THE LAW SOCIETY OF HONG KONG v. A SOLICITOR

cacv 62/2005

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 62 of 2005

(on appeal from THE FINDINGS AND ORDER OF THE SOLICITORS

DISCIPLINARY TRIBUNAL DATED 31^ST JANUARY 2005 )

______________________

__________________________

REASONS FOR JUDGMENT

__________________________

Hon Rogers VP:

1.  This was an application by the appellant, the respondent before the Tribunal, that the costs awarded by this court following the judgment handed down on 11 January 2006 should be taxed on an indemnity basis.  At the conclusion of the hearing this court ordered that the appellant’s costs should be taxed on a common fund basis.

2.  In the judgment of 11 January 2006, this court held that the order of the Tribunal should be set aside and the matter remitted to be heard by a differently constituted Tribunal.  There were a number of disturbing matters which were referred to in this court’s judgment including the involvement of the Clerk and the costs incurred.  In addition there was the matter that the disciplinary proceedings were launched after a request in a letter had been complied with in circumstances where it would have been the reasonable understanding that there would have been no disciplinary proceedings.  That apart, however, this court was of the view that the appellant should have been permitted to challenge the legality of the calls that had been made and, since the Tribunal had refused to consider that aspect, the appeal had to be allowed for that reason alone, if not for the other matters.

3.  It was some seven months after this court’s judgment that the Law Society wrote to the appellant informing him that the Council had resolved that there would be no referral to the Tribunal Convener and hence that the disciplinary proceedings would be abandoned.

4.  Since then there was some delay by the appellant who sought to explain it on the basis that matters were being taken up within the Law Society with a view to redressing some of the complaints.  That is not a matter which this court would wish to go into.  Nevertheless the delay involved does not appear to have caused the Law Society any difficulty in handling this application.

5.  In considering the basis upon which the appellant’s costs should be taxed, reference was made to the notes in the White book at 62/App/7 which reads:

“Common fund basis (O.62. r28(4))-On a taxation on a common fund basis, being a more generous basis than the party and party basis, there shall be allowed a reasonable amount in respect of all costs reasonably incurred.  The ordinary rules applicable on a taxation as between solicitor and client where the costs are to be paid out of a common fund in which the client and others are interested shall be applied, whether or not the costs are in fact to be so paid.”

6.  Mr Carolan, who appeared on behalf of the Law Society, was anxious that this court should specify the reasons taken into account in ordering costs to be paid on this basis.

7.  Costs are always a matter of discretion and all circumstances of the case have to be taken into consideration.  In this case the factors to be taken into account include not merely these proceedings but the fact that before the disciplinary proceedings were commenced it was clear that the appellant, amongst a substantial number of solicitors, considered that the amount which they had been required to pay was not justified.  It was in those circumstances that, when the disciplinary proceedings were taken, the appellant wished to challenge the validity of the calls.  That opportunity was denied and this court has dealt with that.  There has been no explanation as to why the proceedings have not continued.  In the circumstances of this case they were clearly brought as a matter of principle because, as already indicated, the appellant had in fact paid the sum demanded by the extended deadline.  In those circumstances there can be no justification for the vacillation which the Law Society has exhibited in bringing the proceedings but abandoning them when told that they had to face a challenge to the validity of the basis upon which the disciplinary proceedings were originally brought.

8.  In these circumstances it can only be right and proper that the appellant should not be out of pocket in respect of reasonable amounts which had been reasonably incurred.  Although common fund taxation is generally ordered where there is a trust fund, in circumstances where there is a professional body involved to which the members have to subscribe, the funds of the body may not be strictly a trust fund but they are funds which are held in trust to be used for the benefit of the professional body.  In those circumstances it is appropriate to treat the taxation as being one analogous to one where the costs will be paid out of a common fund.

Hon Le Pichon JA:

9.  I agree.

Hon Lunn J:

10.  I agree with the judgment of Rogers VP.