GEORGE Y C MOK & CO (A FIRM) v. TRADE ADVISERS CO LTD AND OTHERS

HCMP 2538/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 2538 OF 2003

(ON APPEAL FROM DCCJ NO. 5157 OF 2002)

_________________________

_________________________

_________________________

REASONS FOR JUDGMENT

_________________________

Hon Rogers VP:

1. This was an application by the defendants to have the grant of leave made by Ma JA, as he then was, on 30 June 2003 reconsidered inter partes in open court pursuant to Order 59 rule 14(2B). At the conclusion of the hearing, this application was refused with reasons to be given later together with the order for costs.

2. The plaintiff's claim in this action is for the sum of $56,500 plus interest. That sum is pleaded as being due and owing as the balance of work done and services rendered by the plaintiff as solicitors. The statement of claim refers to 6 invoices which total the said sum of $56,500. In the pleading it is also said that there was a letter from the plaintiff to the defendants, dated 24 March 2000, by which the agreement which the plaintiff had reached with the defendants in respect of the charging rate for the work was reduced to writing. The writ in the action was issued on 16 August 2002 against both Trade Advisers Company Limited and 2 directors of the company. The defendants filed, on their own behalf, a defence dated 13 September 2002. On 30 September 2002 the plaintiff issued a summons seeking summary judgment. That summons came on for hearing on 17 March 2003.

3. This court has been provided with a copy of the skeleton argument on behalf of the defendants. It is dated 14 March 2003. The plaintiff's case that it did not reach their counsel on 14 March, a Friday, but only on the following day is entirely understandable. Even on the basis that the skeleton was delivered on the Friday, it would seem that it came to the attention of those representing the plaintiff at a comparatively late stage. The skeleton argument discloses that the defendants intended to rely upon the fact that not only had they filed a defence but that defence disclosed some 8 grounds of defence. Paragraph 8 of the skeleton argument read as follows:

"In this case, filing out of time an O. 14 Summons claiming a sum of $56,500, forcing the defendants to employ solicitors and counsel is a vehicle of oppression by a firm of solicitors acting as litigants in person. (The Professional Conduct of Lawyers in Hong Kong, Wilkinson & Sandor Vol. 2 XI [1504].)"

4. That paragraph of the Wilkinson and Sandor indicates that although a solicitor may act as a litigant on his own behalf "they are ethically required to declare that they are suing or appearing as litigants in person". The authority for that is said to be Principle 10.08 of the Solicitors' Guide. Hence, as far as the skeleton argument was concerned the only point which was being raised was that the plaintiff was acting oppressively in forcing the defendants to employ lawyers for the purpose of defending the summary judgment application. Insofar as reference was made to the work by Wilkinson and Sandor, the point being made was that it was a matter of ethics.

5. When the matter came before the court, counsel for the defendants went further. He drew the court's attention to paragraph 1553 of Wilkinson and Sandor. That states:

"... it is considered by the authors to be essential that a firm which is a party in an action ought not to be the firm on record as instructing solicitors even in a case where there are several co-parties to the action. Another firm should be retained."

6. There was no authority cited for this proposition save for a ruling by the Guidance Committee of the Law Society in 1989 that had advised a firm of solicitors to consider whether they should cease to act on behalf of a consultant of that firm. The proposition set out in that paragraph, therefore, merely expressed the views of the authors. Nevertheless, on the basis of that, counsel for the defendants submitted that the plaintiff firm should not be entitled to instruct counsel on its behalf. In a passage in the transcript at page 3, which is either replete with errors or leaves much to be desired in respect of precision, the defendants' counsel submitted that that was his "threshold" point.

7. There then followed a discussion between counsel and the bench. The plaintiff's counsel submitted that there was no absolute bar to his being instructed by the plaintiff firm. At the foot of page 4 of the transcript the judge is recorded as saying:

"Either your client represents himself as a litigant in person or he should find another firm of solicitors acting for them and then another firm of solicitors to instruct you. Well, that is what he is saying."

8. Counsel was then invited to search for authorities to "counter" the defendants' authorities. He was given 15 minutes. In that time he was not able to locate Cordery on Solicitors as it was not in the library. The discussion between the bench and counsel then continued. The plaintiff's counsel proposed that the merits of the case should be dealt with first and that any issue as to the question of conduct could be dealt with subsequently. The judge refused that suggestion on the basis that "Well, if I cannot hear you, if I can't hear you because you have no locus or your locus was improper, why should I carry on with hearing you?"

9. Eventually Counsel was given a further 15 minutes adjournment. The judge said just before the adjournment:

"I will give you another 15 minutes and you shall either, if you feel that you do not require instructions of another firm of solicitor, then you can give me authorities to say that you have a locus to represent the plaintiff, or any other suggestion you may make that is acceptable."

10. When the matter resumed some 20 minutes later, the plaintiff's counsel told the court that a representative from another firm of solicitors was on his way from Mongkok. There, then, were objections from the defendants' counsel on the basis that proper instructions could not be given in time and that the new firm of solicitors would not be taking a proper part in the proceedings. When questioned, the plaintiff's counsel thought that the representative would arrive in about half an hour's time. The matter was concluded with the judge indicating to the plaintiff's counsel that he had no instructions from the new firm and that he had no brief from the new firm. The judge clearly indicated that she was not prepared to wait any longer. Counsel was thus put in the position where he could do nothing but ask for an adjournment. The defendants' counsel then suggested that the matter should be adjourned sine die. The plaintiff's counsel agreed to an adjournment sine die with liberty to restore and went on to say:

"As regards the costs in this particular case, I would say that throughout the proceedings and from all the evidence filed by the defendants, this point has not been raised. It is only raised in the skeleton submissions which my instructing solicitors have only received on Saturday afternoon at about 12 o'clock."

11. As I have just noted, it is quite clear that the plaintiff's counsel was put in a position where he could do nothing else but agree to an adjournment. In doing so, he gave the defendants unwarranted credit by suggesting that the point which they raised on the day of the hearing had even been raised in their skeleton argument. It had not been so raised. The point raised in the skeleton argument was a different point. The judge then ordered that the costs of the hearing and occasioned by that adjournment should be borne by the plaintiff to be taxed forthwith, if not agreed, with a certificate for counsel.

12. On 20 May 2003 the judge heard an application on the part of the plaintiff for leave to appeal the order of costs made on 17 March 2003. The grounds of the appeal as stated in the summons were that the judge had concluded that the plaintiff could not act on its own behalf and could not instruct counsel directly to represent it. The grounds continued "... or in preventing the Plaintiff's Counsel so instructed from appearing on behalf of the Plaintiff ...." Well prior to the hearing an affirmation had been filed exhibiting a copy of a letter from the Law Society dated 24 March 2003 indicating that the Guidance Committee had taken the view that a firm of solicitors acting on its own behalf in a litigation matter could instruct counsel directly. There was also exhibited an extract from Halsbury, Vol 3 (4th Ed), to the like effect.

13. The judge gave a short judgment, the basis of that was that the judge said "... I clearly did not make a ruling on the point of locus standi of counsel." Nothing was said in the judgment about whether what had happened at the hearing on 17 March had been, in effect, to prevent counsel from continuing his submissions on the merits of the summary judgment application. As I have already indicated, it is quite clear on reading the transcript that it was made clear to the plaintiff's counsel that he could not continue and argue in respect of the merits of the application without producing authority that he was entitled to be instructed by the plaintiff. As it has now turned out, both the Bar and the Law Society consider that there is nothing improper in a solicitor litigant instructing counsel. It is a matter for the counsel concerned as to whether he considers that a separate firm should be instructed. In this case, where it is a question of a summary judgment application which is decided on paper, I do not see any reason why counsel should consider that another firm of solicitors should be introduced. In any event, a breach of etiquette, or a conflict of interest is a matter primarily for the lawyers concerned. A court cannot debar a lawyer from appearing unless there are clear grounds for considering that the interests of justice will be prejudiced.

14. After the refusal of leave to appeal by the judge below, the plaintiff applied to a single judge of the Court of Appeal for leave to appeal. The matter was dealt with by Ma JA on paper. The present application to reconsider the leave granted is made on 2 bases. The first is that there was material nondisclosure in the affidavit in support of the application for the grant of leave and the second is that there had been delay in making the ex-parte application which was excessive and inexcusable.

15. The first point about material nondisclosure is that it is said that the affidavit from the solicitor seeking leave, which had been used at the hearing on 20 May 2003, had wrongly stated that the judge had concluded that the plaintiff, being a firm of solicitors acting on its own behalf, could not instruct counsel directly. In my view, that might be technically correct but it has no merit whatever. As I have already indicated, it was made quite clear to the plaintiff's counsel on 17 March 2003 that unless he could produce authorities to the court he would not be permitted to continue to argue the merits of the case. Whether or not there was a formal ruling is quite beside the point. Whether or not the judge actually made an order preventing counsel from further submissions, it is quite clear, that he was put in a position where he was prevented from making submissions. It is clear that he should not have been.

16. It is said that the plaintiff must have had possession of a copy of the transcript of 17 March 2003 when the application was made before Ma JA and that he had not been shown a copy of that transcript. In my view, if he had been shown a copy of the transcript it is a practical certainty that he would have made the very order which he made.

17. The submission is made in the skeleton argument before this court that the court, on 17 March, had exerted no pressure whatsoever when it was the plaintiff who asked for time on each occasion. That submission seems to me to be as far from the reality as it possibly could be. It is then said that the plaintiff had "deliberately deceived the Court" in that "there are was no question of outstanding issues when the proposal came from the Plaintiff to retain new solicitors and adjourn the summons for better preparation of its prosecution". Again, as counsel before this court readily conceded when his attention was drawn to the relevant part of the transcript, the proposal to retain new solicitors did not come from the plaintiff. It came from the court. It is also said that the application for adjournment was made by the plaintiff. As already noted, the plaintiff's counsel was left with no alternative but to request an adjournment. The plaintiff had been wrongly put in the position of having to argue a false point taken by the defendants without notice, he was not in a position to do so and the court was clearly not disposed to hear counsel any further.

18. As to the question of delay, at the most the delay was 11 days in making the application to Ma JA. The solicitor's affirmation of 16 June 2003 goes into great detail about the time involved. It is quite clear that the matter of time was brought to the attention of Ma JA. It is implicit in the order which he made that, insofar as was necessary, time was extended. That was a matter of discretion. In view of the material which was before Ma JA I can see no ground whatever for interfering with that exercise of the discretion. Furthermore, I have to say that insofar as time was extended, it is unarguable that the discretion should have been exercised in any other way.

19. For these reasons I have no hesitation in saying that there was absolutely no merit in this application. At the commencement of the hearing this court made it clear that it was its view that these proceedings had become completely out of hand. With a simple claim amounting to $56,500 plus interest, these proceedings have become bedevilled by false points and interlocutory applications of a nature which are scarcely ever made. That a matter such as this, which should have been resolved between the parties once it was appreciated that a false point had been taken, should cause the full panoply of the law with leading counsel on both sides instructed to argue whether leave to appeal, which had already been granted, should be rescinded is a matter which to my mind brings the law into disrepute. Submissions were made by counsel at the conclusion of the hearing as to the costs. This court reserved its decision in that respect. In my view, the plaintiff should have its costs of this application on an indemnity basis to be taxed and paid forthwith.

Hon Le Pichon JA:

20. I agree.