NORMAN GUY DONALD AND ANOTHER v. LI PAK HUEN in his capacity as executor of the estate of LI PAK WING AND OTHERS

CACV 126 & 137/2024, [2026] HKCA 1300

On Appeal From [2024] HKCFI 645

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NOS 126 AND 137 OF 2024

(ON APPEAL FROM HCMP NO 1836 OF 2017)

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(Heard together)

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D E C I S I O N

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Hon Chow JA (giving the Decision of the Court):

INTRODUCTION

1.  This is the Court’s decision at the second stage of the Plaintiffs’ application (“the Wasted Costs Application”) for a wasted costs order against the 2^nd, 3^rd and 11^th Defendants’ counsel and solicitors in the appeal (“Mr Yeung”, “Mr Fong” and “CMC” respectively, and “the Legal Representatives” collectively).

2.  The basic facts of this case and the Court’s reasons for dismissing the 2^nd, 3^rd and 11^th Defendants’ appeals and various applications made by them have been fully set out in the Court’s Reasons for Judgment dated 31 October 2025 ([2025] HKCA 898, “Reasons for Judgment”), and the background of the Wasted Costs Application has been set out in the Court’s Decision dated 8 December 2025 ([2025] HKCA 1064, “Stage 1 Decision”).  It is not necessary to repeat them in this decision, which should be read together with the Reasons for Judgment and the Stage 1 Decision.

3.  In coming to the present decision on the Wasted Costs Application, we have considered, in addition to submissions and affirmations filed by the Legal Representatives referred to at §4(1) to (3) of the Stage 1 Decision, further written submissions filed by (i) Mr Yeung dated 29 January 2026, and (ii) a principal of CMC dated 2 February 2026.

4.  In this decision, unless the context indicates otherwise, we shall continue to use the expressions and abbreviations as defined in the Reasons for Judgment.

THE WASTED COSTS APPLICATION

5.  As mentioned at §3 of the Stage 1 Decision, the Plaintiffs’ grounds of the Wasted Costs Application against the Legal Representatives are that:

(1)  They adopted, maintained or pursued, and/or introduced additional, grounds of appeal which were wholly unsustainable, including grounds which raised very serious but baseless allegations against both the trial judge as well as the Plaintiffs, being professional administrators appointed by the Court (“Ground (1)”), and

(2)  They made, on behalf of the 2^nd, 3^rd and 11^th Defendants, applications to amend or further amend their respective notices of appeal and/or seek leave to adduce fresh evidence at a late stage of the proceedings when those applications were clearly unmeritorious (“Ground (2)”).

The Plaintiffs contend that, in so conducting themselves, the Legal Representatives were guilty of improper or unreasonable act, or other misconduct or default, resulting in unnecessary costs being incurred by the Plaintiffs to resist the aforesaid wholly unmeritorious or unsustainable appeals and applications.

THE STAGE 1 DECISION

6.  At §5 of the Stage 1 Decision, the Court held that the criteria in Order 62, r 8B(1)(a) of the Rules of the High Court, Cap 4A (“RHC”) were satisfied, and the Wasted Costs Application should proceed to the second stage under Order 62, r 8B(1)(b) in relation to the following matters (“the Matters”):

(1)  Pak Huen’s application by summons dated 15 May 2025 for leave to amend his notice of appeal to raise 2 additional grounds of appeal, namely, Grounds 10 and 11, dealt with at §§57-62 of the Reasons for Judgment;

(2)  Pak Huen’s application by summons dated 27 May 2025 for leave to adduce new evidence, namely, his 6^th affirmation, dealt with at §§29-33 of the Reasons for Judgment;

(3)  Tsang’s application by summons dated 12 May 2025 for leave to amend his supplementary notice of appeal to (inter alia) raise 4 additional grounds of appeal, namely, Grounds 3A-3C and 10, dealt with at §§63, 74-75 and 85 of the Reasons for Judgment;

(4)  Ground 10 of Pak Huen’s appeal, which raised various allegations raised against the Plaintiffs, and was dealt with at §59 of the Reasons for Judgment; and

(5)  Grounds 2A-2B, 3A-3C, and 7 of Tsang’s appeal, dealt with at §§70-71, 74-75, 81 of the Reasons for Judgment.

7.  The matters mentioned at §6(1), (3), (4) and (5) above are relevant to Ground (1).  The relevant grounds of appeal included serious allegations not only against the Plaintiffs, who are professional administrators, but also the Judge.  In particular:

(1)  Ground 10 of Pak Huen’s appeal alleged the Plaintiffs of impropriety and loss of neutrality, accusing them of having sided with the 8^th and 9^th Defendants, such that they had “two bites of the cherry and took turns in attacking, ambushing and/or outflanking D3 causing material procedural irregularity and grave injustice, all of which the learned Judge erred in failing to address”.  It was also alleged that the Judge “failed to give any consideration to the above matters at all, the consequence of which is that P’s non-neutrality was endorsed by the Court”. As held by this Court at §59(7) of the Reasons for Judgment, the making of these serious allegations against the Plaintiffs and the Judge by Pak Huen and his lawyers without the slightest of foundation is reprehensible.

(2)  Ground 11 of Pak Huen’s appeal alleged that the Judge made an adverse costs order against him without hearing any submissions on costs and without there being any relevant application made by the Plaintiffs.  This complaint is completely groundless, because (i) the Plaintiffs did, in their closing submissions, expressly reserve the right to seek costs against Pak Huen on a higher scale having regard to his conduct in the proceedings, and (ii) the Judge’s order on costs was expressly made on a nisi basis (see §61(1) and (2) of the Reasons for Judgment).

(3)  Grounds 2A-2B of Tsang’s appeal alleged, amongst other things, that his joinder as a party to the proceedings was a design calculated to “ambush and/or outflank any genuine Defence in that D9 who was clearly playing the Plaintiffs’ game was allowed to stay in the Defence camp so that the sale-pushing parties (ie the Plaintiffs, D8 and D9) always had two bites of the cherry”, and the Judge, who made the order for joinder, failed to “recuse” herself and/or “stop” the unfair trial in any other way.  Tsang’s argument involved an allegation that the Plaintiffs and the 8^th and 9^th Defendants somehow improperly colluded with each other, or joined force against Tsang, which allegation was baseless and unjustified, and a suggestion that there was/were ground(s) for recusal of the Judge, when there was none (see §71 of the Reasons for Judgment).

(4)  Grounds 3A-3B of Tsang’s appeal alleged, amongst other things, that the Judge made an order to join him as a party in his absence, without him being served with anything and without hearing him, and the Plaintiffs failed to make a “full and frank disclosure to the Court that before the Directions hearing on 7 November 2022, … [Tsang] had neither been served personally nor by registered post with anything”.  These allegations were made without any factual foundation, and was based on a spurious reading of the commentary at §65/2/2, Vol 1, Hong Kong Civil Procedure 2025 (see §75 of the Reasons for Judgment).

(5)  Ground 7 of Tsang’s appeal improperly alleged bias/apparent bias on the part of the Judge, namely, that “[f]or reasons not yet fully known at the moment, the Judge erred in descending into the arena in the eyes of an informed by-stander by adopting an attitude seen to be bias against D11 or towards the Sale-pushing parties (ie the Plaintiff, D8 and D9)”. As held by this Court at §81 of the Reasons for Judgment, this allegation of apparent bias against the Judge is entirely unjustified and without foundation. Although Mr Yeung did, at the hearing of the appeal, eventually withdraw or abandon all allegations of bias/apparent bias against the Judge, this was done only after the Court had pointed out to him that if he pursued serious allegations against the Judge without justification, there could be consequences[1].

(6)  Ground 10 of Tsang’s appeal is materially the same as Ground 11 of Pak Huen’s appeal, and is, for the reasons mentioned at §85 of the Reasons for Judgment, wholly unsustainable.

8.  The matters mentioned at §6(1), (2) and (3) above are relevant to Ground (2):

(1)  The applications complained of were made long after the substantive judgment had been given by Madam Justice B Chu on 8 March 2024, and shortly before the hearing of the appeal, the date of which had been fixed on 6 January 2025[2].

(2)  In relation to the additional grounds of appeal sought to be raised by Pak Huen or Tsang by the applications mentioned at §6(1) and (3) above, we have already explained why they are clearly groundless and unmeritorious (see §7(1), (2), (4) and (6) above).

(3)  In relation to Pak Huen’s application for leave to adduce his 6^th affirmation as new evidence, it was likewise wholly unmeritorious, for the reasons given at §31 of the Reasons for Judgment.  The matters that Pak Huen proposed to rely upon as new evidence did not in fact go to any of his grounds or proposed grounds of appeal.  The application was hopeless, and a complete waste of the Court and other parties’ time and costs.

9.  In view of the fact that the Legal Representatives were responsible or partly responsible for advancing and/or pursuing the above applications and grounds/proposed grounds of appeal, the Court was satisfised that the Matters, if unanswered, would be likely to lead to a wasted costs order being made against the Legal Representatives, and further that the wasted costs proceedings were justified notwithstanding the likely costs involved. Accordingly, the Court directed the Wasted Costs Application to proceed to the second stage, and granted leave to the Legal Representatives to file a final round of evidence and/or submissions in answer to the Wasted Costs Application. Mr Yeung filed a 19-page written submissions dated 29 January 2026.  CMC filed a short, 2-page written submissions dated 2 February 2026, essentially adopting Mr Yeung’s submissions.  Mr Fong did not file any further evidence or submissions, having previously filed written submissions dated 19 August 2025 and an affirmation on 20 August 2025.

APPLICABLE PRINCIPLES

10.  The court’s jurisdiction to make a wasted costs order against legal representatives in civil proceedings is governed by s 52A of the High Court Ordinance, Cap 4 (“HCO”), which, so far as relevant, states as follows:

“(4) In any civil proceedings before it, the Court of Appeal or the Court of First Instance may, in accordance with rules of court, by order disallow, or order the legal representative concerned to meet, the whole or any part of any wasted costs.

(5) When determining whether or not to make an order under subsection (4), the Court of Appeal or the Court of First instance shall, in addition to all other relevant circumstances, take into account the interest that there be fearless advocacy under the adversarial system of justice.

(6) In subsection (4), wasted costs (虛耗訟費) means any costs incurred by a party as a result of -

(a) an improper or unreasonable act or omission; or

(b) any undue delay or other misconduct or default,

on the part of any legal representative, whether personally or through an employee or agent of the legal representative.

(7)  In this section, legal representative (法律代表), in relation to a party to any proceedings, means a counsel or solicitor conducting litigation on behalf of the party.”

11.  The provisions of s 52A of the HCO are supplemented by Order 62, r 8 of the RHC:

“Personal liability of legal representative for costs - wasted costs order (O. 62, r. 8)

(1) The Court may make a wasted costs order against a legal representative, only if -

(a) the legal representative, whether personally or through his employee or agent, has caused a party to incur wasted costs as defined in section 52A(6) of the Ordinance; and

(b) it is just in all the circumstances to order the legal representative to compensate the party for the whole or part of those costs.

(2) A wasted costs order may -

(a) disallow the costs as between the legal representative and his client; and

(b) direct the legal representative to -

(i) repay to his client costs which the client has been ordered to pay to other parties to the proceedings; or

(ii) indemnify other parties against costs incurred by them.

…

(4) When the Court makes a wasted costs order, it shall -

(a) specify the amount to be disallowed or paid; or

(b) direct a master to decide the amount of costs to be disallowed or paid.

…”

12.  The following principles concerning the exercise of the court’s jurisdiction to make a wasted costs order against legal representatives in civil proceedings are taken from the judgment of the Court of Final Appeal in Ma So So Josephine v Chin Yuk Lun Francis and Chan Mee Yee [2004] 3 HKLRD 294:

(1)  Before any order can be made, the legal representative must be given a reasonable opportunity to appear before the court and show cause why the order should not be made.

(2)  The jurisdiction is only exercisable where the legal representative was responsible for conduct of the kind prescribed by s 52A(6) of the HCO in the relevant proceedings (and not, for example, in a transaction which gives rise to subsequent proceedings).

(3)  In deciding whether to exercise this jurisdiction, the court should approach the matter by considering the following questions:

(a)  Whether the legal representative was responsible for (i) acting improperly or without reasonable cause, or (ii) undue delay or any other misconduct or default in any proceedings.

(b)  Whether such conduct of the legal representative caused costs to be incurred or wasted. This is a question of causation.  The causal link between the legal representative’s conduct and the extent of costs incurred or wasted must be established.

(c)  Whether the court should exercise its discretion to make an order.

(4)  The jurisdiction is both compensatory and punitive.  Any order made is directed towards compensating the party concerned, whether the legal representative’s own client or another party, for the costs incurred or wasted as a result of the legal representative’s conduct. An order made should not exceed the amount of the costs so incurred or wasted. On the other hand, in the absence of any order, the party concerned would be liable for the costs incurred or wasted and there would be no question of the legal representative being liable for such costs.  An order would, however, shift the burden of such costs from the party concerned to the legal representative.  To that extent, the order is in effect punitive.

(5)  The jurisdiction is summary in nature and should be strictly confined to questions which are apt for summary determination.

(6)  Questions which are apt for summary disposal are usually clear cases.  As Lord Woolf observed in Wall v Lefever [1998] 1 FCR 605 at 614, it should be used where the need for such an order is “reasonably obvious”; when there is “a clear picture” of the fault of the lawyer.  Applications against the lawyers acting for an opposing party are unlikely to be apt for summary determination although, obviously, this is not an absolute rule.

(7)  Where an order is sought by a party against an opposite party’s legal representative who would be the respondent, the legal representative would, in the absence of any waiver by his client, be unable to disclose what advice and warnings he had given to his client and what instructions were received from his client.  So, the respondent would find himself at a great disadvantage in defending the application.  In these circumstances, the court must make full allowance for his inability to tell the whole story.  Where there is room for doubt, the respondent is entitled to the benefit of it.  Only rarely will the court be able to make full allowance or to conclude that there is no room for doubt.  Further, the court must satisfy itself that it is in all the circumstances fair to make the order.

(8)  The summary jurisdiction is discretionary.  The court may make an order, but is not bound to do so, and the aggrieved party has no right to an order.

(9)  Where the court exercises its discretion at the first stage deciding that the application should proceed further (as in the present case), the burden of proof does not shift to the legal representative.  The burden remains on the applicant.  It is for him to satisfy the court that an order should be made.  However, where the court calls upon the legal representative to show cause, having satisfied itself that the applicant has shown a strong prima facie case, the evidential burden may, depending on the circumstances, shift to the legal representative.

13.  Three further points may be made in respect of the above principles.

14.  First, as pointed out at §2 of Practice Direction 14.5 (Application for Wasted Costs Order under Order 62, Rules 8, 8A, 8B and 8C),Ma So So involved a wasted costs order against a solicitor.  However, the introduction of s 52A(4) to (7) of the HCO in 2008 means that wasted costs orders may now be made against both counsel and solicitor conducting litigation on behalf of a party.  The above principles in Ma So So are relevant to applications for wasted costs against counsel and solicitors alike.

15.  Second, Ma So So was decided on the basis of the pre-2008 Order 62, r 8 of the RHC, under which the jurisdiction to make a wasted costs order against a solicitor was applicable to the situation where “costs are incurred improperly or without reasonable cause or are wasted by undue delay or by any other misconduct or default”, whereas the current jurisdiction to make a wasted costs order against a legal representative under s 52A of the HCO applies to the situation where costs are incurred by a party “as a result of (a) an improper or unreasonable act or omission, or (b) any undue delay or other misconduct or default”.  It does not appear to us that this slight change in the formulation of the circumstances in which a wasted costs order may be made against a legal representative would, at least in the vast majority of cases, produce any different outcomes.  The different formulation is certainly not material in the present case.

16.  Third, in addition to repeating or emphasising the principles mentioned at §12(6) and (8) above[3], Practice Direction 14.5 further provides that:

(1)  If the Court decides to make an order of wasted costs against a legal representative, it will consider how much of the wasted costs are the responsibility of the legal representative, specifying the extent of the costs recoverable in the award (§30).

(2)  The HCO imposes a duty on the court, when considering whether to make a wasted costs order, to take into account the public interest that there be fearless advocacy under the adversarial system of justice (§31).

(3)  Where a wasted costs order is made, such costs would normally be payable by the legal representative on a party and party basis.  But account should be taken of any conduct on the part of the legal representative or the applicant in the course of the wasted costs proceedings which may indicate that a different order should be made (§33).

DISCUSSION

(a)  The 3 issues for determination

17.  As mentioned at §12(3) above, in deciding whether to exercise the jurisdiction to make a wasted costs order against a legal representative, the court should approach the matter by considering 3 issues:

(1)  whether the legal representative was responsible for (i) acting improperly or without reasonable cause, or (ii) undue delay or any other misconduct or default in any proceedings (“the responsibility issue”);

(2)  whether such conduct of the legal representative caused costs to be incurred or wasted (“the causation issue”); and

(3)  whether the court should exercise its discretion to make an order (“the discretion issue”).

(b)  The responsibility issue

18.  While we would accept, as a matter of general proposition, that the mere fact that an unmeritorious ground of appeal is put forward or pursued, or an unmeritorious application is made late in the proceedings, should not be regarded as “acting improperly or without reasonable cause”, or “other misconduct or default” on the part of a legal representative for the purpose of invoking the court’s “wasted costs” jurisdiction under s 52A(6) of the HCO, it is a different matter where an entirely baseless ground or application is advanced or pursued, or where a serious allegation is made against a judge or professional person without any proper basis or foundation.

19.  In the present case, the grounds or proposed grounds of appeal mentioned at §7(1) to (6) above can properly be said to be entirely baseless.  Some of the grounds, namely, those mentioned at §7(1), (3) and (5) above, constituted serious allegations against the Judge and/or the Plaintiffs (who were acting as professional administrators).  Those allegations were raised without any proper basis or foundation, and should never have been made.  Pak Huen’s application to adduce his 6^th affirmation as new evidence in his appeal was also thoroughly misconceived, and was apparently made without the slightest regard being paid to the question of how the proposed new evidence could possibly advance the grounds of appeal raised or sought to be raised by him in his notice of appeal/draft amended notice of appeal.  The seriousness of the matter is compounded by the fact that the applications mentioned at §6(1), (2) and (3) above were made at a very late stage of the appeal proceedings.  That being the position, extra care and attention ought to have been given to the question of the merits of those applications as well as whether it would be justifiable to launch them at that late stage.

20.  Insofar as the individual responsibilities of the Legal Representatives for advancing or pursuing the Matters are concerned:

(1)  Mr Yeung was not counsel acting for either Pak Huen or Tsang at the trial before the Judge.  According to Mr Yeung, he was “originally the Counsel for D11’s appeal”[4], although neither Tsang’s notice of appeal nor supplementary notice of appeal bore his name, while Tsang’s draft amended supplementary notice of appeal did. Mr Yeung also said that he took up Pak Huen’s case in about mid-April 2025.  Pak Huen’s draft amended notice of appeal bore his name.  It is clear that Mr Yeung bore responsibility for (i) Pak Huen’s draft amended notice of appeal and application for leave to adduce new evidence, (ii) Tsang’s draft amended supplementary notice of appeal, and (iii) pursuing all the grounds/proposed grounds of appeal of Pak Huen and Tsang at the hearing (save that the allegation of bias/apparent bias against the Judge was withdrawn or abandoned by him in the course of the hearing as mentioned at §7(5) above).

(2)  Mr Fong was junior counsel acting for Tsang at the trial of the action.  According to Mr Fong, he had no more involvement in the case after the conclusion of the trial until 8 May 2025 when he was contacted by CMC to act as junior co-counsel to assist in Tsang’s appeal.  He agreed to do so.  In the evening of 12 May 2025, CMC contacted him again and informed him that Mr Yeung would be counsel acting for Pak Huen and Tsang, and asked him to touch base with Mr Yeung.  He then spoke to Mr Yeung and thereafter assisted Mr Yeung in relation to both appeals, including the preparation of skeleton submissions in the appeals, Pak Huen’s draft amended notice of appeal, and Pak Huen’s application for leave to adduce new evidence, and appearing as junior co-counsel at the substantive hearing of Pak Huen and Tsang’s appeals.  In our view, although Mr Fong was acting as junior co-counsel under the guidance or direction of Mr Yeung, he still bore responsibility for (i) Pak Huen’s draft amended notice of appeal and application for leave to adduce new evidence, and (ii) pursuing all the grounds/proposed grounds of appeal of Pak Huen and Tsang at the hearing (including the allegation of bias/apparent bias against the Judge until it was withdrawn or abandoned in the course of the hearing).

(3)  CMC were solicitors acting for Tsang at the trial of the action, and in his appeal (CACV 126/2024) throughout.  They also became the solicitors on record for Pak Huen in his appeal (CACV 137/2024) on 16 April 2025.  The various applications mentioned at §6(1), (2) and (3) above were all issued at a time when CMC were the solicitors on record for Pak Huen and Tsang respectively.  In our view, CMC must bear responsibility for (i) Pak Huen’s draft amended notice of appeal and application for leave to adduce new evidence, (ii) Tsang’s supplementary notice of appeal and draft amended supplementary notice of appeal, and (iii) pursuing all the grounds/proposed grounds of appeal of Pak Huen and Tsang at the hearing (including the allegation of bias/apparent bias against the Judge until it was withdrawn or abandoned in the course of the hearing).

21.  We shall now consider the main points raised by Mr Yeung, Mr Fong and/or CMC in their respective submissions or affirmations in answer to the Wasted Costs Application.  In view of the fact that (i) CMC’s affirmation dated 21 August 2025 is materially the same as Mr Yeung’s written submissions dated 19 August 2025, and (ii) CMC’s submissions dated 2 February 2026 expressly adopt the contents of Mr Yeung’s skeleton submissions dated 29 January 2026, the discussion below addressing the points raised by Mr Yeung applies equally to the same points raised by CMC.

22.  First, Mr Yeung says that the contents of his instructions and a lot of the relevant facts are subject to legal professional privilege, and he should be given the “benefit of doubt”.  He also says that he is not able to fully answer any allegation of “improper advice or instructions” in the absence of extensive waiver of legal professional privilege by his clients.  As mentioned at §12(7) above, the Court should give full allowance for Mr Yeung’s inability to tell the whole story in the absence of any waiver of the privilege by the clients, and give him the benefit of the doubt where there is room for doubt.  However, it does not appear to us that this is a case where the clients (ie Pak Huen and Tsang) insisted on putting forth the wholly unmeritorious applications or grounds/proposed grounds of appeal despite advice to the contrary by Mr Yeung.  It is apparent from the submissions of Mr Yeung that he considered the relevant applications and grounds/proposed grounds of appeal to be meritorious and proper, and ought to be pursued.  In fact, Mr Yeung has gone so far as to say that Pak Huen’s allegations against the Plaintiffs and the Judge under Ground 10 of his appeal are “fair and calm”[5].  Also, in relation to the serious allegation of the Judge’s descending into the “arena” and being biased or seen to be biased raised under Ground 7 of Tsang’s appeal, Mr Yeung’s position at the hearing of the appeal was that he withdrew or abandoned that allegation after the Court’s “enlightenment”[6]. This plainly shows that the allegations were not pursued only because of clients’ insistence.  In any event, counsel do not act as a mouthpiece for his client.  If a ground of appeal is plainly unsustainable but client insists that the ground be maintained, counsel’s duty would be to inform the court that he has been instructed by client to put forward such ground of appeal but does not intend to make any further submission in support of the ground beyond what has been stated in the notice of appeal.  What is unacceptable is for counsel to put forth spurious arguments in support of a plainly unsustainable ground of appeal.  It is to Mr Yeung’s credit that he eventually decided to withdraw or abandon the serious allegation made against the Judge after a clear warning by the Court of the consequences of maintaining the allegation, but the withdrawal or abandonment of the allegation came too late.  We have also considered what other possible defences or objections to the Plaintiffs’ Wasted Costs Application that Mr Yeung could potentially have put forward but for the constraints imposed on him by reason of legal professional privilege, but we are unable to think of any proper defences or objections that he can possibly raise.  In our view, even giving full allowance to Mr Yeung for his inability to tell the whole story because of the constraint imposed on him by legal professional privilege, he must bear responsibility for putting forward and/or pursuing the baseless applications, grounds and allegations mentioned at §6 above.

23.  Second, as for Mr Yeung’s submission that the allegations raised against the Plaintiffs and the Judge under Ground 10 of Pak Huen’s appeal are “fair and calm”, we have explained at §59 of the Reasons for Judgment why the serious allegations made against the Plaintiffs and the Judge were without the slightest of foundation and was reprehensible.  It is extraordinary, and entirely unjustifiable, for Mr Yeung to maintain and insist that the allegations are “fair”.

24.  Third, Mr Yeung says that Ground 10 of Pak Huen’s appeal should be regarded as non-existent (or “not added”) upon the dismissal of his summons of 15 May 2025[7]. We would only observe the fact that Pak Huen failed to obtain leave to add Ground 10 by amending his notice of appeal is no excuse for seeking to raise it in the first place or maintaining it at the hearing of the appeal.  The same comment applies to Mr Yeung’s submission that Pak Huen’s summons dated 27 May 2025 for leave to adduce his 6^th affirmation as new evidence was dismissed by the Court and thus the 6^th affirmation “is not evidence before the Court”[8].

25.  Fourth, Mr Yeung submits that since the Plaintiffs have made it clear that there was no wasted costs application against Pak Yuen’s former legal team, the Plaintiffs’ belief that “the new team, by taking up the case, should also be responsible for the old team’s conduct on the case”[9] should be rejected.  This submission can be disposed of briefly.  The Plaintiffs’ application is not that the Legal Representatives should be held responsible for any misconduct or default on the part of Pak Huen’s former legal team.  The focus is on the Legal Representatives’ own act or conduct in the manner complained of by the Plaintiffs (see §5 above).

26.  Fifth, Mr Yeung repeatedly makes the point that Pak Huen’s desire to buy-out the other beneficiaries’ shares in the Estate was genuine, and that was an important point that he sought to put forward in his 6^th affirmation. In our view, even if Pak Huen had a genuine desire, and was in a position, to buy-out the other beneficiaries’ shares in the Estate, that fact was entirely irrelevant.  As pointed out at §31(2)(ii) of the Reasons for Judgment, at the hearing before the Judge, Pak Huen’s resistance to the order sought by the Plaintiffs was never put on the basis that no order for sale should be made because he wished to and could buy-out the other beneficiaries’ shares in the Estate.  It was also not put forward as a ground or proposed ground of appeal in Pak Huen’s notice of appeal or draft amended notice of appeal that the order for sale should not be made because of Pak Huen’s desire and ability to buy-out the other beneficiaries’ shares in the Estate.  The application for leave to adduce the 6^th affirmation as new evidence was a misconceived and completely futile application.

27.  Sixth, Mr Yeung attributes the late applications made by Pak Huen to the change of legal team acting for him in the appeal, and contends that “there [was] no delay whatsoever [at] any stage and that all interlocutory applications [were] taken out as early as possible”.  He also says that those applications were taken out in “the interest of justice and for clients’ interest” and in “good faith”.  In our view, Pak Huen’s change of legal team is not a good excuse for making the late applications to amend the notice of appeal or adduce new evidence.  Also, Mr Yeung’s personal or subjective belief that the applications were made in the interest of justice, or for client’s interest, or in good faith cannot turn those improper or unreasonable applications into proper or reasonable ones.

28.  Seventh, Mr Yeung argues that an allegation that a judge is seen by an “informed bystander” as being biased (ie apparent bias) is less serious than an allegation of actual bias.  In our view, while an allegation of apparent bias on the part of a judge is undoubtedly less serious than an allegation of actual bias, it is a serious allegation nonetheless.  It is not to be made lightly by counsel or solicitors, and certainly not when there is no foundation whatsoever for making the allegation (as in the present case).  The seriousness of the matter is exacerbated by the manner in which the allegation of apparent bias is couched in Ground 7 of Tsang’s appeal, as follows:

“For reasons still not yet fully known at the moment, the learned Judge erred in descending into the arena in the eyes of an informed by-stander by adopting an attitude seen to be bias against D11 or towards the Sale-pushing parties (ie the Plaintiffs, D8 and D9)”.

The opening sentence of this ground of appeal (ie “For reasons still not yet fully known at the moment”) is wholly gratuitous, and implies or suggests, without any basis or foundation, that there may be some sinister or hidden reason(s) behind the Judge’s descending into the arena.

29.  Mr Fong’s main point is that he had only limited role to play in relation to the conduct of the appeals, and was essentially acting in accordance with the direction or instruction given by, and providing support to, Mr Yeung, and the fact that he acted within a very tight time frame.  According to Mr Fong, he “[had] not been briefed or tasked to advise on or review any of the grounds of these appeals, nor on the taking out of interlocutory applications”.  Neither was he briefed, nor asked, to join or attend any conference with lay clients.  Mr Fong also says that he was not briefed to, and did not, provide any legal advice during his involvement in the appeals.  We accept that Mr Fong acted under the guidance and direction of Mr Yeung in relation to the conduct of present appeals.  Nevertheless, his brief[10] was not a limited one. The scope of his brief is what one would reasonably expect of junior co-counsel’s brief in an appeal.  We do not consider that he should be totally exonerated in this matter, although we accept that his responsibility should be less than Mr Yeung.

30.  In addition to repeating or adopting Mr Yeung’s submissions, CMC say in relation to their conduct of the appeals that they acted with the benefit of and in accordance with counsel’s advice.  It bears emphasis that solicitors are officers of the court and are under a duty to exercise their independent judgment, skill and expertise.  The fact that CMC acted with the benefit of and in accordance with counsel’s advice is a mitigating factor, but not a sufficient answer to the Wasted Costs Application.

31.  In all, we are of the view that the Plaintiffs’ complaints in relation to the Matters constitute “improper or unreasonable act or omission” and/or “other misconduct or default” within the meaning of s 52A(6)(a) and (b) of the HCO on the part of all 3 Legal Representatives, and they are responsible for such “improper or unreasonable act or omission” and/or “other misconduct or default”.

(c)  The causation issue

32.  This issue can be dealt with briefly.  There is no doubt that the Plaintiffs incurred costs to deal with the Matters. Causation is established.

(d)  The discretion issue

33.  Mr Yeung argues that, in respect of the Plaintiffs’ costs in relation to Pak Huen’s summonses of 15 and 27 May 2025 and Tsang’s summons of 12 May 2025, Pak Huen and Tsang did not lodge any objections to the Plaintiffs’ relevant costs statement for the purpose of summary assessment, and the Court has already summarily assessed the amounts of costs payable by them in respect of those matters.  Hence, the Plaintiffs’ costs have been fully catered for, and there is nothing to suggest that the Plaintiffs may not be able to fully recover them from Pak Huen or Tsang.  Mr Yeung submits that it would be unfair for anyone in the legal team to shoulder the costs particularly when Pak Huen/Tsang appeared to have no objection to paying such costs in full[11].

34.  The fact that Pak Huen and Tsang are also liable for the relevant costs is not a ground for not ordering the Legal Representatives to pay the wasted costs, when they were responsible for such costs being incurred.  The fact that Pak Huen/Tsang did not lodge any statement of objections to the Plaintiffs’ costs statements is irrelevant to the Legal Representatives’ liabilities to pay the wasted costs incurred by the Plaintiffs. The Court understands that the Plaintiffs have not yet recovered the relevant costs from Pak Huen and Tsang, although those costs are fully covered because of a payment into court made by Pak Huen as a condition for the Court’s granting an interim stay of execution of judgment pending the determination of, inter alia, their Notices of Motion for leave to appeal against the Court’s judgment dated 12 June 2025.  Even if the Plaintiffs should eventually obtain satisfaction of their costs from Pak Huen and Tsang, the Court may, under Order 62, r 8(2)(b)(i) of the RHC, direct the Legal Representatives to repay to them costs which they have been ordered to pay to the Plaintiffs.

35.  We bear in mind that, when considering whether to exercise our discretion to make a wasted costs order, the Court should take into account the interest of fearless advocacy under our adversarial system of justice. We do not, however, consider that fearless advocacy could justify the making of serious but baseless allegations against a judge or professional person.  We also bear in mind that an order for wasted costs should only be made against a legal representative in a clear case, but we consider the present case to be a clear enough one.  The present application is also apt for summary determination because the basic facts underlying the Plaintiffs’ application occurred in the course of the appeal proceedings, and are within the knowledge of the Court.  Having considered all relevant circumstances in the present case, we are of the view that it is just to order the Legal Representatives to compensate the Plaintiffs for the wasted costs incurred by them to deal with the Matters under Order 62, r 8(1)(b) of the RHC, and we exercise our discretion accordingly.

36.  We have dealt with all the major points raised by Mr Yeung, Mr Fong and CMC in their respective submissions or affirmations. For the avoidance of doubt, we have considered all other minor points raised by them, but do not propose to deal with them separately, save to point out that they are all without merit and cannot amount to any good answer to the Wasted Costs Application.

(e)  Basis of assessment and quantum of wasted costs

37.  In relation to the basis of assessment of the wasted costs, we consider that those costs should be assessed on a party and party basis in accordance with Practice Direction 14.5, §33, even though we have made an order that Pak Huen and Tsang should pay the Plaintiffs’ costs on an indemnity basis.  The difference between the costs on an indemnity basis and on a party and party basis would reflect Pak Huen and Tsang’s own responsibilities for raising and pursuing the Matters.

38.  Taking into account their respective roles in relation to the Matters, we order that Mr Yeung, Mr Fong and CMC shall be responsible for 40%, 20% and 40% of the wasted costs.

39.  The quantum of the wasted costs shall be assessed summarily.  The Plaintiffs have previously submitted a statement of costs dated 11 June 2025 in relation to Pak Huen’s application for leave  to adduce new evidence, which would be relevant to the matter mentioned at §6(2) above.  In respect of the remaining matters mentioned at §6(1), (3), (4) and (5) above, the Plaintiff’s two previous  amended statements of costs dated 12 June 2025 do not set out the costs incurred by them to deal with specific grounds or proposed grounds of appeal raised by Pak Huen/Tsang, while the costs claimed in relation to Pak Huen’s summons of 15 May 2025 and Tsang’s summons of 12 May 2025 apparently relate only to costs incurred in “Communications Including Conferences Telephone Calls and Letters” and “Perusal of documents”[12].  We direct the Plaintiffs to produce two updated statements of costs for summary assessment dealing specifically with (i) the matters mentioned at §6(1) and (4) above, and (ii) the matters mentioned at §6(3) and (5) above.

DISPOSITION

40.  The Wasted Cost Application is allowed.  The quantum of the wasted costs shall be summarily assessed.  The Plaintiffs shall file and serve updated statements of costs for summary assessment mentioned at §39 above within 14 days from the date of this decision, and Mr Yeung, Mr Fong and CMC shall have leave to file and serve statements of objections (limited to 2 page each) within 14 days thereafter.  In the event that the Plaintiffs shall obtain satisfaction of the wasted costs from the money paid by Pak Huen into court, Mr Yeung, Mr Fong and CMC shall repay the relevant sums to Pak Huen accordingly.

41.  In view of the fact that the Plaintiffs have taken no further step in the Wasted Costs Application after making the initial application at the end of the hearing of the appeal, we make no order as to the costs of the application.

[1] See Transcript of the hearing on 12 June 2025, pp 13A-G, 26Q-29B.

[2] See Notice of Hearing dated 6 January 2025.

[3] See §§8 and 29 of Practice Direction 14.5.

[4] See §7 of Mr Yeung’s Skeleton Submissions dated 19 August 2025.

[5] See §34 of Mr Yeung’s Skeleton Submissions dated 29 January 2026.

[6] See Transcript of the hearing on 12 June 2025, pp 27N-29A.

[7] See §§12-13 of Mr Yeung’s Skeleton Submissions dated 29 January 2026.

[8] See §19 of Mr Yeung’s Skeleton Submissions dated 29 January 2026.

[9] See §12 of Mr Yeung’s Skeleton Submissions dated 19 August 2025.

[10] See Exhibit “FLHF-3” to the Mr Fong’s Affirmation filed on 20 August 2025.

[11] See §§4-10, 14, 18, 53-55 and 58-59 of Mr Yeung’s Skeleton Submissions dated 29 January 2026.

[12] See Part 3 of the Plaintiffs’ Amended Statement of Costs (for Pak Huen’s Appeal) dated 12 June 2025, and Part 2 of the Plaintiffs’ Amended Statement of Costs (for Tsang’s Appeal) dated 12 June 2025.