LAU KIN WING KEN AND ANOTHER v. DENG YUJIAO One of the Proving Executors of the Estate of Lau Heung, Deceased AND ANOTHER

HCAP 21/2013

[2018] HKCFI 949

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE ACTION NO 21 OF 2013

________________________

____________

____________

______________________________

REASONS FOR DECISION

______________________________

1.  On 29 January 2018, the court handed down its judgment (“the Judgment”) after a contested trial pronouncing in solemn form for the force and validity of what has been referred to as the “November Will”. The court also made an order nisi that the Plaintiffs were to pay the Defendants’ costs of the action (including the counterclaim), to be taxed if not agreed.

2.  On 2 February 2018, the Plaintiffs applied by summons to vary the costs order nisi such that (i) all parties’ costs of the action (including the Counterclaim) shall be paid out of the Estate of the Deceased on the common fund basis, alternatively on the party and party basis, or (ii) alternatively, the Defendants’ costs shall be paid out of the Estate of Lau Heung, and the Plaintiffs shall bear their own costs.

3.  On 8 February 2018, the Defendants applied by summons to vary the costs order nisi such that (i) the costs of the action shall be paid by the Plaintiffs to be taxed on the party and party basis with certificate for 2 counsel, and (ii) the Defendants’ own costs shall be taxed on the solicitors and own client basis with certificate for 2 counsel, and the Defendants shall be entitled to recover the costs so taxed from the Estate of Lau Heung subject to deduction of the amount recovered from the Plaintiff under (i) above.

4.  At the conclusion of the hearing on 30 April 2018, I made the order mentioned in paragraphs 12 and 13 below, with brief reasons to be given later.  This I now do.

5.  The applicable principles regarding the question of costs in a contested probate action can be found in the judgment of the Court of Final Appeal in Nina Kung v Wong Din Shin (No 2) (2006) 9 HKCFAR 800, at paragraphs 10 to 19 per Ribeiro PJ.  They were summarised in the judgment of Kwan JA in Cheung Wai Lan v Kwok Chung Chee, CACV 128/2014, 21 March 2015, at paragraph 77, as follows:-

“The starting point and general rule where opposition to a will is unsuccessful is that costs would follow the event. The general rule is subject to two exceptions. The first exception is where the conduct of the testator or the residual beneficiary was the sole or dominant cause of the litigation and the appropriate costs order in this situation is for the costs to come out of the estate. The second exception is where circumstances lead reasonably to an investigation of the will’s validity and in such cases, there would be no order as to costs. However, even if a case fell prima facie within one of the exceptions, if opposition to the will goes beyond putting the proponent to strict proof of its validity and involved fundamentally hostile litigation, such as where the opposing party took it upon himself to establish a positive case of forgery, fraud or undue influence, the general rule is likely to apply, as implicitly recognised in Order 62 rule 6(1)(c) of the Rules of the High Court. Lastly, the operation of the two exceptions is subject to a further qualification that the courts do not approve of ill-considered and precipitous decision to litigate in opposition to a will and the opponents must have taken all proper steps to inform themselves as to the facts of the case before undertaking the proceedings if they are to take themselves out of the general rule of costs following the event.”

6.  The first exception does not apply in this case because I do not consider the conduct of the Deceased or the Defendants (or other beneficiaries under the November Will) to be the sole or dominant cause of the litigation here.

7.  In so far as the second rule in Barry v Butlin (which, according to Ms Eu, would bring the case within the first exception) is concerned, as mentioned in the Judgment, I have some reservation as to whether it applies in the present case, although I did assume in the Plaintiffs’ favour that it applied and proceeded to consider whether the Defendants had adduced affirmative evidence that the Deceased knew and approved the contents of the November Will.  I found that the Defendants had discharged that burden.  In other words, the Plaintiffs’ reliance on the second rule in Barry v Butlin failed.

8.  I consider, however, that the second exception applies because the circumstances in the present case were such that it was reasonable for the Plaintiffs to investigate the validity of the November Will, having regard to the conflicting MMSE results before and after the making of the November Will as well as the contemporaneous medical notes and records which, in my view, raised a genuine issue as to whether the Deceased was suffering from dementia and whether he had the requisite testamentary capacity at the time of the making of the November Will.  As it was, I eventually came to the conclusion that:-

(1)   the Deceased was not suffering from dementia at the time of execution of the November Will;

(2)   on the basis that he was not suffering from dementia or delirium at the material time, there was no basis to say that he had no testamentary capacity to make the will as per the test laid down in Banks v Goodfellow; and

(3)   even if the Deceased was suffering from dementia at the time of execution of the November Will, he still had the requisite testamentary capacity to make the will at that time.

9.  However, the fact that I found that the Deceased had testamentary capacity after considering the evidence adduced by the parties does not mean it was unreasonable for the Plaintiffs to seek to investigate the validity of the November Will in the first place.

10.  Although the litigation in this case cannot be said to be friendly, I do not think it should be classified as “hostile” either.  There is no allegation of forgery, fraud, undue influence or the like.  I do not consider that the Plaintiffs had gone beyond what was reasonably necessary to challenge the testamentary capacity of the Deceased and his knowledge and approval of the contents of the November Will.  In particular, in relation to the November 2011 meeting, although I accepted the Defendants’ account of what happened in preference to that of the Plaintiffs, I accept Ms Audrey Eu SC’s submission that this is simply a case where the parties gave conflicting evidence and the court ultimately accepted one version rather than another.

11.  Neither do I consider that the Plaintiffs had failed to take all proper steps to inform themselves as to the facts of the case before undertaking the proceedings, for the reasons as submitted by Ms Eu.

12.  In all the circumstances, I consider that the fair order to make is that the Plaintiffs shall bear their own costs of this action but do not have to pay the costs of the Defendants.  The Defendants’ costs of the action are to be paid out of the Estate, to be taxed pursuant to Order 62, rule 31 of the Rules of the High Court, Cap 4A, with certificate for 2 counsel.

13.  In so far as the two summonses are concerned, I order that there be no order as to costs as between the parties, but the Defendants’ costs are also to be paid out the Estate as mentioned in paragraph 12 above, on the basis that they are part of this action.