WONG KAR GEE MIMI v. K C HO & FONG (a firm)

HCMP 61/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 61 OF 2014

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DECISION
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BACKGROUND

1. By Originating Summons dated 11 January 2014, the plaintiff applies for an order that all the bills of fees, charges and disbursements delivered to the plaintiff by the defendant in all causes and matters wherein the defendant had acted for the plaintiff be referred to taxing master for taxation.

2. There are all together 11 bills in question, namely:-

(1) Bill No. JH56700-B001 dated 8 October 2012 for $201,045.00 (“Bill 1”);

(2) Bill No. JH56700-B002 dated 10 December 2012 for $543,500.00 (“Bill 2”);

(3) Bill No. JH56700-B003 dated 8 March 2013 for $539,000.00 (“Bill 3”);

(4) Bill No. JH56700-B004 dated 17 April 2013 for $954,806.64 (“Bill 4”);

(5) Bill No. JH56700-B005 dated 7 May 2013 for $658,692.00 (“Bill 5”);

(6) Bill No. JH56700-B006 dated 30 May 2013 for $1,532,352.50 (“Bill 6”);

(7) Bill No. JH56700-B007 dated 3 June 2013 for $438,536.60 (“Bill 7”);

(8) Bill No. JH56700-B008 dated 4 July 2013 for $2,342,437.00 (“Bill 8”);

(9) Bill No. JH56700-B009 dated 30 September 2013 for $1,315,300.00 (“Bill 9”);

(10) Bill No. JH56700-B010 dated 15 October 2013 for $35,000.00 (“Bill 10”); and

(11) Bill No. JH56700-B011 dated 31 October 2013 for $95,000.00 (“Bill 11”).

3. The defendant conceded at the call-over hearing on 29 April 2014 that Bill 6, Bill 8, Bill 9 and Bill 10 should be taxed, but disagrees to refer the remaining 7 bills to taxing master for taxation.

4. The defendant also took out a summons dated 24 July 2014 to ask for an order that the plaintiff do make: (1) payment into court in the sum of $2,311,626.10 being the total outstanding sum of Bill 6, Bill 8, Bill 9 and Bill 10; and (2) interim payment of Bill 11 in the sum of $95,000.00.

5. The plaintiff’s application is made pursuant to section 67 of the Legal Practitioners Ordinance, Cap 159, which sets out the circumstances where the court may order a solicitor’s bill to be taxed.  The relevant provisions of section 67 read as follows:-

“(1) On the application, made within 1 month of the delivery of a solicitor's bill or a foreign lawyer's bill, of the party chargeable therewith the Court shall, without requiring any sum to be paid into court, order that the bill shall be taxed and that no action shall be commenced thereon until the taxation is completed.

(2) If no such application is made with in the period mentioned in subsection (1), then, on the application of the solicitor or the foreign lawyer or of the party chargeable with the bill, the Court may, upon such terms, if any, as it thinks fit (not being terms as to the costs of the taxation), order-

(a) that the bill shall be taxed;

(b) that, until the taxation is completed, no action shall be commenced on the bill, and any action already commenced be stayed:

Provided that-

(i) if 12 months have expired from the delivery of the bill, or if the bill has been paid, or if a verdict has been obtained or a writ of inquiry executed in an action for the recovery of the costs covered thereby, no order shall be made on the application of the party chargeable with the bill except in special circumstances and, if an order is made, it may contain such terms as regards the costs of the taxation as the Court may think fit;

(ii) if the bill has been paid, no order under this subsection shall be made where the application for the order is made after the expiration of 12 months from the date of payment of the bill.”

6. The effect of section 67 was succinctly summarized by Recorder Jat SC in Re Miller Peart [2007] 3 HKLRD 125 as follows:-

“64. It is clear that the statutory scheme under s.67 is that:

64.1 within one month of the delivery of the solicitor’s bill, the client may apply to have the bill taxed as of right, and no term or condition will be imposed: s.67(1);

64.2 if the client does not apply for taxation within one month since the delivery of the bill, either the solicitor or the client may apply for taxation and the court may so order and impose any terms as it may think fit except terms as to the costs of the taxation: s.67(2);

64.3  if 12 months or more have elapsed since the delivery of the bill or if the bill has been paid, the client must show special circumstances to justify his application for taxation and the court may impose any terms including terms as regards the costs of the taxation: s.67(2)(i).”

7. Thus, as summarized above, section 67 stipulates 3 scenarios in which the court may order a solicitor’s bill to be taxed.  These three scenarios were referred to by Recorder Ho SC in Lee Chi Enterprises Company Limited v K C Ho & Fong, HCMP 61/2007, as “the first, second and third regimes”.  The plaintiff uses the same reference for these 3 scenarios.

8. For cases falling under the second regime (ie where the solicitor’s client did not apply for taxation within one month of the delivery of the solicitor’s bill), it is not disputed that, subject to any terms that may be imposed, the court will generally be inclined to order taxation, although the court does retain a general discretion to refuse taxation in an appropriate case (see Lee Chi Enterprises Company Limited, supra).

9. For cases falling under the third regime (ie when 12 months have expired from the delivery of the bill, or when the bill has been paid), it is not disputed that the client will have to show special circumstances to justify the application for taxation.

10. However, there is a further scenario under section 67(2)(b)(ii) of the Legal Practitioners Ordinance in which no order for taxation should be made at all, namely where the bill has been paid and the application for taxation is made after the expiration of 12 months from the date of payment of the bill.  I shall refer this scenario as the fourth regime.

11. The plaintiff submits that the 7 disputed bills can be divided into four groups based on their respective dates/payment status as follows:-. 

    Group 1: Bill 1 & Bill 2

    Group 2: Bill 4 & Bill 5

    Group 3: Bill 3 & Bill 7

    Group 4: Bill 11

12. I shall deal with these bills according to the grouping made by the plaintiff as discussed below.

GROUP 1: BILL 1 & BILL 2

13. There is no dispute that the plaintiff’s Originating Summons was taken out over 12 months after Bill 1 and Bill 2 were issued.  The plaintiff’s position is that Bill 1 to Bill 9 formed a series of interim bills which culminated in Bill 10 (being the final bill).  The plaintiff only received Bill 10 on 16 October 2013.  This is consistent with the terms of the retainer between the plaintiff and the defendant, ie the defendant would send the plaintiff their bill of services on an “interim basis”.

14. Whether a bill formed part of a series of interim bills or whether it was delivered as a separate final bill is a question of fact.  As held by DHCJ To (as he then was) in Chin Yuk Lun Francis v Messrs Lo & Lo (a firm), HCMP 1142/2005:-

“The second question is a question of fact. There are two elements here. The solicitor has to deliver that bill intending it to be a final bill and it is also intended and understood by the client to be a final bill. This question has to be answered by looking at the intention of the solicitor and the client, their conduct, the reaction of the client upon receipt of the bill and the form the bill took. No assistance could be derived from any decided case.”

15. The plaintiff submits that the forms of Bill 1 and Bill 2 are highly indicative of the fact that they were interim bills given that they were each marked as an “interim bill” by the defendant.  The plaintiff further submits that a clear way to distinguish “interim bills” from “final bills” is that interim bills refer to requests for payment of money on account (see Hong Kong Civil Procedure 2015,  para 62/App/61).

16. It is the plaintiff’s evidence that she deposited costs on account with the defendant because she was repeatedly pressed to do so by the defendant, and she wanted to ensure that her client account with the defendant did not have a negative balance, as well as to ensure that the defendant would focus their attention on the appeal in CACV 197/2012 rather than disputing with her over payment of legal fees.

17. Thus, the plaintiff submits that she had merely deposited costs on account which was then utilized by the defendant to set off Bill 1 and Bill 2. There is no evidence that she had authorized the specific payment of these bills via setting off such costs on account.  The plaintiff does not consider such deduction to constitute “payments”, but rather only as an alteration to the costs on account maintained with the defendant.

18. As such, the plaintiff contends that the court should allow these two bills to be taxed as long as the plaintiff can demonstrate that special circumstances exist (which will be discussed below).

19. I do not accept the plaintiff’s submissions in this regard.  The retainer between the plaintiff and the defendant has a clear term to the effect that the purpose of the costs on account is to settle such disbursements and interim bills to be issued from time to time.  The exact wording of the term is as follows:-

“In addition to professional fees, there are various disbursements that will be met as the case is proceeded along. Hence, it is necessary and obligatory for you to maintain with us appropriate amount of costs on account for purpose of settling such disbursements and interim bills to be issued to you from time to time.”

20. Such a term in the retainer shows clearly that the intention of the parties is to have the costs on account utilized for paying disbursements and interim bills.  I cannot see how else the word “settling” can be interpreted if it does not mean “paying”.  In fact, it is the plaintiff’s own evidence that when she made payments of $244,545.00, $493,806.00 and $658,692.00 to the defendant on 17 December 2012, 18 April 2013 and 7 May 2013 respectively, she did it to ensure that her client account with the defendant did not have a negative balance.  It means that she was well aware that the costs on account would be utilized for payment of disbursements and interim bills and hence the amount of such costs on account in her client account would be reduced accordingly.

21. The payment of $244,545.00 on 17 December 2012 also shows that the plaintiff was paying the outstanding balance sum of Bill 2 after the costs on account of $500,000.00 paid on 6 September 2012 was utilized in full for settling or paying Bill 1 in full and Bill 2 in part, as the amount of $244,545.00 is the exact amount of the outstanding sum under Bill 2.  If the plaintiff had only the intention to pay further costs on account or to make “alteration to the costs on account maintained with the defendant” (as alleged by the plaintiff), there is no reason why she would pay the exact outstanding amount and not a round figure.

22. It does not make sense to me that the defendant was only pressing for payment of costs on account and not actual payment of the bills (as alleged by the plaintiff), as it means that the defendant would still need to keep the money in client’s account and not be able to use the money to settle even the disbursements.  Why would the defendant press so hard then?

23. The payment of $244,545.00 is also clear evidence to show that the plaintiff had agreed to have the $500,000.00 costs on account utilized for payment of Bill 1 in full and Bill 2 in part, as it would not be otherwise necessary to pay the further sum of $244,545.00 if the plaintiff still thought that she had $500,000.00 on account.

24. Thus, from the term of the retainer and the payments made by the plaintiff as aforesaid, I find it as a fact that Bill 1 and Bill 2, although marked as interim bills, were intended by the parties to be paid like final bills when they were issued and not when the culminated final bill, ie Bill 10, was issued.

25. The payment date for Bill 1 and Bill 2 must be on 17 December 2012 at the latest when the plaintiff paid the sum of $244,545.00 and agreed by implication to utilize the $500,000.00 on account.  Since the Originating Summons was taken out on 11 January 2014, the application for taxation was made after the expiry of the period stipulated under the fourth regime (ie 12 months from the date of payment of the bill).

26. In the premises, the plaintiff is not entitled to have Bill 1 and Bill 2 taxed by virtue of section 67(2)(b)(ii) of the Legal Practitioners Ordinance.

27. Even if I was wrong in finding that Bill 1 and Bill 2 were paid on 17 December 2012, I do not accept that there were any special circumstances justifying taxation as discussed below.  Thus, Bill 1 and Bill 2 would not be allowed to be taxed under the third regime either.

GROUP 2: BILL 4 & BILL 5

28. It is not disputed that the plaintiff made payments shortly after Bill 4 and Bill 5 were issued.  The plaintiff paid a further sum of $1,000,000.00 as costs on account on 10 January 2013.  Part of this sum was used to settle Bill 3 (which is of the sum of $539,000.00).  So a balance sum of $461,000.00 was available as costs on account.  Bill 4 (for the sum of $954,806.64) was issued on 17 April 2013 and the plaintiff paid $493,806.00 on 18^th April 2013 to settle the balance sum under Bill 4 after the costs on account available then (ie $461,000.00) was used to pay part of Bill 4.  Bill 5 (for the sum of $658,692.00) was issued on 7 May 2013 and the plaintiff paid the exact amount (ie $658,692.00) for Bill 5 on the same day.

29. However, the plaintiff contends that the making of these payments did not detract from her dissatisfaction with the gross overcharging by the defendant.  She made the payments to the defendant to ensure that her client account with the defendant did not have a negative balance, the defendant would focus their attention on the appeal rather than disputing with her over payment of legal fees, and the defendant would be well satisfied and would continue to work for her on the appeal.

30. Nonetheless, the plaintiff acknowledges that she has the burden to demonstrate that special circumstances exist which justify taxation of these 2 bills. In fact, as the Originating Summons was issued within 12 months from the dates when Bill 4 and Bill 5 were paid, they fall within the third regime.

31. I shall discuss the special circumstances relied upon by the plaintiff below.

GROUP 3: BILL 3 & BILL 7

32. The plaintiff contends that she did not make specific payments in relation to Bill 3 and Bill 7.  Instead, she made various deposits of costs on account to the defendant upon the defendant’s repeated pressing for payments between 6 September 2012 and 19 July 2013.  The defendant’s statements of account indicate that these deposits were then utilized by the defendant to set off against Bill 3 and Bill 7.

33. Thus, the plaintiff’s primary position in respect of these 2 bills is that she does not need to demonstrate that special circumstances exist (ie they fall within the second regime).  Although the defendant had utilized the costs on account to set off again these bills, the plaintiff submits that there is no evidence that the plaintiff had at any stage authorized the specific payment of these bills by means of setting off such costs on account.  The plaintiff also contends that she did not consider such deductions to constitute “payments”, but only as “alterations to the costs on account maintained with the defendant”.

34. However, I find that the plaintiff had “paid” these two bills.  The reasoning as discussed above under Group 1 applies equally here.  In fact, for Bill 3, when the plaintiff admits that Bill 4 was paid, there is no room to argue that Bill 3 was not paid.  Part of the costs on account of $1,000,000.00 paid on 10 January 2013 was used to set off Bill 3 in full, and the remaining part of $1,000,000.00 was used to set off part of Bill 4.  The balance outstanding sum of Bill 4 ($493,806.64) was settled by the plaintiff with the payment of $493,806.00 made on 18 April 2013.  Although there is a small discrepancy of $0.64, I believe the parties had just ignored this very small sum.  This is similar to payments in respect of Bill 1 and Bill 2.

35. As to Bill 7 (for the sum of $438,536.60), it was set off in full by the costs on account available then (ie $967,646.86).  It is clear to me that this set off is similar to the previous set offs made by the defendant in relation to Bill 1 and Bill 3, even though there was no subsequent payment of an exact amount for the outstanding sum under a subsequent bill.  I am of the view that the term of the retainer as discussed above is sufficient to empower the defendant to utilize the costs on account as payment for Bill 7.  The contention that a deduction from the costs on account is not a payment cannot stand.

36. Thus, Bill 3 and Bill 7 should fall within the third regime instead of the second regime.  The plaintiff has to demonstrate that special circumstances exist which justify taxation of these 2 bills, just like Bill 4 and Bill 5.

37. I shall discussed the special circumstances relied upon by the plaintiff below.

GROUP 4: BILL 11

38. There is no dispute that Bill 11 is not paid.  As such, Bill 11 falls under the second regime and there is no need for the plaintiff to demonstrate any special circumstances to justify the taxation of this bill.

39. However, it does not mean that the plaintiff can have Bill 11 taxed as of right.  The court still has discretion to refuse taxation in appropriate cases (see Lee Chi Enterprises Company Limited, supra).  In Simmons & Simmons Solicitors v Thomas Joseph Dillon, JR, HCA 2784/2003, DHCJ To (as he then was) held that “In general, the discretion should be exercised in favour of taxation unless the application is an abuse of proceedings or not bona fide made”.  Thus, the court still needs to decide whether the application is an abuse of proceedings or not bona fide made.

40. Bill 11 is just a disbursement bill for counsel fees charged by Mr Daniel Fung, SC and his junior, Mr David Chen.  The plaintiff has no specific complaints about the work done or the amounts charged by them under Bill 11.  Although the plaintiff does not need to establish special circumstances, the application must still be a bona fide one.  There is simply no reason advanced by the plaintiff to ask the court to exercise discretion in her favour.  Moreover, as I do not see any unreasonableness of the fees charged under Bill 11, the intended taxation would not serve any useful purpose at all.

41. Thus, I do not consider the application to be a bona fide one and I will not exercise my discretion to order Bill 11 to be taxed.

SPECIAL CIRCUMSTANCES

42. In order to establish special circumstances under the third regime, the plaintiff is required to show that there is something out of the ordinary.  As held by Mortimer V-P in Springbok Shipping (HK) Ltd & Others v Clayton Wong & Co [1998] 1 HKLRD 225, “the special circumstances which must be found by a judge must be something which are out of the ordinary.  There must be something which is serious and which justifies not only an ordinary taxation but a special one.”

43. In Wong Kar Gee Mimi v Hogan Lovells (a firm) [2012] 5 HKLRD 348, Master de Souza held that what constitutes special circumstances would necessarily depend upon the facts of each case, and he identified a list of factors constituting special circumstances, including evidence of overcharging, lack of particularity in the bill, whether an applicant has expressly reserved his right to taxation, whether there is pressure brought to bear to settle a bill, the overall nature of the services rendered, the nature of the bill, whether adequate explanations have been given for the amounts, a very large bill, gross blunder and extraordinary charges.

44. Moreover, a large number of clerical duties or functions may amount to overcharging (see Wang Yoeh Yu Ruth v Chan Victoria [1988] HKC 687.

45. The plaintiff submits that special circumstances exist in the present case which would justify taxation of the bills falling under the third regime. The crux of the grounds of her request for taxation relates to the alleged wasteful and unprofessional manner in which the defendant conducted the appeal, which led to the unnecessary incurring of an extravagant amount of costs.  The specific allegations are discussed below.

(1)  Excessive amounts of Counsel’s fees

46. The plaintiff submits that in the appeal, the total amount of disbursements incurred (the vast majority of which are counsel’s fees) was a staggering sum of $7,019,519.74.  A total of 9 counsel (comprising various queen’s counsel, senior counsel and junior counsel of differing seniority) were involved at various junctures of the appeal.

47. The plaintiff has set out her complaints in detail in her two affirmations in respect of the counsel’s fees contained in the bills in Groups 1 to 3.  The counsel concerned are Ms Lucy Stone QC (“Stone QC”).  Mr. KM Chong (“Chong”), John Litton (“Litton”) and Adrian Leung (“Leung”).  These complaints are summarized below and the plaintiff submits that there is strong evidence of overcharging and/or incurring excessive costs, in most instances due to the fault of the defendant.

Stone QC

48. The plaintiff has set out her detailed complaints regarding the costs of Stone QC in paragraphs 21 to 32 of her 1^st Affirmation and paragraphs 19 to 34 of her 2^nd Affirmation.  It is not necessary for me to repeat the same here, but the main issues are discussed below.

49. The plaintiff contends that the defendant’s handling of the engagement of Stone QC has been flawed at every juncture of the appeal.  These include:-

(1) Failure to properly negotiate fee agreements with Stone QC: Despite being expressly instructed by the plaintiff to demand for a fee cap of £200,000, the defendant failed to properly follow up on the same.  Furthermore, despite having expressly told the plaintiff that Stone QC’s fees would include the costs of her attendance at the two-day appeal, the defendant never negotiated with Stone QC in relation to the fees payable to her in the event that she was not admitted to the Hong Kong Bar;

(2) Failure to arrange for the admission application of Stone QC to be heard in good time before the appeal: Although the plaintiff was informed back in early March 2013 that an application would be made regarding Stone QC’s ad-hoc admission to attend the appeal and that a hearing should be fixed at the end of March or early April, the hearing in fact did not take place until as late as 21 May 2013, which was merely 8 days before the deadline of filing and serving the Amended Notice of Appeal (29 May 2013) and 1 month before the scheduled dates of the Appeal (20 to 21 June 2013).  After the admission application was rejected, there was little time to properly react and seek alternatives;

(3) Failure to properly formulate contingency plans in the event that the admission application was rejected: Despite being aware of the presence of dissenting views in respect of the admission of Stone QC as early as late March 2013, the defendant failed to inform the plaintiff of the risk that the admission would be refused and instead carried on preparation of the appeal on the assumption that Stone QC would be admitted.  On the other hand, the defendant erred in repeatedly assuring the plaintiff that the chances of Stone QC’s admission was very high and failed to properly prepare for the event of rejection of the application;

(4) Failure to ensure that Stone QC properly handed over her research and work after her admission application was rejected: The defendant failed to follow the express instructions of the plaintiff requesting Stone QC to hand over her research and work which she had prepared up to that date, and to cease all further work in the appeal.  Instead, Stone QC continued to work and incurred substantial amounts of costs after 21 May 2013 (the date of rejection) and even after Mr Daniel Fung SC was subsequently instructed on 31 May 2013.  As a result, there was substantial overlapping of work done between Stone QC and Mr Daniel Fung SC after 21 May 2013.

Chong

50. The plaintiff has set out her complaints regarding the costs of Chong in paragraph 45(1) of her 1^st Affirmation and paragraph 49 of her 2^nd Affirmation.  In gist, it is her view that Chong’s billed costs of $221,000 is excessive, given his limited involvement in the appeal in settling a simple Notice of Appeal with several bare grounds of appeal and attending a stay application.

51. Furthermore, the defendant’s conduct in engaging Chong is questionable. The defendant had failed to comply with the plaintiff’s express instructions to engage local senior counsel in the conduct of the appeal.  Furthermore, they had never informed the plaintiff about Chong’s hourly rate and as such the amount of his brief or fees for preparing the Notice of Appeal was not agreed by the plaintiff.  The defendant also did not provide the plaintiff with a copy of Chong’s fee note until she instructed her legal representatives to ask for a copy of the same from the defendant upon the commencement of those proceedings.

Litton

52. The plaintiff has set out her complaints regarding the costs of Litton in paragraph 23 of her 1^st Affirmation and paragraphs 20-21 of her 2^nd Affirmation.  The allegation is that the defendant had again failed to comply with her express instructions to engage local senior counsel in the conduct of the appeal.  Instead, the defendant recommended her to seek advice from Litton, and the plaintiff reluctantly agreed to do so.  In the end, the costs of engaging Litton were wasted as Wong decided not to instruct Litton given her worries on whether he had time to conduct the appeal and her desire to instruct senior counsel with similar seniority as Mr Yu SC (who was representing her opponent).

Leung

53. The plaintiff raised an example regarding overcharging of costs by Leung in paragraph 45(2) of her 1^st Affirmation, where she stated that Leung had billed her for a total of 23 hours of conferences during a short 3 days period in London.

Johnny Mok SC/Daniel Fung SC

54. Although the fees of Mr Johnny Mok SC and Mr Daniel Fung SC are not included in the bills in Groups 1 to 3, in passing, the plaintiff submits that she also has complaints regarding the fees of Mr Johnny Mok SC and expressed her frustrations at the engagement of Mr Daniel Fung SC at a substantially higher rate as a result of the fault of the defendant.  The details of these allegations are set out in paragraphs 31 to 42 of her 1^st Affirmation and paragraph 43 of her 2^nd Affirmation.

55. The plaintiff submits that the defendant’s overall conduct in respect of the fees incurred by these two counsel is also a highly relevant special circumstance which the court should take into consideration.

Discussion

56. The defendant has denied all the above allegations and explained in details the circumstances leading to the engagement of all these counsel in their Affirmation.  Again, I do not think that I need to repeat all the details here.  However, the main contention is that all counsel’s engagement and their charges were agreed by the plaintiff.  I have no doubt that this must be the case.  Even from the plaintiff’s own evidence, it can be seen that the plaintiff was very concerned with which counsel should represent her at the appeal.  I simply see no reason why the defendant would not get the plaintiff’s agreement before each and every counsel was engaged.  In getting the plaintiff’s agreement, I do not think that the defendant would not inform the plaintiff about the counsel’s charges.  It is just unbelievable that the plaintiff would agree to the engagement of the counsel without knowing their charges, especially when the plaintiff had been involved in quite a number of litigation before and had also challenged her own solicitors’ bills in other proceedings.

57. Thus, I accept that the defendant’s evidence concerning the circumstances in which counsel were engaged is more credible than the plaintiff’s.

58. In any event, I do not see how the plaintiff’s challenge on counsel’s engagement or their performance could amount to special circumstances.  The counsel’s fees are just disbursements and in fact some of them were paid by the plaintiff as discussed above.  Even assuming the defendant had failed to engage some counsel properly as alleged by the plaintiff, it would just amount to a negligence claim against the defendant.  The plaintiff would still be liable to pay the counsel’s fees.

59. In particular, concerning the engagement of Stone QC, the plaintiff contends that the defendant failed to properly negotiate fee arrangements with Stone QC, failed to arrange admission application to be heard in good time, failed to formulate contingent plans when the admission application was unsuccessful, and failed to ensure Stone QC properly handed over her work. However, all these allegations, even if they were true, would not reduce the plaintiff’s liability in paying the agreed fees.

60. There is in fact no truth at all in the plaintiff’s allegation that Stone QC’s fees were capped at £200,000.00 instead of £250,000.00.  The correspondence between the parties shows clearly that the fees were capped at £250,000.00 and the plaintiff was aware of it.

61. The allegation that Stone QC did not hand over the work to Mr Daniel Fung SC or there was substantial overlap of their work is also unfounded.  The evidence shows clearly that the plaintiff continued to rely on and use the service of Stone QC after the admission application failed and after Mr Daniel Fung SC was engaged.  This can be confirmed by the Skype conferences on 1 and 6 June 2013 where the plaintiff was seeking advice from Stone QC.  The plaintiff also continued to copy Stone QC with her emails to her legal team on 15 and 18 June 2013.

62. The allegations against the other counsel are also unfounded.  Chong was engaged because he was previously instructed to represent the plaintiff in another related set of proceedings.  Litton was engaged just for one single conference for advice.  These counsel were engaged when the plaintiff was looking for counsel to take up the appeal case and they were all agreed by the plaintiff.

63. As to Leung’s charge of 23 hours for a conference in London with Stone QC, I do not see how this can be regarded as excessive when Leung had spent 3 days there.

64. Mr Daniel Fung SC was engaged by the plaintiff because she feared that Mr Johnny Mok might not have time to deal with her case.  The plaintiff was aware that Mr Daniel Fung SC’s rate was higher and still agreed to engage him. In any event, these 2 counsel’s fees had nothing to do with the bills in Groups 1 to 3.  I simply cannot see how the allegations in this regard could amount to special circumstances as contended by the plaintiff.

65. Thus, I do not find that there were any special circumstances arising out of the engagement of counsel.

(2)  Overcharging by the defendant and excessive proportion of work done by highest fee-earner

66. The plaintiff contends that the total sum charged by the defendant in relation to the appeal and certain interlocutory applications ($1,636,150.00) is a very substantial amount given their relatively minor role to play in the preparation of the short appeal.

67. The plaintiff further submits that Mr Ho Kwan Yiu (a partner of the defendant and the highest fee-earner in the bills in question) had in fact billed a total of 153 hours at the total cost of $848,440.00 (representing more than 50% of the costs billed by the defendant).  The plaintiff’s contention is that the majority of the tasks particularized in the bills are simple and mundane tasks such as attending conferences, service of documents, drafting correspondences and preparation of appeal bundles which could easily have been performed by trainee solicitors namely Ms Clara Wong and Mr Ray Chan.

68. The plaintiff also alleges that there were errors committed by the defendant, such as: (1) failure to properly advise the plaintiff in various aspects of the appeal which resulted in action having to be subsequently taken to rectify the same; (2) filing key documents (Amended/Supplementary Notice of Appeal) at the last juncture without allowing the plaintiff any opportunity to peruse or comment on the same and not in accordance with proper procedure of having them signed by counsel; and (3) Mr Ho Kwan Yiu charging a conference that he did not attend.

69. Although overcharging can amount to a special circumstance, I do not accept that the plaintiff has established a case of overcharging based on the evidence before me.  In fact, even from her own evidence, the plaintiff only has “grave doubts” about the actual hours spent by Mr Ho Kwan Yiu.  Thus, the matters raise by the plaintiff remain just her allegations and not substantiated with cogent evidence.

70. Furthermore, some clerical and few individual mistakes in the bills would not amount to special circumstances justifying taxation.  As held in Wong Kar Gee Mimi v Hogan Lovells (a firm), supra, the blunder has to be “gross” and the charges have to be “extraordinary”.  I do not find that there was such gross blunder or extraordinary charges in the present case with the evidence before me.

71. Thus, I do not accept that the plaintiff has established any special circumstances in relation to her allegations of overcharging.

(3)  Lack of particularity in the defendant’s bills

72. The plaintiff contends that another special circumstance in the present case is the lack of particularity in the defendant’s bills.  In the bills under Groups 1 and 3, there is no breakdown of how the total billable hours of Mr Ho Kwan Yiu, Ms Clara Wong and Mr Ray Chan were calculated.  In every bill, there is simply a list of “services rendered” which was then concluded by a general summary of the total billable hours of these persons in respect of each bill.

73. The plaintiff submits that the layout of the bills in such a format is extremely confusing and prevents one from understanding the respective roles and actual work done by each of the individual fee-earner.  This has in turn led to issues where crucial information over the number of hours of work done by an individual fee-earner being missing.

74. However, it is not unusual for solicitors to issue gross sum bills.  In fact, the plaintiff had engaged the defendant in other proceedings and received bills in similar format before.  There was no complaint raised by the plaintiff in those proceedings about the format of the bills.  Furthermore, in the present proceedings, the plaintiff took out an application for itemized bills and the matter was argued before Master Chow on 20 August 2014.  Master Chow did not order the defendant to provide itemized bills.

75. Thus, I do not see how the plaintiff can be prejudiced by the lack of itemized bills.  In fact, the bills in question, although in gross sum form, still have some particulars of the work done and the charges of individual fee-earners.  The plaintiff cannot really say that there is a total lack of particulars.  In any event, there is nothing out of ordinary for the defendant to issue bills in such a format.  It cannot amount to a special circumstance as alleged by the plaintiff.

(4)   Exercise of right of taxation

76. Lastly, the plaintiff submits that it is also a special circumstance when the plaintiff did not take out an application for taxation earlier because she was keen to ensure that the defendant would focus their attention on the appeal instead of disputing over payment of legal fees, and she had the impression that she could have the chance to ask for taxation of these bills in one go during the final settlement of the fees.  The plaintiff also submits that she was never reminded of her right to tax the bills until 12 September 2013, and even then she was very reluctant to ask for taxation given the threatening tone adopted by the defendant.

77. I have no doubt that the plaintiff was well aware of her right to taxation and I do not believe that she would have thought that she could ask for taxation in one go during the final settlement.  In other proceedings, she had asked for her own solicitors’ bills to be taxed before.  There is no reason to suggest that she has to be reminded of her right to taxation by the defendant.  In fact, she confirms in her Affirmations many times that she knew about her right to taxation.  When she was aware of her right to taxation and chose not to exercise it because of her own concern about whether the defendant would be able to focus on the appeal, it is just entirely a matter of her own choice and cannot amount to a special circumstance justifying taxation now. Even assuming there was threatening tone adopted by the defendant as alleged by the plaintiff (which I do not accept), it is still a deliberate decision made by the plaintiff not to ask for taxation earlier.  There is simply no reason to allow her to have a second chance when she has chosen not to do so in the first place.

78. Thus, I find that none of the alleged special circumstances has been established by the plaintiff.  In other words, there is no ground to refer the bills to taxing master for taxation under the third regime.

CONCLUSION

79. By reasons aforesaid, only Bill 6, Bill 8, Bill 9 and Bill 10 will be taxed, and the remaining 7 bills will not be referred to taxing master for taxation.

80. The plaintiff has asked for other consequential reliefs in the Originating Summons.  Apart from the orders concerning the stay of action before taxation, I do not think that it is necessary for me to order the other reliefs.

81. As to the defendant’s Summons, there is no dispute that I can impose terms in ordering the bills to be taxed.  The defendant is asking for the total outstanding sum under Bill 6, Bill 8, Bill 9 and Bill 10 (ie $2,311,626.10) to be paid into court, but the plaintiff suggests that only a portion of it should be paid.  I agree that such a payment into court is only to provide some security to the defendant, and it is usual that the amount of a bill will be reduced upon taxation.  I therefore do not find it necessary for the plaintiff to pay the full amount into court.  Judging from the amount of the costs involved, I think a sum of $1,500,000.00 will be sufficient security for the defendant.

82. The defendant is also asking for interim payment of the full amount under Bill 11 (ie $95,000.00).  As I will not order Bill 11 to be taxed, there is no reason for me to impose a term for interim payment.  Thus, I will not grant such an order.

83. In the defendant’s final submission, the defendant further suggests that a substantial portion of the outstanding bills should be paid by the plaintiff immediately as interim payment to alleviate pressure from counsel on their outstanding fees, especially when Stone QC has already initiated action against the defendant.

84. I do not think that it is appropriate for me to make such an order. First of all, the defendant’s predicament is caused by their own failure in not obtaining sufficient costs on account to cover counsel’s fees.  They are responsible for paying counsel’s fees even when the plaintiff refuses to pay them at all.  For Bill 6, Bill 8, Bill 9 and Bill 10, the defendant will be protected by payment into court and it is not necessary for the plaintiff to make interim payment to the defendant. As to the remaining 7 bills, since I will not refer them to taxation, there is no reason for me to impose a term for interim payment.

ORDER

85. I therefore order as follows:-

(1) Upon the plaintiff making payment of the sum of $1,500,000.00 into court on or before 3 June 2015, Bill 6, Bill 8, Bill 9 and Bill 10 be taxed by a taxing master.

(2) In default of the aforesaid payment into court, Bill 6, Bill 8, Bill 9 and Bill 10 shall not be taxed.

(3) Upon the aforesaid payment into court and until the taxation is completed, no action shall be commenced on Bill 6, Bill 8, Bill 9 and Bill 10, and any action already commenced on these bills be stayed.

(4) Save as aforesaid, the Originating Summons herein be dismissed.

(5) Costs order nisi:-

(a) The defendant do pay the plaintiff costs of the Originating Summons in relation to Bill 6, Bill 8, Bill 9 and Bill 10 with certificate for counsel to be taxed if not agreed.

(b) Save as aforesaid, the plaintiff do pay the defendant costs of the Originating Summons in relation to Bill 1, Bill 2, Bill 3, Bill 4, Bill 5, Bill 7 and Bill 11 and costs of the Summons dated 24 July 2014 with certificate for counsel to be taxed if not agreed.