MARK RICHARD CHARLTON SUTHERLAND v. CRB (a firm)

HCMP 2285/2019

[2023] HKCFI 1383

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLEANOUS PROCEEDINGS NO 2285 OF 2019

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D E C I S I O N

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A.  INTRODUCTION

1.  On 4 November 2022, this Court handed down Judgment giving an order to tax with conditions imposed. The time for compliance with the conditions have lapsed without Mr Sutherland complying with them. He filed a Summons on 20 January 2023 now before me:

(1)  For leave to appeal out of time (“leave application”);

(2)  For (a further) stay of the payment conditions pending determination of the leave application and of the appeal (“stay application”); and

(3)  For a stay in the conduct of his 2 prior summonses issued on 18 and 25 November 2022 for variation of costs order nisi and stay of execution of the payment conditions pending final determination of his counterclaim in the Writ Action, his ancillary relief proceedings and the summons dated 18 November 2022 (“stay of conduct application”).

2.  These applications are opposed by CRB. Mr So, counsel for Mr Sutherland, has failed to address the Court on items (2) and (3) except to invite the Court to make orders in terms of the Summons.

B.  LEAVE APPLICATION

B1.  Legal principles governing extension of time

3.  There is no dispute as to legal principles. The Court will consider the length of the delay, the reasons for the delay, the chances of success of the appeal if an extension of time is granted and the prejudice caused to the other party. If the delay is substantial and not wholly excusable, the applicant must show a real prospect of success on the merits, ie a strongly arguable case: Ng Hing Yau v Kong Art Ltd [2023] HKCA 212, §27. A delay of 20 days was regarded as substantial in Riaz Hussain v Permanent Secretary for Security [2021] HKCA 1017, §7.

B2.  Delay and explanations for it

4.  In the present case, the time to appeal expired on 2 December 2022. The length of delay was 28 days up until 30 December 2022 when Mr Sutherland filed the notice of appeal and summons for extension of time with the Court of Appeal; or 49 days up until 20 January 2023 when the present Summons was filed. Either period of delay was substantial.

5.  Mr Sutherland gave 8 reasons for his delay, which need not be set out here.

6.  He was represented when the time to appeal expired. He did instruct his solicitors to make interlocutory applications within the same 28‑day period, on 18 and 25 November 2022 but did not lodge the appeal.

7.  Despite his claim that he was involved in Family Court proceedings on various days between 8 November and 22 December 2022, he was able to contact an English barrister within 5 days of the Judgment, ie on 9 November 2022, asking him to “settle” the notice of appeal.

8.  Mr Sutherland claimed to be suffering from stress and trauma caused by the Family Court proceedings and he had not spent time with his daughters for years. In Sutherland-9^th filed in reply, he belatedly produced a note from a clinical psychologist (not a medical doctor) which did not explain how any symptoms had prevented him from instructing his solicitors to serve a notice of appeal on time.

9.  His reference to delay caused by the Christmas holidays was far‑fetched because Christmas occurred after the time for appeal had expired.

10.  His going to the wrong Registry to “file” the notice of appeal and summons did not assist him, having regard to the fact that he himself was a lawyer and a veteran appellant.

11.  I find no reasonable explanation for the delay and shall focus on the merits of the intended appeal.

B3.  Real prospect of success of the intended appeal

12.  The prolix grounds of appeal can be summarized into 3 limbs:

(1)  That this Court has erred in law in holding that there was a “natural break”, which error had the consequence of miscalculating the delay in delivery of the bills (“Natural Break Ground”);

(2)  That this Court has erred in imposing conditions for the order to tax; in so doing, this Court has wrongly expressed a view on Mr Sutherland’s counterclaim in negligence and failed to take into account the fact that if his counterclaim were to succeed, CRB’s entitlement to fees would be negated or diminished; in the alternative, the conditions were beyond the ambit of conditions that were reasonably available to the Court (“Conditions Ground”); and

(3)  That this Court erred in ordering Mr Sutherland to bear costs (“Costs Ground”).

B4.  Natural Break Ground

13.  Apart from a series of authorities that refers to the test in Chin Yuk Lun Francis v Lo & Lo, HCMP 1142/2005, 7 July 2006, DHCJ To (as he then was), §§16-17, Mr So additionally refers to Gao Haiyan v C L Chow & Macksion Chan (a firm) [2018] HKCFI 2832, DHCJ Leung, and Tianjin Textiles (Hong Kong) Limited v S. K. Wong & Co. (a firm), HCMP 2019/2011, 23 August 2012, Master J Wong, for the proposition that the mere fact of a notice to act in person cannot in itself lead to a conclusion that there was a natural break. The Court should look at substance over form.

14.  With regard to Gao Haiyan, Mr So submits that the solicitors went off record for a period (footnote 4 to that case). Since they continued to advise on and assisted on handling the matter, the Court found that there was no natural break (§43 of the judgment).

15.  Without disrespect, Gao Haiyan was not a case of solicitors going off record in the midst of a piece of litigation. The original bill issued by the defendant (CL Chow & Macksion Chan) in January 2012 gave a summary of the plaintiffs’ account for about 3 years from May 2009 to 5 January 2012 (§25), involving HCA 1315/2009, enforcement of arbitration award and an appeal to the Court of Appeal. Footnote 4 of the decision stated that “the litigation momentum continued just 2 months after the original bill was issued when one Ma commenced HCA 466/2012 against the plaintiffs, though the defendant was not their solicitors on record in that particular piece of litigation (emphases added)”. The Court found that there was ongoing legal dispute surrounding the plaintiffs at that time. §43 of the decision explained why there could not be a natural break in that case. There were various complex litigious matters going on and the original bill was the very first bill (§44). The fact was that both sides were minded to maintain the solicitor-client relationship. The defendant solicitors continued to provide professional service to the plaintiffs while they continued to resolve their difference in respect of the legal costs (§48). The findings were fact sensitive.

16.  Mr Sutherland claims that he had continued to instruct CRB after the notice to act in person and CRB seamlessly continued to provide legal services as if nothing had changed, as stated in the 9^th (last) bill. As such there was no break either in the proceedings or the retainer.

17.  With respect, the parties’ intention is a question of fact. The parties’ intention in Gao Haiyan was wholly different from that in Mr Sutherland’s case. At the hearing which led to the Judgment, Mr Sutherland did not make the point in §16.

18.  There could not have been a clearer natural break than a client deciding to act in person in an ongoing piece of litigation and the solicitors going off record for close to a year (§45 of the Judgment). It would be wholly unreasonable to bar a solicitor from issuing a final bill until the relevant litigation (over which the solicitor would no longer have control or knowledge) is completed.

19.  Tianjin Textiles was not a case of solicitors going off the record either. The court took into account the fact (at §12) that bills were constantly issued on work done for a continuing piece of litigation and found against the existence of a natural break. That was a finding which applied established principles for deciding natural break to the facts of that case.

20.  Mr Sutherland then relies on clause 4 of the retainer about issuing final bills for the proposition that the natural break principle must defer to any agreement to the contrary. That is misconceived because this Court found that clause 4 was not accepted by Mr Sutherland and there was nothing which authorized the issue of interim bills (Judgment, §§41-42).

21.  The Natural Break Ground has no real prospect of success.

B5.  Conditions Ground

22.  When the intended appeal is against the exercise of discretion, the applicant has to show that the relevant decision exceeds the generous ambit within which reasonable disagreement is possible and is in fact plainly wrong and not merely that the appellate court would prefer a solution which the judge had not chosen. See Hong Kong Civil Procedure 2023, Vol 1, §59/2A/4.

23.  For the purpose of deciding what conditions to impose on an order to tax, the Court took a preliminary view of the merits of the negligence counterclaim in the light of the history of Mr Sutherland’s conduct over some years. There is no principle that a solicitor will not be allowed the entirety of her costs on taxation. Mr Sutherland’s assertion that he had “continuously” instructed CRB despite the notice to act in person, if true, reinforced the Court’s observation that the belated counterclaim in negligence was “strange”.

24.  It was not shown that the exercise of discretion was plainly wrong. The Conditions Ground has no real prospect of success.

B6.  Costs Ground

25.  The making of a costs order is a matter of discretion. To successfully appeal, it is necessary to show that the judge making the order had erred in law, taken irrelevant factors into account or omitted to take relevant factors into account or had made a costs order that went beyond the ambit of reasonable costs orders: Ng Hing Yau, §28.

26.  The Decision dated 12 April 2023 (§7) varying the costs order nisi explained, amongst others, how Mr Sutherland sought an order to tax in the OS but disavowed his own OS at the hearing which led to the Judgment. He resisted the order to tax and the Payment Terms but failed. Mr So has failed to show that the Decision has fallen foul of the principle in Ng Hing Yau.

C.  STAY APPLICATION AND STAY OF CONDUCT APPLICATION

27.  There has been a prior application to stay execution of the Payment Terms pending final determination of the counterclaim in the Writ Action and this Court has ruled against it: Decision on 12 April 2023.

28.  The two applications must fail as there are no grounds of appeal with real prospect of success. In any case, Mr Sutherland could have complied with the Payment Terms and avoided what he calls the “huge prejudice” of losing the right to tax CRB’s bills. There is no evidence that he is financially unable to comply, or that the appeal would be rendered nugatory because, eg CRB will be unable to repay any sums paid.

D.  CONCLUSION

29.  I dismiss the Summons for lack of grounds of appeal with real prospect of success.

30.  On a nisi basis, I order Mr Sutherland to pay the costs of CRB. The costs shall be summarily assessed on the papers. CRB shall lodge and serve their statement of costs within 7 days. Mr Sutherland shall lodge and serve his grounds in opposition within 7 days thereafter.