SO YEE MUI AND OTHERS v. LAM PUI CHI

CACV 283/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 283 OF 2010

(ON APPEAL FROM HCAP NO. 7 OF 2008)

____________

In the estate of CHAN HAY SHUN （陳起信）late of Flat D, 1/F, Ho On Mansion, 109 Austin Road, Tsim Sha Tsui, Kowloon, Married Man, Deceased

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BETWEEN

	SO YEE MUI（蘇綺梅）	1st Plaintiff
	CHAN YU CHING（陳宇正）	2nd Plaintiff
	CHAN HEI PING VERA（陳希平）	3rd Plaintiff
	CHAN CHING CHING TRUDEE（陳菁菁）	4th Plaintiff
	CHAN KAM YEE（陳錦誼）	5th Plaintiff
and
	LAM PUI CHI（林珮芝）	Defendant

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Before: Hon Yuen and Chu JJA in Court

Date of hearing and judgment: 28 June 2011

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JUDGMENT

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Hon. Yuen JA (giving the judgment of the court):

1.  This is the Defendant’s appeal against a decision of Kwan JA given on 8 April 2011 ordering the Defendant to pay security for costs of CACV283/2010 which is her appeal against a judgment of Lam J given on 1 December 2010 in a contested probate action HCAP7/2008 over the estate of Chan Hay Shun, deceased.

2.  In the probate action the 1^st Plaintiff sought a declaration that she was the Deceased’s wife and the 2^nd Plaintiff (who it was proved was the Deceased’s son) sought an order for Letters of Administration.  The Defendant claimed to be the Deceased’s wife.   

3.  Lam J found that the Defendant was not the Deceased’s wife.  In brief, the learned judge disbelieved the Defendant’s evidence that she had taken part in a marriage ceremony under the Marriage Reform Ordinance on a day before 7 October 1971, being the date after which such marriage ceremonies would cease to be valid.  He also found that the 1^st Plaintiff was the Deceased’s wife and that the Defendant had admitted in certain letters written to the Deceased in 2006 that she herself was not his wife.      

4.  The Defendant lodged an appeal against Lam J’s judgment.  The Plaintiffs sought an order for security for costs.

5.  Kwan JA ordered security in the sum of $350,000 to be paid within 42 days of her order, failing which CACV283/2010 would be dismissed.  The sum was not paid in time and as no stay had been granted, technically the appeal has already been dismissed. 

6.  The Defendant’s appeal against Kwan JA’s order was also out of time as the deadline for appealing fell on 18 April 2011.  The Defendant did not lodge her appeal against Kwan JA’s order until 11 May 2011. No reasons have been given for the delay.  This factor counts against the Defendant in her appeal.

7.  In any event, it is well-established law that an order for security for costs is made in the exercise of the court’s discretion and generally an appellate court will not interfere unless it has been shown that there has been an error of law, or a misapprehension of material facts, or errors in matters taken or not taken into account, or the exercise of discretion was plainly wrong.  We do not see any such grounds for disturbing Kwan JA’s judgment.   

8.  As for the Defendant’s amended grounds of appeal against Lam J’s judgment which amended grounds were not before Kwan JA, these are all directed against the learned judge’s findings of fact.  However it is well-established law that an appellate court would generally not interfere with a judge’s findings of fact.  We would therefore agree with Kwan JA that the Defendant does not have reasonable prospects of success on her appeal such as to provide her with an exception to an order for security for costs.

9.  Finally the Defendant has suggested that in place of payment of $350,000 cash as security for costs, there could be a charging order over the shares registered in her name in American Electronic Ltd.  We do not think it would be appropriate to vary Kwan JA’s order in this way.  There is a dispute as to whether these shares belong beneficially to the Defendant or to the Deceased.  In any event, this is a private company and it is well-established that enforcement of orders over shares in a private company may be expensive or protracted.

10.  Accordingly we would not vary the security for costs order in the manner suggested by the Defendant.

11.  In the circumstances, this appeal against Kwan JA’s order must be dismissed. 

12.  Having heard the parties on costs, we see no reason to depart from the usual rule that costs should follow the event and having regard to the hopeless nature of this appeal, we would make a gross sum order in the sum of $35,000 in lieu of costs to be taxed on an indemnity basis to be paid by the Defendant to the Plaintiffs.

(MARIA YUEN) Justice of Appeal

(CARLYE CHU) Justice of Appeal

Mr Gary Lam Chin Ching instructed by Terry Yeung & Lai Co for the Plaintiffs (Respondents)

The Defendant (Appellant) in person, present.

CACV 283/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 283 OF 2010

(ON APPEAL FROM HCAP NO. 7 OF 2008)

____________

In the estate of CHAN HAY SHUN （陳起信）late of Flat D, 1/F, Ho On Mansion, 109 Austin Road, Tsim Sha Tsui, Kowloon, Married Man, Deceased

____________

BETWEEN

	SO YEE MUI（蘇綺梅）	1st Plaintiff
	CHAN YU CHING（陳宇正）	2nd Plaintiff
	CHAN HEI PING VERA（陳希平）	3rd Plaintiff
	CHAN CHING CHING TRUDEE（陳菁菁）	4th Plaintiff
	CHAN KAM YEE（陳錦誼）	5th Plaintiff
and
	LAM PUI CHI（林珮芝）	Defendant

____________

Before: Hon Kwan JA in Chambers

Date of Hearing: 8 April 2011

Date of Decision: 8 April 2011

Date of Handing Down Reasons for Decision: 15 April 2011

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REASONS FOR DECISION

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1.  There are two applications taken out by the plaintiffs, who are the respondents in this appeal. The 1^st summons is dated 7 March 2011, in it the plaintiffs seek security for costs of the appeal against the defendant in the estimated sum of $1,152,000. The 2^nd summons is dated 25 March 2011, in it the plaintiffs seek an unless order that the defendant be required to file and serve a draft appeal bundle within 28 days.

2.  I should mention that the day before the hearing of these summonses, on 7 April 2011, the Director of Legal Aid issued a Notice of Application for legal aid by the defendant.  The defendant has applied for legal aid on 9 December 2010 to prosecute her appeal and this was rejected on 29 December.  As I understand from the defendant, her latest application for legal aid is in respect of the plaintiffs’ application for security for costs of the appeal.  Under section 15(4) of the Legal Aid Ordinance, Cap. 91, the court has discretion to lift the stay of proceedings notwithstanding the Director of Legal Aid has filed a memorandum of notification that a party has applied for legal aid.  I have exercised my discretion to lift the statutory stay in this instance, as I consider the fresh application for legal aid to be without merit.

3.  The judgment being the subject of the appeal is in hostile probate litigation.  The single issue at trial is whether the 1^st plaintiff or the defendant was the lawful wife of the deceased.  The determination of this issue will resolve the conflicting claims to the grant of letters of administration for the deceased’s estate.  After a 5-day trial in October 2010, Lam J handed down judgment on 1 December 2010.  He found in favour of the plaintiffs.  He ordered the defendant’s caveat to be vacated and letters of administration be granted to the 2^nd plaintiff.  The defendant was ordered to pay the plaintiffs’ costs on a party-and-party basis.  The defendant’s application to vary the costs order nisi was dismissed on 29 December 2010 and she was ordered to pay gross sum costs of $20,000 to the plaintiffs in respect of that failed application.

4.  The defendant was legally represented at the trial.  She is acting in person in this appeal.  The Notice of Appeal was filed on 28 December, followed by a Notice of Setting Down an Appeal on 29 December.  As mentioned earlier, she applied for legal aid to prosecute her appeal but the application was turned down on 29 December .

5.  On 11 January 2011, the defendant wrote to the court stating that she would adopt the trial bundles as the appeal bundle and would like to obtain a transcript of the trial.  It would appear from the letter of the Registrar of Civil Appeals to the plaintiffs’ solicitors on 28 February 2011 that the defendant’s application for a transcript was granted by the judge and the transcript had been sent to her on an earlier date.  As the defendant is acting in person, a preliminary directions hearing is required and the hearing date for this would only be given after the defendant has submitted a draft appeal bundle.

6.  The plaintiffs’ solicitors and the Registrar of the High Court have written to the defendant on 10 and 15 March 2011 asking her to lodge the appeal bundle without delay.  As this was not complied with, the plaintiffs issued the summons for an unless order on 25 March 2011 requiring her to lodge the bundle within 28 days failing which her appeal would be dismissed.  I understand from the defendant the reason why she has not done so is because she is still looking for solicitors to represent her in the appeal.  This is plainly not a reason for failing to lodge the bundle.  Other than this, she has no difficulty in lodging the bundle.  I consider she should do so without delay, so as not to hold up the progress of the appeal, as prejudice would be occasioned to the plaintiffs who would not be able to obtain letters of administration from the probate registry until the appeal has been disposed of one way or other.  I am not minded to make an unless order on this occasion but will lay down a specific period within which the defendant is required to lodge the draft appeal bundle.

7.  I turn to the summons for security for costs of the appeal.

8.  The 2^nd plaintiff filed evidence in support of that summons on 7 March 2011.  The plaintiffs’ solicitors have written to the defendant on 10 March drawing her attention to the fact that if she should fail to file evidence in opposition before the hearing, the plaintiffs would proceed with the application on the day of the hearing.  The defendant has not filed any evidence in opposition.

9.  In the absence of countervailing factors, if it is established that the respondent would have difficulty or encounter delay in recovering his costs on appeal due to the impecuniosities of the appellant, the court would generally exercise its discretion to order security to be provided by the appellant for the costs of the appeal.

10.  On the available evidence, I am satisfied that the plaintiffs have made out a case that they would have difficulty or would encounter delay in recovering their costs from the defendant if the appeal is dismissed.  I have taken into account the defendant has said in her witness statement she was completely dependent on the deceased financially, and it was the deceased who had provided for her monthly maintenance and all her needs.  The deceased passed away on 18 March 2008.  She had incurred legal fees in the trial estimated by her solicitors to be in the region of $1 million. She is liable to pay the costs of the plaintiffs and such costs for the 5-day trial are very likely to exceed $1 million.  She has made two applications for legal aid in this appeal.

11.  I have considered the grounds of appeal in the Notice of Appeal. Three grounds are raised, they seek to challenge the findings of fact made by the judge, who has found the defendant not to be a credible witness.  Counsel for the plaintiffs submitted that the appeal is hopeless.  On a preliminary view, I am inclined to think the grounds as they stand do not have reasonable prospects of success.

12.  It is appropriate in the circumstances to order security.

13.  The amount sought is $1,152,000 on the basis that senior counsel and junior counsel would be engaged, as in the trial below.  It seems to me that this appeal on findings of fact should be straightforward.  The amount of security should be premised on the estimated costs that would be allowed on taxation on a party-and-party basis.  On the basis that the plaintiffs are to recover the costs incurred in engaging a reasonably competent counsel to handle this appeal which is unlikely to last more than one day, I reduce the amount of security for costs of this appeal to $350,000.  The orders I have made on the two summonses are as follows:

(1) the defendant is to lodge the draft appeal bundle within 21 days hereof;

(2) the defendant is to pay into court $350,000 as security for costs of this appeal within 42 days hereof;

(3) the appeal proceedings are to be stayed until payment by the defendant of the security for costs as ordered in paragraph (2) hereof;

(4) for the avoidance of doubt, the time for the defendant to lodge the draft appeal bundle as ordered in paragraph (1) hereof is to continue to run notwithstanding the stay of proceedings in paragraph (3) hereof;

(5) in the event security is not provided as ordered in paragraph (2) hereof, this appeal do stand dismissed with costs without further order; and

(6) costs of the plaintiff’s summonses are to be in the cause of the appeal.

(Susan Kwan) Justice of Appeal

Mr Lam Chin-ching, Gary, instructed by Messrs Terry Yeung & Lai, for the 1st to 5th Plaintiffs

The Defendant, acting in person, present