KENCY BROTHERS LTD v. LAU MAN SANG JAMES

CACV 116/2021, 117/2021, 118/2021

[2023] HKCA 281

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 116 of 2021, 117 of 2021, 118 of 2021

(ON APPEAL FROM HCA 1567 of 2012, HCA 1462 of 2012, HCA 1228 of 2013)

____________

CACV 116/2021

____________

CACV 117/2021

____________

CACV 118/2021

____________

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

REASONS FOR DECISION
TAXATION OF COUNSEL’S FEES

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

1.  This is the taxation hearing of the respective Respondents’ Bill of Costs pursuant to three Costs Orders all dated 14 January 2022 (“the 3 Bills”). Costs was awarded in favor of the respective Respondents upon the Appellant abandoning his three appeals.

The 3 Bills

2.  There is nothing unusual of the respective Section A of the 3 Bills which covers solicitors’ costs, hence they are taxed as usual. What vigorously opposed by the Appellant (Paying Party) is the respective Section B1 of the 3 Bills concerning Counsel’s fees.

3.  Indeed, Counsel’s various fee notes are staggering at first sight. Further considered the amount charged and the items of work claimed to have been done, they startled and worried me.

4.  As stated in paragraphs 16 and 17 below, I made enquiry of relevant details and asked for relevant documents in support of the fees charged. I also gave Counsel and the Respondents’ solicitors the opportunity to attend this hearing to explain and address the concern of the Court. Matter stood down for the Respondents’ law costs draftsman to take instructions.

5.  Hearing resumed, the Respondents’ law costs draftsman confirmed there was no information or documents to provide or produce, nor anything to explain or address the Court. The Court is asked to simply tax Counsel’s fees as it deems just and reasonable.

6.  Things appear so unusual and discomforting that it is beyond taxing down or off excessive or unreasonable fees. It gives rise to the Court’s grave and genuine concern on (1) whether there was improper charging of Counsel’s fees that may involve conduct not in accordance with the standard of conduct applicable to members of the Bar; (2) whether justice is undermined; and (3) whether lay clients are prejudiced thereby.

7.  While the Court takes the matter seriously, I must approach it with caution. It must be stressed that nothing adverse be held or inferred against Counsel without first giving him the full opportunity to exercise his right over the matter and/or to address the said concern of the Court. However, as stated in paragraphs 4, 5 and 9 - 11 herein, Counsel waived his right over the matter.

Taxation of Counsel’s fees and Consequential Order

8.  As explained in paragraphs 12 - 21 below, based on the available materials, I taxed down and off Counsel’s fees substantially and extensively by 85%.

9.  I also made an Order nisi that Mr James Tze of Counsel shall not charge lay clients any sum exceeding the amount taxed and allowed. If Counsel’s fee notes or any part thereof were already settled or paid, all surplus received should be paid back by Counsel to lay clients through the Respondents’ solicitors.

10.  I directed that should Counsel and/or the Respondents’ solicitors wish to be heard to show cause why the Order nisi should not be made, a 1-hour hearing be fixed within 14 days, failing which the Order nisi shall become absolute upon expiration of 14 days.

11.  Time lapsed and no hearing to show cause is fixed, the Order nisi has become absolute. Further, there is no application for review of taxation within the prescribed time limit.

Counsel’s Fee Notes

12.  Counsel represented the respective Respondents ie the respective plaintiffs in the three high court actions tried together. The respective claim of the same defendant is dismissed after trial, then he lodged respectively three appeals.

13.  The three Notices of Appeal are filed on 22 March 2021. Pursuant to the directions of the Registrar of Civil Appeal, parties have to lodge draft agreed composite appeal bundles. Well before the Application to fix a date for the appeal was filed, the three appeals were abandoned by way of the Appellant’s Request for Dismissal of Appeal dated 12 January 2022. Respondent’s Notice was never filed.

14.  In the circumstances, the scope of work which reasonably involves Counsel should at most covers (1) perusal of Notices of Appeal; (2) advising on preparation of composite appeal bundles which requires perusal of transcript of trial to ascertain which part of the testimonies of witnesses is relevant to the appeal and should be included in the bundles; and (3) reasonable and necessary miscellaneous work incidental to the above.

15.  There being one composite set of work for the three appeals, Counsel’s charge under various fee notes for a total sum of HK$870,000 (87 hours on hourly rate of HK$10,000) is apportioned among the 3 Bills as follows.

	116/2021	117/2021	118/2021
1st set of fee note(s) perusal of Notice of Appeal, review of trial bundles, research (56 hours in total, HK$560,000)	20 hours	18 hour	18 hours 20 hours
	($200,000)	($180,000)	($180,000)
2nd set of fee note(s) perusal of transcript of trial (24 hours in total, HK$240,000)	6 hours	9 hours	9 hours
	($60,000)	($90,000)	($90,000)
miscellaneous : perusal of Appellant’s letters, settling reply letters, index of bundles, checklist application (7 hours in total, $70,000)		7 hours
		($70,000)
Total : $870,000	($260,000)	($340,000)	($270,000)

16.  The fees charged are largely unsupported and unexplained. I asked for a copy of Written Instructions to Counsel in order to ascertain the scope of work Counsel instructed to undertake, none is provided. I enquired about the breakdown of the 56 hours on perusal of Notice of Appeal, review of trial bundles and research, none is provided. I asked why perusal of trial bundle is necessary, no explanation is given. I questioned what research is done since the appeal is purely against finding of facts, this is not answered.

17.  Worse still, there is no explanation why Counsel’s record of work or research notes cannot be produced to support the fees charged notwithstanding the Code of Conduct of the Hong Kong Bar Association (“the Code of Conduct”) consists of the following :

9.13  A practising barrister must:-

(a)  ensure that adequate records supporting the fees charged or claimed in a case are kept at least until the last of the following: payment of his fees, completion of any taxation or determination or assessment of costs in the case or expiry of the time for lodging an appeal against such assessment or determination of that appeal; and

(b)  provide the instructing person with such records or details of the work done as may reasonably be required.

Counsel’s Fees taxed down and off by 85%

18.  Out of the 56 hours charged under the 1^st set of fee notes, I only allowed 2 hours on an hourly rate of $6,500 ($13,000) for perusal of the three Notices of Appeal which are identical and not complicated at all. The sum of $13,000 represents only about 2.32% of the charge of $560,000. In terms of time, the 2 hours represents only about 3.57% of the 56 hours charged.

19.  Under the 2^nd set of fee notes charging a total sum of $310,000 ($240,000 + $70,000) for perusal of transcript of trial and miscellaneous work, I allowed $117,000 altogether which represents only about 37.7% of the fees charged.

20.  Therefore, a total sum of $130,000 ($13,000 + $117,000) was allowed for the 3 Bills to be apportioned, representing only 15% of the total fees charged.

21.  It is evident that in all the circumstances the fees charged is unjustifiable, disproportionate, unreliable, improper and unreasonable. Not only that there is inflation and overcharging of fees, in the absence of research notes or record of work in support, there is reasonable ground to doubt whether work was in fact done as alleged, in particular research work.

22.  Reference is also made to the Code of Conduct which provides as follows:

9.1  A practising barrister may charge for any work undertaken by him:-

(a)  the fee that has been agreed between him and the instructing person before he commences work. In this regard, subject to paragraphs 9.6 and 9.9, it is permissible for a practising barrister to agree with the instructing person to charge a separate fee for each item of work which he is instructed to undertake in the particular case or matter or a lump sum fee for all the work to be undertaken by the barrister in the entire case or matter or on any other basis or by any other method they think fit; or

(b)  in default of such agreement between the barrister and the instructing person, a proper and reasonable sum in all the circumstances.

23.  In light of the taxation outcome and under the concern that lay clients may be prejudiced, the said Order nisi as stated in paragraph 9 above was made. In waiving his right to show cause, Counsel has accepted not to be paid a considerable sum of HK$740,000 which represents 85% of the fees for professional work he claimed to have done. This is something inordinate, awkward and remarkable as to call the matter into serious doubt and/or adverse inference.

Concluding Remark

24.  The Court is not assuming any role of the professional body in preserving or furthering professional ethics and discipline. However, in the overall interests and administration of justice and in order that the honour and prestige of the Bar of Hong Kong be protected and maintained, its members ought to be reminded to observe the high standard of conduct concerning fees, to correct mistakes for those who have made any and to guard against them for those who have not.

25.  A copy of this Decision be provided to the Bar Council for reference.