SHALINI NARESH KUMAR BASANT v. STEVENSEC SERVICES LTD

HCMP 57/2024

[2025] HKCFI 6450

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 57 OF 2024

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DECISION ON COSTS (3)

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1.  I refer to my Decision on Application for Leave to Appeal handed down on 14 November 2025. I use the same terms as used therein.

2.  For the reasons set out therein, I refused the Applicant’s Leave Summons.  I also at §12 thereof made a costs order nisi against the Applicant.  That order has since become absolute. 

3.  I have read parties’ statements of costs and lists of objections lodged for the purpose of summary assessment.

4.  For the Respondent:

(a)   For sections C and D, the claimed costs of HK$41,445 and HK$59,300 are in my view excessive even on an indemnity basis;

(b)   I allow only HK$30,000 and HK$35,000 respectively only;

(c)   I allow counsel’s fees as claimed;

(d)   On a broad-brush approach, I summarily assessed the Respondent’s costs at HK$114,000.

5.  For the Interveners, I am of the view that the claimed costs of HK$75,899 are reasonable, which I so assessed.

HCMP 57/2024

[2025] HKCFI 5461

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 57 OF 2024

________________________

________________________

________________________

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DECISION ON APPLICATION FOR LEAVE TO APPEAL

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1.  I refer to the Decision which I handed down on 9 April 2025 (the “Decision”)[1]. I refer further to the Decision on Costs which I handed down on 17 July 2025[2] (the “Decision on Costs”). I use the same terms and abbreviations as used in the two decisions.

2.  At §32(b)  of the Decision, I made a costs order nisi (the “Costs Order Nisi”)  that the costs of the Respondent and Interveners of and occasioned by the Conversion Application be borne by the Applicant and be summarily assessed on an indemnity basis, with certificate for 2 counsel in the case of the Interveners, and be paid by the Applicant personally forthwith.

3.  For reasons set out in the Decision on Costs, I at §19 refused the Applicant’s Costs Application for variation of the Costs Order Nisi.  The Costs Order Nisi has since become absolute.  I further ordered, specifically at §19(b)  of the Decision on Costs, that the costs of and incidental to the Costs Application be paid by the Applicant personally on an indemnity basis, to be assessed summarily (collectively the “Costs Orders”).

4.  By summons of 31 July 2025 (the “Leave Summons”), the Applicant seeks leave to appeal against the Costs Orders, for the following orders (as set out in the draft Notice of Appeal attached to the Leave Summons (the “Draft NOA”):

(1)    The costs of each of the Applicant, the Respondent, the Trustee (if any), and the Interveners of and occasioned by or incidental to the Conversion Application and the Costs Application be paid out of the fund of the K.S. Shahani Trust (the “Trust Fund”)  on an indemnity basis, with certificate for two counsel in the case of the Interveners and the costs of and incidental to this application be likewise paid out of the Trust Fund.

(2)    In the alternative to (1)  above, that the Respondent bear its own costs of the Conversion Application and the Costs Application and that there be no order for the costs of and incidental to this application.

(3)    In the alternative to (1)  and (2)  above, and to the extent that it is ordered that the Applicant bear the costs of the Interveners and/or the Respondent in the Conversion Application and/or the Costs Application, that the costs thereof be on a party-to-party basis, to be summarily assessed, and that there be no order for the costs of and incidental to this application.

5.  I have since handed down directions for paper disposal of the Leave Summons.  Pursuant to those directions, Mr Mariani has for the Applicant filed his submissions in support and reply (“A/Sub#1” and “A/Sub#2”), and Mr Martin Ho and Ms Bonnie Cheng have respectively for the Respondent and the Interveners filed their submissions in opposition (“R/Sub” and “I/Sub” respectively).  I have read the submissions.  I have read the authorities referred to me. 

6.  3 Grounds are set out in the Draft NOA.  I deal with them in turn.

7.  Ground 1:

(a)  The main paragraph of Ground 1 reads as follows:

The learned Judge erred in declining to conclude that Re Buckton [1907] 2 Ch. 406 category 2 applied to the costs of the Conversion Application such that the costs of all parties to the Conversion Application should have been paid out of the Trust Fund and not by the Applicant personally.

(b)  I did in dismissing the Costs Application consider Re Buckton. I reiterate my relevant discussions in the Costs Decision, and in particular §§11(e) to (h)  and 18(c) to (g)  thereof;

(c)  Concerning whether resisting the Conversion Application was for the benefit of the Trust, Mr Mariani submits at §4 of his A/Sub#1 that allowing the Conversion Application would increase the costs and delay adjudication of the Applicant’s substantive application;

(d)  I agree with Ms Cheng that that submission is outright wrong.  The Conversion Application was necessitated by the serious factual disputes raised. As I have observed at §26(w)  of the Decision:

…focusing too much on the advantage on expedition which the originating summons process may give so as to push cases which are otherwise not suitable for that process will create in the long terms problems which ultimately would cause more loss and waste of time and resources …

(e)  The Conversion Application was a discrete application.  For the Applicant to focus unrealistically upon the theoretic benefit of the originating summons process and to resist the Conversion Application when the originating summons process is clearly not appropriate could not have been for the benefit of the Trust;

(f)  At §7 of his A/Sub#1, Mr Mariani submits that it was inaccurate to characterize the application “as currently constituted” as hostile.  In this regard, I repeat §18(d) to (g)  of the Costs Decision, in which I considered the costs positions before and after the Applicant dropping certain of the plainly hostile parts of her claim.  Mr Ho submits at §3.3 of R/Sub that “It is regrettable that the Applicant did not see fit to deal with this aspect of the Court’s reasoning at all, whether in the [Draft NOA] or in the accompanying written statement”.  There is clear force in this submission;

(g)  Mr Mariani submits that “whilst the taxonomy in Re Buckton does not constitute an inflexible rule, it is well-established at common law.  The Court should not derogate from that general approach without good reason”.  Assuming without accepting the validity of these submissions, I have set out in the Costs Application facts which in my view plainly justify the Costs Orders even if Re Buckton were applicable – see §§11(f)  to (h)  and 18(d) to (h);

(h)  Ground 1 is not reasonably arguable, and has no reasonable prospect of success.

8.  Ground 2:

(a)  The main paragraph of Ground 2 reads as follows:

The Applicant should not, in any event, be personally liable for the costs of the Respondent because the Respondent has changed its position both vis-a-vis the substantive remedies sought by the Applicant and, importantly, the Conversion Application itself.

(b)  I repeat §§26(o)-(r)  of the Decision, and §18(b)  of the Costs Decision;

(c)  Ground 2 is not reasonably arguable, and has no reasonable prospect of success.

9.  Ground 3:

(a)  The main paragraph of Ground 3 reads as follows:

In the event that the Applicant were ordered to pay the costs of any party in the Conversion Application and the Costs Application, such costs should be assessed on a party to party and not on an indemnity basis because the Applicant's resistance to the Conversion Application, and by extension her decision to commence these proceedings under the Originating Summons process, was not unreasonable.

(b)  I have considered at §13 of the Costs Decision the legal principles on awarding indemnity.  I repeat them;

(c)  In my view, and as explained in the Costs Decision, the Applicant’s resistance of the Conversion Application was clearly and plainly unreasonable;

(d)  On the facts of the case, as set out and explained in the Costs Decision, the Costs Orders are plainly justified;

(e)  Ground 3 is not reasonably arguable, and has no reasonable prospect of success.

10.  I have considered Re Up Energy Development Group Ltd (in liquidation)[2023] HKCA 536 §8.  For the reasons set out above, I am of the view that none of the grounds which the Applicant intends to rely upon has any reasonable prospect of success.

11.  I refuse the Applicant leave to appeal, and dismiss the Leave Summons.

12.  On Costs:

(a)  Ms Cheng submits[3] that the present application is a continuation of the Applicant’s unreasonable and unjustified position;

(b)  Mr Ho submits[4] that the Applicant has failed to engage with (1)  the high threshold which she has to surmount to get leave, and (2)  this Court’s actual reasoning in finding that her litigation behaviour was unreasonable.  He submits hence that the Leave Summons should never have been issued;

(c)  There are clear forces in those submissions;

(d)  On the facts, I make a costs order nisi, absolute within 7 days, that the costs of the Respondent and Interveners of and occasioned by the Leave Summons be borne by the Applicant and be summarily assessed on an indemnity basis, with certificate for counsel for the avoidance of doubt for both the Interveners and Respondent, and be paid by the Applicant personally forthwith;

(e)  If there is any application for variation of the nisi order, I will upon request or when necessary hand down further directions.  If not, the Respondent and Interveners may within 14 days from the date hereof serve and lodge their Statements of Costs, the Applicant may within 7 days thereafter serve and lodge her Statements of Objections, and the Respondent and Interveners may within 7 days thereafter serve and lodge their replies.  Subject to any further directions which this Court may make, the summary assessment will then be conducted on the papers.

Written Submissions and Reply by Mr Stefano Mariani of LCP, for the Applicant

Written Submissions by Mr Martin Ho, instructed by Lo, Wong & Tsui, for the Respondent

Written Submissions by Ms Bonnie YK Cheng, instructed by Kennedys, for the 1st to 4th Interveners

HCMP 57/2024

[2025] HKCFI 5460

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 57 OF 2024

________________________

________________________

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DECISION ON COSTS (2)

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1.  I refer to the Decision which I handed down on 9 April 2025 (the “Decision”)[1]. I refer further to the Decision on Costs which I handed down on 17 July 2025[2] (the “Decision on Costs”). I use the same terms and abbreviations as used in the two decisions.

2.  For reasons set out in the Decision on Costs, I refused the Applicant’s Costs Application.  I gave directions at §20 for summary assessment of the costs both for the Conversion Application and Costs Application.

3.  The Respondent has lodged its Statement of Costs (“R/SC”).  The Interveners have separately lodged 2, one in respect of the Conversion Application (“I/SC/Conv”)  and one in respect of the Costs Application (“I/SC/Costs”). The Applicant has filed her Lists of Objections (“A/SO”).  The Respondent and the Interveners have then filed their respective replies (“R/Reply” and “I/Reply”).  I have considered all of them.

The Respondent’s costs

4.  In R/SC, the Respondent claim costs in the total amount of HK$509,600.

5.  I have considered the objections raised on behalf of the Applicant.  The main complaint is made on the basis of unreasonable excessiveness.  In respect of counsel fees, objections are raised on the basis that no certificate for counsel has been granted.

6.  In respect of Item C (Communications), the Respondent claims total man-hours of 21.5 hours in the total sum of HK$96,000.  I find that unreasonably high even on an indemnity basis.  I allow only HK$75,000.

7.  In respect of Item D (Professional Work), the Respondent claims total man-hours of 50 hours in the in the total sum of HK$191,600.  I find that unreasonably high even on an indemnity basis.  This is particularly so when counsel had been engaged.  I allow only HK$130,000.

8.  The Applicant’s objection on counsel fee ignores paragraph 2(3)  of Part II of the First Schedule to Order 62 of the Rules of the High Court (Cap 4A).  I accept the submission made on behalf of the Respondent in R/Reply that certificate for counsel is not necessary for one counsel appearing before a judge in chambers.  I also do not find the fees claimed unreasonable.

9.  Adopting a broad-brush approach, I assess the Respondent’s fees at HK$427,000.

The Interveners’ costs

10.  In respect of the Conversion Application:

(a)  The Interveners in the I/SC/Conv claim costs in the total amount of HK$976,785 (solicitors’ costs in the total amount of HK$256,785, and counsel fees in the total amount of HK$720,000);

(b)  I have considered the objections raised on behalf of the Applicant.  The main complaint is made on the basis of unreasonable excessiveness.  In respect of counsel fees, it is asserted on the Applicant’s behalf that “there should have been no need to instruct both Senior Counsel and junior counsel”.  The amount of their fees are also objected to;

(c)  I am of the view that the time and costs charged by the solicitors are reasonable;

(d)  In respect of counsel fees, I have granted certificate for 2 counsel. I also do not find the fees unreasonable;

(e)  Adopting a broad-brush approach, I assess the Interveners’ costs for the Conversion Application at HK$976,000.

11.  In respect of the Costs Application:

(a)  I have considered I/SC/Costs and A/SO;

(b)  I am of the view that the claimed sum of HK$86,226 is reasonable;

(c)  Adopting a broad-brush approach, I assess the Interveners’ costs for the Costs Application at HK$86,000.

HCMP 57/2024

[2025] HKCFI 3052

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 57 OF 2024

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____________________

____________________

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DECISION
ON COSTS

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A. The application to vary the Costs Order Nisi

1.  I refer to the Decision I handed down on 9 April 2025 (the “Decision”)[1]. I use the same terms and abbreviations as used therein.

2.  At §32 of the Judgment, I made a costs order nisi (the “Costs Order Nisi”) that:

(a)  there be no order as to costs of the Amendment Summons; and

(b)  the costs of the Respondent and Interveners of and occasioned by the Conversion Application be borne by the Applicant and be summarily assessed on an indemnity basis, with certificate for 2 counsel in the case of the Interveners, and be paid by the Applicant personally forthwith.

3.  By summons of 23 April 2025 (the “Costs Summons”, and the “Costs Application”), the Applicant seeks certain variations to the Costs Order Nisi, as follows:

1.  The [Costs Order Nisi] in respect of the [Interveners’ Summons] … be varied as follows:

“The costs of each of the Applicant, the Respondent, the Trustee (if any), and the Interveners of and occasioned by or incidental to the Conversion Application be paid out of the fund of the K.S. Shahani Trust (the “Trust Fund”) on an indemnity basis, with certificate for 2 counsel in the case of the Interveners.” 

2.  Costs of and incidental to this application be likewise paid out of the Trust Fund.

3.  In the alternative to (1) and (2) above, that the Respondent bear its own costs and that there be no order for the costs of and incidental to this application.

4.  To the extent that it is nonetheless ordered that the Applicant bear the costs of the Interveners and/or the Respondent in the Conversion Application, that the costs thereof be on a party-to-party basis, to be taxed if not agreed.

4.  I have since handed down directions with the view of disposing of the application on the papers.

5.  Pursuant to those directions, Mr Mariani for the Applicant has lodged his written submissions in support dated 8 May 2025 (“A/Sub#1”) and in reply dated 30 May 2025 (“A/Sub#2”).  In opposition, Mr Martin Ho for the Respondent, and Ms Bonnie Cheng for the Interveners, have filed their submissions, both dated 22 May 2025 in opposition (“R/Sub” and “Int/Sub” respectively).  I have read all those submissions.

6.  As the interests and perspectives of the Interveners and Respondent are not entirely the same, it is more convenient to consider their submissions separately. 

B.  The Interveners’ position

7.  I consider first of all the Interveners’ position.

8.  2 questions are involved: (i) whether the Applicant should bear the costs of the Conversion Application personally (“Costs Liability”), and (ii) whether indemnity costs should be awarded (“Costs Scale”).

B.1.  Costs Liability

9.  I consider the Costs Liability first.

10.  The Applicant’s stance may be summarised as follows.  Mr Mariani relies on Re Buckton.  He submits that the Applicant makes no claim against the Interveners.  Any mutual hostility between the Applicant and the Interveners is a personal matter.  The purpose of the action was to “secure that [the Trustee] be able to perform the Trust.”  It is not a hostile claim, and does not affect the Interveners’ rights.  The fact that the Interveners feel affronted by the allegations made against them does not make the action a hostile one.

11.  For the following reasons, I accept Ms Cheng’s submissions that the Applicant should personally bear the costs concerned (including her own costs):

(a)  Whether the Applicant seeks any relief against the Interveners is off the point.  The Applicant’s claim and allegations raise factual disputes.  Some are serious.  Some relate to the Interveners.  Those disputes are required to be resolved before the Court can then decide whether to step in.  I repeat paragraph 26, and in particular subparagraphs (h), (q), (u) and (v) thereof;

(b)  In A/Sub#2, Mr Mariani submits that “Whereas the Court granted the Conversion Application, it does not follow simpliciter that it ‘must have been known’ to the Applicant that the Application should have been commenced or continued as a Writ” (original emphasis);

(c)  No one has said that this is a “simpliciter” scenario.  But in the circumstances of the present case, given the nature and seriousness of the factual allegations made, an inference can in my view clearly be drawn that the Applicant must have had that knowledge;

(d)  The contemporaneous inter partes correspondence reinforces the inference:

(i)     By letter dated 27 February 2024, the Interveners’ solicitors said the following to the Applicant’s solicitors:

We put on record at the outset that it is wrong for the Applicant to have commenced these proceedings by originating summons rather than by writ and without naming our clients as parties.  Given the nature of the Applicant’s allegations and the extensive correspondence exchanged among the current parties and our clients before she issued the OS, she ought to have known or been advised that (i) it is inappropriate to use the originating summons procedure where there are clearly factual disputes involved …

and that:

We once again request the Applicant to rectify the said problems. We reserve all our clients’ rights, including to make submissions on these matters and to seek costs against the Applicant to be borne by her personally (and not to come out of the trust assets) on an indemnity basis.

(ii)    In response, the Appellant’s solicitors stated their letter in reply dated 28 February 2024 that:

As you are aware, under O.28, r.8 of the Rules of the High Court, the Court may, if it thinks fit, direct that this application continue as though it had been begun by writ.  Your clients may make such submissions as they are advised to make in that regard at the Directions Hearing.  We remain of the view that it is in all circumstances proper for this action to be continued as an application begun by Originating Summons.

(iii)   By letter of 4 March 2024, the Interveners’ solicitors reiterated their position that the action:

a.  … involve substantial disputes of fact which render the OS procedure wholly inappropriate.  This ought to have been plain to the Applicant from the nature of her own allegations and proposed relief, and the correspondence among the parties and our clients before commencement of the action.  Your view that “it is in all circumstances proper for this action to be continued as an application begun by Originating Summons” is unjustified.

b.  If a plaintiff/applicant ought to have anticipated there would be substantial factual disputes so that the originating summons procedure would be inappropriate, she would be penalised on costs upon the Court making an order under O.28 r.8 (which your letter alludes to).  She would also be ordered to pay costs if she ought to have reasonably consented to an application under O.28 r.8.

…

3.  We have given fair and more than ample opportunity to the Applicant to rectify the fundamental problems in her conduct of this action.  Unless the Applicant provides a constructive response and takes all necessary steps to rectify those problems by 11 March 2024, our clients will take out the appropriate application(s) and seek costs against her personally (and not to come out of the trust assets) on an indemnity basis.

(e)  In respect of Re Buckton, I accept Ms Cheng’s submissions[2] it does not assist the Applicant.  The Applicant’s averred reasons for bringing the action and the mode of originating process she chose to adopt and maintain are 2 distinct matters.  The former, whatever they are, do not mean that her adoption of the originating process and her opposition of the Conversion Application are necessarily proper and reasonable.  On the facts before me, I am of the view that they are not. 

(f)  Further, on the facts of this case, I accept Ms Cheng’s submissions that even if Re Buckton were applicable, it had still not been shown how the adoption and insistence upon the use of the originating process were properly for the benefit of the Trust Funds;

(g)  Given the nature of the Conversion Application, I further accept Ms Cheung’s submissions that it is a discrete application;

(h)  I have also considered Lam Pak Cheung v Lin Zhen Lue [2009] 1 HKLRD 35 at §49, and Industrial and Commercial Bank of China (Asia) Ltd v Tse Ching [2022] 5 HKLRD 284 at §31.  They are consistent with this Court’s exercise of its discretion in ordering personal costs against the Applicant.

B.2.   Costs Scale

12.  Mr Mariani submits[3] that:

As a broad rule and without presuming to fetter the Court’s broad jurisdiction over costs, indemnity costs should only properly be ordered where the proceedings were scandalous or vexatious, or had been initiated or prosecuted maliciously, or for an ulterior motive, or in an oppressive manner …

13.  I do not accept those submissions.  The authority Mr Mariani cites in support is Choy Yee Chun (The Representative of the estate of Chan Pui Yiu) v Bond Star Development Ltd[1997] HKLRD 1327 (CA).  I am surprised that Mr Mariani has decided to cite the 1997 decision of Choy Yee Chun, but not the subsequent authoritative decision from the Court of Final Appeal in Town Planning Board v Society for Protection of the Harbour Ltd (No 2) (2004) 7 HKCFAR 114.  As explained and summarised by the Court of Appeal in Huge Dragon Corp Ltd v Lung Mun Oasis [2014] 3 HKLRD 286 at §§12-13:

12.  As to when the courts may award indemnity costs, Li CJ had this to say in Town Planning Board v Society for Protection of the Harbour Ltd (No 2) …

[16]  The courts have rejected the proposition that an award of indemnity costs will only be made where a case has been brought with an ulterior motive or for an improper purpose or where there is some deception or underhand conduct on the part of the losing party ...[4] These decisions and the reasoning on which they were based have been endorsed by the Hong Kong Court of Appeal …

[17] In these and other cases, courts have emphasised the undesirability of attempting to define the circumstances in which orders for indemnity costs are to be made. It has been said that:

“… the discretion is not to be fettered or circumscribed beyond the requirement that taxation on an indemnity basis must be ‘appropriate’.”

…

13.  What constitute appropriate circumstances to award indemnity costs must be fact-sensitive.  As demonstrated by numerous authorities and now enshrined in O.62 r.5(1)(e), Rules of the High Court, the conduct of the party against whom indemnity costs are sought is cogently relevant.  Thus, where the proceedings in question should never have been brought or defended but the party nevertheless unreasonably and unjustifiably persisted, he may well be visited with indemnity costs …

14.  I have considered the submissions made by Mr Mariani at §11 of A/Sub#1.  I reject his submissions that the Trustee Action could have given the Applicant any “reasonable expectation” that the present action may be determined under the originating summons process.  I repeat §26 of my Decision.  I repeat further the contemporaneous inter partes correspondence discussed above.  The fact that the Appointor has not disputed that he had declined to grant Mr Yuen the Necessary Sanctions does not obviate the need to consider the other issues involved.  The Applicant’s averred concern over costs is no justification for the adoption of an inappropriate and unsuitable procedure – and see §26(w) of the Decision.

15.  For the above reasons, I am of the view that the Interveners’ costs should be assessed on an indemnity basis.

C.  The Respondent’s position

16.  I now turn to the Respondent’s position.

17.  Given the position which the Respondent is in (as the Appointor under the Trust), the 2 questions of Costs Liability and Costs Scale may be, as explained below, considered together.

18.  For the following reasons, I accept Mr Ho’s submissions that the Applicant should personally bear the costs concerned (including her own costs).  I accept also his submissions that the Respondent is entitled to have his costs assessed on an indemnity basis:

(a)  In the case of the Respondent, the starting point is that it is entitled to costs on an indemnity from the Trust – see Lewin on Trusts 20th ed. §§48-004 to 48-005, and O.62 r.6(2).  The true question, as submitted by Mr Ho which I accept, is whether the costs should be borne by the Applicant personally, or be paid out of the Trust;

(b)  Mr Mariani principally relies on the alleged “fact that [the Appointer] changed, without prior notice to the Applicant, its position with respect to the Conversion Application itself.”[5] I do not accept that there has been any change as alleged.  I repeat §§26(o) to (q) of the Decision;

(c)  In relation to Mr Mariani’s reliance upon Re Buckton, the discussions above on the same equally apply;

(d)  Even if Re Buckton were applicable, there would be the following further considerations;

(e)  As I have recorded in the Decision, the Applicant has changed the scope of her claim a number of times – see §§8-10, 16 and 26(o) of the Decision. Until the Applicant has dropped the parts of her claims (or at least indicated her intention to do so) for the various Declarations and discharge, the claim was plainly in the nature of a hostile application for breach of trust.  I accept Mr Ho’s submissions in this regard.  As explained in Lewin on Trusts at §48-076:

A beneficiary who unsuccessfully sues trustees for breach of trust will normally be ordered to pay the costs of the trustees.

(f)  I accept Mr Ho’s submissions that the costs incurred prior to and until the amendment should be borne by the Applicant;

(g)  In respect of the balance of the costs, I bear in mind the observations of Lord Scott NPJ in Cheung Pui Yuen v Worldcup Investments Inc (2009) 12 HKCFAR 31 on the nature of the principles explained in Re Buckton.  The learned Non-permanent Judge firstly summarised those principles at §§56 to 57.  He then set out at §58 a further principle, that if it is the deceased who is responsible for the creation of the doubts that have necessitated an application to the court for the doubts to be resolved, it is the deceased’s estate on which the costs of the application should fall.  He then at §59 observed that:

But these principles do not constitute rules.  They provide a guide as to how, in probate or administration proceedings, judicial discretion regarding the costs of litigation should be exercised.  The answer to that may depend not only on the principles referred to but also upon the particular circumstances in which the litigation has been commenced and prosecuted.

(h)  On the overall unreasonable conduct of the Applicant in employing the originating summons process to start with, and in resisting the Conversion Application subsequently, I repeat the discussions above.  I add here also the matters raised by Mr Ho, which include the repeated shifts by the Applicant of the scope of her claim, the making of very serious allegations against the Respondent, the inappropriateness hence of a trial without pleadings (and see 26(v) of the Decision in this regard), and the protracted inability on the Applicant’s part to confirm what she seeks to rely on and what not;

(i)  In my view, in addition to the Respondent’s position as the Appointer, this is clearly an appropriate case for indemnity costs to be ordered.

D.  Overall disposition

19.  For the reasons set out above, I refuse the Costs Application. For the avoidance of doubt:

(a)  I refuse §1 of the Costs Summons;

(b)  I refuse §2 of the Costs Summons, and order that the costs of and incidental to the Cost Application be paid by the Applicant personally on an indemnity basis, to be assessed summarily;

(c)  I refuse the alternative §3;

(d)  I refuse §4;

(e)  I refuse to vary the Costs Order Nisi, which has now become absolute.

20.  For better case management and easier reference, I make the following directions on assessment of costs:

(a)  The Respondent and Interveners may within 7 days re-serve and re-lodge their Statements of Costs, both for the Conversion Application and the Costs Application;

(b)  The Applicant may within 14 days thereafter lodge her Statements of Objections;

(c)  The Respondent and Interveners may within 7 days thereafter lodge their replies;

(d)  Subject to any further directions which the Court may make, the summary assessment will then be conducted on the papers.

HCMP 57/2024

[2025] HKCFI 1442

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 57 OF 2024

____________________

____________________

____________________

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DECISION

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A. Introduction

1.  Before me are:

(a)  the Applicant’s application by summons of 7 March 2024 (the “Amendment Summons”) to amend the Originating Summons taken out on 11 January 2024 (the “OS”) as per the draft attached (the “OS AS Version”),

(b)  the parts of the Interveners’ summons of 15 March 2024 (the “Interveners’ Summons”) that have not been adjudicated upon (namely whether the summarily assessed costs for the Joinder Application (the “Joinder Costs”) should be paid forthwith, and the “Conversion Application”); and

(c)  the Applicant’s Notice of Appointment to Hear Originating Summons of 5 April 2024 (the “Notice of Appointment”), for inter alia orders that the Amendment Summons be granted, the Interveners’ Summons be dismissed, and directions for further conduct of the OS. 

B.  Background in summary

2.  This action centres around a family trust (the “Trust”) set up some years ago for members of the Shahani family.  It has a number of underlying companies, some incorporated in the BVI, and some in Hong Kong (“Underlying Companies” or “Group Companies”).  Assets are held via the Trust.

3.  The Applicant, the 1^st Intervener (“Rajan”) and the 2^nd Intervener (“Dilip”) are siblings.  Rajan and Dilip are brothers (“Brothers”). The applicant is their sister.  I will refer to their mother as “Mother”. The 3^rd and 4^th Interveners are Rajan’s children (together with the Brothers, collectively the “Interveners”).  The Applicant and the Interveners are 5 eligible beneficiaries of the Trust. 

4.  The Respondent is a corporate, secretarial and trustee service company wholly owned and managed by the law firm Stevenson, Wong & Co (“SWC”). It is the Appointor under the Trust (“Appointor”).  It was appointed in 2002.  The Interested Party is the Trustee of the Trust (the “Trustee” or “Mr Yuen”).  He was appointed pursuant to the Order of Recorder Rachel Lam SC Court of 20 January 2023 in HCMP 420/2021 (the “Trustee Action”, and the “Trustee Order”)[1]. He replaced Sovereign Fiduciaries (Hong Kong) Limited (“Sovereign”), which the learned Recorder discharged at the same time.

5.  Under the relevant Trust Deed, certain (in fact a lot) of the Trustee’s powers under the Trust can only be exercised with the “Necessary Sanctions” by the Appointor.  In the Trust Deed, the phrase “‘with the Necessary Sanction’ means so long as there shall be in existence an Appointor with the prior written consent of the Appointor or if more than one Appointor, of all the Appointor but otherwise means in the absolute discretion of the Trustee.”[2] The Appointor has also the power to remove existing trustee(s) or appoint new one(s)[3].

6.  Upon the Trustee’s appointment, he has made to the Respondent a number of requests for Necessary Sanctions for a number of matters.  Those requests have been summaried by Mr Cheng Yim Poon (“Mr Cheng”), a partner at SWC, in his affirmation filed on behalf of the Respondent (see Sections E1 to E5 in particular).  Those matters include:

(a)  The Trustee’s proposal to charge on a time-spent basis;

(b)  The Trustee’s proposal to appoint legal advisors on continuous and ongoing basis;

(c)  The conduct of investigations into (i) whether the Mother was also a de facto settlor and if so, what letter of wishes should be taken into account; (ii) the Applicant’s Complaint of (a) Rajan’s utilization of funds as a director of the Underlying Companies; (b) the lack of declaration of dividends since 2019, and (c) the resettlement of the Trust with the assistance of Sovereign;

(d)  The Trustee’s attempted appointment of himself onto the board of the Underlying Companies; and

(e)  The Trustee’s attempted appointment of himself as an authorized bank signatory.

7.  The Trustee and the Respondent had engaged in extensive correspondence over those requests.  The Respondent has not provided the Trustee with the Necessary Sanctions requested.

8.  By the OS, the Applicant seeks the discharge of the Respondent as the Appointor (§5).  It seeks also a number of Declarations, to the effects that (1) some or all of the Appointor’s powers under the trust are “fiduciary” (§1), (2) that the Respondent has a potential or actual conflict of interest in so acting, on the basis that SWC have been acting for the Brothers in a matter in which the Applicant “might be an adverse party; and/or … there is a current and unresolved dispute between the Applicant and the Brothers in, … the matter of the proper administration of the Trust” (§2), (3) the Respondent has acted in breach of its fiduciary duties by declining to give the Trustee certain Necessary Sanctions, and that “the Respondent has thereby in effect sought to stymie, impede, and/or frustrate: (1) the rightful exercise by the Trustee of its fiduciary powers and the proper discharge of its fiduciary duties; and (2) the purpose and intent of the Trustee Order” (§3), and (4) the Respondent has otherwise breached its fiduciary duties by failing to act impartially with respect to the administration of the Trust, namely by unduly preferring the interests of the Brothers to those of the Applicant (§4).

9.  The OS is supported by the Applicant’s first affidavit.  A large number of allegations have been made therein.  A lot of them are serious ones against the Respondent (including SWC) and the Brothers.  Below are some examples:

… [Mr Yuen] has at each stage been stymied by the refusal of the Respondent to provide the Necessary Sanction.  In that regard, it appears to me the Respondent has in effect succeeded to Sovereign’s role as an advocate for Rajan and Dilip.  I am advised and believe that the Respondent has not acted with the impartiality and loyalty that one might expect from a fiduciary in the context of the administration of a trust. (§35)[4]

… Mr Yuen has been unable to obtain Necessary Sanction from the Respondent to even begin to conduct his inquiries into the history and management of the Trust and properly obtain oversight and control over the Trust Fund.  As I believe should be clear from the contents of the correspondence that I have exhibited, the Respondent is pursuing its own interests and/or the interests of Rajan and Dilip to the detriment of mine by refusing to collaborate with Mr Yuen and, in effect, frustrating the order of this Court in the Trustee Action. (§37)[5]

… the Respondent is for all intents and purposes a de facto ally of Rajan and his ‘camp’.  Consequently, I believe that the Respondent could be seen as acting, in effect, to frustrate the order of the Court in the Trustee Action.  I am, with respect, startled that a professional trust services provider whose directors are partners of a prominent firm of solicitors in Hong Kong (who I understand are also officers of the Court) should act in that manner. (§45)[6]

… I believe that the Respondent is entrenched in its position, despite being a fiduciary, most likely because: (1) it considers Rajan to be its ‘true’ client and the rightful controller of the Trust (despite the Trust being discretionary); and (2) it and SWC stand to derive financial benefit from continued collaboration with Rajan, including remuneration on an hourly basis and further instruction from Rajan and LSL[7] to SWC as their solicitors.  In that regard, I verily believe that the Respondent is nothing more than the alter ego of SWC, as it does not appear to have any directors or agents who are not partners and/or employees of SWC. (§57)[8]

Rajan has engaged, and continues to engage, in a pattern of behaviour that credibly leads me to believe that he wishes to continue to control the undertaking of LSL himself, and primarily for his benefit (and, more broadly, the benefit of his ‘camp’).  He now appears to be using the Respondent as a smokescreen to perpetuate a state of affairs that is favourable to him: that is, managing the business of the companies held on Trust at his discretion and without interference from Mr Yuen as Trustee. (§58)[9]

That is, in summary, why the continuation of the Respondent in the role of Appointor is fundamentally unsatisfactory.  I am advised and believe that I am as an Eligible Beneficiary entitled to credible assurances that the Trust will be properly performed, in an impartial manner, starting from the fundamental principle of equality between Eligible Beneficiaries. (§59)[10]

I jump slightly ahead and observe that similar allegations were repeated and maintained in the Applicant’s 2^nd affidavit filed in reply – see in particular §§7 and 8 thereof.

10.  On 7 March 2024, the Applicant took out the Amendment Summons.  The OS AS Version was attached thereto.  A new paragraph 6 was proposed to be inserted[11], in the following words (underlining added for ease of presentation):

6.  If and to the extent that the Court does not consider it to be just and convenient in the exercise of its equitable jurisdiction to discharge the Respondent as Appointor, directing the Appointor to give forthwith to the Trustee the “Necessary Sanction” to do each of the following on such terms as the Trustee thinks fit or otherwise subject to such conditions as the Court may specify:

i.    Appoint and remove directors of any of the companies whose shares are held, directly or indirectly, in the fund of the Trust (the “Group Companies”), including without prejudice to the generality of the foregoing to appoint himself a director of any such Group Company;

ii.   Instruct solicitors and/or counsel in Hong Kong and/or the British Virgin Islands to: (a) investigate the terms and relevance (if any) to the performance of the Trust of the various letters of wishes addressed to the Trustee; (b) take advice on his rights and obligations as a shareholder and/or director in those jurisdictions, and on the rights and obligations of third parties with respect to each Group Company to the extent that these are reasonably relevant to the proper performance and administration of the Trust and to be indemnified from the Trust fund for those purposes;

iii.  Secure proper remuneration for himself as Trustee of the Trust in accordance with its terms;

iv.  Investigate the Applicant’s complaints in the matter of the management of any or all of the Group Companies by their respective directors and agents;

v.   Appoint himself as a signatory to the various bank accounts held by the Group Companies; and

vi.  Liberty to apply to the Court for further directions at the expense of the Trust Fund; and

A declaration that the prior refusal by the Respondent to give the “Necessary Sanction” to any or all of (i) – (v) above was in breach of the Respondent’s fiduciary duties; …

11.  When the Applicant first took out the Originating Summons, she only named as parties the Respondent and the Trustee (the latter as the Interested Party).

12.  Subsequently, the Interveners’ took out the Interveners’ Summons and made the Joinder and Conversion Applications.

13.  By Order of 15 April 2024, Deputy Judge KC Chan allowed the Joinder Application.  He ordered that the Joinder Costs be borne by the Applicant.  The Conversion Application was at the same time adjourned.  The Amendment Summons also had not been adjudicated upon.  The learned Deputy Judge subsequently on 13 December 2024 summarily assessed the Joinder Costs at HK$420,000. He at the same time directed that the question of the time for payment of the same be reserved to this Court. 

14.  Also on 15 April 2024, the learned Deputy Judge directed “the Applicant do lodge and serve a Particulars of Claim (i) setting out each matter that Necessary Sanction ought to have been, but failed to have been given by the Appointer and setting out succinctly all the factual allegations, material facts and legal proposition and clauses in the trust deed in support of her case that the Appointer ought to have given such Necessary Sanction and (ii) setting out in detail and full terms of the direction(s) the Applicant is asking the Court to make in this case.”

15.  The Applicant’s Particulars of Claim subsequently filed is dated 27 May 2024 (“Particulars of Claim”):

(a)  It is a 22-page document;

(b)  Whereas the Applicant claims that “the Applicant does not require the Court to make any determination on the extent to which her complaints against any of Rajan, Dilip, and/or any other Intervener are substantially made out” (§1(c)), she claims at §1.d. that the “conduct of [the Respondent] and its fitness to act as Appointor are the only issues that the Court has been asked to adjudicate”; 

(c)  The last paragraph thereof (§19) says that:

It is recognised that the specified and/or particularised scope of the Applicant’s application above will, as a matter of best practice, entail further amendment to the Amended OS.  The Applicant will accordingly apply for leave to vary the Amended OS on the basis of the above at the appropriate time or otherwise as directed by the Court.

16.  The Applicant has so far made no formal application to have the Amendment Summons withdrawn, amended or otherwise replaced, despite what she has said at §19 of the Particulars of Claim.  Instead, Mr Mariani has enclosed in his written submissions an “Amended Originating Summons” (the “OSSubmission Version”).  The OS Submission Version is different from the OS AS Version, and apparently supersedes it.  The principal difference between the OS Submission Version and the OS AS Version are:

(a)  The addition of the conjunctives “and/or” between a number of paragraphs;

(b)  The deletion of §5 asking for discharge; and

(c)  The deletion of the part of §6 of the OS AS Version which I underlined above.

As we shall see, even the OS Submission Version is not the version which the Applicant is now seeking to rely on.

C.  Whether the Joinder Costs be paid forthwith

17.  This Court has in Chen Hongqing v Liu Yiu Keung Stephen[2021] HKCFI 440 (§§24-26) considered the scope and the operation of RHC O.15, r.6(2)(b).

18.  I have set out above what the Applicant seeks in the OS.  She seeks an Order that the Appointor be discharged.  That directly affects the Interveners’ interest in the administration of the Trust.  The Declarations sought also otherwise bear upon them.  The Applicant is described, vis-à-vis a matter between her and the Brothers, as an “adverse party”.  The Brothers’ interests are said to have been preferred by the Appointor.  Serious allegations have been made against the Brothers.  Given the wide scope of RHC O.15, r.6(2)(b), and the nature of the relief which the Applicant is seeking, I am of the view that the Interveners ought clearly have been joined to start with.  Mr Mariani’s submissions that the Applicant is not seeking any relief against the Interveners in my view misses the point entirely.

19.  Not only did the Applicant fail to join the Interveners, she resisted the Joinder Application.

20.  The Joinder Application has been allowed.  It is a discrete application.  The Joinder Costs have also been summarily assessed. 

21.  I have considered Mr Mariani’s submissions on this issue at section F of his written submissions:

(a)  Dealing with his submissions at §59(3) first, wherein he says “it is denied, with the greatest respect for the Judge’s decision in the Joinder Application, that the Applicant’s resistance thereto was unreasonable”, I am of the view that the learned Deputy Judge was correct in that view.  I am of the view that the resistance of the Joinder Application was unwarranted;

(b)  Mr Mariani further submits, and highlighted orally in the course of the hearing, that it is yet unclear which party or parties would have to bear the costs of the substantive application, and that in any event, the costs may be borne and paid out of the Trust.  He submitted that the Applicant’s application by the OS is for proper administration of the Trust.  He refers to Re Buckton [1907] 2 Ch 406 as explained in Lewinon Trusts 20th Edition at §§48-033 – 48-041.  He submitted that the application falls within class (2) of the categories for the incidence of trust litigation costs;

(c)  I do not accept those submissions.  Firstly, as I have observed above, the Joinder Application is a discrete application.  That was made as a direct consequence of the Applicant choosing not to name the Interveners in the OS. The incidence of costs of the substantive application has little to do with it;

(d)  I have set out some of the allegations that the Applicant has made against the Respondent (including SWC) and the Brothers.  I accept Mr Fung submissions that the proceedings, and more importantly the resistance of the Joinder Application, has the character of a hostile claim, so that it falls within class (3) of the categories.  I so find for the purpose of the present exercise.

22.  I have considered the Final Report of the Chief Justice’s Working Party on Civil Justice Reform (§§529-530, also referred to Hong Kong Civil Procedure 2025 §62/9A/1).  I have also considered Wing Fai Construction Co Ltd v Yip Kwong Robert (No 2) (2012) 15 HKCFAR 454 at §5. Immediacy is indeed a feature of summary assessment.

23.  On the facts of the present case, I am of the view that immediate payment of the Joinder Costs is clearly called for. 

24.  For the above reasons, and in the exercise of my discretion on costs, I order that the Applicant shall pay the Interveners the Joinder Costs forthwith.

D.  The Conversion Application

25.  I have considered parties’ submission, both written and oral.  I have considered the law cited to me, which include Young’s Engineering Co Ltd v The Hong Kong and Shanghai Banking Corp Ltd (HCMP 2676/2002, 18 June 2004) at §9, IO of Foo Hoo Centre v HK Alliance in Support of Patriotic Democratic Movements of China [2016] 1 HKC 517 at §10, Lam Pak Cheung v Lin Zhen Lue [2009] 1 HKLRD 35 at §49, Industrial and Commercial Bank of China (Asia) Ltd v Tse Ching [2022] 5 HKLRD 284 at §§18 and 31, Tsang Wing Kwai v The Personal Representative of the Estate of Chan Chung Han, the Deceased (CACV 216/2015, 9 May 2016), Szeto Yuk Lin v Kanton Ltd (HCMP 251/2016, 6 October 2017), and Re Estate of Chiu Keung [2020] 3 HKLRD 779.  I remind myself in particular the observations of Chu JA (as the V-P then was) in §59 of the last case mentioned above, which Mr Mariani highlights.  The applicable principles are not in dispute.  I will not repeat them.

26.  For the following reasons, I accede to the Conversion Application:

(a)  Mr Mariani first submits that the default originating process for an application under O.85 is originating summons.  He refers to Hong Kong Civil Procedure 2025 §85/2/17;

(b)  Where the default position lies is neither here nor there.  In any event, that same paragraph of the White Book which Mr Mariani relies on explains also that:

… when there are serious issues regarding whether certain assets form part of the estate, particularly when complicated factual issues are raised and examination of evidence of the witness is necessary, it is not appropriate to proceed in such manner.

(c)  The Applicant’s case even at this stage is still evolving.  It is entirely unclear as to what facts she is seeking to rely on to get the relief sought.  I have summarised above the contents of the OS, the OS AS Version, the Particulars of Claim, and the OS Submission Version;

(d)  In the Particulars of Claim, whilst the Applicant claims that she is not seeking any determination on the extent to which her complaints are substantially made out, she says at the same time that the conduct of the Respondent and its fitness to act as the Appointor are in issue;

(e)  The conduct of the Appointor are clearly in issue.  The Respondent was the one who has been appointed as the Appointor.  Not the Court.  The Court cannot compel him to exercise his powers under the Trust Deed unless he has been in breach of his duty, in circumstances and such that the Court should step in;

(f)  That has in fact been how Applicant’s application, as can be gleaned from the OS, the OS AS Version, and the OS Submission Version, flows and is premised upon: that the Appointor’s powers are that of a fiduciary, that he has potential or actual conflict, that he has been acting in breach of his fiduciary duties, and that he has otherwise been partial.  There are all intermediate findings which she invites the court to find and rule in her favour, such that the she can then invite the court to grant her the ultimate relief she seeks, ie, that the Appointor be discharged, and/or that he has to be compelled to give the Necessary Sanctions requested;

(g)  This Court ought not compel the Respondent to give those Necessary Sanctions merely because the Applicant has made complaint to the Trustee, as Mr Mariani has maintained[12]. The Court has to make factual findings as to whether the Respondent has been in breach, and if so, bearing in mind the facts found and the applicable law, whether to step in;

(h)  Mr Fung has in the Annex to his written submissions identified 14 examples of disputed facts.  I do not recite them all.  I highlight some of them: whether the Interveners have breached fiduciary duties as directors of the Underlying Companies so as to warrant investigation[13]; whether absence of declaration of dividends warrants investigation; whether the Respondent should have on the facts given the Necessary Sanctions for the Trustee to be appointed directors and bank signatories; whether the Respondent had colluded or acted partially in favour of the Brothers; and whether the Respondent has conducted itself as “de facto additional Trustee”;

(i)  The theme under those issues is unified – without considering and making findings of the underlying facts, this Court has no basis to consider whether it should step in;

(j)  At §38 of his affirmation[14], Mr Cheng on behalf of the Respondent says as follows:

Since Mr. Yuen’s appointment in 2023, the parties have been embroiled in rounds of correspondence regarding a series of requests raised by Mr. Yuen, [the Applicant], Rajan and Dilip.  The Respondent denies that it has (i) ever acted as an advocate for Rajan and Dilip or had otherwise acted partially and (ii) not acted with the impartiality and loyalty that one might expect from a fiduciary, as explained below.  At all material times, the Respondent adhered to its duties impartially and objectively under the terms of the Trust Deed.  The Appointer will fail in its duty if, as [the Applicant] or any other concerned party might hope or wish, the Appointer accedes to any request or demand purportedly made to it by [the Applicant] or any concerned party without making its own assessment and judgment.

(k)  The Respondent has denied the factual allegations made against him.  Its position is that it has made its own assessment and judgment before deciding not doing at this stage what the Applicant is now seeking this Court to summarily compel it to do.  That position does not appear to me to be erroneous.  Resolution of disputed facts is necessary before this Court can decide whether to step in;

(l)  Mr Mariani in §42 states reasons why he submits none of the 14 issues Mr Fung has identified “any matter relevant to the specific reliefs sought by the Applicant.”  I have considered them.  I do not accept his submissions. His main theme is to divorce the relief which the Applicant is seeking from the underlying facts.  His reply to Issue 1 framed by Mr Fung is illustrative, where he submits “This is irrelevant to the disposal of the Application because the only matter before the Court is whether Mr Yuen should have obtained the Necessary Sanction to investigate a complaint brought by the Applicant as an Eligible Beneficiary, without prejudice to the ultimate outcome of any such inquiry”.  That theme is in my view neither correct nor justified.  I also reject his submissions that certain of the issues are otherwise pure points of law;   

(m)  Mr Mariani relies heavily on the Trustee Action and the Trustee Decision.  He submits that somehow, a prima facie case has been made out for investigation by the Applicant, so that the Trustee should investigate, such that the Appointor should give the Necessary Sanctions.  He refers to §51(5) of the Trustee Decision.  I have considered the same.  The learned Recorder only observed that certain matters mentioned therein “raises queries on the part of the Applicant”.  That is far removed from any finding of any “prima facie merit”, as Mr Mariani calls it at §24 of his written submissions;

(n)  In any event, as Mr Fung submits[15] which I accept, the Applicant cannot merely rely on any alleged prima facie grounds or prima facie complaints.  If any prima facie position is disputed, the court must resolve the disputes in the usual way.  This is particularly so when the allegations made against the Respondent are serious in nature, which impugn its impartiality and integrity;

(o)  I have said above that not even the OS Submission Version is the final one which the Applicant is seeking to rely on.  In his Supplemental Submissions, Mr Mariani suggests that there has been a shift by the Respondent from the neutral position which it says it takes in respect of the Applicant’s substantive application.  Mr Mariani then says that “in the interests of enabling this Court to focus its time and resources on the nub of the matters that are truly in dispute between the parties and with a view to focusing the time and resources thereof for the better administration of the Trust, the Applicant is, in view of R’s Skeleton, prepared to abandon her application for all the declaratory reliefs sought in §§1-4 and 6 of the Amended Originating Summons and so limit her application strictly to a prayer that the Court direct that SSL grant Mr Yuen the Necessary Sanction…”;

(p)  To start with, I do not believe it is fair to suggest that there has been any shift by the Respondent.  I have set out above §38 of Mr Cheng’s affirmation.  He reiterates the Respondent’s position at §75 of his affirmation, wherein he concludes that:

I wish to make clear that the Appointer remains neutral insofar as the relief sought by the Applicant in the Originating Summons is concerned, and would abide by any court order that the Court may make.  However, the Respondent strongly refutes any allegation made against it that it had committed any wrong or had otherwise been in any position of conflict or at all.

(q)  More importantly, the abandonment of the declaratory relief does not in my view relieve the Applicant from establishing facts or findings (which I have called intermediate findings above) necessary for the court to compel the Respondent to give the Necessary Sanctions requested.  She may not want to seek relief from those intermediate findings.  She may want to focus on the Necessary Sanctions which she ultimately wants.  But factual disputes would still need to be resolved, and facts still need to be found.  Whether any relief is sought or flow from them is not important, and changes nothing;

(r)  Clearly, the existence of factual disputes by itself does not invariably render the originating process inappropriate.  But the factual disputes identified in the present case are highly material and controversial ones;

(s)  I have considered the possibility of ordering cross-examination in lieu of conversion.  This is in my view clearly undesirable given the mixture of facts and evidence in the affirmations concerned.  The Respondent and Interveners will not be able to identify from the affirmations what are facts which Applicant seeks to rely on and what not;

(t)  In fact, in the cause of the hearing, I asked Mr Mariani whether he could inform this Court, sentence by sentence, what parts of the affirmations/affidavits would be relied on and what not.  This is important as, with pleadings, parties can deal with and plead to the facts sentence by sentence.  Mr Mariani informed this Court that he could not off hand do that, but might need some time.  In my view, the Applicant has been given ample time and opportunity to frame her case properly;

(u)  In my view, given the nature of the factual disputes, and the seriousness of the allegations, it is clearly appropriate for pleadings to be ordered;

(v)  I highlight again the seriousness of the allegations that the Applicant has made against the Respondent and the Interveners.  As Mr Ho has submitted[16], it is well-established that fraud or dishonesty has to be pleaded “distinctly” with the “utmost particularity”.  If any authority is required, see Kwong Yi Ling v Lau Kwun Leung[2021] HKCFI 2303 §24;

(w)  Any extra time that may be taken for this instant case, with a conversion, to be trial-ready is in my view not an important consideration. This case is at a very early stage.  The Applicant’s case is still evolving. The Amendment Summons is still pending.  Even without conversion, fairness would require allowing the Respondent to file further evidence in response to the Applicant amended claim, whatever it is going to be.  The Interveners have not filed their evidence in substantive reply.  There are still many steps to be taken even with no conversion.  On the other hand, focusing too much on the advantage on expedition which the originating summons process may give so as to push cases which are otherwise not suitable for that process will create in the long terms problems which ultimately would cause more loss and waste of time and resources – see e.g. Tsang Wing Kwai;

(x)  On the facts before me, and having balanced all, I am of the view that this is a clear case for conversion.

E.  The Amendment Summons

27.  The Amendment Summons has been superseded by events.  Parties are however prepared to overlook any formality.  Mr Ho further submitted that it would be more principled for a form of the proposed amended OS be allowed, so that it in effect functions as the Writ upon conversion, so that any Statement of Claim to be filed should be confined thereby.  I see force in that submissions, and sense in that approach.

28.  I grant the Applicant leave to amend the OS as per the OS Submission Version.

F.  Conclusion and disposition

29.  In respect of the Amendment Summons, I grant the Applicant leave to amend the OS as per the OS Submission Version.

30.  I accede to the Conversion Application.  Subject to what I am going to say, I make the order and consequential directions sought and in terms of §§2 to 6 of the Interveners’ Summons.  I note that §4 (in relation to the filing of defence and counterclaim (if any) by the Interveners).  The Respondent is not mentioned therein.  I add it back in, so that the Respondent is also given the liberty and the same time to file its defence and counterclaim (if any).

31.  The Notice of Appointment to hear Originating Summons is superseded by the conversion of the present proceedings.  I make no order in that regard (if any order is expected to be made at this stage in relation to the same).

G.  Costs

32.  I make the following costs orders, all nisi at this stage, absolute within 14 days:

(a)  It appears that any costs for the Amendment Summons has been subsumed into those of the Conversion Application.  I hence make an order, on the aforesaid nisi basis, that there be no order as to costs of the Amendment Summons; and

(b)  In respect of the Conversion Application, I see force in the submissions made by Mr Fung in §48 of his written submissions.  I hence make an order, on the aforesaid nisi basis, that the costs of the Respondent and Interveners of and occasioned by the Conversion Application be borne by the Applicant and be summarily assessed on an indemnity basis, with certificate for 2 counsel in the case of the Interveners, and be paid by the Applicant personally forthwith.

33.  If there is any application for variation of the nisi orders, I will upon request or when necessary hand down further directions.  If not, the Applicant may lodge her statements of objections to the respective statement of costs of the Respondent and Interveners within 21 days from the date hereof.  The Respondent and Interveners are granted liberty to lodge their reply within 7 days thereafter.