TSANG GRACE YEE MAN also known as GRACE YEE MAN TSANG EBTEHADJ v. TSANG WILLY

HCAP 17/2018

[2020] HKCFI 1909

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE ACTION NO 17 OF 2018

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D E C I S I O N
(Variation of Costs Order Nisi)

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Introduction

1.  On 7 May 2020, this Court dismissed P’s application under Order 14A pursuant to a decision handed down by this Court on that day (“Decision”).  The Court made a costs order nisi that costs of the summons be in the cause.

2.  P’s application under Order 14A was to determine the issue of whether the Grant made to D under the 2017 Will on 5 February 2018 should be revoked when D failed to disclose the 3 Chinese Documents (or PRC Wills) in the course of applying ex parte for the Grant.

3.  On 4 June 202, D issued a summons for variation of the costs order nisi to an order that costs to D be paid forthwith by P.  I shall follow the abbreviations in the Decision unless otherwise indicated herein.

The legal principles

4.  Order 62 rule 3(2) and rule 3(2A) of RHC sets out respectively how Court makes an order as to costs in non-interlocutory and interlocutory proceedings, as follows:

“(2) If the Court in the exercise of its discretion sees fit to make any order as to the costs of or incidental to any proceedings (other than interlocutory proceedings), the Court shall, subject to this Order, order the costs to follow the event, except when it appears to the Court that in the circumstances of the case some other order should be made as to the whole or any part of the costs.

(2A) If the Court in the exercise of its discretion sees fit to make any order as to the costs of or incidental to any interlocutory proceedings, it may, subject to this Order, order the costs to follow the event or make such other order as it sees fit.” (emphasis added)

5.  The distinction between the Court’s approach in costs in interlocutory proceedings and costs in non-interlocutory proceedings since CJR has also set out by To J in Melvin Waxman and Anor v Li Fei Yu and Anor [2013] 6 HKC 424.  As summarised by Mr Wong on behalf of P, the principles are:

“(1) The issue of costs is a matter of discretion for the Court. Subject to certain well-established legal principles, the Court has wide discretion in costs, particularly in respect of costs of interlocutory proceedings. (§3)

(2) In respect of interlocutory costs, the Court is no longer required to apply the general rule of costs following the event, except in special circumstances, though that principle remains as one of the options. The Court may make such other order as it sees fit. O 62 r 3(2A) gives the Court even wider discretion than that under rule 3(2) in respect of costs in other proceedings. (§11)

(3) The general rule of costs following the events does not apply.  The Court is entitled to take into account all the circumstances of the case, including those set out in O 62 r 5, to make such order as it thinks fit.  In the exercise of its discretion, the Court may take the issue-based approach or may take into account merit of the parties’ case or the possible outcome of the action.  (§19)”

6.  To J further went on to say:

“20. As for the onus of proof, I think it is the same post-CJR as it was pre-CJR. It must be the successful party’s burden to satisfy the court as to the type of costs order it is entitled. To begin with, the successful party is assisted by the general rule of costs to follow the event. By the mere fact of being successful, the successful party has discharged the evidential burden of showing it is entitled to costs. Thus, effectively, the evidential burden is on the unsuccessful party to adduce sufficient evidence or argument that some other or lesser order is appropriate, such as no order as to costs, costs be to the successful party’s costs in the cause or costs to the unsuccessful party. In the absence of evidence or convincing argument to the contrary, the successful party would also have discharged the legal burden. Costs to follow the event would be the appropriate order to make. If the unsuccessful party is able to discharge that evidential burden, it will be the legal burden of the successful party to show that he is entitled to the costs order which he seeks. In reality, having heard the interlocutory application, it would be quite obvious to the court what costs order would best serve the justice between the parties without relying on the burden of proof.”

D’s reasons for variation

7.  Mr To had referred the Court again to the CFA’s decision in Shell Hong Kong Ltd v Yeung Wai Man Kiu Yip Co Ltd & Another [2003] 3 HKLRD 62.  In his judgment, Chan PJ had said that :

“20. The Order 14A procedure was first introduced in England in 1991 and in Hong Kong in 1992. The underlying policy of this Order is, as the Supreme Court Practice 1993 described, ‘to accelerate the final judicial disposal of an action at the interlocutory stage and thereby save the expense and delay which would otherwise arise not only if the action were to proceed to a full trial but also if the parties would be required to undertake the necessary pre-trial steps to prepare for such trial.’ Vol. 1 para. 14A/1-2/1, p. 175.

21. …

22. …

23. … However, it is not contemplated that the parties would submit a trivial matter for determination under Order 14A. This would not only be contrary to the spirit and purpose of this procedure, but may also lead to possible abuse, resulting in unnecessary expense and delay and wastage of judicial time.  No judge would accede to that sort of request or application in the proper exercise of his discretion.”

8.  As set out by Mr To on behalf of D that in the Decision, the Court found that P failed to meet the 1^st Condition and the 2^nd Condition and that no matter what the Court’s determination on the Issue was, the parties were likely have to proceed to trial in order to determine the validity of the 2017 Will which was the dominant issue in the case and that any determination on the Issue would not result in a great saving of time or costs.

9.  Thus, it is argued by Mr To that it is clear that this O 14A application is one that should not have been taken out by P in the first place and that there is no reason why costs should not follow the event.

Discussion   

10.  Mr Wong argued that the Court did not determine the Issue in D’s favour, nor in P’s favour, and only declined to determine the Issue, and that the Decision reached no material result in favour of either party. 

11.  It was with this in mind that in the Decision this Court made an order nisi that costs be in the cause.

12.  Mr Wong further argued that P’s arguments were not wholly unarguable or vexatious and that :

(i) this Court accepted P’s Counsel’s submission at the time that the Issue was a question of law;

(ii) In relation to whether the Issue was part of P’s pleaded case, this was strenuously argued by Mr To on behalf of D, but this Court was not persuaded that the Issue was not part of P’s pleaded case, and that some time had been spent on this ground of challenge;

(iii) Further, D was at all material times in possession of the Chinese Documents but he purposively did not disclose them in his ex parte application for the Grant and there was clearly non-disclosure on the part of D.

13.  However, having re-read what was said by Chan PJ in his judgment in the Shell Hong Kong case, although P’s Order 14A application could not be said to be vexatious, it really did not achieve the underlying purpose of the Order to accelerate the final judicial disposal of this action or any issue at the interlocutory stage.  As seen in the Decision, D had indicated that even if the Court had decided to revoke the Grant, he would re-apply for another grant of probate under the 2017 Will, and even if P were to enter a Caveat again, it would only lead to litigation over the main issue all over again, namely  whether the Deceased had the requisite mental and/or testamentary capacity at the time of executing the 2017 Will and whether the execution of the 2017 Will was obtained by fraud. 

14.  However, even though this Court found that there was no sufficient evidence that the non-disclosure would have led to the Grant not being granted or ought not to have been granted, the fact was that there was clearly non-disclosure of the 3 Chinese Documents on the part of D. 

15.  Costs are in the overall discretion of this Court.  Having considered the circumstances of this case and the parties’ respective submissions, I have come to the view that the costs order nisi should be varied but only to D’s costs of the Order 14 A application and costs of the present variation application be D’s costs in the cause.