LEE SHUK YEE v. EDWIN KWOK WING YUN AND ANOTHER

HCMP2507/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2507 OF 2000

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J U D G M E N T

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1. This is the adjourned hearing of an appeal by the plaintiff against an order by Master Stephen Wong dated 24 September last year lifting a stay of execution on an allocatur dated 28 August 2001 on an order for costs, which then had the effect of enabling the trustee in bankruptcy, representing the 1st and 2nd defendants, to enforce the amount of the allocatur, which is in the sum of $144,342.

2. The background to this matter has been set out in a judgment by me dated 12 December last year, when the appeal first came on for hearing.

3. Following full argument on the matter, I adjourned the appeal to enable the plaintiff to do as she already had been directed by the Master and had failed to do, which was to file an affidavit personally showing what she had spent on legal costs in obtaining letters of administration of the estate of her late father and that these were costs which would entitle her to be reimbursed by the estate, which in turn would give the estate a right of subrogation for those amounts against her two bankrupt siblings, who are now represented by the trustee in bankruptcy.

4. As appears in the judgment, the main issue was whether the order for costs obtained by her in getting letters of administration, which far exceed the order of $144,000 given to the trustee in bankruptcy, is capable of creating a right of set-off as between the estate, on subrogation, and the trustee in bankruptcy.

5. In order to qualify for a set-off, there has to be mutuality as to time and as to parties. I ruled that such mutuality existed, and it was this ruling that enabled me to say that the plaintiff should have a further opportunity to get her house in order by providing the necessary evidence, she having failed to file an affidavit personally, although there was one by her solicitor which I had admitted de bene esse and, having done so, I then admitted for the purposes of my judgment.

6. She has now filed an affidavit, to which I will need to refer presently.

7. Now, on this adjourned hearing, Mrs Irving has sought to make further submissions on the issue of mutuality to the effect that I should change my mind so far as my previous view on the existence of the requisite mutuality is concerned. Secondly, she has submitted that now that I have admitted Mr Au's, the plaintiff's solicitor's, affidavit, it can be seen from paragraphs 16 and 17 of that affidavit, page 169, that upon the distribution of the estate there is, in fact, no debt due to the plaintiff, having regard to the way that she chose to distribute the estate, which was to cut out from the distribution five of the eleven children of the deceased, which has had the effect of depriving those who have received nothing of a share of about $1.3 million each. In such circumstances, it is submitted that there is, therefore, no debt due from those siblings to the plaintiff, the overpayment to her more than satisfying the order for costs in her favour. Lastly, Mrs Irving submits that if all else fails, the affidavit by the plaintiff is wholly inadequate, and that as a matter of evidence she has failed to prove that the amounts spent by her on legal costs are amounts which she can properly look to the estate for reimbursement.

8. I take this last issue first. The affidavit is a brief document. It starts at page 279. Mr Allan, who appears for her, submits that it is more than sufficient to prove her case. The affidavit itself is really no more than a back sheet for the exhibits that come with it, which are solicitors' letters and bills purporting to show that she paid over $1.9 million in fees and disbursements to two firms of solicitors, namely Messrs Foo & Li and K Y Lo & Company.

9. I am bound to say that I had expressed some confidence in my earlier judgment that the plaintiff would have been in a position to carry the burden of proving her case in respect of these costs. That confidence appears to have been misplaced. There is nothing from Foo & Li of a contemporaneous nature. What has been put in is a letter dated 19 November 2002 which summarises the bills, without the bills themselves being exhibited and without the vouchers which would support them.

10. Bare recitals that these accounts refer to the relevant action are not sufficient for these purposes. Such bills do, of course, appear in the affirmation of Mr Au affirmed on 10 July 2002, but the whole purpose of the exercise of adjourning this was so that the plaintiff could get her house in order and to enable her to attend to these matters and go on affirmation in doing that.

11. In respect of this, she has singularly failed to come up to standard, and I find it remarkable that her solicitors could not even do that when they appear to have had access to all of this material. She has failed on the Foo & Li bills. I am of the view that what is exhibited in her affirmation is wholly insufficient.

12. As to K Y Lo & Company, there is at least an itemised bill by them, but none of the supporting vouchers. On a generous appraisal of this evidence, it might just be said that this is sufficient even without the vouchers and fee notes from counsel and so forth attached, but this bill accounts for a little over $539,000. Mr Allan says that this, of course, exceeds the $144,000 order for costs which the trustee has in his favour which therefore is sufficient for Mr Allan's purposes.

13. But what further troubles me is that I have not been shown correspondence between the plaintiff and the estate exhibited to her affidavit as to how this has been claimed by her and treated by the solicitors for the estate. What I am left with is a rather perfunctory affidavit, short on content and evidence. It is quite insufficient for these purposes, and it fails to provide for what had been lacking when the matter was last before me in December.

14. For these reasons, the appeal must fail. The Master's order removing the stay will therefore stand.

15. I find it remarkable that such elementary evidence could not have been marshalled on the plaintiff's behalf.

16. This being my view on the quality of the plaintiff's evidence, it is not necessary for me to refer to Mrs Irving's other arguments, but for the sake of completeness I ought to briefly indicate my view on them.

17. As to mutuality, I have already ruled on this issue following full argument. Mrs Irving has placed further authorities before me. But it seems to me that where I have already given judgment, that I should not re-open this issue. In the event of an appeal, this can be considered by the Court of Appeal.

18. In relation to the allegation that there is no debt owing, having regard to the nature of the distribution of the estate, I feel unable to take these arguments into account because I cannot judge the correctness of that distribution. I would need to have considered that first before I can draw any conclusions on the propriety of the distribution. This, I am told, is to be litigated separately. I am unable to take any notice of these complaints for the purposes of this appeal.

19. This being so, the appeal has failed on the narrow but absolutely fundamental question of lack of evidence, for which the plaintiff and her advisers can blame nobody but themselves.