XCHRX WONG POON CHAN LAW & CO. (a firm) v. THE INCORPORATED OWNERS OF CHERRY MANSION AND ANOTHER

HCMP 6395/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANOUS PROCEEDINGS NO. 6395 OF 1998

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REASONS FOR DECISION

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1. This is an appeal by the Plaintiff against the decision of Master Poon that the taxation proceedings in High Court Miscellaneous Proceedings No. 6395 of 1998 be adjourned pending determination of High Court Action No. 12211 of 1998 (the High Court Action).

2. The Plaintiff was the solicitors acting for the 1st Defendant, the Incorporated Owners of Cherry Mansion, in the Personal Injuries Action No. 394 of 1994 (the PI Action).

3. The 1st Defendant was also one of the Defendants in the PI Action. At some stage of the PI Action, the 1st Defendant was not satisfied with the way in which the Plaintiff handled the 3rd party proceedings and the 2nd Defendant, M/s Ip Kwan & Co., was engaged in the place of the Plaintiff.

4. Subsequently, the 1st Defendant commenced the High Court Action against the Plaintiff claiming that the Plaintiff had not properly advised the 1st Defendant and had acted without instruction in the PI Action. That High Court Action is still pending but as I understand, is ready to be set down for trial.

5. When the papers in connection with the PI Action were passed from the Plaintiff to the 2nd Defendant, M/s Ip Kwan & Co., M/s Ip Kwan & Co. undertook to settle the Plaintiff's fees in connection with the PI Action.

6. Subsequently, the Plaintiff's fees were not settled and hence the present proceedings commenced by the Plaintiff against both Defendants.

7. Judgment in favour of the Plaintiff was granted by Master Muttrie against the Defendants "for such amount as may be found due on taxation of the Plaintiff's final bill of costs in High Court PI Action No. 394 of 1994".

8. When the Plaintiff seek to tax the final bill of costs in the PI Action, Master Poon ordered that the taxation hearing be adjourned sine die with liberty to restore pending the determination of the High Court Action, hence the present appeal.

9. The parties through their counsel raise two issues in this appeal:

1. whether the order by Master Poon was a consent order;

2. if the order was not a consent order, whether there was any valid basis for the learned Master to exercise the discretion as he did.

10. As for the 1st question on whether the order in question is a consent order, as I indicated in the course of counsel's argument, I have difficulty in resolving this particular dispute.

11. In fact, I am firmly of the view that it is not a proper issue for me to resolve at this stage of the proceeding.

12. If necessary, Master Poon should be asked to clarify the issue which is an issue of fact. Insofar as this appeal is concerned, it is the Defendants who seek to rely on the suggestion that the order in question is an order by consent.

13. It is for the Defendant to satisfy me that it is so.

14. On the evidence, including the various affidavits filed by the parties pertaining to this issue, together with the letter from the clerk of Master Poon, I am not persuaded that it is correct for me to proceed with the matter on the basis that the order in question is a consent order.

15. I think it is appropriate, for the purpose of the present proceedings that I should consider the order of Master Poon simply as an order made in the exercise of his discretion and not by way of a consent.

16. Mr. Houghton on behalf of the Plaintiff suggests that the negligence claim in the High Court Action has no bearing on the taxation of the Plaintiff's bill of costs in the PI Action despite the fact that M/s Ip Kwan & Co. is not a party to the High Court Action and hence cannot make any claim that the costs were incurred as a result of negligence on the part of the Plaintiff.

17. Mr. Houghton also suggests that the Plaintiff has no intention and would not hold M/s Ip Kwan & Co. liable for more costs than it is entitled to recover from the 1st Defendant.

18. I note in the High Court Action that one of the claims made against the Plaintiff by the 1st Defendant is for "all costs incurred by the Plaintiff, that is Cherry Mansion Incorporated Owners, in defending the said Personal Injuries Action".

19. One of the issues to be canvassed by the Court in the High Court Action is whether the costs incurred by the Defendant was properly incurred or whether they were incurred as the result of the alleged negligence on the part of the Plaintiff.

20. Whilst M/s Ip Kwan & Co., the 2nd Defendant, may not be a party to the High Court Action, his liability for the Plaintiff's fees would be affected by the outcome of the High Court Action.

21. If the suggestion of Mr. Houghton is correct, as I have observed in the course of counsel's submission, it would mean that M/s Ip Kwan & Co. would not be entitled to the benefit of the reduction of the bill of costs on the basis that the Plaintiff had been negligent. Theoretically speaking, we can have a situation whereby the liability of the 2nd Defendant for the Plaintiff's bill of costs would exceed that of the 1st Defendant.

22. In my view, on the taxation of the Plaintiff's bill of costs, the Taxing Master no doubt would have to have regard to the way in which the Plaintiff conducted the PI Action on behalf of the 1st Defendant, and decide whether the costs that they claimed were properly incurred. It is also right to say, which appears not to be disputed, that if the costs were incurred as result of negligence, it could not be said to have been incurred properly.

23. That being the case, the result in the High Court Action would have significant bearing on the taxation of the Plaintiff's bill of costs in the PI Action.

24. To proceed with the matter in the way as suggested by Mr. Houghton, would result in the duplicity of actions, conflicting findings of facts and as I have said earlier, difference in the extend of the liability of the 1st and the 2nd Defendants.

25. Bearing in mind all these matters, in my view, there is indeed valid basis for the learned Master to exercise the discretion as he did. It is not for this court to dictate how that discretion should be exercised and I am not persuaded that there is any valid foundation for me to interfere with decision of the learned Master. That being the case, the appeal against his decision has to be dismissed and I so order.