Tam Mei Kam and Others v. Hsbc International Trustee Ltd and Others

HCA 1856/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 1856 OF 2014

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DECISION

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I. INTRODUCTION

1.The 1^st plaintiff (“Mother”) is the mother of the late Mui Yim Fong (also known as Anita Mui, “Deceased”).  The 2^nd and 3^rd plaintiffs (“Nieces”) were the daughters of the 2^nd son of the Mother.  Poon Chun Ho, Royce and Poon Man Ho, Kenny (“Nephews”) were the sons of the eldest daughter of the Mother.

2.On 3 December 2003, the Deceased executed a last Will, a Settlement/Trust Deed and a Trustee Memorandum (“Will”, “Trust Deed” and “Trustee Memorandum”). The Mother challenged the validity of the Will and Trust Deed in HCAP2/2004, but on appeal the Court of Appeal (“CA”) in CACV200/2008 and the Court of Final Appeal (“CFA”) in FACV11/2010 upheld the validity of both the Will and Trust Deed.

3.The Trust Deed entered into between the Deceased as settlor and the 1^st defendant (“HSBC Trustee”) as trustee constituted an irrevocable inter vivos discretionary trust (“Karen Trust”).[1] HSBC Trustee was/is the professional trustee of the Karen Trust. 

4.The following were some relevant provisions of the Trust Deed:

(a)   Under clause 22(a), HSBC Trustee was vested with full discretionary powers:

“Every discretion or power hereby conferred on the Trustee shall be an absolute and uncontrolled discretion or power and the Trustee shall not be held liable for any loss or damage including without limiting to the generality of the foregoing any diminution in value of any part of the Trust Fund occurring as a result whether directly or indirectly of its exercising or refusing or failing to exercise any such discretion or power other than loss or damage arising from the wilful default, gross negligence, fraud or dishonesty of the Trustee.”

(b)   Under clause 5(a), HSBC Trustee had powers over inter alia appointment of the trust fund and income:

“The Trustee shall stand possessed of the Trust Fund and the income thereof UPON TRUST and with full power from time to time and at any time before the Vesting Date by resolution to appoint pay or apply the whole or any part of the Trust Fund and the income thereof for the advancement maintenance education or benefit of all or such one or more to the exclusion of the other of the Beneficiaries and in such proportions or manner and upon such other terms and conditions as the Trustee shall in its absolute and uncontrolled discretion deem appropriate PROVIDED THAT no payment, appointment or advancement made herein:-

shall be made if it is a Perpetuiity; and

(ii) shall be revoked or be revocable

AND in exercising the aforesaid powers the Trustee shall not be bound as such trustee to see to the application by any person of any moneys paid.”

(c)   Under clause 5(c), HSBC Trustee had powers over appointment of beneficiaries:

“The Trustee may in its absolute discretion at any time by deed appoint additional persons not being members of the Excluded Class to become beneficiaries.”

(d)   Under clause 1(c), “Excluded Class” included HSBC Trustee and the Settlor (ie the Deceased), and did not include the 2^nd defendant (“New Horizon”) and/or the 3^rd defendant (“Lau”).

(e)   Under clause 7, the Trustee had powers over the vesting of the Karen Trust:

“(a) The Trustee may in its absolute discretion by deed at any time declare an earlier Vesting Date which shall be any date not earlier than the date of this Deed nor later than the last day of the Perpetuity Period.

(b) Subject to any appointment payment or application pursuant to Clause 5(a) above the Trustee shall on the Vesting Date stand possessed of the Trust Fund and the income thereof upon trust to distribute the same to the Beneficiaries or any one or more of them to the exclusion of the other of them as the Trustee shall in its absolute discretion determine, such discretion to be exercised in writing before the Vesting Date and in default of such determination for all of the Beneficiaries then living or in existence in equal shares.

……”

(f)   Under clause 1(o), “Vesting Date” meant “the date which is the last day of the Perpetuity Period or such earlier date as the Trustee may in accordance with Clause 7(a) hereto declare to be the Vesting Date for the purposes of this Deed”.

(g)   Under clause 1(d), “Final Repository” meant “the party or the parties named in the Sixth Schedule”, and the Sixth Schedule named New Horizon as the Final Repository.

5.HSBC Trustee was appointed as the sole executor and trustee under the Will, which devised all the Deceased’s estate to HSBC Trustee (as trustee under the Will) upon trust for HSBC Trustee acting in its sole capacity as the trustee for the time being of the Karen Trust to be held subject to and upon the trusts powers terms conditions and provisions as were set out in the Trust Deed.[2]

6.The Trustee Memorandum set out the Deceased’s non‑binding suggestions in respect of the Karen Trust.  The relevant provisions of the Trustee Memorandum were as follows:

“3. The Settlor’s Suggestions

……

3.2 Upon the death of the Settlor, [HSBC Trustee] would consider holding and distributing the Trust Fund in the following manner:

(1) [HSBC Trustee] would hold and distribute all shares of and in the following companies comprising the Trust Fund to [Lau] absolutely if he shall survive the Settlor by thirty days: ……

……

(3) Subject as aforesaid, to hold the balance of the Trust Fund for the Settlor’s mother, [the Mother], while she is alive and make a monthly distribution of HK$70,000 for her use and benefit absolutely and upon the death of the Settlor’s mother, …… to distribute the entire balance of the Trust Fund then remaining to [New Horizon] …… absolutely or if the same has ceased to exist or amalgamated with another institution, then to such other charitable organization as [HSBC Trustee] shall in its absolute discretion determine.”

7.The Deceased passed away on 30 December 2003.  The Mother, Nieces and Nephews were named as the original/initial beneficiaries of the Karen Trust.[3] On 29 June and 2 November 2005 respectively, HSBC Trustee by deed (“Appointment Deeds”) appointed Lau and New Horizon as additional beneficiaries of the Karen Trust (“2005 Appointments”).

8.On 25 April 2012, the Mother was adjudged bankrupt, apparently because of her inability to pay legal fees in HCAP2/2004. On 12 June 2012, Wong Teck Meng and Chan Pui Sze were appointed joint and several trustees of the Mother’s property (“Trustees in Bankruptcy”).

9.There had been numerous litigation proceedings between the Mother and HSBC Trustee (in its capacity as executor and trustee of the Estate) and/or other parties.  According to the Mother and Nieces, it appeared in the course of one of these proceedings that HSBC Trustee informed the court on 7 February 2014 that the Deceased’s estate then consisted of about $129 million in cash and Hong Kong landed properties against liabilities of about $30 million plus $570,000.

10.On 16 May 2014, the Mother wrote to HSBC Trustee (“Mother Letter”).  In the Mother Letter, the Mother (a) claimed she had “full authority and capacity to act also for [the Nieces and Nephews] …… The 4 will speak the same voice for matters contained herein”, and (b) contended the 2005 Appointments were defective, so there remained only the 5 original/initial beneficiaries, ie the Mother, Nieces and Nephews, hence she demanded as follows:

“In the capacity of Beneficiaries of the Karen Trust all of full age and are absolutely entitled to the subject matter of the trust, [the Mother, Nieces and Nephews] hereby give [HSBC Trustee] formal notice to terminate the Karen Trust forthwith, with immediate effect. [HSBC Trustee] are hereby asked to take steps to wind up the Karen Trust. ……”

The Mother relied on the principle that strict formalities must be complied with,[4] and the rule that “all beneficiaries of a trust who are all sui juris and are all in agreement they can bring the trust to an end irrespective of the wishes of the trustee(s) or of the creator of the trust”.[5]

11.The Mother Letter referred to clause 10 of the Trust Deed[6] and the information about the Deceased’s estate in paragraph 9 above, and suggested that the net trust fund of the Karen Trust “ought still to be substantial, and be vested in [HSBC Trustee] in any event.  Please let [the Mother] know the updated net cash position”.

12.On 26 June 2014, HSBC Trustee through Appleby (Cayman) Ltd (“Appleby”) replied to dispute the assertions in the Mother Letter:

(a)   the Karen Trust was governed by the laws of the Cayman Islands;

(b)   the Mother Letter was not a valid request to terminate the Karen Trust because not all of the Karen Trust’s beneficiaries (ie the Mother, Nieces, Nephews, New Horizon and Lau) were in agreement to terminate such trust;

(c)   the 2005 Appointments validly appointed New Horizon and Lau as beneficiaries of the Karen Trust, and the Mother had not provided any documentary evidence to demonstrate she had lawful authority to act on behalf of the Nieces and Nephews;

(d)   the Karen Trust was fully discretionary in nature, and HSBC Trustee might, on its own motion, exercise its powers of appointment in favour of any one or more of the beneficiaries to distribute the capital and/or income of the trust fund[7] and/or might accumulate any income generated from the trust fund,[8] so there was no presumption at law, or under the terms of the Karen Trust, that any of the beneficiaries were entitled to distribution of capital and/or income from the trust fund;

(e)   in exercising its discretion, HSBC Trustee must have regard to all of the interests of the beneficiaries and the Karen Trust as a whole, including the wishes of the Deceased as set out in the Trustee Memorandum (which were non-binding but which HSBC Trustee was at liberty to consider as it saw fit);

(f)   HSBC Trustee might therefore make distributions to the beneficiaries as it considered appropriate, acting in accordance with the terms of the Karen Trust and having regard to the Trustee Memorandum (which accurately reflected the Deceased’s wishes in relation to the Karen Trust);

(g)   having considered all relevant circumstances and the interests of the beneficiaries as a whole, HSBC Trustee rejected the request for information regarding the Karen Trust’s net cash position.[9]

13.There was further correspondence, including a further reply by Appleby dated 3 September 2014, in which the Mother and HSBC Trustee maintained their respective stance.  In the further reply dated 3 September 2014, Appleby added inter alia that:

(a)   Lau and New Horizon had been validly appointed as beneficiaries of the Karen Trust;

(b)   in order to terminate the Karen Trust, all of the present beneficiaries (ie the Mother, Nieces, Nephews, New Horizon and Lau) would need to agree;

(c)   there was no documentary support to show that the Nieces and Nephews were in agreement with the Mother’s request to terminate the trust;

(d)   hence the request in the Mother Letter to terminate the Karen Trust was invalid;

(e)   the Mother’s allegation that HSBC Trustee was in breach of trust was denied.

14.The Mother and Nieces commenced the present action on 22 September 2014 against HSBC Trustee, New Horizon and Lau to seek the following reliefs:

(a)   a declaration that the Karen Trust had been validly terminated by the Mother Letter and that such termination took effect from 16 May 2014;

(b)   an order that the Karen Trust be wound up and the remaining trust fund and income be handed over to the Mother for distribution amongst the valid beneficiaries according to their agreed arrangements or otherwise;

(c)   a declaration that the Appointment Deeds were void and of no effect;

(d)   a declaration that clause 33 of the Trust Deed was unlawful and void ab initio, and that HSBC Trustee had committed breach of trust by invoking and relying on such provision in its replies dated 26 June and 3 September 2014 to the Mother Letter.

II.  STATEMENT OF CLAIM

15.According to the Statement of Claim indorsed on the Writ of Summons (“SoC”), the Mother and Nieces claimed that :

(a)   “the Will/Trust scheme made by the Deceased” was intended by the Deceased to secure that the Mother shall continue to enjoy high quality lifestyle during her entire lifetime;

(b)   Lau was only mentioned in the non-binding Trustee Memorandum but not in the Trust Deed;

(c)   notwithstanding the non-binding nature of the Trustee Memorandum, HSBC Trustee by clauses 1.1 and 1.3 therein imposed upon itself and assumed a duty to act in the best interests of the beneficiaries as a whole;

(d)   by reason of clause 31 of the Trust Deed, no beneficial interest was intended to be given to New Horizon, whose inclusion in the Trust Deed as the Final Repository was merely to avoid the remote possibility of a resulting trust back to the Deceased, and since such scenario did not arise, no beneficial interest shall be given to the Final Repository as “otherwise it would be a fundamental breach of trust”;

(e)   by reason of the Third Schedule of the Trust Deed, unless and until additional beneficiaries were lawfully and validly added to the Trust Deed, HSBC Trustee shall always act on the best interest of the Mother, Nieces and Nephews without regard to any purported interest of New Horizon and/or Lau;

(f)   by reason of clause 5(c) of the Trust Deed, strict formalities must be complied with before any additional beneficiary could be lawfully and validly added to the Trust Deed;

(g)   by reason of clause 7(b) of the Trust Deed, on the Vesting Date (ie the date of termination of the Karen Trust, which would include the date of an earlier termination of such trust) the then existing beneficiaries shall be jointly entitled to the entire remaining trust fund and income;

(h)   upon “a full review of documents” after HSBC Trustee informed the court on 7 February 2014 about in the matters in paragraph 9 above, the Mother discovered the 2005 Appointments were void and of no effect because the Appointment Deeds were critically defective, hence the only valid beneficiaries of the Karen Trust were the Mother, Nieces and Nephews, who could unanimously terminate the Karen Trust and be entitled to the whole remaining trust fund and income;

(i)   clause 33 of the Trust Deed offended the well-settled common law rule that a trustee was duty-bound to provide accounting information of the trust to any beneficiary upon request irrespective whether such beneficiary had vested or contingent interest in any property comprising the trust fund, and such provision was therefore void ab initio.

16.In a nutshell, the Mother and Nieces purported to terminate the Karen Trust and to have the trust assets (ie the remaining trust fund and income) paid over to the Mother for distribution to the beneficiaries on the following grounds:

(a)   the 2005 Appointments were defective because the Appointment Deeds did not state on their face the names of the authorised signatories who executed such deeds on behalf of HSBC Trustee, and as a result the Karen Trust only had 5 beneficiaries, ie the Mother, Nieces and Nephews;

(b)   the Mother had the support of the Nieces and Nephews to terminate the Karen Trust by the Mother Letter, hence the Mother and Nieces sought the declarations in paragraph 14(a) and (c) above together with an order for the Karen Trust to be wound up and for payment over of the trust funds and income to the Mother.

Further, the Mother and Nieces claimed that clause 33 of the Trust Deed offended the common law rule set out in paragraph 15(i) above and was therefore unlawful and void ab initio, hence they sought the declaration in paragraph 14(d) above.

III.  NEW HORIZON’s DEFENCE

17.On 23 December 2014, New Horizon filed its Defence, and denied the allegations in the SoC.  New Horizon went on to aver that the Mother did not have lawful authority to commence the present action because all the property (including the purported right to terminate the Karen Trust) belonging to or vested in the Mother was deemed to have been assigned to the Trustees in Bankruptcy, and by a letter dated 28 November 2014 the Trustees in Bankruptcy confirmed they had not consented and did not consent to the Mother commencing the present action.  New Horizon also averred the 2005 Appointments were valid, and the Karen Trust could not be terminated without the consent of all beneficiaries (including New Horizon and Lau).

IV.  SUMMONSES

18.On 26 January 2015, New Horizon filed a summons under Order 18 rule 19(1), (b) and (d) of the Rules of the High Court (“RHC”) and the inherent jurisdiction of the court inter alia to strike out the SoC on the ground that (a) it discloses no reasonable cause of action, (b) it is scandalous or frivolous or vexatious, and/or (c) it is otherwise an abuse of the process of the court, and to seek dismissal of the action against New Horizon (“NH Summons”).

19.On 5 February 2015, HSBC Trustee also applied by summons under Order 12 rule 8 and Order 18 rule 19 of the RHC to inter alia strike out the SoC and dismiss the present action on the following grounds: (a) grounds (a)-(c) in the above paragraph, (b) this court had no jurisdiction to grant the relief in paragraph 14(d) above, and/or (c) the Mother had no authority to commence and/or carry on the present action (“HSBC Summons”).

20.At the hearing of the HSBC and NH Summonses before me on 15 June 2015 (“Hearing”),

(a)   Ms Sit, counsel for HSBC Trustee, confirmed that for the HSBC Summons HSBC Trustee would only rely on the grounds set out in paragraph 18(a)-(c) above and not the grounds in paragraph 19(b)-(c) above;

(b)   Mr Wong, solicitor for New Horizon, confirmed that for the NH Summons New Horizon would rely on the grounds set out in paragraph 18(a)-(c) above (for which Mr Wong adopted and relied on Ms Sit’s submissions) and in  paragraph 19 (c) above;[10]

(c)   the Mother appeared in person and relied on her written submissions dated 12 June 2015 in addition to her oral submissions made at the Hearing;

(d)   the Nieces wrote to the court on 12 June 2015 stating they “would take a neutral stance and would not oppose [the HSBC and NH Summonses], and requested to be excused from attending the Hearing and for an order that “…… there be no order as to costs as regarding the 2^nd & 3^rd Plaintiffs”.

21.New Horizon filed the 1^st and 2^nd affirmations of its director Shiu Yin Yu Vivien on 26 January and 10 March 2015 in support of the NH Summons.  HSBC Trustee filed the 1^st and 2^nd affirmations of the Assistant Vice President in Trust Relationship Management – Private Wealth Solutions of HSBC Trustee (Hong Kong) Limited (administrative assistant of HSBC Trustee) Cheung Tin Yan Sarina (“Cheung”) on 5 February and 9 March 2015 (“Cheung 1^st and 2^nd Affs”) in support of the HSBC Summons. 

22.The Mother filed her 2^nd and 3^rd affirmations on 6 February and 23 March 2015 (“Mother 2^nd and 3^rd Affs”) to oppose the NH and HSBC Summonses.  For completeness, the Mother’s 1^st affirmation filed on 28 November 2014 was included in the hearing bundle. 

V.  LEGAL PRINCIPLES ON STRIKING OUT

23.The principles governing a striking out application are well established.  Hong Kong Civil Procedure 2015 provides inter alia as follows:[11]

“…... It is only in plain and obvious cases that the court should exercise its summary powers to strike out …… any pleading under this rule. …… Disputed facts were to be taken in favour of the party sought to be struck out. Nor should the court decide difficult points of law in striking out proceedings. The claim must be obviously unsustainable, the pleadings unarguably bad and it must be impossible, not just improbable, for the claim to succeed before the court will strike it out. …… The mere fact that the case is weak and not likely to succeed is no ground for striking it out ……

It is for the party seeking to strike out …… pleading to demonstrate that the case is a plain and obvious one in which the other party’s claim is bound to fail. ……

…… This rule also empowers the court to amend …… any pleading. If a statement of claim does not disclose the cause of action relied on, an opportunity to amend may be given, …… even though the formulation of the amendment is not before the court …… However, unless there is reason to believe that the case can be improved by amendment, leave will not be given. Or where the amendments would be far‑reaching and so radical as to amount to a totally new pleading which would probably provoke a fresh application to strike out, the correct course is to strike out. ……”

24.The fact that in a particular case the question of law appears difficult or obscure does not preclude the court from striking out pleadings if it is satisfied it has all the necessary information to decide the question, and has come to the conclusion after full argument in the face of all relevant information that the case is plainly and obviously one for striking out.  In such circumstances, the court “should not decline to do so on the ground that the issues are difficult or complicated”.[12]

25.It must also be borne in mind that the object of the jurisdiction under Order 18 rule 19 of the RHC “is to ensure that defendants shall not be troubled by claims against them which are bound to fail, having regard to the contested facts.  …… In those circumstances it is pointless for the case to go on so that the defendant can deliver a defence.  The delivery of the defence occupies time and wastes money; and even more useless and time consuming from the point of view of the proper administration of justice is that there should then have to be a summons for directions, and an order for an issue to be tried, and for that issue to be tried before the inevitable result is attained …… the object is “to prevent parties being harassed and put to expense by frivolous, vexatious or hopeless litigation.” ……”[13]

26.In Total Lubricants Hong Kong Limited & ors v Christophe de la Cropte de Chanterac & ors,[14] Poon J said as follows:

“14. First, if a pleading is capable of being cured by amendments, it should not be struck out. An opportunity to amend should be given instead. However, if the pleading is so defective that no amendment can cure it or if the proposed amendment is incapable of improving the defects, the pleading is liable to be struck out and the proposed amendment should be refused.

15.  Second, when a party seeking to amend his pleadings in order to save it from being struck out, the proposed amendment should be properly and exactly formulated, includes all necessary averments or mandatory particulars and constitutes a full and complete plea of a reasonable cause of action.”

VI.  LEGAL PRINCIPLES: PROPER LAW

27.As noted in paragraph 23 of the SoC, clause 26 of the Trust Deed provided that the Karen Trust “is established under the laws of the Cayman Islands and the initial proper law of the [Karen Trust] shall be the law of the Cayman Islands”.  In paragraph 35 of the SoC, the Mother and Nieces accepted that by reason of clauses 26 and 27 of the Trust Deed, it was clear that the “applicable law to be of the Cayman Islands” and “the law of the Cayman Islands shall apply to all matters regarding the [Karen Trust] regardless of the proper forum”.

28.But in neither the SoC nor the Mother 1^st, 2^nd and 3^rd Affs did the Mother and Nieces plead or prove that Cayman Islands law is different from Hong Kong law.[15] “In the absence of evidence of foreign law, the court will usually assume that the law is the same as Hong Kong ……”[16]

VII.  2005 APPOINTMENTS

29.On 20 June and 2 November 2005 respectively, Lau and New Horizon were appointed by HSBC Trustee (being trustee of the Karen Trust) as additional beneficiaries to the Karen Trust.  New Horizon and Lau were not within the “Excluded Class” under clause 5(c) of the Trust Deed.

30.The Mother and Nieces complained that the 2005 Appointments were invalid because it was not immediately apparent from the Appointment Deeds as to who the signatories to those deeds were, and whether they had the requisite authority to sign those deeds.  It was said that since the Appointment Deeds did not state on their face the names of the authorised signatories who executed the same on behalf of HSBC Trustee, this rendered such deeds “critically defective”.  It was further suggested that the identity of the persons who signed the Appointment Deeds “claiming to be “Authorized Signatory”” was crucial because HSBC Trustee might have different classes of “authorized signatories” with different degree of authorization, and in the absence of the identity of the persons signing the Appointment Deeds, “it is impossible to see that such person(s) really had such capacity or authority, or that the appointment(s) by the Directors was not ultra vires.  The purported resolution of Directors appointing “authorized signatories suffered the same defect”. 

31.On the other hand, HSBC Trustee and New Horizon claimed that pursuant to the power in clause 5(c) in the Trust Deed and having regard to the Deceased’s expression of wishes in clauses 3.2(1) and (3) of the Trustee Memorandum, HSBC Trustee validly appointed New Horizon and Lau as additional beneficiaries of the Karen Trust by way of the Appointment Deeds. 

32.I agree with Ms Sit that the challenge against the 2005 Appointments and/or the contentions by the Mother and Nieces were misconceived as a matter of law and on the facts.

33.First, as a matter of law, there is no legal requirement for a deed to state/explain therein the names of the signatories or how those signatories became authorised to sign the deed.  Under the indoor management rule, a person dealing with a company can assume that the directors of the company had authority to act and the acts which the company purports to do are acts within the general authority of the company, even if a fair reading of the articles may lead a third party to make further enquiries.[17]

34.In County of Gloucester Bank v Rudry Merthyr Steam and House Coal Colliery Company,[18] the document in question was a mortgage deed duly executed by the company with the seal of the company being affixed thereon by the secretary.  By virtue of the articles of association of the company, the directors were empowered to fix the number of directors who should form a quorum; and the directors had made a regulation that a quorum of 3 directors should be necessary for the validity of their acts.  But at the meetings at which the mortgage was sanctioned and later at which the secretary was authorised to affix the seal of the company to the deed, only 2 directors were present.  It was held that as between the company and the mortgagee, who had no notice of the irregularity, the execution of the deed was valid.

35.Lord Halsbury at p 632 opined that “nothing has been urged before us which would induce us to hold that the authority of the company was not given to the making of this mortgage; at least in this sense, that an outside person, who had no other means of knowledge, was entitled to regard the company as having performed its functions in the making of this mortgage by whatever means it could lawfully do so”, and at p 633 he said that “…… an outside person …… not knowing the internal regulation, when he found a document sealed with the common seal of the company and attested and signed by two of the directors and the secretary, was entitled to assume that that was the mode in which the company was authorized to execute an instrument of that description”.  Lindley LJ at p 636 went on to say that a person looking at the deed and at the articles of association would not see anything irregular at all, and “he is not bound to go and look at the directors’ minutes; he has no right to look at them except as a matter of bargain.  The directors’ minutes, unless he knows what they are, do not affect him at all.  There is nothing irregular on the face of the deed even taken with the articles – there is nothing illegal in it”.[19]

36.Here, each of the Appointment Deeds was affixed with the common seal of HSBC Trustee and was signed by 2 persons (with 2 obviously different signatures) described as “authorised signatories” of HSBC Trustee.  I agree with Ms Sit that any third party reading the Appointment Deeds and even article 117 of HSBC Trustee’s articles of association[20] would be clearly entitled to assume the signatories were appointed as such and had authority to act on behalf of HSBC Trustee.  In my view, there is no basis for the complaint that the Appointment Deeds “appeared to be critically defective even at face value”.

37.In my view, the 2 cases of In re Phillips[21] and In re Evered[22] mentioned in the Mother Letter did not assist as they did not concern the issue at hand. 

38.In re Phillips concerned whether the provisions in the will of the settlor could constitute a revocation of appointment for the purpose of the trust deed executed by the settlor.  It was held that according to the particular provisions of the trust deed in that case, it was not a power to appoint by will but a power that could be exercised only by any writing other than a will unless the will expressly referred to the trust premises.  Since the will did not refer to the trust premises, the power was not exercised by the will. 

39.In re Evered held that while a done of a testamentary power of appointment by will could not by deed appoint or do any act equivalent to appointing the trust fund or any part of it, she could covenant to tie her own hands as to the manner in which she shall thereafter exercise her testamentary power.  In that case, a lady had under her marriage settlement a testamentary power of appointment over a fund among her children and issue, and in default of appointment the fund was to be divided after the death of the survivor of the husband and wife among her children equally.  In exercising her power of appointment she appointed by her will a sum of £60,000 to be divided between her 6 sons and settled upon them and their children, and the residue to be divided into sevenths and settled upon her six sons and her daughter and their children.  Subsequently she covenanted with 3 of her sons not to exercise her testamentary power of appointment in such a way as to reduce their respective shares in the fund to below £7,000 apiece.  It was held that the fetter imposed by these convenants involved the consequence that each of her 7 children should receive £7,000 absolutely as in default of appointment, and that the appointment operated only over the balance of the fund after deducting £49,000.

40.Secondly, article 117 of HSBC Trustee’s articles of association prescribed that “…… the Seal when affixed to any written instrument shall be witnessed and attested to by the signature of a director or any other person so authorized from time to time by resolution of directors”.  The Cheung 1^st Aff confirmed (a) the names of the signatories to the Appointment Deed dated 20 June 2005 were Doris Lau and Elisa Chan, (b) the names of the signatories to the Appointment Deed dated 2 November 2005 were Doris Lau and Teddy Chu, (c) Doris Lau, Elisa Chan and Teddy Chu were authorised signatories of HSBC Trustee at the time when the Appointment Deeds were signed.[23] Further, Doris Lau, Elisa Chan and Teddy Chu were expressly authorised by 2 memoranda of determination dated 20 June and 2 November 2005 respectively to execute the Appointment Deeds on behalf of HSBC Trustee. 

41.The Mother in her written submissions argued that these “purported unilateral documents now disclosed by [HSBC Trustee] alone could not point to validity of [the 2005 Appointments], as the fact remains that actual parties signing the instruments were unknown at the time of execution.  Validity must be viewed at time of execution, not now with benefit of hindsight”.  However, such argument failed to address or, indeed, overcome the matter of law as explained in paragraphs 33-35 above, and the matter of reality that the signatories was actually authorised at the material time. 

42.In the circumstances, I find it plain and obvious that the 2005 Appointments were valid pursuant to clause 5(c) of the Trust Deed.  The Mother’s and Nieces’ claim that the 2005 Appointments were defective should be struck out on the grounds that it disclosed no reasonable cause of action and/or it was frivolous or vexatious or otherwise an abuse of process of the court.

VIII.  PURPORTED TERMINATION OF THE KAREN TRUST

43.As the Mother and Nieces acknowledged in paragraphs 42‑43 of the SoC, the termination of the Karen Trust required the unanimous consent of all the beneficiaries who are of full age and not under a disability.[24] Ms Sit was prepared to assume for the purpose of the HSBC Summons that the objects of a closed class in a discretionary trust can terminate the trust by all of them acting together.[25] Clearly, the absence of consent on the part of any person interested, however remotely, would be fatal.[26]

44.I have found as a matter of law and fact the 2005 Appointments were valid and effective, so there were 7 beneficiaries under the Karen Trust, including New Horizon and Lau who clearly did not consent to the termination of the Karen Trust.  In particular, New Horizon filed its Defence denying having granted any such consent, and indeed it had taken out the NH Summons to strike out the SoC.  On such basis, I agree with Ms Sit that the principle in Saunders v Vautier collapses in limine since it had no application as a matter of law.

45.In light of the above conclusion, it is unnecessary for me to consider the issue whether or not the Nephews agreed to terminate the Karen Trust.  Indeed, for the purpose of the HSBC Summons, Ms Sit confirmed HSBC Trustee would not rely on any argument that rested on absence of consent by the Nephews to terminate the Karen Trust, and Mr Wong adopted Ms Sit’s submissions.

46.It is plain and obvious that the requisite unanimous consent by all valid beneficiaries of full age to terminate the Karen Trust was absent, and the claim for a declaration that the Karen Trust had been terminated should be struck out on the grounds that it disclosed no reasonable cause of action and/or it was frivolous or vexatious or otherwise an abuse of process of the court.

IX.  CLAUSE 33 OF THE TRUST DEED

47.Clause 33 of the Trust Deed provided as follows:

“[HSBC Trustee] shall not be obliged to make known to any Beneficiary or the Final Repository that the [Karen Trust] or any matters in relation thereto or that they are named as such or that they are now or at any time hereafter included in any of such expressions. [HSBC Trustee] shall not in any way be obliged to contact any Beneficiary or the Final Repository or any of them until any of them becomes absolutely and indefeasibly entitled to any part of the Trust Fund and [HSBC Trustee] shall then provide the Beneficiary so entitled with information relating to the [Karen Trust] as may be reasonably required by him for the compliance of his reporting or tax obligations arising under all applicable laws. Subject to the above no Beneficiary or Final Repository shall be entitled to demand or compel the Trustee to release or disclose any information or document relating to the [Karen Trust] or the exercising of [HSBC Trustee’s] powers and duties thereunder. For the avoidance of doubt, it is hereby declared and confirmed that none of the Beneficiaries nor the Final Repository has any interest right or claim of whatever nature in and to the Property comprised in the Trust Fund.” (my emphasis)

48.The Mother and Nieces claimed that (a) clause 33 of the Trust Deed was void ab initio because it offended the common law rule that a trustee was bound to provide accounting information of the trust upon request to any beneficiary, whether he had a vested or contingent interest in any property comprising the trust fund, and (b) HSBC Trustee in purporting to rely on such provision in the Trust Deed committed a breach of trust.  In the Mother’s letter (alleged to be made on behalf of herself and also for the Nieces and Nephews) to Appleby dated 24 July 2014, she relied on the principles in “Pearse v Green [1819] 1 Jac & W 135, at 140 per Plumer MR and Armitage v Nurse [1988] Ch 241” to say that clause 33 of the Trust Deed was unlawful and void ab initio.

49.On the other hand, HSBC Trustee and New Horizon claimed that the challenge against clause 33 of the Trust Deed was misconceived as a matter of law.  Ms Sit submitted that the validity of clause 33 of the Trust Deed had been determined by the CA in Re Estate of Mui Yim Fong.[27] In that case, the Mother brought the action claiming that the Will was invalid, the Karen Trust was void, and the Deceased had died intestate.  The Mother’s claim was dismissed at first instance, and she “appealed arguing, inter alia, that the Trust was void because the beneficiaries had no enforceable rights against HSBC Trustee, and clause 33 of the Trust Deed was an “excessive or unnecessary power” and “as a result it is void relying on the dictum of Millett LJ (as he then was) in Armitage v Nurse [1998] Ch 241, 253H that: …… If the beneficiaries have no rights enforceable against the trustees there are no trusts ……”[28]

50.I note that in the present action the Mother and Nieces also relied on Armitage in support of their allegation in the SoC that clause 33 of the Trust Deed was void ab initio.  But the CA at p 91 in Re Estate of Mui Yim Fong discussed Armitage and Schmidt v Rosewood Trust Ltd,[29] and concluded that HSBC Trustee did owe enforceable obligations to the discretionary objects (ie the beneficiaries) under the Karen Trust, including the Mother and New Horizon, who had a right to require HSBC Trustee to account for its trusteeship, and it was unreal to say that nobody could enforce the Karen Trust.  It was further held that HSBC Trustee had fiduciary duties thereunder, and it was inconceivable that it would ignore the Deceased’s clear expression of her wishes in the Trustee Memorandum, eg, in favour of the Mother.[30]

51.Tang VP at pp 91-92 noted the Mother also complained that:

(a)   “because [HSBC Trustee] is not obliged to make known the Karen Trust to any of the discretionary objects (which for brevity sake we shall refer to as “beneficiary”) it is void …… It is submitted that since [clause 33 of the Trust Deed] provides that [HSBC Trustee] is not obliged to inform any “beneficiary” of any detail about the Karen Trust or that he/she had been named as a “beneficiary”, that would render the Karen Trust void, presumably because neither [Lau] nor [the Mother] would know that he/she could enforce the Karen Trust”;

(b)   “…… the [Mother] was not told the identity of other beneficiaries in the terms of the [Trustee Memorandum] because [HSBC Trustee] only gave her a redacted form of the [Trust Deed].  Nor did she know her daughter’s wishes regarding the provisions for her. ……”

52.In short, the Mother complained that by barring the beneficiaries’ access to information about the Karen Trust (eg identity of the beneficiaries of the Karen Trust, the Deceased’s wishes regarding provisions for the Mother and/or any detail about the Karen Trust), clause 33 of the Trust Deed was void, and that would also render the Karen Trust void because the beneficiaries would not be able to enforce rights against HSBC Trustee in respect of the Karen Trust.

53.Such argument was rejected by the CA.  It was held that a discretionary trust would not be void even if the trustees were not obliged to inform any person that he was a potential beneficiary.[31] Tang VP at pp 92-96 referred to various authorities and said they “support the view that a discretionary trust would not be void if the trustees are not obliged to inform any person that he is a potential beneficiary.  Indeed, such beneficiary might never know the identity of the trustees or the existence of a trust” (my emphasis). 

54.It is therefore plain that Re Estate of Mui Yim Fong upheld the validity of clause 33 of the Trust Deed even though it gave wide powers to HSBC Trustee over disclosure of information or otherwise in relation to the Karen Trust.  It was further held that how much disclosure a discretionary trustee should make was often a matter of judgment, and in the absence of wrongdoing by the trustee, “it went to whether to exercise the discretion rather than whether the discretion existed at all”. Hence, HSBC Trustee’s non-disclosure of the identities of other beneficiaries and of the Deceased’s wishes in making provision for the Mother (which decision was subsequently overruled) could not render the Karen Trust null and void.

55.Ms Sit further submitted that the CFA in Tam Mei Kam v HSBC International Ltd[32] did not overturn the CA’s decision in Re Estate of Mui Yim Fong.  Chan PJ (giving the judgment of the court) noted Mahoney JA in Hartigan Nominees Pty Ltd v Rydge[33] expressed some doubt as to the existence of a duty on a discretionary trustee to provide information on the trust to potential beneficiaries,[34] but held it was unnecessary for the purpose of the appeal to decide whether, as a matter of law, there was any such obligation.  But the CFA went on to explain that clause 33 of the Trust Deed was aimed at preserving confidentiality and at protecting HSBC Trustee from unwanted requests for discovery or litigation.  It was only when HSBC Trustee had exercised its wide discretionary powers under the Karen Trust that any beneficiary became absolutely and indefeasibly entitled to any part of the trust fund and HSBC Trustee was then obliged to inform him or her of such entitlement.  That was the effect of the clause and how it was intended to work in practice.[35]

56.Ms Sit submitted that the CA decision in Re Estate of Mui Yim Fong was binding on this court, which was bound to follow such decision and uphold clause 33 of the Trust Deed.  Ms Sit added that as between the Mother and HSBC Trustee, the Mother was issue estopped given there was (a) a final judgment in the earlier proceedings, (b) identity of subject matter, and (c) identity of parties,[36] and it would be an abuse for her to re-litigate the same in the present action such that the court should strike out the latter claim.[37]

57.In light of the aforesaid analysis, I accept Ms Sit’s submissions, and I do not see how clause 33 of the Trust Deed can be said to be unlawful and void ab initio.  Both the CA and CFA held there was no question of HSBC Trustee having no duty to be accountable to the settlor or those beneficiaries who had a vested interest in the trust fund after the exercise of HSBC Trustee’s powers in their favour, and the court always had a supervisory jurisdiction over a trust.  As explained by the CA, it went to whether to exercise the discretion rather than whether the discretion existed at all.  The remedy was to seek discovery,[38] and not to seek a declaration that the Karen Trust was invalid (which was rejected by both the CA and CFA) or a declaration that clause 33 of the Trust Deed was unlawful and void (as the Mother and Nieces did in the present action).

58.In the circumstances, the Mother’s and Nieces’ claim that clause 33 of the Trust Deed was void ab initio and that HSBC Trustee committed breach of trust by relying on such provision should be struck out on the ground that it was an abuse of process of the court.

X.  MOTHER’s BANKRUPTCY

59.The Mother is still a bankrupt.  By a letter dated 28 November 2014 by Wong Teck Meng of the Trustees in Bankruptcy, it was pointed out that (a) section 43 of the Bankruptcy Ordinance Cap 6 (“BO”) provided that the debtor’s estate comprises all “property” belonging to or vested in the debtor at the commencement of the bankruptcy, (b) section 2 of the BO defined property as to include “things in action” whether situated in Hong Kong or elsewhere, and (c) section 53(4) of the BO provided that where any part of the property of the bankrupt consisted of things in action, such things shall be deemed to have been duly assigned to the trustee in bankruptcy, hence the Trustees in Bankruptcy took the view that the Mother’s right to claim under the present action was a “thing in action” which was the property of the Deceased’s estate that vested in the Trustees in Bankruptcy.  By such letter the Trustees in Bankruptcy informed the parties to the present action they “had not consented and do not consent to the [Mother] commencing the present action. As the cause of action was vested in the [Trustees in Bankruptcy], [the present action was] commenced by the [Mother] without authority”.

60.On 24 December 2014, the solicitors for the Trustees in Bankruptcy wrote to Master Chow inter alia as follows:

“6. The Trustee’s position is that [the Mother’s] cause of action in HCA1856/2014 is vested in the [Trustees in Bankruptcy] and that the [Trustees in Bankruptcy] have not consented to and do not consent to [the Mother] commencing the said proceedings. As the cause of action is vested in the [Trustees in Bankruptcy], the proceedings in HCA 1856/2014 were commenced by the Mother without authority.”

61.On 21 January 2015, the solicitors for the Trustees in Bankruptcy wrote to New Horizon’s solicitors reiterating that (a) the Trustees in Bankruptcy had not consented and did not consent to the Mother commencing the present action where the Mother sought to inter alia terminate the Karen Trust, (b) the cause of action was vested in the Trustees in Bankruptcy so the present action was commenced by the Mother without authority, and (c) the Trustees in Bankruptcy had not assigned to the Mother or anyone else the right to terminate the Karen Trust or the rights to any causes of action that had been vested in the Trustees in Bankruptcy.

62.New Horizon argued that the Mother being an undischarged bankrupt did not have the authority to terminate the Karen Trust and/or to bring and continue the present action.  The Mother Letter that purported to terminate the Karen Trust and the Writ of Summons with the SoC endorsed thereon were without the authority of the Trustees in Bankruptcy.

63.The Mother 2^nd Aff claimed the aforesaid contentions were unfounded in law as apparent from paragraphs 8-18 of the judgment in Re Tam Mei Kam (bankrupt).[39] According to the Mother and Nieces, Barma J (as he then was) in that case explained that “the key factor to find out whether a cause of action or a legal right belongs to a bankrupt personally or vests in his/her bankruptcy estate, is to see whether such a cause of action or legal right, upon his/her death, (i) extinguishes or (ii) passes to his/her personal representative.  For (i), the same (and even a chose in action) can never form his/her bankruptcy estate.  It is only for (ii) can so form”.  The Mother 2^nd Aff also referred to the hearing on security for costs before Kwan JA in Re Tam Mei Kam,[40] and complained that the Trustees in Bankruptcy failed to raise the matter of the Mother’s alleged lack of authority in relation to the Mother Letter until 28 July 2014 when the Trustees in Bankruptcy made such assertion for the first time.

64.But the true question here is whether or not the rights to terminate the Karen Trust and/or to commence and continue the present action should be (a) characterised as “things in action” being property belonging to or vested in the Mother at the commencement of her bankruptcy and/or (b) regarded as part of the Mother’s bankruptcy estate or belonging to her personally.  Mr Wong submitted that the Mother’s right to claim for the reliefs sought in the SoC was a “thing in action” being property belonging to or vested in the Mother that accrued before or at the commencement of her bankruptcy.  The Mother did not specifically address these interesting questions in her written submissions.  But in light of my conclusions in Parts VII-IX above, there is no need for me to decide on these matters.

XI.  PROCEEDINGS IN CAYMAN ISLANDS

65.The Mother said HSBC Trustee commenced FSD Cause No 121/2014 in the Cayman Islands for directions in relation to the present action, and for determination of the issues as to the validity of the Mother Letter and Appointment Deeds.  The Mother contended that at the hearing on 29 January 2015 at the Cayman Islands court, such court only allowed HSBC Trustee to continue the present action in Hong Kong, but declined to grant any relief to resolve the “validity issues”.  The Mother suggested that HSBC Trustee acted in bad faith in taking out the HSBC Summons to ask this court to rule in its favour on the “validity issues” when the Cayman Islands court had not considered it fit to do so despite HSBC Trustee’s express/substantial request and lengthy submissions. 

66.Although the Mother claimed it was further disclosed in the proceedings in the Cayman Islands that HSBC Trustee had paid Lau in full but did not see fit to remove him as beneficiary of the Karen Trust, she acknowledged that ultimately the key issue was whether New Horizon’s appointment on 2 November 2005 was a breach of trust in contravention of clause 31 of the Trust Deed.

67.The Cheung 2^nd Aff exhibited the originating summons dated 7 November 2014 brought before the Cayman Islands court and the ensuing order made on 29 January 2015.  By such originating summons, HSBC Trustee sought directions from the Cayman Islands court as regards the conduct of and/or its participation in the present action, and the reliefs sought included the following:

“3. If the Court directs that [HSBC Trustee] should apply for a stay of [the present action in Hong Kong], specific directions as to whether in all the present circumstances:

a. The [Karen Trust] has been validly terminated;

b. [Lau] and [New Horizon] have been validly appointed as beneficiaries of the [Karen Trust]; and

c. Clause 33 of the Trust Deed (an information control clause) is unlawful and [HSBC Trustee] has acted in breach of trust in its objection to disclose trust documents and information to [the Mother].

4.     Pending the outcome of [the present action in Hong Kong], directions to [HSBC Trustee] as to the powers and duties upon which it holds the assets of the [Karen Trust] and any other assets that may be affected by the outcome of [the present action in Hong Kong], including specific directions on any question relating to a distribution request made by any of the beneficiaries of the [Karen Trust].”

68.It was apparent from the ensuing Beddoe order that was made that the Cayman Islands court conferred on HSBC Trustee a high degree of flexibility as to the steps which HSBC Trustee wished to take in the present action:

“1. [HSBC Trustee] shall participate in the legal proceedings brought by the [Mother and Nieces] against [HSBC Trustee], in its capacity as trustee of the [Karen Trust], in [the present action in Hong Kong] and may take the following steps:

a. [HSBC Trustee] may file application(s) seeking to stay and/or dismiss [the present action in Hong Kong] on the grounds of invalid service and/or forum non conveniens, and/or pursue or contest any further applications or defend the merits of the claim in [the present action in Hong Kong];

b. [HSBC Trustee] may instruct Hong Kong Attorneys to act on its behalf generally in [the present action in Hong Kong];

c. [HSBC Trustee] may instruct and seek expert evidence from Cayman Islands Attorneys to assist in [the present action in Hong Kong];

d. [HSBC Trustee] may disclose such documents concerning the [Karen Trust] as the Trustee may consider necessary for the purpose of [the present action in Hong Kong].

......

3.   The relief sought by [HSBC Trustee] pursuant to paragraphs 3‑4 of the Originating Summons is adjourned generally with liberty to apply for further or other relief if necessary.”

69.The Mother 3^rd Aff complained that the matters before the Cayman Islands court were capable of being resolved by such court forthwith without the need of calling further evidence, otherwise HSBC Trustee would not have applied for such directions as it did there, but the Cayman Islands court chose not to do so and to leave them to the Hong Kong courts.

70.In my view, it is quite evident from the aforesaid Beddoe order that the Cayman Islands court left it to HSBC Trustee to decide whether to dispute jurisdiction in the present action and later (if so advised) to pursue the matter in Cayman Islands, or to substantively contest the Mother’s and Nieces’ claim in Hong Kong.  Accordingly, the Cayman Islands court did not make any ruling on the substantive issues at the hearing on 29 January 2015, but simply adjourned the matter generally with liberty to apply (such that any application(s) made by HSBC Trustee before this court can be resolved in the meantime).

71.As explained in the Cheung 1^st Aff, pursuant to the aforesaid Beddoe order, HSBC Trustee choose to contest the Mother’s and Nieces’ claim in Hong Kong by filing the HSBC Summons with a view to resolve the present action in a cost-effective and expeditious manner.  I see nothing sinister or unreasonable in HSBC Trustee’s approach or in the Cayman Islands court adjourning the substantive issues generally.  Such arguments by the Mother and Nieces are no answer to the HSBC and NH Summonses.

XII.  POSSIBLE AMENDMENTS

72.The Mother 2^nd Aff claimed that HSBC Trustee and New Horizon were dishonest in saying there were no triable issues.  The Mother claimed that HSBC Trustee, New Horizon and the Trustees in Bankruptcy “have acted in concert or conspired together to mislead and deceive this Court, so that they can all ultimately benefit from the substantial balance of [the Deceased’s] estate”, and the NH Summons finally demonstrated the “greed” of New Horizon despite the assurance given to her by Alan Lin (founder of New Horizon) before the commencement of the present action that New Horizon “did not want money and [her] well-being is all that important, and [her] bankruptcy must be discharged first”.  It was suggested that the averments in the SoC clearly showed the mala fides of HSBC Trustee and New Horizon.  The Mother also alleged the Trustees in Bankruptcy only set out their stance (which they did not honestly belief in) in their letter dated 28 November 2014 “to facilitate [HSBC Trustee’s] delaying tactics of applying for extension of time” to file its Defence or to challenge jurisdiction.  The Mother 2^nd Aff claimed it was “also open to [her] to amend [her] SoC to plead a conspiracy set out hereinabove”. 

73.But the Cheung 2^nd Aff claimed the Mother’s accusations (amongst others) that HSBC Trustee was dishonest, dirty, acting in bad faith or otherwise conspiring with others to mislead and deceive this court were entirely without any merit or basis, and she strenuously denied the same on behalf of HSBC Trustee.

74.It appeared that the Mother wished to raise a claim of conspiracy to injure by unlawful means.  According to Total Lubricants Hong Kong Limited, the claimant must plead and prove the following necessary elements: (a) a combination or agreement between two or more individuals, (b) an intent to injure, (c) pursuant to which combination or agreement and with that intention certain acts were carried out, and (d) resulting loss and damage.[41]

75.The essence of the tort of conspiracy to injure by unlawful means is the injury to the claimant as a result of unlawful act(s) where 2 or more people have combined to cause the injury, and the conspirators must be sufficiently aware of the relevant circumstances and share the same common purpose at the time when they acted in concert pursuant to the conspiracy, and the relevant overt act(s) must be done pursuant to the conspiracy, scheme or combination.  Acting in concert requires agreement such that 2 or more persons deliberately combine with common intention to achieve a common end.

76.But here there was paucity of information as to when such combination(s) or agreement(s) came into existence and what the combination(s) or agreement(s) were about, ie what were the material facts in respect of the conspirational combination(s) or agreement(s) as distinct from unlawful acts and means allegedly carried out pursuant to the conspiracy.

77.It is trite that fraud and/or conspiracy must be pleaded with utmost particularity and distinctly proved, and it is not allowable to leave such pleas to be inferred from the facts.[42] Loose allegations that are not properly particularised will be oppressive as regards defendants who had to face and answer such claim.  Further, no summons to amend the SoC and no draft amendments have been placed before this court for consideration.  I am not persuaded that I should allow the Mother and Nieces to amend the SoC to add any as yet unformulated plea of conspiracy.

XIII.  MOTHER’s SUBMISSIONS AT THE HEARING

78.The Mother made submissions at the Hearing to the effect that she had the authority of the Nephews to terminate the Karen Trust, and it was HSBC Trustee who subsequently approached the Nephews to cause them to “改口供”.  Since neither HSBC Trustee nor New Horizon relied on any absence of consent by the Nephews for the purpose of the HSBC and NH Summonses, it is unnecessary for me to deal with such submissions.

79.The Mother also made oral submissions as relation to the suspension and later resumption of her monthly maintenance payments, the quantum of her monthly maintenance payments and the sale of trust assets including various Hong Kong landed properties.  None of these matters were germane to the issues before the court, and as they might be subject of other proceedings I do not propose to deal with them.

XIV.  CONCLUSION

80.In the circumstances, none of the claims by the Mother and Nieces in the SoC were sustainable.  I therefore conclude that the SoC ought to be struck out, and this action be dismissed as against HSBC Trustee and New Horizon.  Although there is no evidence that the Writ of Summons had been served on Lau, given the above analysis, the Mother’s and Nieces’ claim against Lau could not stand.  Hence, I order that the SoC be struck out, and the whole of the action dismissed.

81.There is no reason why costs should not follow event.  I grant a costs order nisi that:

(a)   the 1^st, 2^nd and 3^rd plaintiffs do pay the 1^st defendant its costs of the HSBC Summons and of the action as between them on indemnity basis to be summarily assessed and paid forthwith;

(b)   the 1^st, 2^nd and 3^rd plaintiffs do pay the 2^nd defendant its costs of the NH Summons and of the action as between them on indemnity basis to be summarily assessed and paid forthwith;

(c)   there be no order as to costs in respect of the action between the 1^st, 2^nd and 3^rd plaintiffs and the 3^rd defendant.

82.Although the Nieces indicated they would not oppose the HSBC and NH Summonses, they could not be said to be “neutral”.  First, they chose to join with the Mother to commence and continue the present action against HSBC Trustee, New Horizon and Lau, and made statements of truth to verify the SoC, which claim this court has now concluded to be irremediably defective, and HSBC Trustee and New Horizon had been put to the trouble and costs of resisting such claim.  Secondly, the Nieces could have discontinued their claim against HSBC Trustee, New Horizon and Lau at the very latest when served with the HSBC and NH Summonses, but they did not do so.  I see no reason why they should not be liable for costs of such summonses and of the action.

83.HSBC Trustee had lodged its statement of cost for summary assessment.  For the purpose of the summary assessment of costs, I grant the following directions:

(a)   if no application is made to vary the costs order nisi within 14 days from the date hereof, the 2^nd defendant do within 21 days from the date hereof lodge and serve statement of costs not exceeding one page pursuant to Practice Direction 14.3;

(b)   leave for each of the 1^st, 2^nd and 3^rd plaintiffs to lodge and serve succinct summary of objections in bullet‑point format of not more than one page in respect of the 1^st defendant’s statement of costs (“Objection Summary”) within 7 days thereafter;

(c)   leave for each of the 1^st, 2^nd and 3^rd plaintiffs to lodge and serve Objection Summary in bullet-point format of not more than one page in respect of the 2^nd defendant’s statement of costs within the same period as prescribed in (b) above;

(d)   unless otherwise directed, the summary assessment of costs will be by paper disposal;

(e)   if application is made to vary the costs order nisi within 14 days from the date hereof, (i) the 2^nd defendant do within 21 days from the date hereof lodge and serve its statement of costs pursuant to Practice Direction 14.3, (ii) the directions in (b)-(c) above shall stand and apply, and (iii) the application for variation of the costs order nisi and (where appropriate) summary assessment of costs shall be heard before me in chambers (open to the public) on a date not before 42 days from the date hereof with half hour reserved.

The 1^st plaintiff acting in person and present

The 2^nd and 3^rd plaintiffs acting in person and absent

Ms Eva Sit, instructed by Clifford Chance, for the 1^st defendant

Mr Tak Wong, of Wong Shum & Co, for the 2^nd defendant