XIE YANLUN AND OTHERS v. 王蘊

HCMP 2052/2022

[2023] HKCFI 2696

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2052 OF 2022

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D E C I S I O N

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A. INTRODUCTION

1.  By Originating Summons dated 7 December 2022 (“OS”) and a Summons (“Summons”) of the same date, the plaintiffs sought 2 categories of relief against the defendant[1]:

(1)  §§1 to 4(1) concerned the funeral arrangements of Mr Xie Maochang (the “Deceased”) (“Part I”).

(2)  §4(2) to (4) concerned property (“Items”) which the plaintiffs allege belonged to the Deceased and are now in the defendant’s possession (“Part II”).

2.  Part I was resolved at the hearing on 16 December 2022 before Mr Recorder William Wong SC (“Recorder”), in circumstances where the defendant agreed to the plaintiffs handling the Deceased’s funeral.  Costs for Part I was ordered against the defendant.

3.  As to Part II, the defendant has on oath confirmed that the Items are not in her possession.  Leave has since been granted by this court to the plaintiffs to withdraw §4(2) to (4) of their Summons and for these proceedings to be discontinued.^[2] The outstanding issue for determination by this court concerns the costs of and occasioned by the Part II application.

4.  The defendant’s position is that the usual order that the party withdrawing an action would have to bear the costs of the action should apply, and that the plaintiffs have failed to demonstrate any good reason to depart from such rule.  The plaintiffs, on the other hand, submit that there was good reason behind the withdrawal instead of an acknowledgement of defeat or likely defeat, so that the just and fair order is to make no order as to costs in relation to the Part II application.

B.   BACKGROUND

5.  The following background facts set out in the defendant’s Skeleton Submissions are not disputed by the plaintiffs.

B1.    Part I

6.  The Deceased died on 4 November 2022.

7.  It turned out that the Deceased had kept two families. The plaintiffs are the family in wedlock, while the defendant claims to be a daughter of the Deceased and belonged to the family out of wedlock.  The two families discovered the existence of each other shortly before the Deceased’s death.

8.  Shortly after the passing of the Deceased, the 2^nd plaintiff and the defendant have been in touch over the telephone and over WeChat, during which the defendant made clear to the 2^nd plaintiff that the Items were in the possession of her mother.

9.  The 2^nd plaintiff then communicated with the defendant on 30 November 2022.  The defendant said that she contracted COVID-19 and was in quarantine in Penny’s Bay, and proposed to discuss the matter when she was released.

10.  On 5 December 2022, the plaintiffs’ solicitors telephoned the defendant.  The defendant again said that she was in quarantine and would be released on 7 December 2022.  She also left her email address.

11.  On the day she was released from quarantine, the defendant was served with the papers for this application, despite her previous indication that the matter could be discussed when she was released.

12.  Despite a lapse of over 7 months since the hearing of 16 December 2022, the plaintiffs have never submitted a Statement of Costs for the Recorder’s consideration.

B2.    Part II

13.  As to Part II, the Recorder made the following orders:

(1)  Part II of the Summons be adjourned for substantive argument with 3 hours reserved.

(2)  In terms of directions for the parties to file affidavit evidence:

(a)   The defendant should file and serve a short affidavit identifying the whereabouts of the Items by 23 December 2022.

(b)   The defendant should file and serve a fuller affidavit outlining any defences for not returning the Items within 21 days thereafter.

(c)   The plaintiffs were granted leave to file and serve affidavit evidence in reply within 21 days thereafter.

(3)  Costs of Part II of the Summons were reserved.

14.  The defendant duly complied with the Recorder’s order and filed her affidavit evidence.  Notably, in the defendant’s 1^st Affirmation, the defendant indicated that she was not in possession of the Items.

15.  While the defendant has put forward substantive defences in her 2^nd Affirmation, the plaintiffs never filed any evidence in reply.  Instead, on 17 February 2023, the plaintiffs wrote to the defendant proposing to withdraw §4(2) to (4) of their Summons on the basis that costs of the plaintiffs’ application under §4(2) to (4) of their Summons and all costs reserved be paid to the plaintiffs by the defendant forthwith.

C.   RELEVANT LEGAL PRINCIPLES

16.  The relevant legal principles have been usefully summarised by To J in Coqueen Company Ltd v Chui Wai Kwan, HCMP 438/2010 (unrep, 8/12/2015) at §§48 to 52:

“48. First, the general rule is for the plaintiff to be given leave to discontinue or withdraw only on terms of his paying the defendants’ costs, unless the court is satisfied that it has a proper basis for making a different order. The burden of persuading the court to depart from the general rule is on the plaintiff.

49. Second, while the court should not make decisions on academic issues of law where there is no dispute to resolve, it may have to do so where the issue of costs so requires. The issue of costs has to be dealt with in accordance with the usual principle of costs to follow the event, that is, which party is likely to have succeeded had the action taken its full course. Hence, another general rule is for the plaintiff to pay the defendant’s costs, if discontinuance is equated with an acknowledgment of defeat or likely defeat.

50. Third, the court may only determine the question of costs on proper factual basis. How far the court should look into the previously unresolved substantive issues depends on proportionality and the good sense of the court. On the one hand, the more substantial are the costs, the more detailed investigation is required. But on the other hand, the costs of such investigation should not be out of proportion to the costs at stake because to undertake such a course of inquiry would be contrary to the underlying objective of Order 1A. Where appropriate, the court may take a broad brush approach to reach within a comparatively short time and without having to give a fully reasoned judgment a conclusion of the factual basis required to determine the costs issue. It may draw inferences from the terms of the settlement and facts which are not in dispute.

51. Fourth, the court should not abdicate from its function of adjudicating on costs merely because there are complicated factual disputes. But, if it is impossible to come to a conclusion as to the likely outcome of the trial without an investigation involving costs which would be out of all proportion to the costs at stake, the court must accept it is truly impossible to determine the question of costs and the appropriate order is to make no order as to costs. In that scenario, no order probably best serves the justice of the situation and the interests of the parties.

52. Fifth, the court’s discretion under Order 21 rule 3 is very wide.  It may impose terms as to costs even where the discontinuance is for reasons other than an acknowledgement of defeat or likely defeat.  The court may take into account the parties’ conduct of the litigation.  The overriding principle is what fairness and justice require in the circumstances.”

(Emphasis supplied)

17.  On the second point referred to above, To J also had this to say at §40:

“40. To persuade the court to depart from the general rule, the minimum a plaintiff has to do is to show that the discontinuance is for reasons other than an acknowledgment of defeat or likely defeat. The most direct way of proof is to show that he will succeed in a postulated trial. The burden of proof is on the plaintiff and the standard of proof is the usual civil standard. Proof of a prima facie case is not enough. The court has to be satisfied on proper factual basis, whether based on agreed fact or determined fact, that the plaintiff will succeed. Discontinuance under such circumstances is consistent with the underlying objective of Order 1A. It is also beneficial to the defendant in that further costs to be incurred by him leading to nowhere but his eventual defeat are saved. The defendant can have no complaint that he was made to incur costs in an action which he is bound to lose but which the plaintiff chooses not to proceed. If the plaintiff is able to discharge this burden of proof, fairness and justice must require that he be permitted to discontinue his action without costs consequence.” (Emphasis supplied)

D.   DISCUSSION

18.  The starting point must be that the plaintiffs, being the parties withdrawing the action, should bear the costs of and occasioned by §4(2) to (4) of the Summons.

19.  The plaintiffs have failed to show any reason to depart from the starting point.  Quite clearly, the plaintiffs have failed to demonstrate that there is good reason behind the withdrawal instead of an acknowledgement of defeat or likely defeat.

(1)  In the plaintiffs’ Skeleton Submissions, the plaintiffs submit that “it is overwhelming that the Defendant was acting together with her mother as one party” so that they were in joint possession of the Items.  Asking rhetorically, if that were so, why did the plaintiffs decide to withdraw the Part II application?  The answer provided by the plaintiffs at the relevant time was contained in the plaintiffs’ solicitors’ letter dated 17 February 2023, namely: “After consideration of your client’s affirmations, we are instructed that our clients will not further pursue [the Part II application]”.  In the proper context, this can clearly be equated with an acknowledgement of defeat or likely defeat by the plaintiffs.

(2)  Further, the plaintiffs urge upon this court to adjudicate costs on the basis the Items belonged to the Deceased’s estate, and they were duty bound to retrieve them.

(3)  As submitted by the defendant, that cannot be true, especially based on the state of the evidence presently before the court.  The defendant filed her 2^nd Affirmation on 13 January 2023 explaining why the Items that are in her mother and brother’s possession do not belong to the Deceased’s estate.  The plaintiffs have never filed any affirmation in reply to that, and there is no evidence to dispute the defendant’s defences raised in her 2^nd Affirmation.

(4)  The plaintiffs therefore cannot show that if the proceedings went ahead, they would succeed.  The defendant’s evidence remains unchallenged and uncontradicted by any evidence from the plaintiffs.

20.  The plaintiffs also cannot be said to be an “effective winner”.  The plaintiffs should only be regarded as a winner if they successfully obtain the Items sought in their Summons - which they have not. In fact, at §19 of the plaintiffs’ Skeleton Submissions, the plaintiffs expressly accept that the documents so far disclosed by the defendant are not the ones most sought-after by the plaintiffs.

E.   CONCLUSION AND DISPOSITION

21.  For the reasons set out above, I hold that the plaintiffs have failed to show any reason to depart from the starting point that the party withdrawing an action would have to bear the costs of the action.

22.  Accordingly, I order that the costs of and occasioned by paragraph 4(2) to (4) of the plaintiffs’ OS and Summons (including all costs reserved and costs of the present application) be paid by the plaintiffs to the defendant, such costs are to be taxed if not agreed.

23.  Lastly, I express my gratitude to counsel on both sides for their helpful assistance in this matter.