KWOK SIU MUI, DIANA, the administrator of the estate of LEUNG SHUI LIN (梁瑞蓮), deceased v. KWOK SIU YEE AND ANOTHER

HCA 380/2014 [2021] HKCFI 860 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 380 OF 2014 ____________________ BETWEEN KWOK SIU MUI, DIANA, the administrator of the estate of LEUNG SHUI LIN (梁瑞蓮), deceased Plaintiff and KWOK SIU YEE 1st Defendant KWOK CHUN SING 2nd Defendant (by Original Action) AND BETWEEN KWOK SIU YEE Plaintiff and KWOK SIU MUI, DIANA Defendant (by Counterclaim) ____________________ HCA 2492/2017 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 2492 OF 2017 ____________________ BETWEEN KWOK CHUN SING Plaintiff and KWOK SIU MAN VIOLA Defendant ____________________ (Heard Together) Before: Hon B Chu J (by Paper Disposal) Date of Parties’ Respective Written Submissions: 15 December 2020 Date of Parties’ Respective Reply Submissions: 22 December 2020 Date of Decision: 9 April 2021 _____________________________ DECISION (On Variation of Costs Order Nisi) _____________________________ Introduction This Court handed down a judgment on 19 October 2020 on the parties’ respective claims in these actions after a 13 day trial (“Judgment”), and in this decision, I shall adopt the same abbreviations in the Judgment, save otherwise indicated. As seen in the Judgment, Diana and Viola were collectively referred therein as D&V , and Sing and Yee were collectively referred therein as S&Y. There are two actions herein: The 1st Action concerned: The Money Claim brought by Diana, as the Administratrix of the Estate against Yee and later Sing; The Defamation Claim, the counterclaim brought by Yee against Diana, in her capacity as the Administratrix of the Estate The Kam Shek Property Claim – the counterclaim brought by Sing against Diana, in her capacity as the Administratrix of the Estate The 2nd Action concerned the Tsui Chuk Property Claim brought by Sing against Viola, which was originally Sing’s counterclaim against Viola in the DC Action (as defined later). In the Judgment, this Court found in favour of Diana (in her capacity as the Administratrix) for the Money Claim and dismissed the Defamation Claim brought by Yee and the Kam Shek Property Claim brought by Sing. This Court further dismissed the Tsui Chuk Property Claim brought by Sing. This Court then made the following order for costs respectively in each of the 4 claims (“Order Nisi”) : For the Money Claim in 1st Action, S&Y are to pay costs incurred by Diana as the Administratrix, jointly and/or severally on party and party basis. For the Defamation Claim, Yee is to pay the costs incurred by Diana as the Administratrix, to be taxed on party and party basis, save for the Rejoinder Summons. Yee is to pay to Diana/Estate the costs of and incidental to the Rejoinder Summons on indemnity basis. For the Kam Shek Property Claim, Sing is to pay the costs incurred by Diana as the Administratrix, to be taxed on party and party basis. For the Tsui Chuk Property Claim, there should be no order as to costs. Any costs incurred by Diana in her capacity as Administratrix of the Estate, not recovered above, shall be paid out of the Estate on trustee basis. D&V has applied to vary the Orders Nisi, and so has S&Y. By summonses issued on 6 November 2020 in the 1st Action and the 2nd Action, D&V are seeking the following: For the Money Claim, S&Y to pay the costs of the proceedings, jointly and/or severally, to be taxed on an indemnity basis, with certificate for one counsel; For the Defamation Claim, Yee to pay the costs of the proceedings, to be taxed on indemnity basis, with certificate for one counsel; For the Tsui Chuk Property Claim, Sing to pay the costs of the proceedings, to be taxed on an indemnity basis, with certificate for one counsel. By a summons issued on 9 November 2020, S&Y are seeking an order that the Orders Nisi in the 1st Action be varied to : Sing’s costs in respect of the Kam Shek Property Claim and (ii) S&Y’s costs in respect of in the Money Claim incurred after 25 August 2015 (ie the G1 25.08.15 Calderbank Letter as defined below), and/or after 17 January 2015 (ie the G1 17.01.15 Letter), or such date as the Court thinks fit, be paid by Diana, to be taxed if not agreed. A core bundle has been lodged containing the correspondence between the two sides. The solicitors for S&Y have been Messrs Joseph PK Pang & Co (“JPKP”). As seen in the Judgment, Lau & Ngan (“L&N”) were the solicitors who acted for Diana in applying for the Letters of Administration and dealing matters in relation to the administration of the Estate. D&V later instructed Messrs Alvin Liu & Partners (“ALP”) in relation to the litigation matters, and when the handling solicitor at ALP Mr Victor Chan left ALP to set up his own firm, D&V changed their solicitors to Messrs Victor Chan & Co (“VC”). For the applications for variation of the Orders Nisi, Counsel Mr Timothy Lam lodged the written submissions for D&V and Counsel Mr Victor Yuen lodged the written submissions for S&Y. The respective submissions for the two side It was submitted on behalf of D&V by Mr Lam essentially that S&Y failed to beat or respond to D&V’s sanctioned offers for the Money Claim, the Defamation Claim and the Tsui Chuk Property Claim and further having regard to various factors governing the exercise of discretion under Order 62 rule 28(3) of RHC, S&Y should pay D&V’s costs on indemnity basis, as sought by D&V. On the other hand, it is submitted on behalf of S&Y by Mr Yuen that S&Y had issued a number of “Without Prejudice Save As To Costs” letters (“Calderbank Letters”) to D&V during the entire proceedings, from the pre-action stage to trial, among which the letters respectively dated 17 January 2015 and 25 August 2015 were relied on by S&Y for the costs orders they now seek. The only pre-action Calderbank Letter I could see in the Core Bundle was one dated 12 December 2013 from JPKP (on behalf of S&Y) to L&N, in which JPKP stated that they were acting for S&Y, and that S&Y were prepared to enter into a “Deed of Family Arrangement” with all beneficiaries in respect of the matters in items 13, 15 and 20 of the meeting held on 25 February 2013 (presumably JPKP was referring to the Family Meeting on 24 February 2013). However, at that time, there was no evidence that all the other beneficiaries were prepared to enter into the “Deed of Family Arrangement”, nor was it clear as to whether L&N had instructions to act for all the other beneficiaries. Anyway, neither side had relied on this letter. Other Calderbank Letters /Sanctioned offers Mr Yuen had helpfully prepared 4 tables in relation to the various offers, namely (i) offers regarding the Money Claim (“Table 1”); (ii) offers regarding the Kam Shek Property Claim (“Table 2”); (iii) offers regarding the Defamation Claim (“Table 3”); and (iv) offers regarding the Tsui Chuk Property Claim (“Table 4”). I will also set out hereinafter chronologically the various offers. The writ in the 1st Action was issued on 7 March 2014. On 11 March 2014, ALP sent to JPKP a sanctioned offer in relation to the Money Claim. In this sanctioned offer from Diana, it was stated that Diana offered to accept a sum of HKD 999,000 in full and final settlement of the Money Claim plus costs to be taxed if not agreed on High Court scale and that this offer was stated to be intended to have the consequences of Order 22 of RHC (“Diana’s 1st Sanctioned Offer”). On the same day, ie 11 March 2014, ALP sent a Calderbank Letter in relation to (i) Money Claim and (ii) the 2 Offending Emails which would become subject matter of the Defamation Claim. In this letter, ALP were instructed to invite JPKP to have a dialogue in the spirit of resolving their respect clients’ disputes and that if JPKP should find the proposal reasonable, JPKP should call them for further discussion. It was not quite clear what happened thereafter. Thereafter, on 11 April 2014, Viola issued a writ in the District Court, namely DCCJ 1375/2014 against Yin, Sing and Cavila for defamation (“DC Action”), in which Sing counterclaimed against Viola in relation to the Tsui Chuk Property. As set out in the Judgment, Sing’s counterclaim in the DC Action, namely the Tsui Chuk Property Claim was later transferred to the High Court and became the 2nd Action herein. On 27 May 2014, in the 1st Action, Yee filed her defence and counterclaim, namely the Defamation Claim against Diana. There were no further offers/proposals for a settlement until 3 December 2014, when ALP sent to JPKP a Calderbank Letter marked a sanctioned offer. Mr Lam accepted the letter was in effect a Calderbank Letter only. This Calderbank Letter was addressed to Sing only in relation to his counterclaim in the DC Action, ie the Tsui Chuk Property Claim against Viola, ie the 2nd Action. The letter stated that ALP were instructed to offer to Sing to withdraw or discontinue his counterclaim against Viola with no order as to costs (“Viola’s 1st Calderbank Letter”). On 8 December 2014, JPKP sent a sanctioned offer to ALO in relation to the DC Action and the Tsui Chuk Property and proposed on behalf of Yin, Sing and Cavila that, in full and final settlement of the Tsui Chuk Property Claim, (i) Viola was to accept and agree to perform the full terms of the alleged Tsui Chuk Agreement as set out in the Minutes of the Family Meeting and signed by Viola; (ii) Viola’s claim and Sing’s counterclaim be discontinued; (iii) Sing’s costs in the DC Action up to the date of discontinuance be paid by Viola. There was no response to the above letter. On 5 January 2015, Diana obtained leave to amend her writ in the 1st Action and added Sing as a defendant. The next Calderbank Letter was a letter dated 17 January 2015 sent by JPKP on behalf of 6 of the Siblings, namely Sing, Yin, Melissa, Yee, Hang and Cavila (as seen later, these 6 Siblings were referred to as G1) (“G1 17.01.15 Calderbank Letter”) in relation to the Kam Shek Property. The G1 Siblings or G1 formally gave notice to Diana that a Deed of Assent and Family Arrangement should be entered into by the parties for Mother’s half share of the Kam Shek Property to be assigned to Hang and Diana (or her nominee), so that the result after such assignment was that the entire Kam Shek Property would be held by Sing (50%), Hang (27.27%) and Diana (22.73%) as tenants in common. In the above letter, it was pointed out to Diana that Sing and his family and Hang had lived in the Kam Shek Property for more than 24 years with the approval and consent of Mother before her demise and that it would cause undue and severe hardship to them if there were to be an order for sale of the property and any such application by Diana would be strenuously resisted with costs implication. The G1 Siblings also gave notice to Diana that they would object to Diana’s costs be paid from the Estate without a prior court order being obtained, and further required Diana to provide an account of the Estate. Thereafter Sing counterclaimed in the 1st Action in relation to the Kam Shek Property against Diana, namely the Kam Shek Property Claim. A mediation session was then held before Mr Brian Wong (“Mediator”) on 31 July 2015, which was attended by Diana, Sing, Yee and Hung. On 25 August 2015, ALP sent a Calderbank Letter to JPKP (“D&V 25.08.15 Calderbank Letter”). ALP had attached to their letter a proposal drafted by the Mediator (“Proposal”), which was for a global settlement (“Global Settlement”) and stated to be a “non-binding proposal” to be discussed amongst the 11 Siblings. The Proposal contained the following Global Settlement terms: “(i) Both the 1st Action and the DC Action to be stayed for 9 months for the parties to explore a global settlement; (ii) A mediation date to be fixed for the attendance of the 11 Siblings and for those unable to attend, he/she must issue an authorization letter to one of the 11 Siblings to attend on his/her behalf; (iii) Subject to all reasonable expenses incurred and to be incurred by all parties in the 2 actions to be borne by the Estate, the Estate be distributed as follows: All cash in the 833 Joint Account and Diana’s sole name account at DBS of about HKD 200,000 be shared equally between the 11 Siblings The sum of HKD 1,008,560.46 and any profits derived therefrom to be shared equally between the 11 Siblings The Tsui Chuk Property to be sold and proceeds be shared equally between the 11 Siblings 50% of legal and beneficial interest in the Kam Shek Property belonging to the Estate to be shared equally between the 11 Siblings whereas the remaining 50% to Sing; and All debts due to the Estate including but not limited to the sums of around HKD 1,300,000 (exact amount to be verified) from Cavilla and a sum of not less than HKD 25,000 (exact amount to be verified) due from Mei to be shared equally between the 11 Siblings” It did not appear that the Siblings had followed up with the mediation on the Proposal, which was regrettable. Further, in the D&V 25.08.15 Calderbank Letter, it was stated that there were certain matters in the Proposal which D&V could not accept, and D&V’s counter proposals were then set out, briefly, as follows: “The DC Action JPKP’s clients, namely Cavila, Sing, and Ying to give to Viola a written apology; Sing to withdraw his counterclaim, ie the Tsui Chuk Property Claim; Viola to withdraw her claim; there be no order as to costs; Viola agreed to the Tsui Chuk Property be sold but proceeds to be shared amongst the 11 Siblings and 2 children of Hung, namely be shared equally by 13 persons, Mother’s 11 children and her 2 grandchildren. The 1st Action Yee to withdraw the Defamation Claim and each party to pay her own costs, ie not to be borne out of the Estate; Y&S to give Diana a written apology to the effect that they had manipulated the transfer of money between various bank accounts and made representations to Diana in a misleading and confusing manner; Insofar as the Money Claim, Diana to withdraw her claim and costs be paid out of the Estate and Sing to return to the Estate the sum of HKD 1,008,560.46 and any profits derived therefrom (if any) for distribution amongst the 11 Siblings; Sing to withdraw the Kam Shek Property Claim and costs of all parties be paid out of the Estate. Others Sing to pay HKD 2m to the Estate for the purchase of Mother’s half share in the Kam Shek Property; Sing to return the foreign currencies equivalent to around HKD 200,000 (ie the balance of the 833 Joint Account) to the Estate; the debts owned to the Estate by Cavila and Mei of about HKD 1.3m and HKD 25,000 respectively to be repaid to the Estate in a reasonably timely manner acceptable to Diana; Beddoe Application after all the above being fulfilled, Diana to withdraw her Beddoe Application with costs being borne by the Estate.” JPKP replied on the same day by a Calderbank Letter (“G1 25.08.15 Calderbank Letter”). As set out in that letter, the 6 Siblings Sing, Yin, Melissa, Yee, Hang, Cavila was referred to as one group, namely (“G1”) and the other 5 formed the other group (“G2”). JPKP stated that they had instructions to act for G1 to put forward the following terms: “(i) In order for Hang to become the owner of Mother’s half share in Kam Shek Property, G1 proposed to pay G2 an amount equal to 5/11 of half of the market value as at 31 July 2015 of that property; The other available assets, namely (i) the market value of the Tsui Chuk Property as at 31 July 2015 and (ii) the money in the HSBC and the DBS accounts (of about HKD1,479,000) be divided equally amongst the 11 Siblings; Legal costs incurred by G1 and G2 up to 31 July 2015 be first paid out of the assets; Diana to issue the apology letter to the named recipients as set out in the JPKP letter of 7 March 2014 and be responsible to pay (i) HKD 500 as damages and (ii) HKD 62,000 as ordered by Master S Lo on 30 October 2014.” There seemed to be no response or follow up after the above G1 25.08.15 Calderbank Letter. Then on 24 May 2016, ALP sent a letter containing a sanctioned offer in relation to the DC Action, inviting Sing to discontinue his counterclaim, ie the Tsui Chuk Property Claim against Viola, and to withdraw the registration of the lis pendens at the Lands Registry with no order as to costs. On 21 June 2016, JPKP sent an open letter in relation to the DC Action in which Sing maintained that the whole of the purchase price for the acquisition of the Tsui Chuk Property was paid by Mother and that the acquisition was made in joint names of Mother and Viola because Viola made no contribution towards the acquisition towards the property, and that as Viola was one of the unmarried daughters living with Mother and Mother needed Viola to assist with the paper work involved in the acquisition of the property. Further, Mother and Viola became co-owners in joint tenancy of the property as this was the only form of joint tenancy permitted for properties sold under the Home Ownership Scheme. It was stated therein that on the parties’ pleaded case, the beneficial ownership of the property was a live issue between the Estate and Sing, rather than between Viola and Sing, and that if there had been any loss arising from the property not being sold at its market value in 2014, the loss was suffered by the Estate or alternatively Sing, and not by Viola. On 28 June 2016, ALP then sent a Calderbank Letter referring to the G1 25.08.15 Calderbank Letter indicating that the proposal therein was not acceptable to D&V and it would appear that ALP was writing on behalf of the G2 Siblings although ALP did not in fact make it clear (“G2 28.06.16 Calderbank Letter”). The following proposal was then set out: “(i) Regarding the Kam Shek Property, G1 to pay G2 an amount equal to 5/11 of half of the market value as assessed by AA Property Services on 19 June 2015 (the whole property being assessed to be HKD 3,750,000), and the property be assigned to Hang. (ii) The Tsui Chuk Property be sold by Viola within 12 months from the date of signing the deed of family arrangement. The sale proceeds, after deducting (i) legal fees, stamp duty and land premium; (ii) expenses in relation to the property paid by Viola since Mother’s death; (iii) Viola’s own costs in the DC Action, to be distributed equally among the 11 Siblings. (iii) Yin, Sing and Yung not required to apologize to Viola but to clarify in writing that (i) Viola and/or her ex boyfriend had never cheated Mother’s money; (ii) Viola had never brought any men back to the Tsui Chuk Property to sleep; (iii) Viola had never done anything to procure Mother’s death. The funds of the Estate as set out below to be distributed among the 11 Siblings in equal shares: * HKD 1m odd, being the Disputed Sum in the Money Claim and all interests accrued thereon; * Foreign Currencies in the approximate sum of HKD 200,000 in the 833 Joint Account; * all cash and items stored in Mother’s drawer in the Tsui Chuk Property belonging to the Estate and taken away by G1 (or some of G1) on 23 February 2013; * around HKD 220,000 in Diana’s account which belongs to the Estate; and * Cavilla’s repayment of HKD 1.3m plus interests, being her debt to the Estate; (v) Before distributing the above funds, the legal fees incurred by G1 and G2 in the 1st Action (except for the costs incurred by Diana and Yee in the Defamation Claim) and the Beddoe application; (vi) Diana to pay HKD 500 as damages and as for Yee’s costs of HKD 62,000 as ordered by Master Lo on 30 October 2014, Diana had already paid the amount; (vii) Neither Diana nor Yee had to issue any apology letter. (viii) the above to be recorded in a deed of family arrangement to be signed by all 11 Siblings. (ix) upon the signing of the deed, all the claims be discontinued with no order as to costs.” JPKP responded to D&V’s above letter by a letter on 15 July 2016 containing a sanctioned offer. Instead of responding point by point to D&V’s above proposal, JPKP set out various arguments put forward on behalf of the G1 Siblings (“G1 15.07.16 Sanctioned Offer”). What can be distilled therefrom appears to be as follows: “(i) The costs of those personal claims should be borne by the respective Siblings individually and must be considered separately from other claims involving money and landed properties; (ii) Sing had asked Diana to substantiate her claim that the foreign currencies of about HKD 200,000 in the 833 Joint Account belonged to the Estate, as Sing’s position was that the amount belonged to him being the survivor of the joint holders of the 833 Joint Account and this sum could not be subject of settlement discussions for the time being; (iii) Yung (Cavila) denied that she had borrowed any money from Mother and therefore the HKD 1.3m could not be subject of settlement discussions; (iv) From the outset, Sing had the good intention to donate the Tsui Chuk Property and the HKD 1m (the Disputed Sum) for the common good of the family. Subject to all other terms of settlement being accepted, Sing was prepared to give up his claim for the Tsui Chuk Property but sale proceeds were to be divided equally between the 11 Siblings and that there was no reason why Hung’s 2 children should get 2 shares; Viola’s costs in the Tsui Chuk Property Claim should not be paid out of the Estate as she was litigating for her own benefit; upon sale of the Tsui Chuk Property, as there would be no need for the Disputed Sum of about HKD 1m to be set aside for the upkeep and maintenance of the property, Sing should retain the sum; As for the Kam Shek Property, the 6 Siblings’ view was that G1 and G2 Siblings should all join in the transfer of half share thereof to Hang.” There was no reason why Diana’s costs of the Beddoe application should be paid out of the Estate.＂ ALP responded by a Calderbank Letter on 19 July 2016 to seek clarification as to what constituted the “sanctioned offer” in the above letter, referring to Order 22 rule 14 of the RHC. However in a reply Calderbank Letter of 28 July 2016, JKPK then asked ALP to specify what information JKPK was requiring D&Y to disclose. On 24 August 2016, after a hearing on 23 August 2016, ALP sent a further Calderbank Letter which again appeared to be on behalf of G2 (“G2 24.08.16 Calderbank Letter”). Insofar as this Court can gather, the proposals in this Calderbank Letter were essentially those as set out in the G2 28.06.16 Calderbank Letter, save that for the Tsui Chuk Property, it was proposed that upon sale of the Tsui Chuk Property, the sale proceeds be divided equally amongst the 11 Siblings, namely 11 shares instead of 13 share, with 2 shares going to Hung’s children. On 29 August 2016, JPKP sent a reply by way of a Calderbank Letter (“G1 29.08.16 Calderbank Letter”) which indicated, amongst other things, that: “(i) G1 agreed that Tsui Chuk Property be sold but only agreed to the deducting the conveyancing fees and agency fees and other incidental expenses from the sale proceeds before distribution to the 11 Siblings; (ii) 6/11 of the 50% of the Kam Shek Property be transferred to Hang and 5/11 shares of the 50% be held by G2 as tenants in common; (iii) The Disputed Sum be distributed equally amongst the 11 Siblings The claims and counterclaims in the 1st Action and DCCJ 1375/2014 be withdrawn by consent upon completion of the sale of the Tsui Chuk Property and upon signing of a deed of family arrangement, and each party to pay their own costs in the 2 Actions (save the defamation claims) and both sides’ costs in the Beddoe application be paid out of the Estate” There was no response to the above from ALP. On 28 October 2016, ALP sent a Calderbank Letter in relation to comments made by Au-Yeung J in the Beddoe Application in relation to whether the Disputed Sum could be secured. JPKP responded on 15 November 2016 clarifying the proposed form of security. Thereafter, the offers/proposals for a settlement seemed to have come to a stop. There was a Case Management Conference on 8 November 2018 and it appeared that at the time, both sides had expressed interest in re-opening without prejudice discussions. By then, VC came into the picture and VC sent a Calderbank Letter on 22 November 2018 in relation to re-opening discussions. It was not until 10 January 2019 that JPKP sent a without prejudice letter and made proposals based on essentially that the Tsui Chuk Property and Mother’s ½ share in the Kam Shek Property Claim were properties of the Estate (“Sing’s 10.01.19 WP Letter”). There seemed to be no response and on 25 January 2019, JPKP then sent an open letter to withdraw all their side’s previous sanctioned offers in both the 1st and the 2nd Actions. There were no further Calderbank Letters/ Sanctioned Offers until 25 March 2020, ie about 2 months before the trial. On 25 March 2020, VC sent a letter containing a sanctioned offer to JPKP in relation to the 2nd Action proposing that Sing to discontinue the Tsui Chuk Property Claim (“Viola’s 25.03.20 Sanctioned Offer”). On 3 April 2020, VC sent a letter containing a sanctioned offer to JPKP, in relation to the 1st Action proposing that (i) Yee to pay to Diana a sum of HK$900,000 in full and final settlement for the whole of the Money Claim, and (ii) Yee was to withdraw the whole of the Defamation Claim against Diana. On the same day, VC sent a similar letter containing a sanctioned offer to JPKP, in relation to the 1st Action, proposing that (i) Sing to pay Diana HK$900,000 in full and final settlement for the whole of the Money Claim and (ii) Sing was to withdraw the whole of the Kam Shek Property Claim (“ D&V 03.04.20 Sanctioned Offers”). There was no response nor acceptance from JPKP to the above Sanctioned Offers from D&V. The trial commenced on 12 May 2020. On 25 May 2020, on the 8th day of the trial, JPKP sent a Calderbank Letter to VC and set out in writing the terms offered by Sing in the morning of the 1st day of trial during a break in the Court lobby in relation to the 2 properties (“Sing’s 25.05.20 Calderbank Letter”), as follows: “(i) For the Kam Shek Property, Mother’s half share be held equally by all 11 Siblings, which meant that Sing would have one half plus 1/11 of the Kam Shek Property, and that any plan for the sale of the property was to be subject to Hang’s attempt to obtain the Siblings’ donations of their respective 1/11 shares to be held by Sing for Hang so that Hand could continue to live in the property. In the event that a plan for the sale is proceeded with, a valuation of the property should be obtained through independent valuation by a qualified valuer and thereafter the property be sold at the assessed priced. (ii) For the Tsui Chuk Property, this property be sold and after deducting conveyancing and incidental expenses, surveyor’s fees and each party’s legal costs in the 2nd Action and the DC Action, the sale proceeds be divided on the principle of equal divisions among the 11 Siblings. The valuation of the property be forthwith obtained through independent valuation by a qualified valuer and thereafter the property be sold at the assessed price upon prior consent of the Hong Kong Housing Authority.” Legal Principles As a start, Order 62 rule 28(3) of RHC provides that: “(3) The Court in awarding costs to which this rule applies may in any case in which it thinks fit to do so order or direct that the costs shall be taxed on the common fund basis or on the indemnity basis.” As submitted by Mr Yuen, in situations where sanctioned offers are not given, common law principles regarding indemnity costs apply and in this respect, Mr Yuen had referred the Court to the Commissioner of Inland Revenue v Poon Cho Ming Johan (No 2) (2020) 23 HKCFAR 74 in which Bokhary NPJ summarised the correct approach to the exercise of discretion towards indemnity costs as follows: “4. With particular reference to indemnity costs but relevantly also to common fund costs, the following propositions emerge from this Court’s judgment in Town Planning Board v Society for Protection of the Harbour Ltd (No 2) (2004) 7 HKCFAR 114 at paras 14-18:- (a) In certain circumstances, costs may be awarded on a more generous than usual basis of taxation so as to achieve a fairer result. (b) It is for the receiving party to show that the case has some special or unusual feature. (c) Such features are not confined to an ulterior motive, an improper purpose, deception or underhand conduct on the part of the paying party. (d) Neither the attributes of the parties nor the character of the proceedings are irrelevant to the question of whether a more generous than usual basis of taxation should be ordered. (e) The discretion to order a more generous than usual basis of taxation is not to be fettered or circumscribed beyond the requirement that such taxation be ordered only when it is appropriate to do so. (f) As to that, the grounds on which a more generous than usual basis of taxation is to be ordered must be connected with the case. That extends to - but no further than to - any matter relating to the litigation and the parties’ conduct in it, and also to the circumstances leading to the litigation.” In relation to sanctioned offers, Order 22 rule 2 of RHC provides that: “2. Offer to settle with specified consequences (O. 22, r. 2) (1) A party to an action containing a money claim or a non-money claim or both arising from any cause or causes of action may make an offer to settle the whole claim, a part of it or any issue arising from it in accordance with this Order. (2) An offer made under paragraph (1) may take into account any counterclaim or set-off in the action. (3) An offer made under paragraph (1) has the consequences specified in rules 20, 21, 22, 23 and 24 (as may be applicable). (4) Nothing in this Order prevents a party from making an offer to settle in whatever way he chooses, but if that offer is not made in accordance with this Order, it does not have the consequences specified in this Order, unless the Court so orders.” Order 22 rule 24 then provides as follows: “24. Costs and other consequences where plaintiff does better than he proposed in his sanctioned offer (O. 22, r. 24) (1) This rule applies where— (a) a defendant is held liable for more than the proposals contained in a plaintiff’s sanctioned offer; or (b) the judgment against a defendant is more advantageous to the plaintiff than the proposals contained in a plaintiff’s sanctioned offer. (2) The Court may order interest on the whole or part of any sum of money (excluding interest) awarded to the plaintiff at a rate not exceeding 10% above judgment rate for some or all of the period after the latest date on which the defendant could have accepted the offer without requiring the leave of the Court. (3) The Court may also order that the plaintiff is entitled to— (a) his costs on the indemnity basis after the latest date on which the defendant could have accepted the offer without requiring the leave of the Court; and (b) interest on those costs at a rate not exceeding 10% above judgment rate. (4) Where this rule applies, the Court shall make the orders referred to in paragraphs (2) and (3) unless it considers it unjust to do so. (5) In considering whether it would be unjust to make the orders referred to in paragraphs (2) and (3), the Court shall take into account all the circumstances of the case including— (a) the terms of any sanctioned offer; (b) the stage in the proceedings at which any sanctioned offer was made; (c) the information available to the parties at the time when the sanctioned offer was made; and (d) the conduct of the parties with regard to the giving or refusing to give information for the purposes of enabling the offer to be made or evaluated. (6) The power of the Court under this rule is in addition to any other power it may have to award interest.” Mr Yuen had summarised that to determine whether indemnity costs should be awarded to the receiving party, the following questions have to be asked: Whether the receiving party is entitled to its costs (“Question 1”); If (1), above is answered in the affirmative, whether the settlement offer in question attracts the consequences provided under Order 22 of the RHC (“Question 2”); (3a) If (2) above is answered in the affirmative, whether it is unjust at the relevant consequences provided under Order 22 to be imposed on the paying party (“Question 3a”); (3b) If (2) above is answered in the negative, whether there are special or unusual features in the case that warrant taxation on enhanced basis (“Question 3b”); and Only when Question 3a is answered in the negative, or Question 3b affirmative, should the paying party be ordered to pay indemnity costs. There was no dispute as to the above approach. The 1st Action As set out earlier, the 1st Action involved (i) the Money Claim by Diana (in the capacity of the Administratrix), (ii) the Defamation Claim by Yee (ie her counterclaim), and (iii) the Kam Shek Property Claim by Sing (ie his counterclaim). D&V’s present application for costs on indemnity basis was only in relation to the Money Claim and the Defamation Claim and not the Kam Shek Property Claim. For the Money Claim, as Diana (on behalf of the Estate) was clearly the successful party, she was entitled to her costs. Thus, the answer to Question 1 is “yes”. Next, for Question 2, the offers regarding the Money Claim from both sides can be seen in Table 1. In D&V’s Skeleton Submissions (15.12.20), D&V had essentially relied on the D&V 03.04.20 Sanctioned Offers for their claim for costs on indemnity basis. As set out earlier, there were 2 letters to JPKP, one regarding Yee and one regarding Sing and both relating to the 1st Action. VC had explained in those letters that it was due to the rules under Order 22 of RHC and to avoid technical arguments as to whether a sanctioned offer could be made jointly to Sing and Yee, Diana had decided to separately make an offer to each of them on essentially the same terms, but that Diana would consider the whole of her claim as being fully settled so long as either Sing or Yee or the two of them jointly pay a sum of HKD 900,000 pursuant to the sanctioned offer. The latest date on which Y&S could have accepted the D&V 03.04.20 Sanctioned Offers without leave of the Court was 1 May 2020. In addition to the above, and also, in relation to costs incurred for the Money Claim before 2 May 2020, it was submitted by Mr Lam on behalf of D&V that Y&S had put up a “spurious defence” to the Money Claim and further Y&S’s conduct involved “deception”, “underhand conduct” and “ulterior motive” and that D&V’s costs prior thereto should also be paid by Y&S on indemnity basis. As set out in Table 1, Diana’s 1st Sanctioned Offer was in fact made immediately after the writ in the 1st Action was issued by Diana against Yee. In the D&V Reply Submissions, they further relied on this 1st sanctioned offer. Although there was a “costs provision” contained in Diana’s 1st Sanctioned Offer, Mr Lam submitted, which I accept, that the costs provision was consistent and simply made clear the default costs consequences of the acceptance of a sanctioned offer under Order 22 rule 21 of RHC. There was in any event no challenge from S&Y that the Diana’s 1st Sanctioned Offer was a sanctioned offer under Order 22 and I am prepared to treat it as such. The latest date on which Yee could have accepted the offer without requiring leave of Court was 8 April 2014, and thus Mr Lam submitted in the D&V Reply Submissions that Yee should at least pay Diana’s costs as from 9 April 2014 onwards. On the other hand Mr Yuen submitted on behalf of Y&S, there were 3 phases of the offers from D&V as set out below: From 11 March 2014 (date of D&V 1st Sanction Offer) to 24 August 2015 (date of the D&V 25.08.15 Sanctioned Offer”); From 25.08.15 to 1 May 2020 (last day for acceptance of the D&V 25.08.15 Sanctioned Offer; From the period of 1 May 2020 and onwards. However, in light of the fact that between 11 March 2014 and 5 January 2015, Yee was the only defendant in the 1st Action, in my view, the 3 phases for the consideration of Yee’s liability towards Diana’s costs in the Money Claim should be (i) from issue of writ (7 March 2014) to 8 April 2014 (latest date of Yee’s acceptance to Diana’s 1st Sanctioned Offer) ; (ii) from 9 April 2014 to 4 January 2015; (iii) from 5 January 2015 (joinder of Sing) to determination of the Money Claim. First of all, as Sing was joined only on 5 January 2015, having considered the circumstances of the case, I have now come to the view that it is more appropriate for Diana’s costs of the Money Claim as from 5 January 2015 onwards to be apportioned as to 50% to be paid by Yee and 50% to be paid by Sing. Mr Yuen submitted that Diana’s 1st Sanctioned Offer was not a genuine offer to settle, as (i) if Diana was in truth willing to accept HKD 990,000 as full and final settlement, it was unreasonable for her not to accept the sum of HKD 1,470,000 subsequently offered in the G1 25.08.15 Calderbank Letter; (ii) Diana’s 1st Sanctioned Offer was a tactical move for securing the costs consequences under Order 22 ; (iii) the offer was made at the very outset of the proceedings and there was insufficient information for Yee to make an adequate assessment on both factual and legal aspects of the case in order to decide whether or not to accept the offer;(iv) at the time of that offer, it was in the middle of the heated arguments between Diana and Yee regarding the Defamation Claim, and that on the same day of Diana’s 1st Sanctioned Offer, ALP had sent a reply letter to Yee denying certain amendments of an apology letter and threatening to strike out Yee’s claim should action be commenced. Thus, it was not unreasonable that, when viewed in such context, Yee decided not to accept the offer. First, the G1 25.08.15 Calderbank Letter was some 16 months after Diana’s 1st Sanctioned Offer had not been accepted by Yee. By then, the circumstances had changed as Sing had been joined and there was a mediation session involving a Global Settlement and involving all the Siblings. As set out earlier, the G1 25.08.15 Calderbank Letter was sent on behalf of G1, ie the 6 Siblings, for a Global Settlement with G2. There was no evidence that Diana could have accepted G1’s proposal of the sum of approximately HKD1,470,000 be divided equally among the 11 Siblings without accepting the rest of the terms concerning the Tsui Chuk Property Claim and also the Defamation Claim. In any event, as pointed out by Mr Lam, the sum of HKD 1,470,000 consisted of the Disputed Sum of HKD 1m and the undisputed sum of HKD 473,950 collected by Diana from Mother’s 3 HSBC accounts and deposited by Diana into the DBS account of her and her husband prior to her opening an account for the Estate. At the time when Diana made the offer in the Diana’s 1st Sanctioned Offer, there was only one issue, ie the Money Claim, and the return of the Disputed Sum to the Estate. There was no evidence that it was not a genuine offer to settle. In fact, as said earlier, there was also a Calderbank Letter sent by ALP on the same day of Diana’s 1st Sanctioned Offer suggesting that JPKP to call to discuss a settlement. Those open letters in relation to the 2 Offending Emails also indicated that Diana had wanted to settle the dispute over the Offending Emails as well. Secondly, Diana did not merely make a HKD 10,000 concession as the 1st Action was essentially based on a breach of trust and conversion of the Disputed Sum and Diana had sought an account and inquiry of the Disputed Sum and any profits therefrom and to forthwith pay the Estate any sums found on the taking of account and inquiry. As seen in the Judgment, the Disputed Sum and any interests and/or profits thereon were declared to be held by Yee and/or Sing on trust for the Estate and there be an account and inquiry to be conducted before a Master for interests and/or profits derived from the Disputed Sum. The offer to accept HKD 990,000 in full and final settlement of the Money Claim, if accepted, would mean that Yee did not have to account for any interests and/or profits nor would Yee need to attend a further inquiry into this. In my view, the concession was not a mere HKD 10,000 and the offer cannot be said to be a mere tactical move or that there was no genuine offer to settle on the part of Diana at that time. Thirdly, the Money Claim was a simple claim and it was in fact Yee’s case that she had no interest in the Disputed Sum and that she was merely a trustee, save that it was her case Sing was the beneficial owner. Notwithstanding Diana was granted the Letters of Administration on 26 June 2013, on 11 July 2013, Yee (and Sing ) decided to change 833 Joint Account to the 833 Joint S&Y Account, namely replacing herself to be the joint owner of that account, and then instead of paying the Disputed Sum to Diana, who had been asking for the return of the sum on behalf of the Estate, or at least to hold the Disputed Sum pending Sing’s beneficial interest thereto being established, Yee decided to pay the Disputed Sum into the Joint S&Y Account on 5 September 2013 and the sum was then withdrawn and transferred to Sing’s DBS Account 5 days later, on 10 September 2013. As Diana had been seeking for the return of the Disputed Sum to the Estate since Diana became the Administratrix, Yee had had plenty of time since then to make an adequate assessment of the factual and legal aspects of Diana’s claim for the Disputed Sum for the Estate. Fourthly, the Diana’s 1st Sanctioned Offer was issued in March 2014, when in fact the disputes over the 2 Offending Emails were in the final stages of being resolved as seen in the open letter of 11 March 2014, Diana had agreed to comply with all Yee’s demands and had in fact signed the Apology Letter (defined below) and issued a cheque for the Damages for Yee (as seen later in this decision), and the only outstanding matter was costs. The terms of Diana’s 1st Sanctioned Offer were simple and straightforward. It was made at a very early stage of the proceedings and the acceptance of the offer would have saved substantial costs. Although Diana did not know the exact movement of the Disputed Sum, Yee herself was very clear about the movement thereof, and Yee had all the information for the offer to be evaluated. I have found that Yee was un-cooperative and placed obstacles in Diana’s administration process and deliberately downplayed her active involvement in matters concerning the administration of the Estate. I also found that Yee was clearly the “leader” of the 9 Siblings at that time, which would include Sing and in particular, over the handing over of the keys of Mother’s Locked Drawer/s, I have said there was no sufficient evidence that had Yee agreed, Sing would refuse to hand over the same . Ultimately, Diana obtained a more advantageous award than what was offered by her in Diana’s 1st Sanctioned Offer. Having considered all the circumstances of this case, I have come to the view that the Diana’s 1st Sanctioned Offer should attract the consequences provided under Order 22 and my answer to Question 2 is “yes”. Further, in light of the above findings and other findings against Yee in the Judgment, I do not consider it would be unjust to order Yee to pay Diana’s costs in the Money Claim against Yee on indemnity basis as from 9 April 2014 onwards until determination of the Money Claim. Thus my answer to Question 3a is “no”, subject to what is stated below. As mentioned earlier, it is my view that there should be an apportionment of the liability towards Diana’s costs in the Money Claim after Sing was joined on 5 January 2015. Hence, from 5 January 2015 onwards, in my view, Yee should pay 50% of Diana’s Money Claim on indemnity basis. As to whether there should be a different order due to the G1 25.08.15 Calderbank Letter which included a proposal for the Disputed Sum (ie part of the HKD 1,470,000) to be divided equally amongst the 11 Siblings, as pointed out earlier, this Calderbank Letter contained various proposals for the Global Settlement from G1 to G2. Although there was no immediate response from D&V or G2, in the G2 28.06.16 Calderbank Letter, one of the proposals from Diana and/or G2 was that the Disputed Sum being part of the funds of the Estate be distributed among the 11 Siblings, which was in line with the G1 proposal in the G1 25.08.15 Calderbank Letter. However, it was clear that it was not really open to Diana to have only accepted the proposal in relation to the Disputed Sum without she or the rest of G2 accepting the other proposals in the G1 25.08.15 Calderbank Letter. Having considered this, in my view, the G1 25.08.15 Calderbank Letter should not result in Diana being deprived of her costs or her having to pay S&Y’s costs in the Money Claim after 25 August 2015. Mr Yuen also referred to the G1 17.01.15 Calderbank Letter but this letter was only in relation to the Kam Shek Property Claim. In any event, those 2 Calderbank Letters from G1 should not affect Diana’s entitlement to costs on indemnity basis against Yee as from 9 April 2014 onwards until the determination of the Money Claim. In light of my views, it is not necessary to consider the cost consequence of D&V 03.04.20 Sanctioned Offer to Yee. I am however of the view that Sing’s position is different from Yee’s. As said, Diana’s 1st Sanctioned Offer was only in relation to Yee, as Sing was not a defendant at the time. However, as Diana was the overall successful party in Money Claim against Sing, as well as Yee, there is no reason as to why Sing should not bear 50% of Diana’s costs after he was joined as Diana was the successful party in the claim against him. Thus the answer to Question 1 is “yes”. In the D&V 25.08.15 Calderbank Letter, they had referred to the mediation session and the Proposal which D&V said certain matters therein could not be accepted by them. In relation to the Disputed Sum, the proposal was that this sum and any profits derived therefrom should be returned by Sing to the Estate together with interests and profits. Similar to the G1 25.08.15 Calderbank Letter, the D&V 25.08.15 Calderbank Letter contained proposals for the Global Settlement and raised other issues. There was no sufficient evidence that Sing could have accepted the proposal regarding the Money Claim without Sing and/or rest of G1 accepting the other proposals in the D&V 25.08.15 Calderbank Letter. The only sanctioned offer made to Sing himself was the D&V 03.04.20 Sanctioned Offer. Mr Yuen had again submitted that this sanctioned offer was made by Diana in the hope of securing her costs before trial because (i) although on the face of it there was a concession of HKD 100,000 in respect of the Money Claim, the offer was made together with the conditions that Sing should withdraw his counterclaim and (ii) the offer of HKD 100,000 concession paled when considered that the offer was not so different from that in the Diana’s 1st Sanctioned Offer and that withdrawing the counterclaim was in essence the same as Diana winning in every claim against her. The D&V 03.04.20 Sanctioned Offer against Sing did include a condition that Sing was to withdraw his counterclaim, ie the Kam Shek Property Claim. By the time this Sanctioned Offer was sent, there had been a number of Calderbank Letters between the two sides as seen in Table 2 in relation to the Kam Shek Property. As seen therein, in the D&V 25.08.15 Calderbank Lettter, it had been proposed that Sing to withdraw the Kam Shek Property and that Sing was to pay HKD 2m to the Estate to purchase Mother’s ½ share in the property. Thereafter, the proposals between G1 and G2 seemed to be working towards a buyout by Sing and/or G1 over Mother’s ½ share of the property and that the ½ share be assigned to Hang, but these proposals eventually did not bear fruit. In Sing’s 10.01.19 WP Letter, although this was neither a Calderbank Letter, nor a sanctioned offer, Sing had further made proposals and in relation to the Kam Shek Property, he had stated he was prepared to agree that Mother’s ½ share was part of the Estate and only proposed that 6/11 of Mother’s said ½ share be transferred to Sing for purpose of granting a licence to Hang to continue to reside in the property for as long as Hang wished and the remaining 5/11 of the ½ share be held by the G2 Siblings subject to Hang’s right of first offer to buy at a price no higher than the prevailing market price. There was no response from D&V. The fact is that Sing and Hang had been living rent free in the Kam Shek Property with Mother’s consent since about 1988, ie for some 30 years by 2020. Further, as pointed out by Mr Yuen, in paragraph 273 of the Judgment this Court had said that if any inference was to be drawn, then it would point to Mother’s intention was that Sing and Hang both having beneficial interest, rather than Sing having sole beneficial interest in the Kam Shek Property. There was no counterclaim by Diana to Sing’s counterclaim (ie Kam Shek Property Claim) for an order of possession or an order for sale, nor was Hang joined in the 1st Action. Having considered the various offers, Diana by imposing in the D&V 03.04.20 Sanctioned Offer the condition that Sing was to withdraw the whole of his counterclaim in the 1st Action ie the Kam Shek Property Claim in addition to paying the sum of HKD900,000 in settlement of the Money Claim was not, in my view, a genuine attempt to resolve all the disputes between Diana and Sing in the 1st Action and it was only a tactical move. As said, Diana herself had not sought any indemnity costs order against Sing in relation to the Kam Shek Property Claim and only the Money Claim and yet her sanctioned offer had linked the two claims. The sanctioned offer also came at a rather late stage, ie about 5 weeks prior to the commencement of a 13 day trial when preparations for the trial must have started. I am therefore of the view that the D&V 03.04.20 Sanctioned Offer should not attract the consequences under Order 22. Having considered the circumstances of the case, I also consider it unjust to order Sing to pay Diana’s costs of the Money Claim on an indemnity basis from 2 May 2020 by reason of Sing’s non-acceptance of the D&V 03.04.20 Sanctioned Offer. Thus my answer to Question 2 is “no” and in any event, my answer to Question 3a is “yes”. As for Question 3b, the burden was on Diana to show that there were some special or unusual features in this case which would justify the imposition of an indemnity costs order against Sing. Suffice to say, although this Court has found that Sing’s evidence was not reliable in parts, and there were discrepancies and inconsistencies in his evidence, this Court did not find that Sing had mounted a defence “littered with lies” or with “litigation afterthoughts” as submitted by Mr Lam. In fact as I have said in the Judgment, I did accept that in 1968 Sing being the second oldest of the Siblings and the eldest son with a stable job and income he did start to make regular monthly contributions to Mother and the family and that he had continued to make regular monthly contributions to Mother throughout until her death. I have also found that out of the 4 sons, Sing was probably the most financially responsible one and that his contributions/payments to Mother were more substantial than his brothers and more regular than his sisters. What I did not accept that Mother’s savings had come from him solely, and I found that the savings came from all the Siblings and therefore Sing was not the sole beneficial owner of the monies in the 833 Joint Account or the Disputed Sum and that there was no sufficient evidence that Mother had intended to gift to Sing the entirety of the Disputed Sum. I am thus unable to agree with Mr Lam that Sing had put up a “spurious defence”, nor there was any finding that Sing had embarked on a scheme to misappropriate funds belonging to the Estate. There was also no evidence of any ulterior motive or improper purpose, deception or underhand conduct on the part of Sing. Sing was in fact prepared to donate the sum for the purpose of defraying all necessary past and future outgoings of the Tsui Chuk Property as seen in the G1 15.07.16 Sanctioned Offer. In short, I do not find that there were special or unusual features in the case that would warrant costs to be paid by Sing on an indemnity basis. My answer to Question 3b is then “no”. Insofar as Yee’s Defamation Claim was concerned, as seen in Table 3 and also from the open letters produced, the pre-action letters commenced from 12 December 2013 to 9 May 2014 prior to the Defamation Claim in S&Y’s Defence and Counterclaim was filed. As Diana was ultimately successful in defending the Defamation Claim, Diana should be entitled to her costs. The answer to Question 1 is “yes”. JPKP first sent a letter in relation to the 2 Offending Emails on 12 December 2013 and then in a letter dated 20 January 2014, set out 4 conditions to be met by Diana, otherwise Yee would issue the Defamation Claim, namely Diana (i) to write a letter to the recipients of the 2 Offending Emails containing a suitable of withdrawal and apology in terms to be approved by JPKP (Yee) (“Apology Letter”); (ii) to undertake in writing that Diana will not repeat the publication of those similar allegations against Yee (“Undertaking”), (iii) to indemnify Yee in relation to costs (“Costs”) and (iv) to pay an appropriate sum in damages (“Damages”). Suffice to say by 28 April 2014, after a series of letters, Diana had accepted Yee’s final amendments to the Apology Letter (which also contained the Undertaking) and had signed the same and had sent over the cheque for HKD 500 for the agreed amount for the Damages. The only outstanding matter was the amount for the Costs, Diana’s last offer was HKD 6,000 and Yee’s was HKD 20,000. Diana had proposed costs only proceedings under Order 62 Rule 11A of RHC. This was not agreed and on 9 May 2014, JPKP returned the Apology Letter and the cheque for HKD 500. S&Y’s Defence and Counterclaim was then filed on 27 May 2014 which contained Yee’s Defamation Claim. The difference between Diana’s offer and Yee’s offer of costs was only HKD 14,000, which would have been less than any costs only proceedings. Such difference was also far less than the ultimate costs incurred by the parties in the trial. In my view, neither Diana nor Yee had been reasonable over the issue of costs in those pre-action proposals. After Yee filed her Defamation Claim (ie Yee’s counterclaim), there had been various Calderbank Letters as set out earlier. In the D&V 25.08.15 Calderbank Letter which was about one month after the mediation session with the Mediator, Diana’s proposal was that Yee to withdraw her Defamation Claim with no order as to costs, but on the other hand, S&Y were to give Diana a written apology letter to the effect that Yee and Sing were to admit that they had manipulated the transfer of the Disputed Sum between various bank accounts and made representations to Diana in a misleading and confusing manner. It was not quite clear as to why Diana suddenly sought an apology letter from S&Y and in my view it was not a reasonable approach on her part. Then in the G1 25.08.15 Calderbank Letter, Yee’s position in relation to the Defamation Claim was that Diana should issue the Apology Letter as set out in the 7 March 2014 and to pay HKD 500 damages and HK$62,000 costs as ordered by Master Lo (which Diana had in fact paid on 6 November 2014). In the G2 28.06.16 Calderbank Letter, Diana offered to pay HKD 500 for the Damages to Yee but proposed no Apology Letter to Yee and that there be no need for Yee to issue any apology letter to Diana either. Having considered those letters in Table 2, I have come to the view that the D&V 03.04.20 Sanctioned Offer to Yee was also a tactical move and not a genuine offer for settlement for the Defamation Claim in that Diana knew that Yee would not have agreed to withdraw the whole of her Defamation Claim without Diana agreeing to send over the Apology Letter or at least the HKD 500 for the Damages, which had previously been agreed by Diana. The sanctioned offer was made only 5 weeks prior to the trial when preparations for trial must have started and in the circumstances of this case, I find it unjust to order Yee to pay Diana’s costs of the Defamation Claim on indemnity basis from 2 May onwards. My answer to Question 2 is “no” and Question 3a is “yes”. As said, the matter could have been resolved in the pre-action stage and neither Diana nor Yee had been reasonable. There are no special or unusual features in the Defamation Claim that would warrant Diana’s costs to be paid by Yee on an indemnity basis. My answer to Question 3b is “no”. The 2nd Action – the Tsui Chuk Property Claim Viola is seeking to vary the Order Nisi to the effect that Sing should pay her costs of the Tsui Chuk Property Claim and that such costs should be on an indemnity basis. As a start, it was submitted by Mr Lam that costs should follow the event, and that looking at the outcome of the Tsui Chuk Property Claim, Viola must be regarded as the winner, having successfully defended the claim by Sing. As set out in Order 62 rule 5 of RHC, there are special matters to be taken into account by the Court in exercising discretion as to costs including in particular the conduct of all parties and any admissible offer to settle made by a party, which is drawn to the Court’s attention. Further, the conduct of the parties includes (a) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue; (b) the manner in which a party had pursued or defended his case or a particular allegation or issue; (c) whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim; and (d) conduct before, as well as during the proceedings. Mr Lam had submitted that the issue of whether Viola is or is not the beneficial owner was not the issue which fell to be determined by the Court, but Mr Lam accepted that the Court was at liberty to make the findings that Viola was/is not. The fact is that it was Viola’s own pleaded case in her Defence in the 2nd Action that she has had beneficial interest in the Tsui Chuk Property since its acquisition in 1989 and further since the death of Mother, she has been the sole legal and beneficial owner of the Tsui Chuk Property. As I have found, there seemed to be confusion on Viola’s part as to the difference between being merely a legal title holder/owner and being a beneficial owner. Her own evidence at the trial had contradicted her own case that she had any beneficial ownership. Further, apart from paying Mother a monthly sum of HKD 2,000 during Mother’s lifetime, there was no evidence that Viola had paid any outgoings directly towards the property until after 27 January 2014, which was after she decided to claim possession of the property. Further, even though I found that the terms of the Tsui Chuk Agreement were too imprecise or general to have any contractual force, Viola did sign the Minutes incorporating the Tsui Chuk Agreement and then later changed her mind and further switched sides. As seen in Table 4, there were a number of Calderbank Letters in relation to the Tsui Chuk Property Claim. In the D&V 25.08.15 Calderbank Letter, although Viola did propose the property be sold but then the sale proceeds should be divided among the 11 Siblings plus Hung’s 2 children. This was inconsistent with the terms of the Proposal as set out by the Mediator. Even though the terms of the Proposal were non binding, it was not quite clear on what basis Viola proposed that the sale proceeds be divided into 13 shares instead of 11. However, then in the G2 28.06.16 Calderbank Letter, there was a proposal that the Tsui Chuk Property be sold and sale proceeds be divided only between the 11 Siblings, but this was on condition that all expenses relating to the property paid by Viola since Mother’s death and her legal costs in the DC Action be paid out of the sale proceeds first, and yet there was no proposal as to the reimbursement of the expenses of the property paid by Sing or Sing’s costs in relation to the Tsui Chuk Property Claim. Further, in this letter, Viola was demanding an apology from Yin, Sing and Yung. There was no evidence that Sing could have accepted the proposal in relation to the Tsui Chuk Property Claim without him or G1 accepting the other terms in the G2 28.06.16 Calderbank Letter. Thereafter the Calderbank Letters between G1 and G2 were towards the Tsui Chuk Property being sold and sale proceeds be distributed among the 11 Siblings, as those letters concerned the Global Settlement, again there was no evidence that Sing could have accepted the proposal in relation to the Trsui Chuk Property Claim only without him or G1 accepting the other terms. Mr Lam had referred to the Viola’s 25.03.20 Sanctioned Offer to Sing in relation to the 2nd Action. In this letter, Viola was offering Sing to discontinue his Tsui Chuk Property Claim without recourse to the same or substantially the same cause of action as the 2nd Action. Mr Lam had submitted that in making such an offer, Viola in fact exposed herself to the risk of having to pay Sing the costs of the 2nd Action up to the date of Sing serving the notice of acceptance under Order 22 rule 20 of RHC, and that the sanctioned offer had represented a significant concession. However, in my view, the letter could not be said to be a genuine offer in that as said earlier, prior to Viola’s 25.03.20 Sanctioned Offer, all the Calderbank Letters had been along the basis that the Tsui Chuk Property be sold and sale proceeds being distributed equally among the 11 Siblings subject to deduction of expenses and legal costs and the disagreement would seem to be whether or what legal costs should be deducted. In my view, the requirement that Sing was simply to discontinue his action without recourse to the same or substantially the same cause of action as the 2nd Action (particularly in light of the issue raised by D&V as to Sing’s locus in the 2nd Action) was not a genuine offer resolve the matter and only a tactical move. Further, as seen in Table 4, in the morning of the 1st day of trial, G1 had made a further Calderbank Offer to G2 for both Mother’s ½ share in the Kam Shek Property and the Tsui Chuk Property be sold and sale proceeds be divided among the 11 Siblings after deducting incidental expenses and legal costs. Mr Lam submitted that (i) prior to the trial, Sing had originally sought 5 Declarations but abandoned Declarations 3, 4 and 5 very late in the day and that Sing should never had pursued the 3 abandoned Declarations over which Viola had incurred substantial costs; (ii) Sing had no locus standi to seek Declaration 2 on behalf of the Estate ; (iii) if Sing disagreed with Diana’s decision not to try and recover the Tsui Chuk Property on behalf of the Estate, what Sing should have done was to take out an application to remove Diana as the Administratrix; (iv) the pursuit of Declaration 1 under Tsui Chuk Property which was predicated on the presumption of resulting trust was also manifestly misconceived and utterly hopeless. In so far as Declarations 2 - 4 were concerned, these were alternative claims to Declaration 1. As stated in the Judgment, I agree with Mr Lam that Sing had no locus standi to seek Declaration 2 on behalf of the Estate and this did not mean that that there was no merit in such a claim on behalf of the Estate. The key issue in the Tsui Chuk Property Claim was the beneficial interest of the property. It was clear that there were at least 3 possibilities, Sing’s or Viola’s or the Estate’s. As mentioned in the Judgment, it had been suggested by S&Y that there could be conflict of interest between Diana (as the Administratrix) and Viola in relation to the Tsui Chuk Property Claim and thus, although Sing was not able to pursue Declaration 2, yet there was no concession on the part of Viola. This Court found that Viola was and is not the beneficial owner of the Tsui Chuk Property as claimed by her. Seen in this light, although this Court found Sing was and is not the beneficial owner, the Judgment in respect of the Tsui Chuk Property in effect cannot be said to be more advantageous to Viola than the proposals contained in the D&V 25.03.20 Sanctioned Offer. The fact was that neither Viola nor Sing had succeeded in claiming sole beneficial interest in the property. All in all, I do not find Viola’s conduct in maintaining that she was/is the beneficial owner of the Tsui Chuk Property reasonable, in light of amongst other things, her own inconsistent evidence during the trial. Having considered all the circumstances of this case, I maintain my Order Nisi, that there be no order as to costs in relation to the Tsui Chuk Property Claim. Conclusion My order is thus: In relation to the 1st Action, the Order Nisi in relation to the Money Claim be varied to: Yee to solely pay Diana’s costs (as Administratrix on behalf of the Estate) in the Money Claim against Yee, on party and party basis from issue of writ until 8 April 2014 on party and party basis, and thereafter from 9 April 2014 until 4 January 2015 on indemnity basis, with certificate for one counsel; As from 5 January 2015 onwards until Judgment, Yee to pay 50% of Diana’s costs (as Administratrix on behalf of the Estate) in the Money Claim, on indemnity basis, with certificate for one counsel; As from 5 January 2015 onwards until Judgment, Sing to pay 50% of Diana’s costs (as Administratrix on behalf of the Estate) in the Money Claim, on party and party basis, with certificate for one counsel; The Order Nisi in respect of the Defamation Claim and the Kam Shek Property Claim do stand and be made final. For the 2nd Action, the Order Nisi do stand and be made final. For the purpose of taxation, I will apportion the trial time between the 4 claims roughly equally, being 25% for each. Any costs incurred by Diana in her capacity as Administratix, not recovered above, shall be paid out of the Estate on trustee basis. D&V have not succeeded entirely with their summonses for variation, although Diana did succeed in obtaining part of her costs in the Money Claim against Yee on indemnity basis. S&Y has not succeeded with their summons for variation at all. Having considered the circumstances of this case, I am of the view that Diana should be entitled to 20% of her costs in relation to the variation summons in the 1st Action, to be taxed on party and party basis, with certificate for one counsel. Save as ordered, there be no order as to costs as to the other applications. Although I accept Mr Yuen’s submission whether a counsel certificate is necessary, I have included the same in my orders, for avoidance of doubt. ( Bebe Pui Ying Chu ) Judge of the Court of First Instance High Court Mr Timothy Lam, instructed by Victor Chan & Co, for the plaintiff by the Original Action in HCA 380/2014, the defendant by the Counterclaim in HCA 380/2014 and the defendant in HCA 2492/2017 Ms Victor Yuen, instructed by Joseph P K Pang & Co Solicitors & Notaries LLP, for the 1st and 2nd defendants by the Original Action in HCA 380/2014, the plaintiff by the Counterclaim in HCA 380/2014 and the plaintiff in HCA 2492/2017