SU LIXIA v. HO KI CHING ANTHONY t/a ANTHONY HO & CO., SOLICITORS

HCMP 489/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 489 OF 2007

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D E C I S I O N

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Application

1. There is an argument on costs and interest before me.

Background

2. Mr. Po Hoi Chi (“the Deceased”) was a taxi driver.  On 12 November 2003, he was killed during a traffic accident.  The other driver involving in the accident was subsequently convicted of dangerous driving causing death of him.

3. The Deceased left a widow (“the Plaintiff”) and 2 children, one of which was a minor.  In about May 2004, the Plaintiff instructed the Defendant to help her in 2 matters.

(a)   To act for her to sue the other driver and related parties for damages, and

(b)   To apply for grant of the Deceased’s estate.

4. Due to the presence of minority interest, the Plaintiff nominated the Defendant as her co-administrator.  On 16 September 2004, under HCAG006048/2004, the letters of administration were issued to both the Plaintiff and the Defendant.  The estate of the Deceased consisted of monies at bank of some $0.2 m odd and the said civil claim.  The Defendant collected the said sum of $0.2 m odd and released the same to the Plaintiff.  On top of it, the Plaintiff also received $124,290 from the Social Welfare Department under the Traffic Accident Victims (Assistance Fund) Ordinance.

5. On the other hand, the other driver causing death of the Deceased was covered by an insurance policy managed by Toplis and Handing (HK) Ltd (“Toplis”).  Out of it, on 12 November 2004, Toplis paid the Plaintiff and the Defendant as co-administrators a sum of 0.6 m.  The Consent Letter of the parties stated, inter alia, that:

“ 2.  投保人及遺產管理人同意此筆款項先由何其清律師事務所直接領取，以死者之遺產來處理。若日後投保人及/或遺產管理人互相之間因此款項而引起任何爭端，保險公司將不負責。

  3.  ……

  4.  ……

  5.  各遺產管理人並明白並遵照保單內Recovery of Damages段落中規定，如日後就上述交通意外成功向第三者追討任何賠償（“該賠償”），遺產管理人需承擔共同及個別責任向保險公司發還該賠償之全數，或保單內訂明之死亡賠款，（即港幣六十萬元正（HK$600,000.00）），以兩數額註少者為準。”

6. Later, the Plaintiff and the Defendant started to turn sour because of the said sum of 0.6 m.  The Plaintiff wanted the money to be released to her and the children while the Defendant asked the same to be kept in his firm.  On 18 August 2006, with no objection from Toplis, a sum of $50,000 was released to one of the children.  Then, on 25 September 2006, under HCAG006048/2004, I removed the Defendant’s co-administratorship.  Further, on 24 November 2006, I ordered, inter alia, that the Defendant to deliver up the Letters of Administration to the Plaintiff and “without prejudice to any of the parties’ right for taxation”, the Defendant be at liberty to deduct $8,177 from the said balance of $0.6 m, i.e. $0.55 m (“the Money”) to settle Bill no. 05019 dated 31 January 2005.

7. Regrettably, the parties’ dispute did not stop there.  The Plaintiff’s new solicitor engaged in some correspondence with the Defendant but did not get the Money.  On 13 March 2007, the Plaintiff commenced the present proceedings against the Defendant for various reliefs relating to the same.

8. Eventually, the Defendant did pay the sum of $541,823 ($0.55 m - $8,177) to the Plaintiff on 29 March 2007, but by that time, costs had been incurred.  There was also an argument on whether the Defendant should or should not pay interest on the said sum of $0.6 m to the Plaintiff.  The parties came before me on 7 April 2008 to argue on the same.  Mr. Poon Hok Man of Counsel acted for the Plaintiff and the Defendant appeared in person.  Having heard from the parties, I reserved my decision to be handed down.  Further, they also sent to me their written closing submissions subsequently.

Interest

9. In relation to the question of interest, I agree to accept the Defendant’s case.  On balance, there was an agreement reached between the parties so that no interest would be payable until the conclusion of the intended action against the driver causing death of the Deceased.

(a)   Such agreement is recorded in a contemporaneous document issued by the Defendant to the Plaintiff

“As already agreed, we shall deposit and keep the said sum in our bank account for safe custody until the conclusion of our civil action against the negligent driver, Mr. Raymond Yik, without earning interest for the estate and anyone because all interest earned will be applied to settle our management charges so incurred.”

(letter of 26 January 2005)

(b)   At all material times, interest is not a major issue of dispute between the parties.  Apart from making enquires by the her solicitors in the letter of 3 January 2007 as to “the amount of interest accrued so far for the past couple of years”, the Plaintiff has not mentioned or demanded interest from the Defendant until the commencement of the present proceedings.

(c)   I refused to accept the Plaintiff’s evidence that the Defendant did agree to pay her interest during a telephone conversation.     She only raised it during cross-examination of her evidence.  Such evidence has not been stated in any of the Plaintiff’s affidavit and/or correspondence between the parties, even when the question of interest has become an issue.

(d)   Mr. Poon made a number of comments on the reliability of the said letter of 6 January 2005, including that it was highly irregular, self-serving, uncorroborated and written in a language deliberately chosen.  However, in light of the seriousness of these comments as compared to the amount of interest involved in the sum of $6,118.55 ($14,295.55-$8,177 = $6,118.55), I am not persuaded to accept them as sufficiently enough to discredit the Defendant on the issue of interest.

10. Having accepted the agreement on interest put forward by the Defendant, I further rule that it will end on “the conclusion of the civil action” or, a fortiori, the termination of instructions to the solicitor regarding the civil action.  Applying such determination on the facts of this case, apart from the usual interest to be awarded since the commencement of the proceedings, no interest would be payable to the Plaintiff because, as per the said Deposit Report, the $0.6 m was put in a fixed deposit account from 7 January 2005 to 30 November 2005, earning interest in the amount of $6,118.55.  Since then, the money was transferred to the current account and has thereafter not produced any interest.  Hence, when the Plaintiff, together with her 2 children, terminated their instructions of the civil action on 5 June 2006, the $0.6 m did not earn any further interest at all.

Costs

11. I now move to the parties’ argument on costs.  Upon thoughts, I will order that the Defendant shall bear half of the Plaintiff’s costs on party and party basis.  My reasons appear in below.

(a)   Costs is a matter in the discretion of this Court, to be exercised judicially having regard to the facts of the case.

(b)   As a matter of general principle, costs usually follow the event unless there is reason justifying a departure from it.

(c)   The Plaintiff commenced the proceedings herein on 13 March 2007 mainly to recover the Money and the Defendant made payment to her 16 days later.  Hence, prima facie, costs should be awarded for the Plaintiff.

(d)   When making the payment, the Defendant explained that:

“In light of Toplis’s reply, I find myself comfortable to release the said sum of HK$541,823.00 to the two co-administrators of the Estate of the Deceased, i.e. Su Lixia and Yuen Shuk Mun Shirly (“the two Co-administrators”).  I have the opinion that the said sum of HK$541,823.00 belongs to the Estate of the Deceased and the two Co-administrators are appointed by the Court to administer the Estate of the Deceased jointly under the Grant.  So, the said sum should be paid to the two Co-administrators for them to perform their duty under the Grant.”

(letter of 29 March 2007)

(e)   However, in my view, as probably conceded by Mr. Ho at the hearing before me, he has not been able to get the comfort he wanted because Toplis had only replied that:

“With regard to the releasing of the outstanding sum of HK$550,000.00 from the overall sum of HK$600,000.00 to Madam Su Lixia and/or Kelvin Cheung & Co. and/or some other party, our Principal maintain the view that they are not in any position to comment the same as the ownership of the proceeds has transferred to the co-administrators since the date of the signing of the 接受保險賠償同意書.  Since 17th November, 2004, the decision of the release of proceeds always lies in the hands of the co-administrators, i.e. Mr. Ho Ki Ching Anthony and Madam Su Lixia but not Liberty.”

 (letter of 28 March 2007)

Hence, as a matter of principle, Mr. Ho is still be liable to Toplis regarding the sum of $0.6 m.

(f)    Having said that, Mr. Poon urged me to award costs on indemnity principle.  In this regard, party-and-party costs is the usual norm and it depends on whether the Plaintiff can satisfy this Court with sufficient reasons to uplift her entitlement of costs to a higher basis

(g)   In my view, it has not been done.  I am not satisfied that the Defendant has been wholly unreasonably in the matter.  The Defendant’s concern over his personal liability towards Toplis is true.  However, probably, without Toplis’s consent, he will not able to get rid of such liability once he signed the said Consent Letter as co-administrator for the estate.

(h)   To balance the fact that the Plaintiff has lost her argument on interest before me as well as the question of scale of costs, I believe that she should only be awarded half of her costs herein.

Conclusion

12. In the end, I order that:

(a)   The Defendant shall pay the Plaintiff interest at the rate of 10.934% per annum on the sum of $541,823.00 from 13 March 2007 to 29 March 2007.

(b)   The Defendant shall bear half of the costs of the proceedings herein and application, including costs reserved on 4 April 2007 and 19 September 2007 as well as Certificate for Counsel for hearing on 7 April 2008, on party-and-party basis, to be taxed, if not agreed.