XCHRX CHAN SAI LUN, HENRY v. CHAN WAI WAH, LILY-ANN

CACV 143&205/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NOS. 143&205 OF 1998

(ON APPEAL FROM HCAP 2 OF 1993)

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J U D G M E N T

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Ribeiro JA :-

1. On 1 May 1998, Barnett J handed down his judgment after a trial that had lasted a total of 28 days spanning the period from 20 October 1997 to 17 April 1998. That trial concerned the validity of the will of the 2nd defendant's father. She had challenged its validity on the ground that her father had lacked testamentary capacity at the time when it was made. After a detailed and extensive examination of the factual and expert evidence, Barnett J held that the testator did have the necessary capacity and that the will was valid. He granted the plaintiff probate, whereupon the whole of the testator's estate passed to the plaintiff.

2. The 2nd defendant wishes to appeal against that decision. She had been on legal aid for the trial but, after the judge's decision, the 2nd defendant was refused further legal aid. The appeals have now been set down for hearing and on 14 February, the plaintiff issued a summons seeking security for the costs of the 2nd defendant's pending appeals. Security in the sum of $424,943.00 is sought and in default, an order staying the appeals is sought.

3. The plaintiff, who is the 2nd defendant's brother, has filed an affirmation in support of this application. He deposes to her impecuniosity, based in part on her repeated indications that she has no money. He states his belief that she would be unable to pay the costs of the appeals if she should fail to overturn Barnett J's decision. The sum of security sought is based on a skeleton bill of costs prepared by a law draftsman, showing that since 15 June 1998, about $40,000 by way of costs and disbursements have been incurred and that future costs of the appeals are estimated to be in excess of $385,000.

4. By O 59 r 10(5), the Court of Appeal "may, in special circumstances, order that such security shall be given for the costs of an appeal as may be just."

5. The 2nd defendant does not dispute her inability to pay the plaintiff's costs out of means available to her if she were to lose her appeals. She points, however, to her appeal to the Master against the refusal of legal aid due to be heard on 12 April 2000 and expresses the hope that she will be granted legal aid for the purposes of the appeals. While the fact that an appellant is legally-aided would be relevant to the issue of security, I have to approach the present case, at least initially, on the footing that the 2nd defendant is not legally-aided since that is her present status and it is, to say the least, unclear that her appeal to the Master will succeed. I return to the question of the pending appeal against the refusal of legal aid at the end of this judgment.

6. As the White Book indicates, cases involving an appellant who would be unable, through impecuniosity, to pay the costs of the appeal constitute an established category of "special circumstances", so that the settled practice is for the court to require such appellants to provide security for costs. The court generally bears it in mind that the appellant has already had the issues investigated and determined at the trial and considers it unfair on the respondent to make him face an appeal knowing that he will be uncompensated for his costs if the appellant fails.

7. The court, however, may in some circumstances decline to order security notwithstanding the appellant's impecuniosity where, for instance, it is satisfied that the appeal raises real and substantial issues and that the appellant bears a sufficiently good chance of success to justify exposing the respondent to the injustice of having to bear his own costs even if he successfully resists the appeal.

8. I have given this case anxious consideration as I am all too well aware of the sense of grievance that the 2nd defendant may feel if she is effectively denied a hearing because of her inability to provide security for costs.

9. I have re-read the 55 page judgment delivered by Barnett J with a view to determining whether the 2nd defendant's appeal can be said to bear a sufficiently good chance of success to justify exposing the respondent to the risk of wholly irrecoverable costs. If such good chances exist, an award of security could reasonably be declined. However, if the court's assessment is that such chances cannot be said to exist, an order of security, even if leading to a stay of the appeal because of the appellant's impecuniosity, will in the long run probably not constitute a denial of justice.

10. Barnett J's judgment describes the circumstances of the making of the will and the testator's death. These gave rise to four issues facing the court at the start of the trial, these were (i) whether the will was in fact forged; (ii) whether the testator lacked testamentary capacity, being of unsound mind at the time of signing the will; (iii) whether he had signed under the undue influence of the plaintiff and the 2nd defendant's elder sister; and (iv) whether the testator signed the will without knowing its effect.

11. The allegation of undue influence was withdrawn at the trial and the judge considered the evidence negativing forgery to be so overwhelming that he did not consider that a live issue. The judge considered that the remaining issues (ii) and (iv) were in practice the same issue, and that at their heart lay the question whether the drugs haloperidol and mianserin, which had been administered to the testator on the day when he made his will, had taken effect so as to deprive him of the requisite testamentary capacity and knowledge and approval of the contents of the will.

12. The judge considered the applicable law in some detail and identified with some care the legal test to be applied. He then considered the evidence in great detail.

13. He closely investigated the relationship between the testator on the one hand and his various children on the other. He considered in detail, the notes and diagnoses made by the doctors in the period leading up to the testator's death. The evidence of Dr Ip, who examined the testator at the time he made the will, was subjected to particularly minute scrutiny. He then gave detailed consideration to the psychiatric and pharmacological evidence from opposing experts and to the learned texts cited by such witnesses.

14. On the basis of this painstaking analysis of the evidence, Barnett J stated his conclusion as follows:-

"I conclude that immediately prior to execution of his will, Mr Chan [the testator] was seen by an experienced psychiatrist who carried out a sufficiently thorough examination to be able properly to find that Mr Chan had testamentary capacity. Although I would be happy to give judgment on that basis alone, I believe it is appropriate to add that Dr Ip's finding is supported by the evidence of Henry, Sara and Chi-kin of Mr Chan's condition as observed by lay people before, at the time of, and after the making of the will. While they certainly had interests of their own to serve, their factual evidence was not really challenged and rightly so the finding is also supported by the evidence of Mr Chung who was certainly a disinterested party and who was impressed by Mr Chan's firmness. And, not least, neither Dr Ng nor Dr Sham had any concerns about Mr Chan's mental state. ....... Finally, the substance of the will is entirely rational given the history. ......."

I have sought to summarise Barnett J's judgment in some detail to make it clear that it turned very largely on questions of fact and credibility, matters which are properly left to the determination of the judge who saw the witnesses giving evidence and was able to assess their credibility at first hand. Nothing in the detailed judgment suggests that Barnett J misapprehended the evidence or drew the wrong inferences, or otherwise made any error in reaching his conclusion.

15. In the 2nd defendant's Notice of Appeal filed on 15 June 1998 (which raises the substantive grounds relied on), the judge is criticised, inter alia, for not making certain findings (e.g., that suspicious circumstances attached to the preparation and execution of the will) and for not giving sufficient weight to particular circumstances and, in some cases, for making findings without the support of evidence. He is particularly attacked for being too dismissive of the forgery allegation. The 2nd defendant therefore seeks to challenge the findings of fact which the judge made on the evidence. Such challenges are only entertained in limited circumstances and can only rarely succeed on appeal.

16. At the hearing before me, the 2nd defendant sought to suggest that the Notice of Appeal in question (which was settled by her former solicitors) was incomplete and that there were additional grounds that she would wish to rely on. She has had, of course, over 20 months to apply to amend that Notice but has not done so. Giving her every latitude by reason of her status as a party in person, I offered her the opportunity of telling me what such additional grounds might be. She had great difficulty responding and obviously did not have any real idea of any possible additional grounds. She expounded various theories in support of the contention that the will is a forgery and criticised the Judge for having accepted the evidence of the persons who witnessed its execution, contending that he should have found that they were lying on oath. Forgery is of course a matter that the Judge did consider in his judgment and an attempt to question his rejection of forgery is already to be found in the existing Notice of Appeal. The 2nd defendant also made various unconnected suggestions as to possible technical or formal objections to the will and to the Judge's order.

17. Having listened carefully to the 2nd defendant's submissions, I have come to the view that no omissions to the Notice of Appeal have been identified which may be material to the question which I have to decide, namely, as to whether to order security.

18. I have come to the conclusion, solely for the purposes of determining whether security for the costs of the appeals should be ordered, that the appeals do not sufficiently raise substantial issues with a significant chance of success to justify departing from the usual practice of requiring security to be provided. I have accordingly decided, subject to what I say about legal aid below, that the 2nd defendant should be ordered to provide security in the usual way. While this could well mean that the appellant will be unable to proceed with the appeals, in the light of my assessment of the ultimate prospects success of the appeals and in the light of the established principles, I do not consider that such a result would constitute a denial of justice.

19. As indicated above, there is a pending appeal against a refusal of legal aid to be heard on 12 April. If legal aid should be granted, such grant would be a factor that should be taken into account in the exercise of my discretion in deciding whether to order security. I therefore propose to make an order for security which is not to take effect until the Master's decision in the appeal against refusal of legal aid due to be heard on 12 April is known and, in the event that security should be granted (a matter upon which I express no opinion), that the order should not take effect until after the matter is restored before me in Chambers for further consideration. In the event that the Master dismisses the said appeal, my order for security will become unconditional without further order.

20. Given the large volume of materials that would have to be mastered for the purposes of an appeal, I do not consider the estimate of costs provided by the plaintiff in the skeleton bill of costs to be unrealistic. I will however round the figure sought down to $400,000 and make the following orders, namely, that:-

(1) Security for the costs of the pending appeals (CACV 143/1998 and CACV 205/1998) in the total sum of $400,000 (whether by payment of such sum into court or in some other form acceptable to the court) be provided by the 2nd defendant within 14 days from the date that this order is to take effect as provided for by paragraph 4 below.

(2) Until such security is provided, the appeals be stayed.

(3) In default of such security being provided after this order takes effect and within the time limited as aforesaid, the said appeals do stand dismissed without further order, with costs of such appeals to be taxed and paid by the 2nd defendant to the plaintiff.

(4) This order shall not take effect until the decision of the Master in relation to the 2nd defendant's appeal against refusal of legal aid due to be heard on 12 April 2000 is known and shall only take effect subject to the following provisions of this order namely:-

(a) In the event that the Master should make an order dismissing the said pending appeal against refusal of legal aid, this order shall take effect from the date of the Master's order in accordance with paragraph 1 above and without the parties having to apply for any further order.

(b) In the event that the Master should allow the said pending appeal against refusal of legal aid and should in consequence grant legal aid to the 2nd defendant in relation to CACV 143/1998 and/or CACV 205/1998, this order shall not take effect until after the plaintiff has restored this application for security for costs before this court for further consideration and subject to such further order as this court may thereupon make.

(5) By way of an order nisi and subject to the provisions of Order 42 rule 5B(6) of the Rules of the High Court, the costs of this application for security for costs be costs in the pending appeals in CACV 143/1998 and CACV 205/1998.