MAN KAI-KWONG, DAVID v. MAK YING-MUI as the administratrix of the estate of the Deceased AND OTHERS

HCMP 703/2019

[2023] HKCFI 591

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 703 OF 2019

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DECISION

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1.  On 7 December 2022, I handed down a judgment (“the Judgment”), in which I ruled against David.  I also made a costs order nisi (“the Costs Order Nisi”) that costs of these proceedings (including costs of D2’s Striking Out Summons and all costs reserved) be paid by David to all the defendants herein, and those costs are to be taxed if not agreed.

2.  Subsequently, all the parties have made applications to vary the Costs Order Nisi.

(1)  On 20 December 2022, the defendants have filed their respective summonses (“Ds’ Summonses”) to seek to vary the Costs Order Nisi.  All the defendants are seeking the same variation, i.e. instead of going through the taxation process, costs payable by David to all the defendants are to be summarily assessed.

(2)  On 21 December 2022, David filed a summons (“David’s Summons”) to seek the following variation of the Costs Order Nisi:

(a)  There be no order as to costs in these proceedings or part of these proceedings; and/or

(b)  Costs of these proceedings or part of the proceedings be paid out of the Estate.

3.  The application(s) made by each side is/are opposed by the other side.

4.  I have directed that the summonses be determined on paper without an oral hearing.  The parties have provided their respective written submissions, and I have duly considered the same.  For ease of reference, unless otherwise indicated, the abbreviations used in the Judgment would be adopted in this decision.

David’s Summons

5.  I would first discuss David’s Summons.

6.  As submitted by Mr Ho for the Mother, the starting point involves the application of the Re Buckton principles^[1] as expounded by the Court of Final Appeal in Cheung Pui Yuen v Worldcup Investments Inc.^[2] The principles have been succinctly summarised in headnote (4) of the law report as follows:

“Where proceedings had been properly instituted for the benefit of a trust fund, or a deceased's estate, the court might, in an appropriate case, make an order for the costs of the proceedings to be borne by the fund or estate. There were three classes of cases. First, where the trustees asked the court to determine some question. Second, where the question for determination was not raised by the trustees by some of the beneficiaries but was a question that would have justified an application by the trustees. In the first and second classes of cases, the general rule was that the costs of all necessary parties should be paid by the estate. These two classes could be distinguished from the third class, namely where the application was made by a beneficiary but was, in substance although not form, an adverse claim made in hostile litigation. In this third class, the rule applicable to hostile litigation should be applied and the unsuccessful party ordered to pay the costs. Finally, there was a further principle that, if the deceased had been responsible for the creation of the doubts that had necessitated the litigation, it was the estate on which costs should fall. However, these principles did not constitute rules and a discretion as to costs had also to be exercised in light of the particular circumstances of the litigation.”

7.  In considering David’s application for varying the Costs Order Nisi, everything must be based upon my ruling made in the Judgment.  The application is not an opportunity for a party to reargue the matters which have already been determined by me in the Judgment.  I am not prepared and indeed I am not allowed to revisit those matters.^[3]

8.  In his written submissions, Mr Chan for David has put forward various grounds in support of David’s application.  With no disrespect, I am not prepared to set out all the points made by Mr Chan in this decision.  Suffice for me to say that I have considered Mr Chan’s submissions, but I am unable to accept the same.

9.  As said in the above, in his application for variation of the Costs Order Nisi, David is bound by the ruling made by me in the Judgment and cannot reargue any issue decided by me. In particular, I have made the following findings in the Judgment:

(1)  “It is not in dispute that the Mother has properly administered the Hong Kong Estate, and the administration of the Hong Kong Estate is nearly completed. In the circumstances, there is no reason and no need to remove the Mother from office.”^[4]

(2)  “In my judgment, the Mother cannot be criticized in respect of anything related to the BVI Estate, including the Shareholding Dispute.”^[5]

(3)  “As shown by the evidence, after the Hong Kong Grant was made, the Mother has been undertaking the administration of the Hong Kong Estate diligently.”^[6]

(4)  “There is no evidence showing that the Mother has done anything improper or has neglected to do anything to discharge her duties in administering the Hong Kong Estate.”^[7]

(5)  “There is nothing in the evidence showing that the Mother has not properly administered the Hong Kong Estate, in an independent and impartial manner. There is also no evidence showing that the Mother is being controlled by Peter.”^[8]

10.  In his written submissions, Mr Chan has cited Hong Kong Civil Procedure 2023, Volume 1, §85/2/15:

“If an application for the removal of an executor is dismissed, it does not necessarily follow that the cost order would be made in favour of the executor. The court would take into account the executor’s conduct and whether it was not unreasonable for the plaintiff to have made the removal application (Wong Tat Lun Eddie v. Wong Chi Ho Jimmy (HCMP 2391/2013, [2015] HKEC 282))”

11.  Each case depends upon its own facts.  In Wong Tat Lun Eddie v Wong Chi Ho Jimmy, the executor was criticised for lack of progress and lack of transparency, which criticisms were only answered by the executor in the course of the affidavits.  At [23] – [25] of that decision, B Chu J has explained why the beneficiary plaintiff ought to be regarded as the real winner for the period up to the filing of the affidavit evidence (with no order as to costs thereafter), notwithstanding the fact that the removal application made by the plaintiff was unsuccessful:

“23. I accept that there had been delay and deficiencies in that D1 had at least not been forthcoming with providing sufficient information to Ps on the administration and distribution of the Estate and this was only remedied by D1’s 2nd affirmation which was filed shortly before the 1st Hearing.

24. As [counsel] had submitted, and which I accept, Ps had achieved real and substantial success by the time of D1’s 2nd affirmation in that they had successfully compelled D1 to remedy the delay and deficiencies by providing various information about the administration of the Estate and also the Distribution Plan.

25. Having considered D1’s conduct, I am of the view that it was not unreasonable for Ps to have made the Removal Application and that D1 should pay Ps’ costs up to the time of D1’s 2nd affirmation.”

12.  As submitted by Mr Ho, the facts in the Wong Tat Lun Eddie case are entirely different from the facts as found by me in the present case.  David cannot derive any assistance from that case in support of his application for varying the Costs Order Nisi.

13.  In considering the reasonableness of the parties’ actions in these proceedings (which is relevant to the exercise of the court’s general discretion on costs), David is bound by the ruling made by me in the Judgment.  As found by me in the Judgment, there is no unreasonableness on the defendants’ part.  Further, as submitted by the defendants, David’s claim in these proceedings in substance is an adverse claim against the defendants, and these proceedings are nothing but a hostile litigation.  In my view, the rule applicable in a hostile litigation should apply here.

14.  The substantive hearing of the AOS took place before me on 1 December 2022.  At that time, the issue before me was whether David’s claim as per [1A] and [2] of the AOS should be allowed.  After considering the evidence and hearing the submissions, I handed down the Judgment on 7 December 2022, in which I dismissed [1A] and struck out [2] of the AOS. Plainly, David has failed entirely in these proceedings. 

15.  By reason of the above, David should be ordered to bear all the costs in these proceedings.  I would dismiss David’s Summons.

Ds’ Summonses

16.  The grounds put forward by the defendants in support of their applications can be summarised as follows:

(1)  I have presided over the two substantive hearings in these proceedings (i.e. the hearing on 16 December 2020 and the hearing on 1 December 2022) and is fully in a position to conduct a broad-brush assessment of the costs involved.

(2)  In the hearing on 16 December 2020, costs awarded to the defendants were summarily assessed.  Likewise, the costs awarded to the defendants in the Judgment can also be summarily assessed.

(3)  This case is a dispute between close family members.  It would be in the interests of all the parties concerned for the remaining issue of costs to be resolved as expeditiously as possible, so as to allow the family members to put this litigation behind them and move on with their lives.

(4)  Time and costs would be saved if summary assessment is ordered.

17.  Having considered the matter, with respect, I decline to order summary assessment.  The costs provided in the Costs Order Nisi should be taxed.  My reasons are as follows:

(1)  Unlike the decision made on 16 December 2020, the Judgment handed down on 7 December 2022 is the final judgment in this case, concluding everything in these proceedings.    Although I have handled some hearings in this case, including the hearings on 16 December 2020 and 1 December 2022, not all the interlocutory hearings in these proceedings are before me.  The costs provided in the Costs Order Nisi may cover costs or part of the costs of the interlocutory hearings which are not before me.  In view of this, for the costs provided in the Costs Order Nisi, it would be better to order taxation instead of having summary assessment.

(2)  It is not uncommon that the costs provided in the final judgment handed down after trial would be taxed and not be summarily assessed.

(3)  Summary assessment is assessing costs in a summary way.  Although summary assessment may save some time and costs, whether summary assessment should be ordered would depend upon the circumstances.  In view of the circumstances as set out above, I would exercise my discretion to order taxation and not summary assessment.

(4)  As to the relationship between the family members, based upon the papers before me, I am of the view that the differences between David on the one hand and the defendants on the other hand are still irreconcilable.  I have been informed that David has in fact lodged an appeal (“the appeal”) against the Judgment.  Realistically, I do not think that ordering summary assessment would assist the reconciliation of the parties in any way.  I also do not think that the parties can put the litigation behind them if summary assessment is ordered.  One must not forget that the appeal is in place, and the parties would have to fight another legal battle in the appeal.

18.  I would dismiss Ds’ Summonses.

Disposition

19.  I dismiss David’s Summons.  I also dismiss Ds’ Summonses.  The Costs Order Nisi is now made absolute.

20.  In view of this outcome, taking a broad-brush approach, in respect of each summons covered by this decision, I make no order as to costs.

21.  I thank all the legal representatives for the assistance provided to the court.