Pamela Aldred and Others v. Castle Fiduciary Ltd and Another

HCA 643/2022

[2026] HKCFI 2190

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 643 OF 2022

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REASONS FOR DECISION

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A.     INTRODUCTION

1.By summons of 22nd August 2025 (“the Summons”), the 1st Defendant (“the Trustee”) sought:

1.1     an order that the issue of whether the 1st Plaintiff is a beneficiary of the Compass Trust and has locus standi to bring her claims in these proceedings be determined by way of a trial of a preliminary issue; alternatively,

1.2     leave to appeal out of time against the order I earlier made on 23rd May 2023 that, inter alia, the Striking-Out Summons (as defined below) be adjourned for determination at trial (“the May 2023 Order”).

2.At the hearing on 14th April 2026, I dismissed the Summons.  I now set out my brief reasons for so doing.

B.     THE BACKGROUND

3.The background to these proceedings was set out in Section B of my earlier decision of 23rd May 2023 (“the May 2023 Decision”).  For present purposes, I recap as follows.

3.1     The dispute between the parties relates to a discretionary trust (“the Compass Trust”). The Plaintiffs say that it was created at the behest of Michael John Aldred (“the Deceased”), and that the settlor John Lindsay Aldred (“Lindsay”) (the Deceased’s brother) was merely the settlor on paper.  The Plaintiffs claim against the Trustee for breach of fiduciary duty and breach of trust.

3.2     This action was originally commenced by the 1st Plaintiff, the Deceased’s widow (“Pamela”) in her personal capacity and on behalf of the beneficiaries of the Compass Trust, and the 2nd Plaintiff in his capacity as the administrator of the estate of the Deceased, against the Trustee and Lindsay.

3.3     The Trustee sought to strike out Pamela’s action on the ground that she had no standing to bring her claim (“the Striking‑Out Summons”).  The argument was that upon the death of the Deceased, Pamela ceased to be a beneficiary of the Compass Trust.

3.4     Upon the application of Pamela and the 2nd Plaintiff, the Deceased’s two daughters were added as the 3rd and 4th Plaintiffs, and the writ was amended accordingly.

4.In the May 2023 Decision, I decided that the issue of Pamela’s standing could not be summarily determined on the affirmation evidence alone.  I considered that:

4.1     it is at least arguable that on a proper construction of the trust deed, the intention was not to exclude widows as beneficiaries;

4.2     the trust deed could not be properly construed without first establishing the factual matrix surrounding the formation of the Compass Trust, including the purpose for which the trust was set up and the identity of the real settlor.  There was a conflict of evidence regarding these matters.

5.The question was therefore whether a separate hearing, involving cross-examination of deponents, should be held in advance of the trial (this was the Trustee’s fallback position).  I decided against this, since even if Pamela’s claim were struck out, the 2nd to 4th Plaintiffs’ claims, which were in identical terms to Pamela’s, would remain to be considered at trial, and it was not suggested that they did not have standing to pursue the claims (in the case of the 2nd Plaintiff, at least in relation to rights and benefits accrued to the Deceased’s estate prior to the Deceased’s death).  In such circumstances, no saving of time and costs would be achieved by a separate hearing prior to trial; on the contrary, a separate hearing prior to trial would involve duplication (such as having witnesses attend twice for cross-examination).  In arriving at this view, I considered that Kammy Town Ltd v Super Glory Corporation Ltd, unreported, HCA 3524/2003, 14th January 2005, could be distinguished.  See May 2023 Decision at [22] to [26].

6.I therefore ordered that the Striking-Out Summons be adjourned for determination at trial.

C.      THE PRESENT APPLICATION

7.The Trustee said that on 9th August 2024, the Court of Appeal handed down its judgment in Bold Shine Investment v Zheng Deli [2024] 4 HKLRD 191, which dealt with a challenge by the defendants to the plaintiff company’s authority to sue in the absence of approval or resolution by the board of directors.  The Court of Appeal observed at [35] that it is trite as a matter of law that challenge to a plaintiff’s authority to sue is not a defence, and that authority to sue goes to the fundamental question of whether an action is properly constituted, so that the challenge must be made at the outset.  The Court of Appeal further disagreed at [40] that Kammy Town concerned only a rule of practice rather than a rule of law.

8.The Trustee therefore invited me to reconsider the May 2023 Order.  It said that the issue of standing is akin to the issue of authority to sue, so that if Bold Shine were to apply to the present case, the issue of standing should be tried as a preliminary issue, and it was not within my discretion or case management power to order that it be deferred to trial.^[1]

C1.    Analysis

9.Counsel for the Trustee, Mr Victor Joffe SC (leading Ms Bonnie Cheng), acknowledged that Bold Shine concerned a plaintiff’s authority to sue, rather than the issue of a plaintiff’s standing.

10.Counsel for the Plaintiffs, Mr Charles Sussex SC (leading Mr Kerby Lau), pointed out that whilst both types of challenge involve a threshold question, in that a successful challenge in either case would successfully put an end to the plaintiff’s case, the nature of the challenges is very different.  A challenge to a plaintiff’s authority to sue raises the question of whether the action has been properly brought in the plaintiff’s name, but is not a defence to the substantive cause of action.  A challenge to a plaintiff’s locus, however, is a defence to the substantive cause of action.  The nature of an authority challenge was explained in Bold Shine at [23], citing the leading authority of Russian Commercial and Industrial Bank v Comptoir d’Escompte de Mulhouse [1925] AC 112.  The reason why such a challenge is a matter that should be determined at the outset is because it goes to the question of whether an action is properly constituted: see Bold Shine at [35].

11.Mr Joffe submitted that Bold Shine did not hold that the principles applicable to a challenge to a plaintiff’s authority to sue should not also apply to a challenge to a plaintiff’s standing.

12.It seems to me that in fact, the distinction between the two types of challenge was recognised in Bold Shine: see [29] to [32], in which Chu VP considered Liquidation Committee of Foshan Hongda Development v. East Legend Investment Ltd [2009] 1 HKLRD 169 and observed that although it concerned a challenge to standing, on true analysis it was a case relating to the authority to pursue a claim of the company, and the term “standing to sue” used in that judgment should be understood in that light.

13.Chu VP further referred to the decision of Lam J (as he then was) in Chu Wai Chun Jackie v. Lam Siu Kei, unreported, HCAP 3/2009, 9th June 2010 at [14], where Lam J (as he then was) rejected counsel’s submission that Foshan Hongda Development should be extended to challenges to standing.  Lam J said:

“ 14. Mr Shieh submitted that Foshan Hongda extended that principle to other scenarios where the locus of a plaintiff is being challenged. I do not agree. In my view, on true analysis, Foshan Hongda was also a case concerning the authority to pursue a claim of the company…

15.   Properly understood, I do not think Foshan Hongda laid down a general proposition that whenever the locus standi of a plaintiff is in dispute, the point cannot be raised by way of defence and instead it has to be determined either by way of a strike out application or a determination of preliminary issue.”

14.Thus unlike a challenge to a plaintiff’s authority to sue, which cannot be raised by way of defence, a challenge to standing may well constitute a defence, for determination at trial.

15.Mr Joffe relied on Mok Mei Ling Rekei v. Lau Muk Fat [2021] HKCA 706 as holding that the principle in Kammy Town applied to both types of challenge (authority to sue and standing).  However, the court’s view in that case was that the plaintiff’s locus went to the issue of whether the proceedings were properly constituted and whether the court had jurisdiction to deal with the substantive issues arising on the originating summons: see [46].  In the present case, it cannot be said that there is any issue of locus that affects the constitution of the present proceedings or the court’s jurisdiction to deal with the substantive claims of the Plaintiffs.  As Mr Joffe acknowledged, (1) the 3rd and 4th Plaintiffs undoubtedly have locus to make the claims (as does the 2nd Plaintiff, at least insofar as rights accrued prior to the death of the Deceased are concerned), (2) the present proceedings are properly constituted, and (3) the court has jurisdiction to grant the relief sought in the Plaintiffs’ Statement of Claim.  Mr Joffe did then go on to submit that as far as Pamela was concerned, the proceedings were not properly constituted, and the relief could not be granted at the instance of Pamela.  However, since the Plaintiffs advance identical claims and seek identical relief, the concerns that arose in Mok Mei Ling Rekei do not arise in the present case.

C2.    The application for reconsideration

16.In the light of the above, I did not see how Bold Shine could be said to have given rise to the need to reconsider the May 2023 Decision.  Whilst it may be possible to have the issue relating to Pamela’s standing determined prior to trial, Bold Shine does not require that it be so determined.

17.Mr Sussex further submitted that it was an abuse of process for the Trustee to ask for a reconsideration, since it was seeking to relitigate an issue which had already been decided.  In support, Mr Sussex cited Sanyo Electric Trading Co Ltd v. Leung Kwok-hing [1993] 1 HKLR 253at 256 and Lau Sin v. Wong Mary [2018] 3 HKLRD 202 at [33(b)].

18.Mr Joffe submitted that since the decision to adjourn the Striking-Out Summons was a matter of case management, the court had the jurisdiction to revisit the decision, citing Asia-Pac Infrastructure Development Ltd v Ing Yim Leung Alexander [2011] 1 HKLRD 587, which referred to (1) Practice Direction 5.2 at paragraph 39 (regarding the power of the court to set aside or vary a prior direction where there has been a change of circumstances), and (2) RHC O.1B r.1(2) (which provides that the court may take any other step or make any other order for the purpose of managing a case and furthering the underlying objectives set out in Order 1A).  Stone J also expressed the view that it should always be open to a trial judge to consider afresh case management matters if the interests of justice demanded it.

19.In oral submissions, Mr Joffe said that Bold Shine did not merely restate existing authority, but in fact changed the law.  He submitted that whilst a number of first instance authorities had suggested that Kammy Town was merely a rule of practice, the Court of Appeal in Bold Shine held that Kammy Town was a rule of law: see [40].

20.I accept that the court has jurisdiction to revisit a case management decision and that there may be a wide range of circumstances which would justify such revisiting.  I would also not definitively rule out the possibility that a change in the law alone (without any change in factual circumstances) might in some cases provide justification for such revisiting (for example, where the change in law relates to a matter of case management).  However, insofar as Bold Shine clarified that Kammy Town was a rule of law, this was in relation to challenges to authority to sue, and therefore has no application to the present case.  Furthermore, if anything, Bold Shine clarified that challenges to authority to sue are distinct from challenges to standing, contrary to the stance taken by the Trustee at the original hearing of the Striking-Out Summons that the Court of Appeal in Mok Mei Ling Rekei had applied Kammy Town to challenges to standing, so that the challenge to Pamela’s standing was required to be determined as a threshold issue prior to trial.^[2]

21.In the circumstances, the application for a reconsideration of the May 2023 Decision was nothing more than an attempt to have a second bite of the cherry.  I agree with Mr Sussex that it is an abuse of process.

C3.    Leave to appeal out of time

22.What remained was the issue of whether leave should be given to the Trustee to appeal against the May 2023 Order out of time.

23.The length of delay is substantial: some two and a half years.

24.The Trustee sought to explain much of this by saying that Bold Shine changed the law, and the judgment was only handed down on 9th August 2024.  This was still well over a year before the Summons was filed.

25.On either basis, there was no good explanation for the delay.

26.As regards the explanation that Bold Shine changed the law:

26.1     a change in the law is not in itself sufficient justification for delay; special reasons would still need to be shown: Birkenhead Properties & Investments Ltd v. Leung Yiu & others [1998] 1 HKLRD 527 at 532J to 533F (Mayo JA).  To permit the validity of a judgment to be revisited because of judicial developments that occur long after the date for lodging an appeal has passed will only serve to perpetuate a continuing state of uncertainty and promote a lack of finality in litigation that cannot be in the public interest (at 539A, per Le Pichon J);

26.2     in any event, Bold Shine did not change the law in any relevant respect for present purposes.  As the Court of Appeal said in its judgment at [21], the legal principles underlying a challenge to a party’s authority to sue and the proper procedure and approach to it are not controversial and well‑established.  At [35], it observed that it was trite as a matter of law that challenge to a plaintiff’s authority to sue is not a defence.  Insofar as the Court of Appeal clarified that a challenge to authority is a rule of law rather than of practice, that was not a change which has any relevance for present purposes, as discussed above.

27.Bold Shine therefore cannot in itself amount to justification for any part of the delay.

28.Even if one were to consider the matter on the basis that Bold Shine triggered the Trustee’s application, so that the period of delay prior to Bold Shine is disregarded, there was still no good explanation for much of the remaining period of delay. The Trustee said that Bold Shine was handed down at a time when the parties had expressed a serious intention to engage in mediation, which subsequently culminated in a consensual six-month stay, and it would have increased costs and hampered settlement for the Trustee to have made its application at that time.^[3]  However:

28.1     even after Bold Shine was handed down on 9th August 2024, the Trustee did not take out any application prior to the consensual stay coming into effect on 30th December 2024.  As Huggins VP observed in Chan Mo Ching v Liu Tsui Ying, unreported, HCMP 856/1983, 18th May 1983, it is well established that discussions for compromise do not excuse a failure to file a notice of appeal.  The Trustee could have filed a notice of appeal to preserve its position without any substantial increase in costs or jeopardising settlement, but it did not;

28.2     as the Plaintiffs pointed out, during the period of the six‑month stay, the Trustee did not even seek to raise the point and preserve its position;

28.3     even after the stay was lifted, the issue was first raised only five weeks later, by way of correspondence on 6th August 2025.  The Trustee did not file the Summons until 22nd August 2025.

29.Where delay is inexcusable, an applicant for leave to appeal out of time must show a real prospect of success, and not just a reasonable prospect of success: Secretary for Justice v Hong Kong & Yaumati Ferry Co Ltd & another [2001] 1 HKC 125 at 128C, 132F.

30.I have already set out above why I did not consider that Bold Shine would assist the Trustee.  I therefore did not agree that the Trustee has shown a real prospect of success.

D.     DISPOSITION

31.For these reasons, I dismissed the Summons.

32.Mr Sussex asked for an order for indemnity costs.  Given that the Trustee’s application consisted of (1) an attempt to relitigate a matter already expressly ruled upon without proper justification for re-opening, and (2) an attempt to seek leave to appeal grossly out of time without good explanation, I consider that it is appropriate to award indemnity costs.  I make an order nisi that the Trustee is to pay the costs of the Plaintiffs on an indemnity basis, with certificate for two counsel, to be summarily assessed.  At the hearing, directions were given for the Plaintiffs to lodge and serve their statement of costs by Friday 17th April 2026;^[4] the Trustee has leave to lodge and serve a list of objections within three days thereafter in bullet point form limited to two pages; the Plaintiffs have leave to lodge and serve a reply, if any, within three days thereafter in bullet point form limited to two pages.  At the hearing, counsel raised the issue of whether the Trustee might recoup its costs from trust funds.  Insofar as the Trustee seeks to pursue this, an application to vary the costs order nisi should be made at the time of serving its list of objections; the Plaintiffs have leave to respond within the time limited for serving a reply in relation to the statement of costs, and the Trustee has leave to reply within three days thereafter.

Mr Charles Sussex SC leading Mr Kerby Lau, instructed by Slaughter & May, for the 1^st Plaintiff

Mr Victor Joffe SC leading Ms Bonnie YK Cheng, instructed by Deacons, for the 1^st Defendant