KWAN CHUI KWOK YING AND ANOTHER v. TAO WAI CHUN AND OTHERS

CACV 58/1995

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 58 OF 1995

(On appeal from HCMP No. 2996 of 1990)

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J U D G M E N T

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1.  There are two appeals against two costs orders by Master Levy.

2.  The first appeal arose out of the taxation by Master Levy of a bill of costs in CACV58/1995.  This bill of costs was taxed on 29 April and 11 May 2009.  The 6th defendant filed a Notice of Review on 25 May 2009 seeking to tax off or reduce the amount of costs for a number of items.

3.  Master Levy conducted the review on 16 December 2009 and ordered the 6th defendant to pay the 15th defendant’s cost of the review at HK$1,867.  The 6th defendant then filed a further Application for Review on 28 December 2009 seeking an order to disallow all or part of the costs of taxation of the bill in CACV58/1995 on the ground of the 15th defendant’s serious neglect, misconduct and delay in lodging a valid bill of costs and the bundles for taxation.  He filed a number of grounds for the application. 

4.  Master Levy conducted the second review on 27 January 2010 and dismissed it.  She also ordered the 6th defendant to pay $750 cost to the 15th defendant for this review. 

5.  The 6th defendant then filed a Notice of Appeal against this order on 1 February 2010.  This is the first appeal to be dealt with.

6.  The second appeal arose out of the taxation by Master Levy of another bill of costs in HCMP2996/1990.  The taxation was concluded on 16 December 2009.  The 6th defendant was unsatisfied and filed a Notice for Review on 28 December 2009.  He also asked for an order that all or part of the costs of taxation of the bill in HCMP2996/1990 be disallowed on the ground of the 15th defendant’s neglect, misconduct and delay in lodging a valid bill of costs and the bundles for taxation.  He filed the same grounds for this application as for the review in CACV58/1995.  He also sought the taxing off or reduction of a number of items of costs.

7.  Master Levy conducted the review on 20 May 2010 and dismissed it.  She also ordered the 6th defendant to pay $46,300 cost to the 15th defendant.  The 6th defendant filed a Notice of Appeal against this order on 31 May 2010.  This is the second appeal.

8.  The 6th defendant advanced the same grounds for both appeals.  He also relied on the grounds advanced before Master Levy.  He seeks not only the disallowance of the whole or part of the costs of taxation of both bills.  He also seeks the disallowance of the whole or part of the costs as taxed in both bills.  He said he had sought the same orders from Master Levy, but the Master did not accede to his request.

9.  He referred to the practice direction which requires the parties to discuss and negotiate a bill before the call-over hearing and assist the Master in assessing the length of hearing.  The receiving party should also lodge with the court a bundle of all documents relating to the items objected to at least two clear days before the substantive taxation hearing.  The documents must be marked with the same item numbers as in the list of objections and must be arranged in the same sequence as they appear in the list of objections. Failure to observe the direction may render the petitioner personally liable for the costs. 

10.  The 6th defendant also relied on Order 62, rule 7(1), rule 22(5), rule 32A, and rule 32C(1) -(3).  They provide as follows:

“Order 62, rule 7(1):

(1) Where in any cause or matter any thing is done or omission is made improperly or unnecessarily by or on behalf of a party, the Court may direct that any costs to that party in respect of it shall not be allowed to him and that any costs occasioned by it to other parties shall be paid by him to them.”

“Order 62, rule 22(5):

(5) On the taxation of a bill of costs, whether or not an order has been made under paragraph (3), the taxing master, if he is satisfied that there has been undue delay in commencing taxation proceedings or in proceeding with the taxation:

(a) may make such order as he thinks fit as to the costs of any application or as to the costs of the taxation;

(b) may disallow any part of the costs to be taxed pursuant to the costs order; and

(c) may, in relation to the taxed costs or any part of those costs, disallow interest or reduce the period for which interest is payable or the rate at which interest is payable.”

“Order 62, rule 32A(1)(b):

(1) A party entitled to payment of any costs to be taxed is also entitled to his costs of the taxation except where:

…

(b) the Court makes some other order in relation to all or part of the costs of the taxation.

(2) In deciding whether to make some other order, the Court shall have regard to the underlying objectives set out in Order 1A, rule 1 and all the circumstances, including:

(a) the conduct of all the parties in relation to the taxation,

(b) the amount, if any, by which the bill of costs has been reduced; and

(c) whether it was reasonable for a party to claim the costs of a particular item or to dispute that item.”

“Order 62, rule 32C(1):

(1) The Court may make an order under this rule where:

(a) a party or his legal representative, in connection with a summary assessment or taxation of costs, fails to comply with a rule, practice direction or an order of the Court; or

(b) it appears to the Court that the conduct of a party or his legal representative, before or during the proceedings which gave rise to the summary assessment or taxation, was unreasonable or improper;

(2) For the purpose of paragraph (1), the conduct of a party or his legal representative does not include any conduct before the commencement of the action;

(3) Where paragraph (1) applies, the Court may:

(a) by order disallow all or part of the costs being summarily assessed or taxed; or

(b) order the party at fault or his legal representative, to pay costs that he has caused any other party to incur.”

11.  The costs in HCMP2996/1990 were ordered by Deputy High Court Judge To (as he then was) on 4 May 2007.  They were for the third party proceedings brought by the 6th defendant against the 15th defendant in HCMP2996.  The order required the 6th defendant to pay the costs to be taxed to the 15th defendant. 

12.  The order further provided that the estate of Kwan Kai Ming, deceased should pay the 15th defendant those costs, but the 15th defendant should repay the same to the estate to the extent that he could recover the same from the 6th defendant.  Hence, the estate of Kwan Kai Ming, deceased was liable to pay such costs on behalf of the 6th defendant, but the liability was not personal to the estate.

13.  The 6th defendant’s first ground of appeal is that the estate of Kwan Kai Ming was involved in the taxation and should have taken part therein. The 15th defendant disagreed with that proposition.  The 15th defendant in fact had written to the solicitors for the estate, who indicated that they did not want to take part therein.  The 6th defendant said that three days had been spent in arguing over this matter, and he put the blame of the wastage of the three days on the 15th defendant. 

14.  I think the estate was at liberty not to take part in the taxation as the liability to pay such costs was ultimately that of the 6th defendant.  The 15th defendant also disputed that the time spent on arguing this issue was three days.  The 15th defendant said that the time spent on it was minimal.  I am of the view that if time has indeed been spent on arguing this matter, then it was the 6th defendant who caused the wastage, and he should be blamed for this.  There is nothing in this ground of appeal as the estate was at liberty not to be involved in the taxation of costs which was the 6th defendant’s personal liability to pay. 

15.  The 6th defendant’s second ground is that the 15th defendant’s solicitors had been late in sending him the bill in CACV58/1995 and that necessitated the adjournment of the call-over hearing from 30 September 2008 to 25 November 2008.  The fact of the matter, however, is not as alleged by the 6th defendant.  The bill in HCMP2996/1990 had been sent to the 6th defendant in August 2008.  That bill had 435 pages.  The 6th defendant had not filed any list of objection up to the call-over hearing on 30 September 2008.  Master Ho therefore adjourned the call-over to 25 November 2008 and ordered the 6th defendant to file his list of objections on 18 November 2008.  The Master also ordered the 6th defendant to pay $500 costs to the 15th defendant for the adjournment.  The bill in CACV58/1995 was indeed not sent to the 6th defendant on or before the call-over on 30 September.  That was a relatively short bill of 42 pages, and its then unavailability did not contribute to the adjournment.  Hence, this ground is also of no merit. 

16.  The third ground is that the taxation hearing took 15 days, running from 12 May 2009 to 16 December 2009.  There were several lengthy adjournments to suit the court’s diary and the parties’ convenience.  I do not think there is sufficient material before me to show who should be blamed for the long gaps of adjournment.  However, the large number of days used for the exercise is partly caused by the 6th defendant and partly caused by the 15th defendant.  The 6th defendant had demanded to go through most of the underlying documents.  He admitted that he wanted to go through the underlying document for the sake of prudence and about half of the 40 to 50 lever arch files had been considered for this purpose.  The solicitors for the 15th defendant, however, said that there were much more than half of the documents that had, in fact, been considered in the taxation process.

17.  I also find that part of the reasons for the long duration of taxation is because of the law costs draftsman of the 15th defendant had on some occasions encountered difficulty in locating and producing the relevant underlying documents for the court’s perusal.  Some time had also been wasted for the taxation of some unwarranted items that should not have been included in the bill and they were subsequently taxed off or withdrawn. 

18.  The 6th defendant alleged that of the 4,288 items in the bill in HCMP2996/1990, some 2,821 items were withdrawn.  Of the withdrawn items or events, 1,684 of them had already been taxed before the withdrawal. However, the number of withdrawn items in a list produced by the 6th defendant is only 1,785 instead of 2,821.  The number of items allegedly taxed before they were withdrawn is also at about 1,700.  The 15th defendant disputes this list. 

19.  I understand that Master Levy, in awarding the costs of taxation to the 15th defendant, had taken off five hours of the time spent by the 15th defendant’s law costs draftsman and 1.5 hours spent by his solicitor.  The 6th defendant has not shown why the deduction of costs of taxation by Master Levy was not enough to reflect the loss of time occasioned by the 15th defendant’s law costs draftsman and his solicitor.

20.  The 6th defendant also alleged that the bundles of underlying documents were not ready when taxation was under way.  He at one time even alleged that there was no bundle of documents available for the taxation of the bill in CACV58/1995, and that taxation was done without any bundle of document.  However, that taxation was done on 29 April and 15 May 2009, and it could not have been done without the underlying documents. 

21.  The 6th defendant later retracted his words and instead alleged that he did not treat the bundle of documents supplied by the 15th defendant as proper bundles as they were just documents and not properly arranged and without chronology or list of key documents.  I do not agree with this allegation.  Chronology and list of key documents are not always required.  For complicated matters they are useful to guide the parties along, but I cannot say that the bundles are not bundles if they are not accompanied by a chronology and a list of key documents. 

22.  The 15th defendant’s solicitors also said that the bundles of underlying documents were available before the commencement of the taxation of CACV58/1995.  Regarding HCMP2996/1990, the documents were made available as the taxation proceeded, but there was no interruption of taxation that was caused by the slow supply of documents. 

23.  I am not in a position to make any finding on this dispute.  In any case, the third party proceedings in HCMP2996/1990 was long drawn out and had taken many years to conclude.  Hence, it is a relatively complicated matter and the bill is also very long. 

24.  I do not think there is sufficient evidence for me to find fault with the 15th defendant to the extent that I should disallow any part of the costs as taxed, or to further reduce the cost of taxation which have already been reduced by Master Levy.  I think the conduct of the 15th defendant in the taxation might not be said to be up to an untarnished standard.  However, it is not every error or incapacity that will attract the heavy penalty of having the taxed costs or part of them to be disallowed.  The 6th defendant has also not shown why the reduction of costs of taxation by Master Levy was not an appropriate and sufficient measure to reflect the inadequacy of the 15th defendant. 

25.  I also refer to the grounds of the 6th defendant as advanced before the Master.  He complained that many items should not have been included.  He also said that there were items relating to certain criminal proceedings brought against the 15th defendant which were later withdrawn.  There were also items for unrelated issues that had already been taxed previously.  There were even items that the 15th defendant had been ordered to, and had indeed paid to the 6th defendant.  The 6th defendant admitted that there were these errors and inadequacies, and these items had either been taxed off or withdrawn, and many of them were withdrawn before taxation.

26.  Again the 6th defendant has not shown in any concrete fashion the amount of wastage generated by these errors.  I am not persuaded that the Master had erred in not acceding to the 6th defendant’s request to disallow part or whole of the costs as taxed, or the cost of taxation as already reduced.  I therefore dismiss both appeals. 

27.  I now hear the parties on costs.

(Discussion re costs)

28.  I order the 6th defendant to pay the costs of the appeals to the 15th defendant, and I summarily assess the costs as follows.  I accept that the solicitor for the 15th defendant has spent 2.5 hours in the perusal of documents, conference with the 15th defendant and correspondence.  I also accept that he has spent 3 hours in preparing his written submissions in opposition and that the hearing of yesterday and day before yesterday, together with the time spent for delivery of decision today, totalled 8.5 hours.  Hence the total time spent is 14 hours.  I adopt the rate of $2,500 per hour.  The total amount of costs as summarily assessed is $35,000.  I order the 6th defendant to pay this sum to the 15th defendant. 

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JUDGMENT

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Liu JA:

1. Before us the appellant, the 6th defendant in High Court Miscellaneous Proceedings, applied for leave to adduce further evidence. In the appeal proper, he sought to set aside the determination of Patrick Chan, J. At the conclusion of counsel's submissions, we admitted further evidence and ordered a new trial, thus disposing of the appeal. The parties were told that we would hand down our reasons and these I now give. The appeal proper became otiose and it simply stood dismissed. Accordingly we set aside the order of the judge and dealt with costs.

2. In High Court Miscellaneous Proceedings No. 2996 of 1990, questions relating to the intestate estate of Kwan Kai-ming, deceased, were sought to be determined. The parties to those proceedings are members of the Kwan family, with the surviving widow and the daughter as the plaintiffs and the other potential beneficiaries as defendants. The appellant, being the 6th defendant in those Miscellaneous Proceedings, had pressed the plaintiffs to take steps to ascertain the true identity of the respondent, the 15th defendant. I shall call the parties to this appeal "the 6th defendant" and "the 15th defendant" respectively.

3. That the 15th defendant had throughout been treated by the deceased and all as a member of the Kwan family is common ground, but the 6th defendant maintains that the 15th defendant is not the deceased's natural son. I shall call the deceased "Mr Kwan". The court saw fit to order the issue as to whether the 15th defendant was a natural son of Mr Kwan and the late Madam Wong, the kit fat wife, to be tried in Third Party proceedings between the 6th and 15th defendants. The first plaintiff in the Miscellaneous Proceedings is the surviving tin fong wife. The validity of Mr Kwan's successive marriages is not in dispute. Patrick Chan, J came to the conclusion that the 15th defendant was a natural son of Mr Kwan. From that decision the 6th defendant appealed and sought leave to adduce further evidence.

4. Evidence at the trial of the Third Party proceedings was given viva voce as well as by affidavits. The 6th defendant did not give evidence but the judge admitted the relevant documents exhibited to his affirmation. These documents comprised the birth certificate of "Daniel Kwan", the 15th defendant's declaration in the Judicial Court of Macau and an order made in 1988 by the Macau court excluding the 15th defendant as one of Mr Kwan's heirs in proceedings relating to his intestate estate. The Macau proceedings were verified by the 6th defendant's Macau lawyer, Dr Henrique Miguel Saldanha. The judge expressed the view that the oral evidence of the 6th defendant, if adduced, "would [not] have added very much".

5. The 6th defendant is also known as Daniel Kwan. The Macau birth certificate of "Daniel Kwan" together with attendant documents showed that "Daniel Kwan" was not a son of Mr Kwan. Upon the 6th defendant and the 9th defendant petitioning the Judicial Court in Macau to exclude the 15th defendant as an heir of Mr Kwan, an exclusion order was issued. The prescribed time for appeal has elapsed and the exclusion order is final. On the force of these Macau documents admitted in the Third Party proceedings, at first blush the 6th defendant would appear to have a strong case. But the 15th defendant denied that he was the "Daniel Kwan" in the Macau birth certificate. As to the exclusion order of the Macau Judicial Court, the 15th defendant claimed that he had not been served with the petition, that the order was made in default and that when the exclusion order came to light much later in 1990, he instructed lawyers in Macau to appeal to Lisbon to set it aside. According to the 15th defendant, it was due to the neglect of his Macau lawyers that the appeal to Lisbon was not prosecuted. A certificate from Chung Tak Middle School in Macau was also placed before the judge, which was issued to one called "Kuan (or Kwan) Tan Lau" The certificate bore the date of 15 July 1957, the same year, as it will be seen, in which Mr Kwan applied to the naturalised in Hong Kong. The 15th defendant, however, denied that he had ever lived or studied in Macau.

6. On the other hand, the 15th defendant caused to the filed a number of affirmations with the view to fortifying his claimed status of an heir on Mr Kwan's intestacy. Two brothers and a sister as well as an uncle who is the half brother of Mr Kwan rallied to his support. They gave evidence. The surviving tin fong wife was said to have affirmed the 15th defendant as a natural son of Mr Kwan in another court case. In his 1957 application for naturalisation, Mr Kwan included the 15th defendant as one of his issue. In 1957 the late kit fat wife wrote to a daughter in Guangzhou referring to the 15th defendant by name. In 1957, at the request of Mr Kwan the 15th defendant applied to the Chinese authorities for an exit visa for the 6th defendant to come to Hong Kong. Upon the death of the kit fat wife in 1959, the 15th defendant's name appeared as one of the descendants on her tomb stone. In 1981, in the formal invitation to Mr Kwan's 80th birthday celebration feast, the 15th defendant's name was among those of his sons hosting it. In the obituary of Mr Kwan, the 15th defendant and his wife were listed as son and daughter-in-law. In 1989, in a Macau Court proceeding relating to the intestate estate of Mr Kwan, the attendance of the 15th defendant was objected to on account of the Macau Judicial Court's exclusion order, but the 15th defendant through his lawyer successfully exercised his right of audience as a representative of a creditor of the estate, Messrs Kai Ming Investment Co. Ltd. The 15th defendant claimed that the reason for the objection was not translated to him in that proceeding. In 1992, the 2nd defendant addressed an envelop to the 15th defendant as a senior Kwan family member for an invitation to her daughter's wedding. These would appear to be equally formidable documents although the 6th defendant made no admission to them.

7. The oral evidence adduced by and for the 15th defendant was just as impressive. A former teacher of a Hong Kong school which the 15th defendant allegedly attended was called. Other witnesses called included a teacher of the 15th defendant's other Chinese school in Hong Kong, who happened also to be his classmate, other classmate, a sister, the family rent collector, the half brother of Mr Kwan and the 16th defendant himself. In more ways than one, these witnesses testified that the 15th defendant was a lawful and natural son of Mr Kwan.

8. The judge found for the 15th defendant and the 6th defendant appealed.

9. The new documents in the 6th defendant's application to adduce further evidence may be divided into three groups: first, the Baptist College documents other than its 1962 student index, secondly, the 1962 student index and thirdly, the press reports and a certified copy certificate of trial issued out of the Central Magistracy. According to these reports and the certificate of trial, the 15th defendant was prosecuted in 1962 for making a false statement to the Immigration Department for procuring a travel document.

10. The first group of new documents from Baptist College tend to establish that the 15th defendant studied in the Chung Tak Middle School in Macau, using his name "Kuan (Kwan) Tan Lau". The document in the second group, the 1962 student index, clearly shows that the 15th defendant was indeed called "Kuan (Kwan) Tan Lau" because next to his photograph in that index was printed in Chinese "Kuan (Kwan) Tan Lau" and in English "Daniel Kwan". The press reports and the certificate of trial in the third group of documents tend to show that the 15th defendant had registered himself as an alien, holder of a Portuguese passport. It was complained by the 6th defendant before us that the 15th defendant had perjured himself before Patrick Chan, J and that the judge leant heavily on the perjured evidence in reaching his conclusion.

11. I should first dispose of the settled principles. In Ladd v. Marshall [1954] 1WLR 1489 at p. 1491 Denning L.J., as he then was, laid down the three conditions for reception of fresh evidence on appeal: "first, it must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial; secondly, the evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive; thirdly, the evidence must be such as is presumably to be believed, or in other words, it must be apparently credible, though it need not be incontrovertible." In the sentence preceding, Denning L.J. made it clear that these principles were applicable to an application for a new trial on the ground of perjury.

12. A new trial would be granted on the ground of fraud practised on the court. Fresh evidence admitted may also provide a ground for a new trial. Examples of the former are CICIC v. Snowy Mountains Hydro-Electric Authority [1964] 5 NSWR 178; Flower v. Lloyd [1877] Ch. D. 297; Jonesco v. Beard [1930] AC 298; Meek v. Fleming [1961] 3 All E R 148.

13. An application for a new trial on the ground of deception calls for a different procedure from that for applying for a new trial on the ground of fresh evidence. In Flower v. Lloyd supra at p. 302 James L.J. observed that setting aside a judgment obtained by fraud "must be done by a proceeding putting in issue that fraud". The learned Lord justice elaborated:

"you cannot go to your adversary and say, 'you obtained the judgment by fraud, and I will have a rehearing of the whole case' until that fraud is established. The thing must be tried as a distinct and positive issue; 'you' the defendants or 'you' the plaintiff 'obtained that judgment or decree in your favour by fraud; you bribed the witnesses, you bribed my solicitor, you bribed my counsel, you committed some fraud or other of that kind, and I ask to have the judgment satisfied on that ground of fraud'. That would be tried like anything else by evidence probably taken directed to that issue, and wholly free from and unembarrassed by any of the matters originally tried. There was the old cause of the law, an there seems to be no reason why there should not be now followed; and if it is true that there was a fraud practised upon the Court, by which the Court was induced to make a wrong decree, the way to obtain relief will be to bring a fresh action to set aside the decree on the ground of fraud."

14. In special cases, a judgment for fraud may be set aside and a new trial granted on motion before the Court of Appeal. See Jonesco v. Beard [1930] AC 298. At pp 300 & 301, Lord Buckmaster delivered himself of the following opinion in their Lordships' House:

"In Flower v. Lloyd (1877) 6 Ch. D. 297 at p. 302 the Court of Appeal, consisting of Jessel M.R., James and Baggallay L JJ, held there was not jurisdiction in the Court of Appeal to entertain a similar application, with regard to one of their own judgments. James L J states that "you cannot go to your adversary and say, 'You obtained the judgment by fraud and I will have a rehearing of the whole case' until that fraud is established." Flower v. Lloyd (1879) 10 Ch.D. 327, at p. 333, Cole v. Langford [1898] 2 Q.B. 36 and Baker v. Wadsworth (1898) 67 L.J. (Q.B.) 301 showed that the right procedure for that purpose is by action. That, however, there is jurisdiction in special cases to set aside a judgment for fraud on a motion for a new trial may be accepted. Hip Foong Hong v. H. Neotia & Co. [1918] A.C. 888 is such a case; but it should be remembered that this case had come up to the Privy Council on this procedure and the Board would naturally be unwilling to defeat a case at its last stage on such a ground."

15. Counsel referred us to an Australian High Court appeal from the Full Court for the same given guideline on procedure. See McDonald v. McDonald [1966] A.L.R. 496 at p. 497 line 36 to 46. Evidently a fraud would have to be definitely alleged and affirmatively proved. See McDonald McDonald supra p. 499 line 11 and p. 502 line 21.

16. The 6th defendant applied for a new trial on the ground of fresh evidence. A new trial was not sought on the ground of fraud, but counsel for the 6th defendant relied on Skone v. Skone [1971] 1 W.L.R. 812 for his contention that a strong prima facie case of wilful deception of the court would be of itself sufficient to ground an application for a new trial. First, it must not be overlooked that Skone v. Skone was a case of an application for introducing fresh evidence. It was not a case of a motion for a new trial on the ground of fraud. Further, we must give full weight to the different emphasis in the second condition between Hong Kong and Australia. Our second condition, as laid down in Ladd v. Marshall by Denning, L J, as he then was, is that the evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive. In Australia, the comparable condition is more stringent. There, the evidence would have to be, in all probability, decisive. See McDonald v. McDonald supra p. 497 line 15, where evidence of fraud, not a finding of fraud, was said by Barwick, C J to have the tendency of rendering the proposed fresh evidence more likely to satisfy what is equivalent to the second condition in Ladd v. Marshall. See also p 497 lines 32 & 33. In McDonald v. McDonald, supra at p.498 lines 19-20, Chief Justice Barwick concluded that strong prima facie evidence of fraud would add "emphasis to the Court's acceptance of the fresh evidence as probably [having an important influence on] the issues between the parties". Reference was made to Piotrowska v. Piotrowski [1958] 1 W L R 797. In Piotrowska v. Piotrowski, after leave having been granted the appellant "asked on the hearing of the appeal for a new hearing of the suit based on adultery in view of the material [then] before the court." See p. 798. It was clearly a case of an application for further evidence, in which the English Court of Appeal had the assistance of a conviction of perjury, but there was no finding made by the Court of Appeal of any fraud practised on the court. The conviction was merely taken, in the words of Barwick C J in McDonald v. McDonald, as evidence tending to assist the court to come to a conclusion that the second condition in Ladd v. Marshall had been fulfilled. That much is reasonably clear. Returning to Skone and Skone, supra p 587 G - H, Lord Hodson had this to say:

"Assuming, as I think your Lordships must for the purposes of this application, that the letters sought to be tendered as evidence are genuine, the basis of the judge's finding at the trial has been falsified to such an extent that to leave matters as they are would, in my opinion, be unjust. The co-respondent was served with notice of appeal and was represented at the hearing before the Court of Appeal and made no disclosure of the letters. True he has not been convicted of perjury as was the case in Piotrowska v. Piotrowski, a decision of the Court of Appeal when a new trial was ordered, but the distinction is a fine one between such a case and one where as here, a strong prima facie case of willful deception of the court is disclosed."

Lord Hodson was not treating a finding of fraud practised on the court on the same posting as a strong prima facie case of wilful deception of it. A strong prima facie case of wilful deception would simply enable the appellate count, in the context in Skone & Skone, to accept more readily the proposed fresh evidence as having a probable important influence on the result of the case. That is the second condition in Ladd v. Marshall.

17. We are, therefore, to consider whether on the facts of this case, the three groups of documents satisfy the conditions laid down in Ladd v. Marshall. Mr Chang conceded that these apparently credible documents would satisfy the last condition, but counsel submitted that since the 15th defendant's claim was supported by overwhelming evidence which did not seem to have been seriously debated on the behalf of the 6th defendant, condition two in Ladd v. Marshall had not been satisfied. But, in this case there is the other side of the coin. There would appear to be ample justification for the 6th defendant to display full confidence in the documents at hand before the judge who acknowledged that viva voce evidence of the 6th defendant could have added little to the documents. These documents were prima facie very damaging to the case of the 15th defendant although the judge finally accepted the 15th defendant's denials of the birth certificate and attendant documents and his explanations for his dormancy with reference to the Macau Judicial Court's exclusion order. Credibility was crucial for of the judge's determination. It cannot be denied that the fresh documents would probably have an important influence on the result of the case. The second condition in Ladd v.Marshall is, in my opinion, met.

18. Lastly, I come to the first condition of "reasonable diligence". As for the first group of documents, prior to the trial the 6th defendant had made inquiries from the Baptist College. It is claimed that he "could not gain access to any of such documents". A reason given by a clerk in Baptist College was that student information would not be released without the student's consent. After the trial, in April 1995 the 6th defendant was also to avail himself of the first group documents. The 6th defendant did not disclose how these documents to which he had previously been unable to gain access became accessible to him in April 1995. If the means by which the 6th defendant succeeded in procuring these documents in April 1995 could not have been, with due diligence, made available to him before trial when he first made enquiries from the Baptist College, I would be prepared to consider the first condition as satisfied. Conversely, if the means by which these documents were obtained in April 1995 were then easily accessible to the 6th defendant, he would fail on the first condition in Ladd v. Marshall. The burden of satisfying this court the first condition is upon the shoulders of the 6th defendant. In my view, by not disclosing how he came by these documents in April 1995 after trial, the 6th defendant has not even begun to demonstrate that due diligence was then exercised.

19. As for the document in the second group and the third group of documents the position is otherwise. For the 1962 student index, the 6th defendant made a search in the school library without success. Armed with more disclosure made at the trial, he conducted further search. He was given to understand that it had been lent out and was not available. The efforts of the 6th defendant must be judged against the background in this case. He was uncertain whether there would likely be any relevant information in the 1962 student index and whether, if there be material information, it would be unprejudicial. The 15th defendant's denial at the trial was firm. Legal advisers for the 6th defendant, unaware of the nature and substance of the information (if any), could not be expected to urge the 6th defendant to run the risk of adducing damaging evidence without an opportunity of cross-examination by issuing a subpoena.

20. The same may be similarly said of the third group of documents. The 6th defendant searched in Hong Kong and in Taiwan. The estimated hours of search came to 500. In the end he managed to unearth information from the Hong Kong University library on or about 13 February 1995. He was unsure of the time frame. He was searching wildly in the past for documents between 1959 to 1961.

21. Turnbull & Company v. Duval [1902] A C 429 is a case for the proposition that no fresh documents should be admitted unless discovery had previously been sought. In this case, there was no discovery and the parties were both content to leave the case heard on affidavit and viva voce evidence. As in Skone v. Skone supra p. 817 A - C, in the trial before Patrick Chan, J. no one took issue with the absence of discovery. The 6th defendant had no firm reason for believing that he would likely be able to obtain incriminating evidence in the documents in the second and the third groups. The 15th defendant's refutation in the Third Party proceedings was robust. The 6th defendant was simply making a search. Finally, conduct of the proceedings was such that the parties could be regarded as having reached an agreement to dispense with discovery.

22. In conclusion, for all these reasons I would admit the documents in groups two and three. Before Rogers, J. The 15th defendant committed himself on oath that he had never lived in Macau and that he had not been known as Kuan (Or Kwan) Tan Lau. But from the documents in the second and third groups, it can be seen that he professed to be known by the name of Kuan (or Kwan) Tan Lau and registered himself as a Portuguese alien. True or false, the information contained in the 1962 student index and that fed to the Portuguese passport authority or the Hong Kong Immigration Department had once been held out to be true by the 15th defendant. It matters not whether the 15th defendant was dishonest then or before the judge. Wherever the truth lies, his credibility as found by the judge must in justice be re-evaluated. If the first group of documents were also to come in, the 15th defendant would have more to explain as to why he told Rogers, J. that he had never studied in Macau. A new trial was ordered by this court. A new trial by its very nature would bring into play all the documents which each party sees fit to adduce. This case is closest to Skone v. Skone and we awarded costs of the appeal to abide by the result of the new trial as in that case. But that is not to say that the judge's discretion will in any way be affected. He will be entitled to take into consideration the conduct of each party throughout all the stages of the proceedings up to the 6th defendant's application to adduce further evidence and his appeal.

Mayo, JA:

23. This is an appeal against a judgment of Patrick Chan J in what were third party proceedings.

24. The main action involves the estate of the deceased who was referred to by the judge as Mr Kwan. The 6th Defendant in the main action who is the appellant invited the plaintiffs to contest the right of the 15th Defendant who is the respondent to have an interest in Mr Kwan's estate. This invitation was declined.

25. Hence it was ordered that issues be framed as 3rd party proceedings between the appellant and the respondent to determine whether the respondent was indeed entitled to an interest in the estate.

26. It is the contention of the appellant that the respondent was not the lawful son of Mr Kwan.

27. There was a hearing on this issue before Patrick Chan J and he held the respondent had established that he was the legitimate son of Mr Kwan.

28. The appellant in his affidavit in support of the present application makes reference to additional evidence he has obtained since the hearing. He seeks our leave to introduce this additional evidence and consequentially upon this an order that there be a retrial of the third party issue.

29. It must be said immediately that the issues which had to be resolved by Patrick Chan J were by no means simple. He was faced with compelling evidence by both sides.

30. It seems to have been accepted by both sides that the respondent had to an extent been accepted as a son by Mr Kwan and his family. The main issue which had to be determined was whether in fact he was the natural son of Mr Kwan and his then wife Madam Wong.

31. The appellant mainly placed reliance upon a Birth Certificate issued by the Macau Authorities on 12 September 1957 in the name of Daniel Kwan. According to this certificate Daniel Kwan was born on 15 October 1935 to Kwan Heng the father and Lok Si the another. There was evidence that Kwan Heng was a half brother of Mr Kwan.

32. This birth certificate was issued pursuant to an application made 3 days previously supported by a statutory declaration made by 4 witnesses. These witnesses did not include either Mr Kwan or Madam Wong.

33. At the hearing before Patrick Chan J the respondent denied that he was the Daniel Kwan referred to in the said certificate.

34. Another important matter relied upon by the appellant was what was described as an Exclusion Order made by the Macau Court in the course of litigation being conducted by members of the family in respect of the estate.

35. The appellant obtained an order which ordered that the respondent should be excluded from an interest in the subject matter of the litigation as it had been established that he did not have an interest. At the time of the hearing before Patrick Chan J the respondent had not appealed against this order.

36. As against this evidence there was a wealth of evidence that the respondent had been treated as a member of Mr Kwan's family and had attended schools in Hong Kong.

37. The respondent's name had been included as one of the sons of Madam Wong on her tombstone after her death in 1959. Also a letter written by her in 1957 was adduced as evidence where she makes reference to the respondent as being one of her sons.

38. At the time of Mr Kwan's death in May 1983 the respondent's name appeared as one of his sons in the obituary and the press announcements of his death. In addition to this his name appeared as one of the sons of Mr Kwan on his tombstone.

39. In the light of all of this evidence it was not surprising that Patrick Chan J was prepared to make a finding that the respondent was the legitimate son of Mr Kwan.

40. The additional evidence which the appellant seeks to adduce are records of the Baptist College where the respondent was a student from 1959 to 1962, a Certificate of Trial from Hong Kong Central Magistracy dated the 10 April 1995 and various newspaper reports.

41. The Baptist College records can be divided into two parts.

42. The first part comprises the application form submitted by the respondent when he was applying to enter the college together with supporting documentation in the form of a certificate issued by Chong Tak Middle School Macau dated 16 March 1959.

43. The second part consists of the Baptist College's Student Index 1962.

44. The Certificate from the Magistracy relates to proceedings which were taken against the respondent where it was alleged that he had made an untrue statement to procure a travel document. He pleaded guilty to this offence and the conviction was discharged on 8 June 1962 under s35 of the Magistrates Ordinance. The newspaper reports were reports on this case.

45. All of these documents are highly significant.

46. So far as the Baptist College records are concerned it seems likely that the respondent was and is the same Daniel Kwan who was referred to in the Macau Birth Certificate. The same can be said of the particulars of the Daniel Kwan referred to in the Student Index.

47. So far as the certificate from the Chong Tak Middle School is concerned this likewise appears on the face of it to refer to the respondent. It certifies that the respondent attended at the College and presumably the attendance at the College was the evidence of the respondent's studies which satisfied the Baptist College that he should gain admittance.

48. The Court proceedings are also important. On the face of it it seems likely that the respondent was the Defendant in those proceedings. Indeed he has not sought on the present application to file affidavit evidence denying the fact.

49. It would appear from the evidence that the respondent who had been the holder of a Portuguese passport had made an application to the Hong Kong Immigration Authorities for registration as an alien on 29 January 1959.

50. On 17 February 1962 he made an application for re-registration for another identity card to the Hong Kong Immigration Authorities. Presumably some of the evidence given in support of this application was inconsistent with evidence provided in connection with the application made in January 1959.

51. What is of crucial significance is the connection with the Macau documentation which almost inevitably again reverts back to the Macau birth certificate.

52. Mr Rodway QC who represented the appellant before us mainly placed reliance upon the principles propounded in Ladd v. Marshall [1964] 1 WLR 1489.

53. They can conveniently be stated:

"(1) The evidence could not have been obtained with reasonable diligence for use at the trial; (2) The evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive; (3) The evidence must be such as is presumably to be believed, or, in other words, it must be apparently credible though it need not be incontrovertible."

54. However having regard to the respondent's denial that he was the Daniel Kwan referred to in the Macau Birth Certificate Mr Rodway contended that there had been an element of deception which should dispose the court to more readily exercise its discretion in the appellant's favour. His authority for this was a passage from the speech of Lord Hodson at 587 of Skone v. Skone & Another [1971] 2 All E.R. 582.

55. Mr Rodway did not wish to pursue the route of attempting to prove that there had been fraud along the lines indicated in McDonald v. McDonald 1966 ALR 496.

56. He was content to reply upon Ladd v. Marshall together with the assistance he thought was given by Skone v. Skone.

57. In this connection it will be appreciated that the deception which has been alleged by the appellant has not at this point of time been proved in a court of law. At best it is prima facie evidence that a deception has been resorted to.

58. I am satisfied however that the facts of this application are virtually indistinguishable from the evidence which was before the Privy Council in Skone v. Skone and that we should be more ready to exercise our discretion in favour of the appellant.

59. I am however of the view that the alleged deception of itself would not justify us in admitting the additional evidence and that is still necessary for us to satisfy ourselves that the 3 conditions in Ladd v. Marshall have been met.

60. So far as the 3rd condition is concerned Mr Chang QC for the respondent very helpfully conceded that on the material before us this had been complied with.

61. So far as the 2nd condition is concerned I am satisfied from the factual background above recited that this evidence would undoubtedly have an important influence on the result of the case.

62. Mr Chang QC argued that little weight should be attached to the Macau documents. What was important was the overwhelming evidence to the effect that the respondent had been treated as a son by Mr Kwan and had received his education in Hong Kong.

63. That may all be true. However there is a grave paucity of evidence establishing that the respondent was the natural son of Mr Kwan. There can be no doubt that the existence of the Macau birth certificate and the respondent's attempts to distance himself from the documents lead one inevitably to the conclusion that this additional evidence would have an important impact on the outcome of these proceedings.

64. This then leaves the 1st condition. It is this condition which has occasioned us the most difficulty.

65. In the affidavit in support of the application the appellant has described the efforts he made to obtain the additional evidence for the original trial. He claims to have spent 500 hours altogether in his endeavours.

66. In my view the most satisfactory approach to adopt is to consider all of the additional evidence together.

67. So far as the court proceedings were concerned it is understandable that difficulty was encountered in obtaining this. The appellant only had a vague recollection that criminal proceedings had been instituted against the respondent. He did not know the date nor did he know in which Magistracy the case had been heard. He did not know definitely that the proceedings had been the subject of press reports and so accordingly it would not have been a simple matter to trace the reports.

68. Mr Chang QC submitted that the Baptist College records should not be admitted as evidence.

69. He drew attention to the fact that the appellant had subsequent to the trial succeeded in obtaining the records and that he had not condescended to provide particulars as to how he had obtained the records notwithstanding the difficulties he claimed previously to have encountered.

70. What I think needs to be borne in mind is that when the appellant first sought out these records he was unaware that they would contain the material which would lead to the connection with the Macau documents.

71. Having referred to all the circumstances I am of the view that the applicant did exercise sufficient diligence to enable the first condition of Ladd v. Marshall to be complied with.

72. In reaching this conclusion I think that the observations made by Lord Hodson in Skone v. Skone are relevant.

73. As all three conditions have been complied with we advised the parties at the conclusion of the hearing that we would order that the additional evidence be admitted and that Patrick Chan J's order be set aside. We also ordered that there be a new trial before another judge.

74. We made an order for costs in a similar manner to the order made in Skone v. Skone. That was an order that all of the costs, including the costs below, the costs of this appeal and the costs of the new trial be reserved to the new trial. I have no doubt that when the judge makes his order he would take cognisance of all of the matters ventilated before us.

Nazareth V-P:

75. I agree with the reasons given by Mayo JA; and, save in the following minor respect, also those given by Liu JA. With reference to the conditions in Ladd vMarshall [1964] 1 WLR 1489, in my view, the three categories of documents for which leave to adduce is sought, would plainly have an important influence on the result of the case, and likewise are apparently credible to say the least. The second and third conditions are therefore satisfied; indeed, in relation to the third, that is not disputed by Mr Chang for the appellant. Likewise 1, also, am satisfied that the first condition (that the evidence could not have been obtained with reasonable diligence for use at the trial) is satisfied in relation to the second and third category of documents. But more needs to be said of the first category, i.e. the application form, and the Chung Tak Middle School certificate submitted by the 15th defendant when applying for admission to the Baptist College. The appellant did attempt to obtain the two documents from the Baptist College. He was told by a member of the staff that they could only be obtained with the written consent of the student. Such consent, it seems to be reasonably clear from the circumstances, he could not hope to obtain from the 15th defendant. Equally, it was not unreasonable of him to accept the statement made by the member of the staff of the Hong Kong Baptist College. In those circumstances, it seems to me that he exercised reasonable diligence in attempting to obtain the documents.

76. That, then, was the position up to the trial before P. Chan J in January 1995. I am unable to see how the fact that he was able to obtain the documents in April 1995 should change that position. I do not think I am called upon to speculate upon his reluctance to disclose the manner in which he ultimately obtained the two documents, nor to conclude from that, that he now fails to show that he exercised reasonable diligence. Upon that basis, I conclude that he has satisfied the conditions in Ladd vMarshall in relation to all the documentary evidence he seeks to adduce. The point is, in any case, academic, for it is agreed on all sides that even if only the category 2 and category 3 documents are admitted, a re-trial is necessary, and that upon such re-trial, the parties will be at liberty to seek the admission of all relevant documents.