CHAN FUK TAI AND OTHERS v. CHAN WAI MING

HCMP 3474/2016

[2020] HKCFI 2352

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 3474 OF 2016

________________________

________________________

________________________

________________________

________________________

DECISION ON COSTS
(TO VARY COSTS ORDER NISI)

________________________

A.  Introduction

1.  On 10 June 2020, this court handed down a Decision ([2020] HKCFI 1041) upon the making of an inquiry into verified administration accounts supplied by the defendant as the administrator of the estate of Chan To (陳濤), deceased (“Decision”)[1].

2.  At paragraph 87(3) of the Decision, it was ordered, on a nisi basis, that the defendant do pay 80% of the plaintiffs’ costs of and incidental to the inquiry, including the hearing on 19 December 2019, with certificate for counsel (“Costs Order Nisi”). 

3.  By summonses respectively filed on 6 July 2020 and 14 July 2020: -

3.1  The defendant applies for the Costs Order Nisi to be varied: -

“… in favour of the Defendant having due regard to the principles including but not limited to “costs follow the event” and “right of indemnity against the estate” and the unfettered discretion of the court…”; and

3.2  The plaintiffs apply for the Costs Order Nisi to be varied: -

“… such that the Defendant shall bear the costs of the inquiry (including the Plaintiff’s costs and the Defendant’s own costs) personally, without any recourse to or indemnity from the estate”.

4.  The parties’ costs arguments have focused on six areas: -

4.1  First, the timing and circumstances of the filing of Wong’s Affirmation on 11 November 2019[2];

4.2  Second, the effect of the parties’ “without prejudice save as to costs” letters, particularly the plaintiffs’ offers dated 9 August 2018 and 28 October 2019;

4.3  Third, the costs of the defendant’s failed recusal application;

4.4  Fourth, the costs of the hearing before Master Queenie Lau on 23 September 2019, which was adjourned due to Mr Ching’s absence;

4.5  Fifth, the allocation of costs as between the plaintiffs and the defendant; and

4.6  Finally, whether the defendant should be indemnified from the estate as to any costs ordered to be payable by him to the plaintiffs and/or his own costs.

B.  WONG’S AFFIRMATION

5.  Starting with Wong’s Affirmation, it was filed in relation to renovation expenses under category 4, which I ordered to be included in the accounts.  Its significance for costs purposes may be seen from §85 of the Decision where I stated: -

“85. But as mentioned in §55 above, I would not have included category 4 (HK$867,300) if not for the evidence in Wong’s Affirmation, which had been filed by the defendant without leave in breach of an unless order and the defendant did not apply for leave to rely on Wong’s Affirmation until halfway through the hearing. It was therefore justified, in my view, for the plaintiffs to contest category 4 up to the hearing, though their eventual failure to successfully exclude these items is also relevant.”

6.  It is necessary to understand why Wong’s Affirmation was regarded as having been filed without leave in breach of an unless order, for reasons that will become apparent below.  At the 19 December 2019 hearing, just as Mr Ching sought to introduce Wong’s Affirmation while on his feet, Mr Chen objected to the affirmation on the grounds that: -

6.1  It was only filed by the defendant on 11 November 2019, after the original (but adjourned) hearing of the inquiry before Master Queenie Lau on 23 September 2019 (“Original Hearing”), without having obtained leave of the court; and

6.2  It was filed in breach of an unless order of Chung J dated 8 May 2019 (“Unless Order”) which requires the defendant to make discovery of certain documents by 4pm on 5 June 2019 failing which he would be debarred from adducing further documentary evidence at the inquiry. 

7.  The court was indeed somewhat taken by surprise by Mr Chen’s objection to Wong’s Affirmation at the hearing.  To start with, the plaintiffs had not filed any application beforehand[3]. More importantly, in his skeleton argument lodged before the hearing dated 13 December 2019, Mr Chen made no complaint against the admissibility of Wong’s Affirmation.  In fact all Mr Chen submitted in this regard was that: -

“(c) On 11 November 2019, the Defendant filed an affirmation of one Wong Kin Man [B/49] who claims to be a contractor of Tin Hung. Wong deposed that all the renovation expenses were paid by the Defendant in cash.

(d) It is submitted that Wong's evidence - that HK$867,300 was all paid in cash - is incredible. At the very least, the Defendant should produce receipts issued by Tin Hung, or bank statements showing that he withdrew HK$867,300 in cash to pay the renovation expenses.

(e) In the circumstances, there is insufficient evidence to show that the Defendant actually incurred these expenses.” (emphasis added)

8.  Faced with Mr Chen’s sudden objection, Mr Ching readily accepted that the affirmation was filed without leave of the court.  He then provided a further explanation as follows: -

“I take the fact that this was included in the bundle to mean agreement. I did write to them [i.e. the plaintiffs’ solicitors, who prepared the hearing bundle] a letter, saying that, “Would you object to the inclusion of the document?” But then it was included in the bundle, so I didn’t make a formal application.”

9.  Not only did Mr Ching agree that the affirmation was filed without leave, he made no contrary submission that it was not filed in breach of the Unless Order and proceeded to apply verbally for leave to rely on the affirmation.  The court therefore proceeded to hear Mr Ching’s application based on the parties’ agreed underlying premise, ie that Wong’s Affirmation was filed in breach of the Unless Order without leave.  As stated in §50 of the Decision, his application was eventually granted. 

10.  At the costs hearing, Mr Ching took a contrary position that the filing of Wong’s Affirmation did not in fact require leave and was not done in breach of any unless order.  He referred to the fact that the court had not previously made an order that “there shall be no further affirmation without leave of the court”, and that the Unless Order only related to the discovery of documents but did not cover the filing of affirmations.

11.  When I asked Mr Ching why then he made the concession as he did at the 19 December 2019 hearing, he submitted that he was mistaken and was misled by Mr Chen.  While this explanation is not entirely satisfactory given that Mr Ching is a professional solicitor, I am somewhat sympathetic to him when Mr Chen suddenly objected to the admissibility of Wong’s Affirmation at the hearing, when he only attacked the credibility of Wong’s Affirmation in his skeleton argument (see §7 above). 

12.  At the costs hearing, I did not understand Mr Chen to maintain that Wong’s Affirmation was filed in breach of the Unless Order.  When I asked him why he made a submission at the 19 December 2019 hearing that there was such a breach, all Mr Chen was able to say was that it was his then submission, and that the defendant’s filing of the affirmation was in breach of the “spirit” of the Unless Order.  

13.  It is in my view regrettable that Mr Chen made a submission to the court, be it off-the-cuff or otherwise, that Wong’s Affirmation was filed in breach of the Unless Order when it was not.  If his submission back then was only that the affirmation was filed in breach of the “spirit” of the Unless Order (even assuming such a contention could possibly be valid), he should at least have made this clear to the court there and then. He however took no step to do so at the 19 December 2019 hearing. 

14.  The breach of an unless order by a party carries with it a degree of procedural stigma and has real implications.  Any submission that there has been such a breach should only be made on proper grounds.  It is unfortunate that the court was on this occasion led to believe, by an erroneous submission coupled with an erroneous concession across the bar table, that there was such a breach when there was not.  This is a matter which I shall, as I am entitled to do under RHC O 62 r 5, take into account when addressing the costs of these variation applications. 

15.  Returning to the substantive issue, I agree with Mr Chen that the defendant only filed Wong’s Affirmation on 11 November 2019 after the Original Hearing.  Thus, even if he was at liberty to file Wong’s Affirmation, he should in principle have sought leave of the court to rely on the affirmation at the inquiry given the late stage it was filed. 

16.  That said, on the same day Wong’s Affirmation was filed, Mr Ching’s firm did inform the plaintiffs’ solicitors that the defendant intended to rely on it.  The plaintiffs’ solicitors made no objection to this and even included it in the hearing bundle without protest.  Moreover, as pointed out above, Mr Chen did not take issue with the admissibility of that affirmation in this skeleton argument either.  His belated objection at the hearing to this effect was, in my view, obviously an afterthought. 

17.  As I explained in §55 of the Decision, I would not have allowed category 4 if not for Wong’s Affirmation.  After having heard full costs submissions, it now transpires that the defendant was not in fact barred from filing the same on 11 November 2019, and the plaintiffs and Mr Chen were content to deal with the substance of the affirmation prior to the hearing.  There is thus no reason why the plaintiffs should not be visited with costs for persisting with their failed challenge over category 4 beyond that date, and I am persuaded that the Costs Order Nisi ought to be varied to reflect this. 

18.  Taking all relevant circumstances into account, and in the exercise of my discretion, the defendant should be ordered to pay the plaintiff’s costs incurred in respect of category 4 up to and including 11 November 2019, and the plaintiffs should be ordered to pay the defendant’s costs in the same respect thereafter.  This shall be factored into my global consideration of the inter partes costs under Section F below. 

C.  PLAINTIFFS’ CALDERBANK OFFER

19.  The next question arises from the plaintiffs’ “without prejudice save as to costs” offer dated 9 August 2018 to have the sum of HK$700,000 deducted as proper costs and expenses, which offer was made again in another such letter dated 28 October 2019. 

20.  In his skeleton argument, Mr Ching submitted that as the plaintiffs only managed to exclude a much smaller amount following the inquiry, the plaintiffs’ offer “had been beaten” and they should thus be ordered to pay the costs of the inquiry. 

21.  As submitted by Mr Chen, this was not the case when the defendant made an offer, which was not accepted by the plaintiffs, that was “better” than my decision.  It was the other way around.  It is difficult to see how, in that situation, the defendant could benefit from these offers and no authorities have been cited.  With respect to Mr Ching, these offers simply bear no weight in the exercise of my discretion as to costs.

D.  FAILED RECUSAL APPLICATION

22.  On the costs of the defendant’s failed recusal application at the 19 December 2019 hearing, it is common ground that the defendant should be ordered to bear those costs. 

23.  For the defendant, Mr Ching suggested that such costs should be summarily assessed separately from the costs of the inquiry.  This was not resisted by Mr Chen.  

24.  Given the parties’ agreement, I am prepared to order the costs of the recusal application separately from the rest of the costs of the inquiry. 

E.  HEARING ON 23 SEPTEMBER 2019

25.  As regards the costs of the Original Hearing, which was adjourned owing to Mr Ching’s illness and hospitalization, the dispute rests on whether the defendant should bear the costs (as Mr Chen submitted) or there should be no order as to the costs or alternatively that they should be in the cause (as Mr Ching submitted).  

26.  Subsequent to the costs hearing, Mr Ching filed an affirmation giving details of his hospitalization in the evening of 22 September 2019, the medical tests he underwent, the diagnosis of his condition, and his subsequent discharge on 23 September 2019.  

27.  Without challenging this evidence, Mr Chen submitted that, properly analyzed, the defendant should be treated as having made an application for adjournment due to Mr Ching’s illness.  He submitted that since the defendant sought and was granted an indulgence from the court, he should pay the costs arising from the adjournment. 

28.  On the other hand, Mr Ching submitted that his hospitalization was an unexpected and isolated event outside the defendant’s control.  Since neither himself nor the defendant was at fault for the adjournment, he argued that there should be no order as to costs or that costs of the Original Hearing be in the cause of the inquiry. 

29.  In Lifestyle Equities CV v Santa Monica Polo Club Ltd [2020] EWHC 1326 (Ch), the 5^th defendant (Mr Ahmed) sought to vary, set aside or stay a costs order made against him arising out of an adjournment of the trial due to his illness and inability to attend the trial.  While that was dismissed based on jurisdictional grounds, the following passage from the decision of Mr Recorder Douglas Campbell QC is instructive: -

“71. In the end, Dr Sampson’s point is essentially that D5 should not be required to pay for the costs of an adjournment which was due to his own illness. Of course I appreciate that point because nobody would either want to be ill or have to pay for being ill. However I see even less reason why in these circumstances the claimants should not only be forced to have an adjournment due to someone else’s illness but should be forced to swallow the costs of that adjournment as well. Someone had to pay these costs and D5 was the one who sought and obtained and adjournment, whereas the claimants did not want one and were not at fault in any way. If I had been in Ms Reed QC’s shoes I would have made the same order.”

30.  I agree with the learned Recorder’s reasoning and find it directly applicable to the facts of the present case.  I therefore accept Mr Chen’s submissions and hold that the defendant shall be ordered to bear the costs of and incidental to the Original Hearing.  To facilitate the assessment of costs of the inquiry, I shall be ordering this set of costs separately from the remainder of the costs. 

F.  INTER PARTES COSTS

31.  On the costs of the inquiry, it is common ground that costs should follow the event and a party’s relative success is a relevant consideration as to its position on costs. 

32.  For the plaintiffs, Mr Chen submitted that the “event” for present purposes is the inquiry as a whole.  Since the plaintiffs had to come to court to falsify those expenses, and partly succeeded in doing so, he submitted that the starting point is that the plaintiffs are entitled to their costs.  He nevertheless accepted that the court may apply a discount to the costs to reflect the plaintiffs’ partial failure in excluding some items. 

33.  On the other hand, Mr Ching adopts a “dollar and cent” approach based on the overall outcome.  As noted in §84 of the Decision, of the total disputed expenses in the sum of HK$1,290,890, the plaintiffs succeeded in excluding only HK$356,373.  Thus, Mr Ching submitted, the defendant is the overall winner and should be entitled to costs as a starting point, though he did not strongly resist a discount being applied to reflect the defendant’s partial failure in resisting the plaintiffs’ challenge.  

34.  It will be recalled that the parties’ substantive dispute focused on eight categories of expenses (see §19 of the Decision).  Each of the categories is distinct and separate and entails different considerations.  Thus Mr Chen’s and Mr Ching’s approaches, both involving the identification of one successful party based on the overall outcome as a whole, are in my view inappropriate as they do not truly reflect the justice of the case.  

35.  It is well established that, whether before and after the implementation of the Civil Justice Reform, the court may in the exercise of its discretion adopt an issue-based approach when determining costs, bearing in mind:- (a) whether an issue is something distinct and separate in itself such that the decision of it constitutes an “event”; and (b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue and the manner in which a particular allegation or issue was pursued (see In re Elgindata (No 2) [1992] 1 WLR 1207 per Nourse LJ at 1214A-D, cited with approval in Chan Shun Kei v Hong Kong Construction (Hong Kong) Ltd (unreported) CACV 192/2014; 7 March 2016 per Lam VP at §§24-25).  

36.  This is not to say that, on the issue-based approach, the court would make cross orders as to costs for the different issues, for it would unnecessarily complicate the taxation process.  Instead, the commonly adopted practice is to make a global order in terms of the overall percentage of costs to be awarded to one side.  See: Keen Lloyd Holdings Ltd & Ors v Commissioner of Customs and Excise & Anr (unreported) CACV 97 and 107/2015; 13 September 2016 per Lam VP at §7; Hung Sau Fung v Lai Ping Wai (unreported) CACV 240/2011; 1 March 2016 per Chu JA at §18.

37.  Given the discrete nature of the categories, I consider it more appropriate to apply the issue-based approach in arriving at a global costs order of the inquiry. 

38.  In the exercise of my discretion, and having regard to (a) my decision at §18, §24 and §30 above; (b) the parties’ respective success and failure over disputed categories (see §82 of the Decision); and (c) the quantum of each of the categories and the length and complexity of the arguments involved, I consider it just and fair in all the circumstances that the defendant should be ordered to bear 65% of the plaintiffs’ costs of the inquiry (excluding the costs of the recusal application and the costs of and incidental to the Original Hearing which shall be separately ordered). 

G.  INDEMNITY FROM ESTATE

39.  The last question relates to whether any costs awarded against and incurred by the defendant should be indemnified by the estate or borne by him personally. 

40.  For the plaintiffs, Mr Chen submitted that, although a personal representative who has been made a party to proceedings would be entitled to an indemnity as a starting point[4], the defendant should not be so entitled because[5]:-

40.1  The plaintiffs had successfully excluded some of the expenses in the defendant’s accounts, and hence not all the expense items were properly incurred; 

40.2  Given the nature of the inquiry, the defendant was “defending his private interest against the [estate] in the inquiry.  The expenses incurred would either be borne by the [estate] or, if disallowed, by the Defendant himself.  This puts the Defendant’s personal interest directly at odds with the [estate]’s interest”; and 

40.3  Although the defendant’s failure to obtain a Beddoe order is not fatal and the court could still allow the defendant to recover costs from the estate if a judge would have authorized the defence had he applied for such an order in advance[6], “no judge would have authorised the Defendant’s defence of the inquiry because (a) it was for the Defendant’s private interest; and (b) the Defendant’s defence lacked merits, at least before Wong’s Affirmation was filed”. 

41.  Mr Ching, on the other hand, argued that the defendant should be entitled to recover such costs from the estate in any event.  He submitted that, even if a trustee was mistaken in charging the estate for expenses which he was not permitted to do, the trustee should not be deprived of an indemnity from the estate save in cases of misconduct[7]. Since the defendant has not been guilty of any misconduct, Mr Ching submitted that the defendant should not be deprived of an indemnity from the estate. 

42.  The relevant principles governing the instant question of a trustee’s indemnity has been helpfully summarized in Lewin on Trusts (20^th ed; 2020) Chapter 48 as follows: -

42.1  “The general principle is that a trustee is entitled to indemnity out of the trust fund in respect of costs and expenses properly incurred by him in connection with the performance of his duties and exercise of his powers and discretions as a trustee.  The general principle extends to costs incurred in trust proceedings.” (§48-004, p 1039); 

42.2  “In trust proceedings, a trustee’s indemnity out of the trust fund extends both to his own costs and any costs he is ordered to pay to the other parties, unless the court otherwise.” (§48- 005, p 1040); 

42.3  “Thus, where a trustee successfully defends proceedings brought by a beneficiary, he should be entitled to an indemnity out of the fund for any costs not recovered from the beneficiary.  Even where he is unsuccessful, he is still in principle entitled to recover from the trust fund any costs he has been ordered to pay to the successful beneficiary.  In either case, however, the court may limit or remove that entitlement; this is explored below.” (§48-005, p 1040); 

42.4  “The right of a trustee to indemnity in respect of costs extends only to costs properly incurred in the execution of the trust.  By this is meant costs which have been both honestly and reasonably incurred. A doubt is to be resolved in favour of the trustee…” (§48-006, p 1041); 

42.5  “The right of indemnity can be lost or curtailed by such inequitable conduct on the part of the trustee as amounts to a violation of culpable neglect of his duty as trustee.  Thus if breach of trust causing loss to the trust fund or misconduct is established against the trustee, the trustee may be deprived of his right of indemnity and further ordered to pay costs of other parties.” (§48-006, p 1041); 

42.6  “The word “misconduct” should be widely construed and may include caprice and obstinacy, or neglect, negligence or carelessness, or even conduct which is unreasonable in the circumstances.  While the mere fact that the trustee has made a mistake is not enough, it is equally clear that dishonesty is not requisite.” (§48-006, p 1041); and 

42.7  “A trustee may be deprived of costs, or ordered to pay costs, not only by reason of his conduct which occasioned the proceedings, but also by reason of his unreasonable conduct in bringing unnecessary trust proceedings, or his conduct in the proceedings themselves, for example by taking procedural steps which needlessly increase costs, by acting in a partisan manner to some beneficiaries against others, by adopting an excessive role in trust proceedings by contesting claims which ought to be contested by others, not the trustees, or which ought not be contested at all.” (§48-007, pp 1041-1042). 

43.  In Hong Kong, the court’s power to deprive a trustee of his right of indemnity on the basis of unreasonable conduct or having acted for his own benefit is laid down in RHC O 62 r 6(2).  That sub-rule provides that: -

“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.”

44.  Applying these principles, I reject Mr Chen’s submission that the defendant should be deprived of the indemnity as he is “defending a private interest against the trust”.  As noted in §21 of the Decision, these proceedings are for general accounts and not for accounts on the footing of wilful default.  At the inquiry, the plaintiffs made no allegation against the defendant for having acted for his own benefit or in breach of trust.  Nor was the question of the defendant’s conduct a live issue the court was asked to consider. No finding to that effect was made by the court at all. 

45.  If Mr Chen were to be correct, whenever some or all beneficiaries challenge the charging of certain administration expenses as being improper, the trustee, if he contests the challenge, would then be exposed to personal costs consequences irrespective of the merits.  This consequence would be extremely harsh to the trustee and would not reflect the justice of the case.  Indeed Mr Chen cited no authority, nor did he provide any policy reason, in support of such a bold and sweeping proposition. 

46.  Likewise, Mr Ching’s position is equally unattractive.  As explained above, a trustee may be deprived of his costs indemnity if he has acted unreasonably, and that includes unreasonably contesting proceedings.  Although doubts as to whether a trustee incurred costs properly should be resolved in his favour, where he has unreasonably sought to defend a plainly indefensible challenge, there is no good reason why the beneficiaries should be made out of pocket for the trustee’s unreasonable conduct. 

47.  In my judgment, the correct approach on the question of indemnity requires the consideration of whether the defendant had unreasonably contested the plaintiffs’ challenges.  Owing to the distinct nature of the expenses, each category of the disputed expenses must be considered separately.  By analogy to the similar context of a notional Beddoe application[8], the key consideration would be the substantive merits of the plaintiffs’ challenge and the defendant’s defence. 

48.  In principle, the appropriate notional date for assessing merits should be the time when this inquiry was ordered in November 2018 when the defendant had to consider whether to defend.  However, since the burden of proof in this inquiry rested on the defendant alone[9], the defendant could reasonably be assumed to have obtained and presented to the court all such evidence in a notional Beddoe application.  Accordingly, it would be right, as Mr Ching submitted, for the court to now proceed on the basis of the evidence then available at the inquiry hearing in December 2019. 

49.  Having considered the parties’ further written submissions, I find that: -

49.1  The defendant had acted unreasonably in defending category 2.  In fact, even Mr Ching conceded that such expenses would unlikely be allowed; 

49.2  The defendant also acted unreasonably in defending category 3.  It is noteworthy that, even as at the date of the inquiry hearing, there was no explanation as to why the defendant had to attend to property viewings on 196 occasions, when estate agents had been engaged.  Such explanation is something the defendant was able to give but chose not to do so.  Given the major evidential lacunae in the defendant’s case, and considering that the defendant was legally represented, there is no question that he acted unreasonably in defending this item; 

49.3  On category 4, the defendant had not acted unreasonably in defending this item, given the availability of Wong’s Affirmation.  But even if Wong’s Affirmation were not available, I am still prepared to give the benefit of doubt to the defendant, particularly since the plaintiffs’ challenge only focused on evidence of payment, but not the inherent nature of the renovation expenses themselves;  

49.4  On category 5, Mr Ching conceded that there was insufficient evidence in support, and that the defence would not have been allowed.  It follows that the defendant must have acted unreasonably in defending this challenge; 

49.5  On categories 6, 7 and 8, I do not think that the lack of documentary evidence per se for these items, particularly given the relatively small sums involved, would mean that the defendant acted unreasonably in defending these challenges; and 

49.6  As to category 9, the only parts where the defendant acted unreasonably in defending are items 133 and 134 which plainly did not relate to the administration of the subject estate.  He did not act unreasonably in defending items 24 and 93 since they were prima facie expenses incurred in the administration of the estate. 

50.  Thus, to reflect the overall extent to which the defendant has unreasonably contested the plaintiffs’ challenge as aforesaid, and bearing in mind the quantum of the relevant categories and the length and complexity of the arguments involved, I find that he is only entitled to an indemnity as to 80% of the costs ordered to be payable by him to the plaintiffs (see §38 above) and his own costs of and incidental to the inquiry, except as provided for otherwise under §§51-52 below. 

51.  On the recusal application, there is no question that the defendant acted unreasonably in pursuing it which has no merit whatsoever.  The defendant should be made to bear his own costs and the plaintiffs’ costs personally in full in this respect. 

52.  As to the costs of and incidental to the Original Hearing, the incurrence of such costs cannot be said to be a result of the defendant having acted unreasonably or for his own benefit.  The defendant would be entitled to an indemnity in full in this respect. 

H.  CONCLUSION

53.  Finally, on the costs of these variation applications, it is fair to say that the parties’ arguments mainly revolved around the impact of Wong’s Affirmation on inter partes costs and the defendant’s indemnity from the estate.  I have varied the Costs Order Nisi in both respects substantially in the defendant’s favour.  Moreover, the defendant’s application was justified, not least to put the record straight that there was no breach of the Unless Order as explained in §§13-14 above. 

54.  Accordingly, the defendant being the substantial winner should have the costs of both variation applications.  I see nothing unreasonable on the defendant’s part by taking out his variation application and resisting the plaintiffs’ application, or that he has acted for his own benefit.  His own costs of these applications, to the extent not recoverable from the plaintiffs, should therefore be indemnified out of the estate. 

55.  Both parties agreed that it is possible for the court to assess costs of the inquiry summarily.  However, save in respect of the costs of the recusal application, Mr Ching objected to summary assessment of costs on the basis of the likely amount involved and the suggestion that a Master’s decision on summary assessment is not appealable.  His latter proposition has no merit: see, eg, Yuan Chu Chen & Ors v Chen Min Chun & Ors (unreported) HCA 1714/2015; 6 December 2017 per Anthony Chan J.  Having considered the discrete nature of the inquiry and the limited amount of evidence and hearing time involved, I consider it appropriate to assess the costs of and incidental to the inquiry and these costs variation applications by way of summary assessment. 

56.  I therefore decide to vary the Costs Order Nisi and order that: -

(1)  The defendant do pay the plaintiffs’ costs of the defendant’s recusal application, with certificate for counsel, to be summarily assessed.  These costs payable to the plaintiffs and the defendant’s own costs in the same respect shall be borne by the defendant personally in full without recourse to or indemnity from the subject estate;

(2)  The defendant do pay the plaintiffs’ costs of and incidental to the hearing before Master Queenie Lau on 23 September 2019, with certificate for counsel, to be summarily assessed.  These costs payable to the plaintiffs and the defendant’s own costs in the same respect shall be indemnified out of the subject estate in full;

(3)  Save as otherwise provided for under paragraphs (1) and (2) above: -

(a)  The defendant do pay 65% of the plaintiffs’ costs of and incidental to the inquiry, with certificate for counsel, to be summarily assessed; and

(b)  80% of (i) these costs payable to the plaintiffs and (ii) the defendant’s own costs of and incidental to the inquiry shall be indemnified out of the subject estate;

(4)  The plaintiffs do pay the defendant’s costs of and incidental to the parties’ costs variation applications to be summarily assessed.  The defendant’s own costs in respect of these applications shall be indemnified out of the subject estate, to such extent that they are not recovered from the plaintiffs;

(5)  For the purpose of summary assessment of costs: -

(a)  Parties do lodge and serve their respective statements of costs for summary assessment in respect of costs they are to receive within 7 days hereof;

(b)  Parties be at liberty to lodge and serve their respective lists of objections to the other party’s statements of costs, limited to 2 pages, within 7 days thereafter;

(c)  Summary assessment shall be carried out on paper without a further hearing; and

(6)  All costs provided for under paragraphs (1) to (4) above shall be paid within 21 days after summary assessment.