MESSRS CHAN & KONG, SOLICITORS v. SKY BLUE INVESTMENT LTD. t/a MIDNIGHT EXPRESS

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

SMALL CLAIMS TRIBUNAL APPEAL NO. 5 OF 1998

(On Appeal from Small Claims Tribunal Claim No. 9095 of 1996)

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J U D G M E N T

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1. The claimant, a firm of solicitors, commenced proceedings in June 1995 in the Small Claims Tribunal against the respondent who had been a client of the claimant in respect of certain immigration matters. In that particular action the claimant claimed against the respondent for a sum of $5,600 being alleged legal costs in connection with such immigration matters.

2. Having filed the claim in the Small Claims Tribunal against the respondent, the applicant did not proceed with that particular claim, which claim was subsequently dismissed for want of prosecution on 6 September 1995. The claimant subsequently took out another fresh proceeding in the Small Claims Tribunal in respect of the same subject matter against the respondent, this time for an increased sum of about $11,000.

3. The respondent did not defend that second action and judgment in default was obtained by the claimant against the respondent. The respondent subsequently applied to have that default judgment set aside and the matter went before the adjudicating officer, Mr CHEUNG.

4. Mr CHEUNG was of the view that the only fair way to dispose of the matter would be to refer the matter for taxation. Hence he made the order that the default judgment ought to be set aside and that the bill of costs should be referred to the taxing master for taxation without specifying who shoulder the responsibility of taking out that particular application. It is against that order of Mr CHEUNG that the appellant now appeals against.

5. At the outset, I think it is right for this court to point out that the way in which the appellant chose to proceed with this claim against the respondent is somewhat unusual and unsatisfactory, if that is the correct word to describe it. When the default judgment was obtained from the Small Claims Tribunal in respect of the second action, it was not mentioned to the tribunal of the earlier action; there was never any explanation as to why the amount involved in the second bill was much larger than that of the first bill.

6. Having said that, I am persuaded, as a matter of law, such approach, unsatisfactory as it might be, did not constitute an abuse of the court's process, although one can have a lot of sympathy for the respondent who are laymen without the benefit of legal advice and, in any event, legal representation is not permitted in proceedings in the Small Claims Tribunal.

7. It falls upon this court to decide whether Mr CHEUNG, in making the order as he did, has erred in law. Clearly, an adjudicator of the Small Claims Tribunal has no power to refer a matter for taxation; the only court that has the power to do so is the High Court. In any event, in making the order as he did, that the bill of the claimant which had been rendered to the defendant was to be taxed without specifying who has the obligation to take it to taxation would mean that the order of Mr CHEUNG could not be carried out and the matter would be left in limbo. That being the case, the order of Mr CHEUNG pertaining to this aspect must be set aside.

8. I have to consider then what is the best way, in all fairness to the parties involved, to dispose of this matter before me. There is no dispute that the bill the subject matter of the second action was rendered more than 12 months ago. And, under Section 67 of the Legal Practitioners Ordinance, a client who has been aggrieved by a solicitor's bill has the right to apply for the taxation of the bill within a period of 12 months provided that, if the 12 months had expired from the delivery of the bill, he still has the right to refer the bill for taxation if special circumstances have been demonstrated.

9. In the light of the background of this case, I am firmly of the view that special circumstances have been demonstrated and that there are ample justification for referring the bill to taxation. The only other matter that I would consider is whether I have, in the exercise of my inherent jurisdiction, the right to refer the matter to taxation by myself or whether either party should take out the necessary application which no doubt would incur further cost and time on everyone's part.

10. In this particular aspect, the Legal Practitioners Ordinance itself had not prescribed any mode whereby the application for taxation ought to be made; in fact, the wording of the ordinance is such that either party has a right to apply to court. As to the mode of application, it is, in my view, when we are dealing with the bill of costs of a solicitor who is an officer of the court over whose conduct this court - namely, the High Court - has the inherent jurisdiction to regulate. I am of the view that, that being the case, I am entitled on my own volition to refer the matter for taxation if the justice of the case demands such a step to be taken.

11. Having reached that conclusion, the order I propose to make is as follows. Firstly, the order of Mr CHEUNG the adjudicator is to be set aside; the claimant's bill is to be referred to the taxing master for taxation; and judgment will be entered against the respondent in favour of the claimant on the amount so taxed by the taxing master.

12. Yes, that is the order I make insofar as this appeal is concerned. The other matter is the question of costs of the appeal. Is there any application?

[Submissions re costs of the appeal]

13. I have considered the parties' submission insofar as the question of costs is concerned. I have also taken into consideration the background of the entire matter.

14. I am of the view that, insofar as the costs of the appeal including the ex parte application is concerned, there should be no order as to costs. That will mean each party will be responsible for their own costs insofar as the appeal procedure is concerned but, as far as the costs of the taxation, as I have explained to you, that will depend on the outcome after taxation. All right, that is all. Thank you.

[Discussion re order staying execution]

15. As I said, this matter will be referred to the taxing master for taxation. I think, perhaps, the court will assume this duty. The matter will be referred to the taxing master for taxation and the time will be set and parties will be informed of the time when taxation will take place. Thank you.