YU & ASSOCIATES, SOLICITORS (A FIRM) v. LAM SIK YING aka LAM SIK YING VICTOR, Administrator for the Estate of LAM TIM alias STAN LAM TIM, deceased

DCCJ 4169/2017 & DCCJ 1041/2019
(Heard Together)

[2024] HKDC 1041

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 4169 OF 2017

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IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1041 OF 2019

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(Heard Together)

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JUDGMENT

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BACKGROUND

1.  By the Order of Master Jocelyn Leung made on 28 June 2022, these two actions are to be heard and tried together.

2.  The Plaintiffs were the solicitors of the Defendant in HCA 1605/2004 (the “2004 Action”) and HCA 894/2011 (the “2011 Action”) during different periods[1]. The Plaintiff in DCCJ 4619/2017 was the firm of solicitors acting for the Defendant in the 2004 Action from 2 August 2004 to 5 January 2012, and in the 2011 Action from 12 July 2011 to 5 January 2012. Thereafter, the Plaintiff in DCCJ 1041/2019 took over and acted as the solicitors of the Defendant in the 2004 Action and the 2011 Action from 4 January 2012 to 21 January 2016.

3.  At the material times during the different periods, the same handling solicitor, namely Chan Pui Ling (“Polly Chan”) was representing the Defendant in the 2004 Action and the 2011 Action.

4.  In DCCJ 4169/2017, the Plaintiff is claiming against the Defendant for 3 unpaid bills in the total outstanding sum of HK$584,148.50 as follows:

(i)  Amended 3^rd Interim Bill dated 17 March 2015 for the 2004 Action (“Amended 3^rd Interim Bill”);

(ii)  4^th Interim Bill dated 11 April 2016 for the 2004 Action (“4^th Interim Bill”), and

(iii)  a bill for the 2011 Action dated 12 March 2015 (“Bill (2011 Action))”.

5.  In DCCJ 1041/2019, the Plaintiff is claiming against the Defendant for 5 unpaid bills all dated 20 January 2016 in the total outstanding sum of HK$1,155,290.83 as follows:

(i)  3^rd Interim Bill for the 2004 Action (“3^rd Interim Bill (2004 Action)”);

(ii)  4^th Interim Bill for the 2004 Action (“4^th Interim Bill (2004 Action)”);

(iii)  Allocatur Bill No.7 for the 2004 Action;

(iv)  3^rd Interim Bill for the 2011 Action (“3^rd Interim Bill (2011 Action)”); and

(v)  4^th Interim Bill for the 2011 Action (“4^th Interim Bill (2011 Action)”).

6.  The Defendant was legally represented in these two sets of proceedings until June 2022. When the trial took place on 3 January 2024, the Defendant was absent. Upon being satisfied with proof of service of the relevant documents on him, including notice of the trial, the court proceeded with the trial in the absence of the Defendant.

7.  The Defendant has filed a witness statement of himself in each of the two actions. However, as he was absent at the trial, his witness statements do not form part of the evidence before the court (see Link Fish Import & Export S. L. v. Multiply Import & Export HK Ltd and Anor [2023] HKCFI 2758 per DHCJ Winnie Tsui (as she then was) at paragraph 8).

8.  Although the Defendant was absent, counsel for the Plaintiffs, Mr Kurt Ng, had during the trial fairly drawn my attention to points identified by him which may arguably be of benefit to the Defendant, which I shall deal with below.

9.  As for the assessment of the credibility of witnesses and the cases put forward by the parties, Mr. Ng has also referred to Tradepower (Holdings) Ltd (in Liquidation) v. Tradepower (Hong Kong) Ltd & Anor (2009) 12 HKCFAR 417 at paragraphs 140-141, where Litton NPJ pointed out that in assessing credibility, the Court should test the witnesses’ testimony against (1) inherent probability and (2) the incontrovertible evidence, and it would be dangerous to rely on the demeanour of the witnesses in isolation. See also: Ting Kwok Leung v Tam Dick Yuen & Anor (2002) 5 HKCFAR 336 at paragraphs 37-38 (per Bokhary PJ).

10.  Bearing the above principles in mind, I shall proceed to consider the parties’ respective cases.

DCCJ 4169/2017

The Plaintiff’s case

11.  At the trial, the handling solicitor of the 2004 Action and the 2011 Action at the material times, Polly Chan, testified on behalf of the Plaintiffs in both actions. The Plaintiff’s case in this action can be summarised as follows. First of all, with regard to the 2004 Action:

(1)  On a date prior to 2 August 2004, it was orally agreed between Polly Chan and the Defendant over the telephone, inter alia, that:

(a)  the Plaintiff would charge the Defendant for professional work done by Polly Chan and the Plaintiff’s legal executive (“LE”) at their respective hourly rates, which would be subject to upward adjustment in line with their increase in experience;

(b)  the Defendant shall be liable to pay all the disbursements incurred by the Plaintiff on behalf of the Defendant in the 2004 Action;

(c)  For the purpose of settlement or partial settlement of the Plaintiff’s interim or final bills issued to the Defendant, which shall be immediately payable, it was agreed that the Plaintiff shall be entitled to obtain payment thereof by deducting funds available from the Defendant’s costs on account. The Defendant would be required to pay further costs on account as demanded from time to time by Polly Chan on behalf of the Plaintiff.

(2)  On 2 August 2004, the Plaintiff was formally engaged by the Defendant to act as his solicitors, and the first payment of costs on account from the Defendant in the sum of HK$54,000 was made on 6 September 2004;

(3)  I shall refer to the above retainer agreed between the parties as the “2004 Retainer”.

12.  Pursuant to the 2004 Retainer, the Plaintiff issued a total of 8 bills to the Defendant for the 2004 Action. Save and except the Amended 3^rd Interim Bill and the 4^th Interim Bill, all other previous bills of the Plaintiff had been fully settled by the Defendant. It is the Plaintiff’s case that the Amended 3^rd Interim Bill, though disputed, had been partly settled by the Defendant.

13.  With regard to the 2011 Action:

(a)  In May 2011, whilst the 2004 Action was ongoing, the Defendant requested Polly Chan to act for him in the 2011 Action;

(b)  In about May 2011, it was orally agreed between Polly Chan and the Defendant over the telephone that the Plaintiff would charge the Defendant for professional work done by Polly Chan and the LE at their respective hourly rates, which would be adjusted upward according to their increase in experience. Similar to the 2004 Retainer, the Defendant shall be liable to pay all the disbursements incurred and the Plaintiff shall be entitled to deduct from the Defendant’s costs on account to effect payment, and the Defendant would be required from time to time to pay further costs on account as demanded by Polly Chan on behalf of the Plaintiff;

(c)  On 12 July 2011, the Plaintiff was formally engaged by the Defendant to act as his solicitors, with the first payment of costs on account made by the Defendant in the sum of HK$100,000 on 11 July 2011;

(d)  I shall refer to the above retainer agreed between the parties as the “2011 Retainer”.

14.  Pursuant to the 2011 Retainer, the Plaintiff issued a bill to the Defendant for the 2011 Action on 12 March 2015 (i.e. the Bill (2011 Action)). The said bill, though disputed, had been partly settled by the Defendant.

15.  The Defendant having defaulted in payment, the Plaintiff commenced the present action seeking to recover the total outstanding sum of the 3 unpaid bills in the amount of HK$584,148.50.

The Defendant’s case

16.  It is the Defendant’s case that he has settled all costs and money due to the Plaintiff. According to the Defendant, the engagement of the Plaintiff was terminated on or about 5 January 2012. During the retainer, the Defendant had been advised to pay costs on account from time to time and had settled all fees demanded by the Plaintiff. It is further contended by him that before and at the time of the change of solicitors, he was not advised by the Plaintiff that there were outstanding fees. He was informed of and had not received any bill of costs of the alleged outstanding amounts or any part thereof until late 2014, which were issued more than 3 to 4 years after the termination of the Plaintiff’s retainers. There had been unreasonable delay and the Plaintiff is estopped from delivering the bills for outstanding fees more than 1 year after the termination of the retainers.

17.  The Defendant further contends that:

(a)  the Plaintiff had failed to advise the Defendant of the likely costs to be incurred in the 2004 Action and the 2011 Action;

(b)  the Plaintiff had advised the Defendant that the hourly rate of Polly Chan was HK$2,000, but had not advised the Defendant or sought his consent as to any adjustments made, in particular the hourly rate of Polly Chan in the sum of HK$3,500. The Plaintiff is not entitled to charge the Defendant at any hourly rate which had not been agreed to by the Defendant. The Defendant also argues that the Plaintiff was in breach of the requirement to have an agreement as to remuneration in contentious matters in writing;

(c)  the Plaintiff had not fully accounted for the costs on account paid by the Defendant and/or taxed costs recovered in the 2004 Action;

18.  In addition, the Defendant says that there was an agreement or understanding between him and Polly Chan that he would receive a discount of 14% of the profit costs charged by the Plaintiff for the 2004 Action. He further contends that the Plaintiff had issued inconsistent/contradictory bills of costs to him, in particular the 2^nd Interim Bill. In any event, the Defendant says he had issued two cheques in the sums of HK$527,243.84 and HK$50,000 respectively in satisfaction of the Plaintiff’s outstanding fees in about October 2014. It is further contended by the Defendant that the Plaintiff has overcharged him with unauthorized disbursements, in particular by double-charging for HK$90,000, HK$21,061.00 and HK$159,765.00, and the Defendant reserves the right to commence taxation.

19.  The Defendant also argues that the Plaintiff was not entitled to amend the 3^rd Interim Bill.

20.  He also stated in his witness statement that he might claim against Polly Chan for professional negligence.

21.  Pursuant to Order 38 rule 1 of the Rules of the District Court, Cap 336H, any fact required to be proved at the trial shall be proved by the examination of the witnesses orally and in open court. As the Defendant did not testify nor call any witnesses, his case is not supported by such evidence.

22.  In any event, I shall deal with the issues raised by the Defendant below.

Main Issues

23.  As the Plaintiff has indicated, the main issues to be resolved in the present proceedings are as follows:

(a)  Whether the Defendant is liable to pay the Plaintiff under the alleged outstanding bills in the total amount of HK$584,148.50 as claimed; and

(b)  Whether the bills have already been fully settled by the Defendant as alleged.

The Plaintiff’s entitlement

24.  The Plaintiff’s claim is supported by Polly Chan’s evidence and the contemporaneous documents. There is no dispute that (i) the Plaintiff and the Defendant had a contractual relationship for the Plaintiff to render professional service to the Defendant pursuant to the 2004 Retainer and 2011 Retainer, and (ii) that the Plaintiff did render professional services to the Defendant in handling the 2004 Action and 2011 Action.

25.  The Amended 3^rd Interim Bill was in the total amount of HK$503,358.00. According to the Plaintiff, after deducting the costs on account in the amount of HK$110,806.00, the balance due is HK$392,552.00. 86% of the profit costs was charged under the Amended 3^rd Interim Bill for the time being when the bill was issued.

26.  The 4^th Interim Bill was for the remaining 14% of profit costs not yet charged under the Amended 3^rd Interim Bill, namely HK$66,612.00.

27.  Under the Bill (2011 Action), the total sum due was HK$224,984.50. After taking into account the costs on account received on 11 July 2011, the outstanding amount is HK$124,984.50.

28.  The Defendant is therefore liable to pay the Plaintiff the outstanding amount due to the Plaintiff in the total sum of HK$584,148.50 under the aforesaid bills for services rendered to the Defendant. However, as explained below, the Plaintiff will give credit to the net payment made by the Defendant in the amount of HK$90,000. Thus, the Plaintiff accepts that the outstanding balance of the claim should be reduced to HK$494,148.50.

29.  As mentioned above, I shall now consider the Defendant’s allegations in the context of the evidence before me.

Alleged settlement of the outstanding bills

30.  The Defendant alleges that he paid HK$527,243.84 and HK$50,000 in satisfaction of alleged outstanding fees of the Plaintiff. According to Polly Chan, however, the payment of HK$527,243.84 was made in settlement of Messrs. Wongs, Solicitors’ 2^nd Interim Bill, and the payment of HK$50,000 was made in settlement of the expert fee of Rome Appraisals Ltd. The cheques were made to Messrs. Wongs, Solicitors but not the Plaintiff. In fact, on the cheque for the sum of HK$50,000, it was marked “for Roma Appraisals Ltd to prepare the joint expert report HCA#1605” by the Defendant. It is therefore clear that the Defendant’s reliance on the aforesaid two payments as payments for the outstanding sum under the Amended 3^rd Interim Bill, 4^th Interim Bill or Bill (2011 Action) does not assist his case.

Unreasonable delay in delivery of bills

31.  Contrary to the Defendant’s allegation that the outstanding bills were not delivered to him until more than 3 to 4 years after termination of the retainer, Polly Chan has pointed out that the outstanding bills were in fact delivered to the Defendant by the following means:

(a)  The Bill (2011 Action) was delivered to the Defendant through the Defendant’s then solicitors, Messrs. Wongs, Solicitors on 12 March 2015;

(b)  The Amended 3^rd Interim Bill was delivered to the Defendant through the Defendant’s then solicitors, Messrs. Wongs, Solicitors on 17 March 2015;

(c)  The 4^th Interim Bill was delivered to the Defendant through the Defendant’s then solicitors, Messrs. CL Chow & Macksion Chan on 11 April 2016.

32.  According to Polly Chan, at the time and immediately after the change of solicitors to Messrs. Wongs, Solicitors she had advised the Defendant that there were still outstanding bills for the 2004 Action and 2011 Action to be issued.

33.  It should also be pointed out that the case papers of the 2004 Action and 2011 Action were withheld from the Defendant’s new solicitors, Messrs. CL Chow & Macksion Chan by reason of the Defendant’s refusal to settle the outstanding bills, but neither the Defendant nor Messrs. CL Chow & Macksion Chan had disputed the withholding of the case papers pending settlement of the outstanding bills.

34.  I accept Polly Chan’s evidence in respect of the delivery of the bills.

35.  In so far as the defence of estoppel is concerned, as Mr. Ng has pointed out, there is no clear and unequivocal representation made by the Plaintiff that the Plaintiff will not deliver bills on any outstanding fees more than 1 year after the termination of the retainer. In any event, the Defendant has not shown he had suffered any detriment in reliance on any such representation. In the circumstances, I agree with the Plaintiff that there is no merit in the Defendant’s argument in this respect.

Lack of advice on the likely costs

36.  The Defendant further contends that the Plaintiff failed to advise him on the likely costs to be incurred. Polly Chan on the other hand said she had advised the Defendant in advance from time to time and at whatever stage necessary concerning the estimated costs of each and every interlocutory application and of the trial proper, including the Plaintiff’s costs and counsel’s fees to be incurred. I do not see any ground for disbelieving Polly Chan’s evidence in this regard, and I accept her evidence. In any event, the Defendant has not protested against the bills and applied for taxation in good time.

The unaccounted sums and double-charging

37.  The Defendant contends that the Plaintiff has failed to account for certain sums he had paid. According to Polly Chan, all the purported “unaccounted sums” were settled or paid pursuant to the instructions of the Defendant. A detailed list of the purposes of the payments of the “unaccounted sums” were set out in paragraph 11 of the Amended Reply. There is nothing in the evidence to support this allegation made by the Defendant.

38.  As regards double-charging, the Defendant’s case is that the sum of HK$90,000 paid was unaccounted for. Also, two further sums of HK$21,061 and HK$159,765 had also been paid to the Plaintiff. The Defendant further alleges that the Plaintiff may have recovered sums received from the other parties.

39.  As explained by Polly Chan in her evidence, it can be seen from paragraph 11 of the Amended Reply that the amount paid as counsel’s fees, including HK$90,000, amounted to HK$448,650. HK$55,000 was reflected in the 1^st Interim Bill. Thus, the total amount of counsel’s fees paid that should be reflected in the Amended 3^rd Interim Bill is HK$393,650, which is the sum of (i) the Allocator in the Amended 3^rd Interim Bill in the amount of HK$142,600 (under Bill No. 10762) and HK$118,875 (under Bill No. 13366) and (ii) item 4 being disbursements in the sum of HK$132,175.00. Thus, HK$90,000 was claimed in the Amended 3^rd Interim Bill. However, under the item for costs on account, HK$90,000 received by the Plaintiff was not taken into account. As mentioned earlier, the Plaintiff is willing to give credit to the same and reduces its claim by HK$90,000.

40.  For the sums of HK$21,061 and HK$159,765, while they were included in the Amended 3^rd Interim Bill, at the same time the Plaintiff also gave credit to the costs on account already paid. There is no evidence that any amount had been overcharged or double charged.

41.  As for the Defendant’s allegation that the Plaintiff may have recovered certain costs from third parties, it has been explained by Polly Chan that the Defendant in fact gave instructions to Messrs. Fan Wong & Tso for recovery of such costs, as is evidenced by the letter from Messrs. Fan Wong & Tso dated 22 September 2009. There is thus no merit in this allegation either.

Inconsistent bills

42.  The Defendant further contends that the Plaintiff had issued inconsistent bills, particularly the 2^nd Interim Bill. It is clear that the 2^nd Interim Bill does not form part of the Plaintiff’s claim herein. In any event, as the Plaintiff has pointed out, the Defendant’s allegation is that on 14 October 2008, the Plaintiff issued a 2^nd Interim Bill seeking the amount of profit costs for services rendered for the period between 30 September 2004 to 15 March 2007, whereas in the 2^nd Interim Bill sent on 12 March 2015, the same amount was said to be in partial settlement of costs (i.e. 80% of HK$304,416.67).

43.  The Plaintiff’s case is that the 2^nd Interim Bill was updated after negotiation, and was eventually settled by the Defendant. This bill does not form part of the Plaintiff’s claim. Thus, any alleged inconsistency in respect of the 2^nd Interim Bill is irrelevant and could not constitute a defence, which I accept.

14% discount?

44.  The Defendant’s case is that Polly Chan had agreed that the Plaintiff would give him a 14% discount for the 2004 Action. As explained by Polly Chan, however, there is no such agreement. As clearly stated in the Amended 3^rd Interim Bill, the payment of HK$409,188 was merely for “[p]artial settlement of costs”, and the remaining amount of HK$66,612.00 (representing 14% of the total costs in the bill) should be paid by the Defendant (i.e. the 4^th Interim Bill).

45.  Again, there is no merit in the Defendant’s case in this respect.

Hourly rate of Polly Chan

46.  The Defendant argues that he had not been informed of the hourly rate of Polly Chan in the sum of HK$3,500, and he had not agreed to it.

47.  There is also no merit in this argument. As pointed out by Mr. Ng, in the 2004 Action, the Defendant was awarded costs pursuant to the Order of Deputy High Court Judge Gill dated 17 September 2007. In the correspondence between the Plaintiff and Messrs. Gloria Chan & Co (the solicitors acting for the paying party of the costs order), it was clearly stated that the hourly rate of Polly Chan was HK$3,500. The matter was subsequently brought to a call-over hearing for appointment for taxation, to be heard on 26 August 2008. Again, in the bill of costs submitted, it was clearly stated that the hourly rate of Polly Chan was HK$3,500. The said bill of costs was sent to the Defendant on 12 August 2008. If there was never any agreement between the Defendant and the Plaintiff on the hourly rate of Polly Chan being HK$3,500, the Plaintiff would not have prepared the bill of costs charging the opponent on the basis of HK$3,500 per hour for Polly Chan. There is no evidence that the Defendant had raised any complaint on the said bill of costs, which showed that the parties had agreed on the hourly rate of Polly Chan as HK$3,500 as early as 16 March 2007, before the period stated in the Amended 3^rd Interim Bill.

48.  In the circumstances, there is also no merit in this allegation by the Defendant.

No written retainer

49.  The Defendant refers to the Hong Kong Solicitors’ Guide to Professional Conduct, and argues that the Plaintiff was in breach of the requirement to have an agreement as to remuneration in contentious matters in writing.

50.  As explained by Polly Chan, she did ask the Defendant to sign written retainers or engagement letters for the 2004 Action and 2011 Action but the Defendant refused to do so.

51.  As pointed out by Mr. Ng, a retainer exists when a client agrees to engage a solicitor to act for him generally or in relation to a specific matter or matters and the solicitor agrees to accept the engagement: William Allan v Messrs Ng & Co and Anor, HCA 10844/1994, 24 December 2010, per To J at paragraph 110. Lack of a signed agreement is not a bar to recovery of costs in contentious business: see Mark Richard Charlton Sutherland v CRB (a firm) [2023] 1 HKLRD 1, per Au-Yeung J at paragraph 33. In the present case, there has never been any dispute as to the fact that the Plaintiff was retained by the Defendant to represent him in both the 2004 Action and 2011 Action. This was accepted by the Defendant in his witness statement.

52.  There is thus no merit in this argument raised by the Defendant.

Nature of the bills

53.  The Defendant argues that the Plaintiff was not entitled to amend the 3^rd Interim Bill after termination of the retainer. However, the Plaintiff is not charging the Defendant for anything after the termination of the retainer. All the items under the Amended 3^rd Interim Bill concerns professional services rendered during the term of the retainer. I do not find anything that may assist the Defendant in this argument either.

Taxation

54.  Coming to the issue concerning taxation, the Defendant stated that he wishes to have the bills taxed. First of all, Polly Chan pointed out that the Defendant has never taken out any formal application for taxation, despite having been advised by her on his right to taxation.

55.  In any event, as pointed out by Mr. Ng, pursuant to section 67(2) of the Legal Practitioners Ordinance, Cap 159, no order shall be made on the application of the party chargeable with the bill if 12 months have expired from the delivery of the bill except in special circumstances.

56.  The 3 bills in the present action have been delivered for over 12 months. The Defendant has not applied for time extension to commence taxation. He has not identified any special circumstances justifying the application for taxation of the bills out of time either.

57.  In the circumstances, I agree with the Plaintiff that in absence of a formal application, the Defendant’s wish should not be entertained, and would not constitute any defence.

Professional negligence

58.  The Defendant alleges in his witness statement that he might claim against Polly Chan for professional negligence, and was therefore “considering seeking a stay of these proceedings pending the outcome” of such a claim.

59.  On the other hand, Polly Chan has denied the accusation and explained that she has repeatedly advised the Defendant as to inter alia the possibility that he would be personally liable to the claims under the 2004 and 2011 Actions, contrary to his contentions. In any event, there is no claim (or counterclaim) by the Defendant to claim against Polly Chan for professional negligence. The allegation of negligence is unsubstantiated and does not constitute any defence to the Plaintiff’s claim.

Conclusion on DCCJ 4169/2017

60.  I accept the evidence of Polly Chan in this case. Despite the points raised by the Defendant, I do not find anything that would render her evidence incredible or otherwise not reliable. By reason of the foregoing analysis, I conclude that the Defendant has no defence against the Plaintiff’s claim in this action, save for HK$90,000 as explained above.

DCCJ 1041/2019

The Plaintiff’s case

The 2004 Retainer and the 3 outstanding bills under the 2004 Action

61.  By a written retainer dated 4 January 2012 (the “2004 Retainer”), the Plaintiff in this action was engaged by the Defendant to act as his solicitors in the 2004 Action. The 2004 Retainer provides, inter alia as follows:-

(1)  the Plaintiff would charge the Defendant for professional work done by Polly Chan for professional work done by her at an hourly rate of HK$4,000, and by her legal assistant or clerk at an hourly rate of HK$1,200;

(2)  the Defendant shall be liable to pay all the disbursements incurred by the Plaintiff on behalf of the Defendant in the 2004 Action; and

(3)  all bills and interim bills issued and delivered from time to time by the Plaintiff to the Defendant shall be immediately payable. In the event any sum payable remains outstanding for over 30 days, interest shall be payable at the rate of 1% per month from the due date of payment.

62.  Pursuant to the 2004 Retainer, the Plaintiff issued a total of 5 bills to the Defendant. It is the Plaintiff’s case that save and except the 3^rd Interim Bill (2004 Action), 4^th Interim Bill (2004 Action) and Allocatur Bill No 7, all other previous bills of the Plaintiff have been fully settled by the Defendant. The 3^rd Interim Bill (2004 Action) has been partly settled by the Defendant by deduction from available costs on account.

The 2011 Retainer and the 2 outstanding bills under the 2011 Action

63.  On the same day when the 2004 Retainer was executed, the Plaintiff was also engaged by the Defendant under a written retainer dated 4 January 2012 (the “2011 Retainer”) to act as his solicitors in the 2011 Action. Insofar as this action is concerned, the 2011 Retainer contains the same provisions concerning payment of costs and the hourly rates of Polly Chan and her legal assistant or clerk.

64.  Pursuant to the 2011 Retainer, the Plaintiff issued a total of 4 bills to the Defendant. Save and except the 3^rd Interim Bill (2011 Action) and 4^th Interim Bill (2011 Action), all other previous bills of the Plaintiff have been fully settled by the Defendant. The 3^rd Interim Bill (2011 Action) has been partly settled by the Defendant by way of deduction from available costs on account.

65.  As the Defendant has failed to settle the bills, the Plaintiff commenced this action seeking to recover the outstanding sum in the total amount of HK$1,155,290.83 according to the following breakdown:

3rd Interim Bill (2004 Action)	HK$362,485.38
4th Interim Bill (2004 Action)	HK$374,006.45
Allocatur No. 7	HK$145,201.00
3rd Interim Bill (2011 Action)	HK$223,058.00
4th Interim Bill (2011 Action)	HK$50,540.00

Total:

HK$1,155,290.83

The Defendant’s case

66.  It is the Defendant’s pleaded case that he has settled all costs or other amounts due to the Plaintiff. The Defendant alleges that he had paid HK$500,000 on or about 13 April 2015, HK$100,000 on or about 6 May 2015 and HK$100,000 on or about 11 May 2015 and was assured by Polly Chan that they would be sufficient to cover all outstanding costs of the Plaintiff.

67.  The Defendant further contends that in about January 2016, the Defendant changed to another firm of solicitors at the request of the Plaintiff. At the time of the change of solicitors, the Defendant says he was not advised by the Plaintiff that there were outstanding fees of the Plaintiff to be settled. According to the Defendant, he had no knowledge of the 5 outstanding bills until July 2019 as they were sent to Messrs. CL Chow & Macksion Chan, the Defendant’s solicitors in the 2004 and 2011 Actions since April 2016, but the same were returned to the Plaintiff as Messrs. CL Chow & Macksion Chan claimed that they had no instructions to accept the outstanding bills.

68.  By his pleaded case the Defendant also alleges that the Plaintiff was in breach of the retainers by:

(a)  failing to advise the Defendant of the hourly rate of Polly Chan;

(b)  failing to follow the instructions of the Defendant to pay the sum of HK$527,243.84 made available by the Defendant on 10 October 2014 to Messrs. Yu & Associates;

(c)  having wrongfully advised the Defendant that counsel’s fees for the trial of the 2004 Action and 2011 Action were in the total amount of HK$3,100,000, while in fact the fees were only half of that sum;

(d)  failing to provide sufficient information to identify the services to which the bills or interim bills related, in particular the periods covered, and particulars of services rendered in the 3^rd Interim Bill and the Allocatur Bill No 7 in the 2004 Action;

(e)  failing to account for the costs on account paid by the Defendant.

69.  The Defendant also pleaded, alternatively, that there had been an agreement or understanding between Polly Chan and the Defendant that there would be a discount of the profit costs charged by the Plaintiff, and as such the Plaintiff is not entitled to claim the balance of 14% of its costs by way of the 4^th Interim Bill in the 2004 Action and the 4^th Interim Bill in the 2011 Action.

70.  As can be further discerned from his pleaded case, the Defendant also contends that the amount claimed by the Plaintiff constitutes overcharging and includes unauthorised disbursements. It is also alleged that the Plaintiff has failed to advise the Defendant of his right to taxation.

71.  Defendant also alleges that he has an intention to make a claim of negligence against Polly Chan for failing to advise him on the availability of a Beddoe Order.

Main Issues

72.  As the Plaintiff submitted, the main issues to be resolved in this action are as follows:

(a)  Whether the Defendant is liable to pay the Plaintiff under the alleged outstanding bills in the total amount of HK$1,155,290.83 as claimed;

(b)  Whether the bills have already been fully settled by the Defendant as alleged.

The Plaintiff’s entitlement

73.  The Plaintiff’s claim is supported by the evidence of Polly Chan. There is no dispute that the Plaintiff and the Defendant had a contractual relationship for the Plaintiff to render professional service to the Defendant pursuant to the 2004 Retainer and 2011 Retainer. There is also no dispute that the Plaintiff has indeed rendered professional services to the Defendant in the 2004 Action and 2011 Action.

74.  According to the Plaintiff, the 3^rd Interim Bill (2004 Action) was in the total amount of HK$2,764,025.38, with HK$1,057,570.38 profit costs partially due and payable thereunder. The total costs on account paid by the Defendant for the 2004 Action as of 11 May 2015 was HK$4,576,599.14. Upon settlement of the previous bills, the due and payable amount under the 3^rd Interim Bill (2004 Action) became HK$362,485.38.

75.  In respect of the 4^th Interim Bill (2004 Action), that was for the remaining 14% of profit costs not yet charged under the previous bills, in the sum of HK$374,006.45.

76.  The Allocatur Bill No.7 was for services rendered pursuant to the Order of Hon Poon J dated 24 June 2013, in the sum of HK$145,201.00.

77.  The 3^rd Interim Bill (2011 Action) was in the total sum of HK$1,944,260.00, with HK$310,460.00 profit costs partially due and payable thereunder. The total costs on account paid by the Defendant for the 2011 Action as of 13 March 2015 was HK$2,102,314.00. Upon settlement of the previous bills, the due and payable amount under the 3^rd Interim Bill (2011 Action) became HK$223,058.00.

78.  The 4^th Interim Bill (2011 Action) was for the remaining 14% of profit costs not yet charged under the previous bills, in the sum of HK$50,540.

79.  On the basis of the above unsettled bills, the Plaintiff claims for a total outstanding amount of HK$1,155,290.83 for services rendered to the Defendant.

80.  As mentioned above, I shall now consider the issues raised by the Defendant’s allegations, in the context of the evidence before me.

No or late delivery of bills

81.  As mentioned above, the Defendant alleges that he was not advised by the Plaintiff that there were outstanding fees of the Plaintiff to be settled. It is alleged that the bills were not delivered to him and he had no knowledge of them until July 2019.

82.  As stated by Polly Chan in her evidence, the outstanding bills were delivered to the Defendant in the following manner:

(a)  The 3^rd Interim Bill (2004 Action), the Allocatur Bill No 7 (2004 Action) and the 3^rd Interim Bill (2011 Action) were sent by Polly Chan to the Defendant on 14 January 2016 by email;

(b)  The 5 outstanding bills, under the cover of two separate letters, were subsequently sent by the Plaintiff to Messrs. CL Chow & Macksion Chan, the Defendant’s then solicitors in the 2004 Action and 2011 Action.

83.  Polly Chan also said that at the time and immediately before the change of solicitors to Messrs. CL Chow & Macksion Chan, she had advised the Defendant that there were still outstanding bills for the 2004 Action and 2011 Action to be issued by the Plaintiff for his settlement.

84.  It is also noted that the case papers of the 2004 Action and 2011 Action were withheld from Messrs. CL Chow & Macksion Chan by reason of the Defendant’s refusal to settle the outstanding bills, and neither the Defendant nor Messrs. CL Chow & Macksion Chan had raised any dispute.

85.  I accept Polly Chan’s evidence in respect of the delivery of the bills and her advising the Defendant of the outstanding bills. In the circumstances, there is no merit in the Defendant’s allegation.

Hourly rate of Polly Chan

86.  The Defendant says that he was not advised on the hourly rate of Polly Chan. As pointed out by Mr. Ng, this is rebutted by the written retainers. As stated in both the 2004 Retainer and 2011 Retainer, the service fee was agreed on a time cost basis, “to be handled by Solicitor Chan Pui Ling at HK$4,000.00 per hour”.

87.  The Defendant also seeks to rely on the fact that Polly Chan had once charged HK$3,500 per hour. However, there is no evidence to prove that the agreed hourly rate had generally been reduced. The parties had agreed in writing that the hourly rate of Polly Chan was HK$4,000. The Plaintiff is therefore entitled to charge the hourly rate as agreed.

88.  In the circumstances, there is no merit in this aspect of the Defendant’s defence.

Instructions to pay Messrs. Yu & Associates not followed?

89.  The Defendant further alleges that the Plaintiff had not followed his instructions to pay a sum of HK$527,243.84 to Messrs. Yu & Associates.

90.  However, as pointed out by Mr. Ng, it was the Defendant’s own written instructions to Polly Chan dated 10 October 2014 that the payment of HK$527,243.84 was to be made in favour of the Plaintiff, not Messrs. Yu & Associates, for settlement of the Plaintiff’s 2^nd Interim Bill issued for the 2004 Action. The Defendant’s allegation is thus ungrounded.

Amount of counsel’s fees

91.  The Defendant also alleges that the Plaintiff had wrongfully advised him that counsel’s fees for the trial of the 2004 Action and 2011 Action were in the total amount of HK$3,100,000.

92.  This allegation has not been substantiated. The Defendant has not set out any basis in suggesting that the counsel’s fees were only half of HK$3.1 million as contended in the Defence.

93.  In fact, the evidence shows that the Defendant had been privy to, and had in fact agreed to the fee quotation by counsel. By an email dated 18 June 2014, the two counsel had informed Polly Chan that their fees for attending the trial would be HK$3.1 million. On 20 June 2014, Polly Chan duly passed the said email to the Defendant for his consideration, and subsequently on 29 June 2014, the Defendant agreed to the quoted fees under his handwritten and signed instructions stating that he would “send cheque shortly”. His agreement was further confirmed by an email dated 6 September 2014 issued by him to Polly Chan and copied to counsel.

Insufficient information to identity the services

94.  As mentioned above, the Defendant also alleges that the Plaintiff had failed to provide sufficient information to identify the services to which the bills or interim bills related, and to state the periods covered. It is the Defendant’s contention that the particulars of services rendered under the 3^rd Interim Bill and the Allocatur Bill No 7 in the 2004 Action had not been provided.

95.  As explained by Polly Chan, the 3^rd Interim Bill (2004 Action) and Allocatur Bill No 7 with full details of the services rendered had been prepared by Polly Chan and sent to the Defendant’s email address on 14 January 2016. In addition, a detailed 3^rd Interim Bill (2011 Action) had also been sent to the Defendant on the same day.

96.  As such, there is no merit in the Defendant’s allegation.

Failure to account for the costs on account

97.  The Defendant alleges that the Plaintiff had failed to account for the costs paid by the Defendant on account, totalling 8 payments. The Plaintiff says, on the other hand, that all such sums paid by the Defendant had been accounted for, as summarised by the Plaintiff below:

98.  For the cheque No. 325289 issued on 20 May 2013 in the sum of HK$300,000, according to the Inward Returned Cheque Advice issued by the Hang Seng Bank, the cheque had been returned unpaid.

99.  For the Bank Transfer (Ref: 300WON88) made on 5 June 2013 in the sum of HK$300,000, HK$15 was deducted (presumably as bank charge), and the balance of HK$299,985.00 was acknowledged in the 3^rd Interim Bill (2004 Action) under “Costs on Account received on 5-6-2013 - HK$299,985.00”.

100.  For the sum of HK$200,000 under the Plaintiff’s Official Receipt No. 6151 dated 17 September 2013, the sum was acknowledged in the 3^rd Interim Bill (2011 Action) under “Costs on Account received on 17-9-2013 - HK$200,000.00”.

101.  For the sum of HK$99,985 under the Plaintiff’s Official Receipt No. 5587 dated 9 January 2012, the sum was acknowledged in the 3^rd Interim Bill (2011 Action) under “Costs on Account received on 9-1-2012 - HK$99,985.00”.

102.  For the sum of HK$202,329 under the Plaintiff’s Official Receipt No. 5859 dated 29 October 2012, the sum was acknowledged in the 3^rd Interim Bill (2011Action) under “Costs on Account received on 29-10-2012 - HK$202,329.00”.

103.  For the sum of HK$1,550,000 under the Plaintiff’s Official Receipt No. 6560 dated 21 October 2014:

(a)  half of the sum was acknowledged in the 3^rd Interim Bill (2004 Action) under “Costs on Account received on 21-10-2014 - HK$775,000.00”;

(b)  another half of the sum was acknowledged in the 3^rd Interim Bill (2011 Action) under “Costs on Account received on 29-10-2014 - HK$775,000.00”;

(c)  by an email from Polly Chan to the Defendant dated 23 October 2014, Polly Chan sought the Defendant’s authorisation to transfer HK$775,000 from the account of the 2004 Action to that of the 2011 Action. The authorisation letter was signed by the Defendant on 29 October 2014.

104.  For the sum of HK$1,550,000 under the Plaintiff’s Official Receipt No. 6686 dated 10 February 2015:

(a)  half of the sum was acknowledged in the 3^rd Interim Bill (2004 Action) under “Costs on Account received on 10-2-2015 - HK$775,000.00”;

(b)  another half of the sum was acknowledged in the 3^rd Interim Bill (2011 Action) under “Costs on Account received on 13-3-2015 - HK$775,000.00”.

105.  For the cheque dated 12 August 2014 in the sum of HK$50,000 (marked for the 2004 Action), it was banked in on 20 October 2014 as can be seen from the email from Polly Chan to the Defendant on 21 October 2014, and as recorded in the 3^rd Interim Bill (2004) Action[2]. On 10 October 2014, the Defendant sent another cheque in the amount of HK$50,000 (marked for the 2011 Action). It was banked in on 20 October 2014 as can be seen from the email from Polly Chan to the Defendant on 21 October 2014. It was then recorded in the 3^rd Interim Bill (2011) Action.

106.  In the circumstances, given the contemporaneous documentary records referred to by the Plaintiff, I am satisfied that the Plaintiff had fully explained and accounted for the respective sums paid on account by the Defendant.

14% discount?

107.  The Defendant also alleges that Polly Chan agreed that the Plaintiff would give him a 14% discount under the bills. This is denied by Polly Chan. According to her, as clearly stated in the 3^rd Interim Bill (2004 Action) and 3^rd Interim Bill (2011 Action), the payment of HK$1,057,570.38 and HK$310,460 were merely for partial settlement of costs. The remaining part of the costs, representing 14% of the total costs in the bills, should be paid by the Defendant under the 4^th Interim Bill.

108.  As such, there is no merit in this allegation by the Defendant.

Overcharging and unauthorised disbursements

109.  The Defendant further alleges that the amount claimed by the Plaintiff constitutes overcharging and contain unauthorised disbursements.

110.  According to Polly Chan, the Plaintiff had billed the Defendant for profit costs for the trial in the 2004 Action but not in the 2011 Action (except for counsel’s fees as disbursements). As stated in the 3^rd Interim Bill (2011 Action), the professional charges under the bill were for services rendered between 1 September 2013 to 31 December 2015, but excluding the trial from 20 April 2015 to 15 May 2015.

111.  The Plaintiff also denies seeking double compensation for the Allocatur Bill No 7 as alleged by the Defendant. As explained by Polly Chan, the Defendant was at the material times clear about the fact that the Plaintiff could never have been able to receive any sum or payments from any parties, the reason being that the Defendant had already engaged another firm of solicitors, Messrs. Fan Wong & Tso, to conduct the recovery action in various ongoing civil proceedings, the details of which were not privy to the Plaintiff.

112.  As such, I accept there is no ground for the Defendant to say that the Plaintiff had been overcharging or seeking double compensation.

Taxation

113.  The Defendant further alleges that the Plaintiff had failed to advise him of his right to taxation, and that he wishes to have the bills taxed.

114.  Again, the Defendant has not taken out any formal application for taxation. As explained by Polly Chan in her evidence, the Defendant had already been advised by her on his right to taxation.

115.  In any event, as mentioned above, pursuant to section 67(2) of the Legal Practitioners Ordinance, Cap 159, no order shall be made on such an application if 12 months have expired from the delivery of the bill, except in special circumstances. The 5 bills in the present action have been delivered for over 12 months. The Defendant has not applied for time extension, nor has he identified any special circumstances justifying the application for taxation of the bills out of time.

116.  As such, the simple statement by the Defendant of his wish to apply for taxation would not constitute any defence.

Professional negligence

117.  Again, the Defendant stated in his witness statement that he might claim against Polly Chan for professional negligence, and would therefore consider seeking a stay of these proceedings pending the outcome of such a claim.

118.  Polly Chan denies the accusation. In any event, there is no claim (or counterclaim) by the Defendant to claim against Polly Chan for professional negligence. The allegation of negligence is unsubstantiated and does not constitute any defence to the Plaintiff’s claim.

Conclusion on DCCJ 1041/2019

119.  I also accept the evidence of Polly Chan in this case. Despite the points raised by the Defendant, I do not find anything that would render her evidence incredible or otherwise not reliable. Given the above analysis, the Defendant has no defence against the Plaintiff’s claim in this action either.

JUDGMENT

120.  By reason of the above, I find for the Plaintiff in each of the two actions, and give judgment against the Defendant (i) for the sum of HK$494,148.50 in DCCJ 4169/2017, and (ii) for the sum of HK$1,155,290.83 in DCCJ 1041/2019.

121.  As for interest, the Plaintiff in each action has not put forward any applicable rate for my consideration, although a claim for interest has been made under sections 49 and 50 of the District Court Ordinance, Cap.336. Having regard to the provision in the 2004 Retainer in DCCJ 1041/2019 that interest shall be payable at the rate of 1% per month from the due date of payment of the relevant bills, I award interest on the outstanding amount under each of the outstanding bills in each action at the rate of 1% per month from the due date of payment of each of the bills to the date of judgment, and thereafter at judgment rate until payment in full.

122.  I also order that the Defendant shall bear the costs of both actions, including the costs of the trial (with certificate for counsel).

123.  Lastly, I would like to thank Mr Ng for his helpful assistance.