HKSAR v. KAM CHEUNG TING

HCMA 421/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 421 OF 2003

(ON APPEAL FROM WSCC 14050 OF 2000)

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JUDGMENT ON COSTS

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Introduction

1. The appeals of the 3 Appellants herein have been allowed. Each of them made an application for costs. In order to save further costs, I allowed parties to make written submissions and indicated that I would hand down my rulings later.

2. Of the three appeals, two were in fact conducted in Chinese while one in English. As written submissions have been written in English I decide to give my ruling in English for all three cases.

The Application

3. Mr Eric Kwok, on behalf of all three Appellants, referred to the costs application by Chan Shu Hung and another CACC 512/2001 where the Court of Appeal allowed such application, Mr Kwok submitted that all Appellants should be allowed their costs accordingly.

4. Madam TANG (HCMA 421/2003) applies for costs of the appeal to the extent of her contribution to the Legal Aid in the sum of HK$1,000.

5. Madam WONG (HCMA 461/2003) applies for (a) costs of the appeal to the extent of her contribution to legal aid in the sum of HK$2,000 and (b) costs in the Magistracy in the sum of HK$25,000.

6. Madam KAM (HCMA 462/2003) applies for costs incurred in the Magistracy in the sum of HK$25,000.

Respondent's response

7. The Respondent has no objection to the application for costs incurred by Madam TANG and Madam WONG in the appeal to the extent of their respective contribution to the Legal Aid Department.

8. The prosecution however objects to the application for costs by Madam WONG and Madam KAM in the trial on the ground that the costs were not "incurred by them" within the meaning of section 15 of the Costs in the Criminal Cases Ordinance, Cap. 492.

9. Mr David Leung of the Respondent submitted that it was clear, both from the receipt exhibited in Mr Kwok's submissions and from the affirmations of Madam WONG and Madam KAM, that such costs were NOT paid by Madam WONG and KAM. Such costs were paid by Mr CHAN.

10. He submitted that costs have to be incurred by the appellant before he/she can seek indemnity from the Respondent. He referred to section 15(a) of the Costs in Criminal Cases Ordinance ("the said Ordinance"), which reads:-

"The costs that may be awarded by virtue of an order shall not be punitive but shall be such sums as appear to a court or a judge reasonably sufficient to compensate any party to the proceedings for any expenses properly incurred by him in the course of those proceedings, including any proceedings preliminary or incidental thereto". (emphasis added)

11. Mr Leung submitted that the phrase "incurred by him" was considered in Reg. v. Miller [1983] 1 WLR 1057. The principles provided are (at page 1061D, G)

(a) There is a rebuttable presumption that that a client is liable for costs of the solicitor on record, even though such costs were paid by a third party;

(b) Such presumption can be rebutted if it is established that there was an express or implied agreement, binding on the solicitors, that the client would not have to pay for those costs in any circumstances.

12. The Court in the same case also suggests that if there is any doubt, the Court (Taxing Master) may inspect the file. (page 1061H-1062A).

13. Mr Leung refers to Rule 5D of Solicitors' Practice Rules made under the Legal Practitioners Ordinance, Cap. 159, where it is provided that a solicitor should in criminal litigation as soon as practicable and not more than 7 days after receiving instructions, confirm by letter to the client:-

(a) the instructions given by client;

(b) the services to be rendered by the firm;

(c) the name of the solicitor in charge of the matter;

(d) the fees to be charged or an estimate of such fees; and

(e) the name of the counsel, his fees and any refreshers or an estimate of such fees and refreshers.

14. He submitted that such letter will show whether the solicitors had an express agreement with Madam WONG and KAM on whether the two of them need to pay.

15. Mr Leung submitted that, in any event, the following factors, taken together, supports the proposition that there was an implied agreement that the solicitors acting Madam WONG and KAM would not charge them in any event:-

(a) WONG and KAM originally were represented by the Duty Lawyer. It was on CHAN's finance that they sought private representation. This suggests that WONG and KAM did not have sufficient funds themselves to engage private lawyer.

(b) The receipt shown dated 1 December 2000 was in respect of both clients and received from CHAN. It is rather strange to have one receipt for 2 clients with one file reference. This shows that the intention was that CHAN was the one that the solicitors would ask for payment. Otherwise, if one client pleads guilty and the other pleads not guilty, how were the costs to be divided by the two of them?

(c) The payment on 1 December 2000 was as costs on account on 1 December 2000. There was no evidence that Madam WONG or KAM has paid or demanded to pay any further money since then. This further suggests that both of them were not liable to pay under any circumstances.

16. He further submitted that the onus is not on the prosecution to prove such implied agreement. Rule 7(3) of the Costs in Criminal Cases Rules read:

"For the purposes of this rule, there must be allowed a reasonable amount in respect of all costs reasonably incurred and any doubts which the taxing authority may have as to whether the costs were actually and reasonably incurred or were reasonably sufficient in amount must be resolved against the claimant" (emphasis added).

17. Finally, Mr Leung submitted that it is sufficiently clear on the facts that Madam WONG and KAM were not personally liable for the costs payable to Messrs Chan & Chiu. The costs were therefore not incurred by them. It follows that the Respondent need not compensate them for such costs.

Appellant's reply

18. Mr Eric Kwok, in his written Reply, submitted that there is no dispute that $50,000 has been incurred in the proceedings in the lower court. The question is whether the $50,000 were incurred by Madam Wong and Madam Kam.

19. He referred to the receipt of Messrs Chan & Chiu and submitted it is clear that the clients are Madam Wong and Madam Kam, and that it is in relation to their cases in Kwun Tong Magistracy though $50,000 being costs on account was settled by Madam Sze and Mr Chan.

20. Mr Kwok refers to the following speech by Lloyd J in Reg. v. Miller (1061D):-

"... costs are incurred by a party if he is responsible or liable for those costs, even though they are in fact paid by a third party ... and even though the third party is also liable for those costs. It is only if it has been agreed that the client shall in no circumstances be liable for the costs that they cease to be costs incurred by him ..."

He submitted it was also held by the learned Judge that once it was shown that there was a solicitor and client relationship, a presumption arose that the client was to be personally liable for the costs.

21. Further the learned Judge in his considered judgment held the fact that a 3rd party had agreed to pay the costs, and that it was certain the 3rd party would pay the costs, may make him primarily liable, in the sense that the solicitors would look to him in the first place, did not rebut the presumption, nor is it sufficient to exclude the normal liability of a client to pay his solicitors' costs that it was never realistically anticipated that the client would have to bear any costs at all.

22. Mr Kwok submitted that the fact that costs on account was actually paid by Madam Sze and Mr Chan and the fact that Madam Wong and Madam Kam may not intend to engage private representation initially do not rebut the presumption which arose as a result of the solicitor and client relationship.

23. Mr Kwok further submitted that Reg. v. Miller was considered by the Hong Kong in Lam Lai Wah v. Pacific Century Insurance Co. Ltd CACV 385/2002, it was held by the Court of Appeal that:

"The fact that a 3rd party had already paid costs on account does not, by itself, preclude recovery by the winning party of the costs from the losing party, short of a binding agreement by the winning party's solicitors ..." (para. 17)

24. Mr Kwok also refers to the reference made by the Court of Appeal to an expectation where a litigant is helped by a 3rd party that the litigant would reimburse the 3rd party who had helped him. (para. 17)

25. Mr Kwok submitted that it is clear that the Appellants will reimburse Madam Sze and Mr Chan if the appeal is successful and costs could be sought.

Ruling

26. As the appeals were allowed on the basis that what the Appellants had admitted to, in law, did not amount to any offence, in exercising my discretion regarding costs they are all entitled to costs properly incurred by them.

27. There is no objection regarding the Legal Aid contributions made by Madam TANG and Madam WONG. I allow their costs to that extent accordingly.

28. Regarding the claim of $25,000 each by Madam WONG and Madam KAM, having considered submissions advanced by both Mr Kwok and Mr Leung, I find that I am not in a position to decide, on the evidence (or lack thereof) before me, whether these two Appellants have shown that the amount were properly 'incurred by them'.

29. There is no evidence before me from either Madam TANG or Madam WONG that even though a third party (i.e Mr CHAN and Madam SZE) were liable to pay the costs to the solicitors they are also liable for those costs. Under Rule 7(3) (mentioned above) if there is doubt whether the costs were actually and reasonably incurred the taxing authority may resolve the matter against the claimant.

30. In my view, it is up to these Appellants/claimants to satisfy the taxing authority that the sum of $50,000 were actually and reasonably incurred by them. That being the case, I will order that costs be taxed if not agreed.

Order

31. Re Madam TANG (HCMA 421/2003) the Appellant to have costs in the sum of $1,000 being her contribution to the Legal Aid Department.

32. Re Madam WONG (HCMA 461/2003) the Appellant to have costs in the sum of $2,000 being her contribution to the Legal Aid Department. Her claim for costs in the sum of $25,000 is to be taxed by the Registrar of the High Court pursuant to section 20 of the said Ordinance.

33. Re Madam KAM (HCMA 462/2003) the Appellant's claim for costs in the sum of $25,000 is to be taxed by the Registrar of the High Court pursuant to section 20 the said Ordinance.