LUI MING LOK v. NG IM FONG LORETTA, the executrix of the estate of LUI KWAN CHEUNG, Deceased

HCAP 28/2019

[2020] HKCFI 2463

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE ACTION NO. 28 OF 2019

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C O S T S   R U L I N G

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A.   Introduction

1.  By my Decision dated 11 August 2020 [2020] HKCFI 1243, I dealt with the defendant’s appeal from the order of Master KH Hui dated 11 December 2019, dismissing her summons dated 16 July 2019 seeking orders that various paragraphs and prayers of the statement of claim (“SOC”) be struck out.

2.  As I stated in the Decision, the appeal arose in this probate action, in which the plaintiff asked the Court to propound a Chinese Will dated 25 June 1994 (“Chinese Will”) of the late Lui Kwan Cheung (“Deceased”), of which the plaintiff is a beneficiary.  The plaintiff also seeks revocation of the probate granted to the defendant in respect of another Will made on 21 August 2010 (“2010 Will”), under which the defendant is the executrix and sole beneficiary.

3.  The Deceased passed away on 31 July 2014, and it was not in dispute that the defendant in general cared for the Deceased and looked after his affairs before he passed away.

4.  The action also raised the issue as to the validity of the marriage between the Deceased and the defendant on 1 August 2010 (“2010 Marriage”).  The plaintiff argued that the 2010 Marriage was void.

5.  In §8 of my Decision, I pointed out that the plaintiff essentially was advancing the following four pleas:

 (1)  The 2010 Marriage is invalid and/or null and void on the ground that the Deceased was mentally incapacitated at the material time.  Hence (a) the 2010 Marriage is void and (b) the 1994 Will is valid.

 (2)  The Deceased lacked the mental capacity to execute the 2010 Will at the material time.  Hence, the 2010 Will is null and void and of no effect.

 (3)  Further to the plea of lack of testamentary capacity, the Deceased was under the undue influence of the defendant in executing the 2010 Will.  Hence, the 2010 Will is for that reason null and void and of no effect.

 (4)  The defendant acted wrongfully in reliance of the 2010 Marriage and the 2010 Will when applying for and obtaining the grant of probate.  Hence, that grant should be revoked.

6.  By my Decision, I struck out the first plea as being closed to the plaintiff as a matter of law.  On my finding as to the proper construction of section 20 of the MCO, the plea that the 2010 Marriage is void falls to be struck out.  Hence, the 1994 Will must be taken to have been revoked by the 2010 Marriage.  But there remain the other challenges to the 2010 Will, which challenges I have not found liable to be struck out, so the other pleas remain.

7.  In the circumstances of those findings, I thought it appropriate to allow the parties to consider their position before making submissions as to costs.  I said I would deal with the question of costs on paper submissions, on the following timetable: (1) the defendant shall file her costs submissions within 14 days; (2) the plaintiff shall file his costs submissions within 14 days thereafter; and (3) the defendant shall file any reply costs submissions within seven days thereafter.

8.  The defendant’s submissions were filed on 25 August 2020 and the plaintiff’s submissions were filed on 8 September 2020.  The defendant indicated that it would not file any reply submissions, despite leave to do so, if required, by 15 September 2020.  As at the hearing, the plaintiff was represented by Mr Anson Wong SC leading Mr Billy NP Ma, and the defendant was represented by Mr Robert Pang SC leading Mr Raymond Fong.

9.  For the defendant, Mr Pang seeks an order that the defendant should have full costs both of the appeal and of the hearing before the Master.  On the other hand, for the plaintiff, Mr Wong submits that the defendant should have 20% of the costs before the Master (with certificate for one Counsel) and 40% of the costs of the appeal, with certificate for two Counsel.

B.   Applicable Principles

10.  Costs are in the unfettered discretion of the court.  However, the discretion must be exercised judicially, seeking to achieve practical justice in the particular circumstances of the case.  Therefore, although costs normally follow the event, the court may make some other order as to the whole or any part of the costs, depending on the circumstances of the case.

11.  Order 62 rule 5(1) identifies the matters which the Court will take into account in exercising its discretion as including the underlying objectives set out in Order 1A rule 1 and the conduct of all the parties.  For the purposes of the rule conduct 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 is during, the proceedings.

12.  The well-known Elgindata principles relating to costs have been considered by the Court of Appeal in, for example, Zhuhai International Container Terminals (Jiuzhou) Ltd v Lo Tong Hoi (unreported, CACV 181/2011, 31 July 2012) at 33.  There, Kwan JA considered the principles after the amendment to Order 62 rule 5 and held that it is not necessary to establish that a successful party has acted unreasonably or improperly in raising an issue for it to be deprived of the whole or part of its costs.  The rule as amended requires litigants to bear in mind the possible cost implications, and there is incentive to conduct litigation a responsible way and be selective as to the issues raised.

13.  It is also now settled that there is a broader or wider discretion in the court on matters relating to the costs of interlocutory arguments.  Issue-based costs orders are now more common than prior to CJR.

C.   The Arguments

14.  Mr Pang submits that the main issue dealt with before the Master was the construction of section 20 of the MCO, on which the defendant was successful on the appeal.  He says that though the defendant was not successful on the remaining plants dealing with the deceased’s alleged lack of mental capacity and undue influence, the argument on those plans did not significantly increase the length or cost of the hearing.  On the basis that there was nothing improper or unnecessary as would deprive the defendant of her for costs, no deprivation should occur.  Further, even if some discount is to be applied relating to the time and costs spent on argument on the undue influence point, that was less than 20% of the time and costs, so that the defendant should be entitled to at least 80% of her costs.

15.  Mr Wong submits that the defendant should be deprived of part of the costs of the appeal and the hearing before the Master.  Firstly, there were points on which the defendant did not succeed, and those points underwent “metamorphosis” between the court below and this court, which led to significant increase in time and costs.  For example, of the six points or grounds which were run before the Master, only one was really pursued on the appeal, though additional new grounds were raised without complying with the applicable Practice Directions.  Mr Wong also submits that the fact that many grounds run before the Master were dropped on appeal was a clear acknowledgement that the grounds were plainly bad and should not have been raised at the outset, even if some elements were “repackaged” on the appeal.

16.  Mr Wong also identifies that the ground which succeeded was a pure question of law on which evidence was completely unnecessary, but where evidence was filed resuscitating costs which were ultimately wasted.  So, taking the broad brush, the defendant should have only 20% of the costs before the Master and only 40% of the costs of the appeal.

D.   Analysis

17.  It seems to me, in the exercise of my discretion, that the important points to be brought into the consideration are as follows:

(1)  Six points were run before the Master, but for of them were apparently completely dropped on appeal, whilst the other two were substantially “repackaged”.

(2)  By my Decision, I decided that the Master ought to have found for the defendant on the first point.

(3)  The point which ultimately succeeded was on a question of law, being the proper construction of section 20 of the MCO, and no evidence was relevant to that question.

(4)  That evidence was filed in advance of the hearing before the Master, but was barely referred to in the argument on the appeal.

(5)  The argument on that question of law took up most of the time at the hearing before the Master and on the appeal, and probably most of the time in preparation for the hearing (at least for the appeal hearing).

(6)  The other points were less time-consuming, but were pursued as being necessary if the entire claim were to be struck out.

(7)  The result of the appeal reduces the issues in the case, but does not lead to the striking out of the entire claim.

18.  In those circumstances, it seems to me that some form of issue-based or time-divided approach to costs is appropriate.  That is the way properly to reflect the incidence of costs and the respective degrees of success and failure, also taking into account the time and expenditure on preparation for and at the hearings.  This can be done on a relatively broad brush approach.

E.   Result

19.  In the exercise of my discretion, I order:

(1)  the plaintiff to pay the defendant 50% of her costs of the striking out application before the Master, to be taxed and paid forthwith if not agreed, with certificate for (one) Counsel; and

(2)  the plaintiff to pay the defendant 75% of her costs of the striking out appeal before this Court, to be taxed and paid forthwith if not agreed, with certificate for two Counsel.

20.  For the avoidance of doubt, I make no order as to the costs of the costs argument leading to this Costs Ruling.