A SOLICITOR v. THE LAW SOCIETY OF HONG KONG

CACV246/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CIVIL APPEAL NO.246 OF 2004

(ON APPEAL FROM THE FINDINGS AND ORDER OF THE SOLICITORS
DISCIPLINARY TRIBUNAL  DATED 26 JULY 2004)

 -------------------------

-------------------------

 ------------------------

JUDGMENT

------------------------

Background

1. The appellant is a solicitor.  On 26 July 2004, he had been found guilty by the Solicitors Disciplinary Tribunal (“the tribunal”) of an offence contrary to section 8AA of the Legal Practitioners Ordinance, Cap. 159.  The tribunal ordered that the appellant should be censured and fined $100,000.  The tribunal also ordered that the appellant be suspended from practising as a solicitor if he failed to comply with that order within 28 days.  That suspension was to continue for a period of four months or until the order had been complied with. 

2. In addition, the appellant was ordered to pay the costs of the proceedings before the tribunal.  Those costs were for (i) the Law Society of Hong Kong (“the Law Society”) (ii) the prosecutor (iii) the clerk to the tribunal.  Costs were ordered to be paid on a party-party basis and if not agreed to be taxed. 

3. The appellant appealed that decision (CACV246/2004).  On 24 May 2005, the Court of Appeal at the conclusion of the hearing dismissed the appeal and on 9 June 2005 handed down its Reasons for Judgment.  The appellant was ordered to pay the costs of the appeal. 

4. Thus, it can be seen that by the date of the handing down of the Reasons for Judgment of the Court of Appeal dismissing the appellant’s appeal he had been ordered to pay four sets of costs.  It is with respect to one of those sets of costs that the matter it is now before me, namely the order for costs made by the Court of Appeal.  On 2 August 2006, Messrs Boase, Cohen & Collins, solicitors for the Law Society in all of the proceedings which involved the appellant wrote a letter to the appellant’s solicitors on the record enclosing four draft bills of costs for their consideration.  On 9 August 2006 the appellant’s solicitors acknowledged receipt of that letter and advised that they were taking instructions from their client.  On 5 September 2006 Messrs Boase, Cohen & Collins again wrote to the appellant’s solicitors enclosing by way of service four taxation bills and advised that the taxation call-over hearing for those bills had been fixed for 17 October 2006 at 9:30a.m. before Master S. Kwang.  The appellant’s solicitors acknowledged receipt of those documents and that letter on 8 September 2006.  

5. On 17 October 2006 there was no appearance by or on behalf of the appellant at the taxation call-over hearing and the master, having been satisfied that the bill arising out of CACV246/2004 and the notice of appointment had been duly served on the appellant’s solicitors and being satisfied that there was no list of objections filed before the hearing date, taxed the bill as drawn.  The other three bills were not dealt with on that day because the master was not satisfied that it had been established that the appellant’s solicitors were in fact still acting for him in respect of those proceedings. 

6. On 20 October 2006 Messrs Boase, Cohen & Collins again wrote to the appellant’s solicitors advising them that the taxation hearing in respect of the orders for costs made in CACV246/2004 had proceeded on 17 October and enclosing a draft allocatur for their information.  On 23 October 2006 the appellant’s solicitors wrote to the clerk to Master S. Kwang stating inter alia that the fact that no one had appeared on behalf of the appellant on 17 October was as a consequence of a misunderstanding between them and the appellant.  They, in the same letter, requested that the master withhold approving or sealing the allocatur.  On the same day the appellant himself wrote to the clerk to Master S. Kwang and likewise reiterated that said by his solicitors namely that the fact of that there had been no appearance was a misunderstanding.  In the same letter the appellant indicated that he wished to object to the bill and said :

“I hereby inform the learned Master that I object to the bills submitted by the other side, and given the circumstances, I am preparing the application to the learned master for review within the prescribed period after I have perused the relevant papers. 

By a copy of this letter to the other side’s solicitors, I ask that the papers before the learned master be served on me at the address above.  I also make it clear that acknowledgement by way of a chop of my firm on the papers to be served would be proof of service.”

The other three bills have been fixed for a taxation hearing before Master S. Kwang on 18 May 2007.  It is apparent that the appellant has disputed those bills. 

7. On 31 October 2006 the appellant again wrote to the clerk to Master S. Kwang, the relevant part reads as follows :

“Further to my letter dated 23^rd October 2006 and pursuant to the advice of your Miss Li to Miss Tam earlier, I hereby confirm my application for review of the taxation matter in my absence, and further request that a hearing date be fixed for the said review.” 

8. On 2 November 2006, the clerk to Master S. Kwang wrote to the appellant as follows :

“I refer to your letter dated 31^st October 2006 and I quote hereunder the comment of Master S Kwang dated 2^nd November 2006 :

‘Application by letter is not appropriate.  Please follow the High Court Rules to take out inter-partes summons.’”

That letter, the appellant says, was never received by him.  The letter was left in the appellant’s firm’s pigeonhole in the High Court for its attention.  This the master has said, and I accept, is the usual practice. 

9. On 14 November 2006 Messrs Boase, Cohen & Collins wrote to the clerk to Master S. Kwang which letter was copied to the appellant.  In that letter they referred specifically to the letter of 2 November 2006 (paragraph 8 above).  It is said and I accept that that letter and enclosure should have alerted the appellant to the requirement that application to the master to review his decision must be made by way of an inter partes summons. 

10. The appellant before me acknowledged that he received the letter from Boase, Cohen & Collins dated 14 November 2006 but asserts that he did not fully apprehend, notwithstanding its clear and unambiguous terms, that it was incumbent upon him to take out an inter partes summons. 

11. On 28 November 2006 Master S. Kwang sealed the allocatur. 

12. On 8 December 2006 the appellant again wrote to the clerk to Master S. Kwang expressing his surprise that the allocatur had been sealed on 28 November 2006 despite the fact that he had written to the court advising them that he intended to review the master’s decision. 

13. On 2 December 2006 the appellant filed a Notice To Act In Person in respect of CACV246/2004, and on 26 January 2007 he finally took out an inter partes summons seeking a review of the master’s decision under Order 62, rule 33 of the Rules of the High Court the orders sought were :

(i)      for leave to review, irrespective out of time or not, the decision of the learned Master Kwang made on 17 October 2006 ; and

(ii)     costs of this application be reserved.  

On 26 February 2007 after hearing from the appellant and the solicitors for the Law Society, Master S. Kwang ordered that the appellant’s summons be dismissed and that costs be paid by the appellant.  That sum was assessed as a gross sum of HK$9,000.  

14. The appellant now appeals that decision pursuant to Order 58 of the Rules of the High Court. 

15. I have set out the chronology of events in detail above because it is important in the context of the proceedings before me to fully appreciate that which transpired.  The appellant, with some force, emphasises that notwithstanding the fact that he is a qualified and practising solicitor nevertheless his failure to appreciate that it was incumbent upon him to take out an inter partes summons to seek to review the decision of the master within 14 days of the date of his order should not be decisive of the matter.  He says that irrespective of his not complying with the rules it is manifest that it was always his intention to proceed to taxation on all four bills. 

The Law

16. An appeal pursuant to Order 58 of the Rules of the High Court from the decision of a master to a judge in chambers is by way of a hearing de novo of the original application.  The instant appeal is not by way of Order 62, rule 35 (review of taxing masters’ certificate by a judge). 

17. Practice Direction 14.3, headed “Taxation of Costs of Civil Proceedings in High Court and District Court” is relevant.  That Practice Direction requires the parties where there are disputes to identify what these are prior to the date fixed for the call-over.  Paragraph 2(d) is relevant in the instant case, it reads :

“The paying party shall as soon as possible but in any event not less than 3 clear days before the call-over prepare, file and serve on the receiving party a list of objections.” 

18. Paragraph 2(h) is equally important and it reads as follows :

“Failure to observe 2(d) above or non-appearance of the paying party at the call-over may result in the bill being taxed as a drawn”.

In the instant case paragraph 2(d) was not complied with and paragraph 2(h) came to pass when the bill was taxed as drawn. 

19. There has been no satisfactory explanation provided to me as to why it was that the appellant’s solicitors failed to appear at the taxation call-over hearing.  The appellant himself offers no explanation other than that there was a misunderstanding.  There is no explanation provided by the solicitors. 

20. Relevant Rules of the Supreme Court in the instant proceedings are Order 62, rules 33 to 35.  For the sake of convenience rule 33 is reproduced below :

“33. Application to taxing master for review (O. 62, r. 33)

(1)   Any party to any taxation proceedings who is dissatisfied with the allowance or disallowance in whole or in part of any item by a taxing master, or with the amount allowed by a taxing master in respect of any item, may apply to the taxing master to review his decision in respect of that item.

(2)   An application under this rule for review of a taxing master’s decision in respect of any item may be made at any time within 14 days after that decision or such shorter period as may be fixed by the taxing master:

Provided that no application under this rule for review of a decision in respect of any item may be made after the signing of the taxing master’s certificate dealing finally with that item.

(3)   Every applicant for review under this rule must at the time of making his application deliver to the taxing master objections in writing specifying by a list the items or parts of items the allowance or disallowance of which or the amount allowed in respect of which, is objected to and stating concisely the nature and grounds of the objection in each case, and must deliver a copy of the objections to each other party (if any) who attended on the taxation of those items or to whom the taxing master directs that a copy of the objections shall be delivered.

(4)   Any party to whom a copy of the objections is delivered under this rule may, within 14 days after delivery of the copy to him or such shorter period as may be fixed by the taxing master, deliver to the taxing master answers in writing to the objections stating concisely the grounds on which he will oppose the objections, and shall at the same time deliver a copy of the answers to the party applying for review and to each other party (if any) to whom a copy of the objections has been delivered or to whom the taxing master directs that a copy of the answers shall be delivered.

(5)   An application under this rule for review of the taxing master’s decision in respect of any item shall not prejudice the power of the taxing master under rule 17 to issue an interim certificate in respect of items his decision as to which is not objected to.”

It is immediately apparent from the above that the appellant has not complied with rule 33.  No formal application pursuant to Order 33(2) was made.  The fact is that the applicant wrote to the master’s clerk advising of his intention to apply for a review, but no such application was actually made until 26 January 2007 when the inter partes summons was issued.  This was, as can be seen, almost three months after the time prescribed by rule 33(2).  

21. I have perused the transcript of the master’s reasons for dismissing the appellant’s application for the review of his decision of 17 October 2006.  It is fair to say that the master made clear in his reasons that the fact that the appellant had sought leave to review as opposed to a review was not a matter upon which anything turned.  It was the master’s opinion if there was merit in the application and then it would be granted irrespective of how the prayer for relief was drafted.  The master emphasized the statutory requirement under Order 62, rule 33(3) that an application for review must specify the items objected to and the reasons why.  He was of the opinion that such a defect was fatal to the application for review.  He said :

“I do not see any particular ground that the applicant can seek a review of my taxation conducted on 17 October 2006, when he did not even raise any objection in the first place to the respondent’s bill, with a detailed list of objections which should be filed, under the rules and pursuant to the Practice Direction.

So this is the reason why I say review is a non-starter.  When the applicant himself did not raise any objections to the respondent’s bill, I do not see any ground that they can by now seek a review of my taxation conducted on 17 October 2006.

Order 62 rule 33 apparently does not apply to the applicant’s case here.  In my experience, Order 62 rule 33 would only apply when there was objections raised to the receiving party’s bill and both parties have argued at the taxation as to the allowance and disallowance of items involved in the bill, and the taxing master had made express ruling as to such objections.  The party who is not satisfied with the rulings may apply by then a review under Order 61 rule 33.  At the time when he applied for the review, he needs to state, under subrule (3), what are the grounds of this review.”

22. This to my mind is too narrow a construction of the intent of Order 62, rule 33.  Powers to review given to judges, magistrates or masters are designed in part to provide a simple means to remedy or revisit decisions without recourse to the full appellate process.  I have posed to in the course of this appeal the hypothetical situation of a party to a taxation not attending for reasons that were entirely unavoidable, for example that they had been involved in an accident and had for a period of time being hospitalized or that their firm of solicitors had at the most inopportune time ceased to exist.  In those circumstances it is possible for an order for taxation to be made and the allocatur to be signed, whilst at all times the paying party is wholly ignorant of the proceedings.  If the master’s interpretation be correct then that party has no simple remedy whereby the decision of the master and the signing of the allocatur can be reviewed and/or set aside.  Whilst it is true to say that the wording of rule 33 requires objections to be filed, nevertheless the fact that they have not been so filed should not necessarily be a bar to the exercise of the discretion.  As can be seen in the instant case, the applicant was essentially saying to the master :“of the proceedings before you on 17 October, I intended to be represented.  The fact that I was not was a misunderstanding.  Under the circumstance, I am asking you to allow me to contest the taxation as this was always my intention”.  In my opinion, to suggest that Order 33 could not apply in those circumstances is not correct. 

23. What is of the more significance however is the proviso to rule 33(2).  

24. When dealing with sub-rule 2, the master said :

“… subrule 2 does have a proviso to state that no application under this rule for review of a decision in respect of any item may be made after the signing of the taxing master’s certificate dealing finally with that item.  So no review would be possible after a certificate for taxation, which usually we call as an allocatur, was issued.  That was the reason why, all along, the court did not seal the allocatur, trying to see whether the applicant would issue a formal application for review by way of an inter partes summons.  However, no such summons was issued until recently, on 26 January 2006 (2007?).  By then, the allocatur was sealed, on 28 November 2006, after the respondent’s solicitors urging the court to seal such allocatur without further delay.

So in this case, the applicant is barred from seeking a review by now.”

25. Order 62 rule 16 provides as follows :

“(1) A taxing master may—

(a)   extend the period within which a party is required by or under this Order to begin proceedings for taxation or to do anything in or in connection with such proceedings before that master;

(b)   extend the period provided by rule 33(2) beyond the signing of the taxing master’s certificate by setting the certificate aside;

(c)   where no period is specified by or under this Order or by the Court for the doing of anything in or in connection with such proceedings, specify the period within which the thing is to be done.

(2)   Where an order of the Court specifies a period within which anything is to be done by or before a taxing master, then unless the Court otherwise directs, the taxing master may from time to time extend the period so specified on such terms (if any) as he thinks just.

(3)   A taxing master may extend any such period as is referred to in the foregoing provisions of this rule although the application for extension is not made until after the expiration of that period.”

What is immediately apparent from the above is that notwithstanding the wording of rule 33(2) which says that the master may shorten the period within which an application for review may be made, it is clear from Order 62, rule 16 that he may when it is considered appropriate, extend that period and also where necessary set aside the certificate (allocatur).  As I read it Order 62 rule 16 is drafted as it is because the proviso to rule 33(2) would otherwise prohibit the taxing master dealing with a bona fide application, for review, where he had proceeded to seal the allocutur and yet the paying party was unaware that the bill was to be taxed—for example, where there was no notification of the date fixed for the taxation. 

26. Regrettably no one brought to the attention of the master’s Order 62, rule 16.  It was clearly within his power on the date of the hearing to extend the time for the filing of the inter partes application and if necessary in so doing to set aside the allocatur so as to overcome the proviso contained in Order 62, rule 33(2).  In my opinion, in those circumstances, the master has fallen into error and this appeal must be allowed.

27. There is no doubt in my mind that the appellant has not conducted himself with expedition and that I have serious reservations as to the circumstance surrounding the non-appearance on the date the bill was taxed.  Nevertheless, the appeal must be allowed and the order for costs discharged, I order that the allocatur sealed 28 November 2006 be set aside and that the application for the taxation of the bill in this matter be fixed together with the other three bills on 18 May 2007.  I order that the appellant file and serve his list of objections to the bill of costs in CACV246/2004 within seven days of this date.  Given that in the main part the appellant is the author of his own misfortune, I make no order as to costs of this appeal.  I grant liberty to apply.