Lam Po Chun Virginia v. Ku Kin Kwan

DCMP 6780/2024

[2025] HKDC 1043

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 6780 OF 2024

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BETWEEN

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DECISION

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I. INTRODUCTION

1.This is an application by Summons dated 13 May 2025 (“the Costs Summons”)  made by the Plaintiff, Lam Po Chun:

(i)  for the costs order nisi made on 29 April 2025 be varied to “the Defendant do pay the Plaintiff’s costs in relation to the Plaintiff’s application for the order for sales”;

(ii)  Such costs in (i)  above be assessed summarily and for such costs to be paid by the Defendant to the Plaintiff forthwith; and

(iii)  Costs of the present application be to the Plaintiff.

II.  BACKGROUND

2.By an Origination Summons dated 5 December 2024, the Plaintiff sought to remove herself from the co-ownership of the Property with the following relief from the Court, namely:

(1)  A declaration that the Defendant shall be the only party in breach of the 1^st BOC Mortgage of the Electric Road Property and be solely responsible for any loss and/or damages arising therefrom;

(2)  An order for sale of the Electric Road Property pursuant to sections 2, 3 & 6 of the Partition Ordinance (Cap 352)  by way of private treaty or public auction to be conducted by agents and/or auctioneers;

(3)  An order that the conduct of the sale of the Electric Road Property shall be committed to a solicitors’ firm to be nominated by the Plaintiff’s solicitors herein (“Nominated Solicitors’ Firm”);

(4)  An order that the Defendant shall do all acts and things necessary for the sale of the Electric Road Property to the purchaser(s)  and cause all documents and instruments as necessary to implement the sale of the Electric Road Property and convey its title to the purchaser(s)  to be properly signed or executed within 7 days of the written request made by the Nominated Solicitors’ Firm;

(5)  An order that in the event that the Defendant neglects or refuses to sign or execute the documents and instruments as referred to in (4)  above, a representative of a solicitor’s firm appointed by the Nominated Solicitors’ Firm, shall be appointed to sign and execute all documents and instruments (in place of the defaulting defendant(s))  as necessary to implement the sale of the Electric Road Property and convey its title to the purchaser(s);

(6)  An order that the proceeds of sale of the Electric Road Property shall be applied in the following orders of priority:-

(a)  first, in discharge of all taxes, rates, government rent, and other outgoings due and affecting the Electric Road Property, if any;

(b)  second, in discharge of the 1^st BOC Mortgage and other encumbrances affecting the Electric Road Property having priority to the 3^rd Parklane Mortgage, if any;

(c)  third, in payment of the reasonable costs, charges and expenses as necessarily incurred in the sale of the Electric Road Property (including conveyancing legal fees, estate agent's commission and auctioneer’s fee, if any);

(d)  fourth, the net proceeds of sale to be split into two equal halves of which one half shall belong to the Plaintiff (“P’s half share”);

(e)  P’s half share shall be paid to the Plaintiff;

(f)  As to the other half (“the Remaining half share”), it shall be distributed as the Court deems fit taking into account the encumbrance of the 3^rd Parklane Mortgage which the Defendant should use the Remaining half share for clearance. 

(7)  An order to direct the Defendant to discharge the remaining 3^rd Parklane Mortgage and all other encumbrances, if any, affecting the Electric Road Property;

(8)  An order that the parties do have leave to bid at the auction;

(9)  An order that the parties be at liberty to apply;

(10)  Interest;

(11)  Costs; and

(12)  Further or other relief as this Honourable Court deems fit.

3.An Affirmation of the Plaintiff dated 2 January 2025 (in 13 pages)  had been filed in support of the Originating Summons, setting out the background to the acquisition of the Property and the Plaintiff’s allegations against the Defendant that formed the reasons for the Plaintiff’s application for an order for sales, with Exhibits LPCV-01 to LPCV-09.  The Plaintiff’s argument for an order for sales was that the Defendant had mortgaged her share of the Property without the consent of Bank of China, the 1^st mortgagee, nor the Plaintiff, and the Defendant had further mortgaged her share of the Property to Parklane Mortgage Services Limited (“Parklane”), putting the Plaintiff at risk.

4.By a Notice of Appointment dated 18 February 2025, the date to hear the Originating Summons was fixed on 28 March 2025.

5.A Skeleton Submissions dated 19 March 2025 (of 12 pages)  was lodged by the Plaintiff with the Plaintiff’s List of Authorities and the Plaintiff’s Statement of Costs for Summary Assessment.

6.The Plaintiff filed an Affirmation of Service dated 26 February 2025 of Cheung Ka Yu to affirm service of the Originating Summons and the Notice of Appointment to the Defendant. The Defendant did not respond at all and did not enter into an appearance at the Court on 28 March 2025.

7.Having considered the legal principles, it was decided in the circumstances a sale would be more beneficial than a partition, as it was impractical to make an order for partition given the size of the small flat. It was recognized that a co-owner has a basic right to rid himself of the shackles of co-ownership by way of an order for sale.

8.At the hearing, Cheung Ka Yu, Associate of WTS Lawyers representing the Plaintiff, obtained instruction and withdrew the Plaintiff’s request for the declaration at §10(1)  of the Decision dated 29 April 2025 (“the Decision”), namely, that “…the Defendant shall be the only party in breach of the 1^st BOC Mortgage of the Electric Road Property and be solely responsible for any loss and/or damages arising therefrom”. So, this Court was left with the application for an order for sale of the Property and the consequential orders necessary to give effect to the order for sale, if granted.

9.In the circumstances, this Court exercised its jurisdiction and granted an order for sale of the Property upon the terms stated at §26 (1)  to (8)  of the Decision for the reasons stated therein, but not in the terms of the orders sought by the Plaintiff in the Originating Summons.

10.At §26 (8)  of the Judgment, it was directed that there be no order as to costs of the application and the hearing on nisi basis, giving the Plaintiff an opportunity to vary the order nisi within 14 days of handing down.

11.In respect of the present Summons, the Plaintiff has filed the 2^nd Affirmation of Cheung Ka Yu filed on 13 May 2025. In her 2^nd Affirmation in support of her application to vary the costs order nisi, Miss Cheung Ka Yu at §3 set out Order 62 rule 3(2)  of the Rules of the District Court to highlight that “the Court shall, subject to his order, order the costs to follow the event, except when it appears to the Court that in the circumstances of the case some other order should be made to the whole or any part of the costs”. 

12.In this case the Plaintiff had only succeeded in terms of the order for sales but not in respect of the declaration it sought but was withdrawn at the hearing, nor in respect of the other orders sought for the conduct of the sales and the distribution of the proceeds. For the above reason, it was then considered it was a limited partial success and, as a result, it was ordered there be no order as to costs. The Plaintiff was a party that opted to own the Property jointly with the Defendant and needed an order for sales or partition and the consequential orders.

13.With this application to vary the order nisi, upon further consideration of all the circumstances, including the pre-action letters Exhibits CKY-08 and CKY-09 to the 2^nd Affirmation of Cheung Ka Yu, I agree that the Plaintiff had succeeded to the extent of the order for sales and it would be appropriate to order in terms of the Costs Summons, for the Defendant to pay the Plaintiff’s costs on party to party basis, subject to summary assessment by the Court, giving due consideration of the costs incurred in relation to the order for sales.

14.The Plaintiff’s Statement of Costs for Summary Assessment is at Exhibit CKY-10. In respect of the application and the hearing on 28 March 2025, the costs incurred by WTS Lawyers included that multiple fee earners, WTS (Principle), JC (Consultant)  and KC (Associate). In respect of attendance on client, all three attended. In respect of preparation for the simple hearing of 0.5 hours, 14.1 hours was incurred by KC, even though 31.6 hours was already spent by KC in respect of the preparation of documents. Further, both JC and KC attended the hearing. Given the limited success, and the multiplicity of fee earners, I summarily assess the costs to be HK$110,000.00 and I shall order the Defendant to pay the Plaintiff the sum so assessed forthwith.

 III.   DISPOSAL

15.To conclude, for the costs variation application under the Costs Summons, I order that:-

(a)  The costs order nisi be varied and made absolute such that the Defendant shall pay the Plaintiff HK$110,000.00 forthwith being the Plaintiff’s costs in relations to her application for the order for sales; and

(b)  The costs of the Costs Summons be to the Plaintiff, to be taxed if not agreed on party to party basis. 

Miss Cheung Ka Yu of WTS Lawyers, for the plaintiff

The defendant was not represented and did not appear