Ng Yeuk Chu Winnie v. Ng Sung Kui Ng Hon Man

HCMP 1259/2020

[2021] HKCFI 2524

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1259 OF 2020

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Before:  Mr Recorder Stewart Wong SC

Dates of Written Submissions:  9, 16, 18 and 19 August 2021

Date of Decision:  1 September 2021

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DECISION

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1.On 21 July 2021, I handed down a judgment[1] appointing, subject to various matters, the 1^st defendant as the sole administrator of the Estate, rather than the second defendant (whose own preference was the 1^st defendant as well) or the plaintiff.

2.The Judgment disposed of a contested application as to who amongst the three parties should be appointed as the sole administrator/administratrix of the Estate.   In substance, the defendants won and I made an order nisi that the plaintiff was to pay their costs. That is, I ordered, on a nisi basis, costs to follow the event.

3.By Summons dated 3 August 2021, the plaintiff applies for a variation of the costs order nisi, to be replaced as follows:

“(a) The 1^st and 2^nd Defendants do pay the costs of the Plaintiff up to 4^th November 2020 (i.e. when the 1^st Defendant’s affirmation in opposition and the 2^nd Defendant’s affirmation in opposition were both filed), to be taxed on a party and party basis if not agreed; and the costs of the Plaintiff and the 1^st and 2^nd Defendants thereafter be paid out of the Deceased’s Estate, to be taxed on a solicitor and client basis if not agreed.

(b) In the alternative to (a), the costs of the Plaintiff and the 1^st and 2^nd Defendants be paid out of the Deceased’s Estate, to be taxed on a solicitor and client basis if not agreed.

(c) In the alternative to (a) and (b), there be no order as to costs of the proceedings.”

4.The plaintiff’s case on variation is as follows:

(1)   It was not unreasonable (and indeed it was reasonable) for her to make the application, and the continuation of the application after receipt of the defendants’ affirmation was also made in connection with the administration of the Estate.

(2)   Citing the decision of DHCJ B Chu (as she then was) in Wong Tat Lun Eddie v Wong Chi Ho Jimmy (as the sole executor of the estate of Wong Chung Ming, deceased)[2], it is submitted that the issue is whether the application

“was made in connection with administration of the estate, or was in substance an adverse claim made in hostile litigation”.

(3)   The plaintiff points to various unsatisfactory conduct of the defendants, such as the “defects” in locating assets of the Estate, the preparation of the schedule of assets, and the intermeddling (which she says the defendants always denied and which justified the continuation of the application).

(4)   The continuation of the application has brought substantial benefits to the administration of the Estate, for example, that the Judgment stated that the administration must be carried out with care, with proper regard to the rules, and with proper legal advice if necessary.

(5)   It is also submitted that the Court should be more ready to depart from the “costs to follow the event” rule in the post-CJR era, and the various steps taken by the plaintiff (said to be reasonable) and by the defendants (said to unreasonable) are referred to.  It is stressed that, because of the conduct of the defendants, it was the defendants who brought about the litigation in that by their conduct they led the plaintiff to believe that she had a good cause of action.

5.The defendants do not appear to dispute that the issue is as stated at [4(2)] above.  However, they submit, and I agree, that Wong Tat Lun Eddie is distinguishable.  In that case, which concerned an application to remove an incumbent executor, the failure or delay by him in properly responding to queries or to provide information was clearly quite serious, in contrast to the present case where the attitude and action of the defendants was as I found at [62] of the Judgment.   After all, the award of costs is always a highly fact specific matter in each piece of litigation.

6.While I did find that the defendants had intermeddled, and the preparation of the schedule of assets was not satisfactory, the application was not a claim against the defendants for such conduct as such, and the plaintiff and those advising her ought to have properly reflected on how such conduct, with the explanations given by the defendants in correspondence before the commencement of these proceedings (either by themselves directly with the plaintiff or through solicitors) in what I had found to be a properly responsive manner, impacted on their suitability to be appointed as administrator.  Given the explanations, which I referred to in the Judgment and which I shall not repeat here, which if reasonably and objectively considered, in my view the plaintiff ought not have commenced, let alone continued, this application.  It cannot be said that the application was not unreasonable, or that defendants bought the application upon themselves.  

7.Nor can it be said that since the Judgment has brought the “benefits” in the sense described, the application is justified.   The matters referred to from the Judgment are all obvious without the need to spend substantial legal costs to obtain.

8.In the light of the above, and having regard to the evidence from the plaintiff, and indeed from the correspondence, I do find this to be an adverse claim in hostile litigation.  Despite the correspondence and the affirmations filed by the defendants, this application was pursued to the very end. There is no reason to deprive the defendants of their costs, let alone to order them to pay some of the costs (whether directly or effectively so by directing the costs to be paid out of the Estate, as they are, together, entitled to 75% of the assets).  Indeed, it is fairly accepted by the plaintiff that if the application was an adverse claim in hostile litigation, the usual costs order (to follow the event) should not be departed from.

9.The circumstances under which a wholly successful defendant ought to be deprived of costs were summarised by G Lam J (as he then was) in Re Wing Fai Construction Co Ltd (in compulsory liquidation)[3].  Because of my finding that the defendants had intermeddled, and the preparation of the schedule of assets was not satisfactory, it may be argued that the defendants are not wholly successful, and the third exception (“that the defendants had done some wrongful act in the course of the transaction of which the plaintiff complains”) may well be applicable.   However, the nature of those acts must be considered in the context of this case, namely, as I said above, not a claim for those acts as such, but how those acts reflected on the suitability of the defendants to be appointed.   Taking into account the explanations given in correspondence, I do not believe that those acts justify the exercise of my discretion to make an order depriving the defendants of their costs.

10.The costs order nisi in the Judgment is now made absolute.  The Summons to vary the costs order nisi is dismissed. The plaintiff is also to pay the defendants the costs of this application to vary, to be taxed if not agreed.  For the avoidance of doubt, there is certificate for counsel for both defendants for the application to vary.

11.I thank counsel for their assistance.

Mr Tommy Cheung, instructed by Robertsons, for the plaintiff

Mr Victor T S Lui, instructed by Ng & Partners, for the 1^st defendant

Ms Joyce M Y Chan, instructed by Hoosenally & Neo, for the 2^nd defendant