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Kwok Hong Yee Jesse T/a Jesse H.y. Kwok & Co. v Tso Hon Leung And Another

Judgment Cited authorities 11 Cited in Precedent Map Related
Vincent
Judgment Date17 September 2021
Neutral Citation[2021] HKCA 1391
Year2021
Judgement NumberCAMP154/2020
Subject MatterMiscellaneous Proceedings
CourtCourt of Appeal (Hong Kong)
CAMP154/2020 KWOK HONG YEE JESSE t/a JESSE H.Y. KWOK & CO. v. TSO HON LEUNG AND ANOTHER

CAMP 154/2020

[2021] HKCA 1391

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 154 OF 2020

(ON AN INTENDED APPEAL FROM DCCJ NO. 5354 OF 2018)

________________________

BETWEEN

KWOK HONG YEE JESSE trading as
JESSE H.Y. KWOK & CO.		 Plaintiff
and
TSO HON LEUNG 1st Defendant
NG LAI OI 2nd Defendant

________________________

Before: Hon Cheung and Chu JJA in Court

Date of Judgment: 17 September 2021

________________________

J U D G M E N T

________________________


Hon Chu JA (giving the judgment of the Court):

A. Introduction

1. This is the 1st and 2nd defendants’ renewed application for leave to appeal against the decision of Her Honour Judge Tsui (“the Judge”) given on 3 April 2020[1]. By her decision, the Judge dismissed the defendants’ appeal against the decision of Master B Mak given on 19 August 2019 refusing their application to set aside a default judgment and a charging order nisi, and to strike out the plaintiff’s claim against them. The defendants’ previous application for leave to appeal was refused by the Judge on 25 August 2020[2].

2. Having considered the documents filed and lodged by the parties, we are of the view that it is appropriate to determine the present application on the papers without an oral hearing pursuant to Order 59, rule 2A(5) of the Rules of the High Court, Cap. 4A. We now give our judgment on the application.

B. The facts

3. The relevant facts of the case are not controversial and can be briefly stated.

B1. HCA 180 of 2011 (HCA 180)

4. The plaintiff is a solicitor practising as the sole proprietor of a law firm.

5. Between February 2011 and May 2015, pursuant to a letter of engagement dated 18 February 2011, the plaintiff represented, and rendered legal services to, the 1st and 2nd defendants in High Court Action no. 180 of 2011 (“HCA 180”). Two counsel were engaged to act for the defendants.

6. The action was settled between the parties on 25 February 2014, which was the first day of the trial.

7. In July 2015, The plaintiff delivered to the defendants a bill of costs no. 32604 dated 26 June 2015 (“the 1st Bill”) for his fees and disbursements in HCA 180 in the total sum of HK$1,008,691. Among the items of disbursement included in the bill were the fees of the two counsel in the respective sums of HK$175,000 and HK$414,000.

B2. HCA 2702 of 2015 (HCA 2702)

8. As the defendants did not settle the 1st Bill, the plaintiff commenced HCA 2702 of 2015 (“HCA 2702”) on 19 November 2015 to recover the amount claimed in the bill.

9. On 2 February 2016, upon the defendants’ application, Master K Lo granted leave to the defendants to tax the 1st Bill and directed the plaintiff to file a revised bill for taxation in accordance with Practice Direction 14.2 and the defendants to file a list of objections.

10. The plaintiff filed a revised bill for taxation dated 1 March 2016. The fees of the two counsel were listed respectively as items 117 and 120 (“the 2 Items”) in the revised bill. The defendants’ list of objections raised a number of preliminary arguments, of which arguments no. 4, 6 and 7 related to the 2 Items.

11. On 19 December 2016, Master Chow heard the preliminary arguments. By her oral decision given on 22 December 2016, Master Chow followed the decision in Mong Man Wai v H H Lau & Co (a firm)[3] and ruled that, since the plaintiff had not yet paid the fees to counsel, the 2 Items were not disbursements and could not be claimed under the bill.

12. On 5 January 2018, the plaintiff paid to the two counsel their fees under the 2 Items.

13. At the substantive taxation hearing on 8 January 2018 before Master KW Wong, the plaintiff applied to reinstate the 2 items. It was opposed by the defendants who were represented by counsel. Master Wong refused the application, holding that the 2 Items had already been disposed of on the previous occasion and could not be “resurrected”. At the same time, he expressed reservation about the defendants’ argument based on res judicata, and indicated that the plaintiff was not barred from issuing another bill of costs to seek payment of the 2 Items.

14. The taxation proceeded and the amount taxed had since been paid by the defendants. After the taxation hearing, the plaintiff delivered to the defendants another bill of costs no. 34918 dated 8 January 2018 (“the 2nd Bill”) to seek payment of the counsel fees that had been paid.

15. On 21 February 2018, the plaintiff issued a summons to apply for leave to tax the 2nd Bill. Master KW Wong heard the application on 23 May 2018. He refused the application on the ground that when HCA 2702 was commenced, the plaintiff had not yet paid the counsel fees; accordingly, the defendants’ liability to reimburse the plaintiff for the disbursement had not yet arisen. He pointed out that the plaintiff would have to bring a fresh action to seek payment of the 2nd Bill.

B3. DCCJ 5354 of 2018 (DCCJ 5354)

16. In November 2018, the plaintiff commenced the action below (DCCJ 5354 of 2018, “DCCJ 5354”) against the defendants to recover the amount of counsel fees covered by the 2 Items.

17. Although the defendants had given notice of intention to defend the action, they did not serve any defence. On 19 March 2019, the plaintiff entered default judgment against the defendants. On 22 March 2019 the plaintiff obtained, by way of execution, a charging order nisi against the defendants.

B4. The defendant’s application

18. By summons filed on 25 April 2019, the defendants applied to set aside the default judgment and the charging order nisi, and also to strike out the plaintiff’s writ and statement of claim.

19. On 18 August 2019, Master B Mak refused the applications and dismissed the defendants’ summons.

C. The Judge’s decision

20. The defendants appealed the Master’s decision to a judge in the District Court. They relied on three grounds, namely, (1) the plaintiff was not entitled to deliver the 2nd Bill (“one bill only argument”); (2) even if the plaintiff was so entitled, he was estopped from suing on the 2nd Bill (“estoppel argument”); and (3) alternatively, the claim based on the 2nd Bill was an abuse of the court process (“abuse of process argument”).

21. By her decision handed down on 3 April 2020, the Judge dismissed the appeal and ordered costs the defendants to pay the plaintiff’s costs summarily assessed at HK$155,000. The Judge’s principal reasons are as follows.

22. On the one bill only argument, the Judge held that:

(1) The solicitor’s bill contemplated by section 67 of the Legal Practitioners Ordinance, Cap. 159 is a final bill, to be contrasted with a statement of account or intermediate bill: Chin Yuk Lun Francis v Messrs Lo & Lo (a firm)[4]; and Re Romer & Haslam[5]. The final bill should set out the solicitors’ complete account for the work rendered for the relevant period; once delivered, it is not expected to change and no further bill is anticipated which would change the amount charged (“One Bill principle”): Mong Man Wai v H H Lau & Co (a firm)[6]; Sadd v Griffin[7]; De Cotiis v Owen Bird[8].

(2) A final bill, however, is not necessarily the last bill: Chin Yuk Lun Francis v Messrs Lo & Lo (a firm)[9]. The One Bill principle is not an absolute rule, and does not create an absolute bar against any alteration of a final bill even after taxation proceedings had commenced. The court has power to allow alteration to a final bill: In re taxation of Costs, Re a Solicitor[10]; and Polak v Marchioness of Winchester[11].

(3) The 1st Bill is a final bill in respect of all the plaintiff’s work done in HCA 180. Prima facie, the plaintiff is not entitled to alter it. The 2nd Bill, in seeking to add back the 2 Items, amounts, in substance, to an alteration of the 1st Bill.

(4) There are sufficient grounds to allow the alteration of the 1st Bill by way of allowing the 2nd Bill in that:

(a) the defendants knew right from the delivery of the 1st Bill that the plaintiff was seeking the payment of the 2 Items;

(b) the defendants did have the benefit of counsel’s services in HCA 180;

(c) the plaintiff has paid the counsel fees, which is a sizeable amount;

(d) there is no suggestion of the plaintiff engaging in improper, dishonest or questionable conduct; and

(e) disallowing the 2nd Bill will create undue hardship to the plaintiff and unjustified windfall to the defendants. This is uncalled for and does not accord with the rationale of the statutory scheme, which is to protect client against improper conduct of his solicitors, and not to enable the client to gain a pecuniary advantage at his solicitors’ expense due to the latter’s mistake that does not involve improper conduct.

(5) For the above reasons, the plaintiff’s claim is viable and is not liable to be struck out. Further, the defendants failed to show that their intended defence (i.e. the 2nd Bill should be disallowed) enjoyed a real prospect of success such that the default judgment should be set aside.

(6) With regard to the defendants’ arguments that the plaintiff ought not be allowed to submit the 2nd Bill for taxation, it is accepted that, as a general proposition, a receiving party ought to include in his bill of costs all the items he intended to claim, and ought not to be allowed to submit further items after his bill is taxed and paid.

(7) However, there is no absolute bar to the issuance of a further bill after completion of taxation. Whether to allow a further taxation must depend on the facts and circumstances of the case, and there is a distinction between a deliberate decision to omit the items and an accidental omission or slip: In the Estate of Segalov, Deceased[12] and Moat Housing Group-South Ltd v Harris & Anor (No 2)[13]...

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