Pamela Aldred and Others v. Castle Fiduciary Ltd and Another

HCA 643/2022

[2023] HKCFI 2366

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 643 OF 2022

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BETWEEN

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DECISION ON COSTS

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A. INTRODUCTION

1.In my decision of 23^rd May 2023 (“the Decision”),[1] I dealt with the Plaintiffs’ Injunction Summons of 30th May 2022 and the Trustee’s Striking-Out Summons of 30th August 2022.  I adjourned the Striking-Out Summons for determination at trial, and made a costs order nisi (“the Costs Order Nisi”)  that the costs thereof be reserved, save that one-third of the costs of the hearing (being roughly the time spent on the summons at the hearing)  should be paid by the Trustee to the Plaintiffs in any event, with certificate for two counsel, as I accepted the Plaintiffs’ submissions that the summons could not be determined at that stage.

2.By a summons of 5^th June 2023 (“the Summons”), the Trustee has applied to vary the Costs Order Nisi such that the costs of the Striking-Out Summons, including the costs of the hearing, should be in the cause of that summons.  The grounds for the application are that (1)  the case law unequivocally holds that an application to strike out for want of standing ought to be heard before the substantive hearing; and (2)  the Plaintiffs had agreed that the Trustee’s Striking-Out Summons should be heard together with the Plaintiffs’ Injunction Summons.

3.In relation to the first ground for variation, I note that the Trustee’s argument is essentially a re-run of the argument based on Kammy Town Ltd v Super Glory Corporation Ltd, unreported, HCA 3524/2003, 14^th January 2005, which has already been considered and addressed in paragraphs 16 to 28 of the Decision.  It is not appropriate to seek to vary a costs order nisi on the grounds that the substantive decision underlying the order is, in fact, wrongly decided.

4.Insofar as the Trustee says that in its view, it was reasonable for it to ask for the Striking-Out Summons to be determined before the Injunction Summons,[2] this is not a reason why costs should not be ordered against the Trustee, since it failed to persuade the court to adopt this view.

5.The Trustee also says that it should not be penalised in costs as the Striking-Out Summons has not yet been substantively determined.  However, the costs that the Trustee has been ordered to pay do not relate to the substantive merits of the summons, but only to the issue of whether the summons should be determined at this stage.  Pamela argued that it should not; the Trustee argued that it should.  The Trustee failed on this issue.  I do not agree with the Trustee’s submission that “Pamela did not succeed in any substantive or procedural element of her pleaded case”.  Under the Costs Order Nisi, costs simply follow the event.  As the Plaintiffs submit, had the Trustee not insisted at the hearing that the Striking-Out Summons should be conclusively determined summarily on that occasion, and indeed that it had to be determined before the Injunction Summons could be determined, arguments need not have been made and costs need not have been incurred; having failed on this issue, the Trustee should be responsible for the costs thereof.  I do not agree that the arguments advanced were merely for the purposes of seeking directions for the further conduct of the case.

6.Nor do I agree that it is wrong to order the Trustee to pay the costs relating to its insistence on determining the Striking-Out Summons at this stage because the Trustee may eventually succeed on the issue of standing at trial.  What has been determined is that it is not appropriate, on the current state of the evidence, to make a final ruling regarding Pamela’s standing.  This will remain the case no matter what the outcome of the Striking-Out Summons may eventually be.

7.The Trustee says that if it had deferred the determination of the striking-out until trial, it could have been criticised for failing to raise the matter of standing at an earlier stage.  However, the Trustee had already raised the matter by virtue of its summons.  I agree with the Plaintiffs’ submission that in any event, this is a case where, even if Pamela’s claim had been struck out, the 2^nd to 4^th Plaintiffs’ identical claims would still need to be tried, and there is no basis to suggest that the evidence adduced at trial would be any different from the evidence which Pamela would have adduced, so it is not as if a determination in the Trustee’s favour would have obviated the need for a trial. See paragraphs 22 to 26 of the Decision.

8.In relation to the second ground for variation, the Trustee says that in making the costs order, I should have had regard to the facts that (1)  the Plaintiffs had agreed to the Striking-Out Summons be heard with the Injunction Summons, and (2)  Pamela did not dispute that the Striking-Out Summons should be heard prior to the hearing of the Injunction Summons until the hearing of 23^rd February 2023.[3]

9.The Plaintiffs say that these assertions factually incorrect.  The Plaintiffs point out that:

9.1  at the three-minute hearing on 20th September 2023, the Master had already ordered (not by consent)  that the Striking-Out Summons be adjourned for argument at the hearing fixed for the Injunction Summons, so that the Trustee’s solicitors’ letter of 3^rd October 2022, signed also by the Plaintiffs’ solicitors as a joint letter, was simply for the purpose of confirming that there were common issues between the two summonses and to confirm that the hearing time allotted would be sufficient for disposing of both;

9.2  the Plaintiffs’ solicitors’ letters of 20th December 2022 and 10^th January 2023 had indicated their position that the Striking-Out Summons should in fact be withdrawn.

10.In any event, it was plain by the time of the Plaintiffs’ skeleton arguments of 20th February 2023 and 23^rd February 2023 that their stance was that the issue of Pamela’s standing would not be resolved at an interlocutory hearing and should not be the subject of a strike-out application.  The costs of the hearing which are the subject of the current application were incurred thereafter.  Furthermore, I agree with the Plaintiffs that an agreement to have the Striking-Out Summons placed before the court at the hearing of 23^rd February 2023 does not necessarily amount to an agreement to have the summons substantively determined. As the Plaintiffs point out, in Kammy Town at [14], it was held that “at the substantive hearing [of the application relating to lack of authority], the court has to see whether the objection raised by the defendant can be summarily disposed of on the affidavit evidence that has been placed before the court for the purpose, and if not, how the objection can be determined and give directions accordingly”.

11.I therefore dismiss the Summons.  The Costs Order Nisi is made absolute.  I further make a costs order nisi that the costs of and occasioned by the Summons is to be paid by the Trustee to the Plaintiffs, to be summarily assessed on the papers.  The Plaintiffs are to lodge and serve a statement of costs, no longer than two pages, within seven days; the Trustee is to lodge and serve a list of objections, if any, in bullet point form and no longer than two pages, within seven days thereafter; the Plaintiffs have leave to lodge and serve a reply, if any, in bullet point form and no longer than two pages, within three days thereafter.

Mr Kerby Lau, instructed by Hugill & Ip, for the Plaintiffs 

Messrs. Deacons for the 1^st Defendant