HONGKONG BANK TRUSTEE LTD v. LEE SEE CHING, JOHN

1992, No. MP820

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS

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REASONS FOR DECISION

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1. These are my reasons for dismissing an application by the Defendant in the issue that his costs of the action be paid out of the estate of the Deceased.

2. At the hearing on 3 December 1997, learned leading counsel for the Defendant submitted that the Defendant's own costs should be borne by the estate and to be taxed on a common fund basis. In support of this contention, the Defendant relied on the case of Boyce v Wasbrough [1922] 1 AC 425 which is authority for the proposition that the cost of resolving a reasonable doubt in a case involving an estate should be borne by the estate.

3. The issue in the present case is whether there was a presumption of gift in favour of the Defendant, when in his life time, the Deceased deposited sums of money into bank accounts in the name of the Defendant.

4. The leading authority on the principles governing the award of costs in litigation between trustee and beneficiaries under a trust is the case of In re Buckton [1907] 2 Ch 406 in which Kekwich, J identified three classes of actions. The first two are concerned with the construction of the trust document; to resolve questions arising from the administration of the estate or to ascertain the interest of the beneficiaries. Applications falling within these two categories involve no dispute of facts and the proceedings are necessary for the administration of the trust. Costs for all parties in these applications are incurred for the benefit of the trust and are generally ordered to be paid out of the trust funds or from the estate.

5. There is, however, a third category of proceedings which Kekwich, J described as :

".... the application is made by a beneficiary who makes a claim adverse to other beneficiaries, and really takes advantage of the convenient procedure by originating summons to get a question determined which, but for this procedure, would be the subject of an action commenced by writ, and would strictly fall within the description of litigation ..... when once convinced that I am determining rights between adverse litigants I apply the rule which ought, I think, to be rigidly enforced in adverse litigation, and order the unsuccessful party to pay the costs. Whether he ought to be ordered to pay the costs of the trustees, who are, of course, respondents, or not, is sometimes open to question, but with this possible exception the unsuccessful party bears the costs of all whom he has brought before the Court."

6. The Defendant in Boyce did not fall into the category of hostile litigants as the proceedings concerned with the construction of the Deed of Settlement. I do not think this case assists the Defendant here.

7. The present case does not involve the construction of a Will or Deed of Settlement. The present litigation was caused by the Defendant who asserted that the money in the accounts was a gift from the deceased. His claim, if successful, would have been against the interest of those entitled to the estate of the Deceased to the extent that their respective shares would have been proportionally reduced. In this context, it must have been hostile litigation.

8. Despite the Defendant's assertion that the monies were gifts, this Court disbelieved him and found that he had not been truthful in his testimony about the circumstances under which the bank accounts in his name were opened by the Deceased. I have little doubt that the Defendant's conduct in these proceedings was motivated by greed and fuelled by animosity against his siblings.

9. I am of the view that it is neither just nor reasonable that such a Defendant should have his costs paid out of the estate and I would therefore dismiss his application.