Cheung Pui Yuen and Others v. Worldcup Investments Inc. and Others

FACV No. 34 of 2007

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 34 OF 2007 (Civil)

(ON APPEAL FROM CACV No. 389 of 2006)

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Court:    Mr Justice Bokhary PJ, Mr Justice Chan PJ, Mr Justice Ribeiro PJ, Mr Justice Litton NPJ and Lord Scott of Foscote NPJ

Date of Judgment:   14 May 2009

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 JUDGMENT ON COSTS

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Mr Justice Ribeiro PJ:

1.This is the judgment of the Court as to costs.

2.On 29 October 2008, judgment was handed down in this appeal.  We unanimously dismissed the appeal in relation to the substantive issues joined as between the plaintiffs and the corporate defendants and dealt with the appeal on costs as between the plaintiffs and the executors and the costs of the appeal in the manner set out in paragraphs 82 to 84 of Lord Scott of Foscote NPJ’s judgment, involving in particular the costs orders nisi set out in paragraph 82. 

3.Subsequently, two rounds of written submissions on costs were lodged with the Court on behalf of the plaintiffs and of the executors respectively.  Having considered those submissions, we are of the view that a variation of the costs orders nisi is warranted only in one respect. 

4.We held, applying the principle in In re Buckton,[1] as well as the principle in Nina Kung v Wang Din Shin (No.2),[2] that it was reasonable for the plaintiffs to have brought before the court for determination the Disputed Shares issue and the Disputed Debts issue,[3] as well as the Disputed Assets issue,[4] particularly in the light of the executors’ conflict of interest which prevented them from representing the estate in claims against the corporate defendants.[5]  We accordingly reversed Reyes J’s order which had required the plaintiffs to pay to the corporate defendants their party-and-party costs of the action and for their own costs to be charged to their interests in the deceased’s estate.[6]  In its place, we ordered that the estate should pay the party-and-party costs of the five corporate defendants and that 80% of the plaintiffs’ costs, taxed if not agreed on an indemnity basis, should also be paid out of the estate.[7]

5.The plaintiffs were only able to establish that they were justified in bringing the proceedings in the interests of the estate as aforesaid by bringing their appeal to this Court.  We accept that the costs of so much of their appeals to the Court of Appeal and to this Court as is attributable to their establishment of such entitlement should be paid to the plaintiffs on an indemnity basis out of the estate.  We apportion such costs at 35% of the overall costs of the appeals.  The executors should get all their own costs out of the estate on an indemnity basis. 

6.The costs relating to the issues between the plaintiffs and the corporate defendants remain unaffected.  The plaintiffs have always accepted that they brought the appeals against the corporate defendants at their own risk as to costs and, having lost, must bear that portion of the costs on appeal on a party-and-party basis.

7.The orders nisi[8] made in relation to the costs of the two appeals must therefore be varied accordingly. 

8.Additionally, having dismissed the executors’ cross-appeal, the Court of Appeal apparently overlooked making any order as to the costs of that cross-appeal.  Though minor, we see no reason for the plaintiffs to be denied their costs of the cross-appeal and will make good the omission.

9.It is also our view that the costs of the parties’ written submissions on costs in the present context should be paid out of the estate on an indemnity basis.

10.We therefore make the following Orders absolute, namely,:

(i)      As to the costs of the directions hearing before Reyes J on 1 June 2005

(1)    That the costs of the executors be treated as administration costs payable out of the estate on an indemnity basis with the plaintiffs bearing their own costs.

(ii)    As to the costs of the action No. 1138 of 2005 up to and including the judgment of Reyes J  

(1)    That those parts of the Court of Appeal’s costs order referred to in paragraphs 53(i) and (ii) of the judgment be set aside;

(2)     That the costs of each of the five corporate defendants, taxed if not agreed on a party-and-party basis, be paid by the executors out of the estate;

(3)     That 80 per cent of the costs of the plaintiffs, taxed if not agreed on an indemnity basis, be paid by the executors out of the estate; and

(4)      That the executors’ costs, on an indemnity basis, be treated as administration costs recoverable out of the estate.

(iii)     As to the costs of the appeal to the Court of Appeal

(1)     That those parts of the Court of Appeal’s costs order referred to in paragraphs 54(i) and (ii) of the judgment be set aside;

(2)     That the costs of each of the five corporate defendants, taxed on a party-and-party basis if not agreed, be paid by the appellants;

(3)     That 35 per cent of the plaintiffs’ costs of the appeal, taxed on an indemnity basis if not agreed, be paid by the executors out of the estate;

(4)     That the plaintiffs’ costs of the cross-appeal, taxed on an indemnity basis if not agreed, be paid by the executors out of the estate; and

(5)     That the executors’ costs of the appeal and cross-appeal, on an indemnity basis, be treated as administration costs recoverable out of the estate.

(iv)     As to the costs of the appeal to this Court

(1)     That the costs of Four Pillars and Megabest, taxed on a party-and-party basis if not agreed, be paid by the appellants;

(2)      That 35 per cent of the plaintiffs’ costs of the appeal, taxed on an indemnity basis if not agreed, be paid by the executors out of the estate;

(3)      That the costs of the written submissions on costs, taxed on an indemnity basis if not agreed, be paid to the plaintiffs by the executors out of the estate; and

(4)       That the executors’ costs of the appeal, including the costs of their written submissions on costs, on an indemnity basis, be treated as administration costs recoverable out of the estate.

Written submissions by Mr Michael Thomas SC and Mr Malcolm Lim (instructed by Messrs DLA Piper Hong Kong) for the 1^st – 8^th plaintiffs/appellants

Written submissions by Ms Lisa KY Wong SC and Mr Bernard Man (instructed by Messrs Chui & Lau) for the 6^th – 8^th defendants/respondents

[1]    [1907] 2 Ch 406 at 414-415.

[2]    (2006) 9 HKCFAR 800 at 811.

[3]    Judgment §73.

[4]    Judgment §75.

[5]    See Judgment §57.

[6]    Reyes J’s order was for such costs to be debited to the interests of members of the Lim Bee side of the deceased’s family, but this was varied by the Court of Appeal to exclude from liability members of the family who were not parties.

[7]    Judgment §82(ii)(a) and (b).

[8]    At Judgment §82(iii)(b) and §82(iv) in so far as it relates to reflect §82(iii)(b).