CAI GUO XIANG v. MOK HANG WON ELSA

HCAP13/1997

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE ACTION NO.13 OF 1997

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D E C I S I O N

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1. Both the plaintiff and the defendant applied for costs of the action today. The strength of the defendant's application is based on a string of letters of offer by the defendant's solicitors to the plaintiff to settle the case. There were four letters on,

(a) 10 December 1999 offering to pay $2 million to the plaintiff;

(b) 10 April 2000 offering $10 million to the plaintiff;

(c) 10 August 2000 offering in effect roughly $27 million; and

(d) 20 October 2000 offering in effect roughly $45 million to the plaintiff.

These letters are in law called "Calderbank letters". Calderbank letters are used in cases where it was inappropriate to pay money into court which was the case herein as agreed by counsel on both sides.

2. If I may say so, first of all, these letters are poorly, casually and carelessly drafted. For example, one of the terms of the offer was a request that the plaintiff should "cancel" the proceedings. There is no such thing in law that the plaintiff can cancel the proceedings. What the plaintiff could do in the action herein was either to discontinue the action subject to the question of costs or consent to an order to be made dismissing his action. Further, the last letter says "twenty five presents" instead of per cent, and these mistakes are all over the place in these letters. I am afraid that I must say that this is a shame to the profession. I implore solicitors to instruct competent counsel to settle these letters instead of just sending them out with all these mistakes. They would become very important later on in the argument of costs as in the case here.

3. In respect of these offers, Mr Edward Chan, SC, counsel for the plaintiff, submitted that they are in effect not Calderbank letters because certain terms in the offer to the plaintiff made the plaintiff difficult to accept, or the plaintiff was not in a position to comply with those terms.

4. I take the last letter of offer on 20 October 2000 which, in my view, is an important letter since the amendment to the defendant's counterclaim to include the claim on the donatio mortis causa ("DMC") in which the defendant eventually succeeded. The first term of offer reads :

"(1) Your client is to give his undertaking that he duly and fully represents all the parties that have or may have interests or claims (except debts against the Deceased estate) in or against the Deceased Estate;"

5. Mr Chan submitted that the defendant did not represent all the beneficiaries under the estate of the deceased. As far as I understand all the beneficiaries entitled under the estate comprised of two categories of persons: one category is concerned with the siblings of the deceased including his only younger brother, the plaintiff and the other sisters. The other category is Madam Wong in the United States. It is not the concern of this court in this action to consider the status of Madam Wong as to whether she was the lawful "kit-fat" wife of the deceased under a modern marriage or otherwise. But the plaintiff and Jennifer Wong said that they have come to certain arrangements with each other. In fact, the previous solicitor for Madam Wong told me in evidence that that was done against her advice. Thus it is not difficult for the plaintiff to secure the agreement of Madam Wong in respect of the aforesaid undertaking in the offer.

6. Mr Chan told me from the bar table that the plaintiff was not in good terms with his sisters. There was no evidence at all before the court. I cannot take it as evidence from the bar table. In fact, there is no evidence put before the court that the plaintiff could not secure the agreement of his sisters. There is simply no reply to the letters or anyone of them. I was told there were oral negotiations between the parties. But the substance of the negotiations was not disclosed. If they are relevant to the consideration of costs, I am sure Mr Chan would have put in affidavit to that effect, failing which he would have asked for an adjournment, subject to a question of costs, to file affidavits to that effect. There is simply no evidence put before the court that the negotiation concerned with the difficulty of the plaintiff and not in respect of the percentage offered by the defendant.

7. This court can always accept a Deed of Family Arrangement when agreed by all beneficiaries sui juris, even though in a probate matter, an order cannot be made just by consent. In other words, it is just usual for family members to come to certain arrangements albeit it is contrary to the provisions in the will when all the beneficiaries agreed. Thus the logistic of the settlement is not, to my mind a difficulty at all. In the premises, I must consider from the evidence before me at this stage, that the plaintiff had rejected the offer of this 25% or roughly $45 million, and the plaintiff must take the consequence in terms of costs.

8. In respect of the previous letters, i.e. previous to the last one on 20 October 2000, the offers were also made in monetary term more than what the plaintiff got at the end of the day. But there was no claim on the DMC. The amendment was only made by 7 September 2000 i.e. after the third letter of offer. I therefore consider that it was not unreasonable for the plaintiff to reject the offer on his own action for a declaration that the purported will was invalid or, on the other side of the coin, the counterclaim of the defendant's action only to propound the purported will. In other words, the three previous letters should not be taken as against the plaintiff. Before the amendment of the defendant on 7 September 2000 to include the claim on the DMC, there was only a claim on the will and the defendant failed on that at the trial and she must therefore take the consequence.

9. In between 7 September 2000 and the offer on 20 October 2000, there was a claim on the DMC, the defendant succeeded on the DMC but the DMC only concerned about 20% of the time of the trial according to Mr Chan's conservative assessment. Thus, taking the matter broadly, I will order as follows :-

(a) costs incurred by the plaintiff in the action herein on or before 7 September 2000 shall be borne by the defendant;

(b) 60% of the costs incurred by the plaintiff after 7 September 2000 but before 20 October 2000 shall be borne by the defendant; and

(c) costs incurred by the defendant after 20 October 2000 shall be borne by the plaintiff.

I think I have covered all the costs of the action and there shall be an order for taxation of all costs incurred by the relevant receiving party if parties cannot agree thereon.

10. Apparently, Mr Mullick has substantially succeeded in the argument today. Thus costs for the hearing today be to the defendant against the plaintiff. The plaintiff's own costs for today and the action herein be taxed according to Legal Aid Regulations.