CHAN YEUK NAM AND OTHERS v. CHAN YEUK SHAN

HCMP 1530/2020

[2022] HKCFI 1275

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1530 OF 2020

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DECISION  ON  COSTS

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1.  By summons dated 17 January 2022 (the “Stay Summons”), the defendant applied for an order staying the execution of the Judgment of this court dated 3 December 2021 (the “Judgment”) pending appeal.

2.  With this court by letter dated 10 March 2022 having granted leave to the defendant to withdraw the Stay Summons and ordered the defendant to personally bear the plaintiffs’ costs to be summarily assessed, the remaining issues on costs are as follows:

(1)  Should the plaintiffs’ costs payable by the defendant be assessed on an indemnity basis (as the plaintiffs contend) or on the usual party-and-party basis (as the defendant contends) (“Issue 1”).

(2)  Should the respondent’s costs of the Stay Summons be borne by the defendant (“Issue 2”).

(3)  Summary assessment of the plaintiffs’ costs, and any costs payable to the respondent, if so ordered (“Issue 3”).

Issue 1

3.  In my view, it is appropriate that the plaintiffs’ costs payable by the defendant should be assessed on the indemnity basis.

4.  First, as submitted by the plaintiffs, the Stay Summons should not have been taken out by the defendant at all.^[1]  In this regard, up to now, the defendant has not provided any explanation for her belated eleventh-hour application to withdraw the Stay Summons.  If it were not a tactical manoeuvre, the defendant ought to have explained why that is so.

5.  Second, it is highly abusive for the defendant to effectively engineer a de facto stay even though the defendant did not apply for or obtain any interim stay pending the determination of the Stay Summons. The defendant has effectively done nothing in compliance with the court’s order since the Judgment dated 3 December 2021.

6.  Third, the stance taken by the defendant’s solicitors, Messrs Norman M K Yeung & Co (“NYC”) was most unreasonable.  When they took out the Stay Summons on 17 January 2022, returnable on 7 March 2022, NYC wrote a letter to the new administrator (ie the respondent) stating their own view that, as a result of the mere issuance of the defendant’s summons for stay:

“In light of the upcoming hearing on 7^th March 2022 before Hon Wilson Chan J in relation to the order for stay of execution, we are of the view that the parties shall remain status quo pending the determination of the summons, and if the Court allows, pending determination of the appeal.” (Emphasis supplied)

7.  NYC’s “view” effectively stated that even though the defendant did not have an interim stay, there was no need to take further action in compliance with the court’s order pending the determination of the Stay Summons and the parties should “remain status quo”.  And that was precisely what they did.

8.  More alarmingly, NYC even saw fit not to confirm to the respondent, as the new administrator appointed by the court, the amount of funds held by NYC on behalf of the Estates, if any at all, let alone transfer the same to the respondent.

9.  When the respondent asked NYC to provide the amount of funds held by NYC on behalf of the Estates back in 26 January 2022, NYC simply responded with the defendant’s undertaking not to deal with the Assets as though neither the defendant nor NYC needed to tell the respondent the amount held by NYC (which is contrary to the Judgment requiring an account).

10.  Given the above circumstances, it is only right to send a clear warning to the defendant and her solicitors to refrain from behaving unreasonably, which resulted (and possibly continue to result) in (a) significant wastage of both the court’s and the parties’ time, and (b) the creation of further unnecessary hearings to the prejudice of the proper administration of the Estates.

11.  For the foregoing reasons, the court orders that the plaintiffs’ costs payable by the defendant should be assessed on the indemnity basis, in light of the defendant’s wholly unreasonable conduct in (a) effectively flouting the court’s order contained in the Judgment; (b) engineering a stay without leave of the court; and (c) taking out the Stay Summons in the first place and withdrawing it at the eleventh hour.

Issue 2

12.  In my view, the defendant should not be made to pay the respondent’s costs.

13.  As submitted by the defendant, the respondent was simply not a party to the Stay Summons taken out on 17 January 2022 and was not served with it.  In fact, the respondent was only joined in these proceedings as a party at the hearing of the plaintiffs’ injunction summons on 4 February 2022.

14.  While the defendant accepts that the respondent was copied in certain correspondence in relation to, inter alia, the Stay Summons, this was done to keep the respondent, as the substitute administrator, abreast of the proceedings generally.

15.  In the letter to the court dated 2 March 2022, the respondent acknowledged that he was “duty bound to remain neutral in these proceedings”.  By the same letter, the respondent even sought leave to be excused from the hearing of the Stay Summons on 7 March 2022, which was granted by the court on 4 March 2022.

16.  In the above circumstances, I agree that any costs that the respondent might have incurred in respect of the Stay Summons should form part of his general costs of administration of the subject Estates, the recourse for which lies elsewhere instead of in the Stay Summons against the defendant.

Issue 3

17.  As to the quantum of the plaintiffs’ costs payable by the defendant, I have considered the Statement of Costs for Summary Assessment dated 15 March 2022 lodged by the plaintiffs.  I have also considered the statement of objections set out at paragraph 17.1 of the defendant’s Costs Submissions.  Taking a necessarily broad-brush approach, and assessing the costs on the indemnity basis, I would summarily assess the plaintiffs’ costs at $181,000.