WU WAI SUN v. WU SIU LING LINDA, in her personal capacity and as the sole executrix of the estate of WOO CHUN SZE, deceased AND OTHERS

HCMP 196/2018

[2025] HKCFI 2468

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 196 OF 2018

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D E C I S I O N

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INTRODUCTION

1.  On 10 September 2024, B Chu J handed down the judgment in this action: see [2024] HKCFI 2382. 

2.  In this decision, I shall adopt the defined terms and paragraph numbers used in the judgment. 

3.  There were six agreed issues which fell to be resolved at the trial.  They are set out in para 36. 

4.  At para 182, her Ladyship made the following costs order nisi: 

“As for costs, as said, this is an administration action, I am of the view all parties’ costs including reserved costs be paid out of Father’s Estate and to be taxed if not agreed on common fund basis. This is an order nisi which shall be final after 14 days.”

5.  By summons dated 24 September 2024, the plaintiff applied to vary the costs order as follows: 

“1. The costs of this action be paid by the Defendants to the Plaintiff on a party and party basis to be taxed if not agreed;

2. Any costs not recoverable by the Plaintiff from the Defendants be paid by the estate to the Plaintiff on a trustee basis.” 

6.  Ds (which term means D1 and D3) oppose this application.  D2 has been served with the summons but has not responded to it. He is not present at today’s hearing.  D4, acting in person, is present today. She opposes the application.  At today’s hearing, the plaintiff is represented by Mr Ronald Pang.  Ds are represented by Mr Ernest Koo and Mr Stony Chan. 

GROUNDS FOR THE VARIATION

7.  The plaintiff puts forward two main grounds in support of the variation application. 

8.  First, he says that while the relief claimed by P is indeed in the nature of an administration action, all the defendants conducted the action in a clearly adversarial manner for the sole purpose of excluding him from the Father’s Estate and to protect D1’s position as executrix.  In the end, P is the major winner in this action.  In particular, he has succeeded in removing and replacing D1 as executrix, which was all along opposed by all the defendants except D4, who at the very last minute conceded on the issue. 

9.  Second, P contends that Ds have been unreasonable in conducting the present proceedings, in particular, ignoring or refusing P’s settlement offer made by way of the letter dated 9 November 2021 and refusing to partake in mediation.  That letter has been referred to as “P’s Calderbank Offer”. 

10.  For the above reasons, Mr Pang submits that all the defendants should pay the costs of P.  In gist, this is a hostile action where P is the major winner.  Costs should therefore follow the event as recognised in Re Buckton[1] for category 3 cases.  That is para 1 of P’s summons. 

11.  As for para 2 of the summons, I should record here that Mr Pang has not provided the court with any authority to support P’s position that any costs not recoverable from the defendants should be paid out of the estate. 

LEGAL PRINCIPLES

12.  The legal principles which apply to the present application are not in dispute.  This application raises the issue of whether the present action is by nature an administration action or a hostile action. 

13.  If it is the former, the present action would fall within the second category in Re Buckton.  The costs of all the parties should generally be paid out of the estate.  The rationale is that the action is necessary for the administration of the trust, and the costs of all parties are necessarily incurred for the benefit of the estate regarded as a whole: Re Buckton at 415. 

14.  If it is the latter, then the present case would fall within the third category in Re Buckton.  The successful party should generally have costs, subject to any other applicable discretionary factors.  This is because the action is in substance an adverse litigation and should be treated as such in the context of costs.  As explained in Re Buckton, at 415, the rationale is as follows: 

“In this class 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. It is often difficult to discriminate between cases of the second and third classes, but 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.”

15.  As regards costs incurred on an application for the removal of an executor, the position is summarised in Lewin on Trusts (20^th ed) at para 48-085: 

“… In a case where a claim for removal of trustees forms part of the relief sought by a breach of trust action, the position as to costs will be governed by the general principles applicable to breach of trust actions. If a trustee is removed on the ground of misconduct, even if some of the charges of misconduct are rejected, the trustee who is removed will normally be ordered to pay the costs of the successful applicant as well as bear his own costs, though the court will consider whether the costs of discrete issues on which the trustee was successful should be treated differently. ... the test should be the same regardless of the grounds relied upon for the trustee’s removal, viz. whether the trustee has acted reasonably in resisting the application for his removal. If the trustee did not act reasonably he will be ordered to pay the applicant’s costs and deprived of his indemnity. …”

16.  As to an executor’s own costs in resisting an application for removal, the position stated in the passage in Lewin above is reflected in Order 62, rule 6(2).  Fundamentally, the test is whether the executor has acted unreasonably or for his own benefit rather than for the benefit of the estate. 

DECISION

17.  I am not satisfied that the two grounds put forward by P are valid.  For that reason, I decline to vary the costs order as sought. 

THE FIRST GROUND

18.  The crux of P’s first ground is that this action is a hostile action and the removal claim is the core issue or the linchpin in this action.  On this issue, P succeeded.  In his own words: 

“I succeeded on most of my case and the 1^st Defendant failed to oppose the most important part of these proceedings, being her removal as the executrix of the estate of the Deceased” (underline added)

19.  The starting point of the discussion of the nature of this action must be the view expressed by the trial judge.  The view consistently expressed in the judgment is that this action is an administration action.  I quote the following passages from the judgment. 

20.  At para 1: 

“The present proceedings were issued by the plaintiff over the interpretation of the Deceased’s last will and the administration of the estate of the Deceased (“Father’s Estate”), including removing the 1^st defendant as the executrix of the will.” 

21.  At para 144, when discussing Issue (3), the judge said: 

“Even though in Clause (3)(iii), the words used were “法律訴訟”, in my view, an administration action, in particular the way the agreed disputed issues were finally framed in the present action, it would mean P and Ds are only seeking a determination from the Court of each of those agreed questions/issues for administration of Father’s Estate.” 

22.  See also para 182 as quoted in para 4 above. 

23.  When considering the true nature of the action, the view of the trial judge must carry significant weight. 

24.  It is necessary for me to deal with P’s contention by reference to each of the six agreed issues and then, where appropriate, take a holistic view of the entire action in order to determine whether P is correct in his contention that this action is a hostile action and the removal of executrix is the most important part of the action. 

Issue (1)

25.  Notwithstanding the judge’s view, I consider that Issue (1) raises a hostile claim.  It is a fight over the beneficial ownership of the Shatin Property.  When one takes into account the nature of P’s claim, the evidence produced by the parties, the manner in which the claim was mounted and resisted, and the impact of the outcome on the beneficial entitlement of the 5 Siblings, this claim is really no different from a typical writ action where parties are disputing and fighting over the beneficial ownership of a real property. 

26.  I do not propose to go into the details of the evidence.  They have been set out extensively in the judgment.  In gist, the primary factual issues revolve around who contributed to the purchase price of the Shatin Property (paras 37 and 40), and whether the Oral Agreement was subsequently reached (paras 41 and 42).  The parties put forward diametrically opposite factual cases on these issues. 

27.  As Madam Wong was the registered owner of the property, in the absence of any challenge to the beneficial ownership, the Shatin Property would be dealt with as part of her intestate estate.  Broadly speaking, each of the 5 Siblings would be able to derive benefits from that property. 

28.  Under Issue (1), P sought to challenge that position.  If he had been successful, he would have been entitled to any interest in relation to the Shatin Property to the exclusion of his siblings by virtue of Clause 4(i) of the 2014 Will.  But he failed. 

29.  In my view, it is quite plain that Issue (1) is a hostile claim in which P lost.  (I should mention here that under the costs order nisi, P would be able to get his costs out of the estate.  He would be better off than if Issue (1) is treated as a hostile action.)  P’s failure in Issue (1) significantly undermines his present contention that he is the major winner in this action. 

Issue (2)

30.  In my view, Issue (2) raises issues which can properly be regarded as those normally dealt with in an administration action. As recognised in Re Buckton, it is often difficult to differentiate category 2 cases from category 3 cases.  The nature of the claims under Issue (2) is not as clear cut as that under Issue (1). 

31.  On one view, if it is shown that P is in breach of Clauses 3(ii) and 4, he would be deprived of his entitlement in the estate. The converse is also true for Ds. 

32.  Furthermore, each side was making factual allegations against the other to say that the other was in breach.  For example, D1 made the allegation that at the funeral ceremony, the Deceased’s body was covered by a “flag” with a Christian cross.  D3 made the allegation that P’s friends were singing hymns or gospel songs at the funeral, and there were no monks praying and no Buddhist ceremony, and that P and his family were not wearing traditional Chinese mourning clothes: paras 113 to 114.  That is to be contrasted with P’s evidence as set out, for instance, in para 118.  As a further example, it was P’s evidence that the defendants failed to comply with Clause 3(ii) as they did not “escort” the Deceased’s body to Qishan Cemetery: see para 123. 

33.  The above features would arguably point to the claim under Issue (2) as an adverse claim. 

34.  However, on another view, it may be said that Issue (2) was legitimately raised for the court to arrive at the proper construction of Clauses 3(ii) and 4 regarding the burial and funeral arrangements, and for the court to determine whether what P and the defendants did (or did not do) complied with the wishes laid down by the Deceased as construed. 

35.  Her Ladyship made her ruling on the construction of Clause 3(ii) and on the issue of breach in paras 122 and 133. 

“122.   On my reading of Clause 3(ii), what was stipulated by Deceased was the burial or worship ceremony in his hometown was to be in accordance with his hometown custom same as Madam Wong’s. There was no mention about any funeral ceremony in Hong Kong being in accordance with his hometown customary ritual. There was no requirement or wishes expressed by the Deceased under the 2014 Will in respect of his funeral ceremony in Hong Kong. Anyway, even if there was a “flag” with a Christian cross as described by D1, it would not mean that the funeral ceremony was held in accordance with Christian rites and I accept Mr Li’s evidence that he had placed the red and white prayer blanket over Deceased’s body, which was one of the ticked items on both P’s Invoice and on D1’s Invoice. Even if there had been friends of P’s who did sing some hymns/gospel songs, it would not mean that the funeral ceremony was held in accordance with Christian rituals. In fact, even if there had been a flag with the Christian cross and hymns/gospel singing, and that the deleted items “喃嘸開路運財” and “全套紙札” were not added back, in my view there was no breach of Clause 3(ii) on the part of P in respect of the funeral ceremony held at the Funeral Parlour in Hong Kong.” (original emphasis)

“133.   In any event, according to this Court’s interpretation, on the natural and ordinary meaning of the Chinese words in Clause (3)(ii), I find no stipulation by the Deceased in Clause (3)(ii) requirement that the “escort” meant that one car followed immediately after another and/or after the hearse. In any event, I find there was no sufficient evidence that Ds did not follow the hearse at some distance away, or that they did not arrive after P and his wife and Mr Li had left.”

36.  On balance, I think Issue (2) falls on the side of an administration action in that the court’s task can properly be described as ascertaining the true testamentary wishes of the Deceased.  As seen from the above quotes, the judge was interpreting the Deceased’s words and determining whether the children’s actions fell within the scope of those words.  As such, the resolution of the issue is necessary for the administration of the estate and is for the benefit of the estate as a whole.  On this, I draw support from para 144 (quoted in para 21 above), which is the paragraph immediately following the rulings made under Issue (2).  Therefore, I would conclude that there is no “winner” or “loser” under Issue (2). 

37.  Again, this undermines P’s contention that he is the major winner in this action.  However, if I am wrong about this characterisation, and that this should be treated as a hostile action, the judge held that neither P nor Ds were in breach.  Therefore, the outcome does not support P’s contention that he is the major winner.  In fact, at today’s hearing, Mr Pang accepts that under Issue (2), the outcome is a draw. 

Issue (3)

38.  The issue was dealt with in para 144.  It is plain that Issue (3) raises a claim which is by nature an administration action. 

Issue (4)

39.  Issue (4) was dealt with together with Issue (6). See paras 145 and 146. 

Issue (5)

40.  Under this issue, the court was to determine whether Clauses 3(ii) and (iii) and Clause 4 are ambiguous and reflect the Deceased’s true testamentary intentions of the 2014 Will, and whether rectification of that will is appropriate in the event that Issues (1) to (4) are determined in the negative.  It is plain from the question itself that it is about giving effect to the true testamentary wishes of the Deceased.  In fact, at today’s hearing, Mr Pang also accepts that Issue (5) raises an administration issue. 

41.  The judge gave her ruling in para 148.  The ruling turned on her findings of the natural and ordinary meaning of the Deceased’s words. 

Issue (6)

42.  Issue (6) concerns whether D1 should be removed as the executrix.  The judge held that she had failed to render proper accounts and inventory of the Father’s Estate, and she had intermingled funds of the Father’s Estate with her own funds in her bank accounts at the time.  It was further held that there is clearly a conflict of interest on the part of D1 to continue to act as executrix of the Father’s Estate.  See paras 175 and 178.  On that basis, she was removed as the executrix.   

43.  For present purposes, the material observation made by the judge on the complaints about intermingling of funds and failure to render accounts is stated in para 174: 

“… D1 had provided information and documents on a piece meal basis and when she eventually provided the bank statements for the accounts containing funds from the 3 Sources, she then decided to open new bank accounts and to transfer what she said were all the funds of Father’s Estate into the new Citibank accounts. Her actions brought suspicion on herself.”

44.  It is clear from the judgment that D1 had acted unreasonably in the administration of the estate.  Her conduct was being criticised as bringing suspicion on herself.  As a matter of principle, it would be appropriate to order D1 to personally pay P’s costs incurred on Issue (6). 

45.  The difficulty which I have presently is that P in this application asks for the entire costs of the action and he has provided no apportionment of costs incurred as between the six issues.  Without even knowing the rough proportion of the time spent on Issue (6), it would not be proper for me just to randomly select or pick a figure to represent the costs incurred on that issue.  It must be borne in mind that in this application, P is the applicant.  He has not asked for apportionment.  He has not produced any information which would shed light on the appropriate figure.  It is therefore not possible for me to come up with any figure which would represent the costs spent on Issue (6). 

46.  As regards the issue as to whether D1 should be deprived of her indemnity under Order 62, rule 6(2), my first observation is that in para 1 of P’s summons, he has not asked for that.  That issue is, therefore, technically speaking, not before this court: see the ruling in Ku Camey v Ku Scarlet [2025] HKCFI 1564 at paras 26 to 29. 

47.  For that reason, there is no room for me today to vary the order in that respect.  But even if I am wrong about this, I would have the same difficulty, namely, how much of the indemnity should be reduced in order to reflect D1’s failure under Issue (6).  That is a question that I cannot answer today. 

The action as a whole

48.  In summary, I do not accept P’s contention that this action can be characterised as a hostile action as a whole.  As explained above, Issues (2), (3) and (5) raise issues in the nature of an administration action.  Issues (1), (4) and (6) are hostile claims.  It cannot be said that on the whole P is the major winner.  He failed on Issue (1) while he succeeded on Issues (4) and (6). 

49.  As regards his contention that the removal issue is the “most important” or the “core” issue in this action, that sentiment, I have to say, is not reflected in the judgment at all.  In any event, in the originating summons itself, P asked for a number of reliefs and the removal relief was only one of them. 

50.  For the above reasons, I reject the first ground put forward by P.  I should say that I have given some thought to whether there is room to vary the costs order nisi to reflect P’s success on Issue (6). But, as explained, it is not possible for me to do any apportionment.  I think on a proper analysis of this application, the first ground as presented by P seeks the entire costs of the action without any fallback position. That ground has now been rejected by me.  Therefore, there should be no variation. 

51.  In any event, I accept Mr Koo’s submission that if I do give effect to P’s success under Issue (6), I should also give effect to his failure under Issue (1).  It would not be fair for me just to do one but not the other.  Hence, overall speaking, it is proper to decline to vary the costs order nisi under the first ground. 

THE SECOND GROUND

52.  The second ground can be disposed of quickly. 

53.  First, P’s Calderbank Offer does not carry any weight as he failed to achieve a better outcome than what he offered there. 

54.  Second, P says that Ds’ refusal to attend mediation as stated in their solicitors’ letter dated 12 January 2024 was unreasonable.  According to that letter, Ds decided not to proceed with the mediation because D2 and D4 would not be participating.  I do not think that Ds can be criticised as having acted unreasonably.  Given the nature of some of the disputes, for example, the dispute over the Shatin Property, any consensus that might be reached between P and Ds alone would not have the effect of settling the issues.  The second ground is therefore not valid. 

CONCLUSION

55.  The two grounds for varying the costs order nisi having been rejected, I dismiss P’s summons.  The costs order nisi made by her Ladyship be made absolute. 

(Submissions on costs)

56.  Ds ask for costs of the application.  D4 makes no application for costs.  P agrees that costs should follow the event. 

57.  I therefore order:

(1)  Ds do have costs of the summons to be summarily assessed if not agreed, with certificate for one counsel only. 

(2)  There be no order as to costs as between P and D4. 

(3)  Ds do lodge and serve their statement of costs within three days from today. 

(4)  P do lodge and serve his list of objections, if any, within seven days after that. 

(5)  The summary assessment be conducted on paper after the deadline. 

(6)  The documents to be lodged should be within two pages.