CHAN YUET SHEUNG v. WONG, HUI & CO, SOLICITORS

HCSA 24/2020

[2020] HKCFI 2894

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

SMALL CLAIMS TRIBUNAL APPEAL NO 24 OF 2020

(ON APPEAL FROM SMALL CLAIMS TRIBUNAL

CLAIM NO 35713 OF 2019)

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BETWEEN

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D E C I S I O N

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1.  This is the Defendant’s application for leave to appeal against an Award made by the Small Claims Tribunal on 28 August 2020. It concerned the costs awarded to the Defendant in this Claim on 19 June 2020 in the sum of HK$340. The Defendant was dissatisfied with that original costs award and applied to have it reviewed. The Tribunal acceded to the review application and revised the costs to HK$7,168 and made the Award.

2.  The Defendant remains dissatisfied with the Award and filed this application on 21 September 2020. 

3.  Leave to appeal against an award made by the Small Claims Tribunal is generally confined to questions of law: see s.28(1) of the Small Claims Tribunal Ordinance, Cap 338 (“Ordinance”).

4.  There are 5 grounds of appeal set out in the Defendant’s Form 9 :

“1. In rejecting the claim of the Defendant (“D”) for costs in respect of the time incurred by D’s equity partner Wong Pui Hon alias David P. H. Wong (“Mr Wong”) in defending the Claimant’s Claim, the learned Deputy Adjudicator erred in law in holding as she did that :

1.1. D ought but had failed to produce tax return as proof to justify D’s claim for Mr Wong’s hourly rate of $1,000 or daily rate of $7,000 or half-day rate of $3,500, as the case may be; and

1.2. costs could not be awarded other than for actual physical attendance at the Small Claims Tribunal (“Tribunal”).

2. The learned Deputy Adjudicator erred in law in requiring strict proof of income by production of tax return on the question of costs where the costs claim was inherently probable and the earning ability of D / Mr Wong was not disputed by the paying party.

3. The learned Deputy Adjudicator had failed to admit in evidence or take or properly take into account :-

3.1. that Mr Wong was a practising solicitor of over 44 years, he having been admitted as a solicitor in Hong Kong since 1975;

3.2. the Claimant’s evidence that she actually paid for Mr Wong’s services in 2014 at the agreed hourly rate of $7,000;

3.3. the following documentary evidence in Mr Wong’s affirmation dated 13 July 2020 :-

3.3.1. a copy of The Law Society of Hong Kong Circular 17-1017(PA) dated 11 December 2017 marked Exhibit “PHW-2”, showing Mr Wong would be allowed hourly rate of $5,800 in the High Court and $3,860 in the District Court;

3.3.2. a printed copy of an email from the Hong Kong Academy of Law dated 30 September 2019 marked Exhibit “PHW-3”, showing Mr Wong was offered an honorarium of $1,200 per hour by the Academy of Law operated by the Law Society for conducting a conveyancing workshop in 2019;

3.3.3. a copy of the Certificate of Lai Yat San, D’s Accounting Officer, dated 21 May 2020 marked Exhibit “PHW-6”, showing Mr Wong, as an equity partner of D, was entitled to a monthly drawing of $150,000 (“Certificate”).

4. Even if the learned Deputy Adjudicator was right in refusing to accept the Certificate as evidence (which is denied), she ought to have adopted the evidence set out in paragraphs 3.3.1 and 3.3.2 above as the starting point to assess the loss of Mr Wong’s wages or time as part of the costs to be awarded to D.

5. On the true construction of the Small Claims Tribunal Ordinance, Cap. 338, section 24(1) is an inclusive but not exhaustive provision. Hence :-

5.1. costs may be awarded to D as a partnership for loss of the service of Mr Wong as a partner of D; and it was wrong in principle to insist on strict proof of salary or wages of a self-employed partner for whom there was no salaries tax return or salaries tax payment; and

5.2. costs necessarily incurred within the meaning of section 24 ought not be confirned to actual physical attendance at the Tribunal.”

5.  Save for 1 issue (Grounds 1.2 and 5), I do not find them to be proper issues of law.  Rather, they reflect the Defendant’s challenge of :

(a) the Tribunal’s factual finding against it that the claim of costs for Mr David Wong (one of the Defendant’s partners) in attending the hearings of the Claim had not been proved; and

(b) the Tribunal’s refusal to allow the Defendant’s costs of preparation works for this Claim. 

6.  Findings of facts do not normally give rise to issues of law.  In any case, the complaints of the Defendant (Grounds 1.1, 2, 3 and 4) are ill-founded.

7.  Dealing firstly with the issue of law, it concerns the proper scope for award of costs and expenses provided under s.24(1)(a) of the Ordinance.  Such costs and expenses “may include … any reasonable expenses necessarily incurred and any loss of salary or wages suffered … in attending the hearing”. 

8.  I do not believe that the Tribunal took the view that only reasonable expenses and loss of salary or wages could fall within s. 24(1) as suggested by the Defendant.  In paragraph 11 of the Tribunal’s Reasons for Decision dated 28 October 2020 (“Decision”), the reasons for rejecting the preparation costs can be found.

9.  The Tribunal rightly observed that the assessment under s. 24 was not a taxation exercise.  Secondly, it was said that in the absence of special circumstances preparation costs would not normally be allowed.  Thirdly, in the exercise of its discretion the preparation costs were not accepted by the Tribunal.

10.  Although the Tribunal appeared to have justified the disallowance of preparation costs by reference to the requirement that reasonable expenses and loss of salary had to be incurred or suffered in attending the hearing, reading paragraph 11 of the Decision as a whole, I do not believe that the Tribunal took the view that only such expenses or loss could be awarded under s. 24.  The Tribunal would not have referred to the award of preparation costs in special circumstances or the exercise of its discretion if that were the case.

11.  It should be mentioned that in paragraph 6 of the Decision, the Tribunal referred to the need to consider the nature of small claim proceedings as a speedy, simple and relatively economical method to resolve civil litigation.  I agree.

12.  For these reasons, I do not believe that the point of law is properly grounded and leave to appeal on Grounds 1.2 and 5 is declined.

13.  Leave in respect of the remainder of the grounds should also be declined by reason of the absence of any proper question of law. 

14.  For completeness, there is no challenge against the exercise of discretion by the Tribunal.  That was the basis on which the preparation costs were not accepted.

15.  Secondly, I do not believe that the Tribunal’s factual finding regarding Mr Wong’s claim can be faulted.  Firstly, the Tribunal did not insist on the production of tax return to prove Mr Wong’s loss of salary or wages[1]. It was one of the means by which the claim might be established: see paras 16 and 17 of the Decision. 

16.  Thirdly, the evidence of Mr Wong’s earning capacity was irrelevant[2]. The issue was his loss of income in attending the hearing.  Unless there was evidence that he had lost the opportunity to earn an income due to the need to attend the hearing, evidence of, eg, Mr Wong’s hourly rate was irrelevant. 

17.  For these reasons, this application is declined.