CHINACHEM CHARITABLE FOUNDATION LTD v. CHAN CHUN CHUEN AND ANOTHER

HCAP 8/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE ACTION NO. 8 OF 2007

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BETWEEN

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JUDGMENT ON COSTS

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1.  In my judgment of 2 February 2010, I have made a costs order nisi. The parties made an application for variation of that costs order. The Plaintiff sought the following costs order,

(a)  Costs of the Plaintiff in the action be borne by the 1^st Defendant on indemnity basis;

(b)  Such costs of action shall include the costs of the administration pendente lite.

2.  Regarding (b), Mr Chang SC accepted that the costs of the administration pendente lite should be paid to the estate instead of the Plaintiff. Thus, counsel invited the court to order the 1^st Defendant to indemnify the estate for costs of such administration paid out of the estate.

3.  On the other hand, Mr Mill QC submitted that the 1^st Defendant should not be required to pay all the costs of the Plaintiff. It is argued that the Plaintiff failed on several issues and this court should apply the approach in In re Elgindata (No 2) [1992] 1 WLR 1207 and make an order that the Plaintiff pay the 1^st Defendant’s costs of such issues or at least deprive the Plaintiff of the costs on such issues. The issues in question are,

(a)  testamentary capacity;

(b)  testamentary intention; and

(c)  undue influence.

4.  Counsel further referred to some aspects as to the conduct of the Plaintiff’s case and submitted that the Plaintiff should be deprived of some of the costs. Mr Mill criticized the Plaintiff for starting the action without waiting for handwriting expert evidence on the 2006 Will. It is said that as a result, instead of basing its case on a plea of forgery, the Plaintiff pleaded and relied upon many other grounds to challenge the 2006 Will, none of which succeeded and some are inconsistent with the forgery plea. He submitted that costs spent on such issues should not be fallen upon the shoulder of the 1^st Defendant.

5.  In his oral submissions, Mr Mill further alluded to the Plaintiff’s defaults in the compliance with this court’s order for disclosure under the principle of Re Fuld and the change of legal teams. Counsel said these events resulted in the increase of costs incurred by the Plaintiff and it would be unfair to require the 1^st Defendant to pay for the additional costs.

6.  On a global basis, Mr Mill submitted that the Plaintiff should be deprived of 50% of its costs.

7.  In addition to these applications, the Secretary for Justice seeks an order that his costs in this action be paid out of the estate. Mr Chang submitted that such costs should be borne by the 1^st Defendant though he had no objection that such costs be paid out of estate with an order that the 1^st Defendant shall indemnify the estate for the same. Mr Mill submitted that the Secretary for Justice should not be involved in the dispute as to whether the 2002 Will or the 2006 Will should be admitted to probate and resisted an order that his costs should be paid out of the estate.

The costs of the Secretary for Justice

8.  I will first deal with the application of the Secretary for Justice. Mr Ho SC submitted that the 1^st Defendant had no locus to resist his application since, according to the judgment of this court, the 2002 Will is to be admitted to probate and the 1^st Defendant has no interest in the estate under that will. That analysis is correct but only insofar as one is confining to Mr Ho’s application. Mr Chang contended that the final incidence of such cost liability should fall on the 1^st Defendant. Thus, the 1^st Defendant does have an interest in the matter and I think fairness requires me to take into account of the submissions of Mr Mill on the question of the costs of the Secretary for Justice.

9.  The Secretary for Justice was joined as the 2^nd Defendant by the Plaintiff. Mr Chang explained that it was because the 2^nd Defendant had issued a caveat. But the proper way to deal with a caveat is to issue a warning to the caveator pursuant to Rule 44(7) of the Non-Contentious Probate Rules. The caveator will then be required to state whether he has an interest contrary to the person warning or whether he wishes to show cause against the sealing of a grant to that person. That procedure would clarify the extent to which the Secretary for Justice wishes to be heard in an application for grant on behalf of the Plaintiff.

10.  Mr Ho initially submitted that the Secretary for Justice is a necessary party to the probate action because of his role as representative of the parens patriae. My attention was drawn to Picarda, The Law and Practice relating to Charities 3^rd Edn p.694-695. That passage does not deal with probate actions specifically and in my experience, there are many cases where the Secretary for Justice was not joined as a party to probate actions even though one of the contesting wills included a bequest with a charitable element. However, if a compromise is reached in such a case, the Secretary for Justice would be notified and he would be asked to give his sanction to the terms of compromise, see Boughey v Minor [1893] P 181.

11.  Mr Ho then submitted that the present case is exceptional given the size of the estate and the public interest in it and the Secretary for Justice is properly made a party to the action. Further, Mr Ho reminded this court of a submission he had made as to the proper role of the Secretary for Justice in the present case with reference to Ware v Cumberlege (1855) 20 Beav 503 at p.500 to 501. Counsel said the Secretary for Justice has all along been following the approach laid down in that case and whenever the Secretary appeared in the course of this action, he only made submissions on point of general principles with a view to provide assistance in his capacity as parens patriae without descending into the arena as regards the dispute between the Plaintiff and the 1^st Defendant. The Secretary for Justice did not file any acknowledgment of service or pleadings and he took no part in the trial itself.

12.  I think it is reasonable and proper for the Plaintiff to join the Secretary for Justice as a party to this action. Quite apart from the caveat filed by the Secretary, the Plaintiff made it clear in the writ that the Secretary for Justice was joined in his position as parens patriae. Mr Mill contended that the size of the estate should not be a relevant consideration as regards the joining of the Secretary for Justice as a party. Whilst I do not think the size of the estate should be the determinative factor, I think it is relevant for the Plaintiff and the Secretary for Justice to take it into account. For an estate as large as the one we are dealing with, the Secretary for Justice as parens patriae cannot be criticized for taking a relatively more active role.

13.  Further, the action as it originally constituted did not simply focus on the validity of the two wills. Some construction issues were raised and the Secretary for Justice had a legitimate role to play in advancing submissions in that regard. The scope of the trial was cut down after some helpful submissions by Mr Ho as to its proper scope and thereafter the Secretary for Justice had incurred very little costs. After the judgment, the Secretary for Justice quite properly appeared by counsel to assist the court as regards what should be the terms of the order in respect of the grant of letters of administration.

14.  In the circumstances, I have no doubt that the Secretary for Justice should be entitled to recover his costs from the estate. The next question is whether I should order the 1^st Defendant to indemnify the estate as to such liability or, as suggested by Mr Chang, directly order the 1^st Defendant to pay the costs of the Secretary for Justice.

15.  I think even though this is not a case where the Plaintiff is suing the Secretary for Justice as an adversary, reference can be made to the applicable principles when the court made a Sanderson or Bullock orders. The jurisprudence pertaining to such orders illustrates that there are cases where a losing defendant may have to shoulder the costs of a successful co-defendant even though that co-defendant was not a necessary party to the claim between the plaintiff and the losing defendant. In Sanfield Building Contractors Ltd v Li Kai Cheong [2003] 3 HKLRD 48, the test applied by the Court of Final Appeal in deciding whether it is appropriate for a Bullock order to be made in a tort action is as follows: whether the two causes of action are in any way connected.

16.  In this action, I am not dealing with a claim by the Plaintiff of similar nature as the one considered in Sanfield Building Contractors. However, I have held that it was reasonable for the Plaintiff to join the Secretary for Justice and the part played by the Secretary in this action was reasonable. I also agree with Mr Chang’s submission that but for the 1^st Defendant’s attempt to propound the 2006 Will, the costs of the Secretary for Justice would not be incurred. There is a connection between the joining of the Secretary for Justice as a party to this action and the lis between the Plaintiff and the 1^st Defendant.

17.  In the circumstances, I think it is appropriate to order that the costs of the Secretary for Justice up to today shall be borne by the estate and the 1^st Defendant shall indemnify the estate of the same.

The costs of the administration pendente lite

18.  It is well settled that the liability for costs of a probate action in general covers the charges of an administrator pending determination of the action and the costs of the application for his appointment, see Williams, Mortimer & Sunnucks, Executors, Administrators & Probate (2008) para.24-59. The principle was applied by the Court of Final Appeal in Nina Kung v Wang Din Shin (No 2) (2006) 9 HKCFAR 800 paras.60 to 63.

19.  Mr Mill submitted that since the 1^st Defendant is appealing against my judgment, and it is probable that the administration pendente lite would continue until the disposal of the appeal, this court should not make any order for costs in that respect.

20.  I cannot accept this submission. Whilst I agree that administration pendente lite is likely to continue until a final grant is issued, in the absence of any order for stay of execution (and none has been made so far), it must not be assumed that the final grant would not be issued until the final disposal of the appeal.

21.  I do not think there is any restriction against a first instance court from making an order for costs with provisions for the costs of administration pendente lite even though an appeal is pending. As a matter of principle, such costs order, like the costs incurred in the first instance, should be made by the trial judge. If an order is made, it is up to the paying party to decide whether he would seek to appeal against such costs order and if he intends to appeal, whether he would seek a stay of execution of that order. Even if there were a stay of execution on the main judgment, the court may not grant a stay of execution in respect of the costs order: different considerations may be apply.

22.  In the present case, I will make an order that the 1^st Defendant shall pay the Plaintiff the costs of the application for the appointment of the administrator pendente lite and indemnify the estate the costs of the administration pendente lite.

Indemnity basis

23.  In The Public Trustee v Annous (1992) NSW Lexis 6832, Powell J ordered indemnity costs in a probate action against a party who, in the words of the learned judge, “sought to peddle as the Deceased’s will, [which] is a cold-blooded forgery produced by him with a view to obtaining a financial advantage for himself.”

24.  Mr Chang invited this court to impose the same sanction against the 1^st Defendant in view of my findings against him in my main judgment.

25.  Mr Mill submitted that there was no special or unusual feature in the present case that warrants the imposition of indemnity costs order. Counsel said it is a regular feature of our adversarial system that the court disbelieved the evidence of the losing party. Thus the rejection of the evidence of the 1^st Defendant and his witnesses should not be a ground for making a more stringent order as to costs against him.

26.  Counsel also invited the court to take into account of the unsatisfactory conducts of the Plaintiff. He referred to the lack of proper investigation by the Plaintiff before commencing the probate action; the putting forward of inconsistent and unmeritorious pleas; the unjustifiable change of the legal team, unsatisfactory discovery; and adducing evidence through last minute applications.

27.  Order 62 rule 5(1) sets out matters which the court should take into account (as may be appropriate in the circumstances) in the exercise of its discretion as to costs. One of the matters is the conduct of all the parties. Rule 5(2) provides that the conduct of the parties includes,

“(a)  whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

(b)  the manner in which a party has pursued or defended his case or a particular allegation or issue;

(c)  whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim; and

(d)  conduct before, as well as during, the proceedings.”

28.  As mentioned, Mr Mill invited the court to make an issue based costs order or a proportionate costs order on the grounds of the Plaintiff’s failure in pursuing several issues. Counsel also invited the court to take into account of the unsatisfactory manner in which the Plaintiff conducted the case. On an overall basis, Mr Mill submitted that the Plaintiff should be deprived of 50% of the costs.

29.  I will deal with these submissions in greater details when I consider whether an issue based costs order or proportionate costs order should be made. As far as the basis of taxation is concerned, though I bear in mind the criticism of Mr Mill as regards the conduct of the Plaintiff, the starting point for consideration must be the conduct of the Defendant. If the conduct of the Defendant does not warrant any sanction by a costs order on a higher basis than the usual party-to-party basis, there will be no issue on the basis of taxation.

30.  This is a probate court and it is the duty of this court to ascertain the true testamentary intention of a deceased. When a party seeks to propound a document as the last will with full knowledge that such a will is a forgery, in my judgment such conduct must be condemned and where appropriate, such condemnation could be reflected in the costs order. In this connection, it should be noted that my findings in the present case are much more unfavourable to the 1^st Defendant than the findings relied upon by the majority of the Court of Appeal in Nina Kung where an indemnity costs order was held to be justified. Unlike that case[1], I have found here that all the signatures on the 2006 Will were forged. Further, I have found that the 1^st Defendant was involved in the preparation of the Specific Bequest Will and he made up a story as regards Nina giving him the 2006 Will. In a nutshell, the necessary implication of the findings of this court is that the 1^st Defendant deliberately perpetuated a deception on the probate court with a view to obtain financial advantage by seeking probate to be granted on the 2006 Will.

31.  In Nina Kung[2], Yuen JA (with whom Yeung JA agreed) observed as follows[3],

“I do not think that in every case where a court rejects a purported will on the ground that the signature was not that of the deceased, the person seeking to propound it should be ordered to pay costs on an indemnity basis.  On the other hand, I do not consider that an actual finding of forgery by that person is a pre-requisite for such an order….  In my view the court must look at the facts of each individual case and if the evidence shows that the person seeking to propound the will has, in order to advance his own interests, knowingly participated in a dishonest design to put forward as a genuine will a document which was not, that may be a special and unusual feature such as to warrant an order for costs on the indemnity basis.”

32.  On the facts of Nina Kung, Her Ladyship said this at para.20,

“The Wife having intentionally made [the statement about the Deceased handing to her a sealed envelope containing the questioned will] on affirmation to advance her own interests based on documents found to have been fabricated, it is clear that this is a case where an order for costs on an indemnity basis is appropriate.”

33.  The dissenting judge, Waung J, disagreed with this particular observation, see paras.89 and 90 of the Nina Kung judgment on costs. His Lordship held the view that there was no clear evidence that the wife in that case knew that the questioned will was forged[4]. In other words, Waung J proceeded on the basis that the wife did not propound the questioned will with the knowledge that it was forged. That was the reason why His Lordship held that The Public Trustee v Annous (1992) NSW Lexis 6832 was distinguishable.

34.  Had it been a case of a party knowingly sought to propound a forged will, it is clear from Waung J’s own judgment that indemnity costs is appropriate. At para.86, the learned judge set out his understanding of Annous,

“The order of indemnity costs is therefore made on the basis of Annous participating in the forgery and knowing it to be a forged document.  On that basis the order of indemnity costs is explainable and understandable.”

35.  Then at para.87, he went on to say,

“To justify a finding of indemnity costs, it is necessary to have a finding by the court that the plaintiff potential beneficiary knew that the will was forged and still put it forward and sought to propound that forged will.”

36.  This is precisely the case here. I have reached a clear and firm conclusion that the 1^st Defendant was aware that the 2006 Will was a forged document when he sought to propound it before this court. In the light of that, it cannot be reasonable for the 1^st Defendant to pursue his Counterclaim and this is a highly relevant conduct.

37.  Further, the evidence which the 1^st Defendant gave in order to prosecute his Counterclaim is not confined to him lying about the circumstances under which he obtained the 2006 Will. In order to bolster his case on the authenticity of the 2006 Will, he told lies about his relationship with Nina, including the commencement of an intimate relationship. He was prepared to go to the extent of testifying to this court that he had never provided any Fung Shui services to Nina and he himself had never been well versed in Fung Shui matters despite he had offered Fung Shui courses to people interested in the subject. He also lied about the nature of the hole-digging activities he performed for Nina. Such a tactic necessitated the Plaintiff engaging in investigation and lengthy cross-examination on these aspects.

38.  Despite the evidence of the attesting witnesses about the nature of the document attested on 16 October 2002[5] and his original expert’s adverse findings[6] about the 2006 Will, and his own knowledge that the 2006 Will was not genuine, the 1^st Defendant chose to pursue with his prosecution of the Counterclaim. He was able to secure the service of Mr Westwood to give expert evidence in his favour. But this must be considered in the light of my finding that all along the 1^st Defendant knew that the 2006 Will was forged. Bearing this in mind, the engagement of Mr Westwood has to be regarded as another try-on attempt by the 1^st Defendant to deceive the court[7].

39.  Balancing these against the conducts of the Plaintiff to which Mr Mill drew attention, I am of the view that it is appropriate to order the 1^st Defendant to pay costs on indemnity basis.

Deduction on account of Plaintiff’s conducts

40.  In Nina Kung, the Court of Appeal ordered indemnity costs and deprived the successful party 25% of the same by reason of the unreasonable conduct of the case on his part. Thus, notwithstanding my conclusion on indemnity costs, I should examine whether Mr Mill’s criticisms of the Plaintiff’s conduct of the case warrant any deduction of costs payable to the Plaintiff.

41.  Mr Mill submitted that after the implementation of the Civil Justice Reform, the court should be more ready to apply an issue-based approach in awarding costs. Counsel referred this court to English authorities on this approach including the comments of Lord Woolf MR in AEI Rediffusion Music Ltd v Phonographic Performance Ltd [1999] 1 WLR 1507 at p.1522-1523 and Multiplex Constructions v Cleveland Bridge [2008] EWHC 2280 (TCC) where Jackson J reviewed many English cases decided since the introduction of the CPR. In the latter case, at para.72, His Lordship set out 8 principles for guidance. For present purposes, I only need to refer to some of them,

“(ii)  In considering how to exercise its discretion the court should take as its starting point the general rule that the successful party is entitled to an order for costs.

(iii)  The judge must then consider what departures are required from that starting point, having regard to all the circumstances of the case.

(iv)  Where the circumstances of the case require an issue-based costs order[8], that is what the judge should make.  However, the judge should hesitate before doing so, because of the practical difficulties which this causes and because of the steer given by r.44.3(7).

(v)  In many cases the judge can and should reflect the relative success of the parties on different issues by making a proportionate costs order.

(viii)  In assessing a proportionate costs order the judge should consider what costs are referable to each issue and what costs are common to several issues.  It will often be reasonable for the overall winner to recover not only the costs specific to the issues which he has won but also the common costs.”

42.  It should be noted that though we have introduced some changes based on the English CPR in our Civil Justice Reform, there are English provisions on costs which do not appear in our amended Order 62. CPR Part 44.3(6) and (7) are not included in our new rules. However, it is well settled even before the CJR that our courts have the power to award proportionate costs order and the discretion as to costs has often been exercised by reference to the approach in Re Elgindata Ltd (No 2) [1992] 1 WLR 1207. Even without a statutory steer similar to CPR Part 44.3(7), in my experience judges in Hong Kong usually made a proportionate costs order instead of an issue-based order as a matter of practicality.

43.  The post-CPR English authorities make it clear that in England it is no longer necessary for a party to have acted unreasonably or improperly before he can be required to pay the costs of the other party on a particular issue which he (the first party) has failed, see Summit Property Ltd v Pitmans [2001] EWCA Civ 2020.

44.  In pre-CJR Hong Kong, Yuen JA had regarded that to be the position in Thomas Vincent v South China Morning Post (No 2) [2004] 3 HKLRD 471. However, subsequently in Nina Kung, at para.40 Her Ladyship referred to the dicta of Lord Woolf in AEI Rediffusion and said,

“However, I fear I may have overstated the extent of Lord Woolf’s preparedness to depart from the Elgindata principles when in Thomas Vincent v South China Morning Post (No 2) [2004] 3 HKLRD 471 I suggested that where the successful party raises issues on which he fails, he may not only be deprived of his costs but may also be ordered to pay the other party’s costs, even though those issues may not have been raised improperly or unreasonably.  Under Order 62 rule 7(1) RHC, it is only where a successful party raises issues or makes allegations improperly or unnecessarily that he may be ordered to pay a part of the other party’s costs.”

45.  Nina Kung was a pre-CJR decision. With the implementation of CJR, can I therefore depart from Nina Kung and adopt the new English approach? Even though the CJR did not bring about any change in Order 62 Rule 7(1), there is now explicit reference to the conduct of the parties in the new Order 62 Rule 5(1) and the reasonableness to raise, pursue or contest a particular allegation or issue under Rule 5(2)(a). In my judgment, as observed in Re Elgindata Ltd (No 2), the general power of the court to adopt an issue based approach stems from Order 62 Rule 3(2) instead of the misconduct provision under Order 62 Rule 7(1)[9]. In the exercise of its discretion, after CJR, the court is directed to take into account of the matters set out in Rule 5(1) and (2).

46.  Thus, in deciding whether it is appropriate to depart from the costs follows event starting point, the court should address the two pertinent matters identified under Rule 5(2)(a) and (b). Elgindata principle (iii) remains relevant because unless the issue in question has caused a significant increase in the length or costs of the proceedings, it is generally disproportionate to embark on an enquiry as to whether an issue-based approach should be adopted, as such likely to be inconsistent with the underlying objectives in Order 1A rule 1(a) to (c). And the court is required to bear in mind these underlying objectives under Order 62 Rule 5(1)(aa).

47.  Insofar as a losing party is seeking costs on a particular issue, I am bound by Nina Kung to hold that by reason of Order 62 Rule 7(1) such party has to show that the issue was raised improperly or unnecessarily.

48.  Turning now to the matters relied upon by Mr Mill. Amongst the three challenges which Mr Mill said the Plaintiff had failed, I do not think the plea of undue influence has occasioned significant increase in the length or costs of the proceedings.

49.  As regards the plea of testamentary incapacity, the treating doctors gave evidence on the physical condition of Nina in October 2006, as such relevant to the preparation of the document executed on 16 October 2006 (and therefore relevant to the general credibility of the 1^st Defendant and the issue of forgery). There are several experts giving evidence on testamentary incapacity. To that extent, I accept that the plea have increased the costs of the proceedings.

50.  But I do not think it was improper or unnecessary for the Plaintiff to raise the issue. The provisions in the 2006 Will was inconsistent with the avowed testamentary intent of Nina made known to the siblings and friends for a long time. Even though the 1^st Defendant had a close relationship with Nina, all along Nina had not indicated that she would change her long held charitable testamentary intent. On 16 October 2006, Nina was in a weak state. Whilst the primary contention of the Plaintiff was that the 2006 Will was a forgery, I do not think the Plaintiff can fairly be criticized as acting improperly or unnecessarily for running an alternative case of testamentary incapacity in the circumstances. Thus, I would not order the Plaintiff to pay for the 1^st Defendant’s costs on this issue.

51.  Should I deprive the Plaintiff of some of its costs by reason of the failure in the challenge on testamentary incapacity? In the context of this question, I think one should consider the two specific aspects of conduct identified under Rule 5(2)(a) and (b).

52.  Mr Chang submitted that this court’s judgment on testamentary incapacity addressed a scenario not advanced by the Plaintiff. My finding was that Nina was not suffering from delirium when she executed the Specific Bequest Will on 16 October 2006. I did not address the question of testamentary incapacity regarding the 2006 Will (as I found it unnecessary to do so given my primary finding as to the nature of the document executed on that occasion).

53.  In the context of testamentary intent, I have explained in my main judgment why different conclusions can be reached depending whether the document executed on 16 October 2006 was the 2006 Will or the Specific Bequest Will[10]. Though I can see that a stronger case can be made out for a challenge to the testamentary incapacity regarding the 2006 Will as compared with a challenge to the Specific Bequest Will for the same reason, I do not feel able to say definitely, as I did in respect of testamentary intent, that the conclusion must be in favour of the Plaintiff. The primary question for a challenge based on testamentary incapacity, irrespective of the nature of document executed on that occasion, is still whether Nina was suffering from delirium and the expert evidence would be the same.

54.  Mr Chang further submitted it was reasonable for the Plaintiff to investigate the issue of testamentary intent in the circumstances of the case. Counsel said it was due to the 1^st Defendant’s attempt to propound a forged will purportedly executed by Nina when she was in weak condition that led to the Plaintiff’s investigation. Counsel also referred to In the estate of Anita Mui Yim Fong HCAP 2 of 2004, 20 November 2008 to support his contention.

55.  In the estate of Anita Mui Yim Fong HCAP 2 of 2004 was a case where the party failed in a challenge was not ordered to pay costs of the successful party. The court was not dealing with a scenario where a successful party failed on some alternative heads of challenge. However, it is helpful to be reminded by what Cheung J said at para.7 of that judgment,

“Although at the end of the day, the Court was fully satisfied that the Will was validly made, it does not meanthat prior to the trial, the circumstances surrounding the making of the Will had been absolutely clear.”

56.  The Plaintiff had no personal knowledge as regards the nature of the document executed on 16 October 2006. It relied upon the evidence of the attesting witnesses, the handwriting expert and other circumstantial evidence to establish its challenge based on forgery. But the Plaintiff could not be said to be acting unnecessarily by raising alternative challenges. The estate is a large one and if there were arguable alternative challenge to the 2006 Will (which is wholly inconsistent with the avowed testamentary intent of Nina) the Plaintiff could not be blamed for raising the issue for the consideration of the probate court.

57.  There is medical evidence supporting a challenge based on testamentary incapacity. The treating doctors were not willing to certify that Nina had testamentary capacity at the material time. The Plaintiff was able to obtain evidence from well known experts supporting its case. In the end, the resolution of the matter depends very much on the court’s assessment of the expert opinions at the trial against what had happened at the relevant period. Further, the Plaintiff was hampered by the 1^st Defendant’s telling lies about (and thus, withholding of relevant information on) how the document came to be prepared. I agree with Mr Chang that in the circumstances it was reasonable for the Plaintiff to pursue the challenge.

58.  The expert evidence on testamentary incapacity took up 2 days in a trial which lasted for 40 days. Though I was not told about the actual costs incurred for those two days and the earlier preparation of the evidence (including the fees charged by the experts), given the level of legal representation and the experience of the experts engaged I can assume that such costs were substantial. But I do not think the Plaintiff acted in an unreasonable manner in pursuing this head of challenge. On the contrary, I find that the parties had been conducting this part of the case (as in most aspects of this piece of litigation) in a very efficient and responsible manner.

59.  On the whole, I do not think the Plaintiff should be deprived of the costs of this challenge. But I am of the view that it would be unfair to require the 1^st Defendant to pay the costs of the Plaintiff for those two days and the costs of the Plaintiff incidental to the calling of the experts on testamentary incapacity. I will order that such costs of the Plaintiff shall be paid out of the estate. On the other hand, the 1^st Defendant shall pay his own costs of and incidental to his experts on testamentary incapacity. For the avoidance of doubt, the costs I have so truncated from the general costs of the action are confined to the costs of and incidental to the experts specified below and they would not be extended to the costs of the evidence of the treating doctors and general events during the relevant period. The experts I have in mind are,

(a)  Professor Jones;

(b)  Dr Leung.

60.  Turning next to the issue of testamentary intent, I do not think it is correct to say the Plaintiff had failed on the Fung Shui will challenge regarding the 2006 Will. I have held specifically that had I concluded as a matter of fact that the document executed on 16 October 2006 was the 2006 Will instead of the Specific Bequest Will, I would have found that it was executed by Nina without any testamentary intent[11]. I did not find it necessary to embark on a discussion whether on that scenario the 2006 Will was made for Fung Shui purposes as the factual basis for such consideration is lacking[12]. But I did observe that there was great support for the Plaintiff’s case on Fung Shui will as far as the 2006 Will is concerned[13].

61.  Like the challenge based on testamentary incapacity, I do not think the Plaintiff should be criticized for raising that alternative plea. Nor do I find the Plaintiff conducted its case under this head in an unreasonable manner. It must be borne in mind that the question of Fung Shui is also relevant to the capacity in which the 1^st Defendant related to Nina and his general credibility.

62.  In the circumstances, the Plaintiff did not act unreasonably or improperly or unnecessarily in running the Fung Shui will case against the 2006 Will. I do not see any ground for treating the costs under this head separately from the costs of the action generally.

63.  Mr Mill criticized the Plaintiff for not raising the issue of forgery earlier and he submitted that had the Plaintiff properly prepared the case on forgery before issuing the writ, these alternative pleas, being inconsistent with the primary case of forgery, would not be raised. On that basis, counsel submitted that the court should draw a temporal line as from the date when the forgery plea was added (viz. 14 April 2009) and ordered the Plaintiff to pay the costs of the 1^st Defendant before that date and the 1^st Defendant to pay the Plaintiff’s costs after that date.

64.  With respect, that submission is fundamentally flawed. First, I do not see any basis for suggesting that had the forgery plea been raised when the writ was issued, the alternative pleas of testamentary incapacity, testamentary intent and undue influence would not be raised. As mentioned, I do not find the Plaintiff to be unreasonable in putting forward these alternative pleas. So long as a party acted reasonably in raising alternative pleas, I do not see any reason why he should be deprived of some of his costs on the ground that at the end of the day he could only succeed on one of the several inconsistent alternatives.

65.  Second, it does not lie in the 1^st Defendant’s mouth to say that the forgery case should have been raised earlier when he had been contesting that issue to its bitter end. The 1^st Defendant is not saying that had the forgery plea been raised from the beginning he would not propound the 2006 Will for probate. Further, as Mr Chang submitted, the 1^st Defendant bore the legal burden of proof in satisfying the court that the 2006 Will was genuine. In the light of the evidence of Winfield Wong on partial will, even without a positive plea of forgery, the 1^st Defendant was aware that authenticity of the 2006 Will was an issue. That was the understanding of counsel for the 1^st Defendant when this court enquired about why it was necessary for handwriting experts to be called at the direction hearing on 10 November 2008.

66.  Third, as I have explained, the Plaintiff acted reasonably in raising the alternative pleas of testamentary intent and testamentary capacity and conducted its case regarding such pleas reasonably. In the present circumstances, I do not think the timing of the addition of the forgery plea has any bearing on the proper costs order to be made.

67.  Mr Mill also complained about the Re Fuld discovery and the change of the legal team on the part of the Plaintiff. He submitted that these unreasonable litigation conducts on the part of the Plaintiff had increased the costs of the Plaintiff and the 1^st Defendant should not be liable for the same.

68.  In respect of the Re Fuld discovery, I have made my order for costs concerning the actual application heard by the court. The Plaintiff would not get the costs of the application from the 1^st Defendant. Regarding the defaults in the compliance with my order (including the costs of the advices from the Plaintiff’s legal advisers) and the resulting interruption of the main trial, I accept there may be some increase in costs on that account and it would be unreasonable to require the 1^st Defendant to pay for the same. Even though I have ordered the 1^st Defendant to pay costs on indemnity basis, the Plaintiff would not get costs unreasonably incurred. In my view, the additional costs incurred by the Plaintiff as a result of its failure to comply with my order on Re Fuld discovery should be disallowed as costs unreasonably incurred. I trust that the taxing master will be guided by this judgment and there is no need for any further deduction to be made at this stage.

69.  As regards the change of the legal team, I do not know whether that has resulted in additional costs incurred by the Plaintiff. The Plaintiff explained that the change was brought about by financial constraints. Insofar as the change has resulted in additional costs incurred unreasonably by the Plaintiff that could be dealt with by the taxing master in the course of taxation. Again, I see no need for any further deduction at this stage.

70.  There were two failed applications on the part of the Plaintiff to introduce further evidence during the trial. I have made my order as to costs regarding the application concerning the evidence of Vincent Kwok. For the application concerning the notes of Leung Kim Ho, I will order the Plaintiff to pay the 1^st Defendant’s costs of that application.

71.  On the whole, apart from the qualifications at paragraphs 59 and 70 above, and subject to costs orders previously made, I order the 1^st Defendant to pay the Plaintiff’s costs of this action on indemnity basis without further deduction.

Certificate for 5 counsel

72.  The Plaintiff seeks a certificate for 5 counsel. The 1^st Defendant opposed. 4 counsel were engaged by the 1^st Defendant.

73.  The Plaintiff engaged a Criminal Silk to cross-examine the 1^st Defendant. Whilst I am grateful for the assistance rendered by Mr Lok SC, I do not think the 1^st Defendant should be required to pay for the costs of 5 counsel.

74.  I will certify for 4 counsel.

Costs of the applications

75.  The Plaintiff and the Secretary for Justice are largely successful in the application to vary the costs order nisi. On the other hand, the Plaintiff should not have pressed for the determination of the grant of letters of administration.

76.  Thus, I order the estate to pay the costs of the Secretary for Justice for the hearing on 17 March 2010 and the 1^st Defendant to indemnify the estate for the same.

77.  Also, I order the 1^st Defendant to pay 80% of the costs of the Plaintiff in respect of the hearing on 17 March 2010. Like the costs of the action, such costs are to be taxed on indemnity basis.