DEACONS v. JET HAVEN LTD

DCCJ3453/2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3453 OF 2005

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Reasons for Judgment

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1.  The plaintiff claims for professional fees in respect of legal services rendered to the defendant.  Thirteen invoices that have been sent to the defendant were exhibited at pages 38 to 50 of the exhibit bundle for this trial.  The sums specified therein were as follows:-

Invoice No.	Invoice Date	Amount (HK$)
1083140	27.09.04	80,679.50
1086015	27.10.04	5,137.00
		(claiming 3,370 after part payment)
1089312	27.11.04	7,540.00
1095555	27.01.05	19,860.00
1095558	27.01.05	13,163.50
1099529	25.02.05	4,923.50
1099533	25.02.05	7,697.00
1102677	30.03.05	2,172.00
1102678	30.03.05	18,873.00
1105312	28.04.05	4,713.50
1105316	28.04.05	12,801.50
1108593	27.05.05	9,941.00
1108602	27.05.05	817.50
	Total	186,552.00
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2.  Apparently the defendant had engaged the legal service of the plaintiff in a number of cases, including both contentious and non-contentious matters.  I was informed by Mr. Shaw, who represented the plaintiff in this hearing, that the two spreadsheets (pages 33-34 of the exhibit bundle for this trial) of legal fees prepared by the defendant are not accepted to be correct by the plaintiff.  Whatever dispute the plaintiff may have with the defendant over those data is a matter to be resolved between them.  Incidentally the data in the spreadsheets of the defendant relates to the above items of legal costs.

3.  The defendant defended the plaintiff’s claim on the following 3 grounds:-

(a) the amounts charged in the invoices were unreasonable;

(b) the plaintiff fails to honour their promise to give the defendant a 20% discount in respect of the legal costs incurred; and

(c) the plaintiff has received 2 sums of settlement payments on behalf of the defendant, HK$391,219.75 and HK$236,168, of which the plaintiff failed to account and pay over the said sums to the defendant.

4.  The defendant counterclaims against the plaintiff for the payment of a sum of HK$253,271.35 of which the defendant gave no elaboration on the accrual of it.

5.  An agreement for payment of legal fees is enforceable when the agreement is fair and reasonable.  The amount of the legal costs recoverable by a legal representative is subject to his client’s right to a proper taxation (Sections 58 to 60 of the Legal Practitioners Ordinance Cap 159).  The defendant was legally represented until its solicitor obtained an order for discharge on 21 July 2006.  The defendant has not asked for taxation of the above legal bills.  Apparently the 1^st element of concern, namely the reasonableness of the bills rendered, is not a live issue.

6.  In respect of the 20% discount, the plaintiff’s witness Mr. NG gave the explanation that it was an offer conditional upon expeditious payment of the outstanding legal costs by the defendant, and the offer lapsed on account of the defendant’s default.  Page 13 of the exhibit bundle is a copy of the telephone message written by Mr. NG about the discussion of fees waiver on 29 April 2005.

7.  In respect of the 2 sums of HK$391,219.75 and HK$236,180 received by the plaintiff on behalf of the defendant, it was the plaintiff’s evidence that the two sums had been applied towards payment of the outstanding legal costs of the defendant.  The plaintiff’s letter of 17 August 2005, exhibited at p-36 of the exhibit bundle, showed how the 2 sums had been applied.  A numerical addition of the 2^nd group of payments showed only a total of HK$226,180.  Hence the defendant should have a balance of HK$10,000 ($236,180 - $226,180) to account to the defendant.

8.  In Mr. NG’s statement, the plaintiff acknowledges their obligation to account to the defendant a sum of HK$27,093.

9.  The defendant did not appear in this trial.  Judgment is entered in favour of the plaintiff in the sum of HK$149,459 (HK$186,552 – HK$27,093 – HK$10,000).  Interest is granted at commercial rate, i.e. 1% above the prime rate, from the date of writ until the date of judgment and thereafter at judgment rate until payment.

10.  Costs of this action is awarded to the plaintiff, to be taxed if not agreed.