AU KWOK CHUEN VINCENT v. MESSRS ONC LAWYERS (A FIRM)

HCMP 1152/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1152 OF 2013

_________________________

_________________________

_________________________

_____________

D E C I S I O N

_____________

1.  This case concerns a dispute of legal fees between a client, the plaintiff, and his solicitors, the defendant.

2.  By way of his Re-amended Originating Summons (which has not been properly filed and served but which the defendant has raised no object to), the plaintiff is seeking, amongst others, the court to dismiss three of defendant’s bills of costs, and alternatively, for these bills to be sent for taxation.

I.  Background

3.  On 28 May 2012, the plaintiff met the then partner of the defendant, a Mr John Yiu, over dinner. There was apparently a discussion on a civil claim (HCA771/2009) of which the plaintiff was one of the defendants.

4.  Around 7 to 13 July 2012, Mr Yiu and the plaintiff communicated by a series of mobile phone text messages. By this means, Mr Yiu and the plaintiff had discussed the choice of counsel, identified one and agreed on that counsel’s fees at HK$120,000. The plaintiff also agreed to pay costs on account at HK$80,000.

5.  It was not in dispute that the plaintiff then paid HK$80,000 as requested, although the plaintiff was somehow under the impression that this was for part payment of the counsel’s fee.

6.  The trial went on for about 20 days which involved 3 days of evidence from the plaintiff.  The plaintiff settled out of court at a late stage of the trial.

7.  Subsequently, the defendant issued 3 bills for professional charges:

a) B121041183 for HK$439,038.50 on 6 September 2012,

b) B121041634 for HK$129,347 on 1 November 2012, and

c) B121042005 for HK$6,975 on 30 November 2012

8.  On 4 December 2012, the plaintiff sent a cheque for HK$150,000 to the defendant with a handwritten cover letter which stated: -

“Dear John:

Please see this cheque for HK$150,000, being partial payment for Bill No. B121041183. I will settle the rest of this bill and further minor ones accordingly. Thanks.

Vincent (signature) 2012.12.4”

9.  Mr Yiu left the defendant’s firm in December 2012.

10.  The plaintiff did not make any further payment despite further chasers so a demand letter was issued by the defendant on 3 May 2013.

11.  The plaintiff raised disputes on the bills on 9 May 2013 and commenced the current proceedings on 22 May 2013.

II.  The issues in dispute

12.  The crux of the dispute is simple: the plaintiff alleged that, during that dinner on 28 May 2012, there was an oral agreement, a sort of gentleman’s agreement, between him and Mr Yiu, that the legal fees for the expected 20-odd day trial inclusive of counsel’s fees should be capped at “200-odd thousand dollars”.

13.  The defendant disputed this.

14.  Mr Yiu has already left the defendant firm and no evidence from him was put before this court.

15.  However, the defendant rightly pointed out that the plaintiff’s handwritten cover letter made no mention of this “oral agreement”.

16.  Indeed, if, as the plaintiff alleged, there was an oral agreement for an “agreed capped fee” of “200-odd thousand dollars” and that the plaintiff was paying HK$150,000 as the final balance of the “agreed capped fee” (having paid HK$80,000 as costs on accounts previously), it would be inconceivable that he would not have pointed this out in explicit terms in the handwritten cover letter for the cheque.

17.  The plaintiff sought to explain that this handwritten cover letter was a “casual” note. He said that this was written on an old headed note from “Cathay Pacific” where he worked some 30 or 40 years ago, and that he had kept these headed notes as “scarp paper”, so this showed that he just “casually” wrote this note.

18.  The handwritten cover letter in fact contained the exact bill reference number consisted of one alphabet followed by 9 digits: B121041183.  I am of the view that this is not something that one can “casually” write down without making careful reference and cross-checking.  The note also contained relevant names (“John” and “Vincent”), the plaintiff’s signature and date.  It was therefore not in any way “casually” written.

19.  Further, if what the plaintiff now claimed was true, then his handwritten cover letter, however “casually” written, had somehow managed to convey the exact opposite of the message he intended at the time: instead of stating: “this is the final balance of the agreed capped fee, I am not paying any more”, the plaintiff stated, in effect: “this is only a partial payment, I will pay the rest”.

20.  The plaintiff attempted to explain this by claiming that Mr Yiu had told him: “Since the trial went on for 20-odd days, it is reasonable to pay more than the agreed capped fee.  It will be OK with the firm as long as you keep paying some money in.” As such, the plaintiff agreed with Mr Yiu to keep paying some further money.

21.  Of course, this alleged “new agreement” was not really consistent with the message the Plaintiff conveyed in the handwritten cover letter.

22.  Further, the plaintiff never mentioned this “new agreement” in any of his Affidavits.  Also, this would not explain why he failed to “keep paying some money” to the defendant in accordance with this “new agreement”.

23.  The plaintiff attempted to explain this by stating that, by then, Mr Yiu had left the defendant and he was the only one he trusted.

24.  However, the plaintiff also stated that he had disputed the bill with Mr Yiu because of various “over-charging” etc.  According to paragraph 21 of his 7^th affidavit dated 13 August 2013, the plaintiff had called Mr Yiu to complain immediately after receipt of the bills in September 2012.

25.  As an example of his complaints, the plaintiff claimed that he was aware that on at least one day when he was giving evidence at the trial, Mr Yiu was not present (allegedly because his mother was ill), and yet he was billed for Mr Yiu’s attendance.  The plaintiff in fact first mentioned this allegation, amongst others, in his 4^th affidavit dated 29 July 2013 and the same allegation was repeated in his 7^th affidavit.

26.  When asked why he would still trust Mr Yiu under such circumstances, the plaintiff first claimed that although he distrusted Mr Yiu, he was the only one he knew in the defendant’s firm.  So he agreed with Mr Yiu to “keep paying some money in”.

27.  I find this totally unbelievable. In such circumstances, I expect that a reasonable client would not pay the bill (partially or otherwise) and would take the complaint to someone higher up in the firm, perhaps even to the senior partner, instead of making a “new agreement” with someone who was clearly not trustworthy if not outright fraudulent.

28.  The plaintiff then claimed that Mr Yiu had confessed to him that the defendant firm needed money so it was charging for Mr Yiu’s attendance despite knowing that he was not present. In effect, this would have amounted to an admission by Mr Yiu that the defendant was defrauding the plaintiff.

29.  I pointed out that this would have been a criminal case and asked why the plaintiff did not report to the police. The plaintiff said that he had considered that.

30.  I then asked the plaintiff why he never stated such “new” evidence (ie the “new agreement” and the “admission to the defendant’s fraudulent billing” by Mr Yiu) in the handwritten cover letter or in any of his affidavits. The plaintiff apologised and explained that he did not understand the law and was not very good with English (despite the fact that 2 of his affidavits were written in Chinese), and asked the court for leave to file and serve a further (9^th) affidavit to state these “new” evidence.

31.  I would think that obtaining an admission from a lawyer that his firm’s bill was fraudulent would have offered the strongest possible evidence to dispute the bill.  I could not see how “not knowing the law” or “not understanding English well” would cause the plaintiff to omit to state his strongest case in a letter (however “casually” written) or any of his affidavits if such an admission was actually made.

32.  There is no doubt in my mind that none of such “new” evidence is true.  The plaintiff was committing the common fallacy of attempting to use one lie to cover another.  He was lying “at will” whenever it suited his (constantly shifting) claim.  His version of events (when it eventually emerged) simply defied any logic or reason.  All this was nothing but a dishonest attempt to reverse what he had stated in his handwritten cover letter.

33.  Of course, what the plaintiff had actually stated in the handwritten cover letter, and thus his intention at the time, was crystal clear: he had received Bill No B121041183 and other “minor” bills from the defendant, he was sending in a cheque for HK$150,000 as partial payment for B121041183, and he would settle the balance of Bill No B121041183 as well as the other “minor” bills.

34.  The plaintiff did not raise any objection to the bills (at the time) and one can reasonably deduce from that there was no “agreed capped fees”, no “new agreement” with Mr Yiu, and certainly no “admission of fraudulent billing” by Mr Yiu.

35.  In accordance with section 62 of the Legal Practitioners Ordinance, Cap 159, the plaintiff, by way of his handwritten (signed and dated) cover letter, had clearly made an agreement with the defendant regarding its costs in pursuant of the provisions of section 58 of the same ordinance.  The bills are therefore not subject to taxation.

36.  Accordingly, the amount owing would be: -

HK$(439,038.50 + 129,347 + 6,975) – HK$80,000 (costs on account) – HK$150,000 (partial payment) = HK$345,360.50

III.  Conclusion

37.  I would make the following orders: -

a) The Originating Summons be dismissed;

b) Judgment be entered for the defendant that the plaintiff do pay the defendant the sum of HK$345,360.50 together with interest at judgment rate from the date hereof until full payment; and

c) Costs of this action be paid by the plaintiff to the defendant to be taxed if not agreed.