LEUNG KANG WAI v. NG YAT WING AND ANOTHER

HCPI 1224 OF 1995

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 1224 OF 1995

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BETWEEN

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REVIEW OF TAXATION OUT OF TIME

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Introduction

1. These applications are brought by the plaintiffs’ solicitors in HCPI No. 1086 of 1995 (“the 1^st action”) and HCPI No. 1224 of 1995 (“the 2^nd action”) for leave to review out of time my decision on the fees of the plaintiffs’ counsel. The circumstances leading up to these applications are summarised below.

2. The plaintiffs were bus drivers of the Kowloon Motor Bus Co (1933) Ltd, the 2^nd defendant in these actions.  On 30^th January 1993, they suffered personal injury in a traffic accident while travelling on board one of the 2^nd defendant’s buses driven by the 1^st defendant, also a driver of the 2^nd defendant.  The present actions commenced when writs were issued against the defendants on 3^rd November 1995 in the 1^st action and on 12^th December 1995 in the 2^nd action respectively.

3. The defendants admitted liability in the actions on 30^th April 1997, followed by a consent order dated 6^th May 1997 for interlocutory judgment for damages to be assessed.  On 3^rd April 1998, both actions were ordered to be set down in the fixture list commencing on 27^th July 1998.  However, they did not proceed to trial.  In the 1^st action, the plaintiff on 24^th June 1998 accepted a settlement offer of HK$1.05 million.  In the 2^nd action, the plaintiff on 6^th July 1998 gave a notice of acceptance of payment into court by the defendant in the sum of HK$2.62 million.

4. The taxation of the plaintiffs’ bills of costs in both actions took place on 23^rd, 24^th and 26^th February 1999.  After hearing submissions, I reduced counsel’s fees for the following items:

"Item	Amount claimed	Amount allowed
(In the 1st action)
(1)   Advice on quantum & evidence dated 18.6.97	$25,000	$15,000
(2)   Further advice on quantum dated 26.8.97	$7,500	$2,500
(3)   Brief	$150,000	$20,000
(In the 2nd action)
(4)   Advice on revised statement of damages and other matters dated 20.5.98	$25,000	$18,000
(5)   Brief	$150,000	$20,000"

5. By a letter dated 11^th March 1999, the plaintiffs’ solicitors confirmed the amount of allowed costs and disbursements and interests for both actions.  On 24^th March 1999, the defendants paid the allowed costs and disbursements.  The present applications were not brought until 30^th September 1999.

6. After the hearing on 15^th May 2000, further submissions in writing, upon my invitation, were made by the plaintiffs and the defendants to address Butterworths Costs Service, para. 2215 at B460 on premature delivery of brief and the English case of Loveday v. Renton (No.2) [1992] 3 All ER 184 in which the principles covering counsel’s fees in legal aid taxations were discussed.  Despite my invitation, the Director of Legal Aid (“the Director”) chose not to make any submission, presumably because he adopts a neutral stance in the present applications.

7. I now turn to deal with the merits of the applications.

Delay and its reasons

8. An application for a review against any decision on taxation shall be brought within 14 days after the decision: RHC, O62 r33(2).  The present applications are hopelessly out of time.  Ms. Lau, counsel for the plaintiffs, seeks to rely on the court’s power to grant extension under O62 r16.  She submits that there was good reason for the delay.  In order to see if this submission is valid, it is necessary to set out the relevant part of counsel’s affirmation in full:

“2.My fees in the case were included in the plaintiff’s solicitors’ said bill which was taxed by Master Poon on the 26th day of February 1999.  On the same day, the plaintiff’s solicitors’ informed me of the result of the taxation by fax.  A copy of the said fax is now produced and shown to me marked ‘SL1’.  I shall explain hereinbelow how my mistaken reading of the said fax and the circumstances that have led to the delay in seeking leave to apply out of time for a review of Master Poon’s said decision.

3.On 14 June 1999, I received a letter from the Legal Aid Department dated 8 June 1999 with regard to my fees in this case.  I was asked for a refund of some $62,750 of the advance payment of fees made to me by the Director.  That sum represented the difference between the total amount of my fees in the case as taxed by Master Poon.  A copy of the letter is now produced and shown to me marked ‘SL2’.

4.Having received the said letter from the Director of Legal Aid, I reviewed my fee notes sent in the case and the fax marked SL1 above.  At the same time I also reviewed my fee notes in the related case in HCPI 1224 of 1995 and the fax from Messrs. Wilkinson & Grist (“W&G”) to me dated 23 February 1999 setting out the results of the taxation in that case.  A copy of the fax from W&G dated 23 February 1999 is now produced and shown to me marked ‘SL3’.  The two cases were connected as the assessment of damages in the two cases was set down to be heard one after the other in July 1998.

5.On reviewing the two faxes from W&G (SL1 and SL3), I recalled reading them earlier at about the time of their receipt and making a decision at the time not to object to the taxation in the two cases.  The reason for that decision was as follows:-

(1)I had mistakenly believed that the amounts set out in the 3rd column of the W&G fax relating to this case (SL1) headed “Taxed” represented the taxed amount of my fees.  I had somehow simply not taken in the word “less” preceding the amounts in that column.  I believe the mistake arose because I was reading the two faxes for the two cases together.  In the fax relating to HCPI 1224 of 1995, W&G had headed the corresponding column as “Amount taxed off” and in the fax for this case, the column was simply headed “Taxed”.  I must have in my mind automatically assumed that there was a distinction between the two, and I believe that was how I just simply did not take in the word “less”.

(2)I recall that when reading the two faxes, my primary concern was with regard to the amount for the unused briefs as I recalled that I had specifically requested for an early delivery of the briefs because I had to turn away other cases for the dates marked in my diary for the assessment in these two cases, and I was particularly concerned that the taxed amount should be reasonable as I had had to forego other briefs in their stead.

(3)I recall being not satisfied with the taxation, but believing as I did that the 3rd column in the fax relating to this case was a reference to the taxed amount and not taxed off amount, I though that what the taxing master had done was to treat the two briefs in substance as one and therefore allowed a total amount of $150,000 as my brief for the two cases: $130,000 for this case and $20,000 for HCPI 1224 of 1995.  I thought that the taxing master might have taken the view that a good number of the issues in the two cases were common, and therefore in substance, only one full brief should be allowed.  Labouring under that misconception, I though that although I was not wholly satisfied with the taxing master’s taxation, it may nonetheless be difficult to challenge his taxation as unreasonable.  I, therefore, decided not to object to the taxation in the two cases.

6.When however, I reviewed the said two faxes in June in the light of the said letter from the Director of Legal Aid (SL2), for the first I realised that I had made a terrible mistake in my earlier reading of the fax for this case.  Had I not misread that fax earlier and been aware at the time that the amounts set out under the 3rd column represented the amounts taxed off my fees, I would never have accepted the taxation and definitely objected to the same.  If the two cases are considered as one, the brief for the assessment of damages in two cases have effectively been taxed at $40,000, and that is substantially below the brief fee for assessment of damages in personal injuries cases normally charged by me as well as by other bar members of my standing (17 years as at July 1998).  $40,000 is the normal refresher that I charge for a High Court case, and it can be seen from the results of a fee survey conducted earlier this year by the Bar Association, a copy of the average range of refresher rates charged by junior counsel of my standing in civil cases in the Court of First Instance.  The range is $35,625 – $40,625.

7.Once I became aware of the mistake that I had made, I wrote to W G to explain the situation and to initiate the process that has to be gone through to enable me, with the authority of the Director of Legal Aid and through W G, to seek a review of the taxation of my fees in this case.”

9. The plaintiff’s solicitors then reported Ms. Lau’s dissatisfaction to the Director and sought his authority to apply for a review.  It took about 2 months for the Director to give the requisite authority to review.  It was given upon counsel’s undertaking to bear any costs of and incidental to the review hearing.

Exercise of discretion

10. I do not accept Ms. Lau’s explanation as to how she had mistakenly read the letters of the plaintiff’s solicitors reporting on the results of taxation, causing the delay in seeking the authority of the Director for review.  It is true that in the letter “SL1” the heading “Taxed” was used.  But the word “less” used thereunder for each item had certainly made it clear that the figures represented the amount taxed off and not the amount allowed.  As no good reason for the delay has been shown, leave to review out of time must be refused.

11. Even if I were to accept Ms. Lau’s explanation, for the following reasons, these applications must also fail.

The advice

12. I first deal with the advice.

13. It is apparent from Ms. Lau’s affirmation and the contemporaneous correspondence, that she was only dissatisfied with my decision on her brief fees.  She had not made any references to, let alone any complaint against, my decision on the advice.  Her dissatisfaction on the brief fees was the only basis upon which authority of the Director for review was sought and given.  In my view, the review against the advice is clearly an afterthought, slipped into the review against the brief fees as a matter of convenience.  That is not permissible.  And leave to review out of time must be refused.

The brief fees

14. On the brief fees, the parties agree that I should take into account the merits of the substantive application for review when considering whether to grant extension.  The reason is obvious.  There is no justification to extend the time to pursue an unmeritorious review.

15. The briefs for the two actions can be conveniently dealt with together.  The order for setting down both actions for assessment was made on 3^rd April 1998.  Trials would take place on 27^th July 1998, one after the other.  Brief was delivered on 20^th May upon Ms. Lau’s request.  She specifically asked for an early delivery of the briefs because she had to turn away other cases for the dates marked in her diary.  In this connection, she refers to the Hong Kong Bar Code, Annex 18(i) which states:

            “If after the marking of Counsel’s diary, Counsel is approached by another solicitor wishing to brief him during the same period in question or part thereof, Counsel (who by that time has agreed his brief as well as refreshers) would be obliged to approach the 1st solicitor and he should specify terms as to the manner in which the agreed brief fee and refreshers should become payable.  If the 1st solicitor or his client is not in agreement with such terms, the Counsel will be at liberty to accept the brief from the 2nd solicitor.  In such event, the 1st solicitor need not pay Counsel anything in relation to the reserved dates.  Provided that the above rule does not apply where:

            (i)Counsel and solicitors have come to an express agreement relating to both the brief and refreshers and the manner in which they are payable; or

            (ii)A brief is delivered before the commencement of trial, because in such event, the brief fee is payable in any event, but the payment of unused refreshers will still be governed by the above rule.”

16. She submits that briefs were not delivered prematurely.  In this connection, she relies on Thomas v. Pain (1882) 30 Ch D 360 where Jessel M.R. said at p. 361:

“If … in a case of a motion to commit for contempt, the Taxing Master thought that the moving party had delivered his briefs prematurely, he disallowed them as being delivered for the purpose of making costs, but if he thought they were fairly delivered he allowed them.”

17. As the actions were eventually settled, these briefs were unused.  Counsel, referring to the above Hong Kong Bar Code, submits that no distinction should be drawn between used and unused briefs.

18. Finally, Ms. Lau accepts that on a party and party taxation, the amount of $150,000 charged for each case might not be allowed in full.  Having regard to the time probably needed to prepare the trials, she suggests that a total sum of $200,000.  She, however, concedes that as a matter of fact, she had not started preparation of the trials yet.  The net effect of counsel’s submission is that the defendants are liable for a significant portion of the brief fees although she had done nothing to prepare for the trials.

19. The defendants submits that the brief fees must be based on the actual work done: Loveday v. Renton (No.2), supra.  As counsel had done nothing to prepare for the trials, the reduction I made was reasonable.  Further, the briefs were delivered prematurely.  And I was right in substantially reducing the brief fees: Butterworths Costs Service, para. 2215 at B460.

20. Counsel’s briefs in the present cases were taxed in accordance with Regulation 4 of the Legal Aid (Scale of Fees) Regulations.  I have previously set out the statutory framework within which such taxations and reviews are to be conducted in Ngan Wun Yeung, an infant, suing by his father and next friend Ngan Man Bun v. The Lok Sin Tong Benevolent Society, Kowloon and Others, HCPI No.536 of 1997, unreported.  I do not propose to repeat them but only wish to point out that in a legal aid taxation, counsel’s fees shall be such as may be allowed on taxation or, in default of taxation, as may be determined by the Director.

21. If I were to give leave to review out of time, the question that I have to decide is whether in a legal aid taxation, counsel is entitled to claim a significant portion of the unused briefs when she had not done anything to prepare for the trials.  In my view, the answer must be no.

22. In assessing a brief fee it is always relevant to take into account what work that fee, together with the refresher, has to cover.  The brief fee covers all the work done by way of preparation for representation at the trial and attendance on the first day of the trial.  In the normal case, counsel is not entitled to be remunerated separately for work done which was necessary for and incidental to the proper representation of the client at the trial unless there was a separate agreement to that effect: Loveday v. Renton (No.2), supra, accepted and applied by the Court of Appeal in Yeung Shu & Another v. Alfred Lam & Co. (A firm) [2000] 1 HKLRD 227.  Thus, a brief fee covers two components: (1) the preparatory work done for the trial; and (2) the attendance on the first day of the trial.  If, as in the present cases, counsel had done no preparatory work at all, I fail to see how a claim for a significant portion of the brief can be justified.

23. I wish to point out that at the hearing in May 1999, the sum of $20,000 for each brief was allowed by me on the basis that counsel had already done some preparatory work for the trials.  That basis, of course, no longer exists.  But since the defendants have not asked me to reopen the matter on this ground, I will just simply leave it as it stands.

24. I do not consider it necessary for present purposes to address the question concerning premature delivery of brief.  For, leaving that question aside, if no preparatory work for the trials had in fact been done although briefs had been delivered, I do not think counsel is entitled to claim for a significant portion of the brief fees.  But for the sake of completeness, I would venture to explain why if a brief is considered to have been delivered prematurely, the fees will be taxed off or reduced in a taxation inter partes: see Butterworths Costs Service, para. 2215 at B460.  If a brief is delivered prematurely, it is only reasonable to infer that counsel had not done any preparatory work for the trial (in which case the fees will be taxed off) or that the preparatory work done by counsel was significantly less than what would otherwise be needed (in which case the fees will be reduced).

25. Lastly, it is my view out that Annex 18(ii) of the Hong Kong Bar Code does not assist Ms. Lau at all.  Annex 18 (ii) may well set out the instructing solicitors’ obligation to pay counsel’s fees after delivery of the brief.  However, it dose not necessarily follow that the defendants are liable for the brief fees on taxation.  This has to be decided by the court by applying the principles.  And according to the principles which I have set out above, a claim for a significant portion of the unused briefs when no preparatory work for trial had in fact been done is not permissible.

26. There is no merit in the review against my decision on the brief fees.  Leave to review out of time must therefore be refused.

Conclusion

27. For the above reasons, these applications for review out of time  fails in their entirety and I dismiss them accordingly.  Upon the parties’ request, I will reserve the question of costs and interest and give them liberty to apply, if necessary.