Case Document

100%Judiciary

HCAP000001A/2000

HCAP 1/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE ACTION NO. 1 OF 2000

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IN THE ESTATE of LAI HO KAI (黎浩楷) late of Block D, Villa Le Parc, STTL 186, To Fung Shan Road, Shatin, New Territories, Hong Kong, Merchant, Deceased.

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BETWEEN
	WONG OI KING	1st Plaintiff
	SO NIM CHO DEREK	2nd Plaintiff

	AND

	LAI LOK YEE CATHERINE	1st Defendant
	LAI HO PAK	2nd Defendant

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Coram: Deputy High Court Judge A Cheung in Chambers

Date of Hearing: 14 November 2002

Date of Judgment: 26 November 2002

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J U D G M E N T

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1.On 16 August 2002, I handed down a judgment in favour of the Plaintiffs after trial. I found that the Chinese document relied on by the two Plaintiffs was indeed the true and last will of the deceased involved in the present probate action. I also made an order nisi that both the costs of the Plaintiffs and the costs of the Defendants be paid out of the estate of the deceased, such costs to be taxed if not agreed on a common fund basis. I gave a certificate for two counsel. I further ordered that the costs of the 2nd Plaintiff be taxed in accordance with the Legal Aid Regulations (Cap. 91).

2.This is a judgment on the Plaintiffs' application to vary my cost order nisi.

3.I will not repeat what I have set out in great details in my judgment relating to the disputes between the parties and my findings of fact. Nor will I repeat here my provisional reasons for making the cost order in the way I did.

4.Mr Ho, appearing for the Plaintiffs, referred me to O. 62 r. 6(1)(c) of the Rules of the High Court (Cap. 4) which reads as follows:

"6. (1) Notwithstanding anything in this Order or in section 52A of the Ordinance -

(c) unless the Court is of opinion that there was no reasonable ground for opposing the will, no order shall be made for the costs of the other side to be paid by the party opposing a will in a probate action who has given notice with his defence to the party setting up the will that he merely insists upon the will being proved in solemn form of law and only intends to cross-examine the witnesses produced in support of the will."

5.Mr Ho argued that although he could not say that the Defendants did not have reasonable grounds to oppose the will, they did not stop at merely putting the Plaintiffs to strict proof of the will; they actually put forward a positive case of forgery. "Lies" were told by the 2nd Defendant in Court, and great expenses were incurred by the Defendants in their instructing a "world-class" handwriting expert to prepare expert handwriting reports as well as to personally attend the trial of the action.

6.An affirmation was also filed by the 1st Plaintiff setting out the difficulties that she has encountered in seeking to clear the estate duty of the estate, and the difficult and uncooperative attitude of the 2nd Defendant. At the hearing, however, Mr Ho, quite correctly, did not seek to place much if any reliance on the material contained in the affirmation. Certainly, in my judgment, a potential beneficiary of an estate is under no duty to assist an intending personal representative to clear the estate duty of the estate. As regards the allegation of delay on the part of the Defendants to make known their opposition to the will, that was factually incorrect: the 1st Defendant lodged a caveat with the Probate Registry in January 1997, even prior to the belated discovery of the Chinese document, whereas the 2nd Defendant lodged his caveat in September 1998. As Mr Cheng, appearing for the Defendants, rightly pointed out, there was really nothing to stop the Plaintiffs from commencing the probate action earlier, which was not commenced until the year 2000.

7.The affirmation also mentioned that roughly estimated, if my cost order nisi should remain intact, the net worth of the estate now, after deducting the costs of both sides as well as the estate duty and the accrued interest, would be in the region of slightly over HK$6 million. But I agree with Mr Cheng that this is really neither here nor there, insofar as the question of how the Court's discretion on costs should be exercised.

8.I agree that O. 62 r. 6(1)(c) sets out an exception to the general rule that costs should follow the event. It restricts the Court's discretion on awarding costs against an unsuccessful opposing party to a will in certain defined circumstances. I also agree that if the opposing party has stepped across the line by putting forward a positive case, the implication of the rule is that the general rule on costs should apply, unless the case falls within other recognised exceptions, which I will turn to shortly.

9.It is debatable in the present case whether the Defendants have, in substance, put forward a positive case. Mr Ho accepted, very fairly, during submission, that the Defendants' instruction of a handwriting expert to prepare reports and to give evidence at trial did not necessarily mean that the Defendants were putting forward a positive case. In a dispute of the present sort, in order to be able to put the Plaintiffs to strict proof of the authenticity of the will in a meaningful way, in my judgment, the instruction of such an expert was most reasonable if not quite necessary.

10.As regards whether the Defendants have put forward a positive case of forgery, in my judgment, the line between putting the Plaintiffs to strict proof of the authenticity of the will and saying explicitly that the will was not signed by the deceased (and thus a forgery) was indeed very thin. I doubt whether the difference between the two was not more apparent than real.

11.I will not repeat what I have already said in paragraph 145 of my judgment which referred to some paragraphs (paragraphs 98 to 102) in another judgment of mine in Wong Zhong Lan-xiang v Frank Wong HCAP 900002/1995 (18 April 2002), which in turn referred to passages in Tristram & Coote's Probate Practice (28th ed.) para. 39.14 and Williams, Mortimer & Sunnucks, Executors, Administrators and Probate (18th ed.) para. 40-04. The latter book actually has this to say (paras. 40-02 to 40-06):

" There are several important exceptions to the rule that costs follow the event in probate actions:

(1) Where notice to cross-examine has been given

Where a party opposing a will has in his defence given notice that he will raise no positive case but merely insists on the will being proved in solemn form and intends only to cross-examine the witnesses who attested the will, such party is not liable to pay the costs of the other party unless it appears that there was no reasonable ground for opposing the will. Although a party who thus limits his opposition will not in most cases be condemned in the costs if he fails, it does not follow that he will be granted his costs out of the estate.....

(2) Where the litigation has been caused by the conduct of the testator

There is the rule which also applies to the construction of an ambiguous will. Where the state of his testamentary papers, the habits and mode of life or (doubtfully) where the testator's own statements have brought about the litigation, costs of unsuccessful parties may be ordered out of the estate.

Thus where owing to the confusion in which his papers were left it was doubtful whether the deceased intended entirely to revoke an earlier will; or where it was doubtful whether an apparently duly executed document was intended to be testamentary the court ordered the costs of both parties to be paid out of the estate.

Where the conduct and habits and mode of life of a testator have given ground for questioning his testamentary capacity, the costs of the unsuccessful opponents of the will must be paid out of the estate......

(4) Where circumstances afford reasonable grounds for opposing a will

Where there are reasonable grounds for opposing a will, other than those mentioned above, the unsuccessful party, though not usually granted his costs out of the estate, will not be condemned in costs.

"It is the function of this court," said Sir J. P. Wilde in Mitchell v. Gard, "to investigate the execution of a will and the capacity of the maker, and having done so to ascertain and declare what is the will of the testator. If fair circumstances of doubt and suspicion arise to obscure this question, a judicial enquiry is, in a manner, forced upon it. Those who are instrumental in bringing about and subserving this enquiry are not wholly in the wrong, even if they do not succeed; and so it comes that this court has been in the practice on such occasions of deviating from the common rule in other courts, and of relieving the losing party from costs, if chargeable with no other blame than that of having failed in a suit which was justified by good and sufficient grounds for doubt."

Thus where a will was unsuccessfully opposed because a doctor, who attested it, expressed doubts as to the testator's testamentary capacity, the court refused to condemn the next-of-kin in costs. There are cases where a party is entitled to demand proof in solemn form, but not justified in fully contesting the action.

But parties should not be tempted into fruitless opposition to a will by a belief that their costs will be defrayed by others, or that they will escape condemnation in costs."

12.The above extract is fully borne out by a decision decided in the latter part of the 19th century in Orton v Smith (1873) LR 3 P & D 23 where Sir J Hannen had this to say:

"But in dealing with the question of costs, I have to consider all the facts of the case. I understand the rule as to costs to be that if the circumstances are such as to justify the litigation, then this Court, going farther than other courts, is in the habit of allowing the party who has entered into a litigation which it considers reasonable and justifiable to have his costs out of the estate. Undoubtedly it frequently refuses such an indulgence where the plea of fraud is improperly pleaded, but the question whether such a plea was justifiable must be judged upon its merits in each case that comes before the Court. Now, in this case, there were many facts calculated to excite grave suspicion ... One of the grounds on which the Court always allows costs out of the estate is that the testator has left his testamentary papers in such a state that they excite suspicion and invite litigation. Assuming that I was right in the conclusion to which I came on the merits, it was a misfortune that the mode in which the testator executed the will certainly gave rise to the most natural and well founded suspicion, for the signature was evidently patched and altered. I could not come to the conclusion that the signature was a forgery, I could not believe that the ignorant people who were about the testator when the will was executed were prepared with the means of obliterating a part of the signature. If they were not, it must be asserted that the attorney of Mr. Orton must have used some means of obliteration; but this was not proved. It was a very great misfortune that the testator executed the will in such a manner as to give rise to very serious suspicions."

13.In Orton, the Court allowed costs out of the estate to the unsuccessful opponent of a will although he had pleaded undue influence and fraud, being of the opinion that the mode in which the testator had executed the will and the conduct of the persons beneficially interested in it had reasonably excited doubt and suspicion, and justified those pleas.

14.Of course the facts in Orton are not the same as the facts in the present case. But there are indeed similarities. Given the mode and manner in which the deceased in the present case chose to make the Chinese document, and the way he chose to hide the making of the will from his wife and stepson as well as his close elder brother (the 2nd Defendant), and given the general circumstances of this case, which I really need not go into here, I am of the view that the Defendants were justified in mounting the most serious opposition to the will, and if in the process, they have inadvertently stepped across the line by putting forward a positive case of forgery, I think that is understandable and is covered by the principles enunciated in Orton and Williams.

15.So for all these reasons, notwithstanding the able submission of Mr Ho, I remain of the same view that in principle, what I ordered in my judgment on a provisional basis was correct. This is however subject to one modification.

16.I take and accept Mr Ho's point that the 2nd Defendant was not entirely frank in his evidence in Court. In fact, I have found against him on a number of important matters. The content of his evidence, and no doubt the instructions he gave to his learned counsel who conducted his case as well as the 1st Defendant's case diligently on their behalf, did, in my judgment, have the effect of complicating the matter, clouding the issues, adding to the suspicion against the Chinese document, and lengthening the trial and thus increasing the attendant costs of both parties, quite considerably and unnecessarily.

17.Having heard Mr Ho, I am convinced that this should be fully reflected in my cost order.

18.So in summary, although I am of the view that in principle, the Defendants should have their costs paid out of the estate, part of their costs as well as the corresponding part of the Plaintiffs' costs that were incurred by reason of the evidence given by the 2nd Defendant that was not accepted by the Court and the corresponding submission made by the Defendants' counsel based no doubt on the 2nd Defendant's instructions, should not be borne by the estate, but should instead be borne by the Defendants.

19.As regards the certificate for two counsel that I granted under my order nisi, I see no good reason to disturb it, despite the attractive argument to the contrary advanced by Mr Ho.

20.Taking an overall view of the matter, and having performed a kind of mental set-off exercise, I make an order varying my cost order nisi to the extent (only) that 75% (instead of 100%) of the Defendants' costs be paid out of the estate of the deceased, to be taxed if not agreed on a common fund basis. My cost order nisi (as thus varied) shall now become absolute.

21.As regards the costs of this application to vary my cost order nisi, the parties are in agreement that the costs should form part of the costs of the trial. And I so order.