LEE GOO LYNETTE SIU YIN AND OTHERS v. CHEUNG WAI MING DAISY in her capacity as executor of the estate of LI SING KUI AND OTHERS

HCMP 1836/2017

[2019] HKCFI 2414

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1836 OF 2017

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DECISION (2)
(On Costs)

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Introduction

1.  On 8 August 2019, this Court handed down its Decision on Costs (“Decision”). 

2.  On 14 August 2019, Ps’ solicitors sent a letter to Court to seek clarification on the following two issues:

1)  That this Court had made no order in respect of the remainder (or 55%) of Ps’ own costs (“1^st Issue”);

2)  There was no ruling as to whether the costs ordered should be paid forthwith or not (“2^nd Issue”).

3.  Solicitors for D1, D4 to D7 replied on 15 August 2019 that they had no objection to Ps’ request for clarification on the above two issues and no further formal submissions had been received from them.

4.  As for D2 and D3, their solicitors sent a letter on 15 August 2019 stating that the two issues raised by Ps should only be adjudged by the Court after consideration of formal submissions from all the parties affected by the 1^st Decision.

5.  Thereafter, on 3 September 2019, further formal submissions were received from Ps on one side, and D2 and D3 on the other.

1^st Issue

6.  I would summarise Ps’ position on costs in relation to the Removal Application as follows:

Originating Summons issued on 29.08.17 (“OS”)	Ps’ costs of and incidental to these proceedings be paid out of the Estate on trustee basis
Ps’ Skeleton Submissions of 11.12.18 (on Removal Application, Sale Application, and Estate Account Application) (“Substantive Submissions”)	(i) if Ps’ applications successful, costs against D1 personally on full indemnity basis; (ii) if Ps’ applications unsuccessful, costs against D1 personally; or alternatively that costs be paid out of the Estate
Ps’ Written Submissions on Costs of 24.05.19 (“Costs Submissions”)	(i) D1 to pay Ps’ costs personally on indemnity basis forthwith to be taxed if not agreed, with certificate for 2 counsel; D1’s own costs be borne by D personally and not paid out of the Estate and to reimburse the Estate for any costs already paid out on her behalf; (ii) D2 to D7 do personally pay Ps’ costs on a party and party basis forthwith to be taxed if not agreed with certificate for 2 counsel, and D2 to D7’s own costs be borne by them personally and without being indemnified by the Estate.
Ps’ Reply Written Submissions on Costs of 14.06.19 (“Reply Submissions”)	(i) Ps fundamentally objected to the proposed orders of D1, D4-D7, (including Ps’ costs be paid out of the Estate), with certificate for 2 counsel, to be taxed on a party and party basis if not agreed; (ii) if costs were to be paid out of the Estate for Ps, they ought to be taxed on the full indemnity basis (emphasis added)
Ps’ Further Formal Submissions on Costs of 03.09.19 (“Further Submissions”)	(i) in light of the Decision, the remainder of 55% of Ps’ costs of and incidental to the Removal Application be paid out of the Estate on an indemnity basis; (ii) Ps’ costs should be ordered to be taxed and payable forthwith.

7.  It would appear from Ps’ above Submissions that although initially Ps were seeking in the OS an order that their costs be paid out of the Estate on trustee basis, their position had changed.  In their Costs Submissions, they were seeking their costs to be paid by D1 personally on indemnity basis, on the basis that the Removal Application fell into the 3^rd class of the Re Buckton categories, and was a hostile litigation.  In their Costs Submissions, they were seeking an order that costs should follow the event and be borne by the losing parties, and that any argument by Ds that costs should be paid out of the Estate should be rejected[1].

8.  Ps now rely on paragraphs 25-26 of their Reply Submissions. However, as set out in the table above, in those paragraphs Ps’ then position was that at the time (i) Ps fundamentally objected to the formulation of the proposed costs orders in the Submissions of D1, D4-D7 and (ii) the proposal of D1, D4-D7 that Ps’ costs be paid out of the Estate but only on a party and party basis was wholly unacceptable for Ps as the successful parties in the application and, if costs were to be paid out of the Estate to Ps, they ought to be taxed on the full indemnity basis.

9.  This Court’s understanding of Ps’ above position was that only if the Court were to order Ps’ costs be paid out of the Estate, then such costs be taxed on the full indemnity basis and not on party and party basis.  However, it remained Ps’ primary submissions that the Removal Application was a hostile litigation and costs should follow the event and be paid by D1 personally on indemnity basis.

10.  As seen in the Decision, costs orders were then made for the Removal Application on the basis of a hostile litigation.  As in any hostile litigation, and notwithstanding Order 62 rule 3 (7) of RHC, the Court is entitled to take into account the special matters in Order 62 rule 5 and costs is in the Court’s discretion.  As pointed out by Mr Chow, for reasons set out in the Decision, there was no order made by this Court that Ps should be reimbursed by the Estate for the remainder of Ps’ costs, whether indemnity or otherwise.  It was not this Court’s intention that the remainder of Ps’ costs in relation to the Removal Application should be paid out of the Estate.

11.  In light of the above, no clarification is necessary in respect of the 1^st Issue.

The 2^nd Issue

12.  On this issue, all along Ps had sought costs to be taxed forthwith, if not agreed, with certificate for 2 counsel.  There were no submissions were made by any of Ds to oppose Ps’ application for costs to be taxed forthwith, if not agreed. 

13.  This Court accepts that this part was inadvertently omitted by the Court, and will make a supplementary order that the costs ordered to be paid by D1, D2/D3 be taxed and payable forthwith.

Costs

14.  I make no order as to costs of the Further Submissions.