CHAN LOK TSUN TSO v. THE SECRETARY FOR THE ENVIRONMENT, TRANSPORT AND WORKS

LDMR 2 OF 2004

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

APPLICATION NO. LDMR 2 OF 2004

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J U D G M E N T

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1. The parties have reached settlement on all heads of compensation except certain items of legal costs incurred. It is not in dispute that the legal costs fall within the class of 'professional fees' within the meaning of provisions of the Land Resumption Ordinance. The instant dispute is about quantum

2. 'Profession fees' is one head of loss that landowner can recover from the Government on resumption of his land. That being the case, it is always the burden of the claimant to prove his loss. The Government challenges 12 items of work in the solicitors' bill which has been delivered to the Applicant but which has not been paid by him or by the Government. If the bill has been submitted for taxation by the claimant under section 67, the Applicant would have certainly discharged the burden. Mr. Yeung, counsel for the Government, indicated that in that event the Government would have had no dispute about the respective amount allowed by the taxation master on those items.

3. The Government can also submit the bill for taxation under section 68 of the Legal Practitioners Ordinance. Alternatively it can require the Applicant to submit the bill for taxation undertaking to bear the costs. However both parties indicated that submitting the bill for taxation is the course they would not adopt. Instead both partied invited me to apply the taxation principles in assessing the disputed solicitors' fees. The Applicant argued that the fees should be assessed on the common fund basis. On the other hand the Government argued that it should be on the party to party basis.

4. In my judgment, the role of this Tribunal in assessing the reasonable professional fees is not limited to that of a taxation master. This Tribunal should not lose sight of the fact that 'professional fees' is an item of loss which an landowner is entitled under the Ordinance. Submitting the bill for taxation under the Legal Practitioners Ordinance is one way of proving the reasonableness or unreasonableness of the amount billed. That is not the only way. Both parties declined the invitation by this Tribunal to have the bill taxed before a taxing master and asked for determination of the reasonable amount of professional fees by this Tribunal. Therefore the ordinary principles of assessing loss should be applied. Taxation principles might be helpful but should not be the only principles applicable to the assessment, particularly in the instant case when both parties are reluctant to have the bill submitted for taxation. An overall view has to be taken.

5. The professional fees for the solicitors are incurred as a direct result of the resumption exercise. As such they would be prima facie reasonable. The doctrine of mitigation of damages might help the Government. However to avail itself of this doctrine, the Government has to point out in what way the land owner has failed to mitigate his loss, i.e. in what way he has acted unreasonably in incurring the professional fees.

6. Both counsels have not advanced any taxation principles which should apply to the present assessment. Mr. Chan, the handing solicitor and counsel for the Applicant, merely referred to a Law Society circular to justify the hourly rate he was charging his client. Mr. Yeung did not dispute that the hourly rate was appropriate for Mr. Chan in view of his standing and the number of years of post admission experience. However he argued that a solicitor of lesser experience than Mr. Chan should have been equally competent and should have been employed by the Applicant. Mr. Yeung therefore urged me that the reasonable hourly rate should be that commensurate with a solicitor of lesser standing than Mr. Chan. Mr. Yeung also argued that the hours spent on the disputed items are two many or unnecessary, and therefore unreasonable.

7. The intent of the legislature as to what professional fees a landowner is entitled to recover should be looked at. The intent of the Land Resumption Ordinance is clear on the question of compensation. An owner should be compensated the full value of its land, no less and no more. He should also be compensated for the professional fees reasonably incurred. In assessing the value of the land, it is expressly provided by the Ordinance that no account should be taken of the fact that the landowner is an unwilling vendor. No similar provision is in the Ordinance prohibiting the Tribunal to take into account the unwillingness of the landowner when assessing the professional fees and in the instant case, the solicitors' fees. It follows that a landowner can take legal advice of whether the resumption or the intended resumption is in order or lawful, and if not, whether it should be challenged. It is reasonable if he takes the advice of a solicitor with appropriate experience and seniority and employs him to act for him in the matter. He cannot be expected to, as seemingly argued by the Government, that he should not employ an over-qualified solicitors. It defies common sense that an owner should have known before taking legal advice that it is a simple matter of resumption and can decides on the appropriate choice of solicitors. Compensation law is always not simple and it is reasonable for the Applicant to choose which solicitors firm he should go to. Nothing in the Ordinance suggests his freedom of choice of counsel should be fettered in any way directly or indirectly by limiting the amount of reasonably incurred solicitors' fees that can be recovered from the Government. Nothing I have heard in these proceedings suggests that it is unreasonable for the Applicant to choose this particular firm of solicitors. I also accept that there is no solicitor in this firm of less seniority than the handling solicitor but of such seniority as conceded by the Government as appropriate. Unless the Applicant can be criticised for going to this particular firm of solicitors, he cannot be penalised for having the handing solicitor conduct the matter for him. For the reasons given, he cannot be so criticised. It is reasonable for the Applicant to go to them, and it is not in dispute that the handling solicitor only charges an hourly rate commensurate with his standing. In my judgment the Applicant is entitled to recover his professional fees based on the hourly rate his solicitors are charging him.

8. The Government also disputes the number of hours spent on the matter. However I have clarified its position. The Government does not dispute that the number of hours charged represents the actual hours spent. There is no allegation or suggestion that the handing solicitor has inflated the number of hours. The Government only contends that it is unreasonable for the handling solicitors to take such long hours. In particular Mr. Yeung cited the example of the offer letter. I cannot agree. Reading efficiency differs from person to person, from document to document. The nature of the subject-matter should also be taken into account. Taking all that into account, I do not think it is unreasonable for the handling solicitor to spend the hours he charged the Applicant. More importantly it is reasonable for the Applicant to have incurred the solicitors' fees. There are other minor disputes about some of the work done by the solicitors. As to this I accept the explanation given by Mr. Chan and find that the work in question is reasonable.

9. I would have reached the same conclusion in these matters even if I am to assume purely the role of a taxing master. The practices of taxation have not been advanced to me. What Mr. Yeung proposed to me is in effect to arbitrarily reduce the hourly rate or the number of hours charged on the ground of unreasonableness. This I cannot do. The hourly rate is reasonable or at least it has not shown to be unreasonable. The number of hours spent on the work is undisputed and must be taken as actually spent. Furthermore, looking at the nature of the subject-matter, the hours spent are reasonable. Mr. Yeung relied heavily on the argument that the amount of compensation is relatively small. Be that as it may, I am only concerned about whether the work done and its charges are reasonable. I find they both are. The work has to be done by the handling solicitor irrespective of the final amount of compensation. The same amount of work has to be done even if the resultant compensation for the value of the land is a hundred times greater.

10. In the premises I refuse to allow any deductions urged upon me by the Government. I now also make an order nisi for costs in favour of the Applicant on the High Court Scale to be taxed if not agreed.