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Chu Pun Kei Clarence v Lee Yee Hung And Others

Judgment Cited authorities 17 Cited in Precedent Map Related
Vincent
Judgment Date23 March 2001
Year2001
Judgement NumberHCA1981/1999
Subject MatterCivil Action
CourtHigh Court (Hong Kong)
HCA001981/1999 CHU PUN KEI CLARENCE v. LEE YEE HUNG AND OTHERS

HCA001981/1999

HCA 1981 of 1999

IN THE HIGH COURT OF

THE HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1981 OF 1999

BETWEEN
CHU PUN KEI CLARENCE Plaintiff
AND
LEE YEE HUNG, TO KUN SUN JAMES, WARNE YAN WAI DAVID and TSUI WAI KI (formerly trading as Y H Lee & James To, a firm Defendants

Coram: Master de Souza, in Court

Dates of Hearing: 24 March 2000, 25 & 26 May 2000

Date of Handing Down Judgment: 23 March 2001

____________________________

Assessment of Damages

____________________________

Introduction

1. This assessment arises out of a suit instituted by the plaintiff against his former solicitors ('the firm') for gross mishandling of his divorce application. The claim upon which judgment was entered by consent on 21 June 1999 for costs including the costs of the plaintiff's summons of 12 May 1999 and damages to be assessed was grounded in contract and tort.

2. The factual background as concerns the issue of liability was uncontroversial.

3. David Warne (Warne), then a partner of Messrs. Day & Chan was instructed by the plaintiff to obtain a divorce on his behalf. The retainer was given by the plaintiff and accepted by Warne and his firm upon a clear understanding that the divorce should proceed expeditiously on an uncontested basis there being no children of the family or any anticipated application from the plaintiff's wife for ancillary relief. The plaintiff intimated in clear terms that he wished to re-marry in 1998. On 18 December 1996, a petition for dissolution of marriage was filed under FCMC 12446 of 1996. General care and handling of the suit lay with Warne, who on 10 February 1997 left Messrs. Day & Co to become a partner of the then Messrs. Y H Lee & James To. The file followed him to the new firm. By a notice of change of solicitors dated 11 February 1997, Messrs Y H Lee & James To took over the conduct of the suit with Warne continuing with care and handling. At all relevant times, Messrs. Y H Lee & James To were carrying on as a firm with Lee Yee Hung (Lee), To Kun Sun, James (To), Warne and Tsui Wai Ki (Tsui) as partners. Tsui joined the partnership in May 1998. Warne retired from the firm on 30 October 1998. With effect from 1 January 1999, Messrs. Y H Lee & James To changed its name to Messrs. Philip Tsui & To.

4. As transpired, Warne and his partners had failed to exercise reasonable care and skill normally expected of competent practitioners in prosecuting the divorce suit speedily or at all. Instead, for nearly 2 years, nothing much was actually done. To compound matters, whenever the plaintiff enquired about the progress of the suit, he was given to understand that matters were well in hand and progressing. Eventually, as the plaintiff became more exasperated and his enquiries for information turned more frequent and urgent, the firm provided him with faxed copies of a Decree Nisi and a Notice of Application For Decree Nisi to be made absolute, which were false documents in every respect. This was done to conceal the truth from him as the suit had barely got off the ground. The truth was finally disclosed when the plaintiff approached the Divorce Registry on 9 October 1998 seeking information as to when he could expect the much-awaited Decree Absolute. It was then that he learned that no documents had been filed save his petition for divorce. It was against this background that the firm was sued for breaches of contract and tortious liability.

5. In summary, the plaintiff sought damages for mental distress, wasted expenditure, loss of housing and leave benefits, spousal maintenance paid, overseas telephone calls, and related travel and hotel expenses on the Mainland. Broadly taken together, the defence challenged the extravagance and genuiness of the claims and queried whether they or any of them had any causal connection with the admitted breaches. It was further contended that despite the consensual judgment, damages ought to be assessed in the context of a contractual relationship as opposed to one arising in negligence.

Quantification in tort or contract?

6. The plaintiff's stance is unambiguous. As the partners of the firm have consented to judgment for damages to be assessed without qualification, it was too late to argue that the plaintiff's right to damages should be confined to contract, the proceedings having been grounded in both contract and negligence. On the facts of the case where remedies are sought for breach of legal retainer and no recourse is had to some procedural or other advantage available only in an alternative cause of action, such as a later accrual time for the cause of action, it matters not whether quantification is undertaken in tort or contract. The practical outcome should be the same, as the damages pursued would necessarily stem from the solicitor client relationship.

7. The law on concurrent liabilities and its impact on damages fell to be considered in Henderson & ors v Merrett Syndicates Ltd & ors [1995] 2 AC 145 (HL). The facts though complicated are immaterial for present purposes. After an exhaustive analysis of the courts' approach to this issue over decades, Lord Goff who gave the leading speech, observed:

So far as Hedley Byrne itself is concerned, Mr. Kaye (referring to an article "The Liability of Solicitors in Tort" by J M Kaye) reads the speeches as restricting the principle of assumption of responsibility there established to cases where there is no contract; indeed, on this he tolerates no dissent ... (p.192H) (parenthesis supplied)

... Mr. Kaye's approach involves regarding the law of tort as supplementary to the law of contract, i.e. as providing for a tortious liability in cases where there is no contract. Yet the law of tort is the general law, out of which the parties can, if they wish, contract; and as Oliver J demonstrated, the same assumption of responsibility may, and frequently does, occur in a contractual context. Approached as a matter of principle, therefore, it is right to attribute to that assumption of responsibility, together with its concomitant reliance, a tortious liability, and then to inquire whether or not that liability is excluded by the contract because the latter is inconsistent with it. This is the reasoning which Oliver J., as I understand it, found implicit, where not explicit, in the speeches in Hedley Byrne. With his conclusion I respectfully agree. But even if I am wrong in this, I am of the opinion that this House should now, if necessary, develop the principle of assumption of responsibility as stated in Hedley Byrne to its logical conclusion so as to make it clear that a tortious duty of care may arise not only in cases where the relevant services are rendered gratuitously, but also where they are rendered under a contract. This indeed is the view expressed by my noble and learned friend, Lord Keith of Kinkel, in Murphy v Brentwood District Council [1991] 1 AC 398, 466, in a speech with which all the other members of the Appellate Committee agreed. (p.193 B-D)

... My own belief is that, in the present context, the common law is not antipathetic to concurrent liability, and there is no sound basis for a rule which automatically restricts the claimant to either a tortious or a contractual remedy. The result may be untidy; but, given that the tortious duty is imposed by the general law, and the contractual duty is attributable to the will of the parties, I do not find it objectionable that the claimant may be entitled to take advantage of the remedy which is most advantageous to him, subject only to ascertaining whether the tortious duty is so inconsistent with the applicable contract that, in accordance with ordinary principles, the parties must be taken to have agreed that the tortious remedy is to be limited or excluded. (p.193H, 194A-B)

8. In Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd [1986] 1 AC 80 (PC), Lord Scarman, delivering the judgment of the Board, stated:

Tort

Their Lordships do not believe that there is anything to the advantage of the law's development in searching for a liability in tort where the parties are in a contractual relationship. This is particularly so in a commercial relationship. Though it is possible as a matter of legal semantics to conduct an analysis of the rights and duties inherent in some contractual relationships including that of banker and customer either as a matter of contract law when the question will be what, if any, terms are to be implied or as a matter of tort law when the task will be to identify a duty arising from the proximity and character of the relationship between the parties, their Lordships believe it to be correct in principle and necessary for the avoidance of confusion in the law to adhere to the contractual analysis: on principle because it is a relationship in which the parties have, subject to a few exceptions, the right to determine their obligations to each other, and for the avoidance of confusion because different consequences do follow according to whether liability arises from contract or tort, e.g. in the limitation of action.

...

Their Lordships do not, therefore, embark on an investigation as to whether in the relationship of banker and customer it is possible to identify tort as well as contract as a source of the obligations owed by the one to the other. Their Lordships do not, however, accept that the parties' mutual obligations in tort can be any greater than those to be found expressly or by necessary implication in their contract. If, therefore, as their Lordships have concluded, no duty wider than that recognised in Macmillan [1918] AC 777 and Greenwood [1933] AC 51 can be implied into banking contract...

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