CHOY PO CHUN AND ANOTHER v. AU WING LUN

CACV 149/2011
CACV 157/2011
CACV 182/2011
(HEARD TOGETHER)

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 149, 157 AND 182 OF 2011

(ON APPEAL FROM HCAP 7/2010)

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BETWEEN

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J U D G M E N T

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Hon Cheung JA:

Background

1.  Mr. Au Kong Tim (‘the deceased’) died on 7 July 2009 at the age of 93.

2.  Au Wing Lun William (‘the defendant’), Au Yuk Lun Anthony (‘Anthony Au’) are his two sons. They are both solicitors. Au Lan Wai, also known as Gloria Au is his daughter.

3.  In 1976, the deceased made a will in favour of his two sons. On 19 July 2002 he executed another will (‘the 2002 will’) written in English in which he appointed the plaintiffs as his executors and gave his property to his six grandchildren. The 1^st plaintiff is the wife of Anthony Au and the 2^nd plaintiff is the son of Anthony Au.

4.  The plaintiffs issued the present action seeking, among other things, an order that the court pronounce in solemn form the 2002 will.

5.  The defendant contested the case and filed a defence and counterclaim. He claimed that the 2002 will was revoked by another will dated 5 September 2008 (‘the 2008 will’) in which the deceased appointed him and Anthony Au as the executors and gave his property to them and his two grandsons equally. The defendant asked for the 2008 will to be pronounced in solemn form.

6.  The plaintiffs had originally in their statement of claim challenged the validity of the 2008 will but that claim was struck out by Master Levy on 1 November 2010.

7.  After the plaintiffs filed the reply and defence to counterclaim, (which was followed by the defendant’s reply to defence to counterclaim), the plaintiffs applied for summary judgment of their claim.

8.  To J granted the defendant leave to defend conditional upon him paying security for the plaintiffs’ costs initially in the sum of $500,000 and with liberty to apply.

9.  Pursuant to leave to appeal granted by a single judge of this Court,

1) the defendant appeals, asking for unconditional leave to defend,

2) the plaintiffs also appeal, asking for summary judgment against the defendant.

Execution of the 2008 will

10.  There was no dispute that the 2002 will was properly executed. The dispute is whether the 2002 will was revoked by the subsequent 2008 will.

11.  The deceased was a wealthy man. Between March 2007 and May 2009, he was residing at an old age home. The 2008 will was executed by the deceased while he was residing there. The defendant said that the deceased verbally instructed him to prepare the 2008 will. The defendant then gave instructions in writing to Mr. Yeung Wai Chung (‘Mr. Yeung’) a solicitor and Mr. Lau Wah Shun (‘Mr. Lau’), a then trainee solicitor of the firm of Messrs. Tso, Au, Yim & Yeung (‘TAYY’).

12.  The 2008 will was prepared in Chinese. The 2008 will was executed in the presence of Mr. Yeung and Mr. Lau. The defendant was also present at the time of execution. The judge referred to a letter dated 8 October 2009 from TAYY exhibited to the defendant’s affirmation dated 17 March 2011 concerning the execution of the 2008 will:

‘ (1) the said Will dated 5^th September 2008 was executed by Au Kong Tim, deceased …... on 5^th September 2008 in the presence of our partner Mr. Yeung Wai Chung and our trainee solicitor Mr. Lau Wah Shun Edwin.

(2) the content of the said Will had been read over and explained to Au Kong Tim, deceased, by our partner Mr. Yeung Wai Chung and he verbally confirmed to Mr. Yeung of his understanding to the said Will before execution.

(3) Mr. Yeung and Mr. Lau were both satisfied as to the mental capacity of Au Kong Tim, deceased, at the time of his execution of the said Will.

(4) Au Kong Tim, deceased, executed the said Will by signing his surname onto the said Will with the assistance of Mr. Au Wing Lun in the presence of both our Mr. Yeung and Mr. Lau.’

13.  The defendant said he assisted the deceased in signing the will by lifting the elbow of the deceased ‘so that he could put his hand on the detachable table to sign the last will’.

14.  The plaintiffs’ solicitors had served interrogatories on TAYY on the circumstances of the execution of the 2008 will. TAYY, however, declined to answer them but stated that Mr. Yeung and Mr. Lau were prepared to testify at trial as to the circumstances of the execution of the 2008 will. The defendant stated that despite his request, Mr. Yeung and Mr. Lau had also refused to provide an affirmation on the circumstances of the execution of the 2008 will.

Probate action and summary judgment

15.  The plaintiffs seek to propound the 2002 will in solemn form. The distinction between grants of representation in common form and those in solemn form are as follows. A will is proved in ‘common form’ where its validity is not contested or questioned. On the other hand, a will is proved in ‘solemn form’ by the executor, or a person interested under the will, propounding it in a claim to which the persons prejudiced by it have been made parties, and by the court, upon hearing evidence, pronouncing for the validity of the will and ordering the issue of a grant. The difference in effect between a probate which has been granted in common form, and a probate which has been granted in solemn form, is that the former is revocable, and the latter, provided proper notice has been given to all persons interested, is, subject to two exceptions, irrevocable. See: Tristram and Coote’s Probate Practice, 30^th edition, paragraph 26.03.

16.  Order 76 sets out the procedure for a contentious probate action. The defendant had served a counterclaim as required by Order 76, rule 8 propounding the 2008 will. A probate action being of the nature of an action in rem and the court’s function being inquisitorial (Re Fuld (No. 2) [1965] 2 All E.R. 657) the court will, at the trial, make a positive finding as to which is the valid will, or whether the deceased died intestate, and (in the case of an interest action) who is entitled to representation: generally it will not (except in the case of a revocation action) merely dismiss the action without more. A defendant is entitled to give notice with his defence that he merely insists upon the will being proved in solemn form of law, and only intends to cross-examine the attesting witnesses (Order 62, rule 4) but in other cases he must set up a positive case by way of counterclaim. For the same reason, a defendant may serve a counterclaim, and thus obtain carriage of the action, even where the plaintiff delays in serving a statement of claim. It would rarely be appropriate for a probate action to be dismissed for want of prosecution, see: paragraph 76/8/1 of the Hong Kong Civil Procedure 2012.

17.  Given the nature of a contentious probate action, the court raised with the parties whether Order 14 summary judgment proceedings is applicable to such an action. On the face of it, Order 14 does not exclude its application to a contentious probate action. In Re Lau Siu Wah [2005] 1 H.K.C. 364, it was held that Order 14 applies to probate actions. This was followed in Sum Wan Piu Paul v. Lau Siu Hong HCAP 3/2004 and in Lisa Poncet v. Kho Sin Tek Henry (unrep., HCAP 19 of 2003) [2007] H.K.E.C. 446 an action for the grant of letters of administration.

18.  To complete the picture, the commentary at paragraph 14/12 of the English Supreme Court Practice 1999 is also relevant. It stated the position prior to the introduction of the new rule for summary judgment in rule 24 of the Civil Procedure Rules:

‘ Formerly O.14 did not apply to probate actions, which were tried in the Probate Divorce and Admiralty Division. Now that such actions are tried in the Chancery Division, there is no longer any reason in principle why summary judgment should not be given in such an action. It will, however, only rarely be appropriate, given that any person whose interest in the estate of a deceased person is prejudiced by a testamentary document may compel the executor or other person seeking to propound it to establish it by the examination of the attesting witnesses.’

19.  Tristram and Coote’s at paragraph 38.08 commented that

‘ Summary judgment under CPR Pt 24 is available but seldom likely to be appropriate in a probate claim.’

20.  It should be noted that none of the Hong Kong cases I have referred to were concerned with the raising of a counterclaim in the probate action. While I am not prepared to say that the mere existence of a counterclaim will preclude the application of the summary judgment procedure, the court must tread carefully before giving effect to this procedure. Ultimately the question is whether credible triable issues have been raised in a contentious probate action.

Two contentious issues

21.  Two contentious issues arose out of the 2008 will. First, whether the will was executed by the deceased. Second, whether the deceased had the mental capacity to execute the will.

Arguable issue on execution

22.  The judge held that the defendant had raised an arguable defence on the first issue regarding the execution of the will by the deceased. The judge held that Mr. Yeung and Mr. Lau being non parties to the litigation were under no obligation to answer the interrogatories, although he was critical that the defendant had not filed an affirmation from Mr. Yeung and Mr. Lau on this issue.

Mental capacity

23.  As to the second issue regarding the mental capacity of the deceased, the plaintiff produced evidence both medical and non-medical showing that the deceased was suffering from dementia. The first was a medical report dated 2 September 2007 from Dr. Ko. The second was a medical report dated 4 March 2008 from Dr. Au when the deceased was admitted to the old age home. The deceased was said to have ‘senile dementia’. The third one was in respect of the deceased’s admission to the Queen Mary Hospital on 27 April 2008 for an operation, which was two months after the deceased commenced his residence at the old age home. It was recorded in the report that the deceased had a history of dementia. After the operation the deceased was transferred to the Tung Wah Hospital on 3 May 2008 and discharged on 9 May 2008. The doctors there also noted that the deceased had dementia.

24.  Eight months after the execution of the 2008 will, Dr. Chan of Queen Mary Hospital prepared a referral letter to a specialist to treat the deceased’s hypertension. In the referral letter, Dr. Chan stated that the deceased was ‘barely communicable’ and was suffering from dementia for which the deceased was receiving follow up treatment with aricept prescribed by a private medical practitioner.

25.  There were non-medical documents in the form of the deceased’s application for welfare assistance and disability allowance and an authorisation dated 13 June 2008 issued by the field unit of the Social Welfare Department authorising the 1^st plaintiff to process the application on behalf of the deceased as the deceased was incapable of expressing himself.

26.  Another non-medical document was an assessment form prepared by a health care assistant of the old age home in relation to the use of controlled medication by the deceased. That assessment was made on 16 February 2009, five months after the execution of the 2008 will. The health care assistant noted that the deceased had dementia.

27.  The plaintiffs further relied on three episodes that took place between January and August 2007, when the deceased left home and wandered in the streets without knowing how to return home.

28.  The judge held that the defendant had failed to show that he had a credible defence that the deceased had testamentary capacity when he executed the 2008 will. He, however, granted conditional leave to defend ‘out of respect’ for Mr. Yeung and Mr. Lau, who are solicitors and officers of the court and who had stated that they were satisfied as to the mental capacity of the deceased.

Arguable case on mental capacity

29.  Conditional leave to defend may be granted when there is a good ground in the evidence for believing that the defence set up is a sham defence or when the court is prepared very nearly to give judgment for the plaintiff.

30.  The defence that the 2002 will was revoked by the 2008 will cannot by itself be described as a sham defence. In propounding the 2008 will, the defendant must show that the deceased had the necessary mental capacity. Whether the deceased had the mental capacity to execute the 2008 will is clearly a question of fact.

31.  The defendant said that during the time when the deceased was residing at the old age home, he visited him three times a week. He communicated with him smoothly during the visits. He further relied on the statement by two solicitors who witnessed the execution of the 2008 will that the deceased verbally confirmed his understanding of the will before the execution. They were also satisfied as to the mental capacity of the deceased. They were prepared to testify at the trial of the action. They had further said that they would prepare witness statements, although they are still not yet available. The defendant obviously cannot compel non parties to file affirmations.

32.  The defendant had, of course, not obtained a medical report on the mental capacity of the deceased before he executed the 2008 will.

33.  Had the matter rested there, I would not hold that the defendant has failed to establish a triable issue on the mental capacity of the deceased.

34.  The matter, however, does not rest there because the plaintiffs had produced medical reports stating that the deceased had dementia. Nonetheless it is necessary to examine the quality of these reports. They did not contain details of the deceased’s mental condition at all. Dr. Ko’s report is just a two line statement stating that the deceased ‘is suffering from dementia which would affect his ability in judgment’. The report of Dr. Au of the old age home likewise is brief to the extreme. What was written under the heading ‘Past psychiatric history’ was the words ‘senile dementia’. In a page entitled ‘Functional Assessment’, a tick was put in the box with the printed words ‘mild dementia’. The words in the other boxes were ‘moderate dementia’ and ‘severe dementia’. Dr. Chan’s referral letter used the word ‘dementia’ without elaboration. The medical report from Queen Mary Hospital simply stated that the deceased was a 92-year-old man with a past medical history of dementia. The medical report from Tung Wah Hospital likewise simply stated that the deceased had dementia. The persons who prepared the two non-medical documents clearly were not in a position to address the extent of the deceased’s dementia. While the episodes of the deceased not knowing how to return home is relevant evidence as to deceased’s mental condition, again they were not determinative of the issue of the testamentary capacity of the deceased.

35.  Even if, on the face of the evidence, it is shown that the deceased had dementia, the crux of the matter must be about the severity of his dementia and the extent to which the dementia affected his testamentary capacity at the time when he executed the 2008 will. To repeat the often quoted words of Cockburn CJ in Banks v. Goodfellow (1870) LR 5 QB 549, at 565

‘… that to the due exercise of a power thus involving moral responsibility, the possession of the intellectual and moral responsibility, the possession of the intellectual and moral faculties common to our nature should be insisted on as an indispensable condition. It is essential to the exercise of such a power that a testator shall understand the nature of the act and its effects; shall understand the extent of the property of which he is disposing; shall be able to comprehend and appreciate the claims to which he ought to give effect; and, with a view to the latter object, that no disorder of the mind shall poison his affections, pervert his sense of right, or prevent the exercise of his natural faculties — that no insane delusion shall influence his will in disposing of his property and bring about a disposal of it which, if the mind had been sound, would not have been made.’

36.  With respect to the judge, the determination of this crucial issue is not suitable in a summary judgment proceeding. For a start it is not sufficient for the court to rely on the written evidence that the deceased had suffered from dementia. In order to properly adjudicate this issue, the court must satisfy itself with the severity of the dementia and its impact on the deceased’s mind when he executed the 2008 will. This can only be properly addressed at a trial with the hearing of oral evidence.

37.  I do not regard the defence raised as shadowy. In my view the order that should have been made is to grant the defendant unconditional leave to defend and I will so order.

Striking out

38.  The plaintiffs had also sought in the summons seeking summary judgment a further order to strike out part of the defence in respect of the allegation of the 1^st plaintiff intermeddling with the deceased’s estate and also colluding with Anthony Au. That part of the summons to strike out was not decided by the judge. Although the plaintiffs have lodged an appeal against the judge’s decision in not striking out the defence, Mr. Li, counsel for the plaintiffs, accepted that issue was not addressed by the judge.

39.  In the circumstances, I do not consider that this court should consider this matter. The plaintiffs may, if they wish, restore this matter before the judge.

Rejoinder

40.  The plaintiffs had further included in the summons an order to strike out the reply to defence to counterclaim filed by the defendant without leave. The Judge held that,

‘ 2. In response to item (2) above, the Defendant took out a summons on 29 April 2011 to apply for leave to serve his Reply to the Plaintiffs’ Defence to Counterclaim out of time under Order 18 rule 4. He had attempted to file the Reply marginally out of time on 23 December 2010 without leave. The application caused no prejudice to the Plaintiffs and was therefore granted with costs to the Plaintiffs.’

41.  The plaintiffs also appealed against that order.

42.  The defendant had effectively issued a rejoinder. Order 18, rule 4 of the Rules of the High Court provides that no pleading subsequent to a reply or a defence to counterclaim shall be served except with the leave of the court. Paragraph 18/4/1 of the Hong Kong Civil Procedure 2012 is relevant:

‘ Effect of rule—This rule enables the court to order the service of any pleading subsequent to a reply. The pleadings subsequent to reply retain their old names: rejoinder (by defendant); surrejoinder (by plaintiff); rebutter (by defendant); surrebutter (by plaintiff). None of these names for pleadings occurs in the former or present rules. All except rejoinder are rare in Hong Kong to the point of extinction; and even rejoinder is seldom seen. It may be necessary, for example, where the defendant raises a counterclaim for libel and the plaintiff in his reply and defence to counterclaim pleads qualified privilege to which the defendant wishes to plead express malice, which he can only do in a rejoinder; or where the plaintiff raises a counterclaim to the defendant’s counterclaim, to which the defence can only be contained in a rejoinder.

Application for leave to serve a rejoinder or subsequent pleading is made by summons to the master or may be made on the summons for directions. An example of leave for a rejoinder plus surrejoinder is The Bank of East Asia Ltd v. Labour Buildings Ltd & Ors (unrep., HCMP 769/2002, DHCJ Gill, September 24, 2007). By its statement of the claim, the plaintiff bank sued to recover money advanced under a contract and not repaid. The defence was that the contract was not properly authorised by the corporate defendant and thus unenforceable. The reply relied upon Turquand’s rule of indoor management. The defendant wished to file a rejoinder asserting that the plaintiff knew or was put upon enquiry of irregularity and could not rely upon Turquand’s rule. Leave was given for the rejoinder and also a surrejounder in response.

Leave to serve a rejoinder or subsequent pleading will not be granted unless it is really required, so as to raise matters which must be specifically pleaded (see r.8). ’

43.  Mr. Li relied on the following passage in the judgment of Deputy High Court Judge Gill in The Bank of East Asia Ltd (cited in the paragraph 18/4/1)：

‘ 5. One gleans from the note at 18/4/1 that pleadings subsequent to a reply are, except for a rejoinder, practically extinct, and that a rejoinder arises only exceptionally. Apart from the specific example of libel, leave to file a rejoinder will not be given unless it is really required in order to allow matters that must be specifically pleaded to be pleaded.’

44.  Mr. Li submitted that what must be specifically pleaded are stated in Order 18, rule 8(1) and the judge had applied the wrong test in granting leave.

45.  The matters identified by Order 18, rule 8(1) are:

‘ A party must in any pleading subsequent to a statement of claim plead specifically any matter, for example, performance, release, any relevant statute of limitation, fraud or any fact showing illegality,

(a) which he alleges makes any claim or defence of the opposite party not maintainable; or

(b) which if not specifically pleaded, might take the opposite party by surprise; or

(c) which raises issues of fact not arising out of the preceding pleading.’

46.  The judge was extremely brief in his judgment. On the face of it, the judge had not applied the correct test in granting leave to file the reply to defence to counterclaim. He was simply concerned with the time aspect. However, as the content of the pleading has not been specifically addressed before us, the best course to adopt is to set aside the leave and remit the matter to the judge for determination afresh.

Costs

47.1) Costs of the defendant’s appeal on summary judgment (CACV 149/2011)

As the defendant is successful in his appeal on summary judgment, he is entitled to the costs of the appeal to be paid from the estate.

2) Costs of the plaintiffs’ appeal on summary judgment (CACV 182/2011)

As the plaintiffs fail in their appeal on summary judgment, the defendant is also entitled to the costs occasioned by this appeal. The costs are to be paid from the estate.

3) Costs of the plaintiffs’ appeal on striking out and leave to file reply to defence to counterclaim (CACV 157/2011)

The plaintiffs are only partially successful in this appeal which requires a remission to the court below. There will be no order as to costs of this appeal.

48.  Costs below

The costs below should be costs in the cause. Whether the costs should come from the estate shall be decided by the judge after the trial.

Hon Yuen JA:

49.  I agree with the judgment of Cheung JA.