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Choy Po Chun And Another v Au Wing Lun

Judgment Cited authorities 10 Cited in Precedent Map Related
Vincent
Judgment Date01 August 2018
Neutral Citation[2018] HKCA 402
Judgement NumberCACV177/2017
Citation[2018] 3 HKLRD 752
Year2018
Subject MatterCivil Appeal
CourtCourt of Appeal (Hong Kong)
CACV177A/2017 CHOY PO CHUN AND ANOTHER v. AU WING LUN

CACV 177/2017

[2018] HKCA 402

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 177 OF 2017

(ON APPEAL FROM HCAP NO 7 OF 2010)

________________________

IN THE ESTATE of AU, KONG TIM (區幹恬), late of Flat A, 23rd Floor, Block 12, Provident Centre, No. 43 Wharf Road, North Point, Hong Kong, married man, Deceased

________________________

BETWEEN
CHOY PO CHUN (蔡寶珍) 1st Plaintiff
AU CHADWICK (區卓威) 2nd Plaintiff
and
AU WING LUN (區穎麟) also known as Defendant
AU WING LUN WILLIAM (區穎麟)

________________________

Before: Hon Cheung JA, Yuen JA and Kwan JA
Dates of Written Submissions: 12 and 26 June and 3 July 2018
Date of Judgment on Costs: 1 August 2018

________________________

JUDGMENT ON COSTS

________________________

The Court:

The application to vary the costs order nisi

1. On 20 April 2018, this court handed down its judgment in a contested probate action. We allowed the plaintiffs’ appeal, set aside the judgment of Chow J that the 2008 Will be pronounced in solemn form and the costs order below, ordered the defendant’s counterclaim (in which he sought to propound the 2008 Will) be dismissed, and pronounced in solemn form the 2002 Will. We made a costs order nisi in these terms: (1) the defendant do pay the plaintiffs 50% of the costs of the appeal, with a certificate for two counsel; and (2) the defendant do pay the plaintiffs two‑thirds of the costs of the action, including the counterclaim.

2. The defendant issued a summons on 3 May 2018 to vary the costs order nisi as follows:

(1) (a) as to the costs of the action, an order that (i) the plaintiffs do receive 50% or such other proportion as the court sees fit of their costs of the action with certificate for two counsel from the estate of the deceased; and (ii) the defendant do receive his costs of the action with certificate for two counsel from the estate of the deceased;

(b) as to the costs of the appeal and the costs of and occasioned by this application, an order that (i) the plaintiffs do receive 50% or such other proportion as the court sees fit of their costs of the action with certificate for two counsel from the estate of the deceased; and (ii) the defendant do receive his costs with certificate for two counsel from the estate of the deceased;

(2) in the alternative to (1), and without prejudice to the defendant’s application for leave to appeal to the Court of Final Appeal, the costs order nisi be varied to an order there be no order as to costs, including the costs of and occasioned by this application.

3. In other words, the defendant seeks a departure from the general rule that costs should follow the event. This application is opposed by the plaintiffs.

The applicable principles

4. The award of costs as between the parties in a contested probate action is in the discretion of the court.

5. The applicable legal principles are discussed in Nina Kung v Wang Din Shin (No 2) (2006) 9 HKCFAR 800. As stated by Ribeiro PJ in §11, the guiding principles were as stated by Sir Gorell Barnes P in Spiers v English [1907] 4 P 122 at 123:

“In deciding questions of costs one has to go back to the principles which govern cases of this kind. One of those principles is that if a person who makes a will or persons who are interested in the residue have been really the cause of the litigation a case is made out for costs to come out of the estate. Another principle is that, if the circumstances lead reasonably to an investigation of the matter, then the costs may be left to be borne by those who have incurred them. If it were not for the application of those principles, which, if not exhaustive, are the two great principles upon which the Court acts, costs would now, according to the rule, follow the event as a matter of course. Those principles allow good cause to be shown why costs should not follow the event.”

6. These proceedings took the form of hostile litigation. In September 2009, the defendant applied for probate of the 2008 Will as an executor, to which the 1st plaintiff entered a caveat and disputed the validity of the 2008 Will. The plaintiffs brought this probate action in March 2010 to propound the 2002 Will and to seek an order that the 2008 Will be pronounced against and a declaration that the defendant is liable for intermeddling with the deceased’s estate. The defendant admits the validity of the 2002 Will, subject to it having been revoked by the 2008 Will. By his counterclaim, the defendant sought to propound the 2008 Will.

7. As held by this court, the plaintiff has succeeded in the probate action. To warrant a departure from the general rule that costs should follow the event in this hostile litigation, special circumstances must be shown.

The first exception

8. The defendant submitted that the two exceptions mentioned in the authorities for departing from general rule apply in this instance. His primary position is that the costs of both parties in the court below and on appeal should come out of the deceased’s estate (i.e. the first exception), for the following reasons.

9. Firstly, he sought to propound the 2008 Will as an executor. He had “no practical choice” but to defend the probate action and seek the court’s adjudication. His claim to propound the 2008 Will was in response to the plaintiff’s action to propound the 2002 Will.

10. He invoked Order 62 rule 6(2) which provides as follows:

“Where a person is or has been a party to any proceedings in the capacity of trustee, personal representative or mortgagee, he shall, unless the Court otherwise orders, be entitled to the costs of these proceedings, in so far as they are not recovered from or paid by any other person, out of the fund held by the trustee or personal representative or the mortgaged property, as the case may be; and the Court may otherwise order only on the ground that the trustee, personal representative or mortgagee has acted unreasonably or, in the case of a trustee or personal representative, has in substance acted for his own benefit rather than for the benefit of the fund.”

11. The defendant contended that as an executor who had good reason to suppose that the testator was of sound mind and capable of managing his affairs, he would be allowed his costs out of the estate, even though the will be pronounced against on the ground of the testator’s incapacity, citing Boughton v Knight (1873) LR 3 P & D 64 at 77 and 79.

12. He submitted he had reasonable grounds to believe that the deceased had testamentary capacity and had succeeded at the trial on all three main issues (due execution of the will, testamentary capacity, knowledge and approval of the contents of the will at time of execution). On appeal, this court affirmed the judge’s holding on due execution, and the finding that the deceased was capable of understanding the nature of the act of making the will and its effects. This court set aside the holding that testamentary capacity was established because the judge has failed to consider and omitted to find whether the other two criteria for testamentary capacity in Banks v Goodfellow (1870) LR 5 QB 549 at 565 are satisfied (the deceased was capable of understanding the extent of the property of which he was disposing, and able to comprehend and appreciate the claims to which he ought to give effect). Thus, he had acted reasonably in his conduct of the defence for the benefit of the four beneficiaries under the 2008 Will with equal shares (he being one of them). He did not “in substance acted for his own benefit rather than for the benefit of the fund.”

13. Secondly, he argued that the probate action was caused by the conduct of the testator in that the problem relates to the capacity of the deceased to make the 2008 Will, citing Kostic v Chaplin [2008] WTLR 655 at §9 for the proposition that where it was the testator’s own conduct which led to his will “being surrounded with confusion or uncertainty in law or fact”, it should not matter “whether the problem is one relating to the state in which the deceased has left his testamentary papers … or whether the problem relates to the capacity of the deceased to make a will.” The defendant contended the deceased led him reasonably to believe by his words and conduct that he had good reason and capacity to make a new will. And as the plaintiffs did not plead in their pleadings that the other two criteria for testamentary capacity are not satisfied, the defendant did not have fair notice of the same.

14. Thirdly, he criticised the litigation conduct of the plaintiffs. This action was commenced in March 2010 but the trial only took place in March 2017, largely due to numerous misconceived interlocutory applications brought by the plaintiffs. He mentioned three instances.

15. One was the plaintiffs’ application for summary judgment which led to conditional leave being granted at first instance but set aside by the Court of Appeal ([2012] 2 HKLRD 148). The appeal court ordered the defendant’s costs to be paid from the estate, and the costs below were in the cause, stating at §48 whether costs should come from the estate should be decided after trial.

16. The second instance was the plaintiffs’ appeal against a master’s decision granting an extension of time to the defendant to comply with Order 76 rule 5 and the plaintiffs’ application to strike out the amended defence and counterclaim. Both were dismissed by a judge ([2014] 4 HKLRD 730).

17. The third instance was the interrogatories served by the plaintiffs on the attesting...

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