Fng v. Bcj

CACV 41/2020

[2021] HKCA 451

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 41 OF 2020

(ON APPEAL FROM HCMP 776/2019)

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BETWEEN

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Before:  Hon Lam VP, Cheung and Chu JJA in Court

Dates of written submissions:  22 February and 9 March 2021

Date of Decision on Costs:  31 March 2021

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DECISION ON COSTS

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Hon Lam VP (giving the Decision on Costs of the Court):

1.In our judgment of 8 February 2021 dealing with the substantive appeal, we directed the parties to lodge submissions on costs. They have complied with the directions. We now give our decision on costs in the present appeal.

2.In the submissions of Mr Whitehead SC (with Ms Booth) on behalf of the Attorney, counsel asked this Court to award costs in their client’s favour, payable by the Plaintiff to the Attorney on trustee basis to be summarily assessed.

3.On the other hand, in the submissions of Mr Chan on behalf of the Plaintiff, counsel submitted that there ought to be no order as to costs because the point involved in the appeal is a novel one which deserved appellate attention.  Alternatively, he submitted that the Plaintiff should not be required to bear all the costs.

4.Mr Chan also submitted that the application of the Attorney for taxation on trustee basis is misconceived.  As a result, counsel said, the Plaintiff should pay the costs of the submissions on costs.

5.Though the appeal involved the consideration of how Section 11 of the Enduring Powers of Attorney Ordinance (Cap 501) should be applied after the demise of the donor of an enduring power of attorney, the resolution of the point was based on established principle concerning the limits of the power of an agent upon the demise of the principal and the law of probate and administration of estate.  Those principle and law had been thoroughly discussed by the Judge in the judgment of 30 December 2019.  Though this Court corrected the Judge on the question of Live Estate and Death Estate, the reasons given by the Judge to stay the earlier order were fundamentally sound and cogent.

6.In the circumstances, we do not see any good reason why the general rule of costs following event should not be applied in this appeal.  The Plaintiff was successful in resisting the appeal though some of the points advanced on her behalf were rejected by us.  We do not find it appropriate to divide the costs by reference to issues in this appeal.

7.As regards the basis of taxation, it is important to bear in mind the character of the dispute in this appeal.  Whilst the Attorney was sued as the attorney of the donor (who had died by the time when the appeal was brought), the claim of the Plaintiff was directed against the Attorney personally for the rendering of accounts in respect of the estate of the donor.  An order for such account had been made but by virtue of the demise of the donor the Judge stayed the order.  The appeal was about whether the stay should have been imposed.  If the appeal were allowed and the stay lifted, the Attorney would have to perform her personal obligation, at least in terms of the rendering of account by herself.  The Attorney resisted the appeal in order to maintain the stay which would have the effect of withholding her personal obligation to render an account in the meantime.  

8.Viewed thus, it is clear that she was resisting the appeal on her own account.  She did not participate in the appeal to represent the interest of the donor.

9.In the circumstances, we do not agree with Mr Whitehead that this Court should order costs in favour of the Attorney on the trustee basis by virtue of Order 62 Rule 28(5) or Rule 6(2) of the Rules of the High Court (Cap 4A).  Rule 6(2) and Rule 28(5)(b) are not applicable since the Attorney did not participate in the proceedings in the capacity as trustee or personal representative.

10.Rule 28(5)(a) is also not engaged because Mr Whitehead was seeking costs against the Plaintiff as opposed to costs being paid out of a fund.

11.There is also no good reason for adopting the trustee basis by analogy.  Even in the context of a trustee or a personal representative, in proceedings for accounts to be rendered by the trustee or personal representative arising from the default to provide the necessary accounts, the Court not infrequently orders a defaulting trustee or personal representative to bear the costs personally.

12.In the present case, there had previously been an order for account (made by consent with modification by the Judge).  Due to the demise of the donor, the Judge stayed that order.  The stay was upheld by this Court.  But the stay and the result in the appeal did not impinge on the validity of the first order.  It was only because of the intervening death of the donor that the stay was held to be appropriate.

13.With such reality in mind, and in light of our above analysis as to the interest the Attorney was serving in resisting the appeal, we do not find it appropriate to give her costs on trustee basis by analogy.

14.It is not clear to us the basis on which the Judge ordered costs on trustee basis.  In any event, the fact that the Judge awarded costs to her on trustee basis cannot dictate how this Court should exercise our discretion on costs in respect of the appeal.

15.In our judgment, the proper basis for costs to be awarded in the present appeal is party-and-party basis.

16.Having considered the statement of costs of the Attorney (seeking $549,545 of which $316,000 is counsel’s fees) and the Comments of the Plaintiff’s solicitors on the same, we agree that this is not a case which merit the engagement of two counsel and there are items in the statement of costs which are excessive.  We take into account the costs involved in the advice and correspondence on service.  Notwithstanding our rejection of trustee basis, we do not think we should order the Attorney to pay the Plaintiff’s costs in respect of the submissions on costs.  But we would deprive the Attorney 50% of such costs.  We summarily fixed the costs payable by the Plaintiff to the Attorney in this appeal at $350,000 (inclusive of the 50% costs on the submissions on costs).

Mr Jeremy SK Chan, instructed by Withers, for the plaintiff

Mr Robert Whitehead SC and Ms Madeleine Booth, instructed by Hart Giles, for the defendant