Chan Suet Yan, The Person Appointed To Represent the Estate of Pang Ho Tong, Deceased v. Tsui Lok Hei and Another
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DCCJ 3407 & 6227/2019 (Consolidated) [2026] HKDC 1740 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NOS 3407 AND 6227 OF 2019 ------------------------------- BETWEEN
(By Original Action) ------------------------------- AND BETWEEN
(By Counterclaim) ------------------------------- (Actions consolidated by the Order of Registrar Lui dated 14 April 2021) -------------------------------
------------------------------- DECISION ------------------------------- A. INTRODUCTION 1.After the Judgment for trial in this matter was handed down on 2 December 2025 (“Judgment”), D1 and D2 have each made applications before this Court. This is my decision on these applications. Save as otherwise provided, I adopt the same abbreviations used in the Judgment. 2.D1 has applied by Summons filed on 11 December 2025 for the following orders:
3.D2 has applied by Summons filed on 5 January 2026 for the following orders:
4.In subsequent submissions, D2 has confirmed that it will not pursue its application for the order in paragraph 3(2) above. P, on the other hand, has confirmed that she does not oppose D1’s applications in paragraphs 2(1) and 2(2) above. B. APPLICATIONS UNDER ORDER 20 RULE 11 AND FOR DISCHARGE OF INJUNCTION 5.I am satisfied that D1’s application to amend the Judgment meets the requirements under Order 20 rule 11. The Court was aware of D1’s counterclaim to recover possession of the Suit Land (see Judgment at paragraph 2) and, given the findings in the Judgment, intended to allow this counterclaim. 6.Separately, I agree that the Injunction should be discharged following the dismissal of P’s claims. 7.As noted above, P does not oppose these applications. 8.I shall therefore order in terms of paragraphs 2(1) and 2(2) above. C. APPLICATIONS TO VARY COSTS ORDER NISI C1. The settlement offers 9.D1 relies on her Calderbank offer by a without prejudice letter from her solicitors to P’s solicitors dated 12 March 2024 on the following terms (“D1’s Offer”):
10.D1’s Offer was said to be valid for acceptance within the next 10 days, ie by 22 March 2024. P did not respond to the offer. According to the solicitor with the conduct of P’s case, P “did not give instructions to [them] to reply to D1”, whilst he was “[t]angled in the mix of his own physical condition and the demanding preparation for the Trial, for which [P] was confident”. 11.D2, on the other hand, had made three Calderbank offers to P. 12.The first offer was made by a without prejudice letter from D2’s solicitors to P’s solicitors dated 14 September 2023 (“D2’s First Offer”), by which D2 proposed that the parties appoint a single joint surveyor to inspect the Suit Land and determine whether P had occupied any part of Lot T42SB situated beyond its slope and fencing. If such encroachment could be established, D2 was willing to transfer the relevant portion of the land to P in settlement of the dispute. D2 asked that the relevant legal costs, surveyor’s fees and fees for transfer (if any) be borne by P. There was no response from P to D2’s First Offer. 13.The second offer was made by a without prejudice letter from D2’s solicitors to P’s solicitors dated 18 October 2023 (“D2’s Second Offer”), in which D2 offered to settle the dispute by transferring a piece of land within the boundary of Lot T42SB (as identified in the letter) to P, on the condition inter alia that P would bear his own costs and all costs relating to the transfer of land. 14.By a letter dated 8 November 2023, P’s solicitors informed D2 that, subject to approval by the Legal Aid Department, D2’s Second Offer was accepted by P. 15.However, by a further letter dated 4 January 2024, P’s solicitors informed D2 that they were instructed that, “upon further consideration”, P’s acceptance of D2’s Second Offer was “hereby revoked”. According to the solicitor with the conduct of P’s case, in about early December 2023, P informed them that since D2’s Second Offer covered only a tiny portion of the Suit Land and P had to bear all the costs for the transfer, P did not consider D2’s Second Offer reasonable, compared to what he might achieve if he were successful in the action. The purported reason for P’s change of mind was not contemporaneously set out in the aforesaid letter of 4 January 2024 or elsewhere. 16.The third offer was made by way of an open letter dated 9 January 2024 from D2’s solicitors to P’s solicitors (“D2’s Third Offer”), in which D2 repeated the same terms for settlement as proposed in D2’s Second Offer. P did not respond to D2’s Third Offer. C2. D2’s application out of time 17.Before turning to the substance of the costs variation applications, I shall first deal with D2’s application for leave to make its application out of time or alternatively to extend time for filing its application. 18.D2’s application was late for 20 days. Below are the grounds advanced to extend time:
19.P opposes the application. P submits that:
20.I accept D2’s submission (which was not disputed by P) that the Court has power to vary the costs order nisi even though that order had (1) become absolute and (2) been sealed at the time the variation application was made. To succeed on the application to extend time, D2 must show there is justifiable reason for not making the application within time and there are merits in varying the costs order. The Court is also required to take into account the consequences that would follow from a time extension when exercising its discretion. To the extent that setting aside the order absolute (in addition to merely extending time) is necessary, the Court takes into account the considerations under Order 2 rule 5 of the RDC. See Lai Kim Ming Joseph v Macrotech Security & Management Services Ltd [2021] HKDC 179 at paragraphs 13-34. 21.Applying the above principles and considering all relevant circumstances, I decide to exercise my discretion to extend time retrospectively to allow D2 to proceed with its costs variation application. My reasons are as follows:
C3. Applicable principles 22.A party who is in receipt of a reasonable settlement offer and who goes to trial having rejected that offer can be liable to a higher level of costs, if they do no better than the offer that has been rejected: Sam Sien San Albert v Sam Mo Yee [2019] HKCFI 1188 at paragraph 24 (DHCJ Paul Lam SC); Bright Gold Ltd v Mega Well Development Ltd [2019] 3 HKLRD 868 at paragraph 13 (A Chan J). 23.A higher costs order should not be regarded as a penalty, but a means of achieving a fairer result for the payee: Bright Gold (supra) at paragraph 12. 24.It is consonant with the underlying objectives enshrined in Order 1A rule 1 for the court to encourage dispute settlement, and therefore failure to respond constructively to a reasonable Calderbank offer, coupled with the subsequent failure to beat the offer, should weigh heavily against the offeree on costs: Bright Gold (supra) at paragraph 15. 25.As to the award of indemnity costs:
26.It has been observed in previous cases that the fact that a party is legally aided would not immunise him from an adverse costs order; and that failure to grant an adverse costs order (such as an indemnity costs order) in appropriate circumstances may serve as an encouragement to legally aided parties to pursue unrealistic and exaggerated claims, which will in turn be an unnecessary and unjustified strain on the public fund: see eg Angbuhhang Netra Jang v Laing O’Rourke Construction Hong Kong Limited & Anor [2021] HKCFI 232 paragraph 6 (Lisa Wong J). C4. D1’s application 27.P accepts that D1’s Offer was more favourable to P than the outcome of the trial. 28.P nevertheless contends that D1’s Offer was unreasonable, in that it was in substance a demand for P to abandon his claim against D1 and to bear most of D1’s costs incurred. It is said that given P genuinely believed he had a realistic prospect of success in the trial of the action, it was not unreasonable that he considered the offer unacceptable. P also refers to the fact that the Legal Aid Department’s decisions to extend the Legal Aid Certificate to P were made upon receipt of the merits assessment of P’s case by counsel. 29.P’s subjective beliefs in the strengths of his case or indeed his legal representative’s support for Legal Aid Certificate to be granted or extended to him for trial do not, in my view, materially advance P’s position for present purposes. For reasons explained in the Judgment, P’s case was objectively weak and fell far short of having the clear and compelling evidence required to establish adverse possession. D1, on the other hand, was entitled to take the view that her case was strong and to make D1’s Offer on the terms outlined above. D1’s Offer was not, in my view, unreasonable. 30.In any case, P did not set out his purported reasons for rejecting D1’s Offer, let alone responded to the offer. A failure to respond constructively to a reasonable Calderbank offer, coupled with the subsequent failure to beat the offer, weigh heavily against the offeree on costs. I note that P’s solicitor does not go so far as to say that P’s physical condition had impeded his ability to consider or respond to the offer. Indeed, his evidence in affirmation is that “[P] swiftly declared to [him] that D1’s Offer [sic] as he did not consider the same reasonable”, and that “[i]n between being hospitalized and receiving medical treatment in the form of, inter alia, dialysis, [P] did, to the extent permitted by his physical condition, diligently prepare for the Trial. From [his] own observation and from what [he has] been told by [his] clerk and [his] former trainee solicitor, [P] appeared cogent, logical and responsive during the said preparation”. 31.For completeness, I do not think it right to suggest that P’s physical condition during trial had the effect of unexpectedly weakening his case. As noted in the Judgment at paragraph 18, everyone involved was careful to ensure that P carried on with his evidence only when he was well enough to do so. It was also evident that many problems with P’s case were inherent and did not simply turn on his performance in the witness box. 32.I therefore come to the view that a fair costs order would be for P to pay D1 her costs of both the original action and the counterclaim, with certificate for two counsel, to be taxed on a party and party basis before and including 22 March 2024, and thereafter on an indemnity basis if not agreed. C5. D2’s application 33.P accepts that D2’s Second Offer and D2’s Third Offer were more favourable to P than the outcome of the trial. 34.I find it unreasonable for P to first accept and then reject D2’s Second Offer, without giving any reason for resiling from his earlier position. P had a further opportunity to consider D2’s proposal in the form of D2’s Third Offer, but he never responded to the same. Such sheer failure to engage in settlement negotiation, coupled with the subsequent failure to beat the offers, weigh heavily against P on costs. 35.Even if P genuinely believed that D2’s Second Offer (and for that matter D2’s Third Offer) unreasonable (a reason which was only given by his solicitor after the event and not contemporaneously), that would not materially advance his position for present purposes, as explained in paragraph 29 above. 36.In the circumstances, I consider it just that P should pay D2 the costs of the original action including all costs reserved, up to and including 4 January 2024 on a party and party basis, and thereafter on an indemnity basis with certificate for two counsel, to be taxed if not agreed. D. DISPOSITION 37.As regards D1’s Summons, I make an order in terms of paragraphs 2(1), 2(2) and 2(3) above. 38.As regards D2’s Summons, I make an order to extend time retrospectively to allow D2 to proceed with its costs variation application, and for time for service of its Summons be abridged. I also make an order in terms of paragraph 3(1) above. 39.As to the costs of these Summonses:
K Y Lo & Co, assigned by the Director of Legal Aid, for the Plaintiff by Original Action and the 1st Defendant by Counterclaim Mr Simon Wong, instructed by Kong & Lam Solicitors LLP, for the 1st Defendant by Original Action and the Plaintiff by Counterclaim Mr Tim C H Yu, instructed by Edward C T Wong & Co, for the 2nd Defendant by Original Action The 2nd and the 5th Defendants by Counterclaim were not represented | |||||||||||||||||||||||||||||||||||||||||||||||
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Further hearings and rulings under DCCJ 3407/2019