LAU YUE KUI (劉汝蘧), THE ADMINISTRATOR OF THE ESTATE OF LAU WAI CHAU (劉維疇), DECEASED AND OTHERS v. PHILIP CHAN & CO (A FIRM)

HCMP 593/2007

[2022] HKCFI 3789

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT MISCELLANEOUS PROCEEDING NO 593 OF 2007

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BETWEEN

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D E C I S I O N

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Background

1.  By way of Inter-Partes Summons dated 25 September 2020 (“the Summons”), the 2^nd to 6^th plaintiffs (“P2-6s”) sought to review my decision on the taxation of Bill No 1 and Bill No 2 dated 11 September 2020 (“the Taxation Decision”) on the grounds stated therein.

2.  The respondent (“R”) also took out a Summons dated 2 November 2020 (R’s Summons”) to seek to vary the Standard Directions pursuant to PD 14.3(2)(j) as ordered in the Taxation Decision.

3.  On 12 October 2020, I ordered that both the Summons and R’s Summons be determined on paper disposal.

4.  Thereafter, the parties issued various summonses in relation to the review application which required my determination before I can deal with the Summons.

5.  On 30 December 2021, I gave my decision on these various summonses. In particular, I allowed P2-6s to amend the Summons as per their amended summons (“the Amended Summons”). In the Amended Summons, P2-6s completely revamped the grounds for the review application and introduced some grounds not raised at the taxation hearings.

6.  As a result, R also needed to amend their Answers in response to P2-6s’ amended grounds of review on 10 May 2022.

7.  P2-6s and R submitted various rounds of written submissions and the last one was submitted by P2-6s on 7 September 2022.

8.  Various issues are now raised by the parties on top of the amounts that I should have allowed on taxation, including jurisdiction for and on review, burden of proof and natural justice. I shall deal with these issues one by one as mentioned below.

Jurisdiction for review

9.  R submits that the court has no jurisdiction to entertain P2-6s’ review application under Order 62, rules 33-35 of the Rules of the High Court, nor is there any exceptional circumstance for the court to reconsider its own decision.

10.  In this connection, R relies on Order 62, rule 2(1), as well as China Creator Estate Ltd v K C Ho & Fung (unreported, HCMP 2689/1997, 3 January 2000), to say that Order 62 does not apply to non-contentious matters, and Rule 59(1) of the Non-Contentious Probate Rules (‘the NCPR”) should apply, which provides that “Every bill of costs (other than a bill delivered by a solicitor to his client which falls to be taxed under the Legal Practitioners Ordinance (Cap. 159)) shall be referred to the Registrar for taxation and shall be taxed in accordance with the provisions contained in Order 62 of the Rules of the High Court.”

11.  R also relies on the authorities in In re Marco (Ipswich) Ltd [1996] 1 WLR 145, CFK v LLL [2003] 3 HKC 190 and Tse Ming Fan v Au Chau Kuk [2005] 4 HKLRD 154 to say that Order 62 is a “self-contained” (or “exclusive”) code which governs taxation proceedings.

12.  Based on the foregoing, R contends that Order 62 does not apply to the present taxation proceedings because Bill No 1 and Bill No 2 are concerned with: (1) non-contentious matters; and (2) taxation of bills delivered by a solicitor to his own client which falls to be taxed under the Legal Practitioners Ordinance (“the LPO”).

13.  R submits that the 1^st and 2^nd Fee Agreements were contracts entered into between R as solicitors and the 1^st plaintiff (“P1”) as client under section 56 of the LPO, and the proceedings herein were commenced on the premises of section 56(4) of the LPO.

14.  Thus, R concludes that when Rule 59(1) of the NCPR and Order 62, rule 2(1) are read together, and in the absence of any express jurisdiction provided for by the LPO for a taxing master to review his own decision, this court has no jurisdiction to entertain P2-6s’ review application.

15.  R further submits that this conclusion is reinforced by Chung J’s observation in his judgment in HCAP 10/2001 dated 10 March 2006, where he affirmed that: (1) the 1^st and 2^nd Fee Agreements were fee agreements under section 56 of the LPO and were subject to taxation thereunder; and (2) there would be no unfairness to P2-6s to have the 1^st and 2^nd Fee Agreements taxed under section 56 because the taxing master’s substantive taxation powers under section 56 and considerations are similar to Order 62 of the Rules of the High Court.

16.  R also seeks to rely on the judgment of A Chan J in these proceedings dated 15 February 2013 to say that P2-6s themselves have confirmed that these proceedings are not Order 62 taxation but proceeded on the basis of section 68(2) of the LPO.

17.  As far as jurisdiction is concerned, I agree with P2-6s that I do have jurisdiction to deal with their review application.

18.  First of all, Order 62, rule 2(1) stipulates that “This Order shall apply to all proceedings in the Court, except non-contentious or common form probate proceedings and proceedings in matters of prize.” The word “non-contentious” is used in conjunction with “probate proceedings”, ie, it should be interpreted as “non-contentious probate proceedings” rather than any “non-contentious matters” as submitted by R.

19.  As the present proceedings do not fall within the exceptions mentioned in Order 62, rule 2(1), Order 62 does apply to the present proceedings, including the mechanism for review under Order 62, rules 33 and 34.

20.  Rule 59(1) of the NCPR does not help R either. It merely provides for automatic taxation of bills which do not fall to be taxed under the LPO. However, it does not say that Order 62 does not apply to bills which do fall to be taxed under the LPO.

21.  In fact, sections 56 and 67 of the LPO sets out the circumstances in which the relevant parties may apply for taxation, while Order 62 prescribes the procedures for the taxation proceedings. They are not mutually exclusive.

22.  On this point of whether they are mutually exclusive, R found an English authority, Harrison v Tew, [1989] 1 QB 307 and [1990] Costs LR (Core) 124, and submits that this authority contradicts P2-6s’ submission. According to R’s analysis of this authority, R contends that the procedure and entitlement for taxation of a solicitors’ bill of costs pursuant to a non-contentious fee agreement under section 56 of the LPO are provided for by section 67 of the LPO, which is to be construed as a self-contained provision. The powers to tax (and also review) are therefore restricted by: (1) the express statutory procedure; (2) recognised powers under the inherent jurisdiction; and (3) the court’s supervisory powers over its own officers.

23.  R submits that since Order 62, rule 2(1), read together with Rule 59(1) of the NCPR, specifically excludes Order 62 procedures from the taxation in the present case, the court can only entertain this review if it is provided for under section 67 of the LPO or its inherent jurisdiction, none of which provides for the court to review its own decision at the application of a third party.

24.  However, I agree with P2-6s that Harrison is concerned only with the issue of whether the court has inherent common law jurisdiction to order taxation of solicitors’ bills, which does not arise in the present case. By his Judgment dated 15 February 2013, A Chan J held that the court has jurisdiction to order taxation of Bill No 1 and Bill No 2, and his decision was upheld by the Court of Appeal. Harrison does not address the real question in this case, namely whether the LPO excludes the court’s statutory power to review taxation decisions under Order 62, rules 33 and 34. R’s contention that there is no known inherent jurisdiction for a court on application of a third party to review substantially its own taxation decisions as between a solicitor and own client at common law is not supported by this authority.

25.  If R’s submission were correct, ie, bills to be taxed under the LPO are not subject to Order 62, it would mean that all solicitors’ bills to their own clients including those in respect of contentious business, which also fall to be taxed under the LPO (sections 66 and 67) are not subject to Order 62. This clearly cannot be right, as taxation of such bills are always subject to Order 62 (see paragraphs 62/App/60 and 62/App/67 of Hong Kong Civil Procedure 2022). It would be inconceivable to have no procedural rules governing these proceedings.

26.  China Creator Estate, supra, does not support R’s contention, as Ribeiro J (as he then was) merely held that Order 62, rules 21 and 22 do not apply to non-contentious matters. This is clearly correct as Order 62, rule 21(1) expressly stipulates that “A party entitled to payment of the costs of any action to be taxed may commence proceedings for the taxation of those costs”, and it refers to contentious proceedings. There is nothing in that reasoning suggesting that the review procedure under Order 62, rule 33 does not apply to taxation of bills in respect of non-contentious business such as the present.

27.  Likewise, the other 3 authorities cited by R (In re Marco, CFK and Tse Ming Fan, supra) did not deal with the question of whether the review procedure in Order 62, rule 33 applies to taxation of bills in respect of non-contentious business, and cannot support R’s contention.

28.  Neither A Chan J in these proceedings, nor Chung J in HCAP 10/2001, ever held or suggested that Order 62 (including the review procedure) does not apply to the present proceedings. In fact, in Deacons v Wiseking Investment Co Ltd, HCA 1221/2011, the court did adopt the review procedure in Order 62, rule 33 in respect of bills relating to non-contentious business.

29.  Thus, it is clear to me that R’s challenge on jurisdiction for review is absolutely groundless and must be rejected.

Jurisdiction on review

30.  R submits that if the court finds that the review mechanism in Order 62 applies to the present taxation proceedings, the review pursuant to Order 62, rules 33 and 34 are not to be conducted on a de novo basis, but the court should reconsider the arguments previously made and, where necessary and as a matter of discretion, hear fresh objections and admit new evidence.

31.  R further submits that in the proper exercise of the court’s case management powers, it must consider each objection and whether or not it meets with the requirements in Order 1A, rule 1(a) to (f) of the Rules of the High Court before allowing a fresh objection to be raised at the review stage. In particular, R contends that I should not have allowed P2-6s to amend their list of objections to include various new objections such as Ground 1 (burden of proof), Ground 10 (natural justice) and Ground 11 (duplication).

32.  R also refers to a number of authorities to demonstrate how the powers on review should be exercised, and submits that the court ought to reject the amended grounds which were not raised at the original taxation proceedings.

33.  In my Decision dated 30 December 2021, I have ruled that by virtue of the wordings in Order 62, rule 34(2) (ie a taxing master may receive further evidence and exercise all the powers which he might exercise on an original taxation in respect of the item), I can deal with the items afresh and there is no real difference between a rehearing and a hearing de novo in the present context. No appeal was made in respect of my decision. Thus, I fail to see how R can object to me hearing new grounds of objections. Order 1A provides no legal basis for R to ask this court to ignore the fact that an interlocutory decision has been made and no appeal was made to overturn the decision.

34.  In any event, R’s contention that on review, only the same grounds advanced at the taxation hearing can be raised is plainly wrong. Order 62, rule 33(3) clearly allow the applicant for review to file a new list of objections. The taxing master on review is also allowed to receive new evidence under Order 62, rule 34(2). Moreover, Order 62, rule 35(4) stipulates that unless the judge otherwise directs, no ground of objection shall be raised which was not raised on the review by the taxing master before a judge reviewing the taxing master’s certificate. No such limiting words can be found in Order 62, rule 33.

35.  Thus, I am of the view that a taxing master is allowed to deal with new objections at the review hearing, and the aforesaid provisions support my view. The authorities cited by R were concerned with review by a judge and were not relevant to the issue before me.

36.  Nevertheless, as stated in my Decision dated 30 December 2021, in giving leave to amend, I have not dealt with the merits of the matters raised in the amendments. The amendments are simply to allow the parties to identify the controversy between them.

Burden of proof

37.  In the Amended Ground 1, P2-6s argue that I erred in finding the onus of proof lies on them as complaining parties to show that the items of the fees charged are unreasonable or the fees in the issued bills are grossly and manifestly excessive, and I ought to have held that the test for solicitor and own client taxation in non-contentious business is whether the fees charged are fair and reasonable, as provided for under Rule 5 of the Solicitors (General) Costs Rules (Cap 159G) (“SGCR Rule 5”).

38.  First of all, P2-6s did not raise any objection on the burden of proof at the taxation hearing and in fact at the hearing for preliminary issues, P2-6s seemed to have agreed that the burden lies on them to show that the fees charged were unreasonable. Thus, in the Taxation Decision, I relied on what R submitted and stated that the onus of proof lies on the complaining party, ie P2-6s. In any event, it was the position adopted by both sides throughout the taxation hearing.

39.  Having reviewed the authorities cited by P2-6s, namely Phipson on Evidence (19^th ed) at paragraph 6.06, HKSAR v Lai Chee Ying (2021) 24 HKCFAR 33 at paragraph 68, R(JS) v The Secretary of State for the Home Department [2013] EWCA Civ 1378 at paragraphs 45-46 and First Tower Trustees Ltd v CDS (Superstores International) Ltd [2019] 1 WLR 637 at paragraph 75, I agree with them that: (1) Analysis of the burden of proof is inapt when the court is dealing with issues of law or evaluative judgments; and (2) Questions of reasonableness are the paradigm example of an evaluative judgment in relation to which “the concept of burden of proof is neither apt nor useful”.

40.  It cannot be disputed that SGCR Rule 5 governs the present taxation, ie the court can only allow such costs that are fair and reasonable, and the conclusive presumption under Order 62, rule 29(2) (for contentious business) does not apply. Thus, it is for this court to make an evaluative judgment on what costs are fair and reasonable.

41.  The burden of proof is only relevant in the taxation context where there are disputes as to or gaps in the underlying facts (eg what was actually done by the solicitor), and in such a case, the burden of proof lies on the solicitor, not the client (see Slingsby v Attorney General [1918] P 236 at 243 and Jemma Trust Co Ltd v Liptrott (No 2) [2004] 4 Costs LR 610 at paragraph 43).

42.  In China Creator Estate, supra, Ribeiro J (as he then was) in fact decided that the court may reduce the amount allowable in the absence of information or allow the solicitor an opportunity to provide more information on specific matters, if available. This supports P2-6s’ contention that the burden (if the concept applies at all) of proving the underlying facts relevant to reasonableness (such as time spent) lies on the solicitor, not the client.

43.  This issue on the burden of proof is a question of law. R cannot rely on P2-6s’ position at the taxation hearing to say that there is issue estoppel or abuse of process. In fact, this is a matter subject to review, no final determination has been made, and hence no issue estoppel can arise (see Res Judicata by Spencer Bower and Handley, 5^th ed at paragraph 1.02). I cannot see how P2-6s can be said to have abused the process when they have made a mistake on a question of law and adopted a wrong position based on their wrong understanding of the law. This is a matter ought to be rectified on review.

44.  R argues that in allowing the question of burden of proof to be reopened, the scope of review is unlimited and there will be significant prejudice to R. However, the scope is not unlimited, as it is limited by what P2-6s raised in the list of objections. P2-6s in fact do not ask for reopening of all factual matters. Both sides have already filed affirmations to supplement the factual matters of the case. I cannot see how R can be significantly prejudiced.

Natural justice

45.  In issue (as stated in the Amended Ground 10) is whether the Undisclosed Bundles ought to have been taken into account by the court in circumstances where P2-6s have not had the opportunity to inspect or comment on the same.

46.  P2-6s submit that the principle of natural justice is engaged, and as a matter of fairness, parties have the right to know the evidence against him, and to respond to the same (see AI Rawi v Security Service [2012] 1 AC 531 at paragraphs 12-13 and 89). Even though taxation is not subject to all the incidents of ordinary civil litigation, the principle of natural justice still applies (see Pamplin v Express Newspapers [1985] 1 WLR 689 at 695F, South Coast Shipping v Havant Borough Council [2002] 3 All ER 779 at paragraph 12, and Sean Eric McLean Hotung v Hillhead Ltd, unreported, HCA 1738/2006, 31/12/2009, at paragraph 139).

47.  P2-6s further submits that if there is a conflict between the principle of natural justice and legal professional privilege, the principle of natural justice prevails, and hence there is no justification for R to rely on materials in the Undisclosed Bundles which have not been made available to P2-6s.

48.  P2-6s also contend that no issue of privilege arises. Any legal professional privilege claimed by the 1^st plaintiff (“Pl”) in his capacity as administrator of the Estate is a joint privilege shared with the beneficiaries of the Estate, including P2-6s. Thus, as a matter of law, Pl cannot assert privilege as against P2-6s (see Talbot v Marshfield (1865) 5 Dr and Sm 549 at 550-551, and O'Rourke v Darbishire [1920] AC 581 at 626-627).

49.  Moreover, P2-6s contend that even if the materials in the Undisclosed Bundles were privileged vis-a-vis P2-6s, R cannot rely on such materials without disclosing them to P2-6s, as his non-disclosure has real impact on P2-6s’ conduct of the taxation. On the basis of the limited materials then available to P2-6s, there was significant factual uncertainty as to the scope of the work done by R pursuant to the 1^st to 2^nd Fee Agreements, and P2-6s were unable to challenge whether R actually spent the time he claimed to have spent.

50.  Thus, P2-6s invite this court not to have regard to any materials (particularly the materials in the Undisclosed Bundles) which have not been made available to P2-6s.

51.  In this regard, I agree with R’s submissions that fairness and natural justice is not achieved in taxation proceedings by full disclosure and inspection of all the documents but rather through the court’s evaluative exercise and by the taxing master exercising his discretion properly. The taxing master has a duty to conduct the proceedings as efficiently as possible, whilst consistently doing justice to both sides.

52.  The so called “Undisclosed Bundles” were the usual taxation bundles which contained solicitors’ notes to client as well as legal advice, and they provide the taxing master with some insight into the work done. P2-6s had their own law costs draftsmen handling the taxation. They were also represented by their own family member who is a senior partner in his own law firm. They can hardly say that they were unaware of these bundles. It is also wrong to suggest that I should have disallowed R to rely on these bundles.

53.  In fact, P2-6s had already made specific discovery against R and multiple rounds of inspection had been provided for on all the requested documents before the taxation hearing. It is not right for P2-6s to make a last minute request for further inspection at the taxation hearing, which would just stall the taxation process.

54.  Whether the documents were in fact privileged and could not be disclosed to P2-6s or not were not important at all. P2-6s through their counsel confirmed clearly that they accept the work allegedly done by R were actually done and that R did spend the time they claimed to do the work. What P2-6s at the taxation hearing challenged was that the time spent was unreasonable. Thus, the taxation was proceeded on that basis.

55.  It is trite that fairness and natural justice in taxation are secured by the court through proper exercise of discretion by the taxing master. What the taxing master is required to do is to assess whether the work done as described and the fees incurred were reasonable. The contents of the documents are of little assistance to parties raising objections.

56.  Thus, it cannot be regarded as unfair or a breach of natural justice when the paying party cannot look at all the documents in the taxation bundles. In fact, this happens all the time in party and party taxation, the paying party would not be allowed to look at some documents such as legal opinions obtained by the receiving party, attendance notes or some draft documents, and to say that this is a breach of natural justice is really too far-fetched.

57.  In any event, the delay in applying for discovery of these taxation bundles is also a valid ground to refuse the application. The court has a duty to proceed with the taxation efficiently and economically as is consistent with doing justice to both sides (see Pamplin v Express Newspapers Ltd [1985] 1 WLR 689 at 696).

58.  Thus, I am of the view that P2-6s’ claim of unfairness or breach of natural justice is unfounded. In fact, P2-6s simply cannot say how the inspection of these documents could help their case. The inspection application was just a “fishing expedition” and no actual injustice was caused to P2-6s.

Bill No 1

59.  In the Amended Grounds 2 to 9, P2-6s submit that I made a number of errors in the Taxation Decision and the remuneration of $20 million for the work done under the 1^st Fee Agreement was not fair and reasonable.

60.  P2-6s rely heavily on the actual hours spent by R in doing the work, ie 485 hours, and use R’s hourly rate of $5,500 to calculate the fees R should charge. This gives a figure roughly around $2.5 million. As this sum is just about 1/8 of the total fees of $20 million, P2-6s contend that the fees were not fair or reasonable, and the court should have used this figure to cross-check the sum claimed.

61.  In the 1^st Fee Agreement, there was no hourly rate agreed. The fees were just based on 2% of the gross value of the Estate. The question I should address is whether it was fair and reasonable to have the fees charged in this manner, not the actual time spent or what the hourly rate should be. As acknowledged by P2-6s, time spent is just one of the factors that I should consider under SGCR Rule 5, but it is not determinative.

62.  In fact, when the 1^st Fee Agreement was agreed by R and P1, it could not be foreseen by R as to how many hours he would need to spend on the work. It is not right to use the actual number of hours spent by R, which was known only subsequently, to say that the 2% charged was unfair or unreasonable. There was a possibility that R could have spent much more hours in doing the work and the fees calculated by hourly rate could have been much more than the 2% charged, but R was bound by this agreement to charge only 2%.

63.  P2-6s submit that the hourly rate of $5,500 was already “very high” compared to the normal rate of $3,200 in party-and-party taxation, and it should have already taken into account of R’s skill and expertise. This is clearly wrong. This is not a party-and-party taxation and it is not right to make such a comparison. If R’s usual hourly rate is $5,500, he should be able to claim a higher rate than this in view of the complexity of the work required.

64.  In any event, as aforesaid, it is not right to look at the hourly rate or the actual hours spent. The issue is whether the 2% is fair and reasonable. In this regard, I have to consider the 7 factors under SGCR Rule 5 (which I did in the Taxation Decision) to see if this arrangement is fair and reasonable.

65.  P2-6s contend that I have taken into account a number of irrelevant matters in assessing the complexity of the work, such as the intention of the Ancestor and his successors and beneficiaries, the claims by tenant and trespassers and the 6^th Fong’s attempt to revoke the letters of administration. I do not think that I need to go into details of these matters to see if they are indeed relevant or not. I think R as a prudent solicitor ought to have investigated into all these matters at the time of the work to find out more of backgrounds facts so as to assist him to do the work. It is too easy to say now with hindsight as to what are relevant or not, but at the time of the work, it was proper for R to make thorough investigation, which may or may not turn out to be useful. Thus, I do not agree that I have considered irrelevant matters.

66.  P2-6s also contend that I have failed to take into account a number of relevant distinctions in considering the place where and circumstances in which the business is transacted, as well as wrongly considered the fees charged by trust companies and the evidence of Anson Kam. Again, I do not think that it is necessary for me to go into detailed analysis of these evidence. They are just for reference only. Ultimately, the question is just whether the 2% fee is fair and reasonable.

67.  There are 7 factors under SGCR Rule 5 that I need to consider and it is an evaluation exercise that this court has to do. These factors cannot give a definite figure on how much the fees should be in terms of figures. They just give an overall picture as to whether these circumstances can justify the fees charged. I have considered all these factors as well as all the circumstances of the case and they gave me a clear picture that the work required to be done is very complicated. It is not a run-of-the-mill job as P2-6s were trying to advocate. Charging at 2% of the gross value of the Estate is plainly not unfair or unreasonable.

68.  P2-6s also contend that there was a misunderstanding of the relevance of the regressive approach, and suggest that it is a highly relevant consideration and should at least be used as a cross-check. I have dealt with this regressive approach in details in the Taxation Decision. I do not think that I need to repeat my decision here. Suffice to say is that the approach of regressive scale is just one of the factors that I need to consider and it is by no means the only decisive factor. If one just applies the regressive scale approach without considering all the other factors, there is simply no uplift in respect of the value factor. Thus, having considered the regressive approach, I am not persuaded that the 2% fee is unfair or unreasonable.

69.  In any event, in P2-6s’ own submissions, they also suggest that there should be a 150% uplift (or some other figure as this court would adopt) to account for factors such as the complexity and importance of the work done. This is an exercise that this court should do in making the evaluative judgment.

70.  I have indeed made such an evaluation and it is my judgment that the 2% fee is fair and reasonable. I find no ground to say that this evaluation is wrong and hence the review of Bill No 1 must be refused.

Bill No 2

71.  In the Amended Grounds 11 to 15, P2-6s submit that there are errors in the Taxation Decision in allowing Bill No 2 in full. First of all, P2-6s contend that Bill No 2 is an ex post facto creation which does not reflect the time actually spent by R and lack reliability.

72.  This contention is contrary to the position adopted by P2-6s at the taxation hearing. P2-6s were not challenging that R did actually spend the time he claimed, and had confirmed with the court that the issue was just whether it is reasonable to spend so much time for the work under the 2^nd Fee Agreement.

73.  Although I can deal with the items of claim afresh in a review hearing, it does not mean that P2-6s can just ignore the position they took at the taxation hearing. Unlike a point of law such as onus of proof as aforementioned, I do not think that it is right for P2-6s to reopen this factual issue. It may well be that Bill No 2 is an ex post facto creation, but it does not mean that the contents are false. In fact, P2-6s also confirmed at the taxation hearing that there was no objection based on the footing that the work as described was outside the scope of work R was asked to perform under the 2^nd Fee Agreement.

74.  R’s allocation of 0.1 hour to each item (which is the smallest time unit allowed in usual practice) cannot be regarded as making false claim. I do not agree that it is unfair or unreasonable to charge the minimum time allowed in usual practice. In the real world, no one can actually clock the time every single minute to record the time spent in each item of work, especially when they are small items of work which would not take much time. There is always some kind of estimation in the time spent. In practice, the law costs draftsman in preparing the bill would look at the documents for the work done and fix a time spent, such as the smallest unit of 0.1 hour, even when there were no contemporaneous records of the time spent. I do not find such a practice being unfair and unreasonable. It is just a practical and reasonable way to assess the time spent for the work done, especially for those small items of work.

75.  On the question of repetition, I have already dealt with that in the Taxation Decision. I do not think that I need to repeat myself here. Suffice to say is that when the work is repeated, R is still entitled to charge the smallest unit of time spent. There is nothing unfair or unreasonable about it.

76.  P2-6s submits that the starting point is that all of the fees under Bill No 2 should be disallowed unless the court is satisfied by reference to evidence or surrounding circumstances other than Bill No 2 that the fee charged is a reasonable one, with any doubts being resolved against R. I disagree with this submission. The Bill was prepared by the law costs draftsman who had looked at the documents in relation to each item of the work. The bill itself is a record on its own for the work done (although not contemporaneous to the time when the work was being done). There is no reason to disregard it and just rely on other evidence or surrounding circumstances. In any event, there are also the taxation bundles, which I had gone through, to support the work done as stipulated in the bill. Thus, I find no reason to ignore the bill as suggested by P2-6s.

77.  P2-6s submit that R can at most establish by reference to the surrounding circumstances that the reasonable fee would be around $6.25 million. This is a very arbitrary suggestion. I fail to see how this can be a fair and reasonable sum for the costs under the 2^nd Fee Agreement.

78.  On the other hand, there is a clear record of the time spent by R (although most are based on the smallest unit of time allowed), which amounted to 3,579.2 hours. It is absurd for P2-6s to suggest using some figures out of the air and not using this actual amount.

79.  The hourly rate of $5,500 is not disputed under Bill No 2. Hence, the fees can be computed easily. As stated in the Taxation Decision, the total costs (including the clerk’s remuneration conceded by P2-6s) amounts to $20,685,600 which exceeds the capped amount of $20 million.

80.  Thus, I cannot see how the fees charged at the capped amount of $20 million can be regarded as unfair or unreasonable. P2-6s’ contention in this regard must also fail.

Interest

81.  In the Amended Grounds 16 to 21, P2-6s seek to vary the interest that I ordered in the Taxation Decision. P2-6s’ primary position is that interest should run from the date of the certification of taxation. They submit that as a matter of law, in the absence of any agreement between the parties as to interest, interest in a solicitor-and-own-client taxation runs from the certification of taxation determining the amount to pay and not delivery of the bill (see Lam and Lai Solicitors v Ho Chun Yan Albert (No 2) [2018] 5 HKLRD 323 at paragraphs 23-25).

82.  Alternatively, P2-6s submit that interest should run from September 2013 because the court has jurisdiction under Order 62, rule 22(5) to disallow interest or reduce the period for which interest is payable on the ground that there has been undue delay in proceedings with the taxation, and there were 2 long periods in which the taxation did not progress as a result of R’s conduct.

83.  Having read the case of Lam and Lai Solicitors, supra, it is clear to me that interest should run from the date of certification of taxation. R, on the other hand, submits that this case is inapplicable to the present case because a judgment debt had arisen before taxation, as P2-6s could have made interim payment to stop interest from accruing, and in any event, interest is a matter for the court’s discretion. In light of P2-6s’ conduct in the history of this litigation, including the range of issues they have taken in this review hearing, the court should uphold its decision on interest in full.

84.  When I made the Taxation Decision, I did not have the benefit of reading the case of Lam and Lai Solicitors, supra. Thus, I accept that in law I should have held that interest should run from the date of certification of taxation.

85.  Although the court still has discretion to order interest differently, I do not think that it is appropriate to do so in this case. As submitted by P2-6s, the power to order interim payment under section 67 of the LPO is not contingent upon the existence of a judgment debt. Thus, whether P2-6s made interim payment or not, the fact remains that in law there is no judgment debt and hence no interest is payable.

86.  The fact that R was not at fault in raising the legal issue about the locus of P2-6s is not a matter that I should consider in asking P2-6s to pay more interest than they would need to pay under the law.

87.  Thus, I allow the review in respect of interest, and it shall run from the date of certification of taxation.

R’s Summons

88.  R’s Summons is an application for variation of the standard direction under PD 14.3 in two aspects, namely: (1) R seeks an order that the whole of the 1^st Fee Agreement and the whole of the 2^nd Fee Agreement be certified as fair and reasonable; and (2) P2-6s do pay R all the costs of and incidental to the Originating Summons dated 27 March 2007.

89.  In R’s written submissions dated 10 May 2022, R also seeks additional directions not referred to in R’s Summons, namely an order to approve and seal the draft allocaturs as filed on 5 February 2021, or alternatively an order that R do file draft allocaturs in accordance with the amounts as reviewed by this court.

90.  First of all, as P2-6s object to R’s application for additional directions not mentioned in R’s Summons, I cannot deal with R’s requests until there is a formal application. Thus, I will not grant the additional directions at this stage.

91.  As to the certification of the 1^st and 2^nd Fee Agreements, I agree with P2-6s that there is no legal basis to make such an application here. The case of In re Frape (No 1) [1893] 2 Ch 284 is not an authority suggesting that this court has jurisdiction to grant the certificate R is seeking. In any event, the present proceedings are concerned with taxation of Bill No1 and Bill No 2, not the 1^st and 2^nd Fee Agreements as such. It is not appropriate for this court to grant the certificate sought, and hence such an application must be refused.

92.  As to the costs of the Originating Summons dated 27 March 2007, since both sides may want to address me further, I would not make an order nisi, but to reserve my decision pending further submissions from the parties.

Costs of the Amended Summons

93.  Since I refuse to review the amounts of costs under Bill No 1 and Bill No 2, but allow review on interest, the parties may have further arguments on costs of the Amended Summons. Like the costs of the Origination Summons dated 27 March 2007, I shall reserve my decision pending further submissions.

Costs of R’s Summons

94.  I have refused to grant the certification as requested under paragraph 1(a) of R’s Summons, but I have not yet dealt with paragraph 1(b) therein. Thus, I will also reserve my decision pending further submissions from the parties.

Conclusion

95.  By reasons aforesaid, I order as follows:-

(1) Paragraphs 1 and 3 of the Amended Summons be dismissed;

(2) Paragraph 2 of the Amended Summons be allowed in that the interest on costs shall run from the date of certification of taxation;

(3) Decision on paragraph 4 of the Amended Summons be reserved pending further submissions of the parties as directed below;

(4) Paragraph 1(a) of R’s Summons be dismissed;

(5) Decision on paragraphs 1(b) and 4 of R’s Summons be reserved pending further submissions of the parties as directed below;

(6) P2-6s do submit and serve further written submissions in respect of the aforesaid reserved decisions on or before 20 January 2023;

(7) R do submit and serve further written submissions in opposition in respect of the aforesaid reserved decisions on or before 20 February 2023; and

(8) P2-6s do submit and serve further written submissions in reply in respect of the aforesaid reserved decisions on or before 20 March 2023.