Kwan Chui Kwok Ying and Another v. Tao Wai Chun and Others

HCMP 2996/1990

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2996 OF 1990

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THIRD PARTY PROCEEDINGS

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Before: Deputy High Court Judge To

Dates of Hearing: 1 - 3, 6 - 9, 14 - 16 December 2004; 17, 22 - 23 June 2005 and 15 - 17 November 2005

Date of Judgment: 30 May 2006

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J U D G M E N T

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introduction

1.This is a hearing to determine the costs of the Third Party Proceedings in a probate action about the estate of the late Mr Kwan Kai Ming (“Kwan Kai Ming” or the “Father”) which had been concluded a long time ago.  Kwan Kai Ming married Madam Wong Woon Wan (“Wong Woon Wan” or the “Mother”) in 1923.  Fourteen children were born out of that wedlock, including the 6^th Defendant (“D6”) and the 15^th Defendant (“D15”).  Three of the children predeceased the Mother who died in 1959.  The Father had another wife, Madam Chui with no issue; and two concubines, Madam Tao who gave birth to four children and Madam Auyeung who gave birth to one child.  The Father died intestate in 1983, survived by Madam Chui and Madam Tao who were respectively the 1^st Plaintiff (“P1”) and the 1^st Defendant and the sixteen children who were the 2^nd Plaintiff and the other fifteen defendants in these proceedings (“D2 to D16”).

2.In the Third Party Proceedings, D6 challenged D15 as being the natural son of Kwan Kai Ming and Wong Woon Wan and hence his entitlement to a share in the estate of the Father.  D6’s case was that D15 was the son of his uncle and aunt, Mr Kwan Heng (“Kwan Heng”) and Madam Lok Si (“Lok Si”).

3.The Third Party Proceedings were tried before Patrick Chan J (as he then was) in March 1994 (the “1994 Trial”).  Patrick Chan J delivered judgment on 30 December 1994 dismissing D6’s claim with costs.  So far as D15’s costs in the Third Party Proceedings were concerned, Patrick Chan J made an order on 3 January 1995 that : -

(1) costs of D15 to be borne by and paid out of the estate of the Father to be taxed on common fund basis with certificate for two counsel (if not agreed);

(2) costs of D15 to be borne by and paid by D6 to be taxed on common fund basis with certificate for two counsel (if not agreed);

(3) upon recovery of the costs from D6, D15 shall reimburse the estate of the Father with such recovered costs to the extent that his own respective costs have been borne by and paid out of the estate.

(4) D15’s counterclaim be dismissed with costs to D6 to be taxed on party and party basis.

4.D6 appealed against the order of Patrick Chan J.  On 3 November 1995, the Court of Appeal allowed the appeal and ordered a re-trial of the Third Party Proceedings.  The Court of Appeal also ordered that “the costs of the appeal to abide by the result of the new trial.”

5.Towards the end of 1996, D15 obtained DNA evidence showing that he could not have been the natural son of Kwan Heng and Lok Si.  That should have brought about the conclusion of the Third Party Proceedings.  However, the dispute between D6 and D15 continued solely for resolving the parties’ dispute as to the costs of the Third Party Proceedings.  The parties took out a number of summonses seeking various orders.  Eventually on 4 October 2001, I dismissed D6’s action against D15 and granted a declaration that D15 is the legitimate child of Kwan Kai Ming and Wong Woon Wan.  I ordered costs reserved.

6.The costs at issue can conveniently be divided into four categories:

(1) the costs of and occasioned by the 1994 Trial before Patrick Chan J in 1994;

(2) the costs of the appeal to the Court of Appeal in 1995;

(3) the costs of preparation for re-trial from 3 November 1995, the date of the Court of Appeal’s order for re-trial until 4 October 2001 when I dismissed the Third Party Proceedings; and

(4) the costs of and occasioned by the present costs hearing.

D15 seeks costs on an indemnity basis.  D6 contests D15’s application for costs contending that D15 should be denied of his costs and in the alternative that he is only entitled to costs on a party and party basis.

7.The dispute between D6 and D15 started in 1988 in Macau.  Their dispute was carried over to Hong Kong.  Though the DNA analysis had brought the dispute to a conclusion, the proceedings continued into 2006, solely for resolving the parties’ dispute on liability for costs brought about by these proceedings.  The proceedings have been unduly long drawn and rather unjustifiably so.  Since then, Patrick Chan J who heard the 1994 Trial had moved all the way up to the Court of Final Appeal; all the three members of the Court of Appeal who set aside Patrick Chan J’s judgment had retired; D6’s counsel at the 1994 Trial had been elevated to the bench and found her way to the Court of Appeal and the counsel who then took over had been “knighted” to the rank of Senior Counsel.  While time and tide keep moving on, the parties are still where they were sixteen years ago, waging their personal vendetta against the other by this meaningless and long drawn legal battle.

the  law

8.The general rule is that costs shall follow the event: Order 62 rule 3 of the Rules of High Court.  A successful party in a litigation is, as a general rule, entitled to have his costs against the unsuccessful party.  Usually, his costs will be taxed on party and party basis.  But a taxation on an indemnity basis could be properly ordered where the proceedings were scandalous or vexatious; or were initiated or prosecuted maliciously; or for an ulterior motive or in an oppressive manner.  It is only in very exceptional cases that a successful party will be deprived of his costs.

9.In the Third Party Proceedings, D6 is the plaintiff and D15 is the defendant.  According to the general rule, as the successful defendant, D15 is entitled to have his costs against D6; but he seeks costs on an indemnity basis.  He bears the burden of proving that the proceedings were scandalous or vexatious; or were initiated or prosecuted maliciously; or for an ulterior motive or in an oppressive manner.  On the other hand, D6 seeks to deprive D15’s costs.  He bears the burden of justifying this exceptional costs order.  In a costs hearing, the Court is often asked to determine either question.  This is an exceptional case where the parties have dug their heels so deep in the sand that D15 asks for one of the questions to be determined while D6 seeks determination of the other question.

10.In the present dispute, so far as the issues are concerned, it would be convenient to consider, firstly, the question whether D15 should be deprived of his costs and, if not secondly, whether he is entitled to have his costs taxed on an indemnity basis.  If I find in favour of D6 on the first question, there will be no need for me to consider the question of indemnity costs.  This is the approach, I shall adopt in determining the costs of the whole Third Party Proceedings.

11.Ms Vivian Chih, counsel for D15 and Mr Paul Harris, counsel for D6 argued for the right to begin.  A successful party will not get his costs unless the Court makes a costs order.  It is therefore for the successful party to apply for such an order.  In a costs hearing, I think the successful party applying for costs should be treated as if he is a plaintiff in a litigation and has the right to begin and the last word.  D15 therefore had the right to open his case and the last word. 

Applicable legal principles in depriving a successful party of his costs

12.An award of costs is a matter of discretion of the court.  But this discretion has to be exercised judicially.  The starting point, as I have stated, is Order 62 rule 3.  A successful party will receive his costs unless there are special circumstances which justify the court to exercise a discretion by refusing him of his costs.  It has been said that the discretion to award costs is exercised more readily in favour of a successful defendant than in favour of a successful plaintiff as the defendant is a passive party being dragged into a litigation by the plaintiff.  I do not think there is any such general rule.  A successful plaintiff in an action for defamation will be deprived of his costs if he is guilty of some misconduct or if the action is one which should not have been brought in all the circumstances.  Likewise, a successful defendant will be deprived of his costs if he has been guilty of misconduct which induced the plaintiff to bring the action.  In addition to conduct of the successful parties in the litigation itself, the court must also consider all the circumstances of the case and everything which led to the action.

13.The applicable principles which a judge should bear in mind in exercising his discretion in depriving a successful party of his costs has been usefully summarised by Atkin LJ in Ritter v Godfrey [1920] 2 KB 47 after reviewing a list of English Court of Appeal authorities.  He held that a wholly successful defendant may be deprived of his costs under three circumstances.  Firstly, he has brought about the litigation in the sense that he has so conducted himself as to lead the plaintiff reasonably to believe that he had a good cause of action against the defendant, and so induce him to bring the action.  Secondly, he has done something connected with the institution or the conduct of the suit calculated to occasion unnecessary litigation and expense.  This includes improper conduct in or connected with the litigation calculated to defeat or delay justice.  Thirdly, he has done some wrongful act in the course of the transaction of which the plaintiff complaints.  This extends the defendant’s conduct to any act which does not give the plaintiff a cause action but discloses a wrong to the public in the course of the transaction complained of.

14.Counsel have no quarrel about these principles.  However, Mr Harris argued that the courts today are more willing than ever to deprive a successful litigant of his costs.  He cited Phonographic Performance Ltd v AIE Redifussion Music Ltd [1999] 2 All ER 299 which was applied in Thomas Vincent and South China Morning Post Publishers Limited,CACV 253/2002 and Scott v Government of HKSAR [2004] 2 HKLRD 991 as authorities in support of the modern approach. 

15.I think the power of the Copyrights Tribunal to award costs in Phonographic Performance Ltd v AIE Redifussion Music Ltd was exercised under a statutory regime which is very much different from that exercisable by the courts under the general traditional rule of costs follow event.  The Tribunal said at 308 and 309:

“On an application to settle terms of payment or other conditions the tribunal has power to make such an order as it may determine to be reasonable in all the circumstances.  Such a power is so different in its nature and scope from that of a court in adjudicating upon ordinary civil claims between plaintiffs and defendants that the civil litigation analogy must be used cautiously.

The special nature and scope of the tribunal’s substantive power is reflected in the very width of the discretion on costs contained in s 151(1) of the 1988 Act and in rule 48(1) of the 1989 Rules.  It is significant that the legislation and the rules do not expressly state any general principle such as is set out in Order 62 rule 3(3).”

As the discretion on costs is not expressly subject to general principles (save as stated in the 1995 practice direction) or provisional statutory steer or fetter, it should be interpreted and applied as a wide discretion to be exercised judicially and reasonably by taking account of, and giving due weight to, all relevant factors in a principle and proportionate fashion.”

16.In Thomas Vincent and South China Morning Post Publishers Limited, the plaintiff made a number of discrete claims.  It was in that context, the Court said it recognized that it should be slow to make issue-based costs order reflecting a party’s success or failure on individual issues, nevertheless, in appropriate cases it would make costs orders that reflect the time spent on the failed claims.  I think this decision is limited to its particular circumstances and is not supportive of the new approach advocated by Mr Harris.

17.The case of Scott v Government of HKSAR is, in my view, a strict application of the principle in Ritter v Godfrey.  In that case, the court held that the Government failed to give the undertaking that the court thought it was justified to give and hence was of the opinion that it had unnecessarily occasioned extra costs.  This decision falls within the second principle in Ritter v Godfrey.

18.Mr Harris also cited a number of Canadian and Singaporean decisions.  I do not think it necessary to analyse those decisions.  They are just examples of how the court exercised its discretion in the range of circumstances where the court saw fit to deprive a successful party of his costs.  Those cases provide little value as legal principle. 

19.I think it is a well established principle in ordinary civil litigation that costs shall follow event unless there are special circumstances justifying a departure from this general rule.  In Wang Din Shin v Nina Kung, CACV 460/2002 and 67/2003, Yuen JA adopted the principle as set out by Nourse LJ in In re Elgindata Ltd (No 2) [1992] 1 WLR 1207 and said :

“39.    In re Elgindata Ltd (No 2) [1992] 1 WLR 1207, Nourse LJ had set out 4 principles governing the award of costs …

(i) Costs are in the discretion of the court [Order 62 rule 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 costs 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.   … 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 (sub-paragraph 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.”

20.Mr Harris argued that the decision of the Court of Appeal in Wang Din Shin v Nina Kung had been overturned by the Court of Final Appeal.  However, to my knowledge, there is nothing in the judgment of the Court of Final Appeal to suggest that it had the effect of overruling the above principles.  I consider I am bound by the above decision of the Court of Appeal.  I adopt the principles as set out by Yuen JA.  Principles (i) to (iii) are clear enough.  As for principle (iv), in determining whether the successful party has raised issues or made ‘improper or unreasonable’ allegations as to justify the Court to deprive him of his costs, the test to apply is that as laid down in Ritter v Godfrey. 

21.In Ritter v Godfrey, Atkins LJ said at 60:

“It is not easy to deduce from these authorities what the precise principles are that are to guide a judge in exercising his discretion over costs.  And yet as the discretion is only to be exercised where there are materials upon which to exercise it, it seems important to ascertain the principles upon which a judge is to discern whether the necessary materials exist.  In the case of a wholly successful defendant, in my opinion the judge must give the defendant his costs unless there is evidence that the defendant (1) brought about the litigation, or (2) has done something connected with the institution or the conduct of the suit calculated to occasion unnecessary litigation and expense, or (3) has done some wrongful act in the course of the transaction of which the plaintiff complains.  These principles require further expansion.

By (1) is meant – has so conducted himself as to lead the plaintiff reasonably to believe that he had a good cause of action against the defendant, and so induce him to bring the action.  The authority for this proposition is Bostock v Ramsey.  It is wide, for in terms it is not limited to unreasonable or improper conduct, or to conduct other than that which constitutes the alleged cause of action. Inasmuch as the bringing of many actions of contract and most actions of tort is due to the effect upon the plaintiff’s mind of defendant’s conduct, and the effect is at any rate to induce a belief that the plaintiff has a good cause of action, it would appear to follow that provided the belief was reasonable the judge in all such cases has grounds for depriving a successful defendant of costs.  I presume e converse there would be grounds for dealing with a successful plaintiff’s costs when his conduct has induced the defendant reasonably to believe that he has a good defence.

I am inclined to think therefore that the propositions in Bostock v Ramsay should be read subject to the first, if not also the second, of the limitations suggested above – i.e., subject to the conduct being unreasonable or improper, and being conduct other than that which constituted the alleged cause of action. … (2) and (3) may possibly overlap.  (2), I think, would include improper conduct in or connected with the litigation calculated to defeat or delay justice.  Such conduct would also be included in (3), which, I think, further extends to cases where the facts complained of, though they do not give the plaintiff a cause of action, disclose a wrong to the public: King v Gillard, by which I understand some criminal or quasi criminal misconduct, e.g., a fraud or crime or preparation for a fraud or crime, or possibly some act of serious oppression.  Such conduct must, however, be in the course of the transaction complained of.”

Thus, a successful party may be deprived of his costs if he (1) has brought about the litigation, (2) has done something connected with the institution or the conduct of the suit calculated to occasion unnecessary litigation and expense, or (3) has done some wrongful act in the course of the transaction of which his opponent complains.  

22.In the above dicta, Atkins LJ assumed that only the successful party was guilty of wrongful act in the course of the transaction.  Mr Harris submitted that it is a well-established rule that where the court finds that both parties have behaved badly in relation to an action it will still in an appropriate case deprive the successful defendant of his costs.  It is not the case that “if both are bad the usual rule that winner gets costs applies.”  He quoted the case of Baylis Baxter v Sabath [1958] 1 WLR 529, 532, 533 which was applied in Hong Kong in Ho Shu Kwong.  It must be borne in mind that civil litigation is a matter between the parties.  The general rule is that costs follow the event.  To deprive a successful litigant of his costs is an exception rather than the rule.  It is not the court’s function through the exercise of its discretion in relation to costs to dispense monetary punishment to any litigant outside the criminal justice system.  It never is the rule that whenever a litigant has been guilty of some misconduct in the course of the transaction he shall be deprived of his costs.  If his misconduct should be brought into the equation as a matter of public policy, then it must be weighed against that of the other party.  The reason is simple.  If public policy should disqualify a successful litigant of his costs because of his misconduct in the course of the transaction, the same policy applies equally to the unsuccessful litigant so that he may not have the protection of public policy if he is equally or more blameworthy.  Thus in deciding whether a successful litigant should be deprived of his costs for reasons of public policy, the misconduct of the successful party must be weighed against that of the unsuccessful party.  Where both parties are equally to blame, the general rule of costs to follow the event applies.  It is only where the misconduct of the successful party outweighs that of the unsuccessful party by such a significant margin that the court thinks it is an affront to justice if he should have his costs that the court will deprive him of his costs.

23.The burden of proof is on the unsuccessful party.  The focal point is on the conduct of the successful party in the particular circumstances.  His conduct must be material or operative on the mind of the unsuccessful party in that it induced him to take the course he took which he otherwise would not have taken.  In other words, the unsuccessful party must show that he instigated the litigation or persisted in the defence because he was led to the belief that he has a good cause of action or a good defence by reason of the conduct of the successful party.  He must genuinely hold that belief and on reasonable ground.  If he does not hold that belief, the conduct of the successful party howsoever heinous is not causative.  He must hold that belief on reasonably ground, otherwise there is no justification for such a reverse costs order.  If the unsuccessful party fails to discharge the burden, the successful party is entitled to his costs.

Applicable legal principles on indemnity costs

24.A successful party may have his costs taxed on a party and party basis, common fund basis or indemnity basis.  The principles governing award of indemnity costs is well settled.  It is also a matter of discretion.  Since the decision of Godfrey J (as he then was) in Overseas Trust Bank Ltd and Coopers & Lybrand (a firm) and Others and Peat, Marwick, Mitchell & Co (a firm) and Another [1991] 1 HKLR 177, it has been settled that a taxation of the successful party’s costs on an indemnity basis could be properly ordered where the proceedings were scandalous or vexatious, or had been initiated or prosecuted maliciously, or for an ulterior motive, or in an oppressive manner, or prosecuted in circumstances as to constitute an affront to the court.  But the power to order indemnity costs may only be exercised when the court feels a proper sense of indignation at the unsuccessful party’s conduct.  In Sung Foo Kee Ltd v Pak Lik Co (a firm) [1996] 3 HKC 570, Godfrey JA (as he then was) further extended the court’s power to order taxation on an indemnity basis against litigants who conduct their cases in bad faith, or as a personal vendetta, or in an improper or oppressive manner, or who cause costs to be incurred irrationally or out of all proportion as to what is at stake.  He also suggested that judges should not be slow to make such order in appropriate cases.  In Choy Yee Chun v Bond Star Development Limited, CACV 225/1996, the Court of Appeal further extended this power to cases where the conduct of a party is of a more venal kind or where the conduct of the litigation has in some sense been wicked.

25.The focal point is the conduct of the unsuccessful party.  The court must not be slow in ordering indemnity costs but it may only do so if it feels a proper sense of indignation at the unsuccessful party’s conduct.  The burden of proof rests on the successful party who seeks such an exceptional costs order.

26.If the unsuccessful party institutes legal action or persists in defending one knowing that he has no reasonable ground to do so, it is some evidence of scandalous, vexatious, malicious and oppressive conduct.  Here, the burden is on the successful party to prove that the unsuccessful party knows he has no reasonable cause of action or defence. 

The  factual  background

The family background

27.The factual background so far as is relevant to this determination is as follows.  Kwan Kai Ming was an authoritative father who had two wives, two concubines and sixteen children.  In early 1930s, the Father obtained some documents which enabled the family to move to Philippines under the surname of Kuan.  D6 was born in Philippines in 1934.  In 1936, D6 together with D7 and D12 were sent to live with their grandfather in Shanghai.  Two years later, D15 was born on 15 October 1938 in Philippines.  When the Second World War ended in 1946, D6, D7 and D12 moved to Hong Kong and lived with their aunt.

28.In 1948, the Father and the family also moved to Hong Kong.  It was only then that D6 for the first time met D15 and five other siblings who were born in Philippines.  The family lived under one roof in 152 Nga Tsin Wai Road.  D6 studied in Heung Tao Middle School from 1950 to 1951 and recommended D15 to study in that school as it was a patriotic Chinese school.  Thus D15 studied in Heung Tao Middle School between 1951 and 1957.  In 1951, D6 returned to China to study, while D15 remained in Hong Kong.  Upon graduating from Heung Tao Middle School, D15 went to study in the University of Southern California in the United States in 1958.  In the same year, D6 returned from China and lived in 152 Nga Tsin Wai Road.  In 1959, D15 returned to Hong Kong and started studying in the Baptist College. In 1962, D6 went to the United States.  In the following year, D15 went to study in Canada.  Thus D6 and D15 were living under the same household between 1948 and 1951 when D6 was between 14 and 17 years of age and D15 was between 10 and 13 years of age.  They shared the same household again between 1959 and 1962 when D6 was between 25 and 28 years of age and D15 was between 21 and 24 years of age and was studying in the Baptist College.

The Macau Proceedings

29.The Father bought a piece of property at Nos 88A and B Avenida Conselheiro Ferreira de Almeida in Macau (the “Almeida Property”) in the name of the Mother. The Father collected rent from the Almeida Property.  When the Mother died in 1959, the Father handled the Mother’s estate in Macau and had the Almeida Property registered in the names of himself, D6 and D9 in equal shares.  In the probate documents, it was stated that the Mother had two sons, namely D6 and D9.  D6 and D9 had given their powers of attorney to the Father so that the Father could sell the Almeida Property at any time.  From 1959 to 1980, the Father treated the Almeida Property as his own and continued to receive rent from the property.  In 1981, the Father purported to sell the Almeida Property to his company, Kai Ming Investment Company Limited.  D15 executed the sale and purchase agreement of the Almeida Property on behalf of Kai Ming Investment Company Limited.

30.After the Father’s death in 1983, D6 and D9 started proceedings in Macau claiming to be the only two children of the Father and to be entitled to the Almeida Property.  D15 with the consent and knowledge of P1 commenced probate proceedings on 7 December 1987 in Macau and petitioned as “head of the family”, a title used in that jurisdiction as equivalent to that of a personal representative with the right to obtain and distribute the estate of the deceased.  He filed a list of persons entitled to the estate of the Father which included all the children of the Father.  Then D6 and D9 abandoned their claim to be the only two children of the Father.  The purpose of the proceedings was to claim back the Almeida Property from D6 and D9 who would otherwise claim to be the absolute owners of the Almeida Property.  In March 1988, P1 took the place of D15 as head of the family as a result of the 7^th Defendant’s contest for that position.

31.On 9 March 1988, D6 and D9 made an application to exclude D15 from the estate of the Father on the ground that D15 was the son of their uncle, Kwan Heng (the “Exclusion Application”).  The basis of their application was a birth certificate issued in the name of “Daniel Kwan” by the Government of Macau which stated that Daniel Kwan was the son of Kwan Heng and Lok Si.  D15 did not dispute that he had notice of the Exclusion Application.

32.On 6 April 1988, P1 was appointed by the Macau Court to be the head of the family and she confirmed the previous declarations of D15 about the beneficiaries of the estate.  On 22 April 1988, D6 and D9 opposed the declaration of P1 on the basis that D15 was not the son of Kwan Kai Ming but of their uncle Kwan Heng.  According to the record of the Macau proceedings, the lawyers of D15 and P1 were notified of the objection of D6 and D9 by the Court of Macau by registered mail on 16 September 1988.  Then on 12 October 1988, a judge in the Judicial Court of Macau stated that D15 had not opposed the Exclusion Application and granted an order excluding D15 from succession to the estate of the Kwan Kai Ming and ordered him to pay costs (the “Exclusion Order”).  D15 claimed that he had no knowledge of the Exclusion Application to exclude him and the making of the Exclusion Order on 12 October 1988.

33.It appeared from the Court record that between 1988 and 1990, the Court in Macau proceeded with the valuation and disposal of the Almeida Property.  The sale and purchase agreement between the Father and Kai Ming Investment Company Limited was then a live issue and Kai Ming Investment Company Limited was joined as a party to the Macau Proceedings.  A conference was held on 20 November 1989 before a judge of the Judicial Court of Macau and all relevant parties.  The record showed that D15 was present at the conference and an issue was raised by the lawyer representing D6 and D9 that D15 should not be allowed to attend in view of the Exclusion Order.  D15’s lawyer contested the objection on the basis that D15 was attending as a representative of Kai Ming Investment Company Limited.  In the end, D15 was allowed to stay in the conference.  D15 claimed that while he was aware of the Exclusion Application, he was not aware of the Exclusion Order until 1990 and since then he had taken active steps to have it set aside, though he was unsuccessful.  That was because the time for appeal had lapsed and the appeal to Lisbon was not prosecuted due to the neglect of his lawyers.

The Third Party Proceedings, the appeal and the prosecution of D15

34.During the Third Party Proceedings before Patrick Chan J in 1994, D6 produced the following documents (Items (1) to (5) are collectively referred to as the “Macau Documents”) : -

(1) a Macau birth certificate certifying that Daniel Kwan was the natural son of Kwan Heng and Lok Si born in Macau on 15 October 1935;

(2) an application dated 6 August 1957 by a person named “Daniel Kwan” for a birth certificate stating that he was the natural son of Kwan Heng and Lok Si;

(3) a copy of sworn declarations by four persons that Daniel Kwan was born in Macau to Kwan Heng and his wife Lok Si;

(4) a graduation certificate dated 15 July 1957 from Chong Tak High School in Macau showing that Kuan Tan Lau (the pronunciation of which is strikingly similar to “Kwan Daniel” in English) had attended and graduated from that school (the “1957 Chong Tak Certificate”);

(5) a statement issued by the Chief of Police Department in Macau on 21 August 1957 giving a summary of facts in support of the application and stating that a certificate of identification was issued to Kuan Tan Lau or Daniel Kwan (the “Macau Police Report”) and

(6) the Exclusion Order dated 12 October 1988 issued by the Judicial Court of Macau.

At the 1994 Trial, counsel for D15 requested information on the circumstances under which those documents came to the knowledge and possession of D6 and how they came to be produced in the Macau Proceedings.  Neither D6 nor his counsel was prepared to offer the information.  D6 elected not to give evidence as well.  The 1994 Trial before Patrick Chan J concluded on 18 March 1994.  On 30 December 1994, Patrick Chan J handed down his judgment dismissing D6’s claim in the Third Party Proceedings with costs.

35.On 4 April 1995, D6 went to the Commercial Crime Bureau of the then Royal Hong Kong Police Force and lodged a complaint of perjury against D15.  He relied on the Macau Documents to allege that D15 was a grandson of his grandfather’s concubine, i.e. his cousin and that D15 perjured at the 1994 Trial by claiming to be the son of Kwan Kai Ming.  He also produced a press report in the South China Morning Post stating that D15 was convicted by a magistrate on 8 June 1962 for supplying false information to the Immigration Department to conceal his identity as a person of Macau of Portuguese nationality.

36.In the meantime, D6 appealed against the decision of Patrick Chan J dismissing his Third Party Proceedings.  At the hearing on 2 and 3 November 1995, he sought leave to adduce the following further evidence :

(1) the Baptist College admission form in respect of D15 (the “Baptist College Admission Form”);

(2) a graduation certificate from Chung Tak Middle School dated 16 March 1959 annexed to the Baptist College Admission Form (though the English name of that school was spelt differently from the one which issued the 1957 Chong Tak Certificate, it is the same school; hence this certificate is conveniently referred to as the “1959 Chong Tak Certificate”);

(3) the 1962 Baptist College Student Index showing D15’s name and photograph; 

(4) a certified copy of a certificate of trial dated 10 April 1995 issued by the Central Magistracy concerning the conviction of D15 in 1962 for making a false statement to the Immigration Department for procuring a travel document; and

(5) press reports about the criminal prosecution against D15.

The Court of Appeal ordered a re-trial.  The additional documents were incorporated into D6’s affirmation.

37.Between June 1996 and January 1997, blood samples were taken from D15, P2, D8, Lok Si and her two sons; Victor Kwan and Nelson Kwan for DNA profile analysis.  The DNA analysis from those blood samples confirmed that D15 was the son of Kwan Kai Ming and Wong Woon Wan and not the natural son of Kwan Heng and Lok Si.  D15’s then solicitors informed D6’s solicitors of the DNA results on 17 February 1997.

38.As a result of D6’s complaint of perjury, D15 was arrested by the police on 3 March 1998 and charged with two counts of perjury.  In the light of the DNA results, HH Judge Geiser in the District Court ordered a stay of the prosecution against D15 on 29 January 1999.

some  finding  of  facts

39.As will be seen from my subsequent analysis, the central factual issues in this hearing are: (1) D15’s knowledge of and involvement in the making of the Macau Documents; (2) D6’s knowledge or belief in the truth or otherwise of the Macau Documents; and (3) whether D15 knowingly abandoned his right to contest the Exclusion Application.

40.D15’s failure to give evidence at this hearing had been subject to some adverse comment by Mr Harris.  I bore that in mind when I assessed the credibility of the witnesses and the reliability of their evidence.  I also bore in mind the different burden of proof in respect of the two costs issues.  But I must say that this is a case where the evidence in respect of these crucial issues were overwhelming.  I am able to reach my finding of fact without having to resolve the factual disputes on the basis of burden of proof.  To these factual issues I now turn.

D15’s knowledge of and involvement in the Macau Documents

41.D6’s case is that D15 had knowledge of and was involved in the making of the Macau Documents.  D15 denied both knowledge and involvement.  He claimed that the Macau Documents might have been arranged by his Father to enable him to study abroad without his knowledge.  At this hearing, he produced evidence that his Father enlisted the help of Kwan Heng to obtain those documents and that his Father had done the same for his sister, D14.   

42.Mr Harris submitted that it must have been D15 who attended in person before the Macau Police Department and other government departments to make the declaration and the application for the Macau birth certificate and to apply and process the certificate of identification.  Ms Chih argued that there is now no dispute that the Macau birth certificate was a forgery and was obtained unlawfully and possibly involving corruption of Macau Government officials.  Hence, she argued that it was unlikely that D15 would have presented or need to present himself personally before the Macau Police Department or other government departments in making the application and declaration and in processing the certificate of identification. 

43.The exercise might well be a fraud practised by those who had knowledge about the loopholes in Macau government with or without involving any police corruption.  Obtaining a Macau birth certificate could not have facilitated D15’s study abroad, but obtaining a Portuguese passport would.  The fact that D15 had a Portuguese passport is not in dispute.  I have no doubt that the Macau birth certificate and the certificate of identification were obtained for the purpose of obtaining a Portuguese passport for D15.  I believe that the Macau certificate of identification would bear a photograph and fingerprint impression of the person identified in the certificate.  This belief is confirmed by Macau’s reply to the Letter of Request which was not then before Patrick Chan J.  Even accepting Ms Chih’s argument that through corruption, D15 did not have to attend in person before the Chief of Police Department to make the various declaration and application or to process the certificate of identification, it makes no sense if the photograph and fingerprint impression in the certificate were not those of D15’s.  D15 must have either attended the Police Department to give his fingerprint impressions or must have in any event done so elsewhere.  He could not have no recollection of such a “ceremonial” occasion when all his fingerprint impressions were taken from him.  He must have at least asked what was the exercise for and why.  Though Ms Chih strongly urged upon me that D15 was legally an infant, he was a young man of nineteen and of sound mind and understanding. D15 could not have no knowledge or no involvement in the obtaining of the certificate of identification.  If so, he could not have no knowledge or involvement in the application for the Macau birth certificate.

44.As the 1957 Chong Tak Certificate was used in support of the application for the Macau birth certificate, I have no difficulty to draw the inference that D15 also had knowledge of that certificate.  Besides, looking backwards from the 1959 Chong Tak Certificate found together with the Baptist College Admission Form, I have no difficulty in reaching the same conclusion.  D15 was twenty-one years of age at the time he applied for admission to the Baptist College.  He was relying on that academic document to support his application.  It lies ill in his mouth to say that his Father arranged the 1959 Chong Tak Certificate for him and his admission to the Baptist College without his knowledge, consent or acquiescence.  He did not use his usual name of “Kwan Tit On” in the Baptist College Admission Form, but applied using the name of “Kuan Tan Lau” which was the name used in the 1957 and 1959 Chong Tak Certificates.  He admitted sitting an examination in Chong Tak Middle School to obtain a graduation certificate from that school.  D15 must have knowledge of the 1959 Chong Tak Certificate and must have been involved in obtaining it.  Likewise, he must have knowledge of the 1957 Chong Tak Certificate which was obtained in 1957 in connection with the Macau birth certificate.  With his knowledge of the 1959 Chong Tak Certificate obtained in 1959 in connection with the application for admission to the Baptist College and with his knowledge of having attended an examination in Chong Tak Middle School and obtained a graduation certificate, he must have known at the 1994 Trial that the 1957 Chong Tak Certificate referred to him.

45.Thus, I find that D15 was involved in the making of his Macau certificate of identification and the Macau birth certificate.  I also find that he had knowledge that the 1957 Chong Tak Certificate referred to him.  Certainly, D15 was involved in the making of the 1959 Chong Tak Certificate as he used it in support of his application to the Baptist College.  It is not with any disrespect that I differ from the finding of Patrick Chan J on the above matters.  Patrick Chan J did not have the benefit of the evidence now before me, especially the reply from the Macau First Instance Court to the Letter of Request.

Whether D6 genuinely believed on reasonable grounds that the information relating to D15 in the Macau birth certificate, the 1957 and 1959 Chong Tak Certificates were true

46.It is now accepted by D6 and D15 that the Macau Documents were forgeries and that some of the information relating to D15 contained in the Macau Documents, the Baptist College Admission Form and the two Chong Tak Certificates were untrue.  The question is whether D6 genuinely believed on reasonable grounds that the information relating to D15 in those documents were true (i.e. D15 was the son of Kwan Heng and Lok Si) at the material time when he sought to rely on those documents as his basis for instituting the Third Party Proceedings against D15.  D6 said he did so believe; while counsel for D15 argued that D6 did not.  

47.Mr Harris ably argued that D6 and D15 were members of a very large family.  The Father was a polygamous husband with four wives and sixteen children.  The Father was authoritative and the children dare not ask him whether any one of them were his natural children.  D6, D7 and D12 were sent to live with their grandfather in Shanghai.  D6 only met D15 for the first time at the age of fourteen in 1948 together with at least another five siblings.  In that background, Mr Harris argued that any reasonable person in the position of D6 would be open to feelings of doubt if later events suggested that one of those siblings whom he first met in 1948, such as D15, might not be a full sibling as he had been told.

48.I can understand the force of that argument.  It is a universal truth that no one could have first hand information who his natural parents are.  Life is not logic but experience.  If a person has been brought up by someone who claimed to be his parent, treated him as his son and publicly acknowledged that relationship, what doubt could his siblings who were similarly brought up have that this person was their sibling?  D6 does not dispute that D15 was treated as a member of the family.  D15 and five other siblings whom D6 had never seen before were introduced to him by his parents as his siblings in 1948 when the family re-united.  D6 knew that in his Father’s declaration for naturalization, the Father declared that D15 was one of his natural sons.  When the Mother died in 1959, D15’s name was engraved on her tomb as one of her sons.  In the Mother’s letter to her children dated 15 March 1957, she acknowledged D15 as one of her children.  In the Father’s 80^th birthday dinner invitation card, D15 was acknowledged as one of the Father’s sons.  On the occasion of the Father’s death, D15 was acknowledged in the obituary and press as one of the sons of the Father.  After half a century’s family relationship, acknowledgement and recognition of D15 as a son of Kwan Kai Ming, one needs to have very strong and cogent evidence before one could even start to have a doubt about D15’s legitimacy.  With this background, I now turn to consider D6’s state of mind.

49.On the face of the Macau Documents, I think a person of D6’s background having resided physically with D15 together between 1948 and 1951 and with half a century family relationship could tell straight away that the information relating to D15 in the Macau Documents was false.  The “Daniel Kwan” referred to in the Macau Documents was born in October 1935 in Macau, lived in Macau until 1940 when he moved to Philippines, then returned to Macau in 1950 and resided at the Almeida Property until 1957 and studied in Chong Tak Middle School between 1951 and 1957.  This “Daniel Kwan”, who was then supposed to be residing in the Philippines, could not be D15, to whom D6 was introduced in 1948 and with whom he lived from 1948 to 1951 in 152 Nga Tsin Wai Road.  This “Daniel Kwan” was born in 1935, just one year younger than D6.  He could not be D15, who was born in 1938, four years younger than D6. Under cross-examination, D6 also admitted the marked difference in age and height between him and D15 as shown in some family photographs in the 1950s and agreed that the “Daniel Kwan” referred to in the Macau Documents did not tally with the personal particulars and background of D15 whom he knew and with whom he lived. This “Daniel Kwan” was supposed to be residing in the Philippines between 1940 and 1950 and then at the Almeida Property between 1950 and 1957.  He could not be D15 with whom he was living together in 152 Nga Tsin Wai Road at least between 1948 and 1951.  The address of that “Daniel Kwan” was that of the Almeida Property purchased by the Father in the Mother’s name, an address D6 was absolutely familiar with as it was the subject matter of the Macau Proceedings.  D6 must have known that the Almeida Property had been rented out by the Father and that D15 could not have been residing there from 1950 to 1957.  Thus, on the face of the Macau Documents, D6 must have known that the personal particulars relating to D15 referred therein were fictitious and false.   In the light of half a century’s history of family relationship, acknowledgement and recognition, D6 could not have any reasonable ground to believe D15 was the son of Kwan Heng and Lok Si.  I would even go as far as to find that D6 actually knew D15 was not the son of Kwan Heng and Lok Si.  This would be sufficient to dispose of this issue of fact.  But the evidence in support of this finding is so overwhelming that I think I would not be doing justice to Ms Chih who explored this issue with exceptional width.  I shall at least mention a few more pieces of evidence.

50.During the Macau Proceedings, D15’s lawyer, Dr Gomes, informed D6’s lawyer, Miss Manuela, that the Macau birth certificate was false.  Evidence for this could be found in a letter written by Dr Gomes to the solicitor representing the Father’s estate in Hong Kong, Miss Ruby Yu of Messrs W I Cheung & Co, dated 9 May 1988.  In that letter Dr Gomes sought instruction from P1 about D6’s offer to withdraw the Exclusion Application against D15 on condition that the Father’s estate would cancel the sale and purchase agreement with Kai Ming Investment Company Limited in respect of the Almeida Property.  Dr Gomes wrote:

“I am hereby sending to you the copy of the petition filled by the solicitor, which is acting for Mr Kwan Chi On and Mr Kwan Tung On, whose name is Miss Manuela Antonio.

This petition will only be appreciated by the judge in charge of this court case on 21 May 1988.

I have talked to Miss Manuela Antonio [D6’s lawyer in the Macau Proceedings] so that she avoid to give any embarrassment to Mr Daniel Kwan.  In this way, I suggest to her to take out the above-mentioned petition from the said case.

She told me she only accept such suggestion, avoiding to give any kind of embarrassment to Mr Kwan, if Madam Chui [P1] pledges not to make use of the sale and Purchase Agreement made between the deceased Kwan Kai Ming (‘the Vendor”) and Kai Ming Investment Company Limited (“the Purchaser”), whose object is the piece of land being now shared in this court case.

So, according to Miss Manuela this Agreement is false, because the signature of Mr Kwan Kai Ming, written there, was falsificated.

In this way, she requests the handover of this Agreement in her hands during the court case and one declaration of M.me Chui not to use this Agreement, either the original, either copy for any purpose.

In the above-mentioned petition submitted into the Court, she asks the exclusion of Mr Daniel Kwan of the said Estate, losing this one its right to his Estates’ share.

If Miss Manuela goes ahead with her wish to give embarrassment to Mr Daniel Kwan, she can put Mr Daniel Kwan into trouble in several places, like Macau, Hong-Kong and Canada because of the false certificate of birth.

Under these circumstances, I submit it into your consideration."  (My emphasis)

51.D6 admitted he had a copy of that letter which he sent to Victor Kwan annexed to his letter of June 1996.  Three points emerged from that letter.  Firstly, Miss Manuela and Dr Gomes were discussing about embarrassment to D15 in the context of D6’s application to exclude D15 from the estate by reason of the Macau birth certificate.  Secondly, Miss Manuela was making an offer to the estate and to Kai Ming Investment Company Limited, i.e. effectively to D15, to cancel the sale and purchase of the Almeida Property in exchange for D6 withdrawing the application to exclude D15 from the Father’s estate in Macau.  From the above letter, it is obvious that Miss Manuela had D6’s authority to make the offer.  Under cross-examination, D6 admitted that was the case and he had knowledge of the offer.  Thirdly, Dr Gomes and Miss Manuela were discussing on the basis that the Macau birth certificate was false.  That was why Dr Gomes wrote in the penultimate paragraph and ask P1 to consider.  So obviously, Miss Manuela knew the Macau birth certificate was false.  That must be because D6 had told her that he knew the Macau birth certificate was false.  Hence, D6 knew of the falsity of the Macau birth certificate as early as May 1988, well before he instituted the Third Party Proceedings.

52.Not only that, according to Victor Kwan, Lok Si’s son, Lok Si had actually told D6 at a dinner in which he was present in 1992 or 1993 that the Macau Documents were false as those documents were arranged by Kwan Heng to help the Father to enable D15 to study abroad.  Victor Kwan’s evidence was also supported by a fax of 12 July 2004 written by his younger brother, Nelson Kwan.  Indeed, D15 went to study in the University of Southern California in 1958.  D6 must also know about that because when he returned to Hong Kong in 1958, D15 was not living in 152 Nga Tsin Wai Road.  He was also aware of D15’s return in 1959 as D6 was still living in 152 Nga Tsin Wai Road then.  It was at that time that D15 started to study in the Baptist College.  In view of half a century’s family relationship, acknowledgement and recognition, there is no reason why D6 would not accept the words of Lok Si, the very woman whom he alleged was D15’s natural mother.

53.On the other hand, there is incontrovertible evidence that D6 tried to prevent the truth from coming out of the mouth of that woman.  He wrote Victor Kwan three letters since the conclusion of 1994 Trial.  In his letter dated 1 March 1995, which was written two months after the judgment of Patrick Chan J and one month before he made the complaint of perjury to the Commercial Crime Bureau, he mentioned that Lok Si knew the Macau Documents which Kwan Heng helped to procure were false.  He referred to D15’s conviction in 1962 when D15 was found to have a Portuguese passport and D15’s denial in the 1994 Trial that the Macau Documents related to him.   Then he said that no matter how D15 explained the origin of the Macau Documents he was doomed to be convicted of perjury.  He was suggesting criminal action against D15, which he instigated a month later.  Then he wrote:

“That if there was anyone from Lok Si’s family to prove that D15 was not their blood brother, Kwan Tit On [D15] could only tell the court that the Macau Documents were false.  But the documents were made by him, why deny?  FORGERY plus PERJURY.  No court in the world would not punish him by imprisonment.  …  I am not afraid you would help Kwan Tit On.  The aim of this letter is to hope that you as their eldest brother would inform your younger brothers and sisters of the whole matter before they would take any action.”

Then he wrote if the three European judges of the Court of Appeal discovered the fraud in D15’s case, the case may be subject to judicial review and the issue of perjury may be referred to the police.  At the time he wrote, D6 could not have had knowledge that the appeal would be heard by three European judges as the appeal was not yet due to be heard.  Indeed one of the Justices of Appeal was Liu JA who was not a European.  Presumably he was trying to boost his threat of imprisonment.  Then D6 continued:

“Surely, Kwan Tit On will be clubbed to the end of the road.  Hope that those who would put Kwan Tit On into jail would not include your brothers and sisters.”

54.The letter contained a lot of false representation about the 1994 Trial.  Against the background that D6 knew from Lok Si that Kwan Heng had assisted in obtaining the false Macau Documents, the threat of D15 being sent to prison for forgery and perjury equally applied to Lok Si.  The effect of the letter was to mildly discourage Victor Kwan, his siblings and Lok Si to come forward to testify that the Macau Documents were forgeries as the effect of such evidence would be to put D15 into prison and the letter contained a hidden reminder that Kwan Heng was involved in the forgery as well.  Reading in between the lines, I find D6 was suggesting to Victor Kwan that they should not tell the court that the Macau birth certificate was false for that would incriminate themselves and D15.  As a result, D15 would be stuck with the representation contained in the Macau birth certificate or to face imprisonment for perjury and forgery. 

55.The threat in the next letter dated 30 April 1996 was more obvious.   D6 wrote:

“I hear that Tit On [D15] now again wants Aunt Seven [Lok Si] to help him in his lawsuit.  I hope that as being sons, you’ll take my advice, so as not to seriously affect the health of your mother.  Tit On may have told you that it will do only by signing an affidavit in the US.  As a matter of fact, it is necessary to testify in court.  Tit On’s lawyer has already filed an application with the court to cross-examine your mother in California.  …  The lawsuit will last for a long time, incurring great expenses …   Most importantly, we should ask ourselves why should we let the old lady suffer a long period of repeated questioning?  Besides, your mother may not be able to answer many of the questions.  For example: “Why did you agree that Tit On should swear in a court in Macau that he was your son?”  At the time, even Uncle Chui Yuen Gui was sought to be a witness.  If you say the birth certificate was a forgery, you could be accused of helping forge the document.  In the year 62, in Hong Kong, Tit On was charged by the Hong Kong Government with hiding his identity as a Portuguese national.  At the time, you were in Macau.  If you think that his birth certificate was a forgery, why not testify in court?  On the contrary, he pleaded guilty and asked for clemency.  “Why ignoring the past ten-odd years of litigation (but) coming out on his behalf now knowing that each estate worth HK$10 million?  Is it true that ….?”  In short, lawyer will ask many many difficult questions.  In the year before last year in the US, I already saw that Aunt Seven was not in very good shape.  (She) would need to take a brief rest even for saying a sentence.  As (her) sons, how can we let her suffer such great pressures? …  If you affirm his (D15’s) words, you’ll be helping him to lie.  If (you) tell the truth, (you’ll) nail his lies.  He’s in a very risky position.  My lawyer says that regardless of the outcome of the lawsuit, he’s sure to be jailed.  …”  (a certified translation)

It is obvious from this letter that D15 was posing many difficult and incriminating questions which might be asked of Lok Si so as to discourage Lok Si from coming forward to give evidence that the Macau Documents were false.  If ever those questions were to be asked, they would be asked by D6’s counsel.  Then D6 suggested Victor Kwan should not allow Lok Si to give evidence for D15 because of her health and the pressure of the trial.  He suggested that whatever they did, D15 was sure to go to prison.

56.In his letter to Victor Kwan dated 22 June 1996, D6 invited Lok Si to mediate the dispute between him and D15.  The scenario he posed to Lok Si was that he did not want to continue the litigation because he did not want to put D15 into prison, but if he gave up, the legal costs would bankrupt him.  He pleaded Lok Si to mediate for him so that D15 would agree to let the estate bear the costs of the litigation or he would be forced to continue which would result in D15 being put into prison.  He concluded the letter with an implied threat that Lok Si would get into trouble for lying with D15 or would incriminate D15 and put him in prison if she was to tell the truth (i.e. that the Macau Documents were false).  He wrote as follows:

“… if he [D15] continues with the litigation, he will surely be in jail, because to lie in court or forge a document constitutes a criminal act.  Now, no one can help him in court, because to do so would cause one to be accused of conspiring with Tit On to lie or forge document.  To help him is on the contrary to harm him or even to harm oneself.”

57.The inference to be drawn from D6’s repeated attempts to dissuade Lok Si, through Victor Kwan, from giving evidence is that he knew the Macau Documents were false and he was afraid that Lok Si would come forward to give evidence to that effect.

58.During this hearing, D6 mentioned for the first time and while under cross-examination as a response to the attack launched against him as a result of the three letters by producing a copy of another letter dated 21 January 1994 which he had allegedly wrote to Lok Si to seek her clarification about D15’s identity.  This copy had never been disclosed in the past eleven years or mentioned at any time before this hearing.  He explained that he had given a copy of the letter to his former solicitors, Messrs Johnson Stokes and Master before the 1994 Trial.  He said he had lost the back up file of this letter soon after it was issued, but he later recovered it from the hard disc of his computer.  He blamed his failure to discover the letter in 1999 on his use of a different method of naming his document files.  He said when he recovered a copy of the letter he faxed a copy to his present solicitors, Messrs Pam Baker & Co (“Pam Baker”), but Pam Baker chose not to exhibit or mention it and even lost it until several days after this hearing began in December 2004. 

59.I think this letter is a recent concoction.  On his evidence, D6 said he had given instruction to his solicitors that he be notified of every development in the Third Party Proceedings.  He said he drafted his own affirmations, read each and every document filed for the Third Party Proceedings and checked that each step was taken at and according to his instruction.  If so, there was no reason why he did not raise that letter with Pam Baker when he did not find it among the documents produced.  After the letter was produced by D6, his solicitors claimed to have recovered the letter.  But that faxed copy bearing the time of transmission was never produced in support of his evidence.  Most fatally, by that letter he was inviting Lok Si to come forward to tell the truth.  This is utterly inconsistent with the three letters he wrote in 1995 and 1996 impliedly intimidating Victor Kwan to persuade Lok Si not to come forward to testify.  The authenticity of those three letters was not in dispute.  The 1994 letter was so inconsistent with those three later letters that it could not have been anything other than a recent concoction.  I reject D6’s evidence that he had written the letter of 1994 to enquire from Lok Si about D15’s identity.

60.During the 1994 Trial, D13 produced the “Chuk Po”, i.e. the pedigree of the Father’s family.  D15’s name was recorded as one of the sons of Kwan Kai Ming and Wong Woon Wan.  This evidence was not opposed or challenged by D6 at the 1994 Trial.  There were declarations by all the siblings (except D6 himself) recognising D15 was the lawful son of Kwan Kai Ming.  However, D6 obstinately chose to turn a blind eye and treated that the siblings were just voting on the question of legitimacy and not telling the truth.  There were evidence from teachers, relatives, family friends, an uncle Kwan Wan Hing and D8 who all confirmed that D15 was the legitimate son of Kwan Kai Ming.  None of them cast any doubt on the legitimacy of D15 by reason of the Macau Documents.  Patrick Chan J accepted their evidence.  So do I.  

61.At the 1994 Trial, D6 also heard evidence from D15 that D14 also had a Portuguese passport arranged by the Father to enable her to study abroad.  That evidence was not challenged by D6 at the 1994 Trial.  He must have accepted that was true.  If so, there was no reason why he should not accept what Lok Si told him about D15 having a Portuguese passport arranged by the Father to enable D15 to study abroad. 

62.D6 relied on the Baptist College Admission Form as new evidence in support of his appeal for a re-trial.  It is now common ground that that document referred to D15.  Firstly and most strikingly, the Baptist College Admission Form stated that D15 completed junior high school in Chong Tak Middle School in 1954 and completed senior high school in Chong Tak Middle School in 1957 and his father was Kwan Kai Ming and not Kwan Heng.  That document added nothing to his case.  It showed that the “Daniel Kwan” referred to in the 1957 Chong Tak Certificate in support of that person’s application for Macau birth certificate was the same “Daniel Kwan” referred to in the 1959 Chong Tak Certificate who was D15 who applied for admission to the Baptist College and whose father was Kwan Kai Ming.  From this observation, it must necessarily follow that the personal particulars in respect of D15 in the Macau birth certificate, the 1957 Chong Tak Certificate and the 1959 Chong Tak Certificate were all false.  D6 said that his doubt about the identity of D15 was enhanced by the finding of the Baptist College Admission Form.  In my opinion, this doubt was on the contrary totally removed by those documents. 

63.As for evidence prepared for the re-trial, there are the affirmations of Lok Si and her son Victor Kwan.  For the present purpose, I only need to refer to two salient aspects of Lok Si’s affirmation dated 15 June 1998.  Firstly, Lok Si denied that D15 was born to her and Kwan Heng.  She had four children, one of them, Kwan Wang On, was born in August 1935 and it was impossible for her to have given birth to D15 in October 1935 within two months of the birth of Kwan Wang On.  Secondly, she confirmed that in about 1957 the Father had sought the assistance of Kwan Heng to obtain a Macau birth certificate for D15 in order to enable D15 to obtain a Portuguese passport.  Her evidence must have put to rest whatever doubts as to D15’s legitimacy created by the Macau Documents.  In fact, D6 admitted under cross-examination that this was a complete explanation for the Macau Documents, but he denied having been so told by Lok Si.

64.To conclude, not only was there no reasonable ground based on which D6 could have held the belief that the Macau Documents and the 1957 and 1959 Chong Tak Certificates were true, i.e. D15 was the natural son of Kwan Heng and Lok Si, the evidence is overwhelming that D6 knew those documents were false.  He knew that the Macau Documents were false before he instituted the Third Party Proceedings.  His knowledge of the falsity was further confirmed by the evidence which surfaced during the 1994 Trial and from the further evidence which became available thereafter.  At no time, whether before or after the 1994 Trial, did D6 ever believe that D15 was the natural son of Kwan Heng and Lok Si. 

Whether D15 knowingly abandoned contesting the Exclusion Application

65.D6 said the fact that D15 did not contest the Exclusion Application was one of the reasons for his belief that D15 was the son of Kwan Heng and Lok Si.  D15’s answer is that he was aware of the Exclusion Application made to exclude him from the estate of the Father, but he had no knowledge of the hearing of the application or of the making of the Exclusion Order against him.  The issue relating to D15’s failure to contest the Exclusion Application had been extensively canvassed at the 1994 trial.  Patrick Chan J accepted the evidence of D15.  He held:

“Then there was the Exclusion Order made by the Judicial Court in Macau.  I have looked into the history of the Macau proceedings and the summary of the probate procedures as compiled by Dr Henrique Saldanha called on behalf of the 6^th defendant. That summary set out most of the events of the proceedings pursuant to a search by the witness. I note that in almost all of the items concerning a particular event or step in the action, there was inevitably a date following in brackets.  However, leading counsel for the 15^th defendant pointed out to me that the two items relating to notification to the 15^th defendant’s lawyer of the application by the 6^th and 9^th defendants to remove him from the probate proceedings on the ground that the 15^th defendant was not a son of Mr Kwan did not bear any date.  This appeared at p.554 at the item with a reference of p.92V.  Nor was there any date in relation to the item for notification to the 15^th defendant’s lawyer of the judge’s decision to exclude the 15^th defendant as an heir of Mr Kwan at the item referred to as p.103V.  The 15^th defendant said he did not receive any notice of such notifications.  In other words, while almost all of the items of events or steps in the action had a date, there was no date for the notification to the 15^th defendant’s lawyers of the application to remove him and no date in respect of the notification to the 15^th defendant’s lawyers of the Judge’s Exclusion Order.  The 15^th defendant had given evidence as to how he handled the proceedings and had changed lawyers a few times and how he was, to some extent, misled by his own lawyers.  He also gave an explanation for the delay in appealing against the Exclusion Order after he had come to know of such order.  I accept his explanation.  Afterall, the Exclusion Order was made in his absence and without hearing his explanation or evidence.  It was made on the basis of documents which I have found to have no relationship with the 15^th defendant.  I do not think he could be regarded as having been bound by such an Exclusion Order for the purpose of the present proceedings.”

In a nutshell, because of Dr Saldanha’s summary omitted to include a date in respect of the notification to D15’s lawyer of the application to exclude D15 and a date in respect of the making of the Exclusion Order, Patrick Chan J accepted D15’s evidence that he had no knowledge of the hearing of the Exclusion Application and of the Exclusion Order made against him.  In addition, Patrick Chan J accepted D15’s evidence that D15’s lawyers were neglectful and failed to lodge an appeal for D15.  Presumably, he also accepted D15’s evidence that he promptly instructed his lawyer to lodge an appeal and paid the necessary fees but that lawyer also let him down.

66.At the hearing before me, Mr Harris had tried to impress me with two pieces of evidence.  The first was a letter written by D15 to D9 dated 22 April 1988 criticising D6 and D9 for seeking to exclude him in the Macau Proceedings.  He also emphasised that D15 was making some very serious allegations against four of his lawyers who acted for him which was extremely unusual and incredible.  Ms Chih argued that D15’s complaint was not that he was not aware of the Exclusion Application but that he was not aware of the hearing of the application or the making of the Exclusion Order and hence could not have taken any steps to contest the application or to have the Exclusion Order set aside. 

67.D6’s and D9’s Exclusion Application to exclude D15 from the estate of the Father was made on 9 March 1988 and their opposition to P1’s declaration confirming the list of beneficiary, which presumably included D15, was made on 22 April 1988.  That was also the date of D15’s letter to D9.  In that letter, D15 annexed some legal documents.  It is not known what those documents were.  But, there could be no doubt that D15 had notice of the application to exclude him and of D6’s objection raised on 22 April 1988.

68.In Dr Gomes’ letter dated 9 May 1988 to P1’s solicitors in Hong Kong, there was some suggestion that the Exclusion Application would be before a judge on 21 May 1988.  Two points arose.  Firstly, this letter is clear evidence that D15’s lawyer and presumably D15 had knowledge of the Exclusion Application, the objection and the hearing on 21 May 1988.  Secondly, D6 confirmed that his offer to withdraw the Exclusion Application in exchange for the estate’s cancellation of the sale and purchase agreement in respect of the Almeida Property was rejected by D15.  D15 must know that the Exclusion Application would go ahead.  According to the summary of record of the Macau proceedings prepared by Dr Saldanha, Mr Remedios replaced Dr Gomes as lawyer of the estate on 18 May 1988.  There could be no doubt in D15’s mind that the Exclusion Application was very much a live issue in May 1988.

69.According to the summary of the record of Macau proceedings, the opposition was notified to the lawyers of P1 and D15 by registered mail on 16 September 1988.  As D15 already had notice of the Exclusion Application in May 1988, it could well be that that notice was a notice of hearing scheduled on 12 October 1988 which D15 did not attend.  But there is no need for me to speculate. 

70.The second piece of evidence which Mr Harris tried to impress upon me was D15’s attendance at the conference held on 20 November 1989 before a judge of the Judicial Court of Macau when his presence was objected to by reason of the Exclusion Order.  D15 explained that at the conference he had been asked by a court staff why he was there and he replied that he was representing Kai Ming Investment Company Limited.  Then a discussion among the lawyers and the judge followed.  The discussion was conducted in Portuguese and was not interpreted to him. 

71.On the other hand, according to Dr Saldanha’ affidavit, Mr Remedios opposed the application to exclude D15 at the hearing on the ground that D15 was not attending in his personal capacity but as a representative of Kai Ming Investment Company Limited which was a creditor of the estate.  The judge agreed with Mr Remedios’ submission.  Dr Saldanha further said in his affidavit that the discussion between the lawyers and the judge was immediately interpreted to D15 by Mr Remedios and that D15 expressed no surprise at Dr Saldanha’s assertion that he had been excluded from the probate proceedings as he was not the son of Kwan Kai Ming.  This is contrary to D15’ evidence at the 1994 Trial.  Presumably, Dr Saldanha’s evidence was not accepted by Patrick Chan J.

72.Ms Chih urged me to adopt Patrick Chan J’s judgment and reach the same conclusion.  The scenario as described by D15 is not uncommon in Hong Kong where the parties are legally represented and the proceedings were conducted in English.  Naturally D15’s concern then was that he could stay and look after the interest of Kai Ming Investment Company Limited in connection with the valuation of the Almeida Property.  He was allowed to stay and would not have bothered himself with what was discussed among the lawyers and the judge.  On the other hand, if Dr Saldanha’s affidavit evidence is accepted, Mr Remedios would not have addressed the judge that D15 was not attending in his personal capacity if he and D15 did not have notice of the Exclusion Order made against D15.

73.Patrick Chan J’s judgment was a fully reasoned judgment and could not have been faulted on the state of the evidence then before the Court.  Though I am not bound by that judgment as it has been set aside, I would only depart from it with the greatest of caution.  However, Patrick Chan J did not have before him the two letters I referred to above, i.e. D15’s letter to D9 dated 22 April 1988 and Dr Gomes’ letter to P1’s solicitors dated 9 May 1988.  D15 was fully aware that the Exclusion Application was very much a live issue.  He attended various hearing between then and 1990.  It was not credible that for two years he attended those hearing without knowing that he had been excluded.  From Dr Gomes’ letter, he knew D6 could and would embarrass him because D6 knew that the Macau birth certificate was a forgery and obtained illegally.  He was given an offer for Kai Ming Investment Company Limited to cancel the sale and purchase agreement in respect of the Almeida Property (effectively giving it away to D6 and D9) in exchange for D6 withdrawing the Exclusion Application.  He rightly refused for otherwise he would be committing a fraud on the estate and defrauding his other siblings for his own ends.  To D15, perhaps more would be at stake accepting the offer than not.  He was then left with the choice of either to contest the Exclusion Application at the risk of the embarrassment which Dr Gomes alerted him of in the letter of 9 May 1988 or not to contest it and let it go by default.  He certainly appreciated that the embarrassment would expose him to the risk of prosecution in Macau for fraud in relation to the Macau Documents, the false certificate of identification and his Portuguese passport.  The documents implicating him were in Macau.  He was physically in Macau prosecuting the Macau Proceedings or would have to be so.  His head was right under the guillotine.  The latter choice was probably a wise one for him.  It was wise not to contest the Exclusion Application.  Accordingly, I find that D15 knowingly abandoned his right to contest the Exclusion Application and allowed the Exclusion Order to be made against him by default.

74.Furthermore, according to the summary of record of Macau proceedings, Kai Ming Investment Company Limited and the estate of the Father represented by P1 appealed on 27 May 1991, but there was no appeal by D15 in respect of the Exclusion Order.  If D15 had instructed his lawyer to appeal as he said, there was no reason why there was no such record, whereas the appeal of Kai Ming Investment Company Limited was duly recorded.  It was also noted in the summary that the judge “fixed the effects” on 7 August 1991.  What that term means is beyond me.  Then it was noted that the appeals were treated as abandoned for non payment of costs.  The summary is inconsistent with D15’s evidence at the 1994 Trial. Though the summary was prepared by D6’s lawyer, Dr Saldanha, the accuracy of that summary was not contested by D15 now and during the 1994 Trial.  It is unlikely that Dr Saldanha would have given an inaccurate summary, being an officer of the court.  Patrick Chan J appeared to have rejected Dr Saldanha’s evidence.  However, he did not have the benefit of the two letters from D15 and Dr Gomes and the reply to the Letter of Request before him.  Thus before Patrick Chan J was D15 whom he found was an unscathed witness.  But on my assessment, based on evidence not available to Patrick Chan J, I do not find D15 an honest witness in denying his knowledge and involvement in the Macau Documents.  D15’s evidence about instructing lawyers to appeal and payment of lawyer’s fees could well have been in relation to appeal by the estate or by Kai Ming Investment Company Limited which he passed off at the 1994 Trial as relating to his appeal.  In the light of all the additional evidence now before me, I prefer the evidence of Dr Saldanha.  I think, had the additional evidence been before Patrick Chan J, he would have reached the same conclusion.  I therefore find that D15 had knowingly abandoned contesting the Exclusion Application in order to avoid the risk of possible embarrassment from D6.

whether  D15  should  be  deprived  of  his  costs

75.D6’s case is that D15’s conduct falls within each of the three categories in Ritter v Godfrey, i.e., (1) D15 brought the action on himself; (2) he contributed to the length and complexity of the proceedings; and (3) he was guilty of repeated acts of dishonesty relating to his identity.

Ground (1) – D15 brought the litigation on himself

76.Mr Harris argued that D15 brought the action on himself by arousing suspicion through a series of dishonest acts including the adoption of the false identity of a cousin.  The dishonest acts are all related to D15’s application for the Macau birth certificate, possession of a Portuguese passport, his application for the 1957 Chong Tak Certificate, his representation in the Baptist College Admission Form, the 1959 Chong Tak Certificate, his failing to contest the Exclusion Application and his distancing himself from the Macau Documents during the 1994 Trial. D6’s evidence at the costs hearing is that when the Macau birth certificate and the 1957 Chong Tak Certificate were first discovered by his lawyers in the course of the Macau Proceedings, it did not lead him to conclude that D15 was not his brother; it only raised a doubt in his mind.  However, he said this doubt was greatly increased when D15 did not contest the Exclusion Application on the grounds of paternity and that this doubt was further increased by D15’s evident determination to distance himself from the Macau birth certificate during the 1994 Trial.  Mr Harris submitted that a reasonable person in the position of D6 would have become increasingly suspicious of the identity of D15 after the finding of the Macau birth certificate stating that D15 was born in Macau, the son of Kwan Heng.

77.According to the legal principles which I have set out in paragraphs 12 to 23, the focal point of this inquiry is the conduct of the successful party, i.e. D15 and D6 bears the burden of proof.  D6 must prove that D15 conducted himself dishonestly, that such conduct led D6 to the belief that D15 was not the son of Kwan Kai Ming (or that the representations in the above mentioned documents were true), that he genuinely held such belief and on reasonable ground and that this belief caused him to instigate the Third Party Proceedings.

78.On the facts that I have found, D15 was involved in the making of the Macau Documents and the Baptist College Admission Form and had knowledge that the 1957 Chong Tak Certificate referred to him.  The issue is how did D15 conduct himself in relation to those documents which induced D6 to believe that he had a good cause of action against D15. But D15 did nothing.  D15 had never presented, informed or done anything to bring to the notice of D6 the existence of those documents.  He had not circulated or used the documents in connection with the Macau Proceedings or in these proceedings.  I think, if he could, he would have done anything to prevent those documents from being brought to D6’s attention.  The Macau Documents, especially the Macau Police Report, the application for the Macau birth certificate and the declaration of the four witnesses were presumably kept in government archives and were not public documents accessible to the public.  Those documents were discovered by D6’s lawyers and it remains an unexplained mystery how they obtained photocopies of those documents from the Macau Government.  Certainly, those documents were discovered through D6’s own unrelenting effort and by dubious and perhaps unlawful means without the knowledge or consent of D15.  It can hardly be said that D6’s notice and possession of those documents could be attributed to any conduct on the part of D15. 

79.As for D15’s representation in the Baptist College Admission Form and the 1959 Chong Tak Certificate, D15 was not involved in circulating or publishing the documents to D6.  According to D6, it was his friend, a Mr Wong, who through some unexplained channel obtained those documents to satisfy D6’s curiosity.  I do not believe in such explanation at all.  The Baptist College Admission Form and the 1959 Chong Tak Certificate were not accessible to the public.  The Baptist College would not for no discernible reasons have made them available to Mr Wong.  Under cross-examination, the Registrar of the Baptist College produced a letter purporting to have been signed by one Daniel Kwan of Sunshine City in Ma On Shan requesting for the documents.  The Registrar provided the documents to the writer at the Sunshine City address, which eventually found its way into these proceedings through D6.  That letter could not have been signed by D15.  I have no doubt that it was D6 who obtained those documents through secretive and unlawful means.  Whether he did so himself or through Mr Wong is immaterial.  But D15 had done nothing to bring those documents to D6’s notice.

80.D6 argued that by distancing himself from the Macau Documents during the 1994 Trial, D15 increased the doubt D6 had about D15’s legitimacy.  In my opinion, this is not a valid argument that D15 brought the litigation on himself so far as the costs of the 1994 Trial was concerned because D15’s denial of his connection with the Macau Documents was not known to D6 until D15 gave evidence in the 1994 Trial.  It may be argued that his denial increased D6’s doubt which induced him to lodge the appeal and may be relevant in considering whether D15 put litigation on himself as far as the costs of the appeal and re-trial are concerned.

81.During the 1994 Trial, D15 called two teachers from Heung Tao Middle School.  They were shown the photograph affixed to the 1957 Chong Tak Certificate and they said they were of the opinion that the photograph did not bear the likeness of D15 whom they recollected.  It is unrealistic to expect a teacher could identify the photograph of one of his many students whom he had taught forty years ago.  I give no weight to such evidence.  I think, whoever supplied the photograph to the certificate must have supplied one which was D15’s as the certificate was to be used for the benefit of D15.  I think D15 was not being honest when he was before Patrick Chan J during the 1994 Trial.  He was dishonest in denying it was his photograph which was attached to the 1957 Chong Tak Certificate or in saying that he could not remember now how he looked when he was a teenager fifty years ago.  While his teachers might have difficulties in remembering how their students looked, a person must have secondary memory, through looking at his past photographs or through recounting their earlier recollections, of how he looked when he was young and could not have easily forgotten his very image which grew with him.  D15 was dishonest in trying to pull wool over the Court’s eye by calling the two old teachers to identify the photograph which they certainly could have no recollection of how a past student looked forty years ago.  He was dishonest in trying to distance himself from the Macau Documents.  The next question is whether D15’s conduct led D6 to the belief that D15 was the son of Kwan Heng and Lok Si.

82.D6 also claimed that he was misled by the fact that D15 did not contest the Exclusion Proceedings, I have found in favour of D6 that D15 knowingly abandoned his right to contest the Exclusion Application.  This was probably not an act of misconduct.  But assuming it was, the next question is whether that led D6 to the belief that therefore D15 was the son of Kwan Heng and Lok Si.

83.The next hurdle D6 has to overcome is to show that as a result of those dishonest acts of D15, he genuinely believed on reasonable ground that the contents of the Macau Documents, the Baptist College Admission Form and the 1959 Chong Tak Certificate were true, i.e. D15 was the son of Kwan Heng and Lok Si.  On this issue, D6 failed hopelessly.  On my finding of fact, D6 knew the Macau Documents were false.  Even if D15 had brought those documents to the notice of D6 (which is not what I have found), it could not have misled D6 as he knew those documents were false. 

84.Likewise, D6 should have attached no significance to D15 trying to distance himself from those documents during the 1994 Trial.  Though D15 had been dishonest in not admitting that the documents related to him, D6 knew that D15 did so for reasons other than that he was the son of Kwan Heng and Lok Si.  Obviously, D15 was trying to avoid saying anything under oath which might implicate him in a passport or certificate of identitification fraud.  That is obvious enough.  I reject D6’s evidence that his doubt about D15’s identity was increased by D15 distancing himself from the Macau Document during the 1994 Trial.

85.As for D6’s reliance on D15’s abandoning his rights to contest the Exclusion Application, it was a blatantly groundless and disgraceful assertion.  Not only that D6 knew the Macau birth certificate which was the basis for his Exclusion Application was false, through his lawyer Miss Manuela, he impliedly intimidated that he would embarrass D15 by means of the false Macau birth certificate if D15 were to contest the Exclusion Application.  He offered to withdraw the Exclusion Application if D15 or the estate of the Father would effectively give him and D9 the Almeida Property by cancelling the sale and purchase agreement in respect of that property.  According to D6, D15 declined the offer.  In the circumstances, the inference that Miss Manuela would cause D15 embarrassment if he contested the Exclusion Application could be readily drawn. 

86.I appreciate that it never was D15’s case that he submitted to this implied threat because that would be inconsistent with his case that he was not aware of the hearing of the Exclusion Application or the making of the Exclusion Order.  However, from the evidence of D6 and Dr Gomes’ letter, the inescapable inference is that D6 must have known that D15 abandoned contesting the Exclusion Application because Miss Manuela had muzzled D15 with the false Macau birth certificate and with her threat of embarrassment should D15 appear in court to contest the Exclusion Application.  In the circumstances, it is at least open to me to find that D6 knew that D15 had other reasons not to contest the Exclusion Application other than that he was the son of Kwan Heng and Lok Si.  Accordingly, I find that D6 had no genuine belief that D15 abandoned the contest because he was the son of Kwan Heng and Lok Si.

87.Thus, D6 has failed to prove that D15 had by his conduct published or brought the Macau Documents to the attention of D6.  He has also failed to show that he genuinely believed on reasonable ground that the contents in the Macau Documents were true.  Even if D15 was at some distant time in the past connected with or acquiesced in the making of the Macau Documents and distanced himself from those documents during the 1994 Trial, such conduct did not lead D6 to believe that the contents of the Macau Documents were true as he knew they were untrue.  Accordingly, D6 has failed to prove that D15 had by any misconduct led him to the belief that D15 was the son of Kwan Heng and Lok Si or that D15 had brought litigation on himself. 

Ground (2) – D15 contributed to the length and complexity of the proceedings

88.In respect of this ground, D6’s case is that if D15 had admitted at the outset of the proceedings that the Macau birth certificate was intended to refer to him but was false, it was unlikely that there would have been any trial.  Alternatively, even if there had still been a trial, it would have been much shorter and there would have been no appeal of the kind which took place, based on the new evidence connecting D15 to the Macau birth certificate.  Mr Harris submitted that it was D15’s insistence in his denial of a connection with the Macau birth certificate, which contributed to the length and complexity of the proceedings by the manner in which he conducted them and in the circumstances justice requires that D15 should be deprived of all or part of his costs.

89.This argument was impressive, but with respect, superficial and unsustainable.  I have already touched on this issue when I considered D15’s conduct in relation to the Macau Documents and his shying away from them during the 1994 Trial.  Save but one point, my finding was in favour of D6.  At the heart of this issue is the question whether D6 genuinely believed on reasonable grounds that the personal particulars concerning D15 contained in the Macau Documents and the 1959 Chong Tak Certificate were true.  For reasons as I have already given, D6 did not.  I find that not only that there was no reasonable ground to support such a belief, D6 actually knew that the particulars about D15 contained in those documents were false.  As I have already observed D6 knew that D15’s denial of connection with the documents was for reasons other than that he was the son of Kwan Heng and Lok Si and most probably because he did not wish to say anything which would implicate him in connection with any passport fraud.  D6 knew those documents were false and indulge in relying on them in pursuing this litigation. 

90.Mr Harris argued that D15 prolonged the proceedings by unreasonably defending himself right up to the last day of evidence in the present hearing by claiming that he did not contest the Exclusion Application in the Macau Proceedings because he had no knowledge of hearing of the application and the granting of the Exclusion Order.  Unlike Patrick Chan J, I found that D15 knowingly abandoned the contest. However, the basis of D6’s application for the Exclusion Order was the Macau Documents which he knew were false.  Therefore, he knew that D15 abandoned his contest to the Exclusion Application for reasons other than that D15 was the son of Kwan Heng and Lok Si.  In advancing a case based on reliance on D15’s failure to contest the Exclusion Application, D6 was attempting to practice a fraud on the Court.   He should not have launched his case on that basis and should be responsible for D15’s costs in resisting his action even though D15’s defence was also false and unmeritorious.  To a certain extent, this ground overlaps with Ground (3) below.  This is not a ground for depriving D15 of his costs.

91.Though D15 prolonged the proceedings by defending issues which he should not have defended, those issues should not have been raised by D6 in the first place.  Both parties were to blame.  As a matter of causation, D6 was more to blame as he should not have concocted a false case against D15 so as to deny him of his right to his Father’s estate.  How can D15 be blamed for prolonging the proceedings when the proceedings should never have started in the first place.  I reject this ground for denying D15 of his costs.

Ground (3) – D15 had repeatedly committed acts of serious dishonesty relating to his identity

92.On this ground, D6 claimed that D15’s repeated acts of dishonesty are such that as a matter of public policy the court should mark its disapproval by not awarding him his costs.  Mr Harris submitted that these repeated acts of dishonesty were related to D15’s identity and directly led to the Third Party Proceedings.  He listed the following fourteen acts of dishonesty on the part of D15 : -

(1) false declaration to the Macau authorities as to his birth in Macau;

(2) obtaining the 1957 Chong Tak Certificate in 1957;

(3) using the falsely obtained Macau birth certificate and the 1957 Chong Tak Certificate to obtain a false Macau identity document;

(4) falsely claiming to the Macau authorities in support of his application for a Macau certificate of identification that he had been living in Macau since 1950 and attending school there;

(5) falsely obtaining a Portuguese passport;

(6) obtaining the 1959 Chong Tak Certificate in 1959;

(7) making an entry in the application to the Baptist College in 1959 based on a false identity, supported by the 1959 Chong Tak Certificate;

(8) making a false statement to the Hong Kong   Immigration Department that he did not possess a Portuguese passport in 1962;

(9) making a false statement to the Immigration    Department that he was born in Guanzhou;

(10) falsely claiming himself to be “the head of the family” in the probate proceedings in Macau in 1987 in relation to the estate of the Father of which he was not one of the administrator;

(11) twice falsely denying on affirmation in 1992 that the Macau birth certificate was connected with him;

(12) falsely affirming in 1994 that he had never applied for or possessed a Macau birth certificate, certificate of identification or the Chong Tak School certificate;

(13) committing perjury in the 1994 Trial by repeating the false statements in his affirmations;

(14) falsely denying repeatedly from 1992 to 2004 in formal court documents and through his counsel, that he had been aware of his exclusion from the Macau Proceedings in 1987;

93.The list is repetitive.  They are all related ultimately to D15’s obtaining a Portuguese passport to enable him to study overseas and to D15’s attempt to distance himself from the Macau Documents and the two Chong Tak Certificates.  As between D6 and D15, D6 well knew that those documents were false.  He knew that D15 was his natural brother.  He tried to build a case against D15 which he knew was false and tried to unearth as many of those false documents as he could to advance his case.  He claimed he wanted to find out the truth and that he had nothing or little to gain by excluding D15 from the estate of the Father as D15’s share would have to be shared among the other beneficiaries and he had to incur huge legal costs in his search for the truth.  However lofty he claimed to be his ideal, the truth is that this litigation was instituted as part of his vendetta against D15 mainly for two reasons.  Firstly, he was outsted from Kai Ming Investment Company Limited and replaced by D15.  D15’s evidence is that D6 was ousted by the Father because of his misconduct in relation to the company.  D6 claimed that he left the company for the United States because he refused to give recognition to the Father’s new concubine.  This is not the venue and the occasion to resolve that dispute and it is not necessary to.  The other reason, which is more obvious, was that D15 fouled D6’s and D9’s plan to appropriate the Almeida Property from the Father’s estate in Macau through the Macau Proceedings.  It was as a result and in connection with those proceedings that D6’s lawyer discovered the Macau Documents through some dubious means and which led to the Exclusion Order.  The Almeida Property was acquired by the Father and put under the name of the Mother.   Upon the Mother’s death, it was transferred to D6, D9 and the Father in equal shares.  D6 and D9 provided no consideration for the Almeida Property.  To their knowledge, even excluding D15, they were not the sole issues of the Mother.  They executed power of attorney in respect of the Almeida Property in favour of the Father.  It is only too obvious that they were nominee owners holding on trust for the Father.  It was an extremely dishonest act to try to appropriate the Almeida Property all to themselves.  The Macau Proceedings were then spilled over to Hong Kong.  It is only too obvious that it was D6 who, with knowledge of the falsity of the Macau Documents and the two Chong Tak Certificates, used those documents as a basis to launch the Third Party Proceedings.  He knew through half a century’s family relationship, recognition and acknowledgement that D15 is his blood brother.  He knew on the facts that he had no chance to succeed in the Third Party Proceedings.  He was trying his luck and took advantage of D15’s handicap in being entangled in some illegality of the past to launch the Third Party Proceedings to exclude D15 from the Father’s estate.

94.As for the false statements D15 made to the Immigration Department, he had been prosecuted and punished for some of those acts of misconduct in 1962.  As for D15’s claim in the Macau Proceedings to be “the head of the family”, that was nothing more than a claim to be a personal representative of the estate which was what the proceedings were for.  That was just a legal term used in Macau as was noted by Patrick Chan J.  D15 honestly disclosed all the beneficiaries to the estate.  There was nothing dishonest about it.

95.As for D15’s attempt to distance himself from the Macau Documents and the 1957 Chong Tak Certificate in the 1994 Trial and in his affirmations as well as in this hearing, I have already explained that such conduct, even assuming that D15 did so dishonestly, were understandable as he did not wish to expose himself to risk of prosecution.  Afterall, he has the right not to incriminate himself.  I am not saying he was right to have lied but what he did was understandable in the circumstances.  His conduct was particularly understandable in view of the criminal prosecution in September 1998 which arose as a result of what he said during the 1994 Trial and which was instigated by D6.

96.As for D15’s perjury during the 1994 Trial, D6 had caused D15 to be arrest by the police on 3 March 1998 and had brought about his prosecution in the District Court for two counts of perjury.  The prosecution was stayed by HH Judge Geiser in the light of the DNA results on 29 January 1999.  But, in effect, D15 had been punished for his perjury through the scourge of prosecution.  That is not anything I should give weight to in considering the misconduct of D15.

97.The misconduct of D15 complained of is not very heinous.  Most of the misconduct were committed while he was young half a century ago.  He had been prosecuted in relation to one of the acts of misconduct, i.e. the false statement to the Hong Kong Immigration Department in 1962.  He suffered the scourge of prosecution in 1998 at the hands of D6.  Though the prosecution was stayed, he incurred legal fees and suffered mental stress.   I think the effect of his misconduct should be regarded as having been spent.  Even without balancing his misconduct against D6’s, D15’s misconduct is not such that the Court would consider it an affront to justice that D15 should have his costs. 

98.As I shall find in the later part of this judgment, the conduct of D6 was appalling and wicked.  He was knowingly trying to build up a false case against D15.  Upon balancing D15’s misconduct against that of D6, I consider this is not a case that the successful party should be deprived of his costs.   Costs should follow the event.

Effect of the Notice To Admit Facts

99.Thus, on the above analysis, there is no reason to deprive D15 of his costs on the principle of Ritter v Godfrey.  However, D6 had served three notices to admit facts on D15 pursuant to Order 27 rule 2 of the Rules of the High Court on 10 May 1999 (the “1999 Notice”), 15 January 2002 (the “2002 Notice”) and 21 October 2004 (the “2004 Notice”). D15 declined to make the admission. 

100.I shall deal with the 2004 Notice first and get it out of the way. In the 2004 Notice, D15 was asked to admit that the Baptist College Admission Form, the 1959 Chong Tak Certificate and the 1962 Student Year Book of Baptist College were documents in the possession of the Registrar of the Baptist College.  Mr Harris submitted that it was unreasonable for D15 not to admit the facts in the 2004 Notice which necessitated great and unnecessary costs in calling the Registrar, Dr Lam to attend Court to prove those facts.  At the hearing, D15 did not contradict the evidence of the Registrar.  He only conveniently made use of the occasion to seek production by the Registrar of the letter written by the person who impersonated him and obtained from the Registrar copies of the Baptist College Admission Form and the 1959 Chong Tak Certificate which eventually found their way to the hands of D6.  If D6 sought to produce any documents, D15 was entitled to find out the circumstances those documents came to D6’s possession.  The Registrar showed that the documents were obtained by fraud.  This has an impact on D6’s credibility and the Court’s assessment on his knowledge of the truth or falsity of the various documents he relied on in the Third Party Proceedings.  In the circumstances, it was reasonable for D15 not to admit the facts stated in the 2004 Notice.  D15’s refusal to admit those facts entailed no costs consequence against him.  

101.In the 1999 Notice, in essence D15 was asked to admit that he successfully applied in 1959 for admission to the Baptist College, that he was the person referred to in the 1959 Chong Tak Certificate, that the representation in the 1959 Chong Tak Certificate was false, that he had in fact been educated at the Heung Tao Middle School, that he was convicted in 1962 for supplying false information when applying for a certificate of identity, that he applied for and obtained a Macau birth certificate by making false statement etc.  In the 2002 Notice, D15 was in essence asked to admit that he personally attended to the making of the various Macau Documents, such as the certificate of identification, provided his fingerprint impressions and that he obtained a Macau birth certificate.    

102.The facts stated in those two notices are among some of the facts which I have found. Mr Harris argued that by refusing to admit those facts D15 unreasonably prolonged the proceedings and more costs were unnecessarily incurred on both sides.  Indeed, a lot of time had been unnecessarily wasted in this hearing which could have been saved had D15 admitted those facts.  While I have found there was an understandable reason for D15 to distance himself from the Macau Documents, that does not relieve him of the consequence of costs.  The best course for a litigant is always to tell the truth and to fight his case on basis of the true facts or to admit liability if on the true facts liability is due.  In my view, D15 could have easily succeeded as indeed he did by admitting those facts and to contest the Third Party Proceedings on the very narrow but absolutely strong ground that the documents relied on by D6 were false and to contest the costs issue on the ground that D6 knew those documents were false before he started the Third Party Proceedings.  In that way, much costs would have been saved and the Letter of Request would have been unnecessary.  Under usual circumstances, D15 should pay all the costs which but for his unreasonable refusal to admit the facts could have been saved.  But the issue at the heart of this dispute is whether D6 genuinely believed D15 was the son of Kwan Heng and Lok Si.  On my finding, he did not and at no time did he ever genuinely believe D15 was not his blood brother.  Both are to blame and D6 more so for there was no reason for him to issue the Third Party Proceedings in the first place.  Upon balancing these considerations, justice requires that both parties should be deprived of their costs incurred on these factual issues since the date of the 1999 Notice, i.e. 10 May 1999 because the facts stated in the two notices were interlocked.  On a fair assessment, D15 should be deprived of one-quarter of his costs since 10 May 1999.  D6 shall not be awarded any costs which the notices would otherwise have won for him.

103.Mr Harris submitted that in order to link up D15 with the person referred to in the Macau birth certificate and in the 1957 Chong Tak Certificate, it became necessary for D6 to apply for the Letter of Request in 1996.  He said D15 went to extraordinary length to prevent those documents from being obtained by opposing the grant of the Letter of Request and after it had been obtained by seeking to have it aside.  I do not think it necessary to re-visit the circumstances leading to the issue of the Letter of Request.  The matter had been conclusively determined by the Court of Appeal and in D6’s favour.  The costs in respect of the Letter of Request had been separately provided for.  If I were as well informed then as I am now, I would have refused D6’s application for the Letter of Request. D15 would not have suffered those costs.  That was his own making for not contesting the proceedings on the true facts.

Conclusion

104.In conclusion, I dismiss D6’s argument that there should be no order as to costs, save that the costs recoverable by D15 since 10 May 1999 should be reduced to only three-quarters.  The next issue is on what scale those costs are to be assessed.

Whether  costs  should  be  awarded  on  indemnity  basis

105.The focal point of this issue is the conduct of D6.  The burden of proof rests on D15 to show that D6’s conduct in the litigation is scandalous, vexatious, malicious, oppressive, were of a more venal kind or in some sense been wicked, or that the Third Party Proceedings were instigated for an ulterior motive, such as a personal vendetta, or if he has caused costs to be incurred irrationally or out of all proportion to what is at stake.  D15 has also to convince the Court that D6’s conduct was such that it provokes in the Court a sense of indignation.  D15 was in a slightly handicapped position in that he elected not to give evidence.  He has to rely on the evidence of his witnesses and such of D6’s evidence which was in D15’s favour.

106.If the unsuccessful party instigates legal action or persists in defending one knowing that he has no reasonable ground to do so, it is some evidence of scandalous, vexatious, malicious and oppressive conduct.  Here, the burden is on the successful party to prove that the unsuccessful party knew he had no reasonable cause of action or defence. 

Instigating action on the basis of a belief unsupported by evidence

107.It was D6, D7 and D9 who instituted the Third Party Proceedings.  D7 and D9 dropped out in due course, while D6 persisted.  In his Points of Claim filed in the Third Party Proceedings, he denied that D15 was the lawful issue of Kwan Kai Ming but was the son of Kwan Heng and Lok Si.  However, during the 1994 Trial, D6 elected not to give evidence.  He did not put forward a positive case that D15 was the son of Kwan Heng and Lok Si, other than producing the Macau Documents which were discovered by his Macau lawyers through some dubious means.  He admitted that during the Macau Proceedings from 1987 to 1990 and up to 1992 he could not and did not believe in the authenticity of the Macau Documents but his doubt was increased by D15’s abandoning his right to contest the Exclusion Application.  His reason for bringing the Third Party Proceedings was that he had a doubt whether D15 was the son of Kwan Kai Ming and hence he wanted to have that doubt resolved by the Third Party Proceedings.  He said at the time he instituted the Third Party Proceedings he was not certain if D15 was the son of Kwan Heng and Lok Si and that he was just making a guess.

108.Yet, he never sought confirmation from Lok Si or her children that what was stated in the Macau birth certificate was true.  In fact, Lok Si had told him in 1992 or 1993 that it was false.  He never sought confirmation from his siblings who were in Philippines when D15 was born.  Apart from D6, D7 and D12 who were brought up in Shanghai and D9 who chose to be in D6’s camp, there were five other siblings who were in Philippines and born before D15 and who could have positively confirmed D15’s identity.  Those elder siblings all confirmed that D15 was their blood brother.  Even D9 who was once in D6’s camp dropped out.  Even D12 who was brought up in Shanghai accepted D15 was her blood brother.  Instead, D6 unreasonably and obstinately insisted that the confirmation was just a vote of legitimacy and was not true.  But he offered no reasonable ground for that belief.   

109.Thus, on D6’s evidence, he instigated the Third Party Proceedings based on nothing more than a belief, which in the light of half a century’s family relationship, recognition and acknowledgement could not be one based on reasonable ground.  He did not even believe he had better than even chance of success.  Even on his evidence, which I do not believe, he simply passed his doubt to the Court and let the Court resolve it for him, one way or the other and without any conviction that the Court will resolve it in his favour.  This is already a ground for an order for indemnity costs.

Instigating action knowing D15 was not the son of Kwan Heng and Lok Si

110.But even putting that aside and assuming that D6’s use of the word “doubt” was semantic, the evidence is overwhelming that he could not have any doubts as to the legitimate status of D15 as the lawful son of Kwan Kai Ming.  The evidence is overwhelming that he knew the Macau Documents, including the Macau birth certificate were false.  He had been informed by Lok Si that D15 was not her child and that Kwan Heng assisted the Father to obtain a Macau birth certificate for D15.  Under cross-examination, D6 agreed that was a satisfactory explanation for the Macau Documents, but he denied he had ever been so informed by Lok Si.  I reject his evidence.  I have no doubt that he had been so informed.  He knew that D15 abandoned his right to contest the Exclusion Application and shied away from the Macau birth certificate during the 1994 Trial for reasons other than that D15 was the son of Kwan Heng and Lok Si. I shall not repeat the evidence and the reasons for my finding.  In my view, D6 knew through half a century’s family relationship, recognition and acknowledgement that D15 was his blood brother.  He knew on the facts he had no chance to succeed in the Third Party Proceedings.  He was trying his luck and launched the Third Party Proceedings on the basis of documents which he knew were false.  This amounted to malicious prosecution of an action.  This alone is a sufficient ground for me to award indemnity costs against D6 to mark the Court’s disapproval of such malicious conduct.

Further malicious conduct in the prosecution of the action

111.Yet, after he failed before Patrick Chan J, D6 appealed to the Court of Appeal on the basis of some new evidence, which were the Baptist College Admission Form, the 1959 Chong Tak Certificate and some press report in respect of D15’s conviction in 1962.  Those new evidence had nothing substantial to offer.  His case against D15 was not any different with the additional evidence.  Indeed, in my view, the Baptist College Admission Form removed any doubt D6 could have about D15’s legitimacy because it stated that D15’s father was Kwan Kai Ming.  Above all, his ground of appeal was a sham ground as D6 knew D15 was his blood brother.  The appeal was prosecuted for the purpose of giving D6 a second bit.  The appeal was in my view malicious.  Indemnity costs is justified.

Malicious prosecution

112.The next thing D6 did before the hearing of the appeal was that he lodged a complaint of perjury against D15 with the Commercial Crime Bureau using the Macau Documents which he knew were false.  This was malicious prosecution, plain and pure. 

113.D6 was informed of the result of the DNA analysis by D15’s lawyer that D15 was the son of Kwan Kai Ming and Wong Woon Wan on 17 February 1997.  Despite that the reliability of such tests had been universally accepted at the time, D6 did not accept the result of the DNA analysis.  If D6 had acted under a genuinely mistaken belief that D15 was the son of Kwan Heng, he would have felt very regretful or even remorseful for having brought about D15’s prosecution when informed of the result of the DNA analysis, whether he accepted it or not.  He would have at least informed the Commercial Crime Bureau of the DNA result and let them decide if the results were acceptable and if the investigation against his brother should continue.  At the time, D15 had not yet been arrested and charged.  But D6 did not do so.  It took him two years to engage an expert to verify the result of the DNA analysis from working data before he accepted the DNA result.  But on the other hand, it did not take long for the prosecution to accept the DNA result.  Prosecution informed D15’s solicitors and the District Court that they accepted the DNA result on 4 September 1998, half a year after the arrest.  This was what HH Judge Geiser said of D6 when ordering a stay of the prosecution:

“I am satisfied that the behaviour of KWAN Chi-on in this whole sorry saga has been quite appalling.  I do not for one moment accept that he was merely mistaken about his brother’s identity.  This cannot be so.  Whilst I appreciate that he comes from a very large family with many brothers and sisters, surely he knows who his own brother is or is not.

… after the defendant [D15] had filed an affirmation on 24 February 1997 exhibiting the results of his DNA testing, that Kwan chi-on became aware of the reality of the situation.  Despite this he did not go back to the police or Commercial Crimes Bureau and inform them that he had been operating under the mistaken illusion that the defendant was not his blood brother.  This alone shows mala fides on the part of KWAN Chi-on.”   

I share the same view.  D6 knew D15 was his blood brother and there was no ground for the prosecution.  The sole purpose of instigating prosecution was to bring pressure on D15 in the Third Party Proceedings or as part of his vendetta.  This is a clear case of malicious prosecution which reflected the wickedness with which D6 conducted the Third Party Proceedings.   

D6’s delay in accepting the result of the DNA analysis

114.Ms Chih accused D6 of conspiring with his solicitor to delay acceptance of the DNA result so as to enable the prosecution against D15 to proceed.  Unknown to D15, D6 had lodged his complaint of perjury against D15 to the Commercial Crime Bureau on 4 April 1995.  Instead of informing the Commercial Crime Bureau of the result of the DNA analysis, D6 resisted and delayed acceptance of the result of the DNA analysis for two years while D15 was arrested on 3 March 1998.

115.In the meantime, the parties’ solicitors negotiated on D6’s acceptance of the DNA result.  D15’s solicitors, Messrs Hampton, Winter & Glynn (“HWG”) gave the DNA result to D6’s solicitors, Pam Baker.  Two months later, Pam Baker replied on 16 April 1997 seeking “all documents and work notes prepared during the different stages of analysis and the relevant autorads; in relation to University Diagnostics Limited, the data on which the probabilities of sibling relationship were calculated; and the protocol reference from both laboratories.”  On 27 May 1997, HWG provided a copy of the comprehensive report obtained from Dr Debenham of University Diagnostics Limited. HWG refused to provide further information until receipt of a copy of D6’s expert’s report and D6’s confirmation that he accepted that DNA testing produced conclusive results and that he was prepared to provide blood samples for testing.

116.Mr Harris argued that D15 did not allow himself to be cross examined during the 1994 Trial by electing not to give evidence and a person in D6’s position was entitled to take into account that he was dealing with someone untrustworthy.  Hence he argued it was justified for D6 to seek more corroboration and explore further by way of an independent report from his own expert based on the working data.  I am not impressed by that argument as I have found that D6 knew D15 was not the son of Kwan Heng but is his blood brother, the exercise was just a waste of time and a delay tactic.  But if D6 and D15 were total strangers and D6 genuinely wished to challenge the result of the DNA analysis, the working data were necessary.  D6 or his expert did not have blood samples of D15, Lok Si and others to conduct his own test and analysis.  D6’s expert could only make a report using the working data obtained and used by D15’s expert.  I think Pam Baker’s request reasonable if D6’s intention to challenge the DNA result was genuine.  HWG failed to appreciate the situation and HWG’s request for confirmation that D6 would provide blood samples for testing was irrelevant or unjustified.

117.A month later, on 25 June 1997, Pam Baker replied that D6’s expert could not provide a report without the information requested, namely, work notes, autorads and statistical information used by University Diagnostics Limited.  So it transpired that D6 was not going to accept Dr Debenham’s report on its face value but wanted to have the working data for his expert to prepare an independent report to verify Dr Debenham’s report.  However, HWG replied on 18 July 1997 on the mistaken belief that such information had been included in the exhibit attached to D15’s affirmation dated 24 February 1997. 

118.Were D6 serious in dealing with the DNA result, he would have instructed Pam Baker to immediately point out HWG’s mistake and to ask for the working data so that his expert could prepare her report as soon as possible.  But Pam Baker just sat on the reply for half a year until pressed by HWG.  No reasonable solicitor would have done that without the client’s connivance or instruction.  At the time, D6’s complaint of perjury against D15 was still pending and D15 had not yet been arrest.  But of course, HWG was also to be blamed for the mistake and for their failure to follow up with timely reminders.

119.So after half a year, when HWG issued a reminder to Pam Baker, Pam Baker replied that D6’s expert had not prepared any report as HWG had failed to provide the working data.  HWG then replied on 23 February 1998 seeking clarification on the type of data to be provided.  On 17 March 1998, Pam Baker replied and named Dr Betty Law of Government Laboratory as D6’s expert.  Incidentally, that was two weeks after D15 was arrested and charged with perjury.

120.It took some time for HWG to obtain the working data from D15’s expert.  Pam Baker acknowledged receipt of the data on 10 August 1998.  Then Dr Betty Law requested for more time to prepare her report due to her own work commitment and illness.  Eventually on 21 January 1999, Dr Betty Law completed her report which confirmed the result of DNA analysis by D15’s expert. 

121.From the above account of the events, it is clear that both Pam Baker and HWG were to blame for the delay.  Pam Baker was happy to sit on HWG’s mistake for half a year.  But I am unable to find any connection between that delay and the decision to prosecute.  It is only too obvious that D15 would have produced the result of the DNA analysis to the Commercial Crime Bureau upon his arrest in March 1998.  What the Commercial Crime Bureau did with the DNA result was a matter solely for the Commercial Crime Bureau and the Secretary for Justice.  D6’s delay could not in any way contribute to the decision to prosecute.   But the delay reflected D6’s lack of good faith in the treatment of the DNA result.  The delay did not incur much costs against D15.  In my view, the delay carries little weigh on the issue whether indemnity costs should be awarded against D6.

Attempt to persuade Lok Si not to give evidence

122.Not only that D6 did not genuinely believe D15 was not the son of Kwan Heng and Lok Si, when he learned that Lok Si was prepared to undergo DNA test and to give evidence in support of D15, he made various attempts to persuade Lok Si not to give evidence.  Thus, having knowingly put up a false case against D15, he attempted to advance the false case by dissuading a witness from coming forward to tell the truth.   This is an attempt to commit a fraud on the Court.  I do feel a sense of indignation at D6’s conduct.

Application for Letter of Request

123.D6 sought a Letter of Request to be issued to the First Instance Court of Macau to obtain evidence to link D15 as the person referred to in the Macau birth certificate and the 1959 Chong Tak Certificate and the person who obtained the Macau certificate of identification.  As D6 knew all those documents were false, what he did was to collect evidence knowingly for the purpose of proving a false case.  This is another wicked attempt to commit a fraud on the Court and provokes a sense of indignation.

Ulterior motive

124.I have found D6’s ulterior motive for instituting the Third Party Proceedings was to revenge on D15 for, fouling his greed to appropriate the Almeida Property to the exclusion of his other siblings if not also for having ousted him from Kai Ming Investment Company Limited.  In addition to that, it also transpired from D6’s letter to Victor Kwan dated 22 June 1996 that the costs of the 1994 Trial would bankrupt him and that he appealed and continued with the re-trial for the purpose of forcing D15 to compromise with him on the question of costs so that the legal costs of these proceedings would be borne by the estate of the Father.  He was throwing in more costs for a case which he knew was false and thereby aggravating D15’s costs all for the purpose of forcing D15’s compromise to have the costs borne by the estate.  This is an abuse of legal process and indemnity costs is justified.

Conclusion

125.On his own admission, D6 started the Third Party Proceedings on the basis of a mere belief that D15 was the son of Kwan Heng and Lok Si, a belief which he never held.  On the contrary, the evidence is overwhelming that he knew D15 was not the son of Kwan Heng and Lok Si.  He presented a false case against D15 using the Macau Documents which his Macau lawyers obtained using dubious means and which he knew were false.  His other ground that D15 abandoned the right to contest the Exclusion Application enhanced his doubt as to D15’s legitimacy was a sham ground.  This was because he must have known that D15 abandoned the contest because his lawyer had muzzled D15 with the false Macau birth certificate and forced D15 to abandon the contest in order to avoid the embarrassment which D6’s lawyer had promised D15 should D15 contest the Exclusion Application.  After he failed before Patrick Chan J, he maliciously caused D15 to be prosecuted for perjury using the Macau birth certificate which he knew was false.

126.Then D6 engaged unlawful means to obtain the Baptist College Admission Form and the 1959 Chong Tak Certificate from the Baptist College which he used to deceive the Court of Appeal.  After having obtained an order for re-trial, he kept on building up his case by seeking a Letter of Request to obtain additional evidence to prove what he knew was a falsity.  He also attempted to destroy D15’s case by dissuading Lok Si from coming forward to tell the truth. 

127.The additional ground which he intended to advance in the intended re-trial which was aborted because of the DNA result was that D15 enhanced his doubt about his legitimacy because D15 distanced himself from the Macau Documents.  That was also a sham ground as he knew the Macau Documents were false.

128.In conclusion, D6 was making up a false case against D15 on documents which he knew were false.  He kept on seeking evidence through legal and illegal means to fortify his false case so as to pass it off as genuine.  In his search for new evidence, he was not genuinely trying to stripe D15’s mask away so as to reveal D15’s true identity.  He took advantage of D15’s handicap in being entangled in some illegality of the past to concoct a false case against D15 and to fix him with a false identity.  In short, he was trying to bury his blood brother alive in someone else’s grave in order to deprive his blood brother of a substantial share in the Father’s estate.  He adopted dubious and unlawful means for his own end.  He subjected D15 to the scourges of prosecution.  All these were done as part of his vendetta against D15, at least for fouling his greed in the attempt to appropriate the Almeida Property to the exclusion of his other siblings if not also for having ousted him from Kai Ming Investment Company Limited.  An additional purpose of his appeal was to force the estate to pay his costs in the Third Party Proceedings which he failed.  To achieve his wicked end, he even tried to practice a fraud on the Court before Patrick Chan J and now before me.   He deceived the Court of Appeal to allow his appeal and to order a re-trial.  He deceived me into granting his application for the Letter of Request.  D6’s conduct in this litigation was extremely shameful, malicious, appalling and wicked.  He was ruthless.  His conduct fits into every category of conduct which justifies an order for indemnity costs: scandalous, vexatious, malicious, oppressive.  I do feel a very strong sense of indignation at such conduct.  It is proper that D6 should be ordered to pay costs on indemnity scale. 

conclusion

129.As the judgment of Patrick Chan J had been set aside by the Court of Appeal, I have full discretion to order costs of the proceedings in respect of all costs up to and including the 1994 Trial, except in respect of D6’s costs against D15 on the counterclaim against which D15 did not appeal.  In view of the additional evidence not available before Patrick Chan J and the additional facts which I have found during this hearing, I feel free to depart from Patrick Chan J’s costs order made in the 1994 Trial.  I have dismissed D6’s Third Party Proceedings with costs.  As the Court of Appeal had ordered that “the costs of the appeal to abide by the result of the new trial”, D15 shall have costs of the appeal. I also have full discretion in respect of the costs of the rest of the proceedings thereafter. 

130.It is most unfortunate that D15 should find himself involved in this meaningless and wasteful litigation. Substantial costs have been incurred throughout these sixteen yeas.  It is unlikely that D15 could recover much of his costs from D6.  It would be unfair that D15 should suffer at the hands of D6.  Equally, it would be unfair for all the costs to be borne by the estate of the Father, because the effect would be that the costs would have to be passed onto P1, D1 and the other siblings.  This would be particularly unfair to those siblings who took no part at all in the Third Party Proceedings.  Also, D15 has unnecessary incurred costs in denying his connection with the Macau Documents and his knowledge of the Exclusion Application and Exclusion Order.  It is unfair that the estate should be made to bear any of those costs.  In the circumstances, as between D15 and the estate, the fairest result would be for the estate to bear up to 50% of D15’s taxed costs which are irrecoverable from D6.  The Third Party Proceedings together with the appellate proceedings have taken such a long time that justice requires that the costs awarded should earn interest with effect from the date when the respective costs orders were made or should have been made.

131.Accordingly, I make the following orders : -

(1) the costs of and occasioned by the 1994 Trial before Patrick Chan J in 1994 be paid by D6 to be taxed on an indemnity basis with certificate for two counsel, if not agreed;

(2) the costs of the appeal to the Court of Appeal in 1995 be paid by D6 to be taxed on an indemnity basis with certificate for two counsel, if not agreed;

(3) unless otherwise provided for, the costs of preparation for the re-trial from 3 November 1995 until 10 May 1999, including all costs reserved if any, be paid by D6 to be taxed on an indemnity basis, if not agreed;

(4) unless otherwise provided for, 75% of the costs of preparation for the re-trial from 11 May 1999, including all costs reserved if any and the costs of the present costs hearing be paid by D6 to be taxed on an indemnity basis, if not agreed;

(5) the costs awarded under item (1) shall be with interest from 3 January 1995; the costs awarded under item (2) shall be with interest from 3 November 1995; and the costs awarded under item (3) and such of the costs awarded under item (4) which were incurred on or before 4 October 2001 shall be with interest from 4 October 2001; 

(6) 50% of the total of D15’s costs taxed or agreed in accordance with items (1) to (4) above not inclusive of interest be borne by and paid out of the estate of Kwan Kai Ming; and

(7) upon recovery of the costs from D6, D15 shall reimburse the estate of Kwan Kai Ming with 50% of the costs so recovered not inclusive of interest.

For avoidance of doubt, Patrick Chan J’s order made on 3 January 1995 in dismissing D15’s counterclaim with costs to D6 to be taxed on party and party basis remains valid.

Mr Paul Harris, instructed by Messrs Barnes & Daly, for the 6^th Defendant

Ms Vivian Chih, instructed by Messrs Huen & Partners, for the 15^th       Defendant