Leungpo Chu v. Ho Hung Ying Donna and Others

HCMP 961/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 961 OF 2010

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BETWEEN

Before: Hon Lam J in Chambers

Date of Hearing:  18 May 2010

Date of Judgment: 28 May 2010

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J U D G M E N T

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1.The Plaintiff in these proceedings seeks relief from the court under Section 23A of the Wills Ordinance Cap.30 for the rectification of the last will of Ho Nai Chew [“the Deceased”]. The last will was a Chinese holograph written by the Deceased on 30 April 2008 [“the Will”]. It divided the estate of the Deceased into 6 shares, with 1 share to be distributed to a Leung Po Chiu. The Plaintiff, whose name is Leung Po Chu, said she was the intended legatee for that share and that the Deceased had made a clerical mistake in spelling her name when he wrote the Will. Thus the application for rectification.

2.The Will was proved by two other legatees named in the Will, the 1^st and 2^nd Defendants. Letters of Administration with the Will annexed was granted to them on 7 October 2009. The 1^st Defendant was the widow and the 2^nd Defendant a daughter of the widow and the Deceased.

3.The 3^rd and 4^th Defendants are two other legatees named in the Will. They are also the children of the widow and the Deceased.

4.The Will also provided for 1 share (out of 6) of the estate to be used to set up a charitable fund. The Secretary for Justice, as parens patriae, is the 5^th Defendant.

5.As mentioned, the 1^st and 2^nd Defendants accepted that the Will was validly made and they had applied for (and obtained) the grant in respect of the estate of the Deceased on that basis. None of the defendants challenged the Will.

6.However, the Defendants did not agree that the Plaintiff was entitled to the relief sought. Mr Chong for the 1^st to 4^th Defendants and Mr Kwan for the 5^th Defendant told the court that they took a neutral stance and put the Plaintiff to strict proof as regards her claim. In the light of Mr Lo’s submissions on costs, I shall need to examine the neutrality of the 1^st and 2^nd Defendants in due course.

The procedural history of the application

7.Before I deal with the substantive merits of the Plaintiff’s application, in view of Mr Chong’s submissions on costs, I need to divert to consider the procedural history leading to the hearing before this court.

8.Even though the Administratrices had included the Plaintiff as one of the legatees under the Will in an affirmation of 7 March 2009 in HCAG 2057 of 2009, in a letter dated 20 March 2009 solicitors for the Administratrices had indicated that the Plaintiff would be put to strict proof that she was the person named as Leung Po Chiu in the Will. Further, in another Affidavit of 17 April 2009 by the 2^nd Defendant, it was indicated that the Plaintiff’s case as to mistake on the part of the Deceased in writing her name in the Will would be challenged.

9.As far as the application for rectification is concerned, the Plaintiff issued an ex-parte summons in HCAG 2057 of 2009 on 25 September 2009 seeking such relief. The main application in HCAG 2057 of 2009 was the application for grant of Letters of Administration. The Registry declined to deal with the application of the Plaintiff on an ex-parte basis and it was re-filed as an inter partes summons on 7 October 2009. By then, the Grant had been issued and the application of the Plaintiff was re-assigned by the Registry as HCEA 108 of 2009.

10.The first hearing of the inter-partes summons took place on 16 October 2009. A substantial skeleton submission was only filed on behalf of the Administratrices on 15 October and there was insufficient time for the Master to deal with the matter at that hearing (which was fixed for 30 minutes). The matter was adjourned accordingly.

11.The next hearing was scheduled to take place on 11 February 2010. However, on 10 February 2010, the Probate Master informed the parties by letter that she considered it was more appropriate for the matter to be heard by a judge and directions would be given at the hearing on 11 February 2010.

12.Points were taken by the Administratrices (in the skeleton submission filed in October and repeated again in February), and adopted by the Secretary for Justice, that the procedure adopted by the Plaintiff was not correct. On the other hand, counsel for the Plaintiff contended that they were following the practice laid down in Wu Man Shan v Registrar [2006] 2 HKC 106. At the hearing on 11 February 2010, the procedural debate was resolved by the Administratrices and the Secretary for Justice agreeing to waive the irregularities (if any) and treated the summons of 7 October 2009 as if it were an originating summons. The Master gave directions dispensing with service and deeming the Defendants to have filed acknowledgment of service indicating that the matter would be contested. Directions were also given for the matter to be proceeded under Order 28 and to be heard by a judge.

13.Since the matter is to be proceeded as if it were commenced by an originating summons, it should not be continued under HCEA 108 of 2009. HCEA is for ex-parte applications under the Non-contentious Probate Rules [“NCPR”]. The application is not an ex-parte application. For reasons set out below, nor should it be proceeded as an application under the NCPR. Therefore, on 18 May 2010, I direct that it shall proceed by way of HCMP and solicitors for the Plaintiff undertook to issue a proper Originating Summons. The case is formally reassigned as HCMP 961 of 2010.

The practice under Wu Man Shan v Registrar

14.Mr Lo said the Plaintiff followed the practice laid down by Master Wong in Wu Man Shan in commencing the application at the Probate Registry as non-contentious probate business. On the other hand it was the contention of Mr Chong, and adopted by Mr Kwan, that the proper course was to proceed by way of a writ action under Order 76.

15.In my view, neither party is correct. In Wu Man Shan, the master considered the matter in the context of an application for rectification before a grant was issued. After examining the relevant statutory regime and the practice in Hong Kong and England, Master Wong concluded that by reason of Section 72(2) of the Probate and Administration Ordinance [“PAO”], in the absence of any rules promulgated in Hong Kong for an application for rectification of will, Rule 55 of the English Non-Contentious Probate Rules 1987 is applicable here.

16.At para.9 of the judgment, Master Wong identified three different ways that an application for rectification of will may be entertained by the court. The first scenario is where an application for grant has been filed with the Probate Registry, Master Wong held that application for rectification may be made to the Registrar within that application by a procedure similar to Rule 55.

17.In many instances, an application for rectification of a will has to be made in the course of an application for grant. Section 5 of the PAO is the primary legislation empowering the Probate Master (and the Probate Registry) in the exercise of jurisdiction over probate matters. As laid down in Section 5(1), primarily the jurisdiction of the Registrar is to process application for grant and the amendments and resealing of the same. Section 5(2) further provides that the Registrar may exercise all ancillary powers the court may exercise in processing matters within the primary jurisdiction under Section 5(1). Rectification of will, insofar as it is one of the steps in an application for grant, falls within such ancillary jurisdiction.

18.Section 72 of the PAO has to be construed against the extent of the jurisdiction of the Probate Master set by Section 5. The “non-contentious or common form probate business” in section 72(1) is defined in Section 2. Again it revolves around the application for grant in non-contentious cases. The expression “such business” in Section 72(2) has to be construed accordingly.

19.Since the power of the Registrar to order rectification as non-contentious probate business is ancillary to an application for grant, can the power continue to exist after the grant has been issued? In this connection, Mr Chong had contended before the Master in his October skeleton submissions that in England there was a distinction between the position before the grant and that after a grant had been issued.

20.In my judgment, having reflected on this question again since the conclusion of the hearing, the power of the Registrar does not end with the issue of grant. If the Will is rectified, the grant has to be amended by either having the order for rectification annexed to the grant or endorsed on it (see Tristram & Coote’s Probate Practice 30^th Edn, paras.3.269 and 41.01). Amendment of grant is within the scope of Section 5(1) of the PAO. Thus, if the rectification of will is unopposed, it can be ancillary to an application for amendment of the grant under the NCPR. I do not read the authorities cited by Mr Chong as supporting his proposition.

21.I agree with Master Wong that in that sort of situation, a procedure similar to the English Non-contentious Probate Rules Rule 55 procedure can be adopted. That practice was explained in a statement issued jointly by the Chief Chancery Master and the Senior Registrar of the Family Division published in 1985 Law Society’s Gazette at p.595. In that statement, different modes of application were explained and the Rule 55 procedure was said to be appropriate one in respect of unopposed applications, whether before or after probate has been granted. On the other hand, if the matter is opposed, the learned co-authors of the statement said proceedings must be commenced in the Chancery Division. And as explained at the beginning of that statement, such proceedings could either be commenced by writ, originating summons or a probate counterclaim.

22.In the present case, given the stance of the Administratrices as set out in the Affidavit of 17 April 2009, the Plaintiff should be aware by September 2009 that the application for rectification of the Will would be opposed. Thus, the Rule 55 procedure was not viable.

23.However, it does not follow that the Plaintiff should have issued a writ. Order 76 Rule 2(1) only applies to a probate action. Rectification of will does not fall within the scope of a probate action as defined under Order 76 Rule 1(2). I agree with Master Wong and the learned co-authors of the 1985 statement regarding the English practice that originating summons is a possible option.

24.As to the choice between writ and originating summons, it depends on whether it was likely that the resolution of the matter would involve substantial dispute of fact. This brings me to the dispute on the merits of the Plaintiff’s application.

The substance of the Plaintiff’s case

25.The Plaintiff was a manager in the dry-cleaning business of the Deceased. She said the two of them became lovers since 1979 and they became cohabitants. She deposed to the circumstances leading to the Will being given to her by the Deceased in a sealed envelope in her affirmations. The Chinese name of the Plaintiff was written by the Deceased on the envelope. It was marked in Chinese as follows: “(密件)交梁寶珠及何詩靈啟”.

26.In April 2008, the Deceased was diagnosed with recurrence of his nasal cancer and he had to undergo an operation on 3 May 2008. The Deceased gave the Will (contained in the sealed envelope) to the Plaintiff on 30 April 2008. He told her should there be any mishaps to him, the Plaintiff should pass the sealed envelope to a lawyer for handling and she would not need to worry about her living. The Deceased also wrote the telephone numbers of the 2^nd and 4^th Defendants on the envelope and asked her to notify them in case he passed away.

27.The Deceased survived the operation but unfortunately he died on 22 January 2009. The Plaintiff informed the 2^nd Defendant of the envelope. The sealed envelope was opened on 23 January 2009 at a solicitor’s office in the presence of the Plaintiff and the 2^nd Defendant. The Will was found inside. At the suggestion of the 2^nd Defendant, on 31 January 2009 the Plaintiff handed the Will to the current solicitor acting for the Administratrices for further handling.

28.The Plaintiff said the Deceased did not know any person by the name of Leung Po Chiu nor did she. The Administratrices are also unable to identify any person called Leung Po Chiu which the Deceased might wish to provide for under the Will.

29.The Plaintiff submitted it was a simple case of the Deceased making a clerical error in misspelling of her name in the Will. On the other hand, the Administratrices invited this court to take into account of the fact that the Deceased had spelt the name of the Plaintiff correctly in cheques issued to her (as evidenced by some cheque stubbs) and there was no evidence to support any case of mistake on the part of the Deceased.

The application by the Administratrices for cross-examination

30.The Administratrices issued a summons on 26 February 2010 seeking directions for the cross-examination of the Plaintiff. Having considered the submissions of the parties, I refused the application for cross-examination.

31.Mr Chong submitted that though the Administratrices did not have any personal knowledge about the circumstances leading to the Will being handed to the Plaintiff, they should be allowed the opportunity of cross-examination of the Plaintiff to deal with the following aspects of the case,

(a)	The physical, psychological and emotional condition of the Deceased leading to the making of the Will on 30 April 2008;
(b)	The possibility of the Deceased making a spelling mistake of the Plaintiff’s name, having regard to his correct spelling of her name on different occasions;
(c)	All other circumstances surrounding the making of the Will including whether the Deceased had sufficiently provided for the Plaintiff during his lifetime.

32.I do not see how cross-examination on these matters could take the Administratrices further. The Plaintiff has set out her case as to the circumstances under which the Deceased prepared the Will in her affirmations and also in a Chinese letter of 3 February 2009 after she had handed the Will to the solicitors for the Administratrices. The solicitor and the Administratrices did not have any reason to dispute her case. They had been prepared to accept that the Plaintiff was the person incorrectly named as Leung Po Chiu in the Will. Thus, in an affirmation of 7 March 2009 filed in HCAG 2057 of 2009, they put forward the Plaintiff as one of the legatees under the Will.

33.The Administratrices had ample opportunity to verify with the hospital whether the Deceased had undergone the operation on 3 May 2008. They had not come up with any evidence challenging what was said by the Plaintiff as to the circumstances leading to the making of the Will. Further, since the Administratrices had obtained the grant based on the Will, they could not challenge the validity of the Will.

34.I do not think any purpose can be served by cross-examining the Plaintiff regarding the possibility of the Deceased making a mistake in the spelling of her name in the Will. The Will was written by the Deceased in her absence. She cannot answer for the Deceased as to why such a mistake was made. The comparison with the correct spelling in the cheques is a matter for submission.

35.Neither do I see any point in allowing the Administratrices to cross-examine on the provisions made by the Deceased for the Plaintiff during his lifetime. The Plaintiff could not be expected to explain on behalf of the Deceased why further provision was made for her under the Will in addition to gifts already made to her during his lifetime.

36.The application for cross-examination had to be considered against the background that the Administratrices did not dispute that the Will was in the custody of the Plaintiff and contained in a sealed envelope. The envelope was opened after the death of the Deceased at the solicitor’s office in the presence of the 2^nd Defendant. The name of the Plaintiff was clearly written on the envelope as one of the addressees of the document. These are all matters within the knowledge of the 2^nd Defendant. Further, the Administratrices are unable to put forward another possible candidate as the intended legatee named as Leung Po Chiu in the Will. Cross-examination along the lines indicated by Mr Chong will not displace these weighty considerations in ascertaining the true intention of the Deceased when he put down the name of Leung Po Chiu as one of the legatees in the Will.

37.In such circumstances, cross-examination will be a wasteful and futile exercise.

Substantive merits of the application

38.Section 23A of the Wills Ordinance gives the court the power to rectify a will so as to carry out the testator’s intentions if it is satisfied that the will is so expressed that it fails to carry out such intentions in consequence of clerical error. Clerical error refers to the nature of the error instead of the person who made it and the expression encompasses errors made by the testator in writing out his own home-made will, see In re Williams, decd. [1985] 1 WLR 905 at p.911-912.

39.Mr Chong submitted that the court should take into account that the Deceased was a shrewd businessman and he had correctly spelt the name of the Plaintiff on several occasions. I agree and I do take these matters into account. However, ultimately it is a question of finding what the intention of the Deceased was when he named Leung Po Chiu as one of the legatees in the Will.

40.Did he actually intend to name the Plaintiff but spelt her name incorrectly? In my judgment, the evidence pointed overwhelmingly to that conclusion. The Plaintiff was the only person close to the Deceased who had a name similar to Leung Po Chiu and the Will was handed to her in an envelope specifically (and correctly) addressed to her in Chinese. Based on what the Deceased told her, the document was meant to provide for her livelihood after his demise and he instructed her to get a lawyer to handle the same. The intention could not have been clearer.

41.I am satisfied that at the time when the Deceased wrote the Will, he made a clerical mistake in spelling the name of the Plaintiff. In order to carry out the intention of the Deceased, the Will should be rectified accordingly.

42.I shall grant the Plaintiff the relief sought by her. The Will will be rectified by substituting the name “Leung Po Chiu” with “Leung Po Chu”. A sealed copy of the order of this court shall be delivered to the Registry of Probate and the Grant in HCAG 002507 of 2009 shall be endorsed with the order.

Costs

43.Pursuant to the directions of this court, parties have provided information regarding costs incurred so far. Solicitors for the Plaintiff has provided a statement certifying the costs of the Plaintiff to be $310,760. For the 1^st to 4^th Defendants, their solicitors estimated their costs to be $259,193[1]. As for the Secretary for Justice, Mr Kwan submitted a statement of costs adding up to $133,618.

44.Thus, for a relatively simple and straightforward matter, the total costs incurred by the parties run up to $700,000 odd. This is partly attributable to costs incurred on arguments as to the proper procedures to be adopted (with two hearings before the Probate Master) and the application for cross-examination by the 1^st to 4^th Defendants.

45.Mr Lo argued that the Plaintiff’s costs should be paid by the 1^st to the 4^th Defendants personally because despite their professed neutrality, they had acted unreasonably in opposing the application and in the application for cross-examination.

46.On the other hand, Mr Chong contended that the Plaintiff should be liable for costs up to 11 February 2010 because of the wrong procedure adopted by the Plaintiff in commencing the proceedings.

47.For the Secretary for Justice, Mr Kwan submitted that the Plaintiff should pay for his costs since there was no need to join him as a party after the Grant. But that was not the stance taken in the correspondence. Further, strictly speaking, the Plaintiff only served the papers on the Secretary for Justice when matter was proceeded under the NCPR procedure. The Secretary chose to appear and take part in the substantive argument before the Master instead of leaving it to the Administratrices to safeguard his interest. Though there are instances where the Secretary for Justice as parens patriae can justifiably take a more active role in probate matter (see Chinachem Charitable Foundation Ltd v Chan Chun Chuen HCAP 8 of 2007, 16 April 2010), bearing in mind the issue to be decided in the present case and the stance of the parties, I do not think it is fair in this instance to require the Plaintiff to pay the costs of the Secretary for Justice.

48.Though the Plaintiff can be criticized for proceeding as if the matter was unopposed when this was not the case, equally the 1^st to 4^th Defendants are not free from blame in causing more costs to be incurred than it is necessary for the proper resolution of this simple matter. As I said, the evidence is overwhelming and in the first affirmation filed jointly by the 1^st and 2^nd Defendants they accepted the Plaintiff to be one of the legatees. Unfortunately, things took a wrong turn and the 1^st to 4^th Defendants embarked on a futile application for cross-examination. Also, as I explained above, Mr Chong was wrong in his submissions before the Master that after the issue of a grant the matter must be proceeded by way of a writ action. And that submission had unhelpfully shifted the focus of the debate to a choice between the NCPR route adopted by the Plaintiff and a much more costly writ action with full discovery and cross-examination of witnesses.

49.Since the Civil Justice Reform, the court expects the parties to be more responsible and sensitive to costs implications in the conduct of litigation and the scale of proportionality has to be applied more vigorously. Also parties are expected to be more proactive in narrowing down their disputes. Even though the Rules of the High Court has no application to non-contentious probate business, once the matter is proceeded by way of writ or originating summons, the proceedings are governed by the underlying objectives under Order 1A. In the evaluation of the conducts of the parties for the determination of costs, the court will take into account whether the matter could have been resolved by other less costly avenue under the NCPR and why it has to be proceeded by way of HCMP or HCAP.

50.I give credit to the Defendants for waiving the procedural irregularity at the hearing of 11 February 2010. However, parties should have been more conscious of the need for procedural economy. Instead of incurring costs on the arid procedural debate on papers by means of skeleton submissions, I see no reason why agreement cannot be reached at an earlier stage for converting the matter into a set of HCMP proceedings in order to minimize the costs of the hearings before the Master.

51.Further, I have to comment on the level of costs incurred by the parties in respect of the two hearings before the Master. The hearing on 16 October 2009 was a very short hearing. The notes kept by the Master recorded that all the parties agreed to an adjournment and the matter was then adjourned. According to the statement of costs prepared by Mr Kwan, that hearing only lasted for 5 minutes. As mentioned, the next hearing on 11 February 2010 was a direction hearing. The Plaintiff appeared by two counsel at this hearing (but not the hearing in October) and incurred counsel fees in the total sum of $80,000 whilst the 1^st to 4^th Defendants attended by counsel at both hearings incurring counsel fees in the total sum of $100,000. And all these costs were spent without achieving much in terms of the resolution of the substantive issue. Whilst the parties might have their reasons for instructing counsel in this manner, one can see how costs could run out of proportion when parties do not focus on procedural economy to achieve a resolution of the real issue in dispute.

52.In the circumstances, I do not agree that the Plaintiff should be liable for the costs of the Defendants in the manner suggested by Mr Chong and Mr Kwan. But I am of the view that the Plaintiff should bear her own costs in respect of the first two hearings before the Master.

53.The 1^st and 2^nd Defendants are Administratrices. They have a duty to see to it that the estate is properly administered. Further, they are protected by Order 62 Rule 6(2). They are entitled to be indemnified by the estate as to costs unless they acted unreasonably or has in substance acted for their own benefit rather than for the benefit of the estate.

54.Mr Lo submitted that the Administratrices had acted unreasonably in opposing the application. Mr Chong had made application for cross-examination and advanced submission to urge the court to dismiss the application for rectification. I agree that the Administratrices had not been acting in a neutral manner.

55.In a hostile trust dispute, a trustee should normally remain neutral and submit to the court’s ruling. The indemnity as to costs would usually be confined to costs necessarily and properly incurred in taking that stance by filing a defence to such effect, see Alsop Wilkinson v Neary [1996] 1 WLR 1220 and HSBC International Trustee v Tam Mei Kam HCMP 716 of 2004, 11 Oct 2004.

56.But the present application is not hostile trust dispute. As I said, the Administratrices have a duty to ensure that the intention of the Deceased was carried into effect. Therefore they have a duty to assist the court in coming to the right conclusion on the application for rectification because they have to administer the estate in accordance with the court’s ruling. In my judgment, the present application is similar to a construction summons where it is necessary for the proper administration of the estate to have a question determined by the court. I do not think it is unreasonable for the Administratrices to put the Plaintiff to proof in respect of matters outside their knowledge and to place before the court relevant information like the correct spelling of the name of the Plaintiff by the Deceased on other occasions. As regards the application for cross-examination, though it is refused, I consider it more to be an error of judgment rather than the manifestation of an unreasonable attitude on their part.

57.Subject to the disallowance of the Plaintiff’s costs of the two hearings before the Master, and subject to what I said below as to quantum, I will order that the costs of all the parties (including that of the Secretary for Justice) be paid out of the estate.

58.Since parties have placed before me costs statements and to save the parties the trouble and costs of taxation, I will make gross sum assessments as to costs.

59.For the Plaintiff’s costs, I do not think the complexity of the matter justified the engagement of two counsel. Further, there are items charged by the solicitor such as perusal of documents and preparation for hearing (bearing in mind the engagement of counsel) which are excessive. Out of the $310,760 in the Plaintiff’s statement for costs, I order $180,000 be paid out of the estate.

60.For the costs of the 1^st to 4^th Defendants, bearing in mind the role of the 1^st and 2^nd Defendants as Administratrices, again I find some of the items charged for perusal to be excessive. Out of $259,193 in their costs statement, I order $227,000 to be paid out of the estate.

61.For the costs of the Secretary for Justice, I do not see any justification for two Government Counsel to be involved. Out of $133,618, I order $110,000 to be paid out of the estate.

Mr Henry Lo, Mr Raymond Fong, instructed by Messrs Fung, Wong, Ng & Lam, for the Plaintiff

Mr K M Chong, Miss Emma S F Wong, instructed by Messrs Foo and Li, for the 1^st to 4^th Defendants

Mr Francis Kwan, SGC of Department of Justice, for the 5^th Defendant