REN MICKY v. FUNG KUNG KUEN AND OTHERS

CAMP 320/2023, [2024] HKCA 164

On An Intended Appeal From [2022] HKCFI 2385 &

[2022] HKCFI 3758

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 320 OF 2023

(ON AN INTENDED APPEAL FROM HCAP NO 17 OF 2017)

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JUDGMENT

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

INTRODUCTION

1.  This is the Defendants’ application by summons dated 6 October 2023 seeking leave to appeal out of time against the order of B Chu J dated 8 August 2022 (“the Costs Order”), whereby it was ordered, inter alia, that the Defendants shall pay the Plaintiff’s costs in the probate action below jointly and severally, including any reserved costs but excluding any costs already ordered, up to 28 October 2020, to be taxed on a party and party basis if not agreed (“the Costs Order”), leave to appeal having been refused by the Judge by her written decision dated 20 December 2022 (“the Leave Decision”).

2.  The basic facts of this case and the Judge’s reasons for making the Costs Order are set out in her written decision dated 8 August 2022 (“the Decision”), and will not be repeated here.  Unless the context indicates otherwise, in this judgment, we shall adopt the expressions and abbreviations as defined in the Decision.

3.  In summary, the Judge ordered the Defendants to bear the costs of the action up to 28 October 2020 because she found that their conduct up to that date had not been reasonable or conducive to an early settlement of the action (§45 of the Decision).

4.  Having considered the papers before us, we consider that it is appropriate to deal with the present application on the basis of written submissions only without an oral hearing pursuant to Order 59, rules 2A(5)(a) and 14A(1) of the Rules of the High Court (Cap 4A).

DISCUSSION

5.  In considering an application for extension of time for leave to appeal, the Court will take into account, inter alia, the following factors: (i) the length of the delay, (ii) the reason(s) for the delay, (iii) the chances of the appeal succeeding if time for appeal is extended, and (iv) the degree of prejudice to the potential respondent if the application is granted.  The Court should consider all the circumstances and decide whether the overall justice of the case requires the exercise of the discretion to extend time (see Hong Kong Civil Procedure 2024, Vol 1, §59/4/9).

6.  Where the delay is inexcusable, the party seeking an extension of time must show a real prospect of success on merits (Secretary for Justice v Hong Kong & Yaumatei Ferry Co Ltd, CACV 819/2000, 2 February 2001).

7.  When considering the merits of an intended appeal against an order as to costs, it is necessary to bear in mind that costs is very much a matter of discretion for the trial judge.  The Court of Appeal would be very circumspect in intervening in such a decision with high discretionary content. It will only interfere when it is satisfied that the decision of the judge is either wrong in principle or plainly wrong.  See Poon Ching Man v Lam Hoi Pun [2016] 3 HKLRD 815, at §34; Chan Shun Kei v Hong Kong Construction (HK) Ltd, CACV 192/2014 (7 March 2016), at §22.

8.  In the present case, Mr Cheung accepts that the Defendants were about 1 month late in seeking leave to appeal before the Judge, and 9 months late in making the present application[1].  The Defendants’ delay is plainly very substantial.  Mr Cheung’s explanation for the Defendants’ delay is that they are all laymen without any legal knowledge.  This cannot be regarded as a good reason or excuse for the delay.  Hence, the Court should not grant leave to appeal in the present case unless the Defendants can demonstrate that their intended appeal has a real prospect of success.

9.  In relation to the merits of the intended appeal, Mr Cheung has raised the following arguments on behalf of the Defendants in the Written Statement Supporting Leave to Appeal dated 17 November 2023:

(1)  The Judge wrongly placed much weight on the fact the 3^rd Defendant had entered 2 caveats in the Probate Registry[2] against the estate of the Deceased, and refused to vacate the same or seek further directions from the court after receipt of the Plaintiff’s warning, leaving the Plaintiff with no alternative but to commence the probate action on 5 September 2017.  The Defendants say that the commencement of the probate action was a neutral event because someone would have to take out an action to resolve the disputes between the parties in any event.

(2)  The Judge wrongly criticised the Defendants for seeking the appointment of the 2^nd Defendant as a joint administratrix of the estate of the Deceased with the Plaintiff in their counterclaim, which the Judge considered to be impractical in view of (i) the animosity between the Plaintiff and the Defendants, and (ii) the Defendants’ claim for a beneficial interest in the Tsing Yi Property, giving rise to a conflict of interest between the Defendants and the estate of the Deceased.  The Defendants further argues that the Judge failed to take into account the fact that the Plaintiff was also in a position of conflict of interest as the dispute over the beneficial ownership of the Tsing Yi Property was in reality a dispute between the Plaintiff and the Defendants.

(3)  The Judge wrongly considered that the Defendants’ counterclaim for a beneficial interest in the Tsing Yi Property had “sidetracked” the real issue in the probate action.  The Defendants say that (i) the dispute over the beneficial ownership of the Tsing Yi Property was something which the Court had to be made aware of in any event in order to determine the question of appointment of the administrator, and (ii) the Plaintiff also “[took] part in this ‘sidetracking’ by putting substantial replies in his Reply and Defence to Counterclaim”[3]. 

(4)  The Judge failed to give due regard to the fact that it was the Defendants who first proposed the appointment of an independent administrator as early as 27 April 2020, and the Plaintiff was agreeable to this proposal one month later on 5 May 2020.

10.  In our view, none of the arguments raised by Mr Cheung has substance:

(1)  As for the 1^st argument, the background or history of the probate action set out at §§10 to 12 of the Decision under the sub-heading “Relevant Events” did not form part of the Judge’s reasons for making the Costs Order mentioned at §§36 to 46 of the Decision.  Although the Judge did, at §8 of the Leave Decision, refer to the Defendants’ caveat and the Plaintiff’s warning, and mention that the Defendants could have withdrawn the caveat or entered an appearance to the warning and issued and served a summons for directions, the Judge did so in the context of considering the Defendant’s complaint that she wrongly failed to take into account the fact that the Plaintiff should also bear some responsibility for the Defendants’ sidetracking of the probate action (an issue which we shall discuss in (3) below).

(2)  As for the 2^nd argument, in view of the Defendants’ claim that they and the Deceased are both beneficial owners of the Tsing Yi Property in equal shares, it is clear that the Defendants are in a position of conflict vis-à-vis the estate of the Deceased, and the 2^nd Defendant is not suitable to be appointed as an administratrix of the estate of the Deceased.  The Judge was entitled to take the view that the Defendant’s original counterclaim for, inter alia, an order that the 2^nd Defendant be appointed as a joint administratrix of the estate of the Deceased with the Plaintiff was not practical[4].  On the other hand, the Plaintiff and the Deceased were husband and wife, and the Deceased died intestate.  The Plaintiff does not claim to be entitled to the Tsing Yi Property in his own right.  The Plaintiff and the 1^st and 2^nd Defendants are both beneficiaries of the estate of the Deceased.  We do not see that the Plaintiff is in a position of conflict vis-à-vis the estate of the Deceased.

(3)  As for the 3^rd argument, it can be seen from the Defendants’ original Defence and Counterclaim that a major part of their pleaded case (prior to the amendments on 5 September 2019) related to their contention that the Deceased held the Tsing Yi Property upon a common intention constructive trust or resulting trust for the Defendants and the Deceased in equal shares.  It was open to the Judge to take the view that the probate action, which should properly be concerned only with the question of the appointment of an administrator (or administrators) of the estate of the Deceased, was sidetracked by the Defendants’ claim.  The Defendants can hardly complain that the Plaintiff sought to answer this claim substantively in his Reply and Defence to Counterclaim.  The fact that the Defendants subsequently commenced a separate action in the District Court (DCCJ 4067/2019) against the estate of the Deceased concerning the beneficial ownership of the Tsing Yi Property[5] is clear recognition on their part that the dispute on the beneficial ownership of the Tsing Yi Property was not suitable to be determined in the probate action, but should be resolved separately in another action.

(4)  As for the 4^th argument, the Judge was well aware of the fact that the Defendants had proposed in their witness statements dated 27 April 2020 that an independent professional be appointed as the administrator to deal with the estate of the Deceased, and that upon receiving the witness statements, the Plaintiff agreed to the appointment of an independent third party.  The Judge’s criticism of the Defendants’ conduct lies in the fact that thereafter, the Defendants failed to respond to the Plaintiff’s attempt to jointly appoint a single third party, or the Plaintiff’s proposal to appoint Mr Ip, as independent administrator.  It was only after directions had been given by Master Ho on 3 September 2020 that the parties should try and reach agreement on the appointment of an independent administrator that the Defendants came up with the names of 3 CPAs on 28 October 2020.  The Judge took the view that up until 28 October 2020, the Defendants’ conduct was not reasonable or conducive to an early settlement of the action[6]. We consider that it was open to the Judge to take that view.

11.  Overall, we do not consider that the Defendants’ intended appeal is reasonably arguable, or has a real prospect of success.  Neither do we see that there is any other reason in the interests of justice why the appeal should be heard.

DISPOSITION

12.  The Defendants’ summons dated 6 October 2023 is dismissed with costs to the Plaintiff, to be summarily assessed.  The Plaintiff shall have leave to file and serve a costs statements (limited to 2 pages) within 14 days from the date of this judgment, and the Defendants shall have leave to file and serve a statement of objections (limited to 2 pages) within 14 days thereafter.  Subject to such further directions as may be given, the Court will assess the Plaintiff’s costs summarily without further reference to the parties.  The above costs order is an order nisi, which shall become absolute unless an application is made to vary the same within 14 days from the date of this judgment.

13.  As the Defendants’ application for leave to appeal is totally without merit, we make an order that no party may request the present determination to be reconsidered at an oral hearing inter partes pursuant to Order 59, rule 2A(8) of the Rules of the High Court.

[1] See §11 of the Written Statement Supporting Leave to Appeal dated 17 November 2023.

[2] At §14 of the Defendants’ Statement, it is mistakenly stated that the caveat was registered against the Tsing Yi Property.

[3] See §21 of the Defendants’ Written Statement Supporting Leave to Appeal.

[4] See §40 of the Decision.

[5] See §16 of the Decision.

[6] See §§41-45 of the Decision.