CHUI & LAU (A FIRM) v. SELLON ENTERPRISES LTD

DCCJ 2230/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2230 OF 2013

--------------------

--------------------

--------------------

JUDGMENT

--------------------

Introduction

1.  This is an action commenced by the plaintiff (“Firm”) against the defendant (“Sellon”) for unpaid legal fees under six bills (“Six Bills”), for a total sum of HK$462,559.79.  It is alleged that the legal services were rendered to Madam Song Lei (“Lei”), Mr Sung Chun (“Chun”) and Sellon from 2004 to 2012.  

2.  In this action, Sellon was legally represented until 17 December 2014.  On 17 December 2014, after the exchange of written closing submissions and immediately before the closing speech, this court was informed that Lei, the sole director of Sellon, had just terminated the retainer of her legal team.  A short break was allowed for her to comply with the procedural formalities. 

3.  When the case resumed, Lei confirmed that she understood all the closing submissions of both parties.  She then sought an adjournment by reason of her disagreement to the closing submissions (“Closing Submissions”) prepared by her former counsel and her needs to instruct other legal representatives to represent Sellon.  With the consent of the Firm, somewhat reluctantly, this court adjourned the case to 15 January 2015 and gave a number of case management directions.  Sellon was ordered to pay costs of the hearing to the Firm.

4.  At the adjourned hearing, Sellon was represented by Lei without legal representative.  Lei declared that she completely agreed to the Closing Submissions and adopted them in full.  She nevertheless applied to produce supplemental closing submissions (“Supplemental Submissions”) together with several new documents.  Upon the Firm’s confirmation that it needed not produce any documentary evidence or witness to challenge those documents and in the absence of substantial unfair prejudice to the Firm, the application was allowed. 

5.  As all the pleadings, witness statements and written submissions (save the Supplemental Submissions) are in English and the trial was conducted in English until 17 December 2014,  I give this judgment in English.  I have directed arrangement to be made for having this judgment interpreted to Lei orally by the court interpreter if she so requires.

Background

6.  The Firm is a firm of solicitors which provides legal services in different areas of law.  Mr. Norman Chui (“Norman”) has been a partner and Mr Alex Chan (“Alex”) a consultant of the Firm for decades. 

7.  Sellon is a limited company incorporated in Hong Kong and was the sole registered owner of a property known as Flat C, 5^th Floor, Block 3, Robinsion Heights, No 8 Robinson Road, Hong Kong (the “Property”) until the sale of the Property in 2013.  There is no evidence to suggest that Sellon has ever been engaged in any form of business other than holding the Property.

8.  Lei is and was the sole director and shareholder of Sellon.  She and Chun (collectively referred as “Couples”) were husband and wife.  She emigrated from Hong Kong to Canada in around 1997.  She petitioned for divorce in around August 2011.

9.  Chun was employed as an account manager by Sun Hung Kai Investment Services Limited (“SHK”) in Hong Kong.  He left Hong Kong for Canada to join Lei on around 25 May 2004.

10.  The Couples came from the Mainland and became acquaint with Norman in early 1990s’.  They had repeatedly engaged the services of the Firm since then. 

The 1^st bill – the 1720 action

11.  In or around July 2004, SHK commenced High Court action HCA1720 of 2004 (the “1720 Action”) against the Couples and Sellon.  The writ of summons was registered against the Property (“Lis Pendens”).

12.  The 1720 Action was a misappropriation case.  It was alleged that Chun had forged the signatures of two corporate clients of SHK (the “SHK Clients”), sold their shares and transferred most of the sale proceeds, a sum of more than HK$10 millions (the “Fund”), to the bank account (“Joint Account”) jointly held by the Couples in Canada without authorization of the SHK Clients or SHK.

13.  In the 1720 Action, Chun was not represented. Default judgment was entered against him.  The Firm represented Sellon and Lei to defend the action resulting in the withdrawal of the action against Sellon and Lei in 2009.  The Firm has kept the Notice of Withdrawal (“Withdrawal Notice”) and filed a copy of it with the Land Registry on around 5 June 2009.

14.  The Firm sent its bill number 09080034 dated 3 August 2009 to Chun for the legal services rendered from 2004 to June 2009 in the sum of HK$154,057.93 (the “1^st Bill”).

15.  In 2004, SHK also commenced an action against the Couples in Canada (the “Canadian Action”) and managed to freeze the Fund by an injunction order.     

The 2^nd bill – memorandum of satisfaction

16.  A memorandum of charge (“Charge”) was registered against the Property for unpaid renovation fees owing by Sellon to the management company of the Robinson Heights in around June 2010.  The Firm obtained a memorandum of satisfaction in respect of it (collectively referred as “Two Memorandums”) on around 4 January 2012.  It sent a bill dated 7 March 2012 (which is now numbered 13060034 dated 15 June 2013) to Lei for the legal services rendered in the sum of HK$12,473 (the “2^nd bill”).

The 3^rd bill – the 85 action

17.  In around January 2005, the Firm commenced Hong Kong High Court Action no 85 of 2005 (the “85 Action”) for Chun to claim against the SHK Clients for more than HK$10 million, allegedly to be the service fees owed to him.  The Firm prosecuted the 85 Action until the close of pleadings.  The Firm sent bill number 05100106 to Chun for the legal services rendered in the sum of HK$18,372.86 (the “3^rd Bill”) on 20 October 2005.

The 4^th bill – police investigation in Hong Kong

18.  On around 22 February 2006, Chun flew back to Hong Kong.  Upon arrival, he was arrested for criminal charges in relation to fraudulent documents and theft for more than HK$10 million from SHK.  The Firm rendered services to him.  He jumped bail and returned to Canada on around 27 February 2006.  The Firm sent bill number 08120119 dated 30 December 2008 to Chun for the legal services rendered to him in the sum of HK$32,173 (the “4^th Bill”).

The 5^th bill – extradition proceedings

19.  Chun was arrested by the police in Canada on around 8 October 2009 and was detained pending extradition to Hong Kong for the fraud case.  A legal team was engaged to resist the extradition (the “Extradition Proceedings”).  The Firm had assisted the Canadian lawyers by providing legal opinion and documents until Chun was extradited to Hong Kong on around 14 April 2011.  The Firm sent bill number 11050031 dated 11 May 2011 to Lei for the legal services rendered in the sum of HK$136,516 (the “5^th Bill”).

The 6^th bill –Hong Kong criminal proceedings

20.  The Firm rendered legal service to Chun after his extradition to Hong Kong.  He has all along been detained.  The Firm represented him in Magistracy action ESCC1617/2011 and subsequently District Court action DCCC496/2011 (“District Court Case”) (collectively referred as “Criminal Proceedings”).  The Firm sent bill number 12010005 dated 4 January 2012 to Lei for the legal services rendered between April to August 2011 in the sum of HK$108,967 (the “6^th Bill”).  

Subsequent events

21.  Legal aid was granted to Chun in around September 2011.  The Firm had represented Chun in the District Court Case under the legal aid scheme since then.

22.  In around November 2011, Chun was convicted of 4 counts of procuring the making of entries in a record of a bank by deception and using a false instrument.  He was sentenced to a term of imprisonment of 6 years and 9 months.  His appeal on conviction and sentence was dismissed in December 2012.

23.  On 4 January 2012, the Firm sent Lei a letter enclosing the copies of the 1^st, 3^rd, 4^th and 6^th Bill.  On 13 January 2012, another letter was sent to her enclosing the copy of the 5^th Bill.

24.  In a meeting on 27 September 2012 (“September Meeting”), Alex gave Lei the Six Bills together with the Two Memorandums in person.

25.  By sale and purchase agreement dated 7 June 2013, Sellon sold the Property (“Sale”).  Execution of assignment was scheduled on 8 August 2013.

26.  On 11 June 2013, the solicitors acting for Sellon in the Sale approached the Firm for the Withdrawal Notice and other documents.  The Firm became aware of the Sale. 

27.  On 13 June 2013, the Firm wrote to Sellon stating that they knew Sellon had sold the Property and demanded immediate payment for all the outstanding legal costs.  In reply, Lei asked the Firm to present a cheque for settlement of the 2^nd Bill on 12 August 2013 and offered to issue another cheque for settlement of the 1^st Bill on condition that the Firm would only present it for payment on 12 August 2013.  The Firm refused and reiterated its demand as stated on 13 June 2013.

28.  At the request of Lei on 15 June 2013, the Firm sent the copies of the Six Bills to Chun.

29.  On 19 June 2013, upon receipt of Lei’s email that it was a mistake to have sent all the outstanding bills to Sellon for payment, the Firm commenced the present action.

30.  On 11 July 2015, an injunction was granted in this action prohibiting Sellon from disposal of assets up to the value of HK$462,559.79.

31.  On 8 August 2015, the sale of the Property was completed as scheduled.  A sum of HK$462,559.79 was paid into court.

Admission of liability- the 1^st Bill and 2^nd Bill

32.  At the start of the trial, Sellon admitted liability to the Firm’s claim relating to the 1^st Bill and 2^nd Bill.  The parties jointly requested this court not to deal with the disputed facts relating to these two bills.

The issues in dispute

33.  The Firm claims that Sellon is liable to settle the 3^rd Bill to the 6^th Bill (collectively referred as “Remaining Bills”).  The claim is based on three oral agreements (collectively referred as “Three Agreements”) allegedly to have been made between the Firm and Sellon through Lei who acted in the capacity of its sole director and on its behalf. The Three Agreements were made respectively in or around October 2004 (“1^st Agreement”), on 24 February 2006 (”2^nd Agreement”) and October 2009 (“3^rd Agreement”).  It is alleged that in each agreement, Sellon agreed to pay for all legal services rendered by the Firm to Lei, Chun and/or Sellon upon sale of the Property. 

34.  The Firm also places reliance on the oral and written assurances (“Assurances”) allegedly to have been given by Sellon through Lei throughout the years that Sellon would pay for all outstanding legal costs upon sale of the Property.  It says Sellon’s refusal to pay and its written denial of liability on 13 June 2013 has evinced unequivocal intention to repudiate the Three Agreements and the Assurances.  It accepted the repudiation and commenced the present action.

35.  At trial, Sellon agrees that Lei, being the sole director and shareholder of Sellon, did have actual and apparent authority to enter into the Three Agreements and to give the Assurances for and on behalf of Sellon. It however denies Lei has done so.  It pleaded in the Amended Defence that the services covered by the Six Bills were rendered to Chun and on his instruction.  It is Chun who is liable to pay and has paid most of them.  It also complains that those bills are highly inflated and the claims relating to the 3^rd and 4^th Bills are time-barred. 

36.  The issues in dispute are:-

(1) whether Lei has entered into the Three Agreements with the Firm and/or given the Assurances to the Firm as alleged;

(2) whether Lei acted in the capacity of the sole director of Sellon and on its behalf to the effect that the Three Agreements and/ or the Assurances are binding on Sellon;

(3) whether the 3^rd, 4^th, 5^th Bills have been fully paid;

(4) whether Alex has agreed with Chun that the Firm would charge the Legal Aid Department for the services covered by the 6^th Bill;

(5) whether the claim relating to the 3^rd and the 4^th Bills are time-barred;

(6) whether the Remaining Bills are highly inflated. 

37.  I will deal with the issues in dispute relating to each of the Remaining Bills separately.

The 3^rd Bill and the 1^st Agreement

38.  In relation to the 3^rd Bill, the Firm claims that in around mid-October 2004, Chun telephoned Norman from Canada instruct the Firm to commence the 85 Action.  The new action was to buttress the defence of Sellon and Lei in the 1720 Action and the Canadian Action.  

39.  Norman was cautious about Chun’s ability to pay the legal costs for the intended action.   He therefore asked Chun to pay the Firm costs on account to the extent of HK$50,000.  Chun told him that he would instruct his sister to pay HK$20,000 as costs on account with the balance to be settled upon the sale of the Property.   He then passed the phone to Lei who acted in the capacity of the sole director of Sellon, undertook to pay all legal costs for the intended action upon sale of the Property. Norman accepted Lei’s undertaking, hence, the 1^st Agreement.

40.  In the Defence and the affirmation (“Affirmation”) of Lei (which was filed before the Defence), it is said that the 1^st Agreement was reached between the Firm and Chun but not Sellon.  All the instructions were given by Chun as the 85 Action only concerned him and for his benefit.  Neither Sellon nor Lei was a party to it.  It is also said that Lei had never communicated with Norman since her emigration to Canada nor had any knowledge about the 85 Action. 

41.  On evidence, I find the case of the Firm more convincing.  I am convinced that the 1^st Agreement was to address Norman’s concern over Chun’s ability to pay legal costs.  I believe that the Firm would not have commenced the 85 Action but for the 1^st Agreement.  First, when the Firm was instructed to represent Sellon and Lei in the 1720 Action, Norman became aware that there were two actions against the Couples and/or Sellon afoot: the 1720 Action and the Canadian Action.  Both actions involved serious allegations of fraud and breach of trust and each claim was more than HK$10 millions.  The Fund was frozen and the Property was encumbered.  The Couples resided in Canada who held no valuable asset in Hong Kong other than the Property.  Chun’s business in Canada was unsuccessful and Lei was unemployed taking care of two young children.  There was no reason for the Firm to increasingly provide legal services to Chun, Lei or Sellon in the absence of sufficient costs on account or any commitment for payment.  It is logical that the parties would have looked to the Property for payment, being the only valuable asset in Hong Kong.

42.  Second, Norman’s reasons for his acceptance of deferred payment were justified by the background facts.  The Couples and Norman had maintained trust and good relationship as clients and friends for more than a decade.  Their good relationship was evidenced by a number of written messages sent by Lei to Norman and Alex.  She used to share with them her feelings and family life, thank them for their utmost efforts to help her and her family through their most difficult times and even express her wish to return to Hong Kong to experience life with them together.  It is understandable that Norman was willing to allow more time for payment so long as payments would be made upon the sale of the Property. 

43.  Third, the Firm had effective means to monitor the undertaking given by Sellon through Lei.  By representing Lei and Sellon in the 1720 Action, the Firm was able to keep check of the Lis Pendens.  After the disposal of the 1720 Action, the Firm has kept the Withdrawal Notice leading to the discovery of the Sale. 

44.  Fourth, Lei’s admission of her promise (“Promise”) to instruct the Firm to represent Sellon in the event that she sells the Property was strong evidence in support of the 1^st Agreement.  Absent convincing explanation on why she made such promise, I accept the Firm's case that the Promise was to induce the Firm in accepting her undertakings by providing the Firm with the means to enforce the undertaking. 

45.  On the other hand, I am not impressed by the defence put forward by Sellon.  Lei's allegation of no communication between Norman and her is undermined by her numerous fax messages sent to Norman at that period of time.

46.  I also do not believe that Lei had no knowledge about the 85 Action or that Sellon and Lei had no interest in it.  The 85 Action was apparently commenced for the purpose of legally validating Chun’s transfer of the Fund to the Joint Account so as to buttress the defence of Lei and Sellon in the 1720 Action.  Given that default judgment had been entered against Chun leaving only Lei and Sellon to defend the 1720 Action, Lei had obvious reasons to cause Sellon to pay for the legal costs.  Further, her fax dated 4 November 2009 was a solid proof of her knowledge about the 85 Action. 

47.  In light of the fact that the Couples, being husband and wife in good relationship, living together and being involved in the same sets of litigation, it is unbelievable that they would not have discussed the three inter-related actions between themselves or with Norman. 

48.  In the Amended Defence, Sellon raised a new allegation that Norman and Chun had agreed to fix the legal services up to service of statement of claim in the 85 Action at HK$20,000 (“1^st Agreed Fee Allegation”) which had been fully paid.  Chun also complained the Firm’s transfer of part of the said sum to settle other payments was unauthorized. 

49.  Sellon gave no explanation on why such allegation (which amounts to a complete defence) was not raised in the Defence which was prepared after consultation with Chun as shown in paragraphs 7-10 of the Defence, nor the Affirmation.  Further, such allegation contradicts to the defence that the 1^st Agreement was made between Chun and the Firm.   

50.  The contemporaneous documents further disprove the 1^st Agreed Fee Allegation.  First, the receipt dated 13 December 2004 recorded the payment of HK$20,000 as “costs on account” but not “agreed fee”.  Second, Chun admitted under cross-examination that he had received Norman’s written notification of the transfer of part of the said HK$20,000 for settling other payments leaving the disbursement on accounts in the 85 Action a few thousand dollars only.  Third, the hours spent for each item of work done and the hourly rate were detailed in the 3^rd Bill which was more than HK$20,000.  No complaint about it had been made before the Amended Defence.  

51.  Apparently, the 1^st Agreed Fee Allegation is not true.  I believe that the Firm had commenced and prosecuted the 85 Action on the strength of the 1^st Agreement.  The payment of HK$20,000 was costs on account for disbursement.

The 4^th Bill and the 2^nd Agreement

52.  In relation to the 4^th Bill, the Firm says that Chun had made a prior request for Alex to attend police enquiry with him after his arrival in Hong Kong.  Chun was unexpectedly arrested upon arrival on 22 February 2006.  On 24 February 2006, Lei telephoned Norman requesting him to assist Chun and bail him out.  Acting as the sole director of Sellon, she agreed to pay for all legal services upon the sale of the Property, hence, the 2^nd Agreement.  She also asked for the bank information of the Firm for payment of costs on account for disbursements. 

53.  I accept the Firm’s explanation that with the actual knowledge of the financial difficulties of the Couples and the serious allegation against them as elaborated above, the Firm would not have rendered substantial services to Chun as detailed in the 4^th Bill but for the 2^nd Agreement. 

54.  In the Defence and her witness statements, Lei denied any conversation with Norman on 24 February 2006.  Upon cross-examination, she changed to admit that she did have a telephone conversation with him on 24^th February 2006 and ask for the Firm’s bank account information.  She nevertheless denied entering into the 2^nd Agreement.  She said that her request for bank account information was for remittance of HK$800,000 to 1,000,000 for bail money as requested by Alex.  

55.  I do not find Lei’s allegations credible.  She gave no explanation on why she gave conflicting versions of event not to mention that neither of them was raised in the Affirmation. 

56.  Lei said that she had not made the remittance for fear that the Firm would use the fund to settle the many unpaid bills. Undoubtedly, this allegation undermines the defence.  The Firm would have no right for payment in the absence of any promise to pay by Lei.  By that time, only the 3^rd Bill was issued which Lei denied liability to pay. 

57.  Further, Lei provided no explanation on why the Firm would have asked for and she would have agreed and prepared to remit a substantial yet unascertained sum into the Firm’s bank account for bail money. After all, it was her case that it was Chun’s sister who handled the bail arrangement and managed to bail him out with a far lesser sum. 

58.  Lei also complained the Firm to have misleadingly stated the bail was granted to Chun on 26 February 2006 instead of 24 February 2006.  I nevertheless accept the Firm’s position that the date was quoted from the judgments of the Court of Appeal and the District Court.  At any rates, I fail to see how the date, be it 24 or 26 February 2006, will advance Sellon’s case any further.

59.  In the Amended Defence, it was pleaded that Chun had instructed his sister to handle the matter with the Firm and all the legal costs had been fully paid.  Such defence cannot stand for obvious reasons that Sellon failed to provide any particulars of the alleged payment let alone solid evidence to prove. 

60.  As to the complaint that the 4^th Bill was issued more than one year after the completion of service, I accept Alex’s explanation that he did not regard the case concluded before the end of 2008 for Chun had jumped bail and left Hong Kong without notifying him.  He received no instruction that his service was terminated.  Instead, he was on and off approached by the Hong Kong police for the matter and was accordingly uncertain as to the further progress of the case.  It was until the end of December 2008 that there was no sign of new development and that he knew the 1720 Action would soon be concluded freeing the Property for sale without encumbrances, he then issued the 4^th Bill for payment settlement.  His explanation is consistent with the reality that the Hong Kong police had not concluded the case but applied for arrest warrant ending up with Chun’s arrest in Canada.

61.  I do not believe Chun’s allegation that he had notified Alex of his plan to jump bail before 27 February 2006.  Otherwise, Alex and Chun’s sister would not have waited for Chun for extension of bail at the police station for a long period of time on 28 February 2006.

62.  I am not impressed by Sellon’s unpleaded argument that the two day services provided to Chun before Lei’s telephone call on 24 February 2006 was past consideration and was not covered by the 2^nd Agreement.  The legal services rendered to Chun after his arrival in Hong Kong was related to the police enquiry on the fraud case and must be regarded as one single transaction.  It is an affront to commonsense that Norman and Lei would have agreed to separate the services provided before and after Lei’s phone conversation leaving the liability to pay the pre-telephone services unattended.

63.  On evidence, I believe the Firm’s case that Lei was anxious to bail her husband out and entered into the 2^nd Agreement.  Chun jumped bail and returned to Canada before payment of costs on account.

The 5^th Bill and the 3^rd Agreement

64.  In relation to the 5^th Bill, the Firm says that in or about end October 2009, Lei telephoned Alex, crying out that Chun was arrested by the Canadian police on 8 October 2009 upon the application of the Hong Kong police for extraditing him to Hong Kong in connection with the fraud case.  A Canadian legal team was retained to resist the extradition and needed the Firm’s assistance to provide legal opinions and documents. 

65.  Alex expressed concern on the outstanding legal costs.  Lei, acting as the sole director of Sellon, promised that all legal costs would be paid off upon the sale of the Property, hence the 3^rd Agreement.  Lei also said that she would arrange Chun’s sister to pay some costs on account for disbursements.  Pursuant to the 3^rd Agreement, the Firm provided services as requested by Lei.  On 11 May 2011, the Firm sent the 5^th Bill to Lei (though the surname of Lei was wrongly typed as “Sung”).

66.  Lei admits that she telephoned Alex in October 2009 but gave contradictory versions of the content of the said telephone conversation.  In the Defence, she alleged that in the phone conversation she made clear that it was Chun and/or his mother and sisters who instructed the Firm and to bear the legal costs.  Lei only relayed messages from Chun to the Firm.

67.  In the Amended Defence, Lei raised a new allegation that in the phone conversation, Lei and Alex agreed to fix the legal costs at HK$90,000 inclusive of HK$60,000 for counsel fee (“2^nd Agreed Fee Allegation”).  Such agreed fee was fully paid by Chun’s sister.

68.  In my view, none of Lei’s allegations stands. There is no reason that the 2^nd Agreed Fee Allegation, which gives a complete defence to the claim, was not mentioned in the Affirmation or the Defence.

69.  Worse still, Chun’s evidence runs counter to Lei’s evidence.  In his witness statement, he alleged that he had agreed with Alex over a phone conversation to fix the legal fees at HK$90,000 inclusive of HK$60,000 for counsel fee and HK$30,000 for the Firm.  In his supplemental witness statement, he changed to say that sometime in May 2010, he had various telephone calls with Alex ending up with an agreement to fix the legal fees in preparing a legal opinion at HK$50,000 inclusive of HK$40,000 for Counsel fee and HK$10,000 for the Firm.  In December 2010, he agreed with Alex to fix the legal fees for another legal opinion at HK$40,000 inclusive of HK$30,000 for Counsel fee and HK$10,000 for the Firm.  No reasonable explanation was offered to reconcile these inconsistencies.

70.  When Lei was confronted with all these inconsistencies, she changed to say that the 2^nd Agreed Fee Allegation was made between Chun and Alex but not her.  Such allegation was contrary to her case. 

71.  On all accounts, the 2^nd Agreed Fee Allegation was disproved by the receipts which recorded the payments of HK$50,000 and HK$40,000 as “costs on account” but not agreed fees and were accounted for in the 5^th Bill as “costs on account”.  No complaint or clarification has ever been raised to the Firm.

72.  Further, as discerned from the written communications among the Firm, the Canadian lawyers, and the Hong Kong counsel, neither party could know what services would be required from the Firm as the proceedings went along.  It was unlikely that the Firm would be able to estimate the fees and agree to a fixed fee as alleged. 

73.  I do not believe that given the grave financial difficulties of the Couples and that Chun had been remanded in custody facing serious criminal charges, the Firm would have increasingly provided legal services to the Couples in the absence of the 3^rd Agreement. 

The 6^th Bill

74.  In relation to the 6^th Bill, the Firm says that pursuant to the 3^rd Agreement, the Firm continued to render services to Chun after his extradition to Hong Kong until legal aid was granted to him.  Lei, acting as the sole director of Sellon, unceasingly instructed the Firm to continue its services to Chun all the way from Canada to Hong Kong as evidenced by her various oral and written instructions. 

75.  In the Defence, Lei admitted that she had several phone calls with the Firm but denied instructing it to represent Chun. She said that she only asked the Firm to contact Chun directly as he was the one who instructed the Firm and to bear the legal costs.

76.  I do not accept Lei’s allegations.  First, Chun has been remanded in custody facing serious criminal charges against him since 8 October 2009.  There was no evidence that he had any financial means to pay the legal costs.  The legal services already rendered to him have been left unpaid for years.  There was no reason for the Firm to accept his instruction without sufficient costs on account.  

77.  Second, Lei’s many written instructions since 15 April 2011 are clear evidence that she instructed the Firm on the conduct of the Criminal Proceedings.  In those messages, she confirmed that she would pay the bail money.  She reviewed the conduct of the legal action relating to Chun since 2006.  She directed the Firm on how to approach the case and to copy all the documents to her.  She even said that she herself had considered the matters discussed with Alex for 20 hours and then gave instructions on the strategy to be adopted in the Criminal Proceedings. 

78.  Third, she had obvious reasons to instruct the Firm for she was anxious to save her husband from criminal convictions. 

79.  In the Amended Defence, a new allegation was raised.  It was pleaded that Alex had assured Chun that the Firm would charge the Legal Aid Department but not Chun for all the legal costs incurred in the Criminal Proceedings (“Legal Aid Representation”).  Chun told Alex that he had applied for legal aid. 

80.  I do not find this allegation believable.  Not only that Sellon gave no valid explanation as to why such important defence had not been included in the Affirmation or the Defence,  the allegation is illogical. 

81.  There was no reason for an experienced solicitor to make such an illegal and unfavourable offer.  By that time, Alex was well aware of the grave financial difficulties of the Couples and that Chun was facing serious criminal charges, not to mention legal aid does not cover Magistracy proceedings. There is no justification for the Firm to engage itself in illegal dealings and to bear all legal costs in the hope that Chun would be granted legal aid in the future, bearing in mind that there was no guarantee that legal aid would definitely be granted or when it would be granted. 

82.  Further, the allegation that the Legal Aid Representation was made on 15 April 2011 runs counter to the written retainer (“Retainer”) signed by Chun on 26 April 2011 in that he directed the Firm to approach Lei for payment of legal costs.  

83.  Chun tried to explain in his supplemental witness statement that he signed the Retainer on the strength of Alex’s representation that it was only a formality for the purpose of lawyer-client privilege.  He said that before he signed it, he had already told Alex that the Couples could not afford the legal costs and that he had already applied for legal aid at Alex’s request. 

84.  His allegation is disproved by the fact that he only submitted his legal aid application long after the Retainer (on 18 May 2011 as evidenced in his letter dated 27 May 2011). 

85.  Chun also seeks to argue that the Retainer was a trap for the Firm to pressurize Lei, the Mother and Chun’s sister to pay legal costs.  Such allegation runs counter to the conduct and messages written by the Mother and Lei.  Those messages demonstrate that Lei was the one who instructed the Firm on the conduct of the Criminal Proceedings and the Mother’s proposal to render her own landed property as security for legal costs for the Criminal Proceedings was declined by Norman and Alex who asked her to keep her own property for her own good.

86.  In the Supplemental Submissions, Sellons also complains the Firm to have, on the one hand, prepared the Retainer for Chun to direct the Firm approach Lei for costs on account in the sum of HK$200,000, on the other hand, advised Chun to apply for legal aid.  It criticizes the Firm to have defrauded the Legal Aid Department or in this action.  I am not convinced.  The Retainer sits well with the Firm’s case that Chun was remanded in custody and lack of money, he had to look to Lei for arrangement for of payment. Further, the advice on application for legal aid was given subsequent to the Retainer and no cost on account was made. 

87.  The evidence shows that Chun’s application for legal aid was refused at the end of June 2011 by reason of his failure to give full and frank disclosure of his financial means.  Lei’s wealth caused concern. In August, Lei petitioned for divorce.  It was only until September 2011 legal aid was granted to Chun.  The fact that the Firm continued to provide substantial legal services to Chun from June to August 2011 is a strong fact to disprove the Legal Aid Representation.

88.  By reason of matters set out above, I believe that the Firm would not have continuously provided legal services to Chun but for the 3^rd Agreement. 

The Assurances

89.  Further, I accept the Firm’s submission that the messages written by or in the name of Lei at the material times, including the fax messages hand-written by Lei respectively on 2 November 2009 (“1^st Fax”), 1 March 2010 (“2^nd Fax”), 20 May 2010 (“3^rd Fax”) and 16 December 2010 (“4^th Fax”) (collectively referred as “Four Faxes”) tend to support the Firm’s case of the existence of The Three Agreements and the Assurances.  It is clear from those messages that Lei gave instructions to the Firm on what legal services to be rendered and how they were to be paid.  She had closely monitored the progress of the cases relating to Chun and instructed the Firm to copy all correspondences and documents to her.

90.  More importantly, Lei instructed the Firm to add the legal fees relating to Chun’s cases to her liability.  She repeatedly assured the Firm that she would pay for those fees together with other long-outstanding legal fees owed to the Firm upon disposal of the Property. She thanked the Firm for its indulgence for deferred payment.  She also kept updating the Firm of the progress of her plan to dispose of the Property for payment settlement.

91.  I am not impressed by Lei’s argument that the 1^st Fax only dealt with the legal fees incurred from the company search for her personal use (which were paid up) while the 2^nd, 3^rd and 4^th Faxes concerned the 1720 Action and the 1^st Bill only.   Not only that the wordings of the Four Faxes could not afford such an interpretation, the background facts also go contrary to her allegation.

92.  The combined effects of the 1^st Fax as well as the subsequent written messages point to the fact that the company search she referred to was required by the Canadian lawyers and the payment was for costs on account for disbursements.

93.  Further, Lei’s allegation contradicts Chun’s evidence.  Chun said that the Four Faxes were written by Lei on his instruction to deal with his own liability under the 1^st Bill, 3^rd Bill and 4^th Bill.  When asked to explain the contradiction, Lei could not give a sensible explanation but illogically replied that she did not find any inconsistency between the two versions. 

94.  Lei alleges that some of the messages in her name were indeed written by Chun or her son.  Be that as it may, the whole sequence of events shows that she has adopted them in full. Further, Chun and her son had no reason to write them for her if not on her instruction.  She is estopped from denying those documents are her documents.   

95.  In my judgment, even if the Three Agreements did not exist, which I do not so find, I accept the Firm’s submission that the Four Faxes are clear evidence to prove that Lei had repeatedly given encouragement and assurances to induce the Firm to believe that its services to Chun, Lei and/or Sellon would be remunerated by sellon upon the sale of the Property. The Firm, in reliance on the repeated assurances of Sellon through Lei which carried express and implied promises to remunerate, continued to render services to them throughout the years.

96.  Given the Firm runs a legal practice but not a charity as well as the long solicitor and client relationship between the parties, the parties would no doubt have intended and understood that the services rendered would be remunerated at the Firm’s usual rate. 

97.  I take the view that whenever Lei requested services from the Firm to Sellon, Chun and/ or her, even if absence of anything as express between the parties, she was taken to have impliedly promised to remunerate the Firm, and the later express payment promises as evidenced by the Four Faxes were to record such promises.   The Assurances are legally enforceable.  See Pao On v Lau Yiu Tong [1979] HKLR 225

98.  Two other arguments in the Supplemental Submissions that the law relating to privacy protection has prohibited Lei from giving the Firm any instructions to render services to Chun and that the general law disallows any payment to be made to the Firm in the absence of written quotation and contract are lack of legal and evidential basis and are bound to fail. 

99.  In all, I am satisfied that the Firm has succeeded in proving the existence of the Three Agreements and the Assurances.

In the capacity of Director

100.  I now turn to the issue of whether Lei entered into the Three Agreements and gave the Assurances in the capacity of the sole director of Sellon and on its behalf. 

101.  In the normal course of events, a firm of solicitors will not increasingly provide services to overseas clients who are in grave financial difficulties and facing serious criminal charges for years without sufficient funds on account or some assurances for payment.

102.  From 2004 to 2012, the Firm increasingly rendered service to the Couples.  Other than the services covered by the 2^nd Bill, all the legal services were to deal with the legal matters arisen from Chun’s misappropriation of fund relating to SHK. 

103.  The Property was the only property in Hong Kong that the Firm could look to.  Since 2004, the Firm has been aware that it was registered in the name of Sellon but not Lei personally.  It knew Lei had no personal capacity to sell it, use the sale proceeds or instruct the solicitors to handle the sale.  Those powers vested in Sellon and must be exercised by its sole director. 

104.  Lei, being the sole director and shareholder of Sellon and the wife of Chun, had obvious reason to use the Property to save herself, Sellon and her husband from criminal charges or civil liabilities.  Her eagerness to help Chun is evidenced by her numerous written messages and her deep involvement in the legal actions relating to him. 

105.  A promise to pay all the outstanding legal costs upon sale of the Property was apparently a beneficial solution to her if not the best as the payments of the substantial fees could be deferred until the Property was free for sale without encumbrances. 

106.  Further, it is her own evidence that she caused the Property register in the name of Sellon and made herself the sole director and shareholder of Sellon because she did not want to hold or deal with the Property personally.  She actually intended that only the director of Sellon has the right to deal with the Property.

107.  All the circumstances suggest that when she gave the promises to pay all the legal costs upon sale of the Property, she was aware and actually intended that she was acting in the capacity of the sole director of Sellon and on its behalf. 

108.  In my judgment, the conducts of the parties, the relationship between them and the surrounding circumstances provide compelling evidence to conclude that Norman, Alex and Lei entered into the Three Agreements with the intention and common understanding that Lei was acting in the capacity of the sole director of Sellon and for and on its behalf.  She had actual and apparent authority to enter into the Three Agreements and given the Assurances and she did so.

The Three Agreements not reduced into writing

109.  Sellon seeks to challenge that it is incredible for the Firm to have undertaken all the work on the strength of oral agreements and in the absence of the wording of Lei acting for and on behalf of Sellon in her written messages.

110.  In my view, the good relationship between the parties, the Firm had actual means to keep check of the sale of the Property, Lei’s many written messages repeating the Assurances and the Promise provide satisfactory answer to address the challenge.

111.  My observation is that the conducts of the parties sit comfortably with the case of the Firm.  The evidence shows that the Firm had all along kept check of the timing of the sale of the Property without encumbrances and demanded payments without delay. Shortly after the conviction of Chun and the discharge of the Charge, it sent copies of the Remaining Bills to Lei for payment.  When the Firm gave Two Memorandums to Lei in the September Meeting, the Remaining Bills were also tendered for payment. It has kept the Withdrawal Notice without returning it to Sellon leading to the discovery of the Sale. 

112.  I do not believe that Lei asked Alex to seek payment from Chun instead of her at the September Meeting.  Otherwise, she should have referred to this matter in her subsequent written messages whenever she was pushed for payment. Instead, she had approached Alex for the precise amount of the total outstanding legal costs in October 2009.  She failed to explain why she had asked for it if she was not responsible for it.

113.  Further, her explanation that she broke the Promise and changed to instruct other solicitor to handle the Sale was to prevent the Firm from deducting the outstanding legal costs from the sale proceeds is clear evidence to support the existence of the Three Agreements and the Assurances.  Otherwise, the Firm would have no right to make the deduction. 

114.  In my judgment, there is ample evidence to prove the Firm’s case and disprove Sellon’s case.

The Issuance of the remaining bills

115.  Sellon tries to argue that as the Remaining Bills did not name Sellon as client and were not sent to Sellon upon their issuance, the Firm indeed had no intention to ask Sellon for payment which disproves the existence of the Three Agreements.  

116.  I am not impressed by this argument.  I accept the explanation given by the Firm that there were solid reasons not to name Sellon as client of the Remaining Bills.  Chun was named as the client of the 3^rd Bill because the service rendered was to commence and prosecute the 85 Action to which Chun was a party but Sellon was not.  He was also named as the client in the 4^th Bill and the 6^th Bill as those bills were for services rendered for criminal matters in Hong Kong and the Firm was duty-bound to name the accused and the defendant as client who would be the one to verify the services rendered.  Lei was named as the client in the 5^th Bill for she was the one who instructed the Firm to give assistance to the Canadian legal team for the Extradition Proceedings when Chun was remanded in custody in Canada.  

117.  It is understandable that the Remaining Bills were sent to the clients named therein upon their issuance in light of the fact that Chun and Lei were couples, living together until 8 October 2009 and were closely communicated with each other thereafter.  Lei was the sole director of Sellon who had the full management of it.  The whole course of dealings between the parties throughout the years demonstrates that the parties have adopted the mode of communication by fax and email between them.  The Couples would relay messages given to and received from the Firm between themselves.       

118.  Further, the fact that the copies of the Remaining Bills were sent to Lei soon after the conviction of Chun and the discharge of the Charge and that the Remaining Bills were given to her together with the Two Memorandums in person at the September Meeting are in line with the Firm’s case that Sellon would have to pay the legal costs upon the sale of the Property.  Obviously, the Firm had waited until Sellon was able to sell the Property free from encumbrances it then sent the bills to Sellon through Lei for payment.  Although the addressees of the bills, as set out in the bills themselves, had not been amended, there can be no doubt and I indeed believe that it has been clear to Lei and the Firm that the Firm was charging Sellon with the bills.  Identity of the party to be charged was plain and clear.

Inflated fees

119.  I now turn to deal with the issue of inflated fees. Save for one item in the 6^th Bill, the complaint that the Firm has highly inflated the legal fees is lack of particulars or evidence.  As to the said item of the 6^th Bill, the Firm is accused of dishonestly claiming for a legal visit attended by Alex on 15 July 2011 which was not done.  Such complaint is unfounded.  The Correctional Services Department has produced contemporaneous record to prove Alex’s legal visit on that day. 

120.  Another allegation that some items of the 6^th Bill were covered by legal aid is neither particularized nor supported by evidence.  On the contrary, the services rendered and the time spent on them was detailed in the 6^th Bill which clearly shows that they were provided before the grant of legal aid.  This fact is corroborated by the Firm’s reply to the enquiry of the Legal Aid Department dated 4th March 2014.     

121.  In my view, the Remaining Bills are itemized bills with details as to the hourly rate and time spent for each item of work. The hourly rates were the usual rates charged against the Couples in the past as well as those in the 1^st Bill and the 2^nd Bill which Sellon has admitted liability, save that the 4^th Bill (relating to legal visit) charged the same rate as that quoted in Alex’s letter (relating to legal visit) in February 2006.  In the absence of any precision the items which were dispute or any ground of objection and in consideration of the professional qualification and experience of Norman and Alex as well as the nature and complexity of the legal services rendered, I take the view that the items and amounts charged are reasonable.  There is no solid evidence to show that the Remaining Bills are inflated. 

122.  Chun seeks to argue that the 5^th and 6^th Bills were sent to him by e-mail while in custody so as to hide the inflated costs and cheat him in respect thereof.  This is a serious allegation which has not been pleaded.  Further, the fact that he has at no stage asked for the bills points to a compelling inference that he has already received them or that he knew someone else would be responsible for them.  At any rates, his allegation was undermined by Lei’s evidence that she has had the use of Chun’s email account after his remand in custody since 8 October 2009 and that she has relayed the e-mail messages to Chun. 

123.  The fact is there was no complaint about inflated fees until the Amended Defence.  Chun only applied for legal aid for taxation of the Remaining Bills in 2014.  Even though he chose not to commence taxation proceedings in the end, his conduct undermines the defence that the 2^nd to the 5^th Bill had been fully paid and the 6^th Bill was covered by legal aid.  Otherwise, he should never have applied for legal aid for taxation of these bills.

124.  In the Closing Submissions, Sellon prays in aid of the maxim omnia praesumuntur contra spoliatorem.  It argues on the fact that the Firm has not produced any primary documents, such as time sheets and attendance notes, is an indication of the Firm’s fear that the documents, if brought, would have exposed facts unfavourable to the party.  It seeks support from the principle set out in the judgment of Le Pichon JA in Tullet & Tokyo International Securities Ltd v APC Securities Co Ltd [2001] 2 HKC 713.

125.  Taking into account all the circumstances, I do not consider the maxim operate against the Firm in this case.  I do not find the production of those documents was reasonably expected.  I accept the explanation of the Firm that neither Sellon nor Lei nor Chun had ever disputed the content of the Six Bills until the Amended Defence.  Further, the complaint was not supported by any particulars or evidence.  The Six Bills are itemized bills with details of work done and time spent.  Sellon would have no difficulty in raising objection and seeking documentary proof for years.  

126.  I also take the view that the cost and inconvenience of producing primary documents relating to the Six Bills which would involve a very substantial amount of documents from 2004 to 2012 in itself is a good reason for non-production unless specifically asked for.  Throughout this action, Sellon has not sought discovery of them.

127.  Doing a balancing exercise, I form the view that no inferences can be drawn in this case.

Time bar

128.  I now deal with the argument on whether the claim relating to the 3^rd Bill and the 4^th Bill are time-barred.  

129.  Sellon seeks to argue that even though the 3^rd and 4^th Bills were issued to Chun respectively on 20 October 2005 and 31 December 2008, the cause of action relating to them accrued when the fees become due and payable in March 2005 and February 2006 respectively.  The present action was commenced on 19 June 2013.  The claims in relation to them are time-barred pursuant to section 4(1)(a) of the Limitation Ordinance (Cap 347) which provides that actions founded on simple contract shall not be brought after the expiration of 6 years from the date on which the cause of action accrued.  

130.  I do not agree.  The general rule in contract is that the cause of action accrues and the time begins to run from the time when the breach takes place.  It is true that generally the right to claim payment upon a service contract accrues when the work is completed but this is subject to the parties’ agreement on a time for payment.  If the parties agree that the payment shall be made upon the happening of a contingency, and the payment is not made, the cause of action arises upon the contingency occurring.

131.  On my finding that the Three Agreements existed, Sellon has contracted to pay off all the outstanding legal costs upon the sale of the Property.  The contingency happened when Sellon sold the Property by entering into the sale and purchase agreement on 7 June 2013.  Sellon however refused to make payment despite repeated requests. It  evinced unequivocal intention on its part to repudiate the Three Agreements. The Firm accepted its breach and commenced the present action.   Time runs from when the breach occurred.

132.  In the circumstances, I do not find that the 3^rd Bill and the 4^th Bill are time-barred.  This would sufficiently dispose of the defence of limitation.  For completeness sake, I will also deal with the other proposition of the Firm.

133.  The Firm seeks protection from section 23(3) of the Limitation Ordinance saying that even if the right of action has accrued upon the completion of the services as alleged by Sellon, Lei has, for and on behalf of Sellon, acknowledged the liability of the outstanding legal fees due to the Firm in the Four Faxes.  The right of the claim is accordingly be treated as having accrued on and not before the date of the Four Faxes.  The rule that current period of limitation may be repeatedly extended under the rule by further acknowledgements applies. 

134.  To this, Sellon fails to raise any valid argument.  Suffice it to say that the Four Faxes were written and signed by Lei in that she extended her thankfulness for the Firm’s indulgence for deferred payments for the long outstanding legal fees and promised to pay them upon the sale of the Property. On my findings of the legal fees that the Four Faxes referred to included the 3^rd and the 4^th Bill as elaborated above, I share the view that even if the right of action has accrued upon the completion of the services as alleged by Sellon, which I do not so find, the Four Faxes constitute an acknowledgment of the liability to pay the 3^rd and 4^th Bills by Sellon through Lei.  As a result, the cause of action already existing accrues afresh.

Credibility of witness

135.  Lei tries to reconcile her inconsistent evidence by alleging that she did not understand the e-mail messages, pleadings and witness statements because of poor English.  I am not convinced.  My observation is that she was able to read through the pleadings, witness statements and even make amendments on them at trial.  By a slip of tongue, she admitted that some English e-mail messages were written by her.  Coupled with the fact that she has received tertiary education, that she has lived in Canada since 1997, that the documents involved are in simple English and indeed have been interpreted to her by her solicitors, I take the view that Lei actually understood the documents relevant to this case.

136.  In the Closing Submissions, Sellon invites this court to consider that Norman and Alex have not kept Sellon informed of the legal fees in the manner as required in Code 4 of the Law Society’s Guide to Professional.  This is unsatisfactory and should not be allowed.  Without raising the issue in the pleadings or allowing the witnesses sufficient opportunities to deal with the issue properly at trial, it is simply not fair for such comment to be slipped in by relying on piecemeal evidence in the hope that the Firm is not sufficiently alert to object.  In any event, even if, which I do not so find,  there had been breach of the professional code, it does not afford Sellon a defence to the claim or a blow to the credibility of Norman and Alex.

137.  In the Supplemental Submissions, Sellon also criticizes Norman to have dishonestly alleged that Chun had told him about Chun’s half beneficial interest in the Property in October 2004.  Sellon says that Norman virtually knew well from the Defence of the 1720 Action that Chun had no interest in the Property at all. 

138.  This argument is unfounded.  Not only that Sellon should not be allowed to raise this matter which is related to the 1^st Bill as both parties have specifically agreed not to deal with the disputed facts relating to 1^st Bill, it is clear from the evidence that just because Norman was not satisfied with Chun’s representation, Chun then passed the telephone to Lei for her to undertake, in the capacity of the sole director of the Sellon, to pay all outstanding legal costs upon the sale of the Property.  I also take note that the written instructions for the preparation of the Defence for the 1720 Action and the filing of the said Defence were all made after October 2004. 

139.  Another criticism goes to Norman’s wrongful allegation that Lei came to Hong Kong several times from 2004 to 2009.  I accept Norman’s explanation that he got confused about the years because of Lei’s many visits to Hong Kong and the lapse of time.  His explanation is consistent with the fact that Lei did visit Hong Kong and meet Norman and/or Alex several times from 2004 to 2012.

140.  Having observed the manner and demeanour of the witnesses giving evidence in court and their oral and written evidence, I find that Lei and Chun are not credible witnesses.    Their evidence was full of contradictions and changed drastically when their evidence went along.  On the other hand, Norman and Alex gave evidence in a straight forward and confident manner.  Their evidence sits comfortably with the background facts and the contemporaneous documents.  I find them to be credible witnesses.  For their evidence that is contrary to those of Lei and Chun, I prefer their evidence.

Unpleaded issues

141.  In the Closing Submissions, Sellon raised a completely new point which has not been pleaded in its pleadings or taken throughout the trial.  It says that this action shall be dismissed on the ground that the Remaining Bills were not delivered to Sellon in accordance with section 66 of the Legal Practitioners Ordinance, Cap 159 (“LPO”)  which requires:-

(i) the bills be delivered to Sellon for more than one month before the commencement of this action;

(ii) the 5^th Bill be signed by the partner of the Firm but not Alex who was a consultant.

     (“Unpleaded Issues”)

142.  I do not accept Sellon is entitled to raise the Unpleaded Issues in this case.  I seek support from the case of Kwok Chin Wing v 21 Holdings (formerly known as GFT Holdings Limited, Capital Prosper Limited, and Rockapetta Holdings Limited & Anor (2013) 16 HKCFAR 663 in that the rationale behind pleadings and the rules governing pleadings have been set out in clear terms: -

“……It is the pleadings that will define the issues in a trial and dictate the course of proceedings both before and at trial. Where witnesses are involved, it will be the pleaded issues that define the scope of the evidence, and not the other round. In other words, it will not be acceptable for unpleaded issues to be raised out of the evidence which is to be or has been adduced.”

143.  Under Order 18 rule 8 (1) Rules of the District Court, the defendant must in his defence plead specifically any matter which he alleges make the action not maintainable, or which, if not specifically pleaded, might take the plaintiff by surprise.  Whenever any statute is relied on as a bar to the action, it should be specifically pleaded.  See also explanatory note 18/8/14 Hong Kong Civil Procedure 2015.

144.  Worse still, there was no application for amendment of the pleadings.  The Unpleaded Issues have not been raised in any of the witness statements or put to the witnesses in cross examination but only surfaced in the Closing Submissions.   

145.  It is simply not permissible for these issues to be “slipped-in” in the written closing submissions.  I agree with the Firm that the whole exercise has taken the Firm by surprise and would cause substantial unfair prejudice to it.  It is not fair to deprive the Firm of the chance to address the challenge in the pleadings or to adduce evidence to object or to seek protection from the exceptions or waivers that are available under the section. 

146.  In any event, Sellon’s argument simply ignores Lei’s admission that she received the Remaining Bills (in an envelope) from Alex at the September Meeting.  It is also my fact finding that Lei had all along acted in the capacity of the sole director of Sellon when dealing with the Firm on legal costs covered by the Remaining Bills.  Sellon had no place of business.  In my view, the Remaining Bills were delivered to Sellon through Lei in the September Meeting.  The one-month requirement between delivery of the bills and commencement of the action has been satisfied. 

147.  Section 66 LPO also provides protection to the solicitors that the one month requirement may be waived if there is probable cause for believing that the party chargeable with costs is about to quit Hong Kong or to do any other act which would tend to prevent or delay the solicitor obtaining payment.  The fact that Lei has broken the Promise and instructed another solicitor to handle the Sale without notifying the Firm and her refusal to settle the Remaining Bills are solid evidence giving rise to a possible right for the Firm to seek the statutory protection.

148.  Likewise, the complaints that the Remaining Bills were not addressed to Sellon and that the 5^th Bill was not signed by a partner of the Firm was unfair.  Suffice it to say that the law does not require the name of the person to be charged be set out in or that the partner must sign on the bill itself.  A line of decided cases have ruled that it is sufficient that the name and the signature be contained in a letter accompanying the bill.

149.  The law also recognizes the payer’s right to waive section 66 LPO.  On my finding that Lei has promised to pay the outstanding legal costs throughout the period.  There is room for a possible argument that Sellon has waived the requirement of s 66 LPO as available in law.

150.  In my judgment, the Unpleaded Issues shall not be ruled against the Firm without giving it a fair chance to address the challenges and to explore the matters set out above.  I take the view that the Unpleaded Issues is not a point open to Sellon to take in the closing submissions.   Even if, which I do not so find, Sellon is entitled to do so, the evidence does not support its argument. 

Order

151.  Having considered all the submissions and evidence of both parties, including the Supplemental Submissions and the new documents submitted to this court on the last day of trial, I accept the Firm’s case.  I am not impressed by any of the arguments put forward by Sellon. 

152.  I enter judgment in favour of the Firm against Sellon in the sum of HK$462,559.79 with interest at 8% from the date of the writ to the date of judgment and at judgment rate from the date of judgment until payment.  

153.  Costs follow the event. I make a costs order nisi for Sellon to pay the Firm costs of this action, including all costs reserved, on a party and party basis, to be taxed if not agreed.

154.  In the absence of application to vary by summons within 14 days, the costs order nisi shall become absolute.