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Mong Man Wai v H H Lau & Co (A Firm

Judgment Cited authorities 16 Cited in 1 Precedent Map Related
Vincent
Judgment Date30 May 2003
Subject MatterMiscellaneous Proceedings
Judgement NumberHCMP3009/2002
CourtHigh Court (Hong Kong)
HCMP003009/2002 MONG MAN WAI v. H H LAU & CO (a firm)

HCMP003009/2002

HCMP 3009/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 3009 OF 2002

____________

IN THE MATTER of Legal Practitioners Ordinance, Cap. 159

AND
IN THE MATTER of Order 106 of the Rules of High Court, Cap. 4

AND
IN THE MATTER of Messrs H. H. Lau & Co., Solicitors

____________

BETWEEN
MONG MAN WAI Plaintiff
AND
H. H. LAU & CO. (a firm) Defendant

____________

Coram: Deputy High Court Judge A Cheung in Chambers

Dates of Hearing: 13 February & 7 May 2003

Date of Judgment: 30 May 2003

_______________

J U D G M E N T

_______________

Facts

1. The Plaintiff is extremely successful with his business. But the same cannot be said in relation to his marriage. The scene was thus set for a very expensive divorce. Divorce proceedings were commenced in February 2001. The Defendant, a sole proprietorship of Mr H H Lau, solicitor, acted for the Plaintiff in the proceedings. In mid 2001, the Plaintiff's wife successfully obtained an injunction restraining the Plaintiff from disposing of any asset with a value in excess of HK$50,000.00 unless he had given his wife 7 days' prior notice of his intention to do so. An appeal was lodged to the Court of Appeal against the grant of the injunction. In August 2002, the District Court ordered that the divorce proceedings be transferred to the Court of First Instance. Between May 2001 and April 2002, the Defendant delivered to the Plaintiff altogether 9 "Interim Bills". On 7 May 2002, the Plaintiff changed solicitors and terminated the Defendant's retainer, and eventually his divorce proceedings were settled.

2. Under the 9 Interim Bills, a total sum of HK$3,377,600.00 was charged as the Defendant's profit costs. According to Mr H H Lau, on 21 June 2002, he orally agreed with the Plaintiff at a meeting to reduce the fees by HK$469,874.40. The profit costs (as reduced) became HK$2,807,725.60 in total. Eventually that amount, less a sum of HK$100,000.00, was fully paid to the Defendant by the Plaintiff through his new solicitors under protest.

3. Apart from the profit costs (and other miscellaneous disbursement items) paid by the Plaintiff to the Defendant, according to the Plaintiff, he has also paid a total sum of HK$4,962,500.00 to leading counsel engaged by the Defendant whilst it was acting as the Plaintiff's solicitors in the proceedings, as well as HK$3,181,000.00 to his junior (apart from an earlier junior who was retained at the initial stage of the proceedings) during the same period of time. Apart from the relatively minor exception in respect of the counsel's fees disbursed in the first 3 Interim Bills, all counsel's fees were paid directly by cheques issued by the Plaintiff in favour of counsel (or counsel's nominee). They were physically given to counsel through the Defendant, or sent to counsel directly by the Plaintiff; no money in respect of counsel's fees was ever paid by the Plaintiff to the Defendant, and the Defendant never drew any cheques of its own in favour of counsel for their fees. The Defendant only acted as a conduit pipe for those cheques that were given to it by the Plaintiff but were made payable to counsel, in forwarding the cheques to counsel. Some of the fees were in fact paid by the Plaintiff's new solicitors after the termination of the Defendant's retainer.

4. By these proceedings, the Plaintiff seeks an order for taxation of the 9 Interim Bills and consequential relief. By an amendment to the Originating Summons, the Plaintiff also seeks an order that the Defendant do deliver bills of costs in respect of all the fees of both leading and junior counsel and that there be a taxation of such bills once delivered. The significance of this subsequent amendment will be apparent in due course.

Legal Practitioners Ordinance

5. It is convenient to summarise the relevant provisions in the Legal Practitioners Ordinance (Cap. 159) here. The Ordinance deals with "Remuneration of solicitors" in Part VI. A distinction is drawn between "non-contentious business" and "contentious business". There is no dispute that the work done by the Defendant in the proceedings was contentious business. Nonetheless, it is useful to set out a section governing non-contentious business in Part VI before dealing with those provisions governing contentious business. Section 56 deals with an agreement for remuneration for non-contentious business. It reads as follows:

"(1) Whether or not any rules made under section 74 are in force, a solicitor and his client may, either before or after or in the course of the transaction of any non-contentious business by the solicitor, make an agreement as to the remuneration of the solicitor in respect thereof.

(2) The agreement may provide for the remuneration of the solicitor by a gross sum, or by commission or percentage or by salary, or otherwise, and it may be made on the terms that the amount of the remuneration therein stipulated for either shall or shall not include all or any disbursements made by the solicitor in respect of searches, plans, travelling, stamps, fees or other matters.

(3) The agreement shall be in writing and signed by the person to be bound thereby or his agent in that behalf.

..."

6. On the other hand, in relation to contentious business, the power to make agreements with clients is governed by section 58 of the Ordinance which reads:

"A solicitor may make with his client an agreement in writing as to his remuneration, in respect of any contentious business done or to be done by the solicitor for the client, which provides that the solicitor shall be remunerated either by a gross sum or by salary, or otherwise, and at either a greater or a less rate than that at which he would otherwise have been entitled to be remunerated."

7. Section 60 deals with the enforcement of such agreements in respect of contentious business. The leave of the court has to be sought, and the court has the power to declare the agreement void if it is of the opinion that it is in any respect unfair or unreasonable. But the Plaintiff has not relied on section 60 in these proceedings, and has only indicated its reservation of right in respect of it. I therefore need not dwell on section 60 of the Ordinance.

8. The effect of an agreement in respect of contentious business, subject to section 60 and other provisions, is set out in section 62 of the Ordinance as follows:

"Subject to the provisions of sections 59, 60 and 61, the costs of a solicitor in any case where any agreement has been made in pursuance of the provisions of section 58 shall not be subject to taxation, nor to the provisions of section 66 with respect to the signing and delivery of a solicitor's bill."

9. Section 63 of the Ordinance deals with the form of bills of costs for contentious business, whereas section 64 contains general provisions as to remuneration of a solicitor.

10. Section 65 of the Ordinance extends the jurisdiction of the court to make orders for the delivery by a solicitor of a bill of costs (and other matters) to cases in which no business has been done by him in the court. It should be noted that the jurisdiction of the court to order a solicitor to deliver a bill of costs is assumed under the section. Section 66 of the Ordinance deals with an action by a solicitor to recover any costs due under a bill after one month from the delivery of the bill, and the requirements for the recovery action.

11. Section 67 of the Ordinance is the all-important section for the purpose of the present proceedings. It reads as follows:

"(1) On the application, made within 1 month of the delivery of a solicitor's bill or a foreign lawyer'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 the foreign lawyer, 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, or if a verdict has been obtained or a writ of inquiry executed in an action for the recovery of the costs covered thereby, 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.

(3) Every order for the taxation of a bill shall require the taxing officer to tax not only the bill but also the costs of taxation and to certify what is due to or by the solicitor in respect of the bill and in respect of the costs of the taxation.

(4) If after due notice of any taxation either party thereto fails to attend, the taxing officer may proceed with the taxation ex parte.

(5) Unless

(a) the order for taxation was made on the application of the solicitor or the foreign lawyer, and the party chargeable does not attend the taxation; or

(b) the order for...

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