Pang Chun Kwong v. Pang Hang Lau

HCMP 2352/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2352 OF 2012

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REASONS FOR COSTS

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Introduction

1.At the end of the hearing on 29 November 2013, the following costs order was made: the defendant do pay the costs of this originating summons (including any reserved costs) to be taxed on party-and-party basis if not agreed. The following are the reasons for the order.

Background

2.The plaintiff commenced this action in October 2012.  The principal relief sought was for the defendant, qua administratrix, to furnish a full and complete up-to-date vouched particulars and accounts concerning the estate of one Mr Pang (“the dec’d”).

3.It is undisputed the plaintiff was the dec’d’s natural son and one of the beneficiaries of the dec’d’s estate, while the defendant was the dec’d’s daughter (they being half-siblings to each other).

4.The dec’d passed away in January 2000 (some 13 years ago), and letter of administration was granted in March 2002.

5.The following chronology relating to this action is relevant to the costs order.

6.Letters requesting for an account, together with the underlying documents, of the dec’d’s estate were sent to the defendant on 16 and 25 August and 24 October 2011.

7.Not having obtained satisfactory answers, this action was, as stated above, commenced in October 2012.

8.On 28 December 2012, in the 2^nd affirmation filed herein, the defendant furnished to the plaintiff accounts audited and verified by a certified public accountant, together with some source documents (such as bank passbook and fixed deposit bank statements).

9.Further, on 3 January 2013, in the 3^rd affirmation filed herein, the defendant furnished other documents, namely, bank statements of a company in which the dec’d had an interest.  The defendant accepts 112 pages of documents were disclosed therein: para 13(iv), defendant’s skeleton submission.

10.This action came on for a short hearing on 11 January 2013.  The plaintiff sought an adjournment on the ground that he was still examining the documents earlier provided by the defendant.  The parties also indicated mediation would be considered.

Issues concerning costs

11.After having considered the matter, the plaintiff seeks leave to withdraw this action, being of the view that he had obtained substantially what was sought herein: para 19 to 21, plaintiff’s skeleton submissions.

12.Based on the above, the plaintiff argues:

(a) costs should be awarded to him;

(b) the defendant should personally be liable for such costs;

(c) those costs should be taxed if not agreed on full indemnity basis.

13.On the other hand, the defendant seeks costs and puts forth the following:

(1) the plaintiff has all along acted unreasonably;

(2) in any event, the usual rule is that costs should be paid by the party who discontinues an action, and there is no sufficient reason to depart from the rule;

(3) there is no valid reason for ordering costs against her, or for awarding indemnity costs.

14.In short, save as to the basis of taxation, I agree with the plaintiff and disagree with the defendant.

15.The defendant’s argument at para 13(1) above is difficult to understand in view she agreed to provide the further information and documents in two affirmations filed herein.

16.In Re Estate of Lee Da Kor [2010] 1 HKLRD 415, the court observed that:

“It is the duty of an executor to keep clear and accurate accounts, and to be always ready to render such accounts when called upon to do so … In order to provide a true and perfect account, the executor must provide details of the whereabouts of all properties … ” (emphasis supplied) (para 17 thereof);

“… under s.56 of the [Probate and Administration Ordinance (Cap 10)], personal representatives are, when so ordered by the court, to exhibit on oath in the court a full inventory of the estate and render an account of the administration of the estate to the court … ” (para 18 thereof).

It should be noted the defendant executors in the above case already provided all the bank statements, ledgers and receipts: para 21 thereof.

17.In the Privy Council case of Schmidt v Rosewood Trust Ltd [2003] 3 All ER 76, the court stated:

“[the main issue being the claim to obtain trust accounts and the disclosure of extensive information from the trustees of two settlements which were in the nature of discretionary trusts (para 3, 5, 7 and 23 thereof)] Their Lordships consider that the more principled and correct approach is to regard the right to seek disclosure of trust documents as one aspect of the court’s inherent jurisdiction to supervise, and if necessary to intervene in, the administration of trusts. … ” (para 51 thereof; see also para 54 and 66 thereof).

The power to do so is said to be discretionary in nature.

18.The dec’d’s estate here cannot be said to be small or straight-forward.  It comprises real properties (at least one of which has rental income) and a company holding cash and where there has been interest income.  Expenses and outgoings have also been incurred.  Timewise, by end of 2011 (when the plaintiff’s letters were sent (para 6 above)), a decade or so has passed by since the grant of the letter of administration.

19.In these circumstances, there is nothing unreasonable for the plaintiff to seek the information and documents sought herein (and which the defendant provided after this action has commenced). There is also no reason for the defendant not to discharge her duty and to provide the same during the relatively lengthy period before the commencement of this action.

20.The defendant’s complaint that the 11 January 2013 hearing was unnecessary is also not justified.  There were only 4 or 5 working days between then and the filing of the defendant’s 3^rd affirmation; the exhibited documents were substantial.  The plaintiff cannot be faulted for applying to adjourn the matter so as to further examine the documents provided.

21.In these circumstances, and bearing in mind the matters set out in para 8 and 9 above (the defendant has provided the information and documents in her affirmations) and 23 below, there is sufficient ground to depart from the usual rule that the party applying to withdraw an action should also bear the costs of the action.

22.The defendant relies on a number of authorities in this regard.  In Standard Chartered Bank Hong Kong Trustee Ltd and Another v Brogan and Others [1990] 2 HKC 560, the court said:

“The general rule is that a defendant is entitled to his costs when the action against him is discontinued. That rule may be departed from … One instance, mentioned by the editors of the Supreme Court Practice, of such a departure might be a case where the matter has become academic, as distinct from one in which the plaintiff has acknowledged a likely defeat” (pp 562-3 thereof).

23.The authorities relied upon by the plaintiff were decided similarly: Re Peaktop Technologies (USA) Hong Kong Ltd [2007] 4 HKLRD 207, para 37-8.  Further, the court said in Re Lucky Ford Industrial Ltd [2013] 3 HKLRD 550:

“In my view … the correct approach to determining costs in cases which do not involve the court granting substantive relief is for the court first to consider the terms of settlement and assess whether the petitioner has obtained substantially what he sought in his petition. If he did it will not be necessary or appropriate for the court to consider evidence and arguments directed to the merits of the case and whether or not the petitioner would have been successful if the petition had gone to trial. The petitioner will be treated as having been successful and entitled to his costs” (emphasis supplied) (para 14 thereof).

Here the plaintiff has obtained substantially what he sought.

24.By virtue of the above matters, the appropriate costs order would be for the defendant to bear the costs of this action (see also In re Skinner [1904] 1 Ch 289, 292-3; Re Estate of Lee Kwong Yuen HCMP 3904/2001 (7 June 2002)).

25.But I cannot agree with the plaintiff’s application for those costs to be taxed on indemnity basis.  There is no material to show that the defendant’s conduct warrants such an order to be made.

Mr Patrick Siu, instructed by V Hau & Chow, for the plaintiff

Mr Holden N Slutsky, instructed by Robert CK Tsui & Co, for the defendant