TAM MEI KAM v. HSBC INTERNATIONAL TRUSTEE LTD AND OTHERS

HCAP 2/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE ACTION NO. 2 OF 2004

----------------------

----------------------

----------------------

----------------------------------------

J U D G M E N T

--------------------------------------

1.  On 16 June 2008, the Court handed down a judgment in this probate action.  The Court was satisfied that the Will propounded by the 3^rd defendant was the true and last will of the deceased.  The Court also made a declaration that the Karen trust is and was, at all material times, a valid trust.  The facts and the Court’s reasons for judgment have been fully set out in the judgment and I shall not repeat them here.

2.  In my judgment, I made an order nisi that, with the exception of the plaintiff, the costs of all parties be borne by and paid out of the estate of the deceased, to be taxed if not agreed on a common-fund basis.  As for the position of the plaintiff, I made an order nisi that there be no order for costs for or against her.  In other words, she would have to be responsible for her own costs.

3.  I have now two applications to vary the costs order nisi.  One is made by HSBC being the 1^st and 2^nd defendants in this action in different capacities.  HSBC essentially asks for costs to be payable to it on a trustee basis rather than on a common-fund basis.  Having considered the submission made by counsel on behalf of HSBC and, bearing in mind that HSBC has been involved in this litigation as the executor and trustee named in the Will of the deceased, as well as the trustee of the Karen trust, I am of the view that Mr Chan is correct in submitting that the appropriate basis of taxation should be that of a trustees basis.  So, to that extent, I am prepared to vary my costs order nisi.

4.  So far as the plaintiff's position is concerned, I took the view in the judgment that her case, broadly speaking, fell within the second exception to the general rule that costs generally follow the event where opposition to a will is unsuccessful, a topic which has been discussed in great detail by Ribeiro PJ in the Court of Final Appeal decision in Nina Kung v Wang Din Shin (No 2) (2006) 9 HKCFAR 800, in which event the proper order is no order as to costs. 

5.  I have considered the written submission made by the plaintiff in support of her application to vary the costs order nisi so as to obtain her costs from the estate in the same way as the other parties to this litigation.  The main point of the plaintiff’s submission is that it was reasonable, in light of the circumstances surrounding the death of the deceased, particularly her medical condition at around the time of the making of the Will, for her to question the validity of the Will and to commence the present litigation. 

6.  I am with the plaintiff to the extent that I have just indicated.  Indeed, as has been explained in Nina Kung (No 2), the second exception to the general rule is where circumstances led reasonably to an investigation of the will’s validity, in which case there would be no order as to costs. 

7.  Given the circumstances of the deceased, in particular her medical condition at around the time of the making of the Will, there were, in my view, circumstances which led reasonably to an investigation of the Will’s validity.  Although at the end of the day, the Court was fully satisfied that the Will was validly made, it does not mean that prior to the trial, the circumstances surrounding the making of the Will had been absolutely clear. 

8.  So, as I say, to that extent, I am in agreement with the plaintiff.  What, however, the Court cannot do, in a case falling within the second exception, is to award the unsuccessful opponent to the will his or her costs of the proceedings.  As has been explained in Nina Kung (No 2), in a case falling within the second exception, the appropriate costs order is no order as to costs.  That has been precisely the order that I made by way of a costs order nisi in the judgment.  I see no reason to vary that part of the costs order nisi. 

9.  It has been pointed out to the Court that, in fact, the plaintiff had taken various other points including an allegation of undue influence against the opposite parties to this litigation, which either failed after trial or were abandoned in the course of the litigation.  I have not lost sight of those facts.  However, in view of the personal, particularly, financial circumstances of the plaintiff, I was, when making the order nisi, prepared to overlook these matters in the hope that the defendants would also share my sentiments.  I am glad to say that none of the defendants has found it necessary to ask the Court to vary the costs order nisi to an extent which would reflect all these matters. 

10.  In those circumstances, the fairest order to make in relation to the plaintiff’s costs of these proceedings, would be to maintain and make absolute the relevant part of my costs order nisi.  In other words, the costs order that I make absolute is as follows:

(a)  The costs of HSBC as the 1^st and 2^nd defendants be borne by and paid out of the estate of the deceased, to be taxed if not agreed on a trustee basis;

(b)  The costs of the 3^rd and 4^th defendants respectively, be borne by and paid out of the estate of the deceased, to be taxed if not agreed on a common-fund basis;

(c)  There be no order as to costs for or against the plaintiff.  In other words, she shall be responsible for her own costs of this litigation.  

11.  As regards the costs of today’s applications, they form part of the costs of the litigation and shall be dealt with accordingly.