HAILS, SAMANTHA MARIE AND OTHERS v. THE HONGKONG AND SHANGHAI BANKING CORPORATION LTD AND ANOTHER

HCMP 1453/2025

[2026] HKCFI 4006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1453 OF 2025

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BETWEEN

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REASONS FOR DECISION

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A. INTRODUCTION

1.  This is an application by the 2^nd Defendant (“the Executrix” or “Elsa” in her personal capacity) for security for costs against the Plaintiffs (“the Security Summons”) pursuant to Order 23, rule 1 of the Rules of the High Court (“RHC”). After hearing submissions, I ordered that:

(1) the Plaintiffs do pay $350,000 into Court as security for the costs of the Executrix for the proceedings under the amended originating summons within 28 days;

(2) The proceedings shall be stayed pending the payment into court;

(3) Within 28 days of notice of payment in being given to the Executrix, the Executrix shall file and serve the affirmation in opposition;

(4) Costs of the Security Summons were reserved;

(5) The application for indemnity of her costs was adjourned to the hearing of the amended originating summons.

Here are my reasons.

B. BACKGROUND

2.  Mr Terry Douglas Jenkins (“the Deceased”) is the father of the Plaintiffs. The Executrix is the wife of the Deceased and step mother of the Plaintiffs. He suffered multiple strokes which led to his being physically immobile and mentally incapacitated after a serious stroke sometime in October 2020. The Plaintiffs claimed that it was unlikely, based on the WhatsApp messages from the Executrix, that the Deceased was capable of taking care of himself after the stroke. He passed away on 24 December 2022.

3.  The Deceased was a man of substantial wealth, well-educated and meticulous with estate planning. By his will made on 23 June 2020 (“the Will”), he made, amongst others, specific gifts to each of the Plaintiffs in the total amount of HK$ 38.15 (“the Specific Legacies”). Those form a small part of the Deceased’s estate (“the Estate”), estimated to be well over HK$348 million.

4.  The Estate accounts prepared by the Executrix showed the net assets to be about HK$1.23 million as of the date of death of the Deceased. The Plaintiffs asserted that, even with the most generous estimation, taking into account the inter vivos gifts to Elsa and assuming meagre returns from his investment portfolio, the Estate accounts revealed that the Estate had lost nearly HK$347 million shortly before the death of the Deceased, notwithstanding his impaired state. The situation was such that there are insufficient assets in the Estate to satisfy the Specific Legacies.

5.  The latest Estate accounts as at 31 October 2024 (“the 2024 Accounts”) showed a net balance of about HK$360,000.

6.  The Plaintiffs queried whether or not Elsa had taken advantage of the Deceased’s poor health to assume control over and misappropriated his assets, or had dissipated the Estate to the detriment of the other beneficiaries. And yet the Executrix has not been forthcoming with information regarding the Estate and believed that her duties as executrix were only limited to matters that occurred after the death of the Deceased.

7.  By an originating summons filed on 27 August 2025 (“the OS”), the Plaintiffs sought discovery against HSBC in respect of the Deceased’s account for the 2 ½ years before the Deceased’s death to decide if a personal action could be taken against Elsa. They issued the OS under Norwich Pharmacal principles and s.21 of the Evidence Ordinance, Cap 8.

8.  Subject to various confirmations (which the Plaintiffs were ready to give), HSBC maintained a neutral stance.

9.  At the call-over hearing of the OS, this Court queried whether or not the Norwich Pharmacal jurisdiction was properly invoked. This Court directed that (a) the Executrix be added as a defendant; (b) the Plaintiffs do consider the question of indemnity for costs of the Estate before setting down the OS for substantive hearing; and (c) failing agreement on indemnity, the Executrix be at liberty to take out a summons for indemnity of her costs or a Beddoe application.

10.  The Executrix was added as a defendant and the OS was amended accordingly. She opposes the OS but has not filed any affirmation in opposition. By the Security Summons, she sought security of HK$1,025,000 for “Costs to be Incurred upon to Setting Down” (“Estimated Costs”). At this hearing, she reduced the sum to HK$520,000.

11.  The Plaintiffs opposed the application on the grounds that the Norwich Pharmacal application was straightforward and that the Plaintiffs had strong merits in the application. Seeking both an indemnity and security for costs was duplicitous and/or redundant. The Estate had around HK$360,000 in net assets. The Plaintiffs have offered to pay the Executrix’s costs out of the Estate in respect of the OS and additionally offered to provide security, which were all rejected. The quantum sought was wholly excessive and disproportionate given the issues in dispute. However, the Plaintiffs were willing to bear the costs of HSBC if an order for discovery of HSBC documents were to be made in the OS.

C. LIABILITY FOR SECURITY

12.  Under Order 23, rule 1 of the RHC, the Court has discretion to order a plaintiff to provide security for the defendant’s costs where the plaintiff is ordinarily resident out of Hong Kong. There is no dispute that this is satisfied as regards the Plaintiffs in this case.

13.  On merits of the claim or the defence, the law is established that it is not necessary for the Court to decide on the merits at this stage.

14.  Suffice it to say that, based on what the Plaintiffs have filed so far, there is a prima facie case for the Plaintiffs to seek a discovery order against the Executrix who is now in control of the bank accounts and is the best person to obtain bank documents. Mr Chong, counsel for the Executrix, did not have enough instructions to be able to say that the Plaintiffs’ case was wholly unmeritorious as to be worthy of being struck out.

15.  Notwithstanding that the Executrix has not yet formulated her grounds in opposition to the OS, there is a question of whether the Norwich Pharmacal jurisdiction was properly invoked which needs to be argued, if not agreed, at the substantive hearing of the OS.

16.  Elsa may feel aggrieved by the allegations, thinking that the Plaintiffs were attacking her integrity as an executrix and as a person and she might want to produce evidence to clear her name. However, the Court is not concerned, in the OS proceedings, to decide on the merits of the Plaintiffs’ allegations against the Executrix but the propriety of the pre-action discovery. Without setting out her defence in full, it is difficult to assess the volume of evidence that the Executrix may need to present in the OS, beyond what is stated in the preceding paragraph.

17.  The Plaintiffs do have assets in Hong Kong, represented by the net balance of about HK$360,000 in the Estate as per the 2024 Accounts. The Plaintiffs claimed that as specific legatees, they are now the only beneficiaries to the Estate. The Executrix is only a residuary beneficiary and on the face of the accounts she has no more interest in the Estate; she is just managing the Estate on behalf of the Plaintiffs.

18.  However, in the circumstances of this case, it is not clear what the net position of the Estate is now, two years after the 2024 Accounts were prepared. Some pre- and post-OS correspondence between the parties would have incurred some costs. It could not be said with any certainty that the HK$360,000 in the Estate was definitely sufficient to cover the Executrix’s costs on trustee basis under the Security Summons and a contested hearing up to execution of an order, if granted, under the OS.

19.  For the reasons given in this Section, I am of the view that the liability to provide security for costs is established.

D. QUANTUM OF SECURITY

20.  The Estimated Costs were for costs “to be incurred up to set down”. On its face, the estimates did not cover costs already incurred. Without disrespect, the Costs Estimates were wild.

(1) The OS procedure is conducted by using affirmations and hearing submissions. There is no step called “setting down” and a second stage that would command further costs.

(2) The Estate had, at best, HK$360,000 according to the 2024 Accounts and yet the solicitors expected the Estate to incur costs of over HK$1,000,000 to contest the OS.

(3) The Costs Estimates broadly comprised (a) counsel fees of $250,000 and solicitor’s costs of HK$ 98,980 for the Security Summons; and (b) the balance of HK$676,020 for the OS. Without disrespect, it was grossly excessive, unreasonable and disproportionate to incur about HK$350,000 to seek security for costs of HK$676,000.

(4) The Security Summons had no complexity that would have warranted the estimated counsel and solicitors fees.

(5) The Executrix was reasonably expected to receive legal advice, file only one affirmation, with some correspondence between solicitors and attend a hearing. It was inconceivable that the whole OS procedure would have required HK$676,000.

21.  In gist, the Plaintiffs had offered, before the hearing, the following security:

(1) 2 June 2026 – without prejudice to their right to argue the merits of the indemnity application, the Plaintiffs offered HK$250,000 as security and agreed that the Executrix was entitled to use the HK$360,000 in the Estate.

(2) 10 June 2026 – the Executrix offered a figure of HK$520,000 for security. The Plaintiffs pointed out that that sum of HK$520,000 was less than that offered in the 2 June 2026 letter. The Executrix then stated in another letter that the cash in the Estate had been used up in legal and accounting fees. She claims that she had failed to mention a deficit of HK$268,624.81.

(3) On 17 June 2026, the Plaintiffs offered a cash sum of HK$350,000 as security for costs up to and including the substantive hearing of the OS, without prejudice to (a) the Plaintiffs’ right to argue both liability and quantum for security/indemnity, including their right to file affidavit evidence and submission in opposition; and (b) the Plaintiffs’ entitlement to current net balance of the Estate assets/funds, by virtue of being specific legatees under the Deceased’s Will.

22.  Mr Chong, counsel for the Executrix, submitted that the Executrix had reduced her claim for security after legal advice to HK$520,000. The offers of the Plaintiffs were not unconditional but were on the basis that liability to pay security would be established.

23.  Without disrespect, the preceding paragraph did not undermine the fact that the original claim of HK$1,025,000 for security was shockingly high for opposing a discovery application. The so-called deficit of HK$268,624.81 had already been taken into account when the 2024 Accounts arrived at a net balance of about HK$360,000. The Plaintiffs had acted reasonably in trying to resolve the security issue amicably and practically. When the Executrix’s solicitor, informed the Court by letter dated 22 June 2026 that the application was limited to quantum of security only, the Executrix’s solicitor did not accept any of the offers of the Plaintiffs and Mr Chong insisted on $520,000 at this hearing.

24.  Adopting the most benevolent approach to the Executrix, I thus ordered the Plaintiffs to pay HK$350,000 as security for the Executrix’s costs of the OS within 28 days into Court. That would cover all costs under the OS leading up to the final hearing, and of execution of any order made by the Court under the OS, but excluded costs of the Security Summons. The Court would not entertain another application for security given the summary nature of the OS procedure.

E. DIRECTION FOR FILING APPLICATIONS

25.  The proceedings shall be stayed pending the Plaintiffs’ payment in. Upon notice of payment in given to her, the Executrix shall file and serve her affirmation in opposition within 28 days. It was well for those advising the Executrix to note that this was already an indulgence to her after a long wait for her affirmation in opposition.

26.  I have indicated to the parties that upon filing of the Executrix’s affirmation, the parties should write a joint letter to the Court giving the time estimates so that the OS could be set down for substantive hearing as soon as possible.

F. ORDER TO INDEMNIFY THE COSTS OF THE ESTATE

27.  I have deferred the making of a pre-emptive order to cover the costs of the Estate until the hearing of the OS, because there was no application for a Beddoe order to indemnify an Estate under PD 20.3 and any such application should be before another judge instead of this Court which has dealt with the substance of the OS. There were also tests under the Beddoe jurisdiction which the Executrix had yet to fulfil.

G. COSTS OF THE SECURITY SUMMONS

28.  A hypothetical junior counsel charging HK$50,000 would have been sufficient. Solicitor’s costs of HK$60,000 would have been sufficient even on trustee basis.

29.  It can be seen that the costs of the Security Summons and the security ordered are well below the Estimated Costs of even HK$520,000.

30.  I therefore reserved the question of costs and whether the Executrix or the solicitors should personally bear the costs of the Security Summons until the substantive hearing of the OS.