CHU PUN KEI CLARENCE v. LEE YEE HUNG AND OTHERS

HCA 1981 of 1999

IN THE HIGH COURT OF

THE HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1981 OF 1999

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Assessment of Damages

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Introduction

1. This assessment arises out of a suit instituted by the plaintiff against his former solicitors ('the firm') for gross mishandling of his divorce application. The claim upon which judgment was entered by consent on 21 June 1999 for costs including the costs of the plaintiff's summons of 12 May 1999 and damages to be assessed was grounded in contract and tort.

2. The factual background as concerns the issue of liability was uncontroversial.

3. David Warne (Warne), then a partner of Messrs. Day & Chan was instructed by the plaintiff to obtain a divorce on his behalf. The retainer was given by the plaintiff and accepted by Warne and his firm upon a clear understanding that the divorce should proceed expeditiously on an uncontested basis there being no children of the family or any anticipated application from the plaintiff's wife for ancillary relief. The plaintiff intimated in clear terms that he wished to re-marry in 1998. On 18 December 1996, a petition for dissolution of marriage was filed under FCMC 12446 of 1996. General care and handling of the suit lay with Warne, who on 10 February 1997 left Messrs. Day & Co to become a partner of the then Messrs. Y H Lee & James To. The file followed him to the new firm. By a notice of change of solicitors dated 11 February 1997, Messrs Y H Lee & James To took over the conduct of the suit with Warne continuing with care and handling. At all relevant times, Messrs. Y H Lee & James To were carrying on as a firm with Lee Yee Hung (Lee), To Kun Sun, James (To), Warne and Tsui Wai Ki (Tsui) as partners. Tsui joined the partnership in May 1998. Warne retired from the firm on 30 October 1998. With effect from 1 January 1999, Messrs. Y H Lee & James To changed its name to Messrs. Philip Tsui & To.

4. As transpired, Warne and his partners had failed to exercise reasonable care and skill normally expected of competent practitioners in prosecuting the divorce suit speedily or at all. Instead, for nearly 2 years, nothing much was actually done. To compound matters, whenever the plaintiff enquired about the progress of the suit, he was given to understand that matters were well in hand and progressing. Eventually, as the plaintiff became more exasperated and his enquiries for information turned more frequent and urgent, the firm provided him with faxed copies of a Decree Nisi and a Notice of Application For Decree Nisi to be made absolute, which were false documents in every respect. This was done to conceal the truth from him as the suit had barely got off the ground. The truth was finally disclosed when the plaintiff approached the Divorce Registry on 9 October 1998 seeking information as to when he could expect the much-awaited Decree Absolute. It was then that he learned that no documents had been filed save his petition for divorce. It was against this background that the firm was sued for breaches of contract and tortious liability.

5. In summary, the plaintiff sought damages for mental distress, wasted expenditure, loss of housing and leave benefits, spousal maintenance paid, overseas telephone calls, and related travel and hotel expenses on the Mainland. Broadly taken together, the defence challenged the extravagance and genuiness of the claims and queried whether they or any of them had any causal connection with the admitted breaches. It was further contended that despite the consensual judgment, damages ought to be assessed in the context of a contractual relationship as opposed to one arising in negligence.

Quantification in tort or contract?

6. The plaintiff's stance is unambiguous. As the partners of the firm have consented to judgment for damages to be assessed without qualification, it was too late to argue that the plaintiff's right to damages should be confined to contract, the proceedings having been grounded in both contract and negligence. On the facts of the case where remedies are sought for breach of legal retainer and no recourse is had to some procedural or other advantage available only in an alternative cause of action, such as a later accrual time for the cause of action, it matters not whether quantification is undertaken in tort or contract. The practical outcome should be the same, as the damages pursued would necessarily stem from the solicitor client relationship.

7. The law on concurrent liabilities and its impact on damages fell to be considered in Henderson & ors v Merrett Syndicates Ltd & ors [1995] 2 AC 145 (HL). The facts though complicated are immaterial for present purposes. After an exhaustive analysis of the courts' approach to this issue over decades, Lord Goff who gave the leading speech, observed:

So far as Hedley Byrne itself is concerned, Mr. Kaye (referring to an article "The Liability of Solicitors in Tort" by J M Kaye) reads the speeches as restricting the principle of assumption of responsibility there established to cases where there is no contract; indeed, on this he tolerates no dissent ... (p.192H) (parenthesis supplied)

... Mr. Kaye's approach involves regarding the law of tort as supplementary to the law of contract, i.e. as providing for a tortious liability in cases where there is no contract. Yet the law of tort is the general law, out of which the parties can, if they wish, contract; and as Oliver J demonstrated, the same assumption of responsibility may, and frequently does, occur in a contractual context. Approached as a matter of principle, therefore, it is right to attribute to that assumption of responsibility, together with its concomitant reliance, a tortious liability, and then to inquire whether or not that liability is excluded by the contract because the latter is inconsistent with it. This is the reasoning which Oliver J., as I understand it, found implicit, where not explicit, in the speeches in Hedley Byrne. With his conclusion I respectfully agree. But even if I am wrong in this, I am of the opinion that this House should now, if necessary, develop the principle of assumption of responsibility as stated in Hedley Byrne to its logical conclusion so as to make it clear that a tortious duty of care may arise not only in cases where the relevant services are rendered gratuitously, but also where they are rendered under a contract. This indeed is the view expressed by my noble and learned friend, Lord Keith of Kinkel, in Murphy v Brentwood District Council [1991] 1 AC 398, 466, in a speech with which all the other members of the Appellate Committee agreed. (p.193 B-D)

... My own belief is that, in the present context, the common law is not antipathetic to concurrent liability, and there is no sound basis for a rule which automatically restricts the claimant to either a tortious or a contractual remedy. The result may be untidy; but, given that the tortious duty is imposed by the general law, and the contractual duty is attributable to the will of the parties, I do not find it objectionable that the claimant may be entitled to take advantage of the remedy which is most advantageous to him, subject only to ascertaining whether the tortious duty is so inconsistent with the applicable contract that, in accordance with ordinary principles, the parties must be taken to have agreed that the tortious remedy is to be limited or excluded. (p.193H, 194A-B)

8. In Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd [1986] 1 AC 80 (PC), Lord Scarman, delivering the judgment of the Board, stated:

Tort

Their Lordships do not believe that there is anything to the advantage of the law's development in searching for a liability in tort where the parties are in a contractual relationship. This is particularly so in a commercial relationship. Though it is possible as a matter of legal semantics to conduct an analysis of the rights and duties inherent in some contractual relationships including that of banker and customer either as a matter of contract law when the question will be what, if any, terms are to be implied or as a matter of tort law when the task will be to identify a duty arising from the proximity and character of the relationship between the parties, their Lordships believe it to be correct in principle and necessary for the avoidance of confusion in the law to adhere to the contractual analysis: on principle because it is a relationship in which the parties have, subject to a few exceptions, the right to determine their obligations to each other, and for the avoidance of confusion because different consequences do follow according to whether liability arises from contract or tort, e.g. in the limitation of action.

...

Their Lordships do not, therefore, embark on an investigation as to whether in the relationship of banker and customer it is possible to identify tort as well as contract as a source of the obligations owed by the one to the other. Their Lordships do not, however, accept that the parties' mutual obligations in tort can be any greater than those to be found expressly or by necessary implication in their contract. If, therefore, as their Lordships have concluded, no duty wider than that recognised in Macmillan [1918] AC 777 and Greenwood [1933] AC 51 can be implied into banking contract in the absence of express terms to that effect, the banks cannot rely on the law of tort to provide them with greater protection than that for which they have contracted. (p. 107 B-D, G-H)

9. In the circumstances of this case, no useful purpose would be served by conducting an enquiry on damages with reference to tortious relationship. As previously stated, the result would be the same given the parties' relationship and the complaints flowing from the handling of the retainer.

10. I turn then to address the heads of damages.

Distress

11. Damages for mental distress are recoverable in contract in very circumscribed situations. The law in this regard was extensively reviewed by the English Court of Appeal in Watts & anr v Morrow, [1991] 1 WLR 421. That case concerned a claim by a husband and wife who had purchased a property in reliance on a surveyor's report made by the defendant. The report suggested that the defects discovered could be dealt with as part of ordinary maintenance. This turned out to be far from the truth as the plaintiffs on taking possession of the property as a second home found extensive defects that cost a substantial sum to correct. The plaintiffs sued for damages for negligence and/or breach of contract and were awarded, inter alia, general damages of L4,000 each for distress and inconvenience. On appeal by the surveyor against quantum, it was held that in the case of the ordinary surveyor's contract, general damages were recoverable only for distress and inconvenience caused by physical consequences of the breach of contract; that such damages should be a modest sum for the amount of physical discomfort endured; and that, on the facts, L750 was an appropriate sum for each of the litigant.

In reviewing precedents and in arriving at his decision, Ralph Gibson LJ said: (p. 1440 A-H)

As to the law, it is, in my judgment, clear that Mr. and Mrs. Watts were not entitled to recover general damages for mental distress not caused by physical discomfort or inconvenience resulting from the breach of contract. It is true that in Perry v Sidney Philips & Son [1982] 1 WLR 1297, Lord Denning MR justified the award of damages for anxiety, worry and distress, i.e. "modest compensation," by reference to the holiday cases of Jarvis v Swans Tours Ltd [1973 QB 233 and Jackson v Horizon holidays Ltd [1975] 1 WLR 1468 and to Heywood v Wellers [1976] QB 446, a solicitor's case. I do not, however, accept that, in that case, the award of damages, which was upheld, was for

"vexation, that is the discomfort and so on suffered by the plaintiff as a result of having to live for a lengthy period in a defective house which for one reason or another was not repaired over the period between the acquisition by the plaintiff and the date of the trial:" see per Oliver LJ, at p. 1304H

Further, in Perry Kerr LJ said, at p. 1307:

"it should be noted that the judge has awarded these [damages for vexation and inconvenience] not for the tension or frustration of a person who is involved in a legal dispute in which the other party refuses to meet its liabilities. If he had done so, it would have been wrong, because such aggravation is experienced by almost all litigants. He has awarded these damages because of the physical consequences of the breach which were all foreseeable at the time."

Mr. Jackson's submission is, I think, correct. In Bailey v Bullock [1950] 2 All E R 1167 Barry J., in a case of solicitor's negligence, held that damages for inconvenience and discomfort could be recovered for the solicitor's failure to get possession of premises for his client but not damages for annoyance and mental distress. So holding, he relied on the judgment of Scott LJ in Groom v Crocker [1939] 1 KB 194, 224 where Addis v Gramophone Co Ltd [1909] AC 488 was held to be a conclusive authority against general damages for injury to reputation or feelings. Barry J contrasted that decision with that of Hobbs v London and South Western Railway Co (1875) LR 10 QB 111 where damages for physical inconvenience were upheld for breach of a contract of carriage.

In Jarvis v Swans Tours Ltd [1973] QB 233 it was held that the old authorities excluding damages for disappointment of mind were out of date and that damages for mental distress can be recovered in contract in a proper case. One such proper case was held there to be breach of a contract for a holiday or of a contract to provide entertainment and enjoyment. Breach of contract of carriage, where vexation may be caused, was distinguished from breach of a contract for a holiday where the provision of pleasure is promised.

(and at 1441 A-C)

Again, in Heywood v Wellers [1976] QB 446 damages were awarded against a negligent solicitor for failure to obtain protection for his client against molestation, and in particular for the client's distress, because the solicitor was employed to protect the client from molestation which was causing distress. In Hayes v James & Charles Dodd [1990] 2 All E R 815 Purchas LJ., with reference to a claim to damages for mental distress in a claim against a surveyor, said , at p. 826:

"I agree with the approach adopted by Staughton L.J. reflecting, as it does, the judgment of Dillon L.J. in Bliss v South East Thames Regional Health Authority [1987] ICR 700 at 718, namely that damages of this kind are only recoverable when the subject matter of the contract or duty in tort is to provide peace of mind or freedom from distress."

(His Lordship reverting to the findings of the trial judge later said p.1442 A-D)

It is clear, I think, that the judge was regarding the contract between Mr. and Mrs. Watts and the defendant as a contract in which the subject matter was to provide peace of mind or freedom [from] distress within the meaning of Dillon L.J.'s phrase in Bliss v South East Thames Regional Health Authority [1987] ICR 700, 718 cited by Purchas L.J. in Hayes v James & Charles Dodd [1990] 2 All ER 815, 826. That, with respect, seems to me to be an impossible view of the ordinary surveyor's contract. No doubt house buyers hope to enjoy peace of mind and freedom from distress as a consequence of the proper performance by a surveyor of his contractual obligation to provide a careful report, but there was no express promise for the provision of peace of mind or freedom from distress and no such implied promise was alleged. In my view, in the case of the ordinary surveyor's contract, damages are only recoverable for distress caused by physical consequences of the breach of contract. Since the judge did not attempt to assess the award on that basis this court must reconsider the award and determine what it should be.

12. Bingham LJ summarised his understanding of the applicable principles with these words:

A contract-breaker is not in general liable for any distress, frustration, anxiety, displeasure, vexation, tension or aggravation which his breach of contract may cause to the innocent party. This rule is not, I think, founded on the assumption that such reactions are not foreseeable, which they surely are or may be, but on considerations of policy.

But the rule is not absolute. Where the very object of a contract is to provide pleasure, relaxation, peace of mind or freedom from molestation, damages will be awarded if the fruit of the contract is not provided or if the contrary result is procured instead. If the law did not cater for this exceptional category of case it would be defective. A contract to survey the condition of a house for a prospective purchaser does not, however, fall within this exceptional category.

In cases not falling within this exceptional category, damages are in my view recoverable for physical inconvenience and discomfort caused by the breach and mental suffering directly related to that inconvenience and discomfort. If those effects are foreseeably suffered during a period when defects are repaired I am prepared to accept that they sound in damages even though the cost of the repairs is not recoverable as such. But I also agree that awards should be restrained, and that the awards in this case far exceeded a reasonable award for the injury shown to have been suffered ... (p.1445 F-H)

13. The plaintiff contended that the very object of the retainer was to provide peace of mind and emotional release from a failed marriage that he wanted quickly dissolved on his specific instructions to Warne. By the firm's neglect and default through Warne's inaction latterly covered up by the subterfuge of falsified documentation, considerable distress, anxiety, anger and emotional turmoil resulted that were plainly causally connected with the breach of retainer. Accordingly, the breach should sound in substantial damage, be it in tort or contract. The defence countered, relying principally on Watts v Morrow [1991] 1 WLR 1421, that the raison d'etre of the relationship was provision of professional services in divorce proceedings, and that any distress that might have been caused had been grossly over-painted. Further, such feelings were merely incidental to the retainer and were irrecoverable. If damages were appropriate, only a modest sum of about $10,000 should be considered as opposed to the suggested quantum of $250,000.

14. I am satisfied to find that while the retainer concerned instructions to obtain a divorce, the failure to properly undertake it with expedition and the care and professional expertise to be expected resulting in frustration and anxiety would, subject to proof, sustain a claim for damages for mental distress. The plaintiff was seeking relief from a failed marriage. The very object of the retainer can, therefore, legitimately be viewed as a brief to obtain peace of mind, emotional release and freedom from an unhappy union, that not only were totally unachieved but denied him until another firm of solicitors were brought in. That damages are recoverable under this head of claim seems only just to me.

15. The retainer commenced on 11 February 1997 and ended on about 12 October 1998, a period of some 20 months. It was the plaintiff's evidence that soon after his first marriage in April 1994, the relationship progressively deteriorated to the point when it was mutually decided that dissolution was inevitable. The task of obtaining an uncontested divorce was left to the plaintiff. In the interim, the plaintiff in 1995 began a relationship with a PRC resident, Madam Du Yali (Madam Du) whom he subsequently married. It was contemplated and hoped that he would be free to re-marry by about the lunar new year in early 1998. In the event, the marriage had to be postponed until 3 August 1999 owing to the conduct of the firm and Warne in particular.

16. It was in late 1996 that the plaintiff first took steps to secure a divorce. He approached Warne then of Messrs. Day & Chan, giving him specific instructions to prosecute the matter swiftly as he was contemplating re-marry. When Warne joined the firm in February 1997, he remained seized of the matter. Since that time, the plaintiff said he made enquiries on numerous occasions about the progress of the divorce proceedings, seldom actually getting to speak to Warne directly. He had to be content with speaking to Warne's secretary leaving word for Warne to call back. This rarely occurred. When Warne deigned to return his calls, the plaintiff said he was continually advised that the proceedings were moving along. On 7 August 1997, the plaintiff whose anxiety over the feasibility of his contemplated remarriage in early 1998 was mounting, managed to contact Warne to vent his frustration and to complain about the service he was patently not receiving. Following this angry exchange, the firm faxed a letter dated 7 August 1997 (P1) to him, effectively advising that a date for the hearing of the petition would be fixed and that he would be contacted in due course. Another 7 months were to elapse with no further news from the firm. In that time, not for want of trying, Warne could not be reached except on rare occasions when the plaintiff demanded to speak directly to him. Even on those occasions, Warne repeatedly assured him that all was well. Not unexpectedly, the plaintiff's exasperation, anger and impatience increased.

17. By early 1998, the plaintiff said he became increasingly furious and frustrated as it was clear that he was in no position to re-marry as envisaged. Contacts with the firm were a daily occurrence. On 23 March 1998, Warne faxed him an undated Decree Nisi. Its falsity became known only later. As the Decree Nisi was undated and he required the date on it to assure Madam Du and her parents that his intentions were both genuine and honourable, his attempts to reach Warne became more urgent. This resulted in Warne faxing him another false document, a Decree Nisi dated 6 March 1998 on 30 March 1998. His worries someone abated, he had to wait another 2 months with no further news from the firm. He continued to telephone Warne and on 14 May 1998 received a faxed copy of an undated Notice of Application for Decree Nisi to be made Absolute. This was yet another falsified document. Meanwhile, the plaintiff said he continued to face mounting pressure from Madam Du and her parents as no date for the intended marriage could be fixed. They had apparently found it difficult to believe that a lawyer could behave in that manner and had begun to question his sincerity.

18. Out of sheer frustration from inability to reach Warne, the plaintiff faxed a letter dated 29 July 1998 demanding a written reply on the progress of the case. Warne continued to avoid him. Finally on the advice of a friend, the plaintiff approached the Divorce Registry and was horrified to learn that he had been persistently lied to by Warne. He was filled with violent emotions when the truth was laid bare. On 13 October of the same year, he took his case to another firm. I have no reason to doubt the veracity of his evidence thus far.

19. The plaintiff said that for some 26 months from about March 1997 to May 1999, he suffered from helplessness, disappointment, discouragement, mental strain, insomnia and a whole host of emotional feelings listed in his witness statement which he adopted as his testimony. That he had been very badly let down and allowed to believe from time to time that his divorce was being handled properly is beyond peradventure. He had faced one disappointment after another.

20. On the evidence, it seems reasonably clear that the plaintiff had become exasperated, angry, and most anxious by the lack of any progress in his case by August 1997. He was no nearer to being divorced than when he first approached Warne in late 1996. Not only had his solicitors not carried out his instructions with reasonable diligence and care, his only contact at the firm had persistently avoided his calls. What little news he had from Warne was totally untrue and designed to get him of Warne's back. To compound matters, he had to deal with his future wife and his parents. Between the summer of 1997 and May 1999 for some 22 months he had experienced distressing mood swings that impacted on his work.

21. The mental distress and anxiety caused by the delay and inconvenience of not getting an uncomplicated divorce was a foreseeable consequence of the default of the errant partner in this case. What was experienced and endured by the plaintiff did not arise from the tension and frustration of a party engaged upon litigation. He was given the run around, lied to and supplied with faked documentation, all the while fully expecting that the decree would become a reality on Warne's assurance. The endless wait came to nought. I entertain no doubt as to his entitlement to damages for mental distress in the circumstances. I am, however, alive to the fact that damages should reflect all the above matters. Doing the best that I can, I assess damages under this head of claim at $130,000. In passing, I note that the quantum suggested by the defence was derisory in the extreme.

Wasted expenditure

22. This item relates to a sum of $10,000 paid by the plaintiff with his personal cheque to the firm on about 24 February 1997 to meet the cost of serving process on his former wife in the United States. The plaintiff has sought full reimbursement of this amount, a claim conceded by Lee and To. In December 1998, the firm issued a cheque for $8,262.20 to the plaintiff but held back on the balance of $1,737.80 as expenditure legitimately incurred in effecting service. Tsui contended that this small sum, representing work properly done in about March 1997, was irrecoverable. The documents at pages 131, 133 to 134 of the Agreed Bundle A were cited in support. It is only right and proper that the balance should be returned viewed either as wasted expenditure or total failure of consideration. Being work done too late in the day to have had any meaning for or any tangible benefit to the plaintiff, I was more than a little surprised that Tsui did not magnanimously offer to return the balance as his former partners had done at the outset. I order than the sum of $1,737.80 be paid.

Reduction of housing benefit

23. At all relevant times, the plaintiff was employed as a manager by Wan Fung Embroidery Co Ltd (Wan Fung) with responsibility for purchases and sales. His duty regularly took him to Northern China. He would frequently take advantage of such trips to see Madam Du. What he did not volunteer was the fact that Wan Fung was a family run business with himself, PW2 his sister and father as directors. His directorship only became apparent after a company search was conducted by the defence. It was his case that consequent upon the firm's breach of duty, his performance at work had deteriorated to the point that the other directors had unilaterally reduced his housing benefit.

24. The evidence disclosed that prior to 1 October 1998, his rented accommodation at 47 Lyttleton Road, Mid-Levels, had been financed by Wan Fung. The rental and rates totalling $14,265 pm were paid as housing allowance. The plaintiff said that his failure to competently discharge his duty owing to his pre-occupation with the divorce proceedings and the resulting stress and frustration had not gone unnoticed by Wan Fung. In consequence, Wan Fung through its Personnel Manager (PW2) wrote to him on 1 August 1998, notifying him of the company's intention to adjust his housing allowance down to $8,000 a month. Exh. P5 refers. The letter made reference to the fact that the plaintiff had been previously warned of the company's dissatisfaction with his performance and that no improvement had been discerned. It also communicated the possibility of further reductions in salary or benefit if there were to be no change in his sales performance. Following that, the plaintiff relocated to a more modest flat in Chi Fu Fa Yuen in Lai Chi Kok. The monthly rental as of October 1998 precisely matched the new housing allowance. By way of damages, he now claims 8 months' reduction from October 1998 to June 1999 at the rate of $6,265 pm being the difference between the two housing benefits, or a total of $50,120.

25. Whether the claim is formulated in contract or tort, causal nexus and remoteness of damages must be established. It is as well that one revisit general principles. In Chitty On Contracts, 28 ed., Vol. 1 para 27-024, the following is stated:

Requirement of a causal connection. The important issue in remoteness of damage in the law of contract is whether a particular loss was within the reasonable contemplation of the parties, but causation must first be proved; there must be a causal connection between the defendant's breach of contract and the claimant's loss. The claimant may recover damages for a loss only where the breach of contract was the "effective" or "dominant" cause of that loss. The courts have avoided laying down any formal tests for causation: they have relied on common sense to guide decisions as to whether a breach of contract is a sufficiently substantial cause of the claimant's loss. The answer to whether the breach was the cause of the loss or merely the occasion for the loss must "in the end" depend on "the court's common sense" in interpreting the facts.

(and at 27-045)

The type or kind of loss. The reference to "the loss" in the formulations of the test for remoteness of damage is to be interpreted as the type or kind of loss in question. The "party who has suffered damage does not have to show that the contract-breaker ought to have contemplated, as being not unlikely, the precise detail of the damage or the precise manner of its happening. It is enough if he should have contemplated that damage of that kind is not unlikely." (There is a similar formulation in the test for remoteness of damage in tort: "the essential factor in determining liability is whether the damage is of such a kind as the reasonable man should have foreseen.") If the parties ought to have contemplated a particular type of loss ("head of damage") they need not have contemplated the extent of that loss.

26. In The Heron II [1969] 1 AC 350, 385, Lord Reid summarised the position thus:

The crucial question is whether, on the information available to the defendant when the contract was made, he should, or the reasonable man in his position would, have realised that such loss was sufficiently likely to result from the breach of contract to make it proper to hold that the loss flowed naturally from the breach or that loss of that kind should have been within his contemplation.

27. Leaving aide for the moment the credibility and veracity of the evidence in this regard, and accepting for the moment that housing benefit was indeed cut for poor performance, I cannot see that such loss was reasonably foreseeable at the time of contract to result from the breach of the retainer. In my judgment, the claim lacks the requisite causal connection. Put shortly, it is too remote to sound in damages.

28. If I were wrong in so holding, I am not persuaded on the quality of the evidence from the plaintiff that the reduction in housing allowance was on the balance of probabilities, essentially attributable to his unsatisfactory performance at work brought on by the stresses and strains from having to deal with Warne and latterly with Madam Du and her parents. As the defence quite correctly demonstrated, Wan Fung had even prior to the period for which damages were pursued, reduced the level of housing benefits. From the Employer's Return Of Remuneration And Pensions for the year ended 31 March 1998 (document at Bundle F7), Wan Fung had paid the plaintiff's landlord for the rented flat at Conduit Road, a total of $112,000 between 1 April 1997 and 30 October 1997, or monthly rental of $16,000. From October 1997, the plaintiff was residing at Lyttleton Road and the rent had dropped to $14,265 each month. Whilst I accept that the plaintiff's concentration and performance might have been deleteriously affected by Warne's conduct, the years following late 1997 was a period of economic downturn in Asia markets. That is a notorious fact of which judicial notice can and should be taken. How then can it be said as a matter of probabilities that the fall in the company's sales were wholly or mainly caused by the plaintiff's performance at work? No one escaped the dire effects of recession, and one can safely say that Wan Fung would in all probability not have been an exception. That was the position taken by the defence with which I am in agreement.

29. Further, it was elicited in cross-examination that despite performing poorly, the plaintiff's salary had actually been increased by his employers from $28,000 to $31,500 per month from April 1998. This fact does not sit comfortably with the reason offered for reducing housing allowance in my considered view. That aside, the plaintiff has also not informed the court of his actual relationship with Wan Fung and his directorship in the company. The defence argued that his evidence and in particular, exh. P5 in this regard must be view with suspicion.

30. The burden of proof on the balance of probabilities remains with the plaintiff. On the evidence, I am far from persuaded that this head of damages has been established.

IDD telephone charges

31. On general principles of causation and foreseeability of damage, this claim cannot, in my view, be substantiated.

32. The plaintiff's case was that he had incurred a huge telephone bill of $71,008.38 between February 1998 and May 1999 contacting Madam Du in trying to salvage their relationship. No telephone bills prior to February 1998 or after May 1999 were produced. These, if available, might have provided an indication of the frequency of communication between them. The plaintiff contended that because of the inapt handling of his divorce, Madam Du and his parents were beginning to put pressure on him to reach a firm decision regarding his plans for Madam Du. To pacify them and to ensure that his prospect of re-marriage was not further jeopardised, he maintained that all these telephone calls were not only necessary but should be paid for by the firm as Warne was at all times fully cognizant of his intention to marry Madam Du in early 1998. Such expenditure represented damages flowing naturally from the breach and was reasonably within the contemplation of the parties at the time of contract. The plaintiff was prepared to give credit for the usual expenses of $500 per month, as he would in any event have maintained contact with Madam Du prior to her obtaining permission to live in Hong Kong. His net claim therefore comes to $63,008.38.

33. I wholly agree with the defence that the level of calls for the 16-month period was extravagant on any view. On occasions, the plaintiff spoke to Madam Du in Beijing several times a day for more than an hour at a time: see e.g. C16, 17. The defence was not entirely unjustified in complaining that they were being asked to finance the courtship.

34. I hold that it cannot be within the contemplation of any reasonable man that the firm's breach of duty would result in all these long distance call charges. If the plaintiff chose to indulge Madam Du, that was his prerogative, but I fail to see any logic why these many costly telephone conversations could be said to have been effectively triggered by the breach. Accordingly, no award is made under this head.

Air Ticket to Beijing

35. This claim related to a trip by the plaintiff to Northern China, he said, to meet Madam Du. The visit was undertaken in February 1998 to patch their relationship. A copy of the ticket can be seen in C92. The amount sought had varied from $3,000 (Statement of Claim), to $4,660 (fare stipulated in the copy of the ticket) eventually settling at $3,100 in the plaintiff's testimony. The plaintiff testified that the trip was not work-related, but was unable to produce any evidence of payment. In the normal course of events, it was probable that the plaintiff would have had from time to time to travel to the mainland to see Madam Du as even upon marriage, she would have had to wait in the queue for her one-way permit to Hong Kong, breach or no breach of the retainer. This comment has equal application to the subsequent claims for expenses related to hotel accommodation and the rendezvous in Guangzhou and Beijing.

36. In my judgment, the plaintiff cannot recover the cost of the air ticket on causation and remoteness.

Expenses in Guangzhou and Beijing and cost of hotel accommodation

37. These can conveniently be looked at together although they relate to different periods.

38. The claim in respect of accommodation was for 64 nights at an average rate of $500 per hotel room night, or a total of $32,000. It covers 3 periods in February, August and September 1998. Not all relevant vouchers have been made available for scrutiny. The plaintiff argued that these were legitimate expenses if his relationship with Madam Du was not to be destroyed by the firm's conduct. He explained that the expenditure was for single rooms and the fact that Madam Du had joined him did not increase his accommodation costs. His China Re-entry Permit confirmed his presence in the PRC at the relevant times.

39. The defence noted that Wan Fung had been debited on 11 August 1998 by the travel agent and suggested that if it had been a personal trip, the company would not have been involved. The plaintiff explained that he usually booked air travel through the company to benefit from discounts. This I accept was the case. The defence further suggested that the possibility of mixing business and personal affairs in the periods in question could not be discounted. In this connection, it was drawn to my attention by reference to documentation at C99, that two hotel rooms were paid for: see the guest invoice dated 13 August 1998. Meal expenses had also been incurred for the benefit of two named individuals, neither of whom were Madam Du or her parents. The evidence adduced in support is, therefore, to some extent suspect. It would be difficult if not impossible to apportion accommodation expenses wholly related to visiting Madam Du in the circumstances. However, that is of little moment, for I conclude that the plaintiff has failed to demonstrate the mandatory causal connection with the breach or that such expenses were reasonably foreseeable. I form a similar view in respect of the expenses claimed for Guangzhou and Beijing.

40. The plaintiff testified that he has had to spend about $1,000 a day for 3 meals and taxi travel. Sustenance ranged between $270 and $360 per meal for himself and Madam Du. The plaintiff fully accepted that he has failed to produce all vouchers pertaining to this claim. He sought reimbursement for 70 days, namely $70,000. It was submitted that the plaintiff was not entitled to claim for two pax and that, quite apart from any contractual or tortious breach of duty, the plaintiff would have had to meet his own travel and meal expenses had he remained in Hong Kong where costs would probably have been significantly higher. With that I concur. I am not prepared to allow this head of claim.

No pay leave

41. An equivalent of two months' salaries is pursued under this head. The total claimed is $63,000 or twice the monthly pay of $31,500. It relates to two periods of 30 days each from 4 June 1998 to 3 July 1998, and from 12 August 1998 to 27 September 1998, respectively exh. P6a and P6b. Both exhibited letters certified that no salary had been paid to the plaintiff by his employers for the relevant periods of leave when the plaintiff said he was in Beijing patching things up with Madam Du. Yet Wan Fung's Employer's Return Of Remuneration and Pensions for the year ended 31 March 1999 (F8) demonstrated unambiguously that the plaintiff had indeed received a whole year's salary totalling $378,000 for the period in question. The plaintiff and his sister's (PW2) evidence was to the effect that, albeit the two tranches of leave had been paid, following checks by the sister, it was determined and the same was communicated to the plaintiff that the over-payments would be treated as loans to him and had to be reimbursed. There was no evidence that this indebtedness has been settled in part or whole since October 1998 when the error was first discovered. Having heard the evidence of the plaintiff and PW2, I find this aspect of the evidence most suspect. I am far from persuaded that the plaintiff has had to take no pay leave to travel to Beijing. That would be sufficient to dispose of this claim.

42. Even were it to be demonstrated that the plaintiff has suffered financial loss inasmuch as a debt is now owed to Wan Fung, I fail to see how the breach of the retainer could have been causative of such damage. The claim cannot begin to satisfy the principles of causation and remoteness in my judgment. As the defence observed, the plaintiff has effectively endeavoured to render them wholly accountable for all the expenses associated with his courtship of Madam Du.

Spousal maintenance

43. The plaintiff contended that but for the breach of duty, he would not have had to pay any ancillary relief to his ex-wife, who had agreed at the outset to an amicable dissolution and requested no maintenance of any kind. He asserted that Warne was informed of this, a fact which I have accepted as true. Consequent upon the manner in which the firm was handing his case, he testified that his ex-wife had telephoned him, seeking a lump sum payment in about November 1998. Apparently, she has had second thoughts in the interim. That was why, he explained, the petition was amended to include maintenance payment in the sum of US $40,000. He denied that the financial provision was his own idea. The evidence disclosed that this sum has not been given to the ex-wife. Neither, it seems, has she chased for payment.

44. The ex-wife signed and returned Form 4 (F17) after being served with the divorce papers. Form 4 was dated 19 November 1998. To both questions 8(f) and 9(f), she had clearly indicated that it was not her intention to be heard on any claim for lump sum or to pursue any application for lump sum. She did, however, sign a consent summons (F20) dated 23 December 1998 that provided, inter alia, for payment of US $40,000 to her on the grant of the decree absolute. The two documents are not necessarily inconsistent as was suggested. As the plaintiff explained, looked at together they should only be read as informing the Family Court that the ex-wife was seeking no other order than those provided for in the consent summons. I agree with that interpretation as it is eminently sensible.

45. A spouse is always entitled to change his or her mind on matters of ancillary relief. The ex-wife in this case is no exception. In the circumstances of this case, while the plaintiff was given to understand that the ex-wife was not intending to make any claim for support following dissolution, it remains his responsibility to provide for her should a need arise. She could well have changed her mind earlier even were the divorce to have proceeded expeditiously and uneventfully. It remains the burden of the plaintiff to establish on a preponderance of probabilities that the ex-wife would have foregone financial provisions and that the breach of duty had brought about a change of heart such that a reasonable man would have contemplated it as a likely consequence of the breach. This he has quite clearly not done. The obligation to maintain arose quite independently of the firm's handling of the retainer. No award is, therefore, made under this head.

Conclusion

46. The plaintiff having failed to prove a significant portion of his claims, damages will, therefore, comprise of the following:

Mental Distress	$130,000
Wasted Expenditure	$1,737.80
Total Award	$131,737.80

47. As the partners of the firm are jointly and severally liable on the consensual judgment, the partners named are to compensate the plaintiff in the sum of $131,737.80. To that will be added interest at judgment rate from the date of the writ until full payment. The plaintiff shall additionally have his costs of the assessment, taxed if not agreed, with certificate for counsel.

Contribution and Indemnity

48. Lee has served a notice claiming contribution and indemnity under the Civil Liability (Contribution) Ordinance, Cap. 377 against To, Warne and Tsui. To's notice was confined to Lee and Warne, whereas Tsui has sought indemnification only against Lee and Warne. It is, therefore, necessary, for an apportionment of responsibility amongst the partners to be undertaken.

49. That the villain of the piece was Warne was beyond dispute. It was he who had accepted instructions on behalf of the firm, and being the solicitor handling the case throughout, had for no immediately apparent reason, totally failed to carry out the task entrusted to him. He had consistently lied to the plaintiff even resorting to using false documentation to delay discovery.

50. Tsui joined the firm on 1 May 1998. He submitted that damages accruing prior to his arrival ought not to be his responsibility, and damages, if any, after that time would have been minimal. Whether he has undertaken antecedent liability (an unlikely scenario) would be a matter of contract between the partners. The partnership agreement has not been exhibited. What is clear is that between 1 May 1998 and the end of the retainer on 12 October 1998, he was an active partner of the firm. The evidence is far from clear whether he was made aware of the firm's default in the period after he joined the partnership. With the benefit of hindsight, he ought to have acquainted himself with case management and the running of the firm. In those circumstances, he can only be faulted upon the basis that qua partner, he shared the responsibility of ensuring that the firm was run properly so that no clients' interest was compromised. It matters not whether a file was handled by a fellow partner, an assistant solicitor, an articled clerk or a litigation clerk. That duty equally fell on Lee until his retirement on 25 May 1998 and on To. That may be an onerous responsibility, but a necessary one if solicitors are to perform to the requisite high standard expected of their calling. Tsui in my judgment is the least culpable of the partners and this should be reflected in the apportionment accordingly. I adjudge Tsui to be liable for 2% of the damages and costs.

51. Lee was a partner throughout until his withdrawal from the firm on 24 May 98. The firm became seized of the divorce on 11 February 1997 when Warne joined it. He joined the Bar in June 1998. His relationship with the firm lasted about 15 1/2 months. It was his evidence that in all that time, the divorce petition was exclusively handled by Warne and he was ignorant of any misconduct on Warne's part. I have no reason to doubt him. In the circumstances, I would assess his share of responsibility at 6%.

52. As for To, his involvement was between 11 February 1997 and the withdrawal of the retainer on 12 October 1998, a duration of about 20 months. He did not give evidence, being content to focus on the heads of claim through counsel. I am, therefore, unable to determine if he was apprised of Warne's errant behaviour. This lacuna is not especially immaterial in light of standard of professionalism expected of him as a partner. I hold him 8% responsible.