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Withers (A Firm) v Antonia Basile Also Known As Antonia Basile Wilson

Judgment Cited authorities 5 Cited in 1 Precedent Map Related
Vincent
Judgment Date04 February 2019
Neutral Citation[2019] HKCFI 325
Year2019
Judgement NumberHCMP1162/2016
Subject MatterMiscellaneous Proceedings
CourtCourt of First Instance (Hong Kong)
HCMP1162A/2016 WITHERS (a firm) v. ANTONIA BASILE also known as ANTONIA BASILE WILSON

HCMP 1162/2016

[2019]HKCFI 325

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1162 OF 2016

____________________

BETWEEN
WITHERS (a firm) Plaintiff

and
ANTONIA BASILE Defendant
also known as ANTONIA BASILE WILSON

____________________

Before: Hon G Lam J in Chambers
Date of Hearing: 15-16 January 2019
Date of Judgment: 4 February 2019

_________________

J U D G M E N T

_________________

Introduction

1. This is an appeal from a Master’s decision.[1] The dispute lies between the plaintiff, a firm of solicitors (“the Firm”), and the defendant, who is the Firm’s former client in relation to the matrimonial litigation she was engaged in against her former husband. For convenience I shall refer to the defendant as the “Wife” and to her husband as the “Husband”. The issue is whether special circumstances exist so that 6 bills of costs issued by the Firm to the Wife should be referred to taxation.

Background

2. The Wife first engaged the Firm on 26 June 2012. Initially she sought advice in relation to her matrimonial matters and certain family trusts. In 2014, she decided to file a petition for judicial separation, and lodged an application for maintenance pending suit (“MPS”) in August 2014 in which she claimed against her Husband, inter alia, funds to cover her legal expenses. This first application for MPS was resolved by an agreement reached in September 2014 after mediation, pursuant to which the Husband provided a total of $1.25 million for the Wife’s legal expenses. A second application for MPS was heard on 10 February 2015 which led to an order for the Husband to provide $2 million for the Wife’s legal expenses with the condition that it was to be offset against the ancillary relief award in her favour at the end. A consent order was further made in June 2015 for a sum of $3 million for the Wife’s legal expenses, subject to the same condition. Another MPS application was heard on 27 October 2015 and decided in December 2015, resulting in an award of $3 million as legal funding for the Wife up to the financial dispute resolution (“FDR”) scheduled for February 2016.

3. The matrimonial proceedings were highly acrimonious and contentious. From September 2014 to October 2015, there were 8 court hearings, in all of which the parties were represented by senior counsel on both sides. By then, the Husband had incurred legal costs of about $14 million and the Wife $8 million.

4. It appears from the documents that the Wife had written to the Firm about her concerns over costs management since August 2015. The retainer was eventually terminated on 22 January 2016, about a month before the FDR.

5. A total of 24 bills were issued to the Wife during the course of the Firm’s retainer, from 26 June 2012 to 22 January 2016. The first 9 bills were not the subject of any legal dispute. 5 of the last bills issued by the Firm, delivered between November 2015 and January 2016, were either not paid or only partially paid. On 9 May 2016, the Firm issued an originating summons for these 5 bills to be referred to taxation. This was not opposed by the Wife, and an order was made in July 2016 for these 5 bills to be taxed. I shall refer to them as “the 5 OS Bills” to signify they are the subject matter of the originating summons itself.

6. Meanwhile, on 30 June 2016, the Wife cross‑applied by summons in the originating summons proceedings for a further 10 bills, delivered between 16 February 2015 and 18 December 2015, to be taxed. These bills had been paid. I shall refer to them as “the 10 Paid Bills”.

7. The particulars of the 10 Paid Bills and the 5 OS Bills have been helpfully summarised by Mr Lui, counsel for the Firm, in a table which (subject to modifications) is appended at the end of this decision.

8. It is not in dispute that, of the 10 Paid Bills, 4 (ie Bills 1 to 4) had been paid more than 12 months before the Wife’s application, and that consequently no order could be made for their taxation having regard to proviso (ii) to s 67(2) of the Legal Practitioners Ordinance (Cap 159). Master J Wong refused to refer these 4 bills for taxation. There is no appeal by the Wife from this decision.

9. The other 6 bills (ie Bills 5 to 10) had been delivered more than 1 month but less than 12 months before the Wife’s application, but had also been “paid”. By virtue of proviso (i) to s 67(2), which I shall refer to simply as s 67(2)(i), no order for taxation may be made in such a case “except in special circumstances”. The Master held that there were special circumstances and referred those 6 bills for taxation. He also refused leave for both parties to adduce certain late affidavit evidence. The Firm now appeals against both decisions.

Legal principles on s 67(2)(i)

10. There is no dispute between the parties on the relevant legal principles. The authorities have established that “special circumstances” in s 67(2)(i) is a very flexible concept that depends on the court’s assessment of the facts and circumstances of the particular case. The discretion is a wide one. Special circumstances “are those which appear to the judge so special and exceptional as to justify taxation”: In re Boycott (1885) 29 Ch D 571, 576, per Bowen LJ. They are not capable of precise definition or exhaustive enumeration.

11. Relevant guidance from the authorities has been summarised by Deputy Judge Lok (as he then was) in Ding Xiaohong & Others v King & Wood (a firm) [2013] 2 HKC 245, at §32, as follows:

“ As regards what constitute special circumstances, the following legal principles are relevant:

(i) they are something out of the ordinary, something serious to justify not only an ordinary taxation but a special one (see: Re Miller Peart [2007] 3 HKLRD 125 at §65, per Recorder Jat SC);[2]

(ii) the discretion to extend the limitation is a wide one and a liberal interpretation should be given to the words “special circumstances” (see: Re Solicitors [1984] HKC 346 at 349I, per Mayo J);

(iii) each case will depend on its own facts (see: Re Miller Peart, supra, at §85);

(iv) overcharging and false charging are well‑established special circumstances (see: Re Miller Peart, supra, at §86, Re Solicitors, supra, at 349D‑I, Wang Yeoh Yu Ruth v Chan Victoria [1988] 1 HKC 687 at 690I‑691E, In Re Norman (1886) QBD 673 at 676 and Re A Solicitor [1961] 1 Ch 491); and

(v) lack of particularity in the bill also constitutes a special circumstance (see: Springbok Shipping (HK) Ltd v Clayton Wong & Co [1998] 1 HKLRD 225 at 227E‑F).”

Special circumstances

12. I turn to the matters alleged and relied on by the Wife as giving rise to special circumstances in the present case. They are summarised in the skeleton argument of Mr Hughes who appeared for her, as follows:

(1) duplicated and excessive charging;

(2) pressure being brought to bear on the Wife to provide costs on account, and mismanagement of her legal funding;

(3) on two separate occasions, the Firm on behalf of the Wife agreed to receive litigation funding from the Husband with the condition that the amount provided would be set off from the matrimonial assets pool; this was contrary to counsel’s advice and client’s instructions;

(4) most of the Firm’s fees were not “paid” by the Wife from her own pocket; instead they were paid from litigation funding sourced from the Husband and were deducted from time to time as bills were presented;

(5) the Wife complained repeatedly to the Firm about its billing practices;

(6) the bills related to a highly contentious matrimonial dispute involving substantial amount of assets, and both parties engaged city firms with senior counsel; and

(7) there will be a taxation of the 5 OS Bills in any event.

Duplicated and excessive charging

13. Whether the fees are excessive has to be assessed on a solicitor and own client basis, which is governed by Order 62 rule 29 of the Rules of the High Court (Cap 4A). The approach is conveniently summarised in the following passage in Hong Kong Civil Procedure 2019 at volume 1 p 1319 (which is the same as that in the 2018 edition quoted by the Master):

“ Solicitor and own client basis (O.62 r.29) — On the taxation of solicitor’s bill to his own client (except a bill to be paid out of funds provided pursuant to section 27 of the Legal Aid Ordinance, or a bill with respect to non‑contentious business) all costs shall be allowed except insofar as they are of an unreasonable amount or have been unreasonably incurred. For the purposes of r.29(1), all costs incurred with the express or implied approval of the client shall, subject to r.29(3), be conclusively presumed to have been reasonably incurred and, where the amount thereof has been expressly or impliedly approved by the client, to have reasonable in amount (r.29(2)). For the purposes of r.29(1), any cost which in the circumstances of the case are of an unusual nature and such that they would not be allowed on a taxation of costs in a case to which r.28(2) applies, shall, unless the solicitor expressly informed his client before they were incurred that they might not be so allowed, be presumed, until the contrary is shown, to have been unreasonably incurred (r.29(3)).”

14. Various examples of alleged overcharging were mentioned in the materials. Mr Lui said even if some criticism could be levelled at specific entries, there was no “gross overcharging”. I am not sure such epithets are useful here. Granted that the court will not act on slight grounds and needs to find something special, it would not be surprising if a court refused to order taxation on the mere basis of a few isolated small items. I do not think...

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1 cases
  • Withers (A Firm) v Antonia Basile Also Known As Antonia Basile Wilson
    • Hong Kong
    • Court of First Instance (Hong Kong)
    • 9 May 2019
    ...DECISION ON COSTS _______________________________ 1. In my judgment handed down on 4 February 2019 in these proceedings: [2019] HKCFI 325, I dismissed the Firm’s appeal (subject to a minor exception) and made an order nisi that the Firm was to pay the Wife the costs of the appeal. At the he......

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