LAM WAI LIK ERIC AND OTHERS v. TAM SUET MUI

CACV 10/2021

[2023] HKCA 1353

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 10 OF 2021

(ON APPEAL FROM HCAP NO 5 OF 2015)

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J U D G M E N T

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Hon Yuen JA:

Background

1.  On 14 November 2023, this court handed down a Judgment¹ (“the CA Judgment”) dismissing with costs the defendant’s appeal from the judgment of Wilson Chan J (“the judge”) given on 14 December 2020² (“the CFI Judgment”). 

2.1.  In the CFI Judgment, the judge pronounced for the 1987 Will of the deceased in solemn form and dismissed the defendant’s counterclaim in which she sought to propound either one of two later wills (“the 1999 Will” and “the 2005 Will”).

2.2.  The judge rejected the plaintiffs’ contentions that the 1999 Will was not authentic and was not signed by the deceased, but found that he did not have the requisite testamentary capacity.  The judge also found that the deceased had neither testamentary capacity for, nor knowledge or approval of, the 2005 Will. 

2.3.  The judge made a costs order nisi that the defendant pay the plaintiffs’ costs of the action, which both parties then applied to vary. 

3.1.  Shortly before the hearing of the appeal (16 May 2023), on 28 April 2023 the judge handed down his decision making a costs order absolute that the costs of the action do follow the event, varying his costs order nisi only to the extent that the plaintiffs be entitled to certificate for two counsel, with legal aid taxation for a specified period of time (“the CFI Costs Decision”).

3.2.  By a summons filed the day before the hearing of the appeal, the defendant proposed to appeal the CFI Costs Decision by way of a Supplementary Notice of Appeal (“the proposed costs appeal”) in which the defendant sought the following orders:

(a) that the defendant’s costs relating to the issue of forgery of the 1999 Will (including costs occasioned and thrown away by the adjournment of the trial, originally listed to start in September 2018) be borne by the plaintiffs, to be taxed if not agreed;

(b) there be no order as to the plaintiffs’ own costs relating to the issue of forgery of the 1999 Will (other than legal aid taxation);

(c) the defendant’s costs of the action relating to the propounding of the 1999 Will, other than costs relating to the issue of forgery of the 1999 Will, be borne by the deceased’s estate;

(d) the plaintiffs’ costs of the action relating to the opposition of the 1999 Will (except relating to the issue of forgery of the 1999 Will) be borne by the deceased’s estate.

3.3.  At the hearing of the appeal, we decided that as the parties had not filed submissions relating to the summons, we would give directions in the Judgment for the proposed costs appeal. 

3.4.  Accordingly in our Judgment, we gave leave to the parties to file submissions on the proposed costs appeal within 14 days of the date of the Judgment.

3.5.  On 28 November 2023, both parties filed submissions for the proposed costs appeal. 

Discussion

4.  As mentioned above, the judge ordered that the costs of the action should follow the event.  

-  The defendant’s submissions

5.  In (a) and (b) above, the defendant essentially contends³ that the judge should have “hived off” the costs relating to the issue of the authenticity of the 1999 Will⁴ (“the authenticity issue”) and ordered that (a) the plaintiffs should pay her the costs of that issue, and (b) the plaintiffs’ costs of that issue should be disallowed.  (Although the parties have not particularised the costs incurred for that issue, one can reasonably assume that where expert reports and expert evidence on handwriting and ink are adduced at a trial, there would have been a significant increase in the length and the costs of the proceedings)⁵.    

- The plaintiffs’ submissions

6.1.  The plaintiffs however submitted that the following circumstances surrounding the authenticity issue should be taken into account.

6.2.  When the plaintiffs commenced the probate action in 2015, the defendant had in her counterclaim sought to propound only an engrossed copy of the 1999 Will.  The defendant’s case was that the original of the will (attested by a solicitor Mr Kam and an articled clerk Mr Kung, and executed at the office of Woo Kwan Lee & Lo) was taken away by the deceased, and later given to Ringo Ho of Ho & Partners for “safe keeping”, but who then lost it. 

6.3.  Ringo Ho however denied that he had ever received the 1999 Will⁶.  He was served with a subpoena by the defendant’s solicitors to testify at the trial which was fixed for 20 days commencing 2 October 2018. 

6.4.  However on 14 September 2018⁷, Ringo Ho said he found the original will⁸.  On 21 September 2018, the defendant applied to amend her defence and counterclaim to plead that she wished now to propound the original will.

6.5.  The plaintiffs then sought an adjournment of the trial for forensic examination of the original will.  Both sides sought the advice of experts on handwriting and ink, and both sets of experts gave evidence at the trial.  During the adjournment, on 1 November 2018, the defendant filed the affirmation of Mr Kam deposing to his attestation of the 1999 Will.

7.  In the CFI Judgment, the judge found in favour of the defendant on the authenticity issue for reasons set out in §§87 - 123.  In a nutshell, the judge preferred the evidence of the defendant’s expert witnesses, and took into account the testimony of Mr Kam and Mr Kung on their attestation of the 1999 will.

- The relevant rules of court

8.  The relevant rules are contained in Order 62 rules 5, 6 and 7 RHC.  Briefly,

-  r.7 provides for costs to be deducted from, or paid by, a party if they arise from his misconduct or neglect (“where any thing is done or omission is made improperly or unnecessarily”),

-  r.5 provides that the court in exercising its discretion as to costs, “shall, to such extent, if any, as may be appropriate in the circumstances”, take into account the conduct of all the parties (r.5(1)(e)) which includes whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue (r.5(2)(a)), and

-  r.6 (specifically applicable to probate actions) provides that “notwithstanding anything in this Order ..., unless the court is of opinion that there was no reasonable ground for opposing the will”, a party opposing a will should not be ordered to pay costs if he has notified the proponent that he “merely insists upon the will being proved in solemn form of law and only intends to cross-examine the witnesses produced in support of the will”.     

- Principles to be applied in the exercise of discretion

9.1.  The principles applicable to the award of costs between parties in contested probate proceedings were set out by the Court of Final Appeal in Nina Kung v Wang Din Shin (No.2)⁹. Ribeiro PJ held:  

-  the award of costs is in the court’s discretion: §10;

-  the general rule in the exercise of discretion is that where opposition to a will is unsuccessful, costs should follow the event: §11; 

-  however,

(i)   if the litigation was caused by the conduct of the testator, the costs should be paid from the estate; and

(ii)  if circumstances had led reasonably to an investigation of the will’s validity, there should be no order as to costs: §12;

-  having said that, if opposition to the will went beyond putting the proponent to strict proof, and took the form of hostile litigation, the court should revert to the general rule that costs follow the event: §15; examples of “fundamentally hostile” litigation were pleas of forgery, fraud or undue influence: §§16-17, and this applies even if the opponent had a reasonable basis for taking the hostile position adopted: §18.

9.2.  In that judgment, which was given before the promulgation of the Civil Justice Reform and before Order 62 rule 5 was amended¹⁰, the CFA was not called upon to consider whether a court in a probate action should also apply the Elgindata¹¹ issue-based approach where a party opposes a will on a number of grounds, and fails on one (forgery) but succeeds on another (testamentary capacity). 

10.1.  In Chinachem Charitable Foundation Ltd v Chan Chun Chuen and anor¹², a probate action, Lam J (as he then was) was asked to apply an issue-based costs order, alternatively a proportionate costs order, in relation to issues on which the plaintiff was unsuccessful.  In that case, the 1^st defendant was found to have fabricated the will he was seeking to propound, but he argued that as the plaintiff was unsuccessful on (1) undue influence, (2) the testatrix’s testamentary capacity and (3) the testatrix’s testamentary intent, that should be reflected in the costs order.

10.2.  Lam J noted that O.62 r.5 RHC had been amended after the CFA judgment such that a court should address the matters raised in that rule.  He held that insofar as a losing party is seeking costs on a particular issue, he was bound by Nina Kung to hold that by reason of O.62 r7(1), that party has to show that the issue was raised improperly or unnecessarily (§47).

10.3.  In relation to the 3 issues, he held that:

-  in respect of issue (1), it was dealt with shortly and did not add to the costs (§48),

-  in respect of issue (2), he held it was not improper or unnecessary for the plaintiff to raise it, so he did not order the plaintiff to pay the 1^st defendant’s costs of that issue (§50), but ordered its costs of that issue to be paid, not by the 1^st defendant, but out of the estate (§59);

-  in respect of issue (3), he also held it was not improper or unnecessary for the plaintiff to raise it and saw no ground for treating the costs for this issue separately from the costs of the action generally (§62).

11.  With great respect, I take the view that Nina Kung should now be read in the light of the amendment to O.62 r.5.  It is clear from a comparison between r.5 in 2006 and r.5 now, that the court is no longer confined to a consideration under r.7 of whether an issue has been raised “improperly or unnecessarily”. Rules 5(1)(e) and 5(2)(a) now require the court to take into account the conduct of all the parties, including whether it was “reasonable” for a party (eg the plaintiffs in this case) to raise a particular issue (eg the authenticity of the 1999 Will) in all the circumstances of the case (including on the one hand, the re-discovery of the original of the 1999 Will after Ringo Ho’s initial denial of possession, and on the other hand, Mr Kam’s affirmation of 1 November 2018). 

12.1.  In the CFI Costs Decision, the judge referred to the CFA Judgment in Nina Kung but held:

“8. Having considered the submissions of the parties, I am satisfied that there were circumstances which led reasonably for the plaintiffs to require the authenticity of the original of the 1999 Will to be investigated by the court. The plaintiffs had acted and undertaken the litigation reasonably. They were the ultimate winners with regard to the 1999 Will.

9. The long and short of it is that the issue of authenticity only arose less than 2 weeks before the commencement of the original trial as prompted by the “sudden re-discovery of the original of the 1999 Will upon which the question of authenticity is a reasonable and natural question to be answered by the defendant”. (Italics added).

12.2.  Although there was no reference to r.5, the reference to “reasonableness” (as opposed to the r.7 reference to “improper or unnecessary”) indicates that the judge did take r.5 into account. 

13.  A costs order is of course a matter for the judge’s exercise of discretion, and it is well-established that an appellate court would not interfere unless there was an error in law, or misapprehension of material facts, or where the judge had failed to take a relevant matter into account, or where he had taken an irrelevant matter into account, or where the decision was plainly wrong.  The weight given to one factor over other factors is also a matter for the judge.

14.1.  In the present case, the judge emphasized the “sudden re-discovery of the original of the 1999 Will”.  In the defendant’s challenge to this, it was argued that:

-  as early as November 2018, Mr Kam had made an affirmation deposing to his attestation of the 1999 Will, and

-  the initial disappearance of the original will was caused by Ringo Ho, not by her.

14.2.  First, in my view the judge was entitled to place weight on the sudden re-discovery of the original will, as the production of an original will (as opposed to only a copy) is significant in a probate action, as it shows that the deceased had not revoked the will by destroying it.  The fact that Mr Kam deposed to its attestation does not alter the significance of the absence of the original will. 

14.3.  Whilst the initial disappearance of the original will was caused by Ringo Ho, not by the defendant, this was a fact known to the judge as he had accepted his evidence (CFI Judgment, §§119-120). 

14.4.  Therefore, while I may have exercised the discretion differently (had I been required to do so) to order that the plaintiffs’ costs on the authenticity issue be paid, not by the defendant, but by the estate, I do not consider that any of the matters which would entitle an appellate court to overturn the judge’s exercise of discretion is present.

15.  Then, as to (c) and (d), the judge held that the defendant “took a view on the validity of the 1999 Will, acted upon it, and failed to establish her case in litigation” (CFI Costs Decision, §11). 

16.1.  The defendant submitted that she held the “honest belief that the Deceased was fit to make the 1999 Will”.

16.2.  However, the fact remains that she would have been well aware of the extent of the deceased’s mental capacity, for it was she who had supplied the information to Sun Life’s service agent who filled in the Disability Claim form¹³, as corroborated by Dr Lee’s Physician’s Statement¹⁴.

Order

17.  For the reasons set out above, I would dismiss the proposed costs appeal, the costs of which should be regarded as part of the costs of the main appeal as in the normal situation, the main appeal would have included the appeal as to costs. 

Hon Au JA:

18.  I agree with the judgment of Yuen JA.

Hon Chow JA:

19.  I agree with the judgment of Yuen JA.

Appendix 1

5.  Special matters to be taken into account in exercising discretion (O. 62, r. 5)

The Court in exercising its discretion as to costs shall, to such extent, if any, as may be appropriate in the circumstances, take into account—

(a)   any such offer of contribution as is mentioned in Order 16, rule 10, which is brought to its attention in pursuance of a reserved right to do so;

(b)   any payment of money into court and the amount of such payment;

(c)   any written offer made under Order 33, rule 4A(2); and

(d)   any written offer made under Order 22, rule 14, provided that the Court shall not take such an offer into account if, at the time it is made, the party making it could have protected his position as to costs by means of a payment into court under Order 22.