Cheung Wai Lan v. Kwok Chung Chee

HCAP 9/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE ACTION NO. 9 OF 2009

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DECISION
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Introduction

1.I handed down the Judgment dated 29 May 2014 in favour of the plaintiff. In this Decision, I shall adopt the abbreviations used in the Judgment.

2.By the Judgment, I order that the 2008 Will be propounded in its solemn form and be admitted to probate. I made a costs order nisi that Chee should pay Lan his costs of this action including all costs reserved on the basis of my finding that the opposition mounted by Chee was not reasonable notwithstanding his absolute disinheritance.

3.Chee has lodged an appeal against the Judgment and his appeal will be heard on 31 March 2015. At the same time, Chee also applies to this court for a variation of the costs order nisi. The parties having indicated their agreement that this application should be dealt with on paper, directions have been given for their respective written submissions to be filed for the purpose of this paper application. This court has accordingly been assisted by counsel’s written submissions.

Applicable principles relating to costs issue in contested probate actions

4.Mr Chong, together with Ms Yip for Lan, and Mr Miu, for Chee, are in agreement concerning the applicable principles. They refer to this court the principles set out by Ribeiro PJ in Nina Kung v Wang Din Shin (No 2) (2006) 9 HKCFAR 800. As the starting point, the general rule where opposition to a will is unsuccessful is that costs follow the event.

5.However, this general rule is subject to two exceptions. The first category is where the litigation is caused by the conduct of the testator or the residual beneficiary and the appropriate costs order in such cases is for the costs to be come out of the estate. Ribeiro PJ referred to this category as the first exception.

6.The second category is where the circumstances lead reasonably to an investigation of the will’s validity. In such cases, there should be no order as to costs. This is the second exception.

7.It should be noted that even if a case may fall prima facie within one of the two exceptions, if opposition to the will goes beyond putting the proponent to strict proof of its validity and takes the form of hostile litigation, the general rule is likely to be application, as implicitly recognized O.62 r. 6(1)(c) of the Rules of the High Court. The relevant part of the provision reads as follows:

“(1) Notwithstanding anything in this Order or in s.52A of the Ordinance (the High Court Ordinance, Cap.4):

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

8.Ribeiro PJ further pointed out that there is a distinction between litigation reasonably undertaken by a person in order to require the validity of a will to be investigated by the court and litigation which is fundamentally hostile with the opposing party advancing a positive case such as forgery, fraud or undue influence. In doing so, the opposing party may wish to defeat the will and advancing his own claim to the estate over that of the will’s proponent. If the opposing party adopts such an approach, he will run the risk of an adverse costs order in the event that he is unsuccessful.

9.Lastly, the operation of the two exceptions is subject to an important qualification. The courts do not approve ill-considered and precipitous decision to litigate in opposition to a will and have emphasised that “the opponents must have taken all proper steps to inform themselves as to the facts of the case” before undertaking the proceedings if they are to take themselves out of the general rule of costs following the event.

10.I should add that for the purpose of the present application, Chee cannot revisit my substantive decisions and factual findings in the Judgment: Yaacov Zoer v Kwan Siu Man Joshu [1998] 2 HKLRD 1001 per Nazareth VP at §11.

11.Moreover, Mr Miu submits, and Mr Chong agrees, that in assessing the reasonableness of Chee’s opposition, this court should have regard to such evidence available to him before the trial and not those emerging in the course thereof.

12.Bearing in mind the forgoing guiding principles expounded by the authorities, I turn to assess the validity of the grounds advanced by Mr Miu for Chee’s application to vary the costs order nisi.

Assessment of the merit of the application

First exception?

13.Mr Miu first submits that Chee’s opposition falls squarely within the first exception and so costs of all the parties ought to come out of the estate of the Deceased.

14.In Mr Miu’s first set of written submissions, he submits that the Deceased was the cause of this action by reason of the fact that the Deceased could and should have made the 2008 Will when he was in good health and at the office of a firm of solicitors. He should not have waited until his last hospitalization to make the 2008 Will and hence caused this litigation. I see no merit in this submission.

15.If Mr Miu is right, a testator making his last will in poor health or when he was hospitalised can only expect that his estate would be depleted by unnecessary legal costs resulting from groundless challenge to the validity of his will. This is clearly absurd. Mr Miu accepts in his reply written submissions that this fact alone should not be a ground for challenge.

16.Mr Miu next highlights that the Deceased in the 2008 Will made a mistake about the credit balance of the Account. I have concluded that this was only a single isolated incident of his memory slip. In all other evidence indicative of the memory capacity of the Deceased including his interactions with other independent witnesses such as Ms Leung and Dr Ho, there was no signs of any memory impairment of the Deceased. I cannot accept the Deceased by his mistake about the Account was a cause of this bitter litigation and hence places Chee’s opposition  within the first exception.  

17.Mr Miu goes on to attribute this litigation to the allegedly unreasonable dispositions that the Deceased made in the 2008 Will. I cannot accept this submission. As explained in the Judgment (§§153, 161, 167, 168, 187, 188 and 190), I was unable to conclude that the dispositions were unreasonable in the first place and on the other hand, I am well convinced that the Deceased had his own reasons to make Lan effectively the sole beneficiary under the 2008 Will. 

18.In his reply submissions, Mr Miu adds the following matters to support Chee’s reliance on the first exception.

19.First Mr Miu points out that the 2008 Will represented a further departure from the Plan (made in 1992). This court concluded that the Deceased had changed his mind in the 2004 Will already because of changing circumstances. There were further changes of circumstances after the 2004 Will. I fail to see how his further departure could justify this litigation at the expense of his estate. After all, the Deceased had his freedom of testamentary disposition.

20.Mr Miu actually acknowledges that the Deceased had in law such a freedom but he submits that given the Plan, there was some sort of moral obligation imposed on the Deceased and he should have taken extra precautions to prevent litigation when he further departed from the Plan.

21.I fail to understand what kind of moral obligations were to be imposed on the Deceased. Mr Miu does not expressly explain what they were with the assistance of relevant authorities. I am unable to accept that by the Deceased’s further departure from the Plan, Chee’s opposition was justified and hence this litigation was rendered necessary.

22.Mr Miu further adds that apart from the moral obligations arising from the Plan, the Deceased also had the moral obligations to treat all his children (and grandchildren) equally. I cannot accept that the unchallenged testamentary freedom of the Deceased was subject to such constraints at all. If Mr Miu is right, a testator not making even distribution among all possible beneficiaries under his will is in breach of his moral obligations and he effectively invites contested probate proceedings. I cannot accept his submission.

23.Mr Miu lastly submits that the conduct of Lan such as the denial of the existence of the Plan on the part of Lan and Man Yi unnecessarily lengthened the trial. I cannot understand how this allegation has anything to do with the first exception to begin with. Furthermore, given my factual finding that the Deceased changed his mind and made the 2004 Will in disregard of the Plan despite Chee’s protest, the existence of the Plan can be of little relevance to the validity of the 2008 Will. The Plan did not feature in the parties’ pleadings at all. I fail to see how the denial of its existence actually caused this litigation.

Second exception?

24.To make out this ground, Chee has to satisfy this court that there were circumstances reasonably leading to an investigation of the validity of the 2008 Will. Mr Miu relies on the following matters set out in paragraph 3 of his first set of written submissions.

25.First, Mr Miu points out that unlike the previous 2002 Will and the 2004 Will executed in good health and at an office of a firm of solicitors, the 2008 Will was executed in his deathbed just 8 days before his demise.

26.Secondly, Mr Miu made the said mistake about the credit balance of the Account in the 2008 Will.

27.Thirdly, the Deceased was without his spectacles and hearing aid when the 2008 Will was read over to him by his solicitor Ms Leung before he executed the document.

28.Fourthly, both the medical certificate of Dr Ho and the 2008 Will were recorded to be made at 10:45 a.m.. It is noteworthy that the respective time records were made by Dr Ho and Betty separately.

29.Lan and his mother went to see the Deceased with Ms Leung at 10:00 a.m. on the material day given the normal visiting hours started at 11:00 a.m..

30.Some of these matters are, with respect, very trivial and can hardly cause me any concern about the validity of the 2008 Will. I find none of the foregoing matters, singularly or cumulatively, can lead to any suspicions calling for investigation of the validity of the 2008 Will in light of all other evidence adduced by Lan.

31.Whilst this court accepts the written statements of Ms Leung and the medical reports of Dr Ho could have been more conclusive, they were in my judgment already cogent enough to prove the necessary testamentary capacity of the Deceased before he made the 2008 Will in the absence of evidence showing any mental incapacity of the Deceased.

32.Mr Miu places heavy reliance on the observation of Dr Cheung in his report that the challenge to the 2008 Will raised by Chee was perfectly reasonable. Dr Cheung’s observation was based on his view that Dr Ho should have conducted a test on the Deceased’s task-specific mental capacity when there were circumstances suspicious in his view. Dr Cheung did not identify any specific suspicious circumstances surrounding the 2008 Will in his report though.

33.As explained in the Judgment, this court does not accept there were any suspicious circumstances at all. This court cannot accept Dr Cheung’s conclusion based on his own perception of suspicious circumstances, which is not shared by this court. I accept the evidence of Dr Ho despite the lack of a task-specific mental capacity test undertaken by the Deceased.

34.Mr Miu lastly points out that Ms Leung’s evidence to the effect she received direct instructions from the Deceased by his deathbed only came out in her oral testimony at the trial. On that basis this court found the Second Rule in Barry v Butlin to be inapplicable. Ms Leung in her witness statements only stated that she relied on the draft will prepared by Betty. Mr Miu thus submits that prior to the trial, prima facie, the Second Rule applied and so this action was necessitated for investigation of the issue of knowledge and approval.

35.I cannot accept this submission. As expressly indicated in paragraph 202 of the Judgment, this court did not find any suspicious circumstances at all. The evidence of Ms Leung in her witness statement (§§12-13) clearly confirmed the Deceased’s knowledge and approval of the 2008 Will. Absent any doubt about the professional integrity of Ms Leung and any other suspicious circumstances in this regard, I do not think that the mere fact that Ms Leung was instructed through the arrangement of Man Yi for the preparation of the 2008 Will should excite any suspicion of this court. There was no issue of knowledge and approval raised on the evidence before trial and the Second Rule should not have any application.

36.Mr Miu prays in aid Re Yip Keung, unreported, HCAP15/2004, 19.12.2007 and Re Liao Ka Khie [2009] 2 HKLRD 115. I do not think these two authorities can assist Chee in any material respect. The facts of the said two cases are obviously very different from the present case. Whether any (or both) of the exceptions were applicable in the said two cases depended very much on their particular facts and I can derive little assistance from them.   

37.On the facts of this case, for the reasons given above, I come to the conclusion that this case does not come within either exceptions. Accordingly, the general rule applies and being the unsuccessful party to oppose the 2008 Will, Chee should Lan his costs of this action.

38.This being the conclusion, strictly speaking there is no need to consider whether this action took the form of hostile litigation and the opposition went beyond putting Lan to strict proof of the validity of the 2008 Will. Suffice it to say, though I agree with Mr Miu that the defence did not put forward a positive case of undue influence despite Chee’s vague allegation in the Defence filed by him in person, I agree with Mr Chong that Chee handled this action as a hostile litigation. His vigorous attempt to show the alleged irrationality of the 2008 Will with his wide-ranging allegations formed the major part of his opposition. Eventually he was in vain. Chee did far more than putting Lan to strict proof of the validity of the 2008 Will and he conducted his opposition in such a manner without any difference from all other hostile litigations.

39.In addition, even if any of the two exceptions apply, there is no evidence that Chee has ever taken any, let alone all, proper steps to inform himself as to the facts of the case and to dispel his own suspicions. In my view, Chee was just too disappointed at his absolute disinheritance under the 2008 Will and was just too keen on defeating the same. He lost sight of the 2005 Application and firmly concluded that the dispositions in the 2008 Will were irrational. He failed to take an objective stance to assess its validity. His reliance on the Plan was misplaced. His opposition was not supported by any cogent evidence and not based on any valid ground. He made the ill-considered and precipitous decision to oppose the 2008 Will. In the circumstances, I maintain my view that his opposition was unreasonable and devoid of merit.

Conclusion and Order  

40.For the reasons given, I conclude that this case does not come with either exceptions and costs should follow the event in accordance with the general rule. I thus make an order that the costs order nisi be made absolute.

41.I further order that Chee should pay Lan his costs of this application.

42.Lastly, I thank all counsel for their helpful assistance.

Mr K.M. Chong and Ms Yvonne Yip, instructed by K M Lai & Li, for the plaintiff

Mr Nelson Miu, instructed by Raymond CP Lo & Co., for the defendant