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Lee Chi Enterprises Co Ltd v Kc Ho & Fong (A Firm)

Judgment Cited authorities 5 Cited in Precedent Map Related
Vincent
Judgment Date13 September 2007
Year2007
Judgement NumberHCMP61/2007
Subject MatterMiscellaneous Proceedings
CourtHigh Court (Hong Kong)
HCMP000061/2007 LEE CHI ENTERPRISES CO LTD v. KC HO & FONG (a firm)

HCMP61/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO.61 OF 2007

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IN THE MATTER of Messrs K.C. Ho & Fong (a firm), Solicitors of the High Court of the Hong Kong Special Administrative Region
and
IN THE MATTER of the taxation of costs under Section 67 of the Legal Practitioners’ Ordinance, Cap.159

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BETWEEN

LEE CHI ENTERPRISES COMPANY LIMITED Plaintiff
and
K.C. HO & FONG (a firm) Defendant

------------------------------

Before : Mr Recorder A. Ho, SC in Chambers

Date of Hearing : 11 July 2007

Date of Judgment : 13 September 2007

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J U D G M E N T

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1. By an Originating Summons dated 9 January 2007, the plaintiff sought taxation of five bills of costs rendered by the defendant, who were formerly the plaintiff’s solicitors in HCA2759/2004. Details of the five bills are as follows :

(i) 1st Interim Bill No.C3513 dated 20 December 2004 for $160,345.00;
(ii) 2nd Interim Bill No.C3530 dated 23 February 2005 for $101,000.00;
(iii) 3rd Interim Bill No.C3539 dated 10 May 2005 for $266,594.72;
(iv) 4th Interim Bill No.C3572 dated 7 September 2005 for $27,922.00; and
(v) Final Bill No.C3613 dated 9 January 2006 for $27,100.00.

2. On 3 May 2007, Master A. Ho ordered that the 1st, 2nd and 3rd Interim Bills and the Final Bill (but not the 4th Interim Bill) be referred to taxation. The defendant now appeals the Master’s order.

Arguments on appeal

3. Section 67(1) and (2) of the Legal Practitioners Ordinance provides :

“ (1) On the application, made within 1 month of the delivery of a solicitor’s bill ..., of the party chargeable therewith the Court shall, without requiring any sum to be paid into court, order that the bill shall be taxed and that no action shall be commenced thereon until the taxation is completed.
(2) If no such application is made within the period mentioned in subsection (1), then, on the application of the solicitor ….., or of the party chargeable with the bill, the Court may, upon such terms, if any, as it thinks fit (not being terms as to the costs of the taxation), order –
(a) that the bill shall be taxed;
(b) that, until the taxation is completed, no action shall be commenced on the bill, and any action already commenced be stayed:
Provided that –
(i) if 12 months have expired from the delivery of the bill, or if the bill has been paid, ….. no order shall be made on the application of the party chargeable with the bill except in special circumstances and, if an order is made, it may contain such terms as regards the costs of the taxation as the Court may think fit;
(ii) if the bill has been paid, no order under this subsection shall be made where the application for the order is made after the expiration of 12 months from the date of payment of the bill.”

4. The effect of the above provision was explained by Mr Recorder Jat SC in Re Miller Peart [2007] 3 HKLRD 125 at 139, which I quote as follows :

“ 64. It is clear that the statutory scheme under s.67 is that:
64.1 within one month of the delivery of the solicitor’s bill, the client may apply to have the bill taxed as of right, and no term or condition will be imposed: s.67(1);
64.2 if the client does not apply for taxation within one month since the delivery of the bill, either the solicitor or the client may apply for taxation and the court may so order and impose any terms as it may think fit except terms as to the costs of the taxation: s.67(2);
64.3 if 12 months or more have elapsed since the delivery of the bill or if the bill has been paid, the client must show special circumstances to justify his application for taxation and the court may impose any terms including terms as regards the costs of the taxation: s.67(2)(i).”

For convenience, I will refer to them as the first, second and third regime.

5. The Final Bill was apparently delivered to the plaintiff on or about 10 January 2006. Mr Chong, appearing for the defendant, accepted that the Final Bill was delivered within 12 months before the commencement of these proceedings, and hence within the second regime.

6. The 1st, 2nd and 3rd Interim Bills, on the other hand, were delivered more than 12 months prior to these proceedings. Mr Chong argued that the plaintiff had failed to demonstrate any special circumstances to justify their reference to the Taxing Master for taxation.

7. I should mention that Mr Chong had informed the Court that no reliance would be placed on proviso (ii) of section 67(2) in the present case.

8. Ms Lok, appearing for the plaintiff, contended first, that all the bills in fact constituted a series of bills. The time under section 67, therefore, did not begin to run until the presentation of the Final Bill. As all the bills fell within the second regime, no special circumstances needed be shown before the plaintiff could apply for their taxation. Secondly, Ms Lok argued that there were special circumstances which justified taxation in any event.

Series of Bills

9. The plaintiff is a company listed in Taiwan. The proceedings HCA2759/2004 was a claim by the plaintiff to recover certain assets from a Madam Hsiung and others. Mr Lin was the Chairman of the plaintiff.

10. On the advice of the defendant, on 2 December 2004, the plaintiff obtained an ex parte Mareva injunction against Madam Hsiung and other defendants in the Action. Since the making of the ex parte order, there were two other occasions when the court had ordered the injunction to be continued with variation to its terms.

11. The substantive hearing of the injunction was scheduled for April 2005. However, sometime before early March, a question arose as to whether the proceedings had been properly commenced in the name of the plaintiff or whether the cause of action should in fact belong to Mr Lin personally. Advice was given by the defendant as to the possibility of abandoning the existing proceedings and commencing a fresh action in the name of Mr Lin on the one hand, and substituting Mr Lin as the claimant in the existing action on the other.

12. At the hearing on 22 April 2005, the injunction was discharged. The application of substituting Mr Lin as claimant was adjourned sine die. The Judge expressed the view that it might well be inappropriate to pursue the substitution application because similar proceedings were already afoot in Taiwan and the protagonists in the Action were Taiwanese: see defendant’s letter to the plaintiff dated 22 April 2005.

13. HCA2759/2004 was eventually discontinued on 29 April 2005.

14. As already noted, the defendant issued five bills of costs to the plaintiff. Mr Chong argued that they were five separate bills representing distinct parts of the proceedings. He contended that the 1st Interim Bill issued after the ex parte injunction marked the first break in the litigation. The 2nd Interim Bill related to the inter partes stage including the...

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