MING SHIU CHUNG AND OTHERS v. MING SHIU SUM AND OTHERS

HCAP 16/1996

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE ACTION NO. 16 OF 1996

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D E C I S I O N

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The Dispute

1. The Plaintiffs applied to discontinue the present probate proceedings.  The parties agreed to the discontinuance but disputed on the question of costs.

Background

2. Mr. Ming John Fook (“the Deceased”) died on 21 December 1992, leaving seven children to inherent his estate (“the Estate”).  The children disputed.  One camp of children (“the Plaintiffs”) believed that the Deceased had devised the Estate to all the children equally, including shares (1,000 shares for each sibling) of a BVI company, JF Ming Inc (“JFM”), set up by the Deceased to save estate duty.  JFM was worth some $288 million.  They relied on the 1964 Will and the 1992 Chinese Memorandum.  On the other hand, the other camp (“the Defendants”) said that the 1^st Defendant was entitled to 10,000 shares (“the 10,000 additional shares”) more than other children, making him the majority shareholder of JFM.  Authenticity of the 10,000 additional share certificates was in dispute.  On 24 September 1996, the Plaintiffs commenced the present proceedings against the Defendants for the relief of:

“ (1)       That the Court shall pronounce in solemn form for the true and last will of the Deceased the Chinese Memorandum dated 29 September 1992;

  (2)       Alternatively, that the Court will pronounce in solemn form for the true and last will of the Deceased dated 18 July 1964 together with the Chinese Memorandum dated 29 September 1992;

  (3)       That the Court do grant to the 2^nd and the 3^rd Plaintiffs Letters of Administration with the true last Will of the Deceased annexed of the estate and effects of the Deceased;

  (4)       Costs;

  (5)       Such further and other relief as to the Court shall seem just.”

(Statement of Claim herein dated 24 September 1996)

3. Both the 2^nd and 3^rd Defendants filed their acknowledgments of service.  The 2^nd Defendant said that he would contest the proceedings.  The 3^rd Defendant told the Court that he would not.  Nonetheless, both of them have not taken substantive steps herein.

4. On the other hand, the 1^st Defendant did seriously contest the proceedings.  He filed a defence and further counterclaimed for:

“ (1)       Insofar as the will dated 18 July 1994 is the true and last will of the Deceased, Letters of Administration with the said will annexed.

  (2)       Further or alternatively, insofar as the Chinese document takes effect as the true and last will of the Deceased, Letters of Administration with the said Chinese document annexed.

  (3)       Further or alternatively, insofar as the Chinese document takes effect as a codicils to the will dated 18 July 1964, Letters of Administration with the said will and codicils annexed.

  (4)       Further or alternatively, Letters of Administration.

  (5)       Costs.

  (6)       Further or other relief.”

(Defence & Counterclaim herein dated 27 November 1996)

5. Since then, the parties have proceeded to the discovery stage.  Both the Plaintiffs and the 1^st Defendant filed their lists of documents on 19 March 1997 and 9 April 1997 respectively.  After that, they spent quite some effort in disputing whether the 1^st Defendant should allow the Plaintiffs for inspection of certain documents, including the 10,000 additional share certificates.  On 9 January 1998, the Hon Yam J. ruled in favour of the Plaintiffs.  The 1^st Defendant took up the matter to the Court of Appeal under Civil Appeal No. 22/1998.  On 10 June 1998, the appeal was dismissed with costs.

6. Later, the parties, including JFM started another battlefield under HCA 18407/1999.  They argued on, inter alia, the authenticity of the 10,000 additional share certificates.  The Plaintiffs won in the Court of First Instance and Court of Appeal (CACV No. 180/2004), but lost in the Court of Final Appeal (FA No. 25/2005 (Civil)).  Thereafter, the majority shareholdings of the 1^st Defendant in JFM was established.

7. In the meantime, it is noted that the Plaintiffs, having won the issue of the 10,000 additional shares in the Court of First Instance, instructed another solicitors firm to apply for the grant of the Deceased.  Probably, without regard of the present probate proceedings, HCMP 1439/2005 was commenced to reconstruct a Will of the Deceased in 1982 (“the Reconstructed Will”) from a similar Will made by the Deceased’s wife.  On 7 October 2005, the Hon A. Cheung J allowed the application and ordered that:

“ (a)       ……;

  (b)       the last will and testament of MING JOHN FOOK (明長福) dated the 8^th day of March 1982 as contained in the reconstruction attached to this Order be admitted to proof, the grant to be limited until the original will or a more authentic copy thereof be proved; and

  (c)       the costs of this application of all parties hereto be paid out of the estate of the Deceased on a trustee basis.”

8. When application for Grant of the Deceased was made pursuant to the Reconstructed Will, the Probate Registry raised that the probate proceedings herein was still pending.  Then, on 28 September 2006 the Plaintiffs took out the present summons for leave of discontinuance.  The parties appeared before me on 10 November 2006 to argue on costs.  Mr. Billy Ma of Messrs. Hobson & Ma acted for 2^nd to 4^th Plaintiffs.  Mr. P. Hui of Messrs. Robin Bridge & John Liu represented the 1^st Defendant.

9. Regarding the 1^st Plaintiff, he wrote to Mr. Ma on 23 October 2006 informing that he was acting for himself and independently from other Plaintiffs.  He objected to the costs order stated on Mr. Ma’s summons.  As to the 2^nd and 3^rd Defendants, the former wrote to Mr. Ma on 8 November 2006 and the latter attended before me at the hearing.  Both of them opposed that costs should be paid out of the Estate.

Ruling

10. Having considered all the evidence authorities and submissions from the parties, I have come to the conclusion that costs of the summons and the costs of the Defendants in the present proceedings are to be borne by the Plaintiffs, on party and party basis, to be taxed if not agreed.  My reasons appear below.

(a)       It is not disputed that costs are matters within the discretion of this Court, to be exercised judicially upon consideration of all the circumstances of the case.

(b)       The Plaintiffs’ application for discontinuance is made under O.76 r.11 RHC which also states that:

“Discontinuance and dismissal (O.76, r.11)

 11.—(1) Order 21 shall not apply in relation to a probate action.

(2) At any stage of the proceedings in a probate action the Court may, on the application of the plaintiff or of any party to the action who has acknowledged service of the writ therein, order the action to be discontinued or dismissed on such terms as to costs or otherwise as it thinks just (emphasis added), and may further order that a grant of probate of the will, or letters of administration of the estate, of the deceased person, as the case may be, which is the subject of the action, be made to the person entitled thereto.

(3) ……”

(c) Costs follow the event.  Generally speaking, when a plaintiff has decided to discontinue the proceedings commenced by him, he shall be responsible for costs incurred by the defendant unless there are special reasons justifying not to do so.

(d) Mr. Ma persuaded me to make an exception by suggesting that:

“17. In the presence case, the reliefs sought by the Plaintiffs in the Probate Action have become academic, in light of subsequent developments, in particular the proceedings in HCA No. 18407 of 1999 and HCMP No. 1439 of 2005.  The Plaintiffs have got what they wanted, namely an equal distribution of the Deceased’s estate.  There is no point in going any further with the Probate Action.

18. In the premises the Court is invited to make an order that the costs of the action incurred by all parties including this application should be paid out of the estate (leaving costs orders already made undisturbed.”

(Skeleton of Mr. Ma dated 4 November 2005)

I agree with Mr. Ma on the principle, i.e. this Court may depart from usual costs order when the proceedings have become academic, but disagree that it is applicable to our case.

(e) It is beyond doubt that the main dispute of the parties lies on the additional 10,000 shares.  The value of JFM amounted to $288m while the Estate, only about $7m only.  Further, judging from the relief prayed by the parties as stated in paragraphs 2 and 4 aforesaid, I do not consider that, given the majority assets of the Deceased having been transferred to JFM, the parties really dispute the Estate, apart from the question as to who should be the executor(s) or administrator(s).  Probably, until the commencement of HCMP 1439/2005, nobody simply has bordered the Reconstructed Will at all.

(f) With respect, the Plaintiffs have failed to get what they want, namely: the issuance of the 10,000 additional shares to the 1^st Defendant is a fraud, and such, all siblings should be entitled equally to the shares in JFM as well as the Estate.

11. By the present summons, apart from discontinuance and costs, Mr. Ma originally also asked for appointment of the 3^rd Plaintiff and the 1^st Defendant to be executors of the Estate (if entitled to).  The 1^st Defendant objected to the appointed of the 3^rd Plaintiff.  Mr. Ma kindly agreed to withdraw such application, leaving it to be decided by the parties later.  It is therefore not necessary for me to rule on this point.

Order

12. In the circumstances, I order that:

(a) Leave be granted to the Plaintiffs to discontinue the action herein; and

(b) Costs of the Defendants in the present proceedings (apart from costs order already reserved or made) including the summons filed on 28 September 2006 and hearing on 10 November 2006 be borne by the Plaintiffs, on party-and-party basis, to be taxed if not agreed.