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Kao Lee & Yip (A Firm) v Carey & Lui (A Firm)

Judgment Cited authorities 1 Cited in Precedent Map Related
Vincent
Judgment Date24 November 1998
Subject MatterMiscellaneous Proceedings
Judgement NumberHCMP882/1996
CourtHigh Court (Hong Kong)
HCMP000882/1996 XCHRX KAO LEE & YIP (a firm) v. CAREY & LUI (a firm)

HCMP000882/1996

MP 882 of 1996

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 882 OF 1996

____________

BETWEEN
IN THE MATTER of Carey & Lui, a firm of Solicitors

and

IN THE MATTER of Section 67 of the Legal Practitioners Ordinance, Chapter 159

____________

BETWEEN
KAO LEE & YIP (a firm) Plaintiff
AND
CAREY & LUI (a firm) Defendant

____________

Coram: The Hon. Mr. Justice Barnett in Chambers

Date of Hearing: 17 November 1998

Date of Judgment: 24 November 1998

_______________

J U D G M E N T

_______________

1. This is a review of taxation. The question which arises is whether, following a taxation ordered under section 67 of the Legal Practitioners Ordinance (the Ordinance) in which the solicitor has been awarded the costs of taxation, the solicitor can recover the cost of preparing a fully itemised 2-column bill for the purpose of that taxation.

2. The parties are both firms of solicitors. The Defendant had been acting for the Plaintiff in a number of pieces of litigation. Between August and November 1995, the Defendant rendered 7 office bills to the Plaintiffs. These bills were for a gross sum but contained a degree of detail of the work which had been carried out. The Plaintiff then gave instructions for the files on which the Defendant was working to be transferred to another firm of solicitors. The Defendant claimed a lien on the files for payment of the costs. The Plaintiff paid the Defendant in full before issuing an originating summons on 15th March 1996 for the bills to be taxed pursuant to section 67 of the Ordinance.

3. On 6th May 1996, Master Jones ordered that the bills be taxed. It seems to be common ground that at the time he directed the Defendant to file "breakdowns" although this is not recorded in the formal order which was drawn up. It also seems to be common ground that although "breakdown" means no more than the provision of sufficient particulars of the bills so that the taxation can sensibly be conducted, it has become the practice for solicitors to prepare a full 2-column bill. It is also asserted on the part of the Defendant that, if a breakdown is not provided, a taxing master will almost certainly refuse to tax a gross sum bill.

4. The Defendant was unable to provide breakdowns because the files had by then been transferred to other solicitors. By summons dated 13th August 1996, the Plaintiff applied for an order that the Defendant serve the breakdowns on which it intended to rely within 7 days. On 10th September, Master Cannon made an order that the Defendant should serve breakdowns on which it intended to rely within 21 days. The Defendant was still unable to comply. Nonetheless, by summons dated 15th October 1996, the Plaintiff applied for an order that the Defendant's bills be struck out for failure to comply with Master Cannon's order. By summons dated 16th October 1996, the Defendant sought an order that the Plaintiff's application to tax should be struck out unless within 7 days the Plaintiff provided the Defendant with the relevant files. On 28th February 1997, Master Cannon brought some order to the proceedings. She gave directions for the Defendant to obtain the files and then ordered

"that within 21 days of receipt of the said files, the Defendant do file and serve upon the Plaintiff the breakdowns in support of the scheduled bills based on the said files."

5. In April 1997, the Defendant provided the necessary breakdowns. The taxation took place before Master Betts on 19th November 1997. Master Betts gave the costs of the originating summons proceedings to the Defendant and directed that it file a fresh bill of costs for this purpose within 21 days. That bill was taxed by Master Betts on 4th February 1998 when he disallowed the Defendant's costs of preparing the breakdowns in the form of 2-column bills. Upon review on 28th April, Master Betts confirmed his decision. In his written reasons, Master Betts made reference to the order made by Master Cannon on 10th September 1996 and said

"It is important to note this is not an order requiring the Defendant to prepare a fully itemised three column bill as is required for a party and party taxation. Such orders as this are commonly so interpreted as demonstrated here where there was a subsequent application for an Unless Order. But that is not what the order says or means. It remained for the Defendant to decide how much detail to provide. If in the event it gave too little it would run the risk of having it's bill reduced. The practice has emerged for solicitors to prepare fully itemised bills in these circumstances."

6. Master Betts' interpretation of that order is, of course, correct. Further, he appeared to accept the practice to which I referred earlier. Unfortunately, either he was not referred to or he overlooked the later order made by Master Cannon in which she did require the Defendant to serve breakdowns.

7. Having discarded an authority to which he was referred as being unhelpful, Master Betts then went on

"An even older authority, cited on, 52 of Cook on Costs was, however, more helpful as it set out criteria that I hold are still good today and in Hong Kong. What Cook says is:-

"A bill of costs must contain sufficient particulars to enable the client to judge the fairness of the charges. There are a number of decisions relating to this and surprisingly the most succinct warning of the danger of computer printouts was in fact a case heard in 1857, Haigh v Ousey 7E & B578, which held the bill ought to be drawn so as to enable the client to judge it's fairness, a solicitor to advise on it and a taxing officer to judge the propriety of the various items of which it is compared."

I do not entirely share the author's surprise at the lack of a more modern decision as a principle so self evident seldom...

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