KU CAMEY v. KU SCARLET, the executrix of the estate of CHEN ELSIE, deceased AND ANOTHER

HCA 1482/2022

[2025] HKCFI 5125

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1482 OF 2022

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D E C I S I O N

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INTRODUCTION

1.  On 25 November 2024, I handed down the decision in this action: see [2024] HKCFI 3316. I shall call that “the substantive decision”.

2.  I shall adopt the defined terms used in that decision.

3.  I granted summary judgment to Camey and ordered that Scarlet be removed as the executrix of the estate. The entire action was disposed of. For that reason, I dismissed Scarlet’s application for security for costs.

4.  I made the following costs order nisi:

“Scarlet personally pay Camey’s costs in this action, the summary judgment application and the security for costs application, including reserved costs, such costs to be taxed if not agreed.”

5.  On 22 April 2025, I handed down another decision in [2025] HKCFI 1564. By way of paper disposal, I dismissed Scarlet’s application to vary the nisi order in which she asked for Camey’s costs to be paid out of the estate, instead of by her personally. The nisi order was made absolute. I shall call that “the costs decision” below.

6.  In that decision, I recorded that Camey, through counsel’s submissions, sought an order that Scarlet should not be indemnified by the estate in respect of her own costs. I refused to make an order to that effect because there was no summons before me to vary the costs order nisi in that way and I declined to entertain an application which was only made by counsel in written submissions, and was therefore out of time. I went on to hold that if I were wrong about this procedural point, I would still not accede to the request on the merits: paras 25 to 35. I shall refer to this ruling as “the indemnity decision” below.

7.  Since then, the parties have taken out a total of four summonses. They are, in order of time:

(1)  a summons taken out by Camey dated 2 May 2025 for leave to appeal against the indemnity decision, accompanied by a draft notice of cross appeal on costs[1];

(2)  a summons taken out by Scarlet dated 16 May 2025 for extension of time to apply for leave to appeal against the security for costs decision;

(3)  a summons taken out by Camey dated 23 May 2025 for leave to amend the draft notice of cross appeal on costs; and

(4)  a summons taken out by Camey dated 24 July 2025 for leave to file and serve the 4^th affirmation of Yeung Sai Yuen, which purpose is to introduce new evidence in support of the summons in (1) above.

8.  I shall call the summonses in (1) and (2) generally as Camey’s leave to appeal summons and Scarlet’s leave to appeal summons. And I shall call the summonses in (3) and (4) “the amendment summons” and “the new evidence summons” below.

9.  By consent of the parties, it was ordered on 30 May 2025 that the two leave to appeal summonses and the amendment summons be dealt with on the papers.

10.  The new evidence summons came on for hearing on 2 September 2025. I heard arguments and adjourned the application to be dealt with together with the other three summonses by paper disposal.

11.  Of the three summonses taken out by Camey, the main one is of course the one seeking leave to appeal against the indemnity decision. The new evidence summons and the amendment summons are subsidiary applications and will therefore be dealt with as part of the leave to appeal summons below. It would, however, be logical to first discuss the proper approach to be taken in respect of these two summonses. Scarlet’s leave to appeal summons will be dealt with last.

12.  The indemnity decision formed part of my decision on costs. Both parties have proceeded on the basis that leave is required for Camey’s appeal under section 14(3)(e) of the High Court Ordinance, Cap 4, as that is an appeal against the court’s exercise of discretion on costs. On 27 October 2025, I invited parties to make submissions on whether that appeal should be as of right instead. I asked the following questions:

“(1) Is Camey’s appeal against the costs decision as of right? Please consider:

(a) Turner v Hancock (1882) 20 ChD 303, at 306 and 307.

(b) Re Beddoe [1893] 1 Ch 547, at 553 to 556, 559 to 560.

(c) Williams, Mortimer and Sunnucks (22^nd ed) at para 59-03.

(d) Any relevant Hong Kong authority.

(2) If yes, how should the court deal with Camey’s summons for leave to appeal?”

13.  In their further written submissions, both Camey and Scarlet contend that leave is required. For reasons elaborated below, I disagree with that and take the view that the appeal lies as of right. However, since no appeal was lodged with the Court of Appeal within the prescribed time, Camey will now need to seek an extension of time to appeal. In answer to question (2), she invites the court to treat her leave to appeal summons as one for an extension of time to appeal. I am prepared to accede to this suggestion and shall proceed accordingly.

14.  In this paper application, Camey is represented by Mr Benjamin Chain, who did not appear for her previously. Scarlet has the same legal representation as before, namely Ms Chantel Lin and Mr Axis Yu.

THE NEW EVIDENCE SUMMONS

15.  The marginal note of the new evidence summons refers to Order 59, rule 10(2) of the Rules of the High Court. The rule is also expressly relied on in the supporting affirmation.

16.  The rule provides:

“The Court of Appeal shall have power to receive further evidence on questions of fact, either by oral examination in court, by affidavit, or by deposition taken before an examiner, but no such further evidence (other than evidence as to matters which have occurred after the date of the trial or hearing) shall be admitted except on special grounds.”

17.  At the hearing, it was clarified on behalf of Camey that she is in fact relying on the inherent jurisdiction of the court instead of the above rule.

The basis of the application

18.  Following the grant of the summary judgment, Scarlet, as ordered, furnished an account of the estate in late May 2025. Ms Fanny Lai, the court-appointed administrator, wrote to Scarlet’s solicitors by letter dated 18 June 2025 raising a number of queries, and demanding explanation and repayment of six sums of money.

19.  By letter dated 9 July 2025, Scarlet’s solicitors replied, responding to some of the queries. Materially, she made repayment of two sums.

20.  The first sum was in the amount of US$50,000, which was withdrawn by Scarlet from the deceased’s account at Hang Seng Bank in July 2020, namely while the deceased was still alive. Scarlet’s solicitors explained as follows:

“Second, as to the USD50,000 withdrawal, we are instructed that that sum was to cover future travelling expenses for her and the Deceased from California to Shanghai after quarantine was lifted to help the Deceased organize and return to Hong Kong. As the USD50,000 sum was unspent, our client is agreeable to returning the sum of USD50,000 with interests to the Estate.”

21.  The second sum was in the amount of HK$68,831.89. According to the bank statements disclosed by Scarlet, Scarlet continued to use the supplementary credit card given to her by the deceased after the latter passed away. The administrator demanded the repayment of this sum “without prejudice to [her] right to report this matter to the police”. Scarlet’s solicitors replied:

“Our client is prepared to repay to the Estate the sum of HK$68,831.89, solely with a view to avoiding any protracted argument with you over the spending of the said sum. That said, we fail to see why, pending any explanation by our client, your first request for repayment was made with a threat to report the matter to the police. … ”

22.  The above two letters are the new evidence which Camey now seeks to admit in support of her leave to appeal summons. She says that they show that in the administration of the estate, Scarlet had plainly committed misconduct by her failure to account, or more accurately, failure to look into her own withdrawals from the deceased’s account made by her in her personal capacity, or in the capacity as the deceased’s attorney. This affords additional ground for the court to reconsider costs.

23.  Camey says that what Scarlet said in the letters amounts to an admission of her own misconduct. This is clearly relevant evidence on the issue of whether I was wrong in allowing Scarlet to recoup her own costs out of the estate.

The proper approach

24.  In a leave to appeal application, where an applicant seeks to rely on evidence not adduced at trial or the substantive hearing, the proper approach which the first instance court should take is as follows.

25.  The first instance court has no power to admit new evidence for use in the intended appeal. Order 59, rule 10(2) confers power to admit new evidence on the Court of Appeal only. That said, the first instance court should consider whether it is reasonably arguable that the Court of Appeal would grant leave, applying the Ladd v Marshall criteria or the criteria governing the admission of post-trial or post-hearing matters, whichever is applicable. In other words, the first instance judge should examine if the new evidence could arguably satisfy these criteria. If so, the judge should take into account the new evidence when considering the leave to appeal application. If not, the new evidence should be disregarded.

26.  The above procedure was explained by Lam VP (as he then was) in Man Lin Heung v 梁根林 [2019] HKCA 846 at footnote 1 to para 2. In that case, the new evidence was subject to the Ladd v Marshall criteria, and the explanation was made in that context. There is however no reason why it should not equally apply to post-trial or post-hearing matters. Separately, the same approach should also apply to a new evidence application made in support of an application for extension of time to appeal.

27.  In the new evidence summons, leave is sought to “file and serve” the affirmation which exhibited the two letters. Strictly speaking, this is procedurally incorrect, as this court has no power to admit the new evidence as such, whether pursuant to Order 59, rule 10(2) or the inherent jurisdiction. I think the proper thing to do instead is to treat the summons as an application to rely on the new evidence for the purpose of the leave summons.

28.  As Camey is relying on the two letters which were written after the indemnity decision was made, I accept her submission that the new evidence are post-hearing matters and as such the Ladd and Marshall criteria do not apply: Cheung Wing Kuen Samuel v Ip Chui Sum [2022] 3 HKLRD 709, [2022] HKCA 1029 at para 42. How the Court of Appeal would exercise its discretion on the admission of such evidence is explained in para 43:

(1)  The Court of Appeal has a wide discretion in relation to admitting fresh evidence but it should always be exercised sparingly with due regard to the need for finality in litigation.

(2)  It is impossible to produce an exhaustive list of considerations but the following factors will always be material: the extent to which the fresh evidence may affect the award of damages, the time element (the closer to the date of the trial the evidence emerges the more likely it is that the evidence will be admitted), and the conduct of the parties.

(3)  The evidence should be admitted in all cases where it would be an affront to one’s sense of fairness not to admit it. The court takes into account all the circumstances, before, during and after trial.

(4)  The new evidence must substantially affect a basic assumption made at the trial. The matter is one of degree.

29.  My task is therefore to examine the two letters and decide whether it is reasonably arguable that the Court of Appeal would admit them in the intended appeal by applying the above guidance. I shall do so on a de bene esse basis.

THE AMENDMENT SUMMONS

30.  The draft notice of cross appeal on costs contains eight proposed grounds of appeal. By the amendment summons, Camey seeks leave to amend grounds 3, 4 and 6 and add a new ground 9. The proposed amendments to the existing grounds are not material as they do not affect the substance of the grounds as drafted. The main dispute between the parties revolves around the new ground 9.

31.  The summons is made pursuant to Order 20, rule 8.

32.  Ms Lin submits that that is not the right rule, and the correct rule is Order 59, rule 7. She further cites the Court of Appeal’s decision in Ng Yuk Pui Kelly v Estate of Dung Wai Man (deceased) [2021] 1 HKLRD 1037, [2021] HKCA 134, in which the court explained how it would exercise the discretion when deciding whether to grant leave to amend a notice of appeal.

33.  I do not agree with that submission. Order 59, rule 7 expressly governs amendments to notice of appeal and respondent’s notice. It does not apply to a draft notice of appeal attached to a summons seeking leave to appeal. In any event, some of the considerations which the Court of Appeal would need to take into account, eg whether to allow the amendment would disrupt the disposal of an appeal (a factor mentioned in Ng Yuk Pui Kelly at para 33), do not necessarily apply at the leave to appeal stage.

34.  The amendment summons is an application to amend Camey’s summons for leave to appeal. Accordingly, Order 20, rule 8 applies. The approach which I will adopt is the principle that, generally speaking, an amendment should be allowed for the purpose of determining the real question in controversy between the parties or correcting any defect or error in any proceedings, and leave should be granted if it can be done without injustice to the other side: see Hong Kong Civil Procedure 2025 at para 20/8/6.

35.  The real dispute here is whether the new ground 9 is reasonably arguable as a ground of appeal. If it is, I should grant leave to amend. If it is not, there is no point in granting leave and, for that reason, the amendment summons should be refused. I shall deal with the substantive merits of the new ground as part of my discussion of Camey’s leave to appeal summons.

CAMEY’S SUMMONS FOR LEAVE TO APPEAL AGAINST THE INDEMNITY DECISION

36.  Camey’s draft notice of cross appeal on costs contains eight proposed grounds and, if the amendment summons is allowed, a further ground 9. Grounds 1 and 2 concern the procedural aspect of the indemnity decision. The remaining grounds concern the substantive merits.

37.  I have stated above my view that Camey’s appeal should be as of right. I consider that section 14(3)(e) does not apply as the decision not to deprive Scarlet of her indemnity under Order 62, rule 6(2) does not involve any exercise of discretion by the court. This issue goes to the rationale and nature of the trustee’s indemnity. I will deal with it when I discuss the legal principles in respect of grounds 3 to 8.

Legal principles on extension of time to appeal

38.  In an application to extend time to appeal, in exercising its discretion, the court will take into account the length of the delay, the reasons for the delay, the chances of the appeal succeeding if an extension of time is granted, and the degree of prejudice to the other party if the application is granted. Where the delay is substantial and not wholly excusable, the applicant must show a real prospect of success. In other words, he would need to demonstrate a strongly arguable case. See, eg, Lee Chick Choi v Best Spirits Co Ltd HCMP 371/2015, 21 May 2015 at para 19.

39.  Here, it was only when Camey lodged her further written submissions on 3 November 2025 that she indicated that she would apply for an extension. That is more than six months after the date of the costs decision. The delay is therefore substantial. The delay came about because she had made a mistake as to the proper way to go about her appeal. I do not find that to be excusable. Therefore, the threshold which Camey now has to reach is the higher hurdle of a strongly arguable case, as opposed to a reasonably arguable case.

Grounds 1 to 2

40.  Under grounds 1 and 2, Camey contends that I erred in ruling that she was not entitled to submit, and would need to make an application for variation of costs before the court would entertain her “application/submission”, that Scarlet should not be indemnified by the estate and should bear her own costs. I ought to have considered that the absence of a formal application caused no prejudice to Scarlet who was able to make, and had made, full submissions on the issue. That was so given that there was no differentiation between the two sets of costs, namely Camey’s costs and Scarlet’s costs, at the substantive hearing.

41.  Mr Chain accepts that what I said in the costs decision about the need to make a proper application to vary the costs order nisi is technically correct[2]. But he submits that given the way the case was argued, both parties were under the impression that the issue of indemnity did arise. Importantly, Scarlet did in fact address the court on it. She was therefore neither taken by surprise nor prejudiced. The court should in all fairness have entertained the point, notwithstanding that it was only made in counsel’s submissions.

42.  By analogy, Mr Chain cites the Court of Appeal decision in The Bank of New York Mellon, London Branch v XJ International Holdings Co., Ltd [2025] HKCA 481 at para 43 in which the court said, in the context of an appeal, whether a party should be permitted to rely on a new allegation or ground on appeal which was not raised in the proceedings below would depend on “an assessment of the fairness of the situation” and whether the opposing party is unduly prejudiced by the raising of the new point. Mr Chain invites the court to apply the same principle in the present case and consider whether it would have been fair to allow Camey to run the indemnity point.

43.  Given Mr Chain’s acceptance that procedurally speaking, Camey ought to have taken out a summons to vary the costs order, the issue under grounds 1 and 2 is effectively this. Had I properly exercised my discretion in not dispensing with the requirement of a formal application? These grounds are therefore a challenge of the exercise of my discretion.

44.  It is true that Scarlet did address the indemnity issue in her written submissions lodged for the paper disposal. However, it is tolerably clear from the written submissions lodged in that paper disposal that neither side was aware of the procedural issue. I observed in the costs decision, at para 27, that it was unnecessary for Scarlet to apply to vary the nisi order in the first place insofar as her own costs were concerned. But she had done so nonetheless. It is therefore reasonably plain that both parties proceeded on the mistaken basis that it was a live issue before the court in that paper disposal when it was not.

45.  In the circumstances, if one is to discuss the fairness of the situation, it may be said that it would be unfair to allow the indemnity point to be run against Scarlet when she (through her legal representatives) held the wrong belief that it was an issue that was open for Camey to take. On the other hand, there is nothing grossly unfair for Camey now to live with consequence of her not being able to argue the indemnity point as it was she who failed to comply with the rules in the first place.

46.  Accordingly, I do not find what Camey now says shows that I had wrongly exercised my discretion not to dispense with the formal requirement.

47.  These two grounds therefore are not strongly arguable.

The trustee’s indemnity

48.  Grounds 3 to 8 challenge my decision not to deprive Scarlet of her indemnity under Order 62, rule 6(2): paras 30 to 35 of the costs decision.

49.  Mr Chain relies on the decision of the English Court of Appeal in Price v Saundry [2020] WTLR 233 in which a trustee’s right to indemnity was discussed. There is no dispute between the parties on the principles explained in that decision. But they disagree on how they should apply to the present case.

50.  The principles are equally applicable to the Hong Kong context, notwithstanding the changes in the English legislation.

The trustee’s indemnity: the statutory provisions

51.  In Hong Kong, the statutory provisions which relate to a trustee or a personal representative’s right to recoup expenses are to be found in section 41U of the Trustee Ordinance, Cap 29, and Order 62, rule 6(2).

52.  Section 41U provides:

“(1) A trustee of a trust who has properly incurred expenses when acting on behalf of the trust –

(a) is entitled to be reimbursed from the trust funds for those expenses; or

(b) may pay for those expenses out of the trust funds.”

53.  For costs incurred by a trustee in legal proceedings, Order 62, rule 6(2) provides:

“Where a person is or has been a party to any proceedings in the capacity of trustee, personal representative or mortgagee, he shall, unless the Court otherwise orders, be entitled to the costs of those proceedings, in so far as they are not recovered from or paid by any other person, out of the fund held by the trustee or personal representative or the mortgaged property, as the case may be; and the Court may otherwise order only on the ground that the trustee, personal representative or mortgagee has acted unreasonably or, in the case of a trustee or personal representative, has in substance acted for his own benefit rather than for the benefit of the fund.”

54.  Together, these provisions form the statutory basis of the trustee’s indemnity. However, the indemnity was not originally created by statute. Order 62, rule 6(2) preserves and sets out the indemnity which has long existed before. (For a history of the development of the Chancery practice, the former English statutes and the former Rules of the Supreme Court concerning the trustee’s indemnity since before 1875 and up to April 1999 when the CPR came into force: see Lewin on Trusts (20 ed) at paras 48-012 to 48-013.)

55.  In gist, a trustee is entitled to indemnify himself out of the trust fund against all costs and expenses properly incurred in the administration of the trust. In Sin Hua Bank Trustee Ltd v Ip Cheung Kwok [1992] 1 HKLRD 211, the Court of Appeal stated, at 215 (lines 25-30):

“This sub-rule [ie Order 62, rule 6(2)] reflects the long established practice of the Chancery Division in England regarding the costs, in the form of costs charges and expenses properly incurred, to which a trustee is entitled out of a trust fund at the expense of the beneficiaries. A trustee has always been entitled as between himself and his cestuis que trust to indemnify himself out of the trust fund against all proper costs incurred by him as trustee. …”

The trustee’s indemnity: the rationale

56.  The rationale for affording a trustee an indemnity is the policy that the trustee should not be out of pocket when acting in his capacity as trustee on behalf of the trust and that the trust is efficiently and properly administered. The right to an indemnity is “part of the fabric of the relationship between the settlor, the trustees and the beneficiaries”. This rationale remains to be true even though in modern times many trustees are remunerated as a result of express provisions in the trust deed: Price at para 23.

57.  It is helpful to look at some of the old cases in which the rationale of the trustee’s indemnity was explained.

58.  In Turner v Hancock (1882) 20 ChD 303, Sir George Jessel MR said, at 305:

“… In like manner the contract between the author of a trust and his trustees, entitles the trustees, as between themselves and their cestuis que trust, to receive out of the trust estate all their proper costs incident to the execution of the trust. These rights resting substantially upon contract can only be lost or curtailed by such inequitable conduct on the part of a mortgagee or trustee as may amount to a violation or culpable neglect of his duty under the contract. Any departure from these principles in the general course of the administration of justice in this Court would tend to destroy, or at least very materially to shake and impair the security of mortgage transactions and the safety of trustees. …

It is not the course of the Court in modern times to discourage persons from becoming trustees by inflicting costs upon them if they have done their duty, or even if they have committed an innocent breach of trust. …”

59.  In the well-known case of Re Beddoe [1893] 1 Ch 547, Lindley LJ said, at 558:

“I entirely agree that a trustee is entitled as of right to full indemnity out of his trust estate against all his costs, charges, and expenses properly incurred: such an indemnity is the price paid by cestuis que trust for the gratuitous and onerous services of trustees; and in all cases of doubt, costs incurred by a trustee ought to be borne by the trust estate and not by him personally. The words “properly incurred” in the ordinary form of order are equivalent to “not improperly incurred.” This view of a right of a trustee to indemnity is in conformity with the settled practice in Chancery and with Turner v. Hancock, the latest decision on the subject.”

The trustee’s indemnity: the “no discretion” nature

60.  It has long been established that the court has no discretion to deprive a trustee of his costs, charges and expenses which are properly incurred. It is only if the trustee has acted unreasonably or has in substance acted for his own benefit rather than for the benefit of the fund that the court may do so. But even then the court is not exercising any form of discretion. For authorities, see the above extracts from Turner v Hancock and Re Beddoe. The same position was expressly confirmed in Hong Kong by the Court of Appeal in Sin Hua Bank. After citing the above passage in Re Beddoe, Clough JA said, at 215 (lines 40-45):

“Thus the court has no discretion to deprive a trustee of his costs charges and expenses properly incurred. It is only if the trustee has misconducted himself in terms now of O. 62, r. 6(2) by acting unreasonably or, in substance, acting for his own benefit rather than for the benefit of the trust fund, that the court may “otherwise order”.”

61.  Section 52A(1) of the High Court Ordinance confers on the court a general discretion as to costs. It provides:

“Subject to the provisions of rules of court, the costs of and incidental to all proceedings in the Court of Appeal in its civil jurisdiction and in the Court of First Instance, including the administration of estates and trusts, shall be in the discretion of the Court, and the Court shall have full power to determine by whom and to what extent the costs are to be paid.”

62.  However, costs properly incurred by a trustee would be protected from such discretion. This position is also reflected in the heading of Order 62, rule 6(2): “Restriction of discretion to order costs”.

63.  It is true that the discretion conferred by section 52A(1) expressly covers proceedings for “the administration of estates and trusts”. However, in the trust context, that phrase typically captures inter partes costs and does not apply to costs which a trustee seeks to recoup from the trust fund. This was explained in Re Beddoe (in the context of the old English statutory provision which is broadly the same as section 52A(1)), at 554 to 555:

“Although costs are costs when they are incurred, the moment you come to ask that they shall be borne as expenses by a particular fund, or by persons not parties to the proceedings in which they were incurred, they become, not costs, but charges and expenses, and when once you get them into the category of charges and expenses this rule and this enactment do not apply to them.”

The trustee’s indemnity: are decisions appealable as of right?

64.  Having examined the rationale and nature of the trustee’s indemnity, I return to the question of whether an appeal against a decision made under Order 62, rule 6(2) requires leave or whether such appeal lies as of right, and that primarily turns on whether section 14(3)(e) applies.

65.  Section 14(3)(e) provides:

“No appeal shall lie – … without the leave of the court or tribunal in question or of the Court of Appeal, from an order of the Court of First Instance or any other court or tribunal … relating only to costs which are by law left to the discretion of the court or tribunal.” (underline added)

66.  Both Mr Chain and Ms Lin draw a distinction between two different outcomes under Order 62, rule 6(2). The first outcome is when the court deprives the trustee of the indemnity, and the second one is when the court upholds it. I shall call the two scenarios the “deprive” scenario and the “uphold” scenario, respectively. They both submit that an appeal in the “deprive” scenario lies as of right[3] whereas an appeal in the “uphold” scenario requires leave. They both say that the “uphold” scenario involves the exercise of a discretion and hence comes within section 14(3)(e).

67.  In particular, Mr Chain relies on the remark made by the Court of Appeal in Waddington Ltd v Chan Chun Hoo Thomas [2019] HKCA 604, at paras 54 and 57, on the potential width of section 52A(1):

“57. Viewed thus, it is clear to us that there is no reason for construing the wide and general wordings in Section 52A(1) in respect of the court’s discretion and power over the costs of and incidental to all proceedings as being restricted to the award of costs or costs orders made inter partes.”

68.  I do not agree with the submission. As explained at some length above, where costs are properly incurred, a trustee is entitled to be indemnified out of the trust fund for those costs. It is a matter of right, not a matter of discretion. Where a dispute arises under Order 62, rule 6(2), the court’s function is to make a finding on whether the trustee has acted unreasonably or for his own benefit. It is a finding which will turn on the facts of the case and the court’s judgement on, eg, whether the trustee’s conduct was unreasonable in the circumstances. This involves the court making a judgement call but there is no discretion involved in the process. This is so whether it is a “deprive” scenario or an “uphold” scenario. Hence, in my view, in both scenarios, an appeal will not come within section 14(3)(e).

69.  The authorities are clear on this.

70.  Turner v Hancock is a “deprive” case: see 304 (before counsel’s argument). Cotton LJ said, at 306:

“The 49th section of the Judicature Act, 1873, says that no order for costs only, which by law are left to the discretion of the Court, shall be subject to any appeal except by leave of the Court or Judge making such order. … Under these circumstances I think it is clear that a trustee’s costs cannot be said to be within the discretion of the Court, and are excepted out of the section of the Act which I have read.”

71.  Re Beddoe is an “uphold” case. This is of course the well-known decision in which the English Court of Appeal explained that a trustee who, without the sanction of the court, commences an action or defends an action, does so at his own risk as regards the costs, with the consequence that he may not be allowed to charge them against the beneficiaries later if he is unsuccessful and if he is considered to have acted unreasonably in doing so. In that case, the trustee, with legal advice, defended an action in the Queen’s Bench Division unsuccessfully. He then sought an order for payment of the costs in that action out of the trust estate in proceedings in the Chancery Division. At first instance, Kekewich J allowed that application. On appeal, it was said that the litigation was “idle and fruitless” and the legal costs had been incurred unreasonably: at 562. The appeal was allowed.

72.  Materially, for present purpose, there was a discussion (at 553 to 556) on whether the appeal from the “uphold” decision was as of right. And the Court of Appeal answered in the affirmative.

73.  As to Mr Chain’s reliance on Waddington, I am of the view that the case is of no direct relevance. That case concerned the indemnity for the costs of a minority shareholder plaintiff in a derivative action out of the assets of a company, and it was held that the indemnity is a matter of discretion: para 76. However, the Court of Appeal expressly acknowledged, at para 75, that the position between a trustee and the trust fund (“where the right to indemnity can be regarded as an incident of the trust and thus equitable in nature”) is different from the dynamics between a minority shareholder and a company.

74.  Mr Chain also refers me to the recent decision of Tsang Lin Yau Linda v Lee Jun Sing [2025] HKCFI 5117 in which a trustee who was deprived of his indemnity sought leave to appeal against that decision, and both parties proceeded on the basis that leave to appeal was needed under section 14(3)(e): para 4. The decision was made on that agreed basis and there was therefore no discussion on the issue of whether the appeal should be as of right.

75.  Accordingly, Camey’s appeal against the indemnity decision (an “uphold” case) does not come under section 14(3)(e) and hence does not require leave under that subsection. It does not require leave under section 14(1) as it is not an interlocutory order for the purpose of section 14AA(1). Therefore, I conclude that her appeal lies as of right.

76.  To complete the answer which I pose in the sub-heading above (ie are decisions on the trustee’s indemnity appealable as of right?), I should add that apart from the “deprive” scenario and the “uphold” scenario, there is a third scenario in which, according to authorities, leave to appeal is required under section 14(3)(e). And that is where the court finds that the trustee’s costs are improperly incurred but still decides to allow him to recover his costs from the trust fund. Charles v Jones (1886) 33 ChD 80, a case cited by Mr Chain, is authority on that. The reasoning is that when the court does that, it is exercising a discretion. The headnote of the reported decision reads:

“… yet if the Judge, notwithstanding charges of misconduct, allows a mortgagee his costs, the mortgagor has no right of appeal; because the fact of the misconduct, if proved, would bring the costs within the discretion of the Judge.”

77.  In this case, we are not concerned with this scenario, and it is unnecessary to discuss this any further.

The trustee’s indemnity: to uphold or to deprive?

78.  The test for whether the indemnity is available or has been lost or curtailed is best expressed in the form of two questions. First, were the expenses properly incurred? Second, were the expenses incurred by the trustee when acting on behalf of the trust? These are the questions formulated in Price at para 24. Notwithstanding this formulation, one must ultimately answer the question posed in Order 62, rule 6(2): has the trustee acted unreasonably, or, has he in substance acted for his own benefit rather than for the benefit of the trust fund?

79.  The English Court of Appeal stressed that the answer to these questions is often far from straightforward and that they are dependent upon all the circumstances of the case: para 24.

80.  The court’s emphasis that the indemnity issue must be considered by taking into account all the circumstances of the case in question is perfectly understandable. In the administration context, the circumstances of each case may vary from one to another in an almost infinite manner. The size of the estate, the nature of the assets, whether the executor or administrator is acting in a professional capacity or is merely a member of the family, and the dynamics between the executor or administrator and the beneficiaries would be different in each case. Questions such as whether the executor or administrator has properly incurred expenses, has acted unreasonably, or has acted for his own benefit are to be answered by reference to the individual circumstances of each case.

81.  It was said in Price that if a breach of trust causing loss to the trust fund or other misconduct is established against a trustee, the trustee may be deprived of his indemnity depending upon all the circumstances. Misconduct in this context should be construed widely to include not only misconduct in the sense of dishonesty but also conduct which is unreasonable in the circumstances. It does not extend, however, to a mere mistake on the part of the trustee: para 31.

82.  When determining the issue of indemnity, there is plainly a spectrum within which a trustee’s conduct would fall. At the one end are cases where there is dishonesty, serious misconduct or breach of trust causing loss to the trust funds. In these cases, it has been said that it would offend all sense of justice if the trustee is allowed to recoup his expenses from the trust funds in defending against such claims (Price at para 29). At the other end of the spectrum there will be cases involving “a mere mistake” (Price at para 31) or “an innocent breach of trust” (Turner at 305). In those cases, the trustee’s indemnity should not be taken away. The difficult cases are of course those which fall in between. But, the court’s task in each case remains the same, namely to answer the question whether the trustee has acted unreasonably in such a way that he should be deprived of his indemnity. In doing so, all the circumstances should be taken into account, and the rationale for why the trustee’s indemnity is given in the first place should be borne in mind.

83.  In a hostile action between a trustee and beneficiaries, the court’s decision on the substantive merits should, as a matter of logic, be an indicator about the issue of indemnity. It was said in Price, at para 43:

“It seems to me that the nature of the judge’s decision in relation to inter partes costs ought to have been some indicator about the indemnity. Although an adverse costs order made inter partes does not necessarily lead to the loss of a trustee’s indemnity, it is a strong indicator that the requirements of s31 [similar to our section 41U] may not have been met. In this case, which was essentially hostile litigation, it seems to me that it was a good indicator which ought to have caused the judge to consider s31(1) of the 2000 Act and the trustee’s indemnity in the round.”

84.  I shall now turn to the indemnity decision. In line with the above legal principles, the decision was not reached as a matter of discretion. It was a finding which I reached under Order 62, rule 6(2).

The matters taken into account in the indemnity decision

85.  I would first make a list of all the circumstances against which Scarlet’s conduct should be assessed. These include the grounds of removal and the surrounding circumstances, as found in the substantive decision, and (on a de bene esse basis) the new evidence. In the new ground 9, Camey relies on other conduct of Scarlet. As I will explain below, this ground raises new points which were not argued at the substantive hearing and I am of the view that Camey should not be allowed to raise it now. Hence, I will not include the factual matters referred to in that ground as part of the overall circumstances which the court should take into account.

86.  First, before the commencement of the action, Scarlet put together the 1^st, 2^nd and 3^rd Calculations. But she did not provide any supporting document to Camey at all save for the two bank documents relating to the sums withdrawn in May 2021. I found that she failed to fulfil her duty to render proper account: paras 61 to 63 of the substantive decision.

87.  Second, Scarlet made pecuniary gifts in the sum of over HK$8.2 million to beneficiaries, including Camey: paras 3, 5 and 47 of the substantive decision.

88.  Third, after the summary judgment application was taken out, Scarlet provided the Revised Estate Account which was accompanied by bank statements. I found that the account was still deficient as there were still missing documents: paras 37 and 64 of the substantive decision. At the same time, I found that notwithstanding its deficiencies, the Revised Estate Account was an attempt on Scarlet’s part to discharge her duties as executrix: para 34 of the costs decision.

89.  Fourth, in the absence of a proper account, Scarlet insisted that Camey agree to her calculations, otherwise her distribution would be put on hold. I found that it was improper for Scarlet to impose such condition and that conduct was clearly prejudicial to the interests of Camey as a residuary beneficiary: paras 65 and 67 of the substantive decision.

90.  Fifth, I made no explicit finding of dishonesty, misappropriation of trust funds, serious misconduct or breach of trust causing loss to the estate on the part of Scarlet. That said, I considered that her conduct was such that her removal was necessary for the due and proper administration of the estate and was in the interests of the beneficiaries.

91.  Sixth, I recorded that Scarlet maintained that the sums withdrawn in May 2021 did not form part of the probate: paras 25 and 27(3) of the substantive decision. That position was clearly erroneous. Nevertheless, notwithstanding her expressed stance, she in fact included the sums in the 1^st Calculations as part of the estate: para 15.

92.  Seventh, in this action, Camey alleged that the deceased told her in 2017 that she had cash of about HK$20,000,000 and that in May 2021, the deceased was suffering from dementia and Scarlet was aware of that. Both allegations were denied by Scarlet in her pleadings and her opposing affirmations. These disputes were not resolved in the substantive decision. At the hearing, Camey’s counsel confirmed that the action would be entirely disposed of if summary judgment was granted: paras 6 and 43 of the substantive decision. In other words, while the parties had incurred costs on the two factual disputes up to the substantive hearing, no findings were made by the court at the conclusion of the action. I found that in the discharge of her duty as executrix, Scarlet needed to deal with the disputes: para 33 of the costs decision.

93.  Eighth, as regards the new evidence, I do not consider that the two letters, when read together, can be taken as an admission by Scarlet that she had committed misconduct while administering the estate. I reject Camey’s submission in this regard. At the hearing of the new evidence summons, Scarlet’s solicitors submitted that the letters amount to Scarlet’s acknowledgment that she failed to return the two sums to the estate. I accept that submission and would treat the new evidence as having such effect.

94.  In the costs decision, I expressly referred to the third and seventh matters. The indemnity decision was however reached against the backdrop of all the other matters (except the eighth matter). I concluded that Scarlet was not acting unreasonably in incurring the costs in defending the action for the purpose of Order 62, rule 6(2): paras 33 to 35 of the costs decision. Even if I am to take into account the new evidence (the eighth matter) as well, I maintain the same view. The admission shows that Scarlet made other mistakes in the administration of the estate. Her explanation regarding the sum of US$50,000 being retained to cover travelling expenses of the deceased seems to be consistent with what she previously said about helping the deceased to manage her financial affairs remotely from the US when the deceased was still alive: see, eg, paras 25, 27(2) and 45 of the substantive decision. There is no admission of dishonesty or misappropriation of trust funds.

95.  Having explained the legal principles and my rulings in the indemnity decision, I now turn to the proposed grounds of appeal.

Ground 3

96.  Under ground 3, Camey contends that the indemnity decision was inconsistent with my earlier order that Scarlet should personally bear Camey’s costs, and that I erred in taking irrelevant matters into consideration or attaching too much weight to matters which were of irrelevant or minimal weight. In particular, I should not have taken into account the alleged existence of the sum of HK$20,000,000 as I had already found in para 21 of the costs decision that the matter was not relevant.

97.  What I said in para 21 was in relation to Camey’s costs, not Scarlet’s own costs. More importantly, it was in response to what Scarlet submitted as her third ground of variation as set out in para 13. The alleged sum of HK$20,000,000 was irrelevant in that context only. It was, and still is, a relevant matter which should be taken into account by the court when assessing the reasonableness of Scarlet’s conduct in defending the action.

98.  Ground 3 is not strongly arguable.

Grounds 4(a) and 5

99.  Under grounds 4(a) and 5, Camey says that I erred in adopting the wrong test in allowing Scarlet’s indemnity, as this is a hostile action and the default position, especially after ruling that Scarlet should be personally liable for Camey’s costs, ought to be that in the absence of any countervailing factor, which there was none, Scarlet ought not to be entitled to the indemnity.

100.  I do not accept that there is any default position as such. I have set out the general legal principles on trustee’s indemnity above. Even in Price, which is the authority predominantly relied on by Mr Chain, there is no mention of such default position. Instead, as stressed in that case, whether the indemnity should be allowed must be dependent on all the circumstances of the case. While it was said that an adverse inter partes costs order against the trustee would be a “good” or “strong” indicator, everything should be looked at “in the round”: para 43.

101.  This is the process which I have attempted to do. I refer to the eight matters which I have listed above.

102.  Accordingly, I find that grounds 4(a) and 5 are not strongly arguable.

Grounds 4(b) and 6

103.  Under grounds 4(b) and 6, Camey contends that I erred in holding that, on the facts as found, while Scarlet’s conduct was prejudicial to Camey as a beneficiary, Scarlet was not acting unreasonably.

104.  I found that Scarlet’s conduct justified her removal as an executor, as her removal and the appointment of a new administrator was necessary for the proper administration of the estate. That is looking at the matter primarily from the perspective of the estate and from the court’s concern of protecting the interests of the beneficiaries. When considering the issue of indemnity, however, one should also bear in mind the rationale for affording indemnity to the trustee in the first place. A trustee should not be made out of pocket if he has done his duty or even if he has made a mistake or committed an innocent breach of trust.

105.  Here, Scarlet was appointed as the executrix by her mother. She acted as such apparently without remuneration and did so as a daughter of the deceased. She made mistakes in the course of administering the estate and some of her views were erroneous (notwithstanding being legally advised). The proper administration of the estate could not carry on with her continuing to be executrix. Nevertheless, there was no finding of her being dishonest, engaged in serious misconduct or breach of trust causing loss to the estate. Within the spectrum of a trustee’s conduct, does she fall on the side of having acted unreasonably such that her indemnity should be taken away?

106.  I think that is the proper analysis which should be undertaken, and which was undertaken by me by giving recognition to the first to seventh matters listed above. I therefore do not agree with the contention put forward under these grounds. Scarlet’s conduct was prejudicial to the interests of the beneficiaries. That was obviously a material matter. But that should be considered against all the other circumstances of the case. These grounds simply focus on one single matter. That is, in my view, not the right approach.

107.  Grounds 4(b) and 6 have no real prospect of success.

Ground 7

108.  Under ground 7, Camey argues that even if it would be reasonable for Scarlet to be indemnified for the costs incurred on the issue of the alleged sum of HK$20,000,000 (ie the seventh matter), the more proper course to take should be to allow her to only have indemnity on those costs, rather than a full indemnity.

109.  In his written submissions, Mr Chain says that a fair percentage should be no more than 25% of the total costs.

110.  This ground is objectionable for a number of reasons.

111.  First, once again, the rules of the court are not complied with. As pointed out by Ms Lin, in a notice of appeal, the appellant should “specify the precise form of the order” which he proposes to ask the Court of Appeal to make: Order 59, rule 3(2). Here, the draft notice of cross appeal on costs does not specify any proposed order at all. That in itself is incorrect. Worse still, as Camey is now proposing a fallback position, it is incumbent on her to specify her alternative order in the draft notice of appeal so that the other side would have proper notice of it and be in a position to deal with it in her submissions. The alternative order is now only raised (once again) in counsel’s submissions. And that should not be allowed.

112.  Second, in any event, this matter was only one of the matters which the court took into account in reaching the conclusion that Scarlet should be entitled to the indemnity in full.

113.  Third, Camey has failed to put forward any justification for the figure of 25%. Nothing is said in the submissions on how this is arrived at and why that would be a fair apportionment, even if one is to adopt a broad brush approach.

114.  Ground 7 is not strongly arguable.

Ground 8

115.  Under ground 8, Camey contends that what I said in para 34 of the costs decision, namely that Scarlet compiled the Revised Estate Account in an attempt to discharge her duties as the executrix, was contrary to my earlier finding that the Revised Estate Account was “still deficient”: para 64 of the substantive decision.

116.  The reasoning in paras 104 to 106 above equally applies here. Ground 8 has no real prospect of success.

Ground 9

117.  Ground 9 is the new ground put forward in the amendment summons. I reproduce it below, with the addition of numbering to facilitate cross-referencing below:

“That the learned judge ought also find and hold as a ground for removal in (a) the 1st Defendant’s failure to provide any or any meaningful account as to what happened to the sum of $10,500,084 of the Deceased’s money admittedly transferred into her (the 1st Defendant’s) own account since 28th May, 2021 which sum should at the very least have earned some interests; (b) the 1st Defendant’s attitude on that sum, which was plainly wrong, was that she could even refuse to distribute or give credit for it, and that since she had gratuitously made that sum available, she could ignore the Plaintiff’s rightful requests for information, (c) but whereas as a matter of law, the 1st Defendant being an agent/attorney of the Deceased, and assuming the Deceased still had capacity on 28th May, 2021, by choosing to mix the Deceased principal’s money with her own, the 1st Defendant was under an absolute duty to render proper and full account, in this case the position was further exacerbated by the fact that the 1st Defendant then abused her position in the capacity as executrix of the Deceased’s estate to in effect “condone” her own aforesaid wrongful act carried out in her capacity as agent/attorney.”

118.  This ground is objectionable on two fronts.

119.  First, insofar as Camey now says that Scarlet’s removal should be made on additional grounds not mentioned in the substantive decision, she should have raised it in a respondent’s notice, as required under Order 59, rule 6(1)(b). I gather from Ms Lin’s written submissions that that is not done. It is not open to Camey to try to raise it in the draft notice of cross appeal on costs.

120.  Second, in any event, the contentions raised in this ground amount to new points not raised previously, whether at the substantive hearing or in the paper disposal of the costs application and, applying the well-known principle in this area, will likely not be allowed to be run by the Court of Appeal.

121.  As recorded in the substantive decision (at paras 39 to 41), counsel for Camey relied on two grounds to seek Scarlet’s removal, namely failure to render proper account and imposing a condition for distribution. In ground 9, part of (a) and the whole of (b) and (c) were not relied on in the summary judgment application. It is true that some of the facts covered by (a), (b) and (c) formed part of the factual circumstances of the case and were set out in the substantive decision. However, the way in which they are now formulated as grounds of removal, eg, Scarlet’s “attitude” referred to in (b) and her mixing of the deceased’s funds with her own and her condoning her own wrongful act referred to in (c), did not feature before.

122.  Whether to remove an executor involves an exercise of discretion by the court. The Court of Appeal would be slow in entertaining new arguments going to the exercise of the discretion. The rationale is that, had the point been taken at first instance, the judge would have had an opportunity to consider it and give it such weight as he considered appropriate. For the Court of Appeal to entertain the new point on appeal for the first time would mean not only that the Court of Appeal would be deprived of the benefit of the first instance judge’s view on this point, but also that it would effectively be exercising the discretion afresh, instead of considering an appeal against an exercise of discretion by the judge. That is not the proper function of the appellate court: see, eg, recently, Wong Pui Yin Georgeanna v Cheer Creation Ltd [2025] HKCA 716 at para 15.

123.  The above principle applies squarely to the new ground. I therefore consider that there is no real prospect that the Court of Appeal would entertain it.

Ruling on Camey’s leave to appeal summons

124.  None of the grounds put forward by Camey have any real prospect of success. Her leave to appeal summons, which is now treated as an application for extending time to appeal against the indemnity decision, should be dismissed.

Ruling on the amendment summons

125.  In light of my conclusion in para 123 above, there is no point in granting leave to Camey to add that to the draft notice of cross appeal on costs. As remarked above, the other proposed amendments are not material. In any event, I have held that all the grounds are not strongly arguable.

126.  The amendment summons should therefore be dismissed.

Ruling on the new evidence summons

127.  The legal principles on how the court should tackle the issue of whether a trustee’s indemnity should be upheld or disapplied are clear. It is dependent upon all the circumstances of the case. While I maintain the view that Scarlet did not act unreasonably for the purpose of Order 62, rule 6(2) even when her admission as revealed by the new evidence is also taken into account, I am of the view that it is a relevant matter which goes to the issue and regard should be paid to it when all matters are considered in the round.

128.  For that reason, I would say that Camey is entitled to rely on the new evidence in support of her leave to appeal summons. However, no leave will be formally granted for her to file the relevant affirmation as this court has no power to admit new evidence as such.

SCARLET’S SUMMONS FOR LEAVE TO APPEAL AGAINST THE SECURITY FOR COSTS DECISION

129.  On 25 November 2024, I dismissed Scarlet’s application for security for costs. Her summons seeking leave to appeal was taken out on 16 May 2025, almost six months later. This is therefore an application seeking an extension of time to apply for leave to appeal.

130.  The principles set out in para 38 above in the context of an application for extension of time to appeal applies equally here: KNM v HTF HCMP 288/2011, 7 September 2011, at paras 16 and 19.

131.  Here, the delay was substantial. It came about this way.

132.  In the notice of appeal lodged against the substantive decision, Scarlet also appealed against the security for costs decision. She and her legal representatives were under the mistaken belief that no leave was required for the latter appeal. After the mistake was pointed out through correspondence from the Registrar of Civil Appeals and the Court of Appeal in April 2025, Scarlet took out the present summons.

133.  I do not consider that in the circumstances, it can be said that the delay is wholly excusable. A mistake about the procedural rule which results in real delay in the progress of an action will not be looked at favourably.[4]

134.  Having said that, there is no obvious prejudice suffered by Camey if an extension of time is granted.

135.  Hence, whether to extend time in this case will boil down to whether the proposed grounds are strongly arguable.

Grounds 1 and 3

136.  Grounds 1 and 3 can be dealt with together. Under these grounds, Scarlet contends that I erred in law and in fact by holding that Camey can be said to be ordinarily resident in Hong Kong and by giving undue weight to Camey’s evidence which allegedly showed her connection with Hong Kong: para 74. More specifically, I failed to consider that Camey had herself admitted that her plan for relocating to Hong Kong had started in 2018 and that such relocation had not materialised for six years as of the hearing.

137.  Mr Chain submits, and I agree, that this is an appeal against a factual finding. There is a high threshold to meet. In her submissions, Ms Lin is simply reciting the arguments made at the substantive hearing, which I had considered and dealt with.

138.  I do not find grounds 1 and 3 to be strongly arguable.

Grounds 2 and 4

139.  Grounds 2 and 4 can be grouped together. Under these grounds, Scarlet points out that the principle of dual ordinary residence has not been conclusively decided in Hong Kong in the context of Order 23, rule 1(1)(a), and that I erred in law in holding that by solely relying on the reason that Scarlet was ordinarily resident in Hong Kong, the security for costs application should be dismissed. I failed to consider the legal question of whether the court has jurisdiction to order security for costs against a person ordinarily resident in Hong Kong if she is also ordinarily resident out of the jurisdiction, which question is answered in the affirmative by the Court of Appeal in Singapore in Tjong Very Sumito v Chan Sing En [2011] SGCA 40 at para 50.

140.  I made the following findings in the substantive decision:

(1)  I was not satisfied that Camey was ordinarily resident out of the jurisdiction: para 73.

(2)  She could be said to be ordinarily resident in Hong Kong: para 74.

141.  Accordingly, the issue of dual residence does not arise. There is no need for this issue to be resolved.

142.  For this reason, no leave should be granted for these grounds.

Ruling

143.  For the above reasons, Scarlet’s summons for leave to appeal against the security for costs decision should be dismissed.

144.  In his submissions, Mr Chain states that it is Camey’s position that as a matter of efficient case management, given that there is in any event going to be an appeal by Scarlet on the summary judgment decision, and that the hearing of that appeal, Camey’s appeal on costs and Scarlet’s appeal on security for costs together would not exceed one day, Camey is willing to be pragmatic and provided that Scarlet does not oppose Camey’s leave to appeal summons, Camey will not oppose Scarlet’s.

145.  Scarlet has not agreed to the proposal.

146.  I should say that I do not endorse Camey’s proposal as the mentality behind it is contrary to the CJR spirit. Under the proposal, Camey is giving her consent to placing an appeal which she considers to be not reasonably arguable before the Court of Appeal. She may not mind incurring time and costs on such an appeal (if in return Scarlet will consent to Camey’s own summons going ahead). However, it must be remembered that the court’s resources are also at stake. Usually, the judicial resources required for disposing of a leave to appeal application will be considerably less than those required for disposing of an appeal. If no leave is granted, that is the end of the matter. It is not right to require the court to devote the higher level of resources to the matter, not based on merits, but for the convenience of the parties.

CONCLUSION

147.  In conclusion, I make the following orders:

(1)  In respect of the new evidence summons, no leave is granted to Camey to file and serve Yeung’s 4^th affirmation, but she is entitled to rely on it in support of her leave to appeal summons.

(2)  The amendment summons be dismissed.

(3)  Camey’s leave to appeal summons be dismissed.

(4)  Scarlet’s leave to appeal summons be dismissed.

148.  I further order on a nisi basis:

(1)  The costs of the new evidence summons be in the cause of Camey’s leave to appeal summons.

(2)  Scarlet do have costs of the amendment summons and Camey’s leave to appeal summons.

(3)  Camey do have costs of Scarlet’s leave to appeal summons, and Camey’s costs be borne by Scarlet personally.

(4)  The costs referred to above include all reserved costs and are to be taxed if not agreed, with certificate for one counsel.