Case Document

100%Judiciary

CACV 460/2002
CACV 67/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL 460 OF 2002 &

CIVIL APPEAL 67 OF 2003

(ON APPEAL FROM HCAP No.8 OF 1999)

______________________

IN THE MATTER OF THE ESTATE OF WANG TEH HUEI

______________________

BETWEEN:

	WANG DIN SHIN	Plaintiff
	and
	NINA KUNG alias NINA T.H. WANG	Defendant

______________________

Before: Hon Yeung & Yuen, JJA & Waung J in Court

Dates of Hearing: 8-9 March 2005

Date of Judgment: 19 April 2005

_______________

JUDGMENT

_______________

Hon. Yeung JA:

1.I will ask Yuen JA and Waung J to give their judgments first before I set out my own.

Hon. Yuen JA:

2.On 8-9 March 2005, we heard:

(I) the Defendant’s appeal from Yam J’s order for costs of the action in HCAP8/1999 ("the Costs Appeal") and

(II) the parties’ submissions on the costs of the appeal on the merits from Yam J’s judgment in the action ("the Costs of the Main Appeal").

(I) The Costs Appeal

3.The trial of the probate action took 172 days, of which 166 days were taken up by evidence. In his order, the judge granted probate of the 1968 will propounded by the Plaintiff (using the same nomenclature as in the appeal judgments, I will refer to him as "the Father") and dismissed the counterclaim of the Defendant ("the Wife") who had sought to propound documents dated 1990 and purportedly signed by the Deceased as his will ("the 1990 documents").

4.On 30 January 2003, the judge gave a final order for costs of the action. Those parts of the order challenged by the Wife on appeal are set out below:

(a) the Wife was ordered to pay the Father his costs of the action (i.e. the Father’s claim) and of the counterclaim, on an indemnity basis;

(b) the Father was however to be deprived of 15% of the costs;

(c) the taxing master was directed that the Father’s costs should include the costs of LiveNote;

(d) the Wife was ordered to pay the Father’s costs of the application for variation of the costs order nisi, with certificate for 3 counsel.

The judge’s reasons for the costs order were set out in chapter 33 of his judgment.

Principles

5.Costs are of course in the discretion of the judge. Where an appellate court is asked to interfere with a judge’s exercise of discretion in making an order on the basis of taxation of the costs of an action, particularly one where the trial had lasted many days, extra caution should be exercised because the appellate court has simply not had the "feel" of the case as the trial judge had.

6.However, as in all cases of judicial discretion, an appellate court can interfere with a judge’s decision if it is shown that the judge had erred in law, or was under a misapprehension of material facts, or if he had taken into account some matter which he should not have taken into account, or had left out of account some matter which he should have taken into account, or if the decision was so plainly wrong that it must have been reached by a faulty assessment of the weights of the different factors which had to be taken into account.

7.With the above principles in mind, I turn to those parts of the costs order which have been challenged by the Wife.

(a) Indemnity basis

8.In §33.4 - §33.6 of his judgment, the judge had set out the principles relating to the award of costs on an indemnity basis. There is no dispute that those principles were applicable.

9.Mr Jat SC, leading counsel for the Wife, submitted however that the judge had, in §33.7 and §33.14, listed 7 factors which had moved him to award costs on the indemnity basis, and as some of those factors no longer applied as a result of the judgments of this court, and the rest had been wrongly decided by the judge, this court can and should interfere with the judge’s exercise of his discretion.

- Judge’s 7 factors

10.The 7 factors, as stated by the judge (§33.7 and §33.14), were:

" (a) that the four 1990 documents were forged documents, in that both the Deceased and Tse’s signatures were forged signatures;

(b) that the [Wife] was probably the author of Document A;

(c) the findings of suspicious circumstances;

(d) the non-disclosure of documents by the [Wife];

(e) the omission of paragraph 5 of the [Wife’s] Lists of Documents up to the 12^th List filed on 16 April 2002;

(f) the unduly lengthy cross-examination on Mr Yih Lee Kong, Ms Teresa Wang and the [Father] himself to a certain extent; and

(g) the various attempts by the [Wife] to delay the trial before and during the proceedings as submitted by Counsel for the [Father]".

11.Mr Edward Chan SC, leading counsel for the Father, grouped the 7 factors under 2 main categories, referred to for short as the ‘peddling of false will’ category for factors (a) and (b), and the ‘conduct’ category for factors (c) to (g).

12.I cannot see from the reasons for judgment that the judge had made the categorizations suggested by Mr Chan SC (or any other categorizations). I think all that the judge did was to indicate that the weight of factors (a) and (b) alone was sufficient to warrant an indemnity costs order, even before taking the other factors into account (§33.8).

13.In relation to factor (a), this court (by a majority) has found as a fact, concurrently with the judge, that the purported signatures of the Deceased appearing on the 1990 documents had not been written by him. As for Tse’s signature, this court (by a majority) reversed the judge’s finding that his signature was forged by superimposition, although in my judgment, I had clarified that this should not be taken as an acceptance that Tse’s signatures on the documents had been written in 1990.

14.In relation to factor (b) however, this court has unanimously held that there was insufficient evidence before the court to support the judge’s finding that the Wife was the author of Documents A and D. Given the judge’s statement of his reliance on this factor (§ 33.8), I think Mr Jat SC is right in submitting that the judge’s exercise of discretion can be set aside under the principles set out in §6 of this judgment.

15.Accordingly, it falls to this court to examine those factors which remain as a result of this court’s judgments and any other relevant factors, and to consider whether in the light of all these factors, an indemnity costs order is appropriate.

- Factors relevant to this court’s consideration

16.Reverting to factor (a), one begins with the finding that the 1990 documents were not in fact signed by the Deceased. I do not think that in every case where a court rejects a purported will on the ground that the signature was not that of the deceased, the person seeking to propound it should be ordered to pay costs on an indemnity basis. On the other hand, I do not consider that an actual finding of forgery by that person is a pre-requisite for such an order, and I do not read the judgment in The Public Trustee v Annous, The Estate of Bader Ali Taleb (NSWSC PD 103223 of 1992, unrep) as suggesting that.

17.In my view, the court must look at the facts of each individual case and if the evidence shows that the person seeking to propound the will has, in order to advance his own interests, knowingly participated in a dishonest design to put forward as a genuine will a document which was not, that may be a special and unusual feature such as to warrant an order for costs on the indemnity basis. (I do not think that it is necessary for present purposes to consider whether the order should be made if the person propounding the will had acted recklessly or without taking reasonable care to ascertain the facts).

18.In the present case, the 1990 documents had not been signed by the Deceased and yet the Wife made an affirmation that the Deceased had personally handed her these very documents sometime between March and April 1990 (which she had kept until they were placed in the custody of the court). In her affirmation of 16 January 1998, she had made the following statement on oath:

"A few days later he [the Deceased] gave me a sealed envelope for safe-keeping and he told me that the envelope contained his will together with confidential instructions relating to his estate ... he told me that it should not be opened until after his death. "

19.That evidence, in terms clear and unambiguous, was no doubt intended to support the genuineness of the documents – documents which did not in fact contain the Deceased’s signatures. The Wife could not possibly claim that in giving this evidence, she had been influenced by expert hand-writing evidence or Tse’s evidence, because she made her affirmation in 1998, well before such other evidence had even come into existence

20.It is inconceivable that the Deceased would have given the Wife documents purporting to be his will but signed by someone else. She has made no attempt - by oral testimony, affirmation or otherwise - to seek to modify, or to account for, her statement in the affirmation of 16 January 1998. Indeed, the statement was in such clear terms there could have been no misunderstanding, and none has been suggested. There is no evidence of any extenuating circumstances. The Wife having intentionally made that statement on affirmation to advance her own interests based on documents found to have been fabricated, it is clear that this is a case where an order for costs on an indemnity basis is appropriate.

21.In relation to factor (c), some of the matters regarded by the judge as "suspicious circumstances" have been taken into account by the majority of this court in arriving at the conclusion that the 1990 documents had not in fact been signed by the Deceased. There is no point in repeating here those circumstances which have been taken into account. In my view, the unexplained statement by the Wife in her affirmation of 15 July 1999 (two months before the envelopes were unsealed in court) deposing to her belief that she was the "sole beneficiary" of the estate, when she had stated on affirmation that she had never seen the contents of the sealed envelopes after the Deceased had given them to her, is a relevant consideration (although not determinative) in ordering costs on a higher scale.

22.In relation to factor (d), the judge obviously had in mind the fact that a number of documents were disclosed only during the trial (§4.43). A particularly culpable example related to a ‘proficiency test’ targeting Mr Erich Speckin, whom the Father was going to call as an ink-dating expert. The ink-dating issue was not before this court at the hearing of the appeal and therefore the judge’s views on this factor when he ordered indemnity costs were not affected by the appeal judgments.

23.Apparently what had happened was that before the trial, the Wife’s agents, acting covertly, had sought Mr Speckin’s opinion on ink-dating on various documents which they had prepared, in order to test the reliability of his methods. At the trial, Mr Speckin was cross-examined on these documents which had not previously been disclosed in discovery, even after Mr Speckin’s reports had been filed. The cross-examination was not simply to discredit Mr Speckin but was held by the judge to be on the central issue of the reliability of Mr Speckin’s methods (Day 47 p.39 line 24 - p.40 line 4; p.41 lines 1-14).

24.The judge clearly disapproved of this method of "cross-examination by ambush" on an important issue, and warned Mr Grossman SC (acting for the Wife on the ink-dating issue) that he should give the Father’s legal team all the documents he had "up your sleeve". To that, Mr Grossman SC’s reply was "I accept your Lordship’s rebuke" (Day 47 p.41 lines 15-21).

25.That course of conduct at the trial supported the judge’s view that costs should be taxed on a higher scale, and it is a view that I share.

26.In relation to factor (e), the matter arose in this way. Order 24 rule 5(1) Rules of the High Court provides that a list of documents "must be in Form No. 26 in Appendix A", and rule 5(3) provides that an affirmation made to verify a list of documents "must be in Form No. 27 in Appendix A".

27.Form No. 26 (the standard form for a list) contains five paragraphs. Paragraph 5 states:

"Neither the [defendant], nor his solicitor nor any other person on his behalf, has now, or ever had, in his possession, custody or power any document of any description whatever relating to any matter in question in this action, other than the documents enumerated in Schedules 1 and 2 hereto."

28.Form No. 27 (the standard form for a verifying affirmation) states at paragraph 3:

"The statements made by me in paragraph 5 of the said list are true to the best of my knowledge, information and belief."

29.The Wife had made 12 lists, none of which contained paragraph 5. This was not noticed by the Father’s legal advisers. It was not until the Wife made the 13^th list that paragraph 5 appeared.

30.Mr Chan SC, leading counsel for the Father at trial, drew the judge’s attention to this on Day 133 of the trial.

31.The explanation proffered by Mr Martin Lee SC, leading counsel for the Wife at trial, was that as the earlier lists were compiled "in a great hurry", the Wife’s solicitor had advised her not to include paragraph 5, and subsequent lists had been prepared following the same format, with the result that paragraph 5 was also omitted. Mr Jat SC, for the Wife before this court, also sought to explain the omission on the ground that difficulties with discovery were caused by the state of the Father’s pleadings.

32.In my view, it is indisputable that Order 24 rule 5(1) and rule 5(3) are in mandatory terms. The rules of court do not permit any deviation from the mandated forms. If any party had been placed in difficulties by the state of the other party’s pleadings, he could have applied to the court for further or better particulars, or asked for the other party’s case to be clarified. That was not done. Moreover, having decided not to comply with the mandatory requirements of Order 24 rule 5(1) and rule 5(3), the Wife’s legal team did not disclose this to the other party and the court.

33.By including this as a factor supporting an order for indemnity costs, the judge was signalling that he disapproved of this type of conduct. I agree with that view. It is essential to the orderly process of civil justice that parties comply with the rules of court. Ambushes and non-disclosure can have no part to play in modern litigation. A party whose conduct in litigation violates that process puts himself at risk of an order for costs on an indemnity basis.

34.In relation to factor (f), the judge had taken into account the length of the cross-examination of Mr Yih Lee Kong, Ms Teresa Wang and "the [Father] himself to a certain extent". In my view, it is relevant to the order of costs on a higher scale that Mr Yih was subjected to cross-examination which the judge described as "extremely long, excessively thorough and vigorous, if not downright oppressive", and his integrity was challenged on the basis of matters put to him which were not subsequently substantiated by evidence (Yam J’s judgment §3.98, §3.100). I accept that the same may not be said in respect of the lengthy cross-examination of Ms Wang, who had somewhat brought it upon herself by her allegation that Document A had been written by the Wife, a matter that had not been pleaded and which this court has found not proven. As for cross-examination of the Father, Mr Chan SC has not suggested that it was such as to warrant an order for costs on an indemnity scale.

35.In relation to factor (g), this is a matter on which, I think, an appellate court must give due weight to the views of the trial judge, even though the appellate court is exercising its own discretion. It is clear from his judgment that the judge had given credit where credit was due - this can be seen from his praise for Mr Grossman SC’s efficiency in dealing with the ink-dating issue (§32.12). Similarly, the judge did not shrink from criticism where criticism was justified. In §32.9 - §32.12, the judge set out examples of time-wasting on the part of other members of the Wife’s legal team. Nothing would be served by setting out those passages here. In my view, it is clear from those passages that an order for costs on a higher scale is appropriate.

36.Taking all the above matters into account, I am of the view that an order for costs on an indemnity basis is appropriate, subject to the deprivation of part of the Father’s costs discussed below.

(b) Deprivation of 15% costs

37.The judge deprived the Father of 15% of his costs. It was clear from the judgment that this was the judge’s estimate of the time taken for the ink-dating issue only.

38.Mr Jat SC for the Wife contended that:

(i) not only should the Father be deprived of his costs on the ink- dating issue, he should also be ordered to pay the Wife’s costs on the issue, and

(ii) in any event, the Father should be deprived of a larger proportion of his costs, by reason of the time taken on other issues where the Father has failed.

Principles

39.In re Elgindata Ltd (No.2) [1992] 1 WLR 1207, Nourse LJ had set out 4 principles governing the award of costs. They are as follows (the applicable Hong Kong rules are set out in square brackets):

" (i) Costs are in the discretion of the court [Order 62 r.2(4) RHC];

(ii) They should follow the event, except where it appears to the court that in the circumstances of the case some other order should be made [Order 62 rule 3(2) RHC];

(iii) The general rule does not cease to apply simply because the successful party raises issues or makes allegations on which he fails, but where that has caused a significant increase in the length or cost of the proceedings he may be deprived of the whole or part of his costs;

(iv) Where the successful party raises issues or makes allegations ‘improperly or unreasonably’ [in Hong Kong, ‘improperly or unnecessarily’], the court may not only deprive him of his costs but may order him to pay the whole or a part of the unsuccessful party’s costs [Order 62 rule 7(1) RHC]".

40.The judge had expressly stated his reliance on these principles. These principles were discussed by Lord Woolf M.R. in AEI Rediffusion Music Ltd v Phonographic Performance Ltd [1999] 1 WLR 1507, a judgment delivered before the Civil Procedure Rules took effect. Lord Woolf stated that the position (even prior to the new Rules coming into effect) was that the courts have become more ready to depart from the ‘follow the event principle’ as too robust an application of that principle encourages litigants to increase the costs of litigation, since it discourages litigants from being selective as to the points they take. However, I fear I may have overstated the extent of Lord Woolf’s preparedness to depart from the Elgindata principles when in Thomas Vincent v South China Morning Post Publishers Ltd (No. 2) [2004] 3 HKLRD 471, I suggested that where the successful party raises issues on which he fails, he may not only be deprived of his costs but may also be ordered to pay the other party’s costs, even though those issues may not have been raised improperly or unreasonably (§15). Under Order 62 rule 7(1) RHC, it is only where a successful party raises issues or makes allegations improperly or unnecessarily that he may be ordered to pay a part of the other party’s costs.

- (i) Ink-dating issue

41.Dealing first with contention (i), it should first be noted that the ink- dating issue was raised in the Father’s defence to the Wife’s counterclaim for probate of the 1990 documents. This is not a situation where there were discrete claims and defences to discrete claims, where separate orders for costs could more easily be made (as in Vincent v SCMP).

42.The question here is whether in raising the ink-dating issue, the Father had acted improperly or unnecessarily. If he had, then Elgindata principle (iv) may be brought into play. If he had not, then the judge was clearly right to have applied Elgindata principle (iii), the Father not having cross-appealed the order depriving him of the costs of the issue.

43.Mr Jat SC for the Wife submitted that the ink-dating had been raised improperly or unnecessarily. He relied on the fact that prior to trial, the Wife’s solicitors had written to the Father’s solicitors enclosing correspondence from two handwriting experts, Dr Audrey Giles and Dr Robert Radley, who expressed views that ink-dating techniques were controversial and thus the results, unreliable. (Although Dr Giles and Dr Radley were not called at the trial, two other experts Dr Valery Aginsky and Mr Peter Tytell were called by the Wife).

44.However, what is of greater relevance is the judge’s statement that his conclusion (that the Father had failed to establish that the ink was less than 3 to 3½ years old at the time of examination) was reached only after thorough cross-examination of Mr Speckin and after hearing the evidence of the Wife’s experts. In particular, the proficiency test undertaken by the Wife’s agents to undermine the reliability of Mr Speckin’s technique was not disclosed until his cross-examination, a matter which is relevant to the question whether the costs of the ink-dating issue were improperly or unnecessarily incurred.

45.Having regard to the above, I am not persuaded that this was an Elgindata principle (iv) situation.

- (ii) Other issues

46.I now deal with Mr Jat SC’s contention (ii), i.e. in any event, the Father should be deprived of a larger proportion of his costs, by reason of the time taken on other issues where the Father has failed.

47.It is clear from the judgment that the deprivation of 15% of the costs was attributed to the ink-dating issue only (§33.20). The judge did not take into account the time taken by the Father in seeking to prove that the Wife was the author of Document A, a matter which was neither pleaded nor (in the light of this court’s judgments) proved. There is also the question of the time taken to prove that Tse’s signature was done by superimposition and on arguments on the proof of forgery by suspicious circumstances.

48.Applying Elgindata principle (iii), and in view of the order for a higher scale of costs (and accepting that this is only a rough and ready estimate), I propose that the judge’s order be varied so that the Father is entitled to 75% of the costs of the action (i.e. the claim and the counterclaim), to be taxed if not agreed, on an indemnity basis, with certificate for 3 counsel (the number of counsel not having been challenged on appeal).

(c) LiveNote charges

49.Generally speaking, LiveNote charges would only be included as part of the costs of an action if there had been a prior direction of the court, or if there had been an agreement between the parties.

50.In the present case, there had been no direction from the court prior to trial that LiveNote should be retained and that its charges be included as part of the costs of the action.

51.As for an agreement, it was suggested by Mr Chan SC that the letters passing between the Father’s solicitors and the Wife’s solicitors between 1 August and 4 August 2001 amounted to an agreement that LiveNote charges should be treated as part of the costs. I cannot agree. If anything, the letters show that the agreement between the parties was that LiveNote charges for the terminals specified in the letters should be shared equally between the parties.

52.The judge said that in view of the length of the trial, it was necessary and proper to have LiveNote’s services. I do not wish to detract in any way from the usefulness of those services. However, I think the court must be cautious not to add to the burden of a party’s litigation costs by the imposition of further substantial charges, sought after the event. Further, the present case was one where there was already a large array of manpower on both teams (who no doubt would be charging for their services) and LiveNote’s services, in the present case at least, appear to be an additional luxury for which the user should be personally responsible.

53.I would therefore set aside that part of the judge’s order in which he directed the taxing master to include LiveNote’s charges as part of the Father’s costs.

(d) Number of counsel on application for variation

54.Finally, there is the question of the number of counsel on the application for variation of the judge’s order nisi on costs (to be taxed on a party and party basis). Mr Jat SC submitted that 2 counsel should have been adequate. The judge gave certificate for 3 counsel.

55.It matters not whether in my view, a certificate for 3 counsel on an application for costs was justified. This was a matter for the judge’s discretion. It has not been suggested that there was any error by the judge of the nature set out in §6 above. Accordingly I do not think that there is anything in this point, and it was right of Mr Jat SC not to have spent any time on it.

Order on the Costs Appeal

56.In conclusion, I would order that the appeal be allowed to the extent that:

- in paragraph (a) of the judge’s order, the order that the Plaintiff [Father] be entitled to 85% of the costs of the action and the counterclaim, to be taxed if not agreed, on an indemnity basis, with a certificate for three counsel, be set aside and in its place, a similar order be made but with 75% being substituted for 85%;

and

- in paragraph (b), subparagraph (i) which reads "the costs of the LiveNote; and" be set aside.

57.As for the costs of the Costs Appeal, in view of the end result, i.e. the Father having succeeded in maintaining the indemnity basis but the Wife having succeeded in reducing the costs to be paid, I would give an order nisi that each party bear his own costs.

(II) The Costs of the Main Appeal

58.Finally there is the question of the costs of the main appeal. The Father’s proposed order was that the Wife should pay his costs of the appeal, to be taxed on the party and party basis, with certificate for 4 counsel. The only issue between the parties was whether there should be some adjustment to reflect the rejection by this court of certain findings made by the judge, referred to in §13 - §14 above.

59.In my view, no adjustment is justified, and the proposed order, which reflects the ‘follow the event’ principle, is correct. The findings which were rejected by this court were not orders against which the Wife could have launched an appeal, separate from her appeal from the order dismissing her counterclaim to propound the 1990 documents. I do not consider that there was any significant increase in the length or the costs of the appeal as a result of those matters, so Elgindata principle (iii) does not apply. It follows that there is no question of any adjustment under Elgindata principle (iv).

Order on the application for the Costs of the Main Appeal

60.Accordingly, I would order that the Wife do pay the Father his costs of the main appeal, to be taxed on the party and party basis, with certificate for 4 counsel. The application for the costs of the main appeal is to be treated as part of the appeal.

Hon Waung J:

61.There are four Questions which require determination by the Court of Appeal, namely:-

(I) What ought to be the proportion of Father’s Costs of the Action (including Counterclaim) to be reduced;

(II) Whether Costs of the Action (including Counterclaim) given to the Father is to be on an Indemnity Basis;

(III) Whether the Live Note costs should be part of the Costs of the Action (including Counterclaim) given to the Father;

(IV) Whether the Costs of the Main Appeal to be given to the Father Respondent should be subject to a reduction and if so what reduction.

62.I agree with the majority of the Court of Appeal that under Question (III), Live Note costs should be excluded from the costs of the Action (hereinafter as meaning to include Costs of the Counterclaim) to be given to the Father.

63.With considerable reservation, I am prepared not to dissent from the judgment of the majority of the Court of Appeal under Question (I) that the proportion of the Costs of the Action to be given to the Plaintiff should be varied from 85% to 75%. In my judgment there is considerable room for a view that the proper proportion of costs to be given should be somewhere closer to 65%. But as I agree that on appeal, the assessment of reduction must be decided on the basis of a rough and ready general approach (as it is not a matter of mathematical precision), 25% reduction is within a tolerable range of different assessments of what is a fair reduction.

64.I am however, for reasons as appearing below, unable to agree with the view of the majority of the Court of Appeal on Question (II) and Question (IV).

INDEMNITY COSTS OF THE ACTION

65.I accept and it is not in dispute that the Courts in modern times are far more ready to award costs on indemnity basis than previously. As pointed out in Sung Foo Kee Ltd. V Pak Lik Co. [1996] 3 HKC 570 and in The Town Planning Board v Society for the Protection of the Harbour (No. 2) (2004) 7 HKCFAR 114, the Court should award indemnity costs when appropriate. The dispute, as always is, when is it appropriate and what makes it appropriate. But there must exist fundamentally some “special and unusual features” which justify the Court in departing from the usual order of costs on a party and party basis (see Wang Din Shin v Nina Wang CACV 275 of 2004 at paragraph 25).

66.Orders of indemnity costs are particularly fact sensitive and issue sensitive. On appeal, if all the findings of facts or issues (based on which the Judge below made an order for indemnity costs) are not challenged or disturbed, then I readily agree that the Court of Appeal should be very slow to disturb the discretion of the Judge below in awarding costs on an indemnity basis. The usual circumstances where the Court of Appeal should disturb that exercise of discretion of the Judge applies. But the case before us is different, as we in the Court of Appeal have rejected a number of findings of the Judge which he took into account in the exercise of his discretion on Indemnity Costs. In these circumstances, by definition the Judge below in the exercise of his discretion, took into consideration irrelevant (and wrong) matters. It is therefore the duty of the Court of Appeal to exercise our own original discretion based on all the relevant matters.

67.In refusing to propound the 1990 Will, the Judge made the following Findings:-

(A) the Wang signatures were forged;

(B) the Tse signatures were forged;

(C) Nina was the author of the text in Document A;

(D) Nina was the author of the words “One life one love” on Document D and Nina was the author of the word “One life one live” and “Nina” in Documents B and A.

68.The Judge relied upon the above 4 Findings (A), (B), (C) and (D) in reaching his decision that Indemnity Costs should be ordered (see paragraph 33.7 of the Judgment). Indeed at paragraph 33.8 of the Judgment, the Judge said that Findings (A), (B) and (C) together “are sufficient to warrant an order for costs on indemnity costs”. Three of the above 4 Findings (including Findings (B) and (C)) are now set aside and without the necessity to consider the subsequent paragraphs of the Judgment from paragraph 33.9 onwards to 33.20, it is plain to me that the exercise of the discretion of the Judge was erroneous in law and must be set aside and that we in the Court of Appeal must exercise our own original discretion by examining afresh for ourselves, all material factors, both in favour and against a discretionary order of Indemnity Costs.

Factors Against Indemnity Costs

69.The 1^st Consideration against indemnity costs is the also the starting point for exercise of discretion on costs, namely that the normal order of costs is on a party and party basis and is not on an indemnity basis.

70.The 2^nd Consideration against indemnity costs is that even the most hostile litigation (the Trial over one year in this case is perhaps the worst example of such hostile litigation) does not alter the general application of the basic rule of costs on a normal party and party basis.

71.The 3^rd Consideration against indemnity costs is that hostile probate litigation does not fall outside the general principle above. In contested probate litigation, whether the defence may be any of the usual grounds of:

execution, testamentary capacity, lack of knowledge and approval, undue influence or forgery

the normal principle of party and party costs would still apply.

72.The 4^th Consideration against indemnity costs is that justice requires the court to look at the conduct of both parties in deciding whether indemnity costs should be awarded. A blinkered look at only the conduct of the unsuccessful party is not a proper exercise of discretion.

73.The 5^th Consideration against indemnity costs is that the Father failed badly on the Ink Dating Issue. The Father persisted with that defence in the face of warning long before the Trial started that the Ink Dating defence should not be pursued as it was bound to fail.

74.The 6^th Consideration against indemnity costs is that although the Wife failed in the Action, the Wife succeeded in defeating many of the false points which were advanced by the Father and this is reflected in the 25% reduction of the Costs of the Action now awarded to the Father by the Court of Appeal.

75.The 7^th Consideration against indemnity costs is that it was reasonable for the Wife to contest unpleaded issues accusing her of personal involvement in the forgery of the 1990 Documents such as Findings (C) and (D). Her success and the Father’s failure in relation to these failed Findings strongly suggest that no penal costs order ought to be made against her.

76.The 8^th Consideration against indemnity costs is that this is a case where both parties (as said by Yuen JA in her judgment) played their cards very close to the chest. In the case of the Father, two features of his team playing cards close to the chest stand out, namely:-

(a) a case of unpleaded forgery (except for the forgery of Tse and Wang signatures) was allowed to be run which had substantially contributed to the length of the Trial;

(b) a case of unpleaded and disavowed personal involvement of Wife in the forgery was allowed to be made and became the basis of the Findings which were set aside by the Court of Appeal.

The conduct of the Father in the Action was the “ugly face” of modern litigation and certainly is not deserving of “encouragement” or “approval” by an award of Indemnity Costs.

77.The 9^th Consideration against indemnity costs is that indemnity costs of the whole Action is the ultimate nuclear weapon only to be employed as a last resort. Lesser orders such as indemnity costs in respect of any particular interlocutory application are often more appropriate and proportionate, reflecting the view of the court of the venal or disapproving features of any particular aspect of any application or any part of the whole case.

78.The 10^th Consideration against indemnity costs is that it was not pleaded by the Father, it was not decided by the Court of Appeal and there was no clear evidence that the Wife knew that the 1990 Will was forged. In fact there was clear evidence that Tse witnessed Wang signing the 1990 Documents and the genuineness of the Wang signatures were supported by no less than three eminent handwriting experts. A loving wife beneficiary could hardly be castigated as being irresponsible in propounding the 1990 Will and taking it to a full Trial in these circumstances, even though at the end her Counterclaim failed. Her failure cannot be equated to a finding by the Court of Appeal that she took part in the forgery or that she propounded the 1990 Will knowing it to be a forgery.

79.The 11^th Consideration against indemnity costs is that the initial reaction of the Judge to award costs on a normal party and party basis is correct and far more reliable than when he adopted wholesale the argument of the Father and awarded indemnity costs. The pink passages in his Judgment on Costs dated 30^th January 2003 again only demonstrate how much the Judge abdicated his own judgment.

80.The 12^th Consideration against indemnity costs is when the court gives a reduction of the Father’s costs, the Wife is in reality having to bear her own costs even on issues she has won. If on top of that, she has to pay the Father’s costs (at a reduced proportion) on Indemnity basis, the injustice to the paying party is that much even greater.

Factors in Favour of Indemnity Costs

81.The Finding of forgery of Wang signatures is certainly a factor which the Court can take into account in favour of indemnity costs. In the context of probate litigation, I doubt whether it is to be given any more weight then say a finding that a will fails because of undue influence or lack of knowledge and approval.

82.What turned out to be a crucial and much debated factor at the hearing before the Court of Appeal is what I might call the Annous Factor, Annous being the name of the case of The Public Trustee v Annous (unreported Judgment of Powell J. of the New South Wales Supreme Court on 31^st July 1992).

83.The facts of Annous need to be understood first. Annous being a friend of the deceased produced a later will said to be found amongst the personal effects of the deceased given to Annous immediately after the death in hospital of the deceased. That later will gave a part of the estate to Annous as compared to an earlier will giving the estate to the brothers and sisters of the deceased. The executors under the first will sought probate of the first will and on the first listing hearing on 24^th April 1992, Annous asked the court for the release of the later will to him for examination by expert of Annous. The expert of Annous came to the same conclusion as the expert of the Executors of the first will, namely that the signature on the second will was forged. At the hearing on 31^st July 1992 (some 3 months after the first listing hearing on 24^th April 1992), Annous announced to the Court that he was no longer opposed to the grant of probate of the first will. It was in these circumstances, that the Judge took the view that the opposition to the first will was conduct which was deserving of an order of indemnity costs against Annous. This is what the Judge said:

“… I have concluded that the various matters to which I have earlier referred make it, in the absence of any acceptable explanation from Mr. Annous, legitimate for me to infer, as I do, that the document which Mr. Annous handed to Mr. Rabaa, and which Annous has since sought to peddle as the Deceased’s Will, is a cold-blooded forgery produced by him with a view to obtaining a financial advantage for himself.”

84.The Judge concluded that the Wife’s conduct in the present case was far worse than that of Annous. He said at paragraph 33.13 that

“…. This submission (of case being distinguishable from Annous) could only be made if the court found that the defendant had nothing to do with those documents in the sealed envelope and she had no knowledge thereof. However, it is the finding of the court that she probably was the author of Document A and also those words “one life one love” and “Nina” as found in Documents B and A, and “one life one love” on Document D.”

85.As the authorship findings of the Judge, namely Findings (C) and (D) have been reversed by the Court of Appeal, the foundation of the Judge applying Annous also disappears. This is the most direct and easy way of dealing with the Annous Factor.

86.It was however also argued that in any event even with the disappearance of Findings (C) and (D), the Annous Factor is still applicable. Paraphrasing the passage in Annous cited earlier, it was argued that the Wife has sought to peddle the 1990 Documents (as the Deceased’s will) which is a cold-blooded forgery produced by her with a view to obtaining a financial advantage for himself. In my view, the usage of the underlined word produced is meant to refer in the Annous case to a finding that Annous himself forged the later will and therefore as forger of the cold-blooded document, he peddled it with a view to gain for himself a financial advantage namely part of the estate. The order of indemnity costs is therefore made on the basis of Annous participating in the forgery and knowing it to be a forged document. On that basis the order of indemnity costs is explainable and understandable.

87.The facts of our case is different in that a purported beneficiary puts forward a document which is held by the court to be not signed by the deceased. The Annous judgment certainly does not lay down a proposition that every time a potential beneficiary relies on a will which the court rejects as a genuine will, that beneficary is to be mauled by an order of indemnity costs. To justify a finding of indemnity costs, it is necessary to have a finding by the court that the plaintiff potential beneficiary knew that the will was forged and still put it forward and sought to propound that forged will. The allegation by the Wife that the 1990 Documents were given to her in fact was the opposite of a case that she knew that the 1990 Documents was forged. The fact that Tse gave his statement confirming the execution of the 1990 Will and three experts gave positive opinion of Wang signatures made it even more difficult for the court to find that she knew it was forged and yet persisted to litigate over its grant. The facts of this case take it totally outside the Annous Factor.

88.The matter of Annous however goes much further against the Father. Annous was merely a decision on costs based on its own particular facts, decided by a judge laying down no principle. Despite the fact that a large number of probate judgments had been looked at in many of which the facts are much worse than ours, no other case has been cited to us or referred to by the Judge, that it was the practice or it was common to award indemnity costs in a fully contested will case where the contested will was defeated on basis that signatures were forged and that the evidence cast doubt on due execution. In my view, contested probate litigation is not a law unto itself providing a different code of ordering indemnity costs. The concluding paragraph 1024 of the judgment of Yuen JA (to be fairly regarded as the majority judgment of the Court of Appeal) which might be considered to be the essence of the reasons why the Counterclaim was dismissed, does not support a case of either Annous Factor being applied or of sufficient good reason for the ordering of indemnity costs of the whole probate action.

89.In my view to say that because the Wife said in her affidavit that the Husband gave her the 1990 Will (which the Court of Appeal found to be forged), therefore she must have known it was forged and that she had knowingly peddled a forged will is not only erroneous in law, but also most unfair as this was not the finding of the majority of the Court of Appeal in its June 2004 Judgment. If the Court of Appeal now should condemn the Wife on Indemnity Costs by applying Annous, it amounts to the Court of Appeal in its unspoken way of punishing her for her not giving evidence or not entering the lion’s den.

90.In my view, even if the Wife took the stand and gave evidence of the Husband giving her the 1990 Documents and she was disbelieved (possibly for a variety of reasons) that would still not lead the Court of Appeal compellingly to a finding that she participated in the forgery or that she knew that the 1990 Documents were forged and deliberately peddled a forged document for financial gain. Financial gain is really a red-herring to trigger off an immediate response to alleged fraudulent behaviour. Every plaintiff beneficiary who propounds a will is seeking financial gain. The fact that the will so propounded turned out to be not accepted on basis of the signature being forged, does not in any way compel the court to find that the plaintiff participated in a fraud. In a case where the personal fraud of the Wife was expressly disavowed by the Father, it is wholly wrong for the Court of Appeal to penalise her on costs on basis of her personal fraud. In my humble opinion, what the Court of Appeal in its wisdom did not say in its elaborate and well considered June 2004 Judgment proper, it ought not in justice, unfairly by the backdoor infer and condemn, in its Judgment on Costs.

91.Once it can be shown that reliance on the Annous Factor is fallacious, the various minor points stated in paragraph 33.14 of the Judgment cannot justify any order of indemnity costs.

92.In Paragraph 33.14(c) the Judge referred to findings of Suspicious Circumstances. He was of course referring to the fallacy of Failure to dispel Suspicious Circumstances and thereby proving forgery. That legal fallacy was disowned by everyone in the Court of Appeal. The Suspicious Circumstances were however used as body of evidence on the issue of the Wife failing to prove due execution. But even on that basis out of the total 9 Suspicious Circumstances relied on by the Judge (for his finding of indemnity costs), only 2 Suspicious Circumstances survived in the majority judgment of the Court of Appeal as I will describe below at paragraph 107 below).

93.The fact that the Wife did not explain in oral evidence at the Trial why she could swear an Affidavit that she believed she was the sole beneficiary before she had seen the contents of the 1990 Documents, was not a suspicious circumstance which should form the basis of an Indemnity Costs order. In my view, a loving wife with no children of the marriage who was a co-partner in the business which was the foundation of the estate of the Husband in the circumstances of this case, could reasonably believe (without having seen the 1990 Documents) and without condescending into explanation (in court or to the public) that she was the sole beneficiary. It was a reasonable belief without the necessity of explanation. There is therefore nothing in this point of suspicious circumstances as a ground for ordering Indemnity Costs.

94.In paragraph 33.14(d), the Judge referred to non-disclosure of documents by the Wife but without specifying exactly what he meant by non-disclosure. In my judgment, there must be a reasonable linkage between the lack of discovery and progress of Trial so as to justify the employing of the nuclear weapon of Indemnity Costs of the whole Action. In any event, discovery depends on issues and issues depend on pleadings. It can hardly be said that the Wife was defective in her discovery when the Father was so lacking in his pleadings and therefore in the proper definition of issues. To elevate the Father’s own shortcoming into a view that the Trial had suffered because of defective discovery (which was not what was held by the Judge) is to reverse the sequence of cause and effect.

95.In my view, it is wrong in law to award Indemnity Costs on the ground of defective discovery by the Wife because:-

(a) the Court must take an overall view of past discovery by both parties. If there was bad discovery by the Wife, there was equally bad discovery by the Father which the Judge simply ignored;

(b) in the circumstances where this case called for the most particular and full pleadings (per dictum of Bokhary PJ in ADS), no proper issues were defined in the pleadings so that to require the necessity of discovery on such non-defined issues in the non-pleaded cases of the Father. In this context it is well to recall the words of Bokhary PJ in the case of ADS v Wheelock which I cited in paragraph 1302 of my June 2004 Judgment and which I repeat here as follows:-

“Never before as much as now

None of the basic rules of pleading have anything to do with technicality. All of them have everything to do with practical justice. They have always been of importance. Never before as much as now. For these days, there are more and more cases so vast and so complex that they push practically to its limit our system’s capacity effectively to cope with them. Any laxity in their proper management, whether in regard to pleadings or anything else, can all too easily result in such cases spinning into confusion if not chaos—even before trial but especially at trial. The present case, for the trial of which half a year has been reserved, is such a case.’’

(c) whatever might have been the defective discovery by the Wife, it had very little impact on the overall progress of the Trial or on the overall Costs of the Action. Therefore to penalise the Wife by an award of Indemnity Costs is both disproportionate as well as irrational.

96.The example of the Wife’s side deliberately holding back Ink Dating documents to demolish Mr. Speckin was singled out as a prime possible basis for the Judge ordering Indemnity Costs on the ground of defective discovery. The Ink Dating issue (which was not pleaded let alone particularised) was lost badly by the Father and to order Indemnity Costs because of the way the Ink Dating issue was badly lost was not only bizarre but bordered on the perverse. It was the so-called “defective discovery” on Ink Dating documents which clearly led to the collapse of the Father on the Ink Dating issue. If the Judge wished to, he could show his displeasure with defective Ink Dating discovery of the Wife by a smaller reduction than 15% from the Costs of the Action. He did not. He took the whole 15% off to reflect the success of the Wife on the Ink Dating but instead mauled her on 85% on Indemnity Costs on the bad way the Wife won her success on the very same Ink Dating issue. This was neither rational nor logical nor fair.

97.In relation to the missing paragraph 5 of the Lists of Documents, I agree that such Lists were defective as being not in compliance with the Rules of the Court. But this was not bad conduct of the Wife. It was the bad conduct of the lawyers who advised her that this was to be done. If there was to be punishment, it should be inflicted on the lawyers and not on the client. Furthermore the missing paragraph 5 in the Lists had no substantial adverse impact on the overall Trial. The punishment of Indemnity Costs of the Action was totally disproportionate to the non-compliance with the Rules.

98.That there were lengthy cross-examination at the Trial could not be doubted. It occurred on both sides. It was in some way, a clear indication of the lack of proper management control of the Trial by the Court. The excess of zeal on the part of the lawyers (although unjustified is not unheard of) on both sides, who obviously thought that this was case of a lifetime where no stone should be left unturned. As said by Yuen JA, Mr. Edward Chan has wisely not sought to rely on the excessive cross-examination as a ground in this case for ordering Indemnity Costs. I will therefore not elaborate on the subject except to say that this factor should be ignored.

99.The Judge did not elaborate on or particularise what he meant by attempts taken by the Wife for the purpose of delaying the Trial. For a Trial which took one year of hearing time, the Trial in fact came on fairly quickly. The Writ was issued on 24 September 1999 and the Trial started on 6^th August 2001, less than 2 years later. Many interlocutory steps of course were taken leading up to the Trial. Given the nature of the various cases both sides were running (unpleaded and unparticularised) and the complexity of matters and evidence relating to handwriting and Ink Dating involving many lawyers and experts, there was simply no proven case of attempted delays. I disagree that this is an area where the Court of Appeal should defer to the views of the Trial Judge when he had given no particulars and where the Trial Judge could not said to be either reliable in his Judgment or fair in his assessment on costs.

Discretion on Balancing Factors for and against Indemnity Costs

100.Taking all the factors against Indemnity Costs and all the factors in favour of Indemnity Costs, I have no doubt whatsoever that a proper exercise of discretion would have resulted in no Indemnity Costs being ordered. In my judgment, this is not a case of weighty Factors in favour of Indemnity Costs against insubstantial Factors against Indemnity Costs. It is the other way round. The overwhelming weight of Factors against Indemnity Costs are such that balanced against the various light weight Factors in favour of Indemnity Costs, the scale of justice weigh clearly in favour of the Wife. I count amongst the weighty Factors against Indemnity Costs:-

(1) the 4^th Consideration (need to consider both Factors for and against);

(2) the 6^th Consideration (Father lost on many issues resulting in 25% reduction);

(3) the 7^th Consideration (Wife reasonable in defending unpleaded case of personal involvement in Forgery);

(4) the 8^th Consideration (Father playing cards close to chest and not deserving of approval of conduct by Indemnity Costs order);

(5) the 10^th Consideration (Wife reasonable to seek grant of Will);

(6) the 12^th Consideration (Even greater injustice on Indemnity Costs as reduced percentage order burdens Wife with own costs on issues lost by Father).

In my view, the ordering of 75% of the Father’s Costs of the Action on any Indemnity Costs would not only be erroneous in law but would be a bizarre order in terms of the history of indemnity costs.

COSTS OF THE APPEAL

101.I regret I cannot agree with the majority of the Court of Appeal that the costs of the Appeal should go 100% to the Father without any reduction.

102.The judgment of In Re Elgindata Ltd. (No. 2) [1992] 1 W.L.R. 1207 is clear authority that the Courts can and often do order reduction of the costs to the successful party. The reduction of a successful party’s costs is described at the hearing before us as the Elgindata 3^rd Principle being what Nourse L.J. said at page 1214B thus:-

“ (iii) The general rule [that costs follow the event] does not cease to apply simply because the successful party raises issues or makes allegation on which he fails, but where that has caused a significant increase in the length or costs of the proceedings he may be deprived of the whole or a part of his costs.”

The Elgindata 3^rd Principle is to be contrasted with what is described as the Elgindata 4^th Principle, being what Nourse L.J. said at page 1214C thus:

“(iv) Where the successful party raises issues or makes allegations improperly or unreasonably, the court may not only deprive him of his costs but may order him to pay the whole or a part of the unsuccessful party’s costs.”

103.It is well recognised now that over the last ten to fifteen years, both the courts in England as well as in Hong Kong are far more ready to apply liberally the Elgindata 3^rd Principle and the Elgindata 4^th Principle. A good illustration of how the court applied the Elgindata 3^rd Principle can be seen from the judgment of Nourse L.J. Elgindata is a case involving the Petitioners succeeding on a minority oppression petition but actually failing on a large number of issues raised by the Petitioners. The Trial Judge ordered the successful Petitioners to pay three quarters of 2^nd Respondent costs. On appeal the Court of Appeal allowed the appeal, and ordered that the successful Petitioners Appellants be awarded half of the costs of the Petition. In other words the successful Petitioners were deprived of half of the costs of the Petition to reflect the failure of the Petitioners on a number of issues. Nourse L.J. explained he came to that Order at page 1215H thus:-

“In my judgment the only fair basis for deciding the part of their costs of which the petitioners should be deprived is to ask how much time and expense was taken up in dealing only the allegations on which they failed. I acknowledge the difficulties with which we are confronted in answering that question. An apportionment made by us is bound to be even more rough and ready than one made by the judge. But we must do the best we can.”

104.That the reduction of a successful party’s costs is fair and should be more readily ordered by the courts in modern times is described by Lord Woolf in his judgment in AEI Redifussion Music Ltd. V Phonographic Performance Ltd. [1999] 1 W.L.R. 1507 at 1522-23 where he said:-

“…. In doing this the new Rules are reflecting a change of practice which has already started. It is now clear that too robust an application of the “follow the event principle” encourages litigants to increase the costs of litigation, since it discourages litigants from being selective as to the points they take. If you recover yours costs as long as you win, you are encouraged to leave no stone unturned in your efforts to do so … “

The change of practice described by Lord Woolf, reflected part of the new culture of the Courts with importance placed on case management, so that modern litigation can be more effective, more costs conscious and more concerned with the limited resources of the courts to manage its business and to control the allocation of work of the courts.

105.Applying the modern approach of the courts as reflected in the judgment of Nourse L.J. in the passage cited earlier, I ask of the time spent in the Court of Appeal, how much time was spent on issues which the Father had failed in the Court of Appeal. The appeal hearing took the unusually long time of 28 days. Large part of the Court’s hearing time was taken up because of the Father strongly arguing on issues which failed in the Court of Appeal (in some cases unanimously and in others by majority). The hearing took the unusual course of Mr. Michael Thomas addressing the Court for the Wife on non-handwriting issues, followed by Mr. Denis Chang addressing the Court on technical handwriting issues. Mr. Robert Tang (as he then was) addressed the Court for the Father on non-handwriting issues and he was followed by Mr. Edward Chan for the Father on technical handwriting issues. In reply, Mr. Thomas and Mr. Chang also followed the same division of work.

106.Roughly, Mr. Thomas took 6 days in opening the appeal, Mr. Tang took 7 days in opposing the appeal and Mr. Thomas took 1.5 days in reply. In all, on non-handwriting issues, the parties took some 14 days. The technical handwriting issues handled by Mr. Denis Chang and Mr. Edward Chan respectively for the Wife and the Father in total took about 14 days and of those 14 days, at least one third of the time was taken up by Tse signatures.

107.In the hearing before us, the following major issues were argued:-

(1) Dispel suspicious circumstances in respect of forgery and dispel suspicious circumstances in respect of execution (Father lost)

(2) Application of Omnia Presumption to Chinese wills (Father lost)

(3) Wong signatures forgery (Father won)

(4) Tse signatures forgery (Father lost)

(5) Nina writer of text of document A and D (Father lost)

(6) Nina maker of one life one love (Father lost)

(7) Suspicious Circumstances as body of evidence relevant to issue of due execution–see paragraphs 895 and 1024 where Yuen JA relied on 7 pieces of evidence (Father won):-

1. Home made will (Suspicious Circumstance 2 of Judge);

2. Husband expected to go to solicitors to make will (same point as 1 above. – Suspicious Circumstance 2 of Judge);

3. Surprising sentiment against parents and siblings (Suspicious Circumstance 2 and 5 of the Judge);

4. Tse statement contain surprising elements;

5. Tse gone to China;

6. No effort to trace other witnesses or authors of documents;

7. Wife being last living link did not give evidence on how she came to have the document.

(Therefore out of the 9 Suspicious Circumstances of the Judge, the Court of Appeal (by majority) only relied on 2 Suspicious Circumstances as body of evidence relevant to execution.)

108.Applying a rough and ready assessment of the time occupied in the Court of Appeal, I would say that at the least 35% of the time was taken up on issues which the Father lost in the Court of Appeal. In my judgment, it is only fair that the Father should be deprived of 35% of the Costs of Appeal.

CONCLUSION ON APPEAL

109.I am therefore of the view that on this appeal on costs of the Action and on costs of the Main Appeal:-

(i) the appeal of the Wife on reduction of Costs of the Action succeeds and the reduction should be 25% instead of the 15% ordered by the Trial Judge;

(ii) the appeal of the Wife on Indemnity Costs of the Action succeeds and the Costs of the Action of the Father at 75% should be on a normal party and party basis and not on an indemnity basis;

(iii) the Costs of the Main Appeal to be given to the Father should be 65% and not 100%.

COSTS OF ARGUMENT ON 8^TH AND 9^TH MARCH 2005

110.Having regard to the success of the Wife in securing the orders on appeal as I have stated in paragraph 109 above, I am of the view that costs of the application before us on argument on costs should be to the Wife and against the Father.

Hon Yeung JA:

111.I have the advantage of reading the judgments of Yuen JA and Waung J. I agree with Yuen JA’s conclusion and her reasons. I only wish to add the following on the LiveNote charges.

112.LiveNote of course is a most helpful facility in any court hearing. It might not reduce the hearing time, but would certainly render the difficult tasks, of judges and lawyers alike, of making adequate notes for their respective purposes less unbearable. Instant references to a reliable record reduce the scope of argument on what is or is not said during the hearing. The availability of a full record soon after the hearing makes it unnecessary to wait for the preparation of the transcript and to incur the associating expenses, just to mention a few examples.

113.On the other hand, the standard facilities provided by the Judiciary must be taken as reasonably adequate for the conduct of any case however complicated the case and/or serious the result of its adjudication may be; and LiveNote is not one of those standard facilities.

114.Any party who wishes to engage LiveNote facility is of course free to do so, at his own expenses. In suitable cases, the Judiciary may provide the backup by allowing the use of the Technology Court, currently without any extra charge.

115.Parties can also agree to the use of LiveNote facility, in which event it becomes purely a contractual arrangement between the parties.

116.However any party who wishes to engage a LiveNote facility and include the associating charges as part of the costs of the hearing in order to recover it or part of it from the other party, in the absence of any agreement, must rest his claim on a prior direction obtained from the court.

117.In deciding if a LiveNote facility should be engaged, the court no doubt will take into consideration all relevant factors including the nature of the case, the evidence to be adduced, the financial abilities of the parties, the costs involved and the impact of such facility on the hearing.

118.If it is considered suitable to engage LiveNote facility, the court should at the same time give consequential directions relating to the scope of the facility to be provided, the amount to be incurred, the mode and time for the initial payments to the provider, and the identity of the parties who are entitled to use the facility so provided.

119.When parties agree to the use of LiveNote facility, it would be desirable to embody the terms of the agreement as part of the directions of the court to avoid unnecessary disputes. In suitable cases, security for the costs of the facility can be ordered.

120.A party, who engages LiveNote facility unilaterally and without obtaining a prior direction from the court, should not be allowed to recover the associating charges as part of the costs of the hearing.

121.The Father did not suggest that the LiveNote facility was engaged pursuant to any prior direction of the court.

122.If Mr Chan’s suggestion was right that the parties had agreed to include LiveNote charges as part of the costs of the hearing, then those charges could and should only be recovered as a contractual arrangement and not to be adjudicated summarily in the exercise of a judicial discretion.

123.There was no valid foundation to include the LiveNote charges as part of the costs of the hearing before the judge and his order to that effect must be set aside.

124.By a majority decision, the court makes an order in terms of paragraphs 56, 57 and 60 of this judgment.

(WALLY YEUNG)
Justice of Appeal

(MARIA YUEN)
Justice of Appeal

(WILLIAM WAUNG)
Judge of the Court of First Instance

Mr Edward Chan SC, Mr Albert Tsang and Mr Victor Luk instructed by KM Chan & Co for the Plaintiff (Respondent)

Mr Jat Sew-tong SC and Miss Linda Chan instructed by Johnson Stokes & Master for the Defendant (Appellant)

Cites 6 cases

Cases cited in this judgment

Phonographic Performance (South East Asia) Ltd v. Lost City Ltd t/a Club Lost City

[1999] 1 WLR 1507

High Court CFI10 Dec 1997

Thomas Vincent v. South China Morning Post Publishers Ltd