CHEUNG KONG (HOLDINGS) LTD. v. CHAN WAI YIP, ALBERT

HCA16790/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 16790 OF 1998

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(HEARD TOGETHER)

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J U D G M E N T

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1. This is an appeal by the defendant from an order made by the master in the course of taxation of three sets of Bills of Costs, two arising from two separate orders made by me and one arising out of an order made by the Court of Appeal (arising from an appeal from my decision). All three orders were made in favour of the defendant on costs, and therefore the defendant put in the three bills and sought for taxation and payment from the plaintiff.

2. The plaintiff launched what was said to be Objection No. 1 in its List of Objections. That Objection No. 1, in relation to the whole bill, reads :

"The defendant is requested to produce proof of any agreement with his solicitors relating to fees so as to satisfy the taxing master that the indemnity principle of taxation is not breached, (62/App/2 O.62 RHC, applied in the judgment handed down by Mr. Registrar C. Chan on 2nd May 2001 in Holiday Resorts (Management) Co. Ltd. V Chan Yuk Yan and ors. HCA No.7665 of 1998)."

3. At the hearing of the taxation, upon the insistence of the law costs draftsman who appeared for the plaintiff, it would seem, from the affidavits that I have before me, that the law costs draftsman of the defendant informed the court that there was no agreement made between the solicitors for the defendant and the defendant. The master, however, perhaps in applying and following the decision of the Registrar in the Holiday Resorts case, made an order in the following terms which reads :

"Objection No. 1 of the Plaintiff's List of Objections to the Defendant's Bill of Costs be adjourned to a date to be fixed for argument to be heard together with Objection No. 1 in Bill 1 in HCA 16790/98; the Defendant's Solicitors do file an affidavit within 14 days to state whether there is any agreement, whether oral or written, with his client related to solicitors costs; no allocatur to issue on the taxed costs until this objection is resolved and decided on; no allocatur to issue related to Counsel's fees until signed receipts from Counsel evidencing payment of Counsel's fees allowed upon taxation are produced to the Court for perusal."

4. The debate at today's hearing, on the appeal of the defendant, is whether the master was right in making the order she did. At today's hearing, I have the assurance and the confirmation from counsel, acting on instructions, that there was no agreement on fees between the defendant's solicitors and the defendant.

5. The question of how to deal with the matter on taxation when the indemnity principle was suspected to be breached was considered in the case of Bailey v. IBC Vehicle Limited [1998] 3 All ER 570, and the passage that was read out to me by Ms Po, from page 573 to page 574, is particularly relevant. It is not necessary for me to analyse the decision in any substantial way here except to say that in every case, it would much depend on the fact of individual case as to how the court should react.

6. I think, generally speaking, there must be a differentiation to be made between two situations : (1) where there was no agreement made as to fees; and (2) when there was an agreement made as to fees. I can readily appreciate in a case where there was an agreement made as to fees, such as in the Holiday Resorts case decided by the Registrar, the Registrar felt that there was a need to call for more material because there was an agreement and the detail of the agreement may be susceptible to a great deal of verification and details. As to how much that might be required by the Registrar or by the taxing master, that is, of course, a matter that will depend on the facts of each case.

7. But in a case where there was confirmation -- as here -- that there was no agreement, then I think the scope for inquiry must be very limited unless the court took the view that what had been said plainly cannot be accepted, or that there would be contrary evidence to show that the confirmation of no agreement cannot be accepted.

8. The narrow point I have to decide today is, having regard to what had happened and what had been told to me, whether this is a case which really calls for an affidavit, and I take the view that no affidavit is required. I do not of course overlook the fact pointed out to me by Mr Chaine in his very able submission that this is a case where there was a very close relationship between the solicitor who is a deputy chairman of the Democratic Party, leading counsel, Mr Martin Lee who is the chairman of the Democratic Party and the defendant who is a member of that same party. But there was, nevertheless, a confirmation that there was no agreement and there was also the bill that had been put in by the solicitor, which speaks for itself.

9. I therefore do not take the view that this is a case which calls for an affidavit. I think it was unfortunate that at the hearing before the master when both sets of the law costs draftsmen appeared (and not the solicitors) the case of Bailey or the possibility of a lesser form of a nuclear weapon, such as, for example, a simple letter confirming the instructions, had not been considered as a sufficient material to be sought from the defendant. But nevertheless, it seems to me that, as matter stands now, this is not a case where an affidavit is called for.

10. I therefore order that the appeal to be allowed, that the taxation should continue without further ado and that no further material should be sought from the defendant on the question of any agreement on fees. I will now hear the parties as to the tricky problem of costs.

[Submissions for Costs]

11. I order that the costs of the appeal be to the defendant in any event.