Law Shuk Hoi v. Lo Lok Fung Kenneth and Others

CACV 203/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 203 OF 2010

(ON APPEAL FROM HCMP NO. 1053 OF 2008)

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BETWEEN

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Before: Hon Tang VP, Cheung JA and Barnes J in Court

Dates of Written Submissions: 12 and 14 July 2011

Date of Judgment: 22 July 2011

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JUDGMENT ON COSTS

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Hon Tang VP (giving the judgment of the Court):

1.On 30 June 2011, by a majority, we allowed the appeal. In para. 35 of my judgment, I invited the parties to make written submissions on the appropriate costs order. We have received the written submissions.

2.The appeal concerned para. 1 of the order of Lam J which read:

"1. Paragraph B(3)(a) of the Letter of Wishes dated 23 April 1996 (the 'Letter of Wishes') of Law Ting Pong (the 'Deceased'), deceased, created a discretionary trust as defined in paragraph 30 of the Judgment in respect of one-third of the Deceased's property referred to in the Letter of Wishes for the benefit of those individuals who satisfy the criteria laid down in that paragraph, namely those descendents of the Law family who is in a state of destitute/adversity and/or achieve a breakthrough in Hong Kong within the meaning of paragraph B(3)(a) of the Letter of Wishes;"

3.As a result of the majority judgment, para. 1 of Lam J's order has been rephrased, such that:

"33. … the Plaintiff holds the assets under Clause B(3)(a) under a discretionary trust, and that he is obliged to exercise his discretion whether to make a distribution from time to time, when the criteria laid down in that Clause are satisfied."

4.In the Notice of Appeal, the Plaintiff had asked:

"For an order that the Judgment be varied such that the disposition created under paragraph B(3)(a) of the Letter of Wishes is a power exercisable at the discretion of the Plaintiff and that the objects of such power are such of the descendants of Law Ting Pong who is in a state of destitute/adversity and/or who has achieved a breakthrough in Hong Kong within the meaning of paragraph B(3)(a) of the Letter of Wishes and not a trust."

5.Thus, the Plaintiff's success is a limited one.

6.The confusion over the effect of the home-made Letter of Wishes is understandable, I believe in the circumstances of this case, the appropriate order for costs of the appeal is that, both the Plaintiff and the Respondents' costs should be paid out of the trust created by Clause B(3)(a) of the Letter of Wishes.  The Plaintiff's costs to be on a trustee basis to be taxed if not agreed; and that the costs of the respondents to this appeal should be on an indemnity basis.  In re Buckton [1907] 2 Ch 406.

7.The 1^st Defendant has also written in asking for costs.  He was joined as an interested party.  His costs should also be paid out of the assets to be taxed on an indemnity basis.

8.The Secretary for Justice was the 9^th Defendant in the proceedings because the Plaintiff had suggested that one of the possible interpretations of Clause B(3)(a) was that it created a charitable trust.  However, the government counsel had not taken any active part at trial or on appeal because the Secretary took the view (rightly, in my respectful view), that only Clause B(3)(b) might involve charitable interest.  Even so, government counsel held a watching brief both at first instance and on appeal.  Lam J has given the Secretary costs on an indemnity basis.  The Secretary now asks for a summary assessment of his costs on appeal at $35,843 to be paid out of the assets under Clause B(3)(a).  There is no objection and I would make an order accordingly.

9.In the court below, Lam J had ordered that the Plaintiff should personally paid 85% of the costs of the 2^nd to 5^th, 7^th and 8^th Defendants in respect of the Plaintiff's originating summons on party to party basis, to be taxed if not agreed; and that the Plaintiff was not allowed to be indemnified from the trust fund in respect of his own costs or his liability as to costs of the 2^nd to 5^th, 7^th and 8^th Defendants; and that the Plaintiff should personally pay the costs of the 2^nd to 5^th, 7^th and 8^th Defendants in respect of the hearing on 10 December 2010 on party to party basis, to be taxed if not agreed.

10.That costs order was the subject of an appeal by the Plaintiff, which was not pursued (rightly so) by Mr Edward Chan SC.

11.I have to decide, whether, having regard to the fact that we have find it right to modify para. 1 of Lam J's order, any consequential changes should be made to his order on costs.

12.I will not repeat what Lam J had said in his judgment on costs.  With respect, I agree with his reasons.  Although the Plaintiff was partly successful on appeal, I do not believe that should affect the costs order below.  So I will not interfere with the costs order made below.

Mr Edward Chan, SC, Mr Paul Shieh, SC, and Mr Eugene Fung, instructed by Messrs Mayer Brown JSM, for the Plaintiff

Mr Benjamin Yu, SC, and Ms Sara Tong, instructed by Messrs Kok & Ha, for the 2^nd, 3^rd, 4^th, 5^th, 7^th and 8^th Defendants

Mr Victor K C Lee, instructed by Messrs Lau, Wong & Chan, for the 1^st Defendant

Mr Francis Kwan, SGC, of the Department of Justice, for the 9^th Defendant