ANMOL KUMAR SAWLANI AND OTHERS v. YESHMA GOBINDRAM SAWLANI AND OTHERS

HCAP 13/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE ACTION NO 13 OF 2014

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DECISION
ON VARIATION OF COSTS ORDER NISI

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INTRODUCTION

1.  This is about the defendants’ applications for variation of the order costs nisi made by this court in the Judgment handed down on 27 September 2017.  The background of the case has already been given in the Judgment which I will not repeat.   

2.  There were 3 issues at the trial which, for the present purpose, can be conveniently referred to as (i) the will issue; (ii) the rectification issue; and (iii) the passing-over issue.  Having heard the evidence and submissions of the parties, this court made the following orders in favour of the plaintiffs in respect of the 3 issues:

(1)   a declaration that the 1997 Will be deemed to be duly executed and embodied the testamentary intentions of the Deceased under s 5(2) of the Wills Ordinance;

(2)   the 1997 Will be pronounced in solemn form;

(3)   a declaration that the 1997 Will ought to be rectified and read and construed as if it contained and had at the time of its execution contained P1’s real middle name of “Kumar” in place of “Gobindram”;

(4)   an order that Mr Chin Choon Onn, Chris and Mr Ted Osborn, both of them partners of PWC, be appointed to act as administrators of the Estate and to apply for a grant of Letters of Administration; and

(5)   there be liberty to apply for directions regarding the administration of the Estate.

3.  As regards costs, as noted in the Judgment, the defendants did not actively oppose the deemed due execution of the 1997 Will and the rectification of P1’s name in that will.  On the other hand, they had not given their consent either.  There was therefore a necessity to have a hearing on those issues.  It was also noted that D1 in effect objected to the passing over, although he said in court that he did not object to the appointment of an independent person as administrator to administer the Deceased estate together with him.  D2 and D3 supported the plaintiff’s application for passing over which occupied much of the court’s time.  Having regards to the issues in dispute, the respective stances taken by the parties and the result of the case, an order nisi was made that D1 was to pay three-fourth of the plaintiffs’ costs and D2 and D3 were jointly to pay one‑fourth of the plaintiff’s costs, to be taxed if not agreed, with counsel’s certificate. Needless to say, the costs order nisi was made without the benefit of submissions from the parties.

4.  D2 and D3 now apply that the order nisi be varied to the extent such that they would not be required to pay the plaintiffs’ costs.  They also ask that D1 pay half of their costs regarding the passing-over issue. Reliance is placed on Nina Kung v Wang Din Shin (No 2)[1] and also O62 r6(1)(c) of RHC[2]. 

5.  D1, on the other hand, applies for a variation so that all the costs would be paid out of the estate of the Deceased.

6.  Mr Lynn, counsel for the plaintiffs, opposes the applications for variation on the basis that there are no reasons to depart from the general rule that costs should follow the event and submits that the matter is entirely within the court’s discretion to make the costs order nisi as it did. 

RELEVANT LEGAL PRINCIPLES

7.  In Nina Kung v Wang Din Shin (No 2), it was held that the award of costs between parties in contested probate proceedings was in the court’s discretion. While costs generally followed the event where opposition to a will was unsuccessful, two exceptions existed: (a) where the conduct of the testator or the residual beneficiary was the sole or dominant cause of the litigation, the costs would come out of the estate (the first exception); and (b) where circumstances led reasonably to an investigation of the will’s validity, there would be no order as to costs (the second exception). The two exceptions overlapped. 

8.  It was also held in the aforesaid case that even if a case fell prima facie within the two exceptions, if opposition to the will went 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, costs were likely to follow the event. Order 62 r 6(1)(c) of RHC implicitly recognised this.  It was also held that in judging whether the party opposing the will comes within either exception, the court “must look at the facts and view them as they were presented to the unsuccessful party”.  However, it must be understood that this does not justify an ill-considered and precipitous decision not litigate in opposition to a will.  The courts have emphasized that “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.  

CONSIDERATION

9.  For the sake of convenience of discussion, I will deal with the submissions of the parties issue by issue.

The Will Issue

10.  As already noted in the Judgment, the matter was not about the validity of either the 1996 Will or the 1997 Will, as none of them met the formal requirements of a will.  The issue was really about which one, if any, of them truly represented the testamentary intention of the Deceased.  For the reasons given in the Judgment, this court has found that in favour of the 1997 Will. 

11.  At the present hearing, Mr Lynn seemed to suggest that the second exception to the general rule as stated in Nina Kung is not applicable to the present case which was not about “validity” but about “deemed due execution”.  With respect, I am unable to subscribe to that submission.  In my view, the considerations on costs discussed in Nina Kung are also pertinent to the present case which is also covered by the policy considerations behind O 62 r 6(1)(c) of RHC. 

12.  Turning to the present case, the fact was that neither the 1996 Will nor the 1997 Will had been validly witnessed and, as regards the 1997 Will, there was an added difficulty that it was witnessed by the 2^nd plaintiff alone which was not a disinterested party.  On the other hand, the Deceased’s safe deposit box in Malaysia was opened by the 2^nd plaintiff without the presence of any independent witnesses so that the defendants were not in a position to confirm whether there had been any other wills.  In view of the above, I agree with the submissions of D2 and D3 that there were circumstances which led reasonably to an investigation about the two Wills.  Therefore, the defendants had not acted unreasonably by not conceding the will issue.  

13.  As regards the respective stance taken by the parties at the hearing, the following is of note:  

(a)   Even the plaintiffs had shown a degree of uncertainty in that they had put their case on alternative bases, asking the court to declare that either the 1996 Will or the 1997 Will represented the last testamentary intention of the Deceased. I consider D2 and D3 has raised a valid point here, namely, if even the plaintiffs were not certain, then why should the defendants be certain?

(b)   Although D1 had counterclaimed that the 1996 Will be pronounced in solemn form and that D2 and D3 had queried in their defence whether the 1997 Will was the last will of the Deceased, as a matter of substance none of the defendants had actively contested the will issue or put forward any positive case at the trial. In fact, none of the defendants had gone beyond putting the plaintiffs to strict proof on the issue.

(c)   All the defendants agreed that both of the 1996 Will and 1997 Will were signed by the Deceased and that the 1997 Will was in the Deceased’s handwriting.

14.  Having considered the submissions of the parties, I am of the view that the defendants had acted reasonably by taking the stance as they did. I agree that they simply put the plaintiffs to strict proof on the issue and that there was no fundamentally hostile litigation.  I am persuaded therefore that there should be no costs on this issue.

The rectification issue

15.  As noted in the Judgment, there was in fact no dispute that the Deceased meant P1 when he referred to “Anmol G. Sawlani” in the 1997 Will.  As such, the application for rectification was unopposed.

16.  In the circumstances, it is only fair that there be no costs on this issue.

The passing-over issue

17.  This was the real and substantial dispute at the trial which occupied the majority of the court’s time. 

18.  I note that not only the plaintiffs, but also D2 and D3 in their counterclaim asked that D1 be passed over as executor and they sought costs in their counterclaims.  At the trial, D2 and D3 supported the plaintiffs’ application for passing D1 over and they also cross-examined D1 on this issue. D1 defended and argued that he should not be passed over as it was the Deceased’s wish that he be appointed as the executor.  Therefore, as far as this issue is concerned, it was an adverse claim made in hostile ligation and D2 and D3 (together with the plaintiffs) should be viewed as winning parties: Cheung Pui Yuen v Worldcup Investments Inc.[3]

19.  I note also that although D2 and D3 acted in person at the trial, they had at the early stage of the proceedings been legally represented. In the circumstances, D2 and D3 should also be entitled to costs from D1 on this issue.  

20.  D2 and D3 had asked that D1 pay 50% of their costs concerning the passing-over issue.  I agree that this is a reasonable request.

CONCLUSION

21.  Having the benefit of the submissions of the parties, and having looked at the matter in the round, I am persuaded that the costs order nisi should be varied and that the costs order should be made on an issue-by-issue basis as follows:

(a)   there be no order as to costs on the will issue;

(b)   there be no order as to costs on the rectification issue; and

(c)   D1 is to pay the plaintiffs’ costs on the passing-over issue, with certificate of counsel, to be taxed if not agreed;

(d)   D1 is to pay 50% of the costs of D2 and D3 on the passing-over issue, to be taxed if not agreed.

22.  D2 and D3 do not ask for costs of their present application.  In the circumstances, I make no order as to costs of the applications for variation of the costs order nisi.