ELIJAH SAATORI v. MICHAEL LINTERN SMITH AND OTHERS

CACV 13/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 13 OF 2010

(ON APPEAL FROM HCA NO. 1626 OF 2009)

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BETWEEN

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J U D G M E N T

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Hon Rogers VP:

1.  This was an appeal from a judgment of Deputy High Court Judge L. Chan (as he then was) given on 4 January 2010. The matter before the judge was an application to strike out the writ and statement of claim in this action and also an application to join Dr Buddy Wong as the fifth defendant. The judge came to the conclusion that there was no reasonable cause of action and, therefore, struck out the statement of claim and the writ of summons. Likewise, he refused the application to join Dr Wong as the fifth defendant. At the conclusion of the hearing of this appeal, judgment was reserved.

Background

2.  This action was brought against the solicitors’ firm and two partners and a solicitor of that firm that acted on behalf of the defendant in a claim for medical negligence that had been brought by the plaintiff.  In the course of those proceedings an application was made which resulted in an appeal to the Court of Appeal.  The court gave its decision on 14 October 2008 and the order of costs was that the plaintiff should pay the costs of the defendant in any event.  On 5 March 2009 the plaintiff sought leave to appeal to the Court of Final Appeal.  That application was refused.  Following the refusal the defendant sought an order for costs to be fixed by way of a gross sum order under Order 62 Rule 9(4)(b) of the Rules of the High Court.  The statement of costs that was put before the court came to a total of $115,550.  The court was highly critical of the way in which the skeleton bill of costs was prepared.  This court has been shown a copy of the transcript of the argument as to costs.  It suffices to say that the court came to the conclusion that the statements of costs was grossly inflated and included costs which were, at best, unnecessary and duplicative.  It is perhaps not inappropriate to quote extensively from the judgment handed down 11 March 2009 in relation to costs as it gives cause for real concern at the way the draft bill was prepared:

“9. The following breakdown is given regarding the charges of the solicitor: a partner (admitted in 1998) allegedly spent 10 hours on communications including conferences, telephone calls and letters with client, the other side, counsel and court. In addition, a trainee solicitor allegedly spent 3 hours on the same head. In total, the charge under this head added up to $43,900.

10. Whilst the Plaintiff may have corresponded with the solicitor firm in a manner that could have contributed to the escalation of costs, we fail to see how such a figure can be justified in the context of a simple application for leave to appeal to the Court of Final Appeal.

11. Then another $15,900 was said to be incurred on perusal of documents. The documents identified are the order of 14 October 2008, the Notice of Motion issued by the Plaintiff on 6 February 2009 and his affirmation of 16 February 2009, a further document called “the Plaintiff’s application for leave to appeal to the Court of Final Appeal” of 20 February 2009. The partner and the trainee solicitor each claimed 3 hours for perusal.

12. The affirmation of 16 February 2009 was not filed for the purpose of this application and had not been relied upon by the Plaintiff in this application. It was clearly stated to be an affirmation for checklist review request. The perusal of that affirmation cannot be regarded as part of the work related to this application. To include that in the statement of costs is misleading and improper.

13. In our view, bearing in mind that the solicitors involved were engaged in these proceedings all along, the perusal of the documents relevant to this application should not take more than 30 minutes. There should not be any duplication in charging perusal both by the partners and the trainee.

14. Then, another $12,600 was charged for “brief to counsel, review file, Defendant’s skeleton argument and Defendant’s statement of costs”. The partner allegedly spent 2.5 hours and the trainee solicitor allegedly spent 2 hours for these matters. We do not know how much of the time were spent on the preparation of this statement of costs. In our view, the statement of costs is so grossly inflated and as such singularly unhelpful to this court that no costs should be allowed for its preparation. As regards the other items, given the simple nature of the application, only half an hour of a partner’s time can be allowed. That should build into it the costs of the trainee solicitor insofar as it is necessary for the partner to be assisted by a trainee in the performance of such tasks.”

3.  The judgment concluded in paragraph 17:

“In view of the inherent unreliability of the proposed statement of costs, we are not minded to make a gross some assessment. We would simply order the Plaintiff to pay costs of the application to the Defendant, such costs to be taxed if not agreed. We further direct the taxing Master to have regard to our observations above in such taxation. The costs in relation to the letter of 5 March 2009 should also be disallowed.”

4.  In the course of the proceedings for medical negligence the first defendant has sworn an affidavit which the plaintiff avers contains deliberate untruths in respect of the plaintiff’s conduct of and in relation to those proceedings.  The second and third defendants also made affidavits confirming the veracity of what the first defendant had said.

5.  Dr Wong provided a medical report which, in part, dealt with the probable causes of the plaintiff’s medical condition.  The plaintiff avers that that report is inaccurate to such an extent that it must be considered that that the inaccuracies were deliberate.

This action

6.  In this action the plaintiff has raised claims which he has categorised as attempted fraud, defamation by the solicitors and perjury.  He also argues that the court should grant a declaration that had contingency fees been allowed he would have been able to engage a lawyer and these proceedings themselves would not have been necessary.

7.  The defendants sought to strike out the proceedings on the basis that there was no cause of action.  The judge below acceded to that application and dismissed the plaintiff’s claim on the basis that no reasonable cause of action could be shown.

8.  Before dealing with the viability of the plaintiff’s claims in law, it has to be said that his first grievance, namely that an inflated bill of costs had been put before the court of appeal is a matter which is rightly a cause for concern.  There are, not infrequently, applications for security for costs which involve imaginative or creative accounting.  In so far as the court is able to identify that, the matter is rectified.  When it comes to a statement of work which has been done on the basis of which it is sought to justify an order for costs, the court and the other parties are entitled to expect a scrupulous preparation of the account.  If a claim for work is inflated to the extent that no reasonable solicitor could justify having spent the time claimed then clearly no such costs could be allowed.  But the matter goes further, a false claim to having spent time which was not spent is a matter, at the very least, of professional misconduct.  Nevertheless, as far as these proceedings are concerned, professional misconduct does not give rise to a cause of action.

9.  The plaintiff opened his case in this court on the basis that he was not pursuing the claim in respect of defamation.  He has put his case on the basis that there was an attempted fraud.  The judge dismissed the claim on the basis that no damage had been occasioned.  It is clear that there is no such tort as attempted fraud.  In essence fraud is constituted by a deliberate or reckless misstatement which is intended to be relied upon and has been relied upon to the detriment of the party to whom the statement was addressed and as a result the party to whom it was addressed has suffered loss.  These are the necessary elements of the tort of fraud or deceit.  In this case the statement was neither relied upon by the plaintiff or by the court, nor, as the judge said, did it cause damage.  There is no tort of attempting to commit a tort.

10.  Likewise perjury is not a tort.  It is a criminal offence.  Complaint can be made in the criminal courts but perjury does not give rise to a cause of action in itself nor does it give rise to a right to damages to any party who has been injured by that perjury.  The plaintiff is, of course, at liberty to apply to the appropriate prosecuting authority to request that a prosecution be brought.

11.  Although the plaintiff sought to argue in respect of the joinder of the further defendant, quite apart from the fact that the cause of action against Dr Wong would appear to fail for the same reasons that perjury is not a tort, as already indicated in respect of the other defendants, the papers in this appeal were not served on Dr Wong and, hence, it would not be open to this court to consider that matter any further.

12.  Finally, the declaration which is sought in respect of contingency fees is not a matter which this court can contemplate.  Such a declaration is unknown.  It does not relate to any right of the plaintiff.  Furthermore, at present, contingency fees are not allowed in Hong Kong.  It may be that in the future they will be allowed.  Any declaration would, in the circumstances, be futile.

13.  This court does not disguise the fact that the plaintiff appears to have legitimate grounds for feeling aggrieved, particularly in respect of the attempt on the part of the defendants to obtain an order for the payment of costs of more than $100,000 in respect of a half hour application which was unavoidably doomed to failure.  The court dealing with that application was highly critical of the solicitors’ conduct to such an extent that it could not accept that work that had claimed to have been done could not have been done.  Nevertheless, this court has no alternative but to dismiss this appeal.  There will be an order nisi of costs in favour of the defendants.

Hon Le Pichon JA:

14.  I agree.