MAK NGUN TAI AND OTHERS v. FUNG MING IP AND ANOTHER

HCAP 37/2015

[2022] HKCFI 2736

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE ACTION NO 37 OF 2015

____________

____________

BETWEEN

AND IN THE MATTER OF AN APPLICATION FOR DISCLOSURE OF DOCUMENTS FROM

____________

_______________

D E C I S I O N

_______________

Introduction

1.  This is a case management conference. The Plaintiffs have filed a Summons for third party discovery of documents against a firm of solicitors, Ford Kwan & Co (“FKC”). FKC had provided services to Madam Lo Siu Fung (“the Deceased”), which led to execution of a purported will (“the Will”) by her.

2.  The Plaintiffs and the 2^nd Defendant are the surviving daughters of the Deceased. The 1^st Defendant is the executor of the Will. Prior to the death of the Deceased, the Deceased had terminated all her fixed deposits, sold most of her landed properties and transferred the bulk of her cash into a joint bank account she opened with her grandson, Jamis, who is the son of the 2^nd Defendant. Jamis had transferred most of the money out of the joint account to his sole name account. All of these happened in the last 3 years prior to the death of the Deceased, whilst she was living with the 1^st and 2^nd Defendant. The Will was executed in this period.

3.  It is the Plaintiffs’ case that the transactions entered into by the Deceased during those 3 years were to her manifest disadvantage. The Plaintiffs challenge the validity of the Will on the grounds that the Deceased lacked the testamentary capacity, knowledge or approval of he Will and that its execution was procured by the undue influence of the 1^st and/or 2^nd Defendants.

4.  The Summons was filed on 4 May 2022, which asks for 6 classes of documents:

(1) Attendance notes in relation to preparation and execution of an assignment dated 3 September 2012 which converted co-ownership of a house in Fanling held by the Deceased and one Koon Jamis from tenants-in-common to joint tenant;

(2) Attendance notes in relation to preparation and execution of a General Power of Attorney dated 5 July 2013 made by Deceased in favour of the 1^st Defendant;

(3) Attendance notes in relation to the preparation and execution of a will made by the Deceased on 7 October 2013;

(4) Attendance notes in relation to the sale of a property in Gage Street, held by the Deceased, on 5 September 2014;

(5) All bills of costs rendered, record of settlement and receipts issued in relation to the transactions in paragraphs (1) to (4) above; and

(6) A copy of the Special Power of Attorney dated 16 January 2012 and the General Power of Attorney dated 3 September 2012 made by the Deceased in favour of Koon Jamis.

5.  The Summons was adjourned on the last occasion before DHCJ Tsui for FKC to report to the Court on their position on the Summons.

The parties’ stance

6.  FKC remains neutral and is willing to produce the documents save that in respect of class 3, they claim legal professional privilege in respect of an attendance note (“the Relevant Attendance Note”) which is said to be concerned with taking of instructions from the Deceased for contents of the Will prior to the moment of execution and attestation. They have provided some documents to the Administrator Pendente Lite of the Deceased’s estate (“APL”) on 16 and 31 August 2017, and some additional documents from their archive to the APL.

7.  On 23 June 2022, FKC informed the Court that the APL has taken the stance that he should not be involved in the dispute and would not express a view on what FKC should do.

8.  D1 has no objection to the stance of FKC.

9.  D2’s stance is neutral.

Analyses

10.  Relevance of the Relevant Attendance Note is not in dispute. To gauge the mental state of the Deceased at the time of execution of the Will, it is relevant to look at how instructions in relation to the transactions 3 years prior to her death were given by the Deceased and under what circumstances the Will was executed.

11.  There is no dispute on legal principles. Documents (including attendance notes) which contain evidence of the attesting witnesses on attestation and execution of a will would fall into an exception to legal professional privilege and are discloseable: Chinachem Charitable Foundation Ltd v Chan Chun Chuen [2009] 2 HKC 365, §19, Lam J (as he then was), following Re Fuld (No. 2) [1965] P 405. However, the rest of an attendance note is privileged and FKC has claimed legal professional privilege on the correct ground.

12.  Since the sole issue is legal professional privilege, the only possible parties who can waive the privilege are D1 (the named executor) or the APL. Subsequent to this hearing, this Court has taken the liberty to ask them, by a letter dated 23 August 2022, whether or not privilege could be waived (“Court’s Letter”).

13.  By a letter of his solicitors dated 29 August 2022, D1 did not assert any right to claim the privilege. Rather, he considered that the APL was the appropriate party who could waive privilege on behalf of the Deceased.

14.  On 1 September 2022, the APL replied, stating that subject to D1’s waiver of the privilege of disclosure, the APL would send a copy of the Relevant Attendance Note to the Court.

15.  By a letter dated 2 September 2022, D1 reiterated his neutral position and did not assert privilege.

16.  Since no privilege is asserted by the only possible parties, I make an order that FKC do provide a copy of the Relevant Attendance Note to the Plaintiffs and the Defendants.

17.  At this hearing, Mr Yau, counsel for the Plaintiffs, requests the Court to make an order for FKC: (i) to preserve the original of the Relevant Attendance Note and (ii) produce it to the Court upon 24 hours’ notice.

18.  I see no problem in granting request (i) as a consequential order, as the Relevant Attendance Note has already been given to the APL. Parties may need to inspect it or rely on it at the trial.

19.  However, I do not see why I should make an order in respect of request (ii), as it is up to the party who consider it necessary to seek an order for production from the right party at the right time. It is for the trial judge to decide when the Relevant Attendance Note should be produced.

Conclusion

20.  I therefore order that:

(1) There be an order in terms of paragraphs 1 and 2 of the Summons; and

(2) FKC do preserve the original of class 3, ie the Relevant Attendance Note until after expiry of the period for appeal against the final judgment in this case or until further order, whichever is the later.

Costs

21.  The Plaintiffs are willing to meet FKC’s cost of complying with until the Order. I am of the view that they should also meet FKC’s costs of this Summons. FKC being an innocent third party, its costs should be on indemnity basis. FKC asks for costs of $68,900. I find those costs to be excessive. The issue concerns only one single point of law. I summarily assess and allow the costs at $46,400, to be borne, in the first instance, by the Plaintiffs. The ultimate costs shall be in the cause of the action.

22.  The Plaintiffs should not be blamed for taking out this Summons as FKC was not willing to provide the documents to them. There were other classes of documents to deal with at the hearing. APL was uncooperative.

23.  FKC disclosed the Relevant Attendance Note to the APL. Apparently both FKC and APL thought that the APL had the right to the document as a court-appointed representative of the estate.

24.  And yet APL hid behind a “neutral” stance initially. In response to the Court’s Letter, the APL stated in a letter dated 1 September 2022 that he would produce a copy of the Relevant Attendance Note to the Court subject to D1’s waiving the privilege of disclosure. The APL should have assisted the Court. He would have to give discovery of relevant documents for the purpose of the trial anyway. If in doubt, he could have obtained the directions of the Court but he did not. He has no right to choose to give a copy to the Court when it is the Plaintiffs who are asking for a copy.

25.  The 1^st Defendant’s solicitors did not consider the 1^st Defendant as having the right to claim privilege despite the Court’s Letter. On reading APL’s letter dated 1 September 2022, the 1^st Draft suddenly asked to see the Relevant Attendance Note before deciding whether to waive the privilege. What right would he have over the Relevant Attendance Note when he did not consider himself as having the privilege in the first place? D1 reverted to a neutral position after the Court’s further requisition. There was simply no proper consideration by D1 on how properly to handle the Summons.

26.  And why would D1 and D2 (having instructed counsel) need to attend Court if their stance was neutral?

27.  All the parties and their legal representatives have a duty to assist the Court in the just resolution of the dispute and in case management. Waiver of privilege was the sole obstacle to disclosure. The whole saga displays a lack of focus, lack of a sense of proportionality and failure to assist the Court in the management of a case. There was no attempt to use the most economical method to dispose of an interlocutory application.

28.  Accordingly, whilst I allow the costs of the Summons (including the costs of the hearing of the Plaintiffs) and of the correspondence arising out of the Court’s Letter to be costs in the cause, I disallow the Defendants’ costs of attendance at this hearing in any event.

29.  I make an order nisi for costs in terms of paragraphs 21 and 28.