AU LICK HANG LEDWIN AND ANOTHER v. AU SUK HAN AND ANOTHER

HCMP 250/2019

[2021] HKCFI 21

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 250 OF 2019

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DECISION ON COSTS

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A. Introduction

1.  This is the hearing of argument on costs in respect of the plaintiffs’ Summons filed on 22 February 2019 (the “Summons”) against Messrs Chung & Kwan (the “Firm”). 

2.  On 22 February 2019, the plaintiffs issued the underlying Originating Summons (the “OS”) seeking, inter alia, the following:

(1)     Subject to the original of the purported last will dated 7 June 1994 of the Deceased (the “1994 Will”) being produced or brought into court or otherwise as the court may direct, an order that the Letters of Administration with the Will annexed granted in HCAG009038/2017 on 27 November 2018 to the plaintiffs (the “Grant”) on the basis of the Deceased’s will dated 25 September 1992 (the “1992 Will”) be revoked (the “Revocation Application”); and

(2)     In the event that the 1994 Will is unavailable and/or cannot be produced or brought into court, a Declaration that the Grant contains no error and ought to have been made. 

3.  The Summons was issued on the same day and ancillary to the OS, pursuant to section 7 of the Probate and Administration Ordinance, Cap 10 (the “PAO”) and rule 49 of the Non-Contentious Probate Rules, Cap 10A (the “Rules”). 

4.  Pursuant to the Summons, the plaintiffs apply against the Firm for:

(1)     an order that Mr Chung Pui Lam (“Mr Chung”), a partner of the Firm, or such authorised representative of the Firm, do produce and bring into the Probate Registry, or otherwise as the court may direct, the original of the 1994 Will, which the Firm alleged to be in their possession or control;

(2)     any such consequential order and/or other directions as the court deems fit and necessary; and

(3)     costs of and occasioned by the Summons to be paid by the Firm to the plaintiffs on an indemnity basis. 

5.  Both the OS and the Summons are supported by the Affirmation of the 1^st plaintiff dated 22 February 2019 (the “1^st plaintiff’s Aff”) only. 

6.  The Firm has not been made a party to the OS because the Revocation Application only affects the interests of the beneficiaries of the Deceased’s estate (ie the defendants), but not the Firm. 

7.  Notwithstanding that, the Firm was duly served with the OS, the Summons, and the 1^st plaintiff’s Aff on 22 February 2019 when the court documents were filed into court.  It is clear that the plaintiffs have fully complied with the requirement of service under rule 49(1) of the Rules. 

8.  The plaintiffs’ costs of and incidental to the Summons comprise, broadly speaking, their costs in (i) the before-action correspondence with the Firm since 18 December 2018; (ii) preparing the 1^st plaintiff’s Aff (of which the court is invited to apportion 50% to the Summons, whereas the rest is for the OS); and (iii) preparing and attending the first hearing of the Summons on 13 June 2019 (the “First Hearing”). 

9.  The plaintiffs submit that these costs should be paid by the Firm to the plaintiffs, with Certificate for two Counsel, to be taxed on an indemnity basis if not agreed. 

10.  The basis of the plaintiffs’ application for indemnity costs can be summarised as follows:

(1)     The plaintiffs are the successful party and have obtained the full relief sought in the Summons, namely the Firm’s production of the original of the 1994 Will to the Probate Registry for the purpose of the Revocation Application.  Costs should follow the event; the Firm has shown no good reason to deprive the plaintiffs, the successful parties, of their costs. 

(2)     To the contrary, the Summons is wholly necessitated by the Firm’s unreasonable refusal to co-operate or conduct shortly before the Summons was issued.  In essence, the Firm not only refused to deliver the original of the 1994 Will to the plaintiffs or their solicitors, it in any event also did not suggest or otherwise indicate their willingness to voluntarily deposit the original of the 1994 Will into court without an application by the plaintiffs being made. 

(3)     The Firm’s unreasonable conduct or behaviour actually subsisted after the plaintiffs issued the Summons on 22 February 2019.  In particular:

(a)     The Firm unreasonably refused to negotiate with the plaintiffs in good faith to resolve the Summons, as evident from their attitude to the plaintiffs’ open and Calderbank letters.  The Firm ignored all 3 Calderbank letters from the plaintiffs which they eventually failed to beat.   

(b)     Since the Summons was issued on 22 February 2019 until 11 June 2019, ie 2 days before the First Hearing, the Firm insisted that the Summons should be withdrawn by the plaintiffs, failing which they would substantively oppose the Summons. 

(i)     There was still no suggestion by the Firm that they would bring the original of the 1994 Will into court and then to focus their argument solely on costs of the Summons. 

(ii)     Rather, the Firm maintained the position that the plaintiffs should withdraw the Summons and bear their own costs, and further to incur additional time and costs in re-applying ex parte to Master under section 7(3) of the PAO for substantively the same relief against the Firm. 

(iii)     It was not until after the plaintiffs had filed the skeleton submissions for the First Hearing that the Firm indicated for the first time a willingness to produce the original of the 1994 Will into court without any fresh application having to be made by the plaintiffs.

(c)     But even then, as of 11 June 2019, the Firm still insisted to file extensive evidence by way of affirmations of Mr Chung (“Mr Chung’s Aff”) and Ms Lau Yuk Mui (“Ms Lau”), their senior probate clerk, and proposed various proliferated directions with the clear intent of pressing ahead a substantive hearing on the Summons. 

(i)     In their Submissions for the First Hearing, the Firm argued that the Summons should be adjourned for argument with cross-examination of the deponents(ie the 1^st plaintiff, Mr Chung and Ms Lau).

(ii)     After this court pointed out to the Firm that the only live question for determination after their deposit of the original of the 1994 Will into court was costs, the Firm then insisted on the need of cross-examination of the deponents for the sole question of costs, alleging that itwas necessary but without identifying sufficient or justified basis.

11.  On the other hand, the Firm’s major ground of complaint is that before the plaintiffs issued the Summons, they had not requested the Firm to bring the original of the 1994 Will into the Probate Registry but had only asked for its delivery up to the plaintiffs’ solicitors, Messrs TC Foo & Co (“TC Foo”).  In that light, the Firm alleged that they had expressed willingness to deposit the original of the 1994 Will into court. 

B.     Was the Firm entitled to refuse to release the 1994 Will to the plaintiffs

12.  On the evidence, the plaintiffs and/or the plaintiffs’ solicitors had all along asked for the return of the original of the 1994 Will before the commencement of this action:

(1)     The 1^st plaintiff claimed: “there is also a will that is in your possession.  I do not understand why the documents were not provided back to me when I clearly stated that I would no longer instruct your firm.”  (the 1^st plaintiff’s letter dated 15 December 2018 to the Firm).

(2)     The 1^st plaintiff claimed: “Please explain the reason(s) of not providing me all the documents when I did not instruct you anymore.  ... Therefore, all documents should have been given back to me.”  (the 1^st plaintiff’s 2^nd letter dated 15 December 2018 to the Firm).

(3)     The 1^st plaintiff claimed: “... you have refused and/or failed to provide the Will in your possession for the above matter (“the Will”) to me.  ...” (the 1^st plaintiff’s letter dated 16 December 2018 to the Firm).

(4)     TC Foo claimed: “We would like to obtain the Will of the Deceased which is in your possession in order to ascertain whether the Will of the Deceased you possess is the one of later date and if the answer is affirmative, we will have to advise our Clients accordingly.  Therefore kindly provide us with the Will of the Deceased in your possession for our further handling.”  (TC Foo’s letter dated 19 December 2018 to the Firm).

(5)     TC Foo claimed: “In view of our Clients urgent duty to disclose the 1994 Will to the Court, we demand for the return of all relevant papers and properties of the above matter, including, of course, the 1994 Will, for our handling as soon as possible and in any event no later than 9 January 2019.”  (TC Foo’s letter dated 2 January 2019 to the Firm).

(6)     TC Foo claimed: “Please take notice that unless you shall return all relevant papers and properties of the above matter, including the 1994 Will to us on behalf of our client for our further handling by close of business on Friday, 18 January 2019, our client shall have no alternative but take such step as may be advised compelling you to hand over the requested documents to him without further notice.”  (TC Foo’s letter dated 15 January 2019 to the Firm).

(7)     TC Foo claimed: “In view of the aforesaid, we are seriously concerned with your current unilateral act of withholding the Last Will from Mr Au and/or purported attempt to release the same to any other third party.  By so doing, Mr Au has been deprived of his opportunity to peruse the original of the Last Will for the purpose of seeking appropriate legal advice and to make timely application to the Court insofar as the Grant is concerned.  We are thus instructed to demand for the urgent return of the Last Will and the title deeds of the Property to us on Mr Au’s behalf by 10:00 on Tuesday, 29 January 2019.”  (TC Foo’s letter dated 25 January 2019 to the Firm).

13.  I agree that the plaintiffs are not entitled to the return of the original of the 1994 Will over which he was claiming ownership and possession, for the following reasons.

14.  First, no grant of letters of administration of the 1994 Will has been made.  The personal and real property including the original of the 1994 Will were vested in the Official Administrator.

15.  Second, under rule 19 of the Rules, the plaintiffs, Madam Au and Ming Chung are all of the same priority under rule 19 (iv) for applying for the grant of administration over the Deceased’s whole estate. 

16.  On the evidence, the plaintiffs failed to show any consent from both Madam Au and Ming Chung that they did not object to the giving of the 1994 Will to the plaintiffs, nor that they had consented to the plaintiffs’ application of letters of administration of the 1994 Will.

17.  Therefore, I agree the Firm was entitled to maintain its stance to the plaintiffs that the Firm has no objection to produce the 1994 Will to the court, instead of the plaintiffs, or to release the original of the 1994 Will to the plaintiffs if other beneficiaries consented before the commencement of this action:

(1)     The Firm stated: “we are indeed prepare to assist the Court in clarifying matters concerning the subject estate and shall have no hesitation in producing to the Court a copy of the Last Will with a copy of this letter, where necessary.”  (The Firm’s letter dated 21^st December 2018 to TC Foo).

(2)     The Firm stated: “Kindly update us on any progress of your report made to the Court within 7 days from the date of this letter or we shall consider directly assisting the Court by sending relevant documents concerning the captioned matter including but not limited to the Last Will and our letter dated 21^st December 2018 to the Court without further notice.  According to Rule 19 of the Non-Contentious Probate Rules (Cap 10A), your client and all other beneficiaries (including but not limited to Madam Au) of the estate of the Deceased have the same priority in terms of application for grant of representation of the estate of the Deceased.  Kindly enlighten us the reasons and authority to show that your client is entitled to all the documents including the Last Will & the title deeds and documents of properties) in respect of the captioned estate, and we are under a duty to release those that are in our possession to your client.” (The Firm’s letter dated 18^th January 2019 to TC Foo).

(3)     The Firm stated: “we shall only release the Last Will to your client upon your client’s production of a written consent from Madam Au and other relevant beneficiaries for such release of the Last Will to your client.  We shall also release relevant title deeds to your client upon production of a grant with the Last Will of the Deceased annexed thereto from the Probate Registry.” (The Firm’s letter dated 29 January 2019).

18.  For the above reasons, I am of the view that the Firm was entitled to maintain its stance prior to the plaintiffs taking out the Summons, not to release the 1994 Will to the plaintiffs as opposed to producing the same to the court.

C.     Post-Summons conduct of the Firm

19.  On 22 February 2019, the Summons was issued and served on the Firm.  By the clear terms of the Summons, it would have been clear to the Firm that the plaintiffs were requesting them to bring the original of the 1994 Will into court only.  They would also have known from the 1^st plaintiff’s Aff served on them that the only application under the OS was for the revocation of the Grant, as opposed to any re-application being made. 

20.  For a whole month, the Firm did not approach the plaintiffs at all, let alone to express their willingness to bring the 1994 Will into court, or to complain that had this been clearly requested before, they would not have refused since December 2018.

21.  Quite to the contrary, the Firm only wrote to TC Foo on 22 March 2019, stating that:

“16. The Originating Summons was taken out without our notice and appears defective. Your clients should have applied ex parte to the Master under Section 7(3) of the [PAO] to issue a subpoena, if they want our Firm to bring the 1994 Will to the Probate Registry.

17. Your clients’ present Summons serves to waste time and costs in requiring our firm to appear ….

18. Your clients’ present application would escalate the costs unnecessarily and cause delay in the matter which, in our view, is not in the interest of the beneficiaries of the estate of the Deceased.

In view of the aforesaid and the likelihood that different beneficiaries of the estate of the Deceased are considering to apply for grant of the Deceased and that we might be subject to claim by other beneficiary(ies) if we release the 1994 will to any party, we hereby request your clients to withdraw the Summons with no order as to costs and we undertake to hold the 1994 Will until there is a consensus amongst all the beneficiaries of the Deceased’s estate. We are happy to answer any subpoena that may be served on us and will produce the 1994 Will to the Probate Registry.

We shall be obliged if you will take your clients’ instructions and let us know whether your clients agree with our proposal aforesaid within 3 days, failing which we shall have no alternative but to instruct counsel to resist your application, in which case we would ask the Court for costs against your clients…” (emphasis supplied)

22.  As submitted by the plaintiffs, the Firm unreasonably complained on the one hand that the Summons was an alleged waste of time and costs, and on the other hand, demanded the plaintiffs to withdraw the Summons and then to re-apply ex parteto the Master for issue of a subpoena against them for precisely the same relief.  They stated that pending this, they would hold onto the original of the 1994 Will; and failing this, they would oppose the Summons.  I agree this is a wholly unjustified request to make, particularly in the era of Civil Justice Reform to reduce procedural proliferation and escalation of unnecessary legal costs. 

23.  By the Firm’s Submissions lodged on 11 June 2019, the Firm sought to argue that:

(1)     the proceedings (namely the Summons as well as the OS which did not concern them) were improperly commenced and misconceived (§§6-25);

(2)     notwithstanding their willingness to deposit the original of the 1994 Will into court, (i) further evidence on the Summons should be filed by the plaintiffs and the Firm; (ii) there should be a substantive hearing of the Summons before a Judge with cross-examination of all the deponents of affidavits; and (iii) costs of and occasioned by the Summons should immediately be ordered to be paid by the plaintiffs to the Firm on an indemnity basis (§26).

24.  The only ground advanced by the Firm in its post-Summons correspondence to justify their conduct is the rather technical objection that the plaintiffs should have proceeded ex parte under section 7(3) of the PAO in obtaining their relief.

25.  Section 7 of the PAO provides as follows:

“(1) The court may, on motion or petition or otherwise, in a summary way, whether any proceedings are or are not pending in the court with respect to any probate or administration, order any person to produce and bring into the Registry, or otherwise as the court may direct, any paper or writing being or purporting to be testamentary which may be shown to be in the possession or under the control of such person.

(2) If it is not shown that any such paper or writing is in the possession or under the control of such person, but it appears that there are reasonable grounds for believing that he has knowledge of any such paper or writing, the court may direct such person to attend for the purpose of being examined in open court or upon interrogatories respecting the same, and such person shall be bound to answer such questions or interrogatories, and, if so ordered, to produce and bring in such paper or writing, and shall be subject to the like process of contempt in case of default in not attending or in not answering such questions or interrogatories, or not bringing in such paper or writing, as he would have been subject to in case he had been a party to an action in the court and had made such default.

(3)  The Registrar may, whether or not any proceedings are pending in the court, issue a subpoena requiring any person to produce and bring into the Registry any paper or writing being or purporting to be testamentary, which may be shown to be in the possession, within the power, or under the control of such person; and such person, upon being duly served with the said subpoena, shall be bound to produce and bring in such paper or writing, and shall be subject to the like process of contempt in case of default as if he had been a party to proceedings in the court, and had been ordered by a judge to produce and bring in such paper or writing.”

(emphasis supplied)

26.  Rule 49 of the Rules further provides that:

“(1) An application under section 7(1) of the Ordinance for an order requiring a person to bring in a will or to attend for examination may be made to a judge by summons, which shall be served on every such person as aforesaid.

(2)  An application under section 7(3) of the Ordinance for the issue by the Registrar of a subpoena to bring in a will shall be supported by an affidavit setting out the grounds of the application, and if any person served with the subpoena denies that the will is in his possession or control he may file an affidavit to that effect.”

(emphasis added)

27.  The Court of Appeal explained in Lau Cho Kun alias Lau Yu Chak v Lau Siang Kok Lionel [2013] HKCA 374 at paragraph 47 that: -

(1)     although sections 7(1) and (3) of the PAO cover the same kind of relief in requiring any person to produce and bring into the Registry testamentary documents, they are not invoked in identical situations;

(2)     where it is known that the document is in the possession, custody or power of a person who refuses to produce it, the simpler procedure under section 7(3) and rule 49(2) of the Rules is usually employed; and

(3)     the procedure in section 7(1) is invoked if it is believed that a person has knowledge of a testamentary document but will not make any statement on the matter, so he can be ordered for the purpose of being examined in open court or upon interrogatories under section 7(2). 

28.  It can be noted that the Court of Appeal merely described the procedure under section 7(3) to be the “simpler” procedure which is “usually” employed.  The court did not say that the situation set out in paragraph 27(3) above is the only situation where it is not employed.

29.  Given the Firm’s unjustifiable hostility in their letters, I agree it was most appropriate as well as proper for the plaintiffs to have proceed inter partes by issuing a Summons pursuant to section 7(1).  In so doing, no order would be made against the Firm without their knowledge and the court could consider any such consequential order and/or directions which should be made under section 7. 

30.  It would in fact have been quite inappropriate for the plaintiffs to proceed ex parte on the basis of factual evidence then known by them; they knew that the Firm would heavily dispute their account.  There was no urgency nor any need of secrecy to justify an ex parte application.  There was a material risk that the Firm would challenge the contents of the ex parte affidavit, or even apply to set aside any order of subpoena on the basis of alleged lack of full and frank disclosure, an allegation which is being made in Mr Chung’s Aff at paragraph 2(d). 

31.  In any event, the real issue to be considered by this court is whether section 7 of the PAO, rule 49 of the Rules and the Court of Appeal’s decision in Lau Cho Kun, ibid wouldhave the effect of precluding the plaintiffs from applying by Summons inter partes under section 7(1) as they did, and leaving them with the only option of proceeding ex parte for a subpoena to be issued against the Firm under section 7(3) despite all the associated detriments and potential risks as highlighted above.

32.  I agree that such proposition as advanced by the Firm is inconsistent with the express wordings in section 7 of the PAO and rule 49 of the Rules.  Nor could this extreme position be consistent with the legislative intent. 

33.  The observations made in Lau Cho Kun,properly understood, only mean that there is a simpler ex parte procedure available under section 7(3) which is suitable in some cases.  By no means does it require that even when faced with facts such as present in the present case, that the applicant should nonetheless be mandated to proceed ex parte. 

34.  In any event, if the Firm was genuine in agreeing to bring the original of the 1994 Will into court but only on the condition that the plaintiffs should have proceeded ex parte under section 7(3), they ought to have made it known to the plaintiffs shortly after the Summons was issued on 22 February 2019.  In that case the parties could agree to restrict their scope of arguments to the question of costs.  The Firm however did not do so. 

35.  For the above reasons, I am of the view that once the Summons had been issued and served on the Firm, the Firm was not entitled to insist that the Summons should be withdrawn, failing which the Firm would oppose the Summons.

D.     Disposition

36.  For the reasons stated above, I order that: -

(1)     The costs of and incidental to the Summons, down to the perusal of the same and the affidavit evidence in support, be to the Firm.

(2)     The costs of and incidental to the Summons thereafter, be to the plaintiffs.

37.  I order that all of the above costs should be taxed on the “party-and-party basis”, if not agreed.  I do not see anything in the parties’ conduct to make it “appropriate” to order taxation on an indemnity basis.

38.  As for the costs of this hearing, neither side has been wholly successful in advancing their respective positions.  In the circumstances, I order on a nisi basis that 50% of the costs of this hearing be paid by the Firm to the plaintiffs, such costs are to be taxed on the party-and-party basis if not agreed.

39.  The above costs order nisi shall become absolute in the absence of any application within 14 days to vary the same.

40.  Lastly, I express my gratitude to counsel on both sides for their helpful assistance in this matter.