AU YUK LIN AND ANOTHER v. WONG WANG HIN, EDDY

HCMP 59/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 59 OF 2011

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(Heard Together)

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D E C I S I O N

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1.  This is an application for variation of a costs order in HCMP 59/2011 (“the 1st proceedings”) and a costs order nisi in HCMP 272/2011 (“the 2nd proceedings).

2.  The plaintiffs in the 1st proceedings, who are husband and wife, claimed the return of half of the interests of a shop from the defendant, their younger son.

3.  The plaintiff, in the 2nd proceedings, who is the wife, claimed the return of 180,000 shares of a company from the younger son.

4.  The proceedings were ordered to be tried together. 

5.  The son at the early stage of his evidence at the trial agreed to return the interests of the shop to the parents without admitting liability.  He also contested liability for costs.  Hence, despite the disposal of the subject matter, it was still necessary to go into the merits of the 1st proceedings to resolve the costs issue. 

6.  I gave judgment on 7 September 2012 and held against the son.  I ordered him to pay the costs of the 1st proceedings to his parents.

7.  For the 2nd proceedings, I also held against him and made a costs order nisi that he should pay the costs of those proceedings to his mother.  He is now appealing against my judgment in the 2nd proceedings.

8.  In this application, he asks me to vary the costs order nisi to no order as to costs or to require him paying only a portion of costs in the 1st proceedings.  For that purpose, he also asks me to apportion the costs for the two proceedings. 

9.  The parties agree that the costs should be apportioned in the ratio of 70% to 30% for the 1st and 2nd proceedings.  I so order by their consent.  This apportionment may be useful in the event that the defendant should succeed on his appeal in the 2nd proceedings. 

10.  The parties in this application produced quite a number of without prejudice letters exchanged between them.  There was also a sanction offer from the defendant. 

11.  The defendant said on affirmation that he was all along willing to return the half interest in the shop to his parents.  He also expected that the proceedings would be settled without the need for a trial. 

12.  Despite when he said, a perusal of the letters shows that he was all the time requiring the mother to forgo her claim for the shares in return for his concession in respect of the shop.  That was also the case in his sanctioned offer.  Now that he has lost the battle on the shares as well, I do not think his offers in the without prejudice letters and sanctioned offer can be viewed as reasonable.

13.  He also complained that despite his having gone along with his parent’s idea of negotiating for the settlement of both proceedings together, his parents suddenly split the consideration for the settlement of the proceedings and made separate offers for their settlement. 

14.  I do not think such is a fair way of describing the conduct of the parents.  The parties had no doubt negotiated for some time on the basis of settling both proceedings together.  However, when the trial was imminent, the parents made separate offers of settlement for the proceedings on 10 August 2012.  Their offers made it plain that the defendant could accept either or both of them and there was no condition in one linking up the other.  If the defendant was indeed willing to concede on the shop but not on the shares, he could have accepted the offer on the shop but not the one on the shares.  He could also have counter-offered to return the shop with no order as to costs or a lenient costs order.  But he did not.  It was clear that he wanted to use the shop as a bargaining chip for the shares which he has now also lost.  I see no basis for this complaint.

15.  He also said that it was the manipulation of his parents by his elder bother behind the scene that had prevented his parents from accepting his offer.  He also thought that it was right that he should be allowed to keep the shares as his elder brother already had a steady business and did not need the shares.

16.  I do not rule out the possibility that the parents might have consulted and received advice from their elder son.  But having heard the plaintiffs and their elder son giving evidence, I do not think that the plaintiffs are feeble minds that can be manipulated by the elder brother. 

17.  I also note that the plaintiffs have been running their paper products business for decades and successfully.  They have supported a number of handicapped close relatives and their families.  They had raised their two sons, provided them with university education outside Hong Kong and supplied all the capital and accommodation required for the setting up and running for a few years of their computer business.  They have also acquired a number of real properties for themselves including the shop from which they operate their business.  They are indeed a very capable couple.  I see no room for the defendant’s conjecture of their manipulation by the elder son.

18.  In the light of the analyses above, I see no merit in this application and I dismiss it.

19.  The parties agree that the costs of this application should follow the event.  I order the defendant to pay the costs of this application to the plaintiffs.

20.  The solicitors for the plaintiffs should file and serve a draft bill of costs within 7 days from today for summary assessment by me.  The solicitors for the defendant should file the objections to the bill, if any, within the next 7 days.  I will then assess the costs summarily on paper.