CHINACHEM CHARITABLE FOUNDATION LTD v. WILKINSON & GRIST (a firm)

HCMP 877/2020, HCMP 878/2020,
HCMP 879/2020, HCMP 880/2020,
HCMP 881/2020, HCMP 882/2020
(Consolidated)

[2022] HKCFI 1743

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 877 OF 2020

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BETWEEN

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 878 OF 2020

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BETWEEN

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 879 OF 2020

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BETWEEN

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 880 OF 2020

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BETWEEN

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 881 OF 2020

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BETWEEN

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 882 OF 2020

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BETWEEN

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(Consolidated pursuant to Order of Master Chow dated 14 September 2020)

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DECISION

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1.  This is WG’s Summons, filed on 17 December 2021, seeking to vary the costs order nisi made by this court in para 79 of the Decision dated 3 December 2021. The nomenclature used in the Decision is adopted herein.

2.  By that Decision, the Foundation was awarded 3/4 of its costs of the applications, namely, 6 Amended Originating Summons by which the Foundation sought taxation of the bills issued by its former solicitors, WG (“OS”). In this application, WG says that the Foundation should pay 77% of its costs of the OS (or any portion of its costs as the court deems fit). In the alternative, there be no order as to costs.

3.  The grounds for this application are: (i) WG was the overall winner; and (ii) the Foundation should be deprived of its costs in light of its conduct.

4.  The first ground is premised upon the fact that of the total fees sought to be taxed involving some HK$291 million, the court only ordered taxation in respect of the bills with a total sum of about HK$67 million. In other words, about HK$224 million of WG’s fees were not subject to taxation, which is equivalent to about 77% of HK$291 million.

5.  The court was taken to various authorities on effective winner of proceedings. I need only refer to a very recent one from the Court of Appeal where the applicable principles were summarised: Yoe Han Yauw v Yoe Han Hian [2022] HKCA 498, [19]-[21].

6.  Despite the persuasive arguments of Mr Ng, who appeared for WG, I am unable to agree to the proposition that WG was the effective winner. I do not believe that it is a matter of looking at the monetary value of the bills ordered for taxation. This is not a case where it may be said that the Foundation had achieved no meaningful result.

7.  In this case, the OS involved a total of 76 bills. With minor exceptions, the taxation of all the bills was contested. Eventually, a total of 54 bills were ordered to be taxed. It seems fairly plain that the Foundation was the winner of the proceedings. Without the OS and their resolution, it would not have been able to have the 54 bills taxed.

8.  I see no unfairness to WG that it should bear the costs of the Foundation because WG could have agreed to have the 54 bills taxed without having the matters litigated, and write a Calderbank letter to protect itself on costs.

9.  It can be seen from the Decision that many arguments were advanced by WG to resist taxation, but only one of which prevailed, namely, conclusion of the matters for which it was instructed by the Foundation. The Foundation was deprived of part of its costs to reflect that success on the part of WG.

10.  As regards the second ground, there are 3 complaints: (a) delay in providing an undertaking to refund to the Estate any overpayment as a result of the taxation of WG’s bills when the Foundation had been reimbursed by the Estate for the payment of such bills (see Decision, [70], [71] and [75]-[77]); (b) refusal to accept WG’s proposal that it would accept such amounts as agreed by the Estate for their bills (Decision, [76]); and (c) the delay by the Foundation in objecting to the bills.

11.  Points (a) and (b) are two aspects of the same abuse argument which was addressed in the Decision. It was not accepted by the court. I do not find them constituting sufficient reason to vary the order nisi.

12.  For the delay, according to the Decision, the Foundation was entitled to wait until the issuance of the final bills before asking for them and all the prior interim bills to be taxed. This complaint is therefore difficult to sustain.

13.  Further, it must be said in fairness that WG was at least a joint author of its own misfortune. Its engagement letters did not spell out in clear terms whether the bills were to be treated as final bills for purposes of taxation, if that was its intention. WG stood in a fiduciary position in relation to the Foundation. It had a duty not only to be perfectly transparent with the Foundation on their charges but also to ensure that the Foundation was adequately advised on its right to taxation of WG’s bills (see Decision, [17]-[19]).

14.  For these reasons, I am unable to agree with the variation of the order nisi. Accordingly, WG’s Summons is dismissed. It has been agreed by the parties that costs should follow the event. I order that the costs of and occasioned by the Summons be to the Foundation, to be summarily assessed if not agreed.

15.  For the summary assessment, a Statement of Costs is to be lodged and served by the Foundation within 7 days from the date of this Decision. WG is to lodge and serve its comments thereon (limited to 3 pages in font size 14 with double line spacing) within 3 days thereafter. Reply to the comments (limited to 2 pages in font size 14 with double line spacing), if any, is to be lodged and served by the Foundation within 2 days thereafter.

16.  I am grateful to counsel for their assistance.