Cheng Ching Fong v. Ting Shuk Kay Peggy, Executrix of the Will of Ting Sok Hang, Deceased

HCA 2834/2016

[2026] HKCFI 613

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2834 OF 2016

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BETWEEN

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DECISION

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1.In this decision, I will continue to adopt the terms and definitions used in the judgment herein handed down on 19 May 2025 after a 6-day trial (“the Judgment”).

2.The parties disputed in this action over the beneficial ownership of 3 properties, namely the Aberdeen Centre Property, the Pearl City Property and the Baguio Villa Property.

3.On the 2^nd day of trial, D abandoned her Counterclaim and an order was then made giving D leave to so discontinue with the costs of the Counterclaim be to P. Thus, D abandoned her claim to Baguio Villa Property entirely; and abandoned her claim for declarations in respect of the other 2 properties, but this latter abandonment had little impact on the trial as D was maintaining the same averments and contentions in respect of these 2 properties by way of defence.

4.The remaining issues over the 2 properties, in a nut shell, were (a) whether as P claimed, despite the severance by the Deceased of the joint tenancy of P and the Deceased over Aberdeen Centre Property (therefore prior to this action P and the estate of the Deceased were holding the property as tenants-in-common), it nevertheless should be regarded as still being held by way of a joint tenancy because of a common intention constructive trust, with the result that P now owns its entirety by right of survivorship, and (b) whether the Pearl City Property was purchased with P’s money and has been held by the Deceased on trust for P under an express or resulting trust.

5.In the Judgment, I dismissed P’s claim in respect of the Aberdeen Centre Property, but gave judgment to his claim over the entire beneficial ownership of the Pearl City Property. In §79, I gave a global costs order, on nisi basis, that D do pay P 75% of P’s costs of this action, including his costs of the Counterclaim and all costs reserved (if any).

6.On 2 June 2025, P issued a summons seeking 2 orders imposing the consequences provided under O.22 r.24 of the Rules of the High Court where a plaintiff does better than he proposed in a sanctioned offer. The 2 orders are (a) a variation of the costs order nisi to the extent that P’s 75% costs incurred after 28 March 2024 be taxed on an indemnity basis, and be paid with interest thereon at 2% above the prevailing prime rate until full payment; and (b) D shall pay enhanced interest at 5% above the judgment rate from 29 March 2024 onwards on the sums found due on an account to be taken (as one of the reliefs ordered following the Judgment) as to the amount D ought to pay P for D’s use of the Pearl City Property and/or from profits D obtained from the property from 24 May 2016.

7.P’s sanctioned offer expressed to be made under O.22 was made by his solicitors’ letter dated 1 March 2024[1], more than a month and a half before the commencement of the trial. The terms of the offer were that (a) D was to transfer her interest (being half share) in the Aberdeen Centre Property to P, with D paying all expenses relating to the transfer, including stamp duty (if any), (b) P would withdraw all his claims relating to Pearly City Property; and (c) D would withdraw all her claims to the Baguio Villa Property; and (d) the offer was inclusive of interest (if any) and each party would bear their own costs (“the Offer”). It is common ground that the Offer was not accepted by D and she made a counter sanctioned offer on 28 March 2024, on which nothing turns.

8.I will first consider D’s first and main contention.

Invalid sanctioned offer

9.D contends as a legal issue that because the Offer contained a provision or term as to the costs consequence, the Offer is an invalid sanctioned offer under O.22, citing Wong Yim Man Anthea v Wong Ho Ming Felix [2016] 3 HKLRD 249 and Choi Tak Man v Chan Yuk Lan Didi [2017] 5 HKLRD 619, where it was held that an offer containing a term as to costs was not a valid sanctioned offer. This was further explained by Ng J in The Owners and/or Demise Charterers of the Ship or Vessel “TS Singapore” v The Owners and/or Demise Charterers of the Ship or Vessel “Xin Nan Tai 77” and Another HCAJ 158/2012, unrep., 30 November 2017 at §§25-28 and explained and applied by DHCJ Winnie Tsui (as she then was) in Cheng Sing Keung and Another v Chan Ka Hay and Others [2021] HKCFI 2646 at §§9 to 10, that the objectionable feature is not the inclusion of a term or provision on costs per se, but is the inclusion of a term or provision on costs which is inconsistent with the automatic costs consequence upon acceptance as provided under O.22 r.20 (upon acceptance of the defendant’s sanctioned offer or payment) or under O.22 r.21 (upon acceptance of the plaintiff’s sanctioned offer), and as such, the offer does not qualify as a “sanctioned offer … made in accordance with this Order” as defined in O.22 r.1(1).

10.In both Wong Yim Man Anthea and Choi Tak Man, the respective winning party included in their respective purported sanctioned offer a term as to costs that there be “no order as to costs”. Though a concession on their respective part, it was held that the respective offer was not a sanctioned offer because of the inclusion of such a costs provision. In Cheng Sing Keung also, a term in the offer that the other party was only to pay 75% of costs was held to have rendered the purported sanctioned offer not qualified as one within O.22.

11.In the present case, the Offer contained a term that there be no order as to costs, which is different from the automatic costs consequence upon acceptance provided by O.22 r.21 that P would be entitled to his costs up to the date D serves notice of acceptance. The Offer therefore is not a sanctioned offer within O.22.

12.As the Offer is not a valid sanctioned offer, the question of interest on costs and enhanced interest on the sum to be found due in the account would not come into play.

P did better that the terms in the Offer ? Indemnity costs be awarded treating the Offer as a Calderbank offer ?

13.D accepted that though the Offer is not a valid sanctioned offer, it can still be considered as a Calderbank offer on the issue of costs.

14.I will only be brief on the following matters, though hotly debated between the parties, as in the round I am not persuaded that indemnity costs, as now asked for by P, should be awarded.

15.The parties have hotly contested as to whether P in fact had done better than the Offer. They proffered valuation reports to compare the market value of the half share in the Aberdeen Centre Property with that of the Pearl City Property. P has exhibited surveyors’ report on the market value of these 2 properties as on 19 May 2025 (date of the Judgment). D contests that the correct valuation date is 28 March 2024 (being the last day she could have accepted the Offer without leave, on the basis that it were a sanctioned offer), but exhibited 2 sets of valuation reports of the 2 properties, one as valued on 19 May 2025, and another as valued on 28 March 2024. There is also the dispute that in assessing the value of the half share in the Aberdeen Centre Property, whether a discount attributable to selling merely half interest in the property, which is usual in open market sale of half interest, should be applied.

16.First, I accept D’s position that to consider the question if the plaintiff has done better than the sanctioned offer, the Court should compare the position as on the date the sanctioned offer could have been accepted without leave and not as on the date of judgment (Chan Nga v Cathay Pacific Catering Services (H.K.) Ltd [2021] 2 HKLRD 874 applying Blackham v Entrepose UK [2005] 1 Costs LR 68 at §14).

17.Second, whether for the purpose of deciding whether P has done better in the Judgment than the Offer or on whether it would be unjust to impose the consequences of O.22 r.24, and in the particularly circumstances of this case, I am not prepared to apply the said discount because the Offer, if and when accepted by D, would mean that P would be able to completely hold the entire interest in the Aberdeen Centre Property, which would be of value to him, and had he tried to acquire the half interest in the open market, the prospective vendor in all likelihood would not be prepared to sell to him with the said discount, but would insist on the full or near full value of that half share.

18.Third, I accept Mr Chan’s submission that even accepting the market value of the properties on 28 March 2024 as valued in D’s reports and even if no discount were to be applied, the value of half share in Aberdeen Centre Property was HK$5 million, while the value of the Pearl City Property was HK4.9 million, but because P was awarded an order for payment of a sum for the use of the Pearl City Property for the period from 24 May 2016 until the date of the account (for more than 10 years), the sum P would be so paid would very definitely be more than the HK$100,000 difference in value. Hence, I readily accept that P has done better than the terms in the Offer.

19.However, as pointed out by Ms Leung, which was indeed the case, that in giving the global costs order nisi awarding to P costs overall of 75%, I have already taken into account D’s conducts relating to her belated abandonment of the Counterclaim and the other matters regarding D’s case that Mr Chan criticized in his submissions. Thus, even weighing in the fact that D has failed to accept the Offer when she should have, in the round I am not convinced that this is a case appropriate for awarding indemnity costs even for the limited period starting from the time the Offer ought to have been accepted.

Disposal

20.By reasons of the above said, P fails in this application and P’s summons dated 2 June 2024 is dismissed, and on nisi basis, with costs to be taxed if not agreed, which will become absolute in 14 days.

21.It remains for me to thank both counsel for their assistance.

Mr Ryan Chan, instructed by Neo Solicitors LLP, for the Plaintiff

Ms Yvonne Leung, instructed by Wai & Co., for the Defendant