XCHRX TIN TIN PUBLICATION DEVELOPMENT CO. LTD. v.JOHN HO & TSUI (a firm)

HCMP6586/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 6586 OF 2000

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J U D G M E N T

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1. This is an appeal by the plaintiff against an order made by the Registrar whereby the Registrar ordered that :

1. the plaintiff should pay $2.5 million to the defendant;

2. the defendant should, within one month from such payment, submit two itemised bills, which in the course of the hearing have been called "the 1st Bill" and "the 2nd Bill"; and

3. the plaintiff should, within 21 days thereafter, give a List of Objections to the defendant with the taxing fee for the taxation of the two bills being deposited by the plaintiff.

2. At the hearing of this appeal, the plaintiff submits that the order made by the Registrar was wrong, and that a new order should be made by this court basically so that the sum of $2.5 million would not have to be paid right away but some time in June. The importance of the June date is because the plaintiff is the subject of a winding-up petition which is due to be heard and there is a substantial hearing on 27 May 2001. The significance of that hearing is that upon the plaintiff failing to be successful in defending the petition, then probably a winding-up order would be made. Therefore, counsel for the plaintiff is seeking an order for payment not right away but some time in June.

3. The history of the matter is somewhat complicated and I would merely summarize it by saying that the defendant, a firm of solicitors, represented the plaintiff in, what must be regarded by any standard, a very heavy piece of litigation which went all the way to the Court of Final Appeal. I have a quick look at some of the judgments. It is the action where the defendant represented the plaintiff which formed the subject matter of the two Bills, and there is no doubt that a huge amount of work had been done by the defendant for the plaintiff.

4. The total Bills, including counsel's fees, come to about $2.8 million. Counsel's fees accounted for about $1 million, so the defendant's own costs come to about $1.8 million. The 2nd Bill is really a relatively minor bill of something like $69,000, so the bulk of the Bills is really the 1st Bill. So far as counsel's fee is concerned, the $1 million has been agreed and cannot be the subject of any challenge. So far as the defendant's own costs are concerned, there is an agreement that the defendant should be paid $1.5 million. So, one is really talking about paying an excess over $1.5 million, by some $300,000. The two Bills were submitted and the applications brought by the plaintiff, in relation to taxation, were firstly for itemised bills to be delivered and, secondly, for taxation.

5. The relevant provisions governing such application are set out in section 67 of the Legal Practitioners Ordinance, Cap.159. Section 67 reads :-

"67. Taxation of bills on application of party chargeable or solicitor or foreign lawyer

(1) On the application, made within 1 month of the delivery of a solicitor's bill or a foreign lawyer's bill, of the party chargeable therewith the Court shall, without requiring any sum to be paid into court, order that the bill shall be taxed and that no action shall be commenced thereon until the taxation is completed.

(2) If no such application is made within the period mentioned in subsection (1), then, on the application of the solicitor or the foreign lawyer, or of the party chargeable with the bill, the Court may, upon such terms, if any, as it thinks fit (not being terms as to the costs of the taxation), order -

(a) that the bill shall be taxed;

(b) that, until the taxation is completed, no action shall be commenced on the bill, and any action commenced be stayed :

... "

It is clear from the section 67 that when an application for taxation by a party chargeable to pay the costs is made, outside the one month time period from delivery of the bill, then the court has a wide discretion to make the order for taxation upon terms.

6. In relation to the 2nd Bill, since the application was made within the one month period, it seems to me that Mr Chan for the plaintiff, is quite right in his submission that the court can only exercise its power under section 67(1) and not under section 67(2). However, in relation to the 1st Bill, which is the really substantial Bill, the court undoubtedly has the power to exercise discretion under section 67(2). This is an appropriate occasion, it seems to me, that I should exercise such power. It was pointed out to the court that the Registrar in the court below had wrongly exercised his powers through the route of interim payment under Order 62, rule 9A. It seems to me that this is probably right and the proper power should be exercised under section 67(2), and I do so exercise.

7. The debate was really as to :

1) the timing; and

2) the quantum

of payment. So far as timing is concerned, I can see no justification for delaying the time for payment to some time in June. The amount has been outstanding for a long time. The defendant has undoubtedly done a great deal of work and has also undoubtedly committed itself for fees to counsel. Counsel had not been paid the $1 million. There is a suggestion that because of some undertaking or agreement made in respect of the winding-up proceedings relating to some funds in the bank account which might be available for counsel, that should therefore prevent or encourage the court not to make the appropriate order in the way of immediate payment of $2.5 million. I can see no justification for that. So far as timing is concerned, therefore, I think the Registrar is quite right to make an order for immediate payment.

8. So far as quantum is concerned, there is undoubtedly a large sum due, the only question is how much I should order. There is the $1 million for counsel and the $1.8 million for the Solicitors defendant. There is an agreement for $1.5 million for the Solicitors. Even on the basis that $1.8 million might be slightly reduced on taxation - if that should take place - by 10% or 15%. $1.5 million for the Solicitors defendant is undoubtedly a reasonable sum. Therefore, it seems to me that the $2.5 million that the Registrar decided should be paid is undoubtedly a right figure. I have the highest respect for assessment of this kind of legal costs by the Registrar who is an extremely experienced solicitor and who knows this area of taxation of costs far better than I do. So, I will not vary the sum of $2.5 million.

9. The order, therefore, that I will make is the same as the order that the Registrar has made in relation to the $2.5 million except that I make it under section 67(2) rather than Order 62, rule 9A, that is, in relation to paragraph 1 of the previous order, i.e. the plaintiff pays the sum of $2.5 million to the defendant immediately. Paragraph 2 of the Registrar's order shall be varied however:- the delivery of the itemised bills in respect of both Bills within one month from the date of payment. I would order instead that the defendant shall within one month from the date of payment aforesaid, submit an itemised bill in respect of the 1st Bill, i.e. Bill No.000479, and serve it on the defendant. In relation to the 2nd Bill, the obligation of the defendant to submit an itemised bill in relation to that 2nd Bill is not dependent on the payment of the $2.5 million. In relation to paragraph 3 of the order, that can stand, i.e. the plaintiff shall, within 21 days of the receipt of the itemised bills, give a List of Objections. Paragraph 4 also can stand, i.e. the taxation fee shall be paid and deposited by the plaintiff. Finally, I will not vary paragraph 5.

10. Basically, therefore the appeal of the plaintiff fails subject to the slight variation as I have indicated. The defendant is to be paid by the plaintiff the costs of the appeal, to be taxied if not agreed.