山東天宇人律師事務所 v. CHAN SO LEUNG t/a WING TAI DECORATION & ENGINEERS CO

DCCJ3155/2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3155 OF 2006

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J U D G M E N T

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1.  The Plaintiff is a firm of lawyers practising in the Shandong Province in the Mainland.  In this action, the Plaintiff sues its former client for unpaid professional fees in respect of certain legal proceedings in the Mainland.

2.  The Defendant does not appear at the trial to contest the hearing, and there has been no application made to this court for a stay of proceedings on the ground of forum non conveniens.

3.  It is the Plaintiff’s case that it had represented the Defendant to sue a company in the Mainland for unpaid decoration fees.  The total sum claimed for the unpaid professional fees of the Plaintiff is RMB281,000, and the claim is supported by the various written agreements signed by the parties in respect of the professional fees at different stages of the proceedings.  The Plaintiff therefore manages to prove that such professional fees were owed by the Defendant.

4.  In the Defence filed, the Defendant seeks to rely on the following grounds of defence: 

(i)	the Plaintiff is not a body incorporated in the Mainland and it is therefore not a legal entity existing in Hong Kong;
(ii)	the service fees charged by the Plaintiff are excessive and are contrary to the legal regulations in the Mainland;
(iii)	the Plaintiff, without the consent of the Defendant, agreed to release assets of the judgment debtor in the Mainland, thereby depriving the Defendant of the fruit of the judgment;
(iv)	after the issuance of the legal proceedings in the Mainland taken out by the Plaintiff against the Defendant for the unpaid professional fees, the Plaintiff agreed with the Defendant that such fees would only be payable when the Defendant successfully enforced the judgment against the judgment debtor, and as such condition is not fulfilled in the present case, the professional fees are not due at this stage.

5.  In respect of the first two issues, the Plaintiff relies on the expert reports on the Mainland law prepared by Professor Zhang Xianchu of the University of Hong Kong.  According to his expert evidence: 

(i)	the Plaintiff is a law firm established under the lawyers’ law of the Mainland with its own distinct legal personality;
(ii)	all the appointment agreements between the Plaintiff and the Defendant were lawfully made;
(iii)	the fee arrangements between the parties do not violate any regulations in the Mainland.  On the contrary, since the Defendant is a foreign party according to the law of the Mainland, the regulations allow the parties to negotiate the Plaintiff’s legal fees freely.

6.   Although the Defendant has filed a report by a lawyer in the Mainland disputing the legal entity of the Plaintiff, the Defendant does not seek to produce that report in the hearing.  In any event, the expert reports by Professor Zhang are very comprehensive with the support of various legal reference materials in the Mainland, I have no hesitation in accepting his expert evidence and the first two grounds of the defence cannot therefore possibly succeed.

7.  For the third ground of defence, Madam Hon, who is a practising lawyer of the Plaintiff, testifies that it was indeed the court in the Mainland who unfroze part of the judgment debtor’s assets in order to satisfy the claims for salary by the employees of the judgment debtor.  I have no reservation about Madam Hon’s evidence and this disposes of the third ground of defence.

8.  In respect of the fourth ground of defence, Madam Hon disputes that there was an agreement between the parties that the legal fees of the Plaintiff would only be payable when the Defendant successfully enforced the judgment against the judgment debtor.  It was only after the assurance given by the Defendant that he would pay the fees that the Plaintiff withdrew its claim in the Mainland for the unpaid professional fees.  However, the Defendant did not honour his promise to pay, and the Plaintiff therefore commenced the present legal proceedings in Hong Kong for the unpaid fees.

9.  After considering the evidence adduced by the Plaintiff, I am satisfied that the Plaintiff is a legal entity recognised under the laws of the Mainland, and so it has the locus to sue for the unpaid legal fees in Hong Kong.  The Plaintiff has also discharged the burden of proving its claim and I therefore grant judgment in favour of the Plaintiff against the Defendant in the sum of RMB281,000.  The Plaintiff is also entitled to interest at the rate of 10.42% per annum, which is the existing judgment rate, on the said judgment sum from 27 June 2006, the date of issuance of the writ, to the date hereof and thereafter at judgment rate.