CHAN FUK TAI AND OTHERS v. CHAN WAI MING

HCMP 3474/2016

[2019] HKCFI 1709

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 3474 OF 2016

________________

_______________

_______________

__________________________________

DECISION ON COSTS

__________________________________

1.  This decision on costs concerns the costs reserved by the court earlier (on 16 December 2016 and 9 February 2017) upon the plaintiffs’ application for interlocutory injunction.

2.  To facilitate the comprehension of the issues raised herein, the background leading to the said hearing has to be mentioned briefly.

3.  The plaintiffs, the beneficiaries of the estate of their uncle (“the suit estate”), commenced this action in December 2016 against the defendant, the administrator of the suit estate, seeking in short the following relief:

(a)   the defendant be ordered to verify on oath (and exhibit) a just and true account of the suit estate;

(b)   the defendant be ordered to pay the costs of this action.

4.  The plaintiffs’ uncle passed away in July 2005 at the age of 69.  A legal action to obtain the right to represent the suit estate was commenced by the defendant in June 2011 (this was settled in July 2014).  Letters of Administration pending suit was granted to the defendant in February 2012; the actual Letters of Administration was granted to him in October 2014.

5.  The suit estate comprised (among other things) several real properties in Hong Kong.  The properties were sold, with the sales being completed in January 2015 and December 2016 respectively, and resulted in a monetary income of about $15 million.

6.  At the end of the hearing on 16 December 2016, it was ordered in effect that the sale proceeds of the sale of the last of the said real properties be paid into a client (or designated) account of the defendant’s solicitors (“the Dec 2016 order”).

7.  The Dec 2016 order was in effect continued by the order dated 9 February 2017 (which was made by the parties’ consent) in that the sale proceeds should continue to be stakeheld by the defendant’s solicitors (“the Feb 2017 order”).

8.  In this application:

(1)   the plaintiffs seek to be awarded the costs reserved by the Dec 2016 order and the Feb 2017 order to be payable forthwith (collectively “the interlocutory orders”);

(2)   the defendant argues that there should be no order as to costs.

9.  The plaintiffs’ main reasons put forth in support of this application are:

(a)   the defendant’s failure to respond to the plaintiffs’ request for an account in 2015;

(b)   the plaintiffs discovered from a search of the Land Office records that there was a pending sale of one of the real properties belonging to the suit estate which was scheduled for completion in December 2016;

(c)   the plaintiffs considered it necessary to commence this action to ensure the sale proceeds from the real property sale is safeguarded.

10.  On the other hand, the defendant denies that there was a need for the interlocutory orders because he has not refused to furnish an account, or to distribute the suit estate.  Further, one of his former solicitors have proposed a meeting with the plaintiffs (albeit, as the plaintiffs point out, the proposed meeting date was after the sale of the real property has been completed).

11.  I agree with the plaintiffs.  By the time of the commencement of this action:

(1)   the suit estate has been administered for about 2 years;

(2)   all but one of the real properties of the suit estate have been sold (and completed as early as in January 2015);

(3)   despite solicitors’ letters requesting for the same, the defendant has failed to furnish an account in 2015;

(4)   in such circumstances, it was reasonable for the plaintiffs to commence this action, and to seek the interlocutory orders.

12.  By reason of the above matters, and there being no other valid reasons to depart from the usual rule that costs should follow the event, an order will be made awarding those costs to the plaintiffs.

13.  I also agree with the plaintiffs that the costs should be summarily assessed.  For this purpose, the plaintiffs have already provided a statement of costs.  The defendant is given liberty to lodge with court and serve a statement of objections within 7 days thereafter.