YOUNG YVONNE v. YOUNG ERIC

HCMP 1103/2018

[2025] HKCFI 2097

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1103 OF 2018

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BETWEEN

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DECISION

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A. Introduction

1.  These proceedings concern the estate of the late Madame Ellis Lee (the “Deceased”).

2.  The Defendant is the administrator of the Deceased’s estate under Grant No. HCAG 008877/2018.

3.  In the originating summons dated 19 July 2018 herein, the Plaintiff seeks the following reliefs against the Defendant:-

(1) the grant of letter of administration in favour of the Defendant under Grant No. HCAG 008877/2018 be revoked;

(2) the Defendant be removed as the administrator of the estate of the Deceased;

(3) the Defendant be compelled to render just and true account of the estate and hand up all money taken or received from the estate of the Deceased;

(4) a fresh letter of administration be issued to the Plaintiff; and

(5) costs be borne by the Defendant personally.

4.  For the reasons elaborated below, the Plaintiff took out a summons dated 10 October 2024 seeking the following orders:-

(1) the sum of HK$5,200,000 paid into Court and the interest accrued thereon (in the amount of HK$719,659) be paid to herself and Eve Young equally;

(2) the claims against the Defendant in these proceedings be discontinued; and

(3) the costs in these proceedings be to the Plaintiff.

5.  This is the substantive hearing of the Plaintiff’s summons dated 10 October 2024.

B. Material Background

6.  On 24 December 2017, the Deceased died intestate.

7.  The Plaintiff, the Defendant and Eve Young are the surviving children of the Deceased and the only beneficiaries of the Deceased’s estate.

8.  Apart from some cash in the amount of HK$2,399,354.29, the only asset of the Deceased’s estate is Flat B, 17^th Floor, Chung Nam Mansion, No. 163 King’s Road, Hong Kong (the “Property”).

9.  According to the Plaintiff:-

(1) She and the Defendant agreed to act as co-administrators of the Deceased’s estate.

(2) Despite such consensus, the Defendant unilaterally applied for and was granted letter of administration in respect of the Deceased’s estate[1].

10.  On the next day after letter of administration was granted (ie 21 June 2018), the Defendant, without consulting the Plaintiff and Eve Young in advance, entered into a provisional sale and purchase agreement for the sale of the Property at the price of HK$5,530,000.

11.  In this connection, the Plaintiff and Eve Young complained that the Defendant wrongfully and unjustifiably incurred the following expenses in selling the Property:

(1) paying an extra 1% commission to the estate agent;

(2) paying a sum of HK$30,000 for “thanking the spirits (答謝神靈)”; and

(3) paying transportation and accommodation expenses of himself and his wife in excess of HK$110,000.

12.  In the circumstances, the Plaintiff commenced the proceedings under the originating summons herein.

13.  The Defendant contested the Plaintiff’s claims. In gist, he said that the Plaintiff’s accusations were false, that he acted bona fide all along, that he had no intention to misappropriate the assets of the Deceased’s estate and that he kept the Plaintiff informed of the affairs of the estate.

14.  Be that as it may, upon the Plaintiff’s ex parte application, on 26 July 2018, B Chu J granted an interlocutory injunction restraining the Defendant from disposing of the money of the Deceased’s estate, including the sale proceeds of the Property.

15.  On 3 August 2018, Lisa Wong J ordered that the interlocutory injunction granted by B Chu J be continued pending the final determination of the claims in these proceedings.

16.  Meanwhile, the Plaintiff registered the originating summons herein as a lis pendens against the Property in the records of the Land Registry.

17.  On 26 September 2018, upon the Defendant’s undertaking to pay HK$5,200,000 (being the sale proceeds of the Property) into court, DHCJ To ordered that the lis pendens against the Property be vacated.

18.  In the circumstances, the sale of the Property completed on 22 October 2018, and the balance of the sale proceeds (ie HK$5,200,000) has been paid into the court.

19.  It is the Plaintiff’s stance that her foremost concern is to ensure that the distribution of the asset of the Deceased’s estate will complete in a manner that is lawful and fair.

20.  The Plaintiff takes the view that the distribution exercise will complete when the sum in court and the interest accrued thereon are paid out. Thus, the Plaintiff took out the summons dated 10 October 2024 seeking, inter alia, an order that:-

(1) two respective sums of HK$2,519,062.73 (totally HK$5,038,125.46 and the interest (of HK$719,659) accrued on the sum of HK$5,200,000 in court be paid out to herself and Eve Young ; and

(2) the claims against the Defendant in the originating summons herein be discontinued.

21.  As I understand, the rationale of the Plaintiff’s application is as follows:-

(1) The Plaintiff accepts the Defendant’s suggestion that the net value of the Deceased’s estate (excluding the interest accrued on the sum of HK$5,200,000 paid into court) is HK$7,557,188.19. The breakdown is as follows:-

Items	Amounts
Cash	HK$2,399,354.29
Net Sale Proceeds of the Property	HK$5,336,271.90
Less: Funeral and Administrative Expenses	(HK$145,105.00)
Less: Lucky money paid to Mr Chan Chi Tung (a friend of the Deceased)	(HK$33,333.00)
Net Value of the Deceased’s Estate	HK$7,557,188.19

(2) Accordingly, the Plaintiff, the Defendant and Eve Young are respectively entitled to receive HK$2,519,062.73 (ie HK$7,557,188.19 divided by 3).

(3) On this basis, the Plaintiff asks that herself and Eve Young be paid respectively HK$2,519,062.73 (totally HK$5,038,125.46) out of the sale proceeds of HK$5,200,000 maintained with the court leaving a balance of HK$161,874.54 (ie HK$5,200,000 less HK$5,038,125.46).

(4) The Defendant could claim the said balance sum of HK$161,874.54 as well as the cash of HK$2,399,354.29. This would be sufficient to cover the Defendant’s claim for 1/3 of the asset of the Deceased’s estate (ie HK$7,557,188.19 divided by 3), to which the Defendant is entitled.

C. The Payment Out Application

22.  Order 22A rule 1 provides that:-

“Subject to Order 22, rule 17, any money paid into court in an action (whether or not in accordance with Order 22) may not be paid out except in pursuance of an order of the Court which may be made at anytime before, at or after the trial or hearing of the action.”

23.  In Lehman & Co Management Ltd v Effiscient Ltd [2021] HKCA 1657 at para 7 (which was applied in Poon Ka Man Jason v Cheng Wai Tao [2023] 4 HKC 434 at para 96 (per G Lam JA), Barma JA stated:-

“The principles governing the court’s powers under O 22A are well-established:-

(1) The court has wide powers and an unfettered discretion over money paid into court to achieve justice between the parties on the facts and in the circumstances of the case.

(2) It is always necessary to consider the purpose of the initial payment into court, and where the applicant for release of the payment is in principle entitled to the money, then the respondent must demonstrate good reasons to justify why the court should retain the money instead of releasing it.”

24.  It is obvious that the purpose of the payment into court was to ensure that the asset of the Deceased’s estate (ie the balance of the sale proceeds of the Property) would be preserved and made available for the beneficiaries.

25.  There is no question that the Plaintiff and Eve Young, being the beneficiaries of the Deceased’s estate, are respectively entitled to 1/3 of the assets of the Deceased’s estate (ie HK$2,519,062.73).

26.  In my view, the payment out application is a practical solution that puts an end to the substantive dispute between the parties. By seeking an order for payment out, the Plaintiff is effectively seeking to complete the administration of the Deceased’s estate.

27.  This approach makes ample common sense.

28.  I see no reason why the court should retain the sale proceeds of the Property any longer.

29.  Whilst the Defendant made an affirmation and lodged a lengthy skeleton submissions that mentioned his grievance and the justifications for his conduct, he was unable to pinpoint any valid reason why the balance of the sale proceeds of the Property (which are now maintained with the court) should not be distributed to the beneficiaries of the Deceased’s estate. The Defendant’s concern was simply costs. However, for the reasons elaborated in the section below, I am of the view that it would be just and fair to make no order as to costs in these proceedings.

30.  I am also of the view that the Defendant will not be prejudiced by the Plaintiff’s application. Whilst he can apply for payment out in respect of the balance sum of HK$161,874.54 (ie HK$5,200,000 less HK$2,519,062.73 x 2) in court, he can also claim the entirety of the cash in the amount of HK$2,399,354.29.

31.  In the premises, I allow the Plaintiff’s application for payment out under paragraph 1 of her summons dated 10 October 2024 and order that:-

(1) HK$2,519,062.73 (out of the sum of HK$5,200,000 sitting in court) be paid out to the Plaintiff and/or her solicitors; and

(2) HK$2,519,062.73 (out of the sum of HK$5,200,000 sitting in court) be paid out to Eve Young and/or her solicitors (if any).

32.  Under paragraph 2 of her summons dated 10 October 2024, the Plaintiff asks that the interest accrued on the sale proceeds of HK$5,200,000 be paid to herself and Eve Leung.

33.  I am of the view this proposal is not fair and appropriate. The interest accrued on the sale proceeds of HK$5,200,000 is fruit deriving from an asset belonging to the Deceased’s estate. Thus, in principle, the Plaintiff, the Defendant and Eve Leung, being the beneficiaries of the Deceased’s estate, are respectively entitled to 1/3 of the accrued interest.

34.  However, at the hearing:-

(1) Mr Ronald Pang (for the Plaintiff) pointed out that:-

(a) the Defendant has been in control of the cash of HK$2,399,354.29 as well as the interest accrued thereon; and

(b) the Plaintiff[2] was content not to claim the interest accrued on the cash of HK$2,399,354.29.

(2) Both Mr Pang and the Defendant informed me that the parties were content to proceed on the basis that:-

(a) the two sums of HK$2,519,062.73 out of the sum of HK$5,200,000 sitting in court (and the interest accrued thereon) be treated as entitlements belonging to the Plaintiff and Eve Young; and

(b) the balance sum of HK$161,874.54 out of the sum of HK$5,200,000 sitting in court (and the interest accrued thereon) as well as the cash of HK$2,399,354.29 (and the interest accrued thereon) be treated as entitlements belonging to the Defendant.

35.  In light of the stance taken by the parties, it would be fair to make the following order insofar as the interest is concerned:-

(1) the interest accrued on the sum of HK$2,519,062.73 (out of the sum of HK$5,200,000 sitting in court) be paid out to the Plaintiff and/or her solicitors;

(2) the interest accrued on the sum of HK$2,519,062.73 (out of the sum of HK$5,200,000 sitting in court) be paid out to Eve Young and/or her solicitors (if any); and

(3) the interest accrued on the sum of HK$161,874.54 (out of the sum of HK$5,200,000 sitting in court) be paid out to the Defendant and/or his solicitors (if any).

36.  Out of abundance of caution, I order that there be liberty to apply.

D. Discontinuance and Costs

37.  The Defendant does not oppose the Plaintiff’s application for leave to discontinue the claims in the originating summons. I see no reason why leave for discontinuance should not be granted.

38.  The only outstanding matter is costs.

39.  The Court has wide discretion on costs. In YBL v LWC (No 2) [2017] 2 HKLRD 783 at para 10, Lam VP (as Lam PJ then was) summarized the relevant principles as follows:-

“(a) Whilst the courts often started with the proposition of costs following the event, it was no longer the general rule but a starting point (Hung Fung Enterprises v Agricultural Bank of China [2012] 3 HKLRD 679 applied);

(b) There had to be some justification for depriving a successful party of his costs;

(c) In measuring who was the successful party and the extent of his success, the court must examine the reality and justice of the case. Thus, in Hysan Development Co Ltd v Town Planning Board (No 2), no order as to costs was made notwithstanding the success of the appellant in reversing the Court of Appeal's decision because they did not achieve the full objects of their appeals (Hysan Development Co Ltd v Town Planning Board (No 2) (2016) 19 HKCFAR 635 applied);

(d) In addition, under O.62 r.5, the court in exercising its discretion should take into account the matters set out in r.5(1) as might be appropriate in the circumstances;

(e) Order 62 r.5(2) highlighted conduct which the court could take into account including whether it was reasonable for a party to take an issue, the manner in which the matter was pursued or defended, the extent of success, and conduct before, as well as during the proceedings;

(f) If a successful party had brought the litigation upon himself or had done some wrongful act in the course of the transaction, he could be deprived of his costs.”

40.  In Coqueen Co Ltd v Chui Wai Kwan & Ors (HCMP 438/2010, 8 December 2017), which was applied in Wan Kwok Leung v Wan Kwok Ling Bonnie [2024] HKCFI 2742 at paras 6-9 (per Herbert Au-Yeung J), To J stated :-

“37. If a plaintiff wishes to avoid the consequence of having to pay costs for the withdrawal, he may seek the court’s leave to discontinue under Order 21 rule 3(1). Under this rule, the court has complete discretion to grant leave to discontinue on such terms as to costs as it thinks fit. The guiding principle is fairness and justice in the circumstances: Covell Matthews & Partners v French Wools Ltd. Invariably the court takes into account two legal principles when deciding on the terms as to costs. First, Order 62 rule 10(1) provides a convenient starting point. Second, the principle that costs follow event usually applies.

38. A plaintiff applying under this rule has to show he has a good reason to discontinue the action. What is a good reason depends on the circumstances of the case. Examples of good reasons include: that the dispute has become academic; that a crucial witness has died or has otherwise become unavailable; that the subject matter of litigation has ceased to exist; or that the defendant has no means to satisfy any judgment which may be awarded against him. A good reason does not necessarily entitle a plaintiff to unconditional leave to discontinue. It is only the threshold which he must overcome before the court would even consider whether to grant leave to discontinue on terms without costs. Absence of good reason must necessarily mean the starting point applies.

39. If a good reason is shown, the second principle comes into play. Because of the starting point and the general rule that costs follow event, plaintiffs are frequently given leave to discontinue or withdraw only on terms of their paying the defendants’ costs, unless the court is satisfied that it has a proper basis for making a different order: Lloyds Bank Ltd v National Westminster Bank Ltd. This principle was confirmed by the English Court of Appeal in that same case. Hence, it was described as the “general rule” by Keith J (as he then was) in Trend Publishing (HK) Ltd v Vivien Chan & Co (a firm) and by Chadwick LJ in BCT Software Solutions Ltd v C Brewers & Sons Ltd.

40. To persuade the court to depart from the general rule, the minimum a plaintiff has to do is to show that the discontinuance is for reasons other than an acknowledgment of defeat or likely defeat..” (emphasis added)

41.  The foremost question to consider is whether the Plaintiff has accepted defeat or likely defeat.

42.  In this connection, I accept the Plaintiff’s suggestion that her foremost concern is to ensure that the asset of the Deceased’s estate be distributed lawfully and fairly, and this was the reason why she commenced the present proceedings and applied for an interlocutory injunction against the Defendant.

43.  In my view, the payment out application is a practical solution for achieving the Plaintiff’s objectives. It is sensible. There is no reason why the Plaintiff would wish to prosecute the proceedings till the end and fight a full-blow trial against the Defendant when there is practical solution that puts an end to the parties’ substantive dispute.

44.  In the premises, I am not of the view that the Plaintiff has accepted defeat or likely defeat. This is not the case. In any event, it cannot be said that the Plaintiff is practically the loser or unsuccessful party. Her objectives for commencing the present action have been achieved practically.

45.  At the risk of repetition, I reiterate the reality is such that the Plaintiff has come up with a sensible and practical solution for achieving her objectives and resolving the substantive dispute between the parties, and as such it is no longer necessary for her to prosecute the claims against the Defendant, which have become academic.

46.  In exercising my discretion on costs, I must bear in mind that the objectives of the Rules of High Court include, inter alios, (i) increasing the costs effectiveness of any practice and procedure; (ii) ensuring that a case is dealt with as expeditiously as is reasonably practicable; (iii) promoting a sense of reasonable proportion and procedural economy in the conduct of proceedings; and (iv) ensuring that the resources of the Court are distributed fairly: see Order 1A, rules 1(a), (b), (c) and (f).

47.  By putting forward a practical solution that puts an end to the parties’ substantive disputes, the Plaintiff (and their legal representatives) have assisted the court to achieve the aforesaid objectives. It would not be just and fair to award costs against the Plaintiff simply because she has no practical reason to prosecute the proceedings till the end. There is no reason why the court should encourage litigants to contest legal proceedings substantively till the end just for the purposes of costs. This will be against the objectives of the Rules of High Court: see Order 1A, rules 1(a), (b), (c) and (f).

48.  In short, I am satisfied that the Plaintiff has good reasons to discontinue the claims against the Defendant in these proceedings, and it would be unfair to penalize her by way of costs.

49.  In my view, it would be just and fair to make no order as to costs.

50.  In coming to this view, I also take into account the following matters:-

(1) Whilst the Plaintiff seeks to rely on the without prejudice letter dated 21 August 2024 from her solicitors to seek costs against the Defendant, I am not of the view that the proposal under this without prejudice letter would avail the Plaintiff. In the letter, the Plaintiff’s solicitors proposed that the interest accrued on the sum of HK$5,200,000 paid into court be shared amongst herself and the Defendant. As pointed out by the Defendant, there was no reason why Eve Young should be excluded from sharing the interest, which formed part of the Deceased’s estate. I am of the view that the Defendant was entitled to reject the Plaintiff’s proposal under the without prejudice letter dated 21 August 2024.

(2) Under paragraph 2 of the summons dated 10 October 2024, the Plaintiff sought an order that the interest accrued on the sum of HK$5,200,000 paid into court be shared amongst herself and Eve Young. Having said that the interest formed part of the Deceased’s estate, there was in principle no reason why the Defendant should be excluded from sharing the interest. In the circumstances, it was justifiable for the Defendant not to consent to the Plaintiff’s application outright and the parties had to come to court to sort out the matter: see paragraphs 32 to 36 above.

(3) As to the Plaintiff’s without prejudice letter dated 2 May 2025, I am of the view that it came late. Anyhow, the Plaintiff had to come to court to justify her position. I am not of the view that the Defendant could be blamed for not accepting the Plaintiff’s proposal.

(4) However, there is much to say about the conduct of the Defendant in general. For instance, there was no reason why the Defendant would have unilaterally entered into the preliminary sale and purchase agreement for the sale of the Property without obtaining the consent of the Plaintiff and Eve Young in advance[3]. Further, I also find it difficult to understand why the Defendant insisted to pay away HK$30,000 for “thanking the spirit (答謝神靈)”, which would appear to be a bizarre idea for those who did not share his religious belief.

(5) In my view, the skepticism on the part of the Plaintiff and Eve Young was understandable. In light of the mistrust amongst the parties (for which the Defendant was, to say the least, partly responsible), the Plaintiff had, to say the least, legitimate reasons to commence the present proceedings.

(6) Nonetheless, although I am not of the view that the Defendant acted in the most reasonable manner, I am unable to proceed on the basis that the Defendant was a wrongdoer or that he was mala fide. Without pursuing a full blown trial, the Plaintiff has not been able to establish that the Defendant was guilty of misconduct in regard to the affairs of the Deceased’s estate. In my view, the court should not lightly make findings against the Defendant without the benefit of cross-examination and without hearing the live evidence of the parties.

(7) For the same reasons, I am also unable to proceed on the basis that the Plaintiff made false accusations against the Defendant or that she was mala fide. Without the benefit of cross-examination and without hearing the live evidence of the parties, the court is not in a position to reject the assertions made by the Plaintiff.

(8) I also take into account that the Defendant lodged lengthy written submissions, the contents of which were convoluted and unfocused. In his written and oral submissions, the Defendant raised various matters that were not relevant. He also appeared to act in a confrontational manner. Although I understand why the Defendant felt upset about the present litigation, I am not impressed by his litigation conduct.

(9) For completeness, I have also considered whether it would be fair and practicable to order that the costs of the parties be paid out of the Deceased’s estate. The disadvantage is that this would disrupt the mechanism of the payment out as canvassed hereinabove. At the time when the hearing took place, the parties had not yet itemized their legal expenses. If I order that the costs of the parties be paid out of the Deceased’s estate, it is envisaged that the parties would strenuously challenge the legal expenses incurred by each other. The practical consequences are that the parties could not be paid immediately, that the disputes between the parties would drag on further, and that the parties could not have a “clean break” as soon as possible. Understandably, both Mr Pang and the Defendant were not supportive of this course.

51.  Considering the circumstances surrounding the proceedings in the round, I am of the view that it would be fair to make no order as to costs.

52.  Accordingly, I grant leave for the Plaintiff to discontinue her claims against the Defendant in these proceedings with no order as to costs.

53.  I thank Mr Ronald Pang for his helpful assistance.