Tse Ming Cheung, Alexander v. Wilkinson and Grist

CACV000025/1990

Courts practice and procedure - costs - whether RSC Ord.62, r.28A intra vires - whether successful plaintiff entitled to the cost of travelling from the USA to Hong Kong (and of reasonable hotel expenses) to conduct his case in person.

BETWEEN

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Coram: Hon Fuad, V-P, Hunter and Penlington, JJA

Date of Hearing: 8 June 1990

Date of Handing Down Judgment: 28 June 1990

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JUDGMENT

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Hunter, JA (giving the judgment of the court) :

1. This is an appeal from a decision of Barnett J given on 18th December 1989 whereby upon a review of taxation he ordered that the defendant's objection be allowed and that the taxing master's certificate be amended by disallowing the items objected to by the defendant. From that decision the plaintiff now appeals.

2. The matter arises in this way. The plaintiff is a medical practitioner, resident in the State of New York, USA. In 1986 he retained the defendant firm as his solicitors in connection with a Hong Kong dispute which led to litigation. In consequence the defendant rendered two bills of costs to the plaintiff dated respectively 1st August and 7th October 1986.

3. The plaintiff wished to challenge these bills. He had difficulty in obtaining legal advice in Hong Kong and so decided to act in person. In this capacity on 21st October 1987 he took out an originating summons seeking an order for the taxation of the bills. On 13th November Master Jones ordered taxation and granted the plaintiff the costs of the application. This taxation took place in January 1988. The plaintiff again appeared in person and was awarded his costs by the taxing master since more than one-fifth was taxed off the bill.

4. The plaintiff then prepared his own bill of costs. This was taxed by Plaster Jennings in June 1989. By his certificate the taxing master allowed the following: -

5. The disbursements item constituted such travelling and hotel expenses incurred by the plaintiff in travelling to Hong Bong from the USA and attending court on the above occasions as the taxing master considered were properly incurred. The plaintiff had claimed considerably more.

6. The defendant raised objections to this item as a whole. It asserted that: -

"The plaintiff is not entitled to any costs which would not nave been allowed if he had been represented by a solicitor (062 r28A)."

It was said that the plaintiff had no need to attend in person at all. The taxing master refused this objection. In his view the plaintiff's attendance in person had been both necessary and proper. His reasoning ends: -

But he felt constrained to reach what he called an "unsatisfactory result" and to allow the plaintiff's objection, upon what he regarded as the true construction of 062 r28A. The relevant paragraphs of this rule read: -

7. The judge reasoned thus. The litigant can claim only such disbursements under paragraph (1) as "would be allowed ... if made by a solicitor". There was nothing special in this case to allow the attendance both of this notional solicitor and the plaintiff. Tire result was that

"a litigant in person who must needs attend upon hearings such as these generally will be unable to recover the costs of physically getting to court because the notional solicitor would be assumed to be attending for him".

If this be right no litigant in person can ever normally recover his expenses in reaching court to conduct his case, and paragraph (1) has deprived the litigant in person of one of the heads of costs he has always been able to recover.

8. Before dealing with the merits of the appeal it is necessary to consider whether our O62 r28A was intra vires the Rules Committee when our rules were re-enacted in May 1988 following the 1987 amendments to the Supreme Court Ordinance, Cap 4. Since this matter went to the jurisdiction, the court felt obliged to raise it with counsel and we are most grateful for their helpful arguments.

9. The doubt was raised by the legislative history in England. Section 50 of the Judicature Act 1925 contained a costs provision very similar to that now to be found in section 51 of the Supreme Court Act 1981. The operative words are :that: -

"costs shall be in the discretion of the court ...and the court ... shall have full power to determine by whom and to what extent the costs are to be paid."

In 1969 in Buckland v watts [1970] 1QB 27, the English Court of Appeal, relying mainly upon 19th century authority, decided that a litigant in person in whose favour an order for costs had been made could recover only his expenses and disbursements and nothing by way of notional profit costs - nothing for the time he had spent in preparing himself for the conduct of his case.

10. This decision highlighted a situation seen to be unfair and unsatisfactory. Parliament intervened and passed the Litigants in Person (Costs and Expenses) Act 1975. By section 1(1) this provided that: -

"There may, subject to rules of court, be allowed on the taxation ... of those costs sums in respect of any work done and any expenses and losses incurred.''

Thereupon r18, which is identical to our r28A, was introduced into RSC 062 in England. The plain intention of both provisions was to enable a litigant in person to recover more than his out of pocket expenses and to recover the equivalent of profit costs. Although this alteration in England was arguably one as to rules of practice and procedure and prima facie within the powers of the Rules Committee to bring about, in fact as has been seen it was the product of a particular statute.

11. The legislative history has been quite different in hung Kong. In particular no equivalent Ordinance has been enacted and the question is whether this omission is fatal. Prior to 1987, although 062 r28A had already been introduced into our rules, there is no provision in Cap 4 dealing with the court's jurisdiction as to costs. The only provision was in the rule making power in section 54(2)(c) which then read: -

"prescribing the fees and percentages to be taken in the Supreme Court, the fees of counsel and the costs of solicitors and the costs of proceedings in that court".

12. Material changes were made in 1987. First, section 52A, derived from section 18 of the Supreme Court Act 1981, was enacted. This reads: -

Secondly, section 54(2)(c) was amended and now reads: -

"Regulating matters relating to the fees and costs of proceedings ... in the Court of Appeal in its civil jurisdiction and in tile high Court.

It is important to note that there was, as far as we are aware, no binding authority in Hong Kong equivalent to the decision in Buckland v Watts. Tile question then is whether in such circumstances it was sufficient for the legislature to use tile broad and unqualified language of section 52A and section 54(2)(c) to enable the Rules Committee properly to enact r28A, or whether express legislative authority was necessary. Our conclusion is that the former view is correct and that at least since 1st May 1988 052 r28A is intra vires.

13. We return to tile merits. For a number of reasons we cannot accept the judge's construction of this rule: -

14. In reaching this conclusion we are comforted to not ,that Hobhouse J in a judgment delivered in England on 8th May 1990 in Law Society v Norman Ernest Persaud with a transcript of which we have been provided and which is also reported in the Times Newspaper, 10th May 1990 reached the same conclusion in rejecting an identical argument advanced by the Law Society. He held: -

"If the litigant in person reasonably incurs the expenses and does not thereby increase the costs payable by the opposite party there is, in my judgment, nothing in paragraph 1 ... which precludes the litigant in person from recovering reasonable expenditure on travelling expenses so that we can represent himself at hearings", p 15.

15. Having regard to the judge's criticisms of the plaintiff for acting in person, we must also express our agreement with the view of Hobhouse J that the litigant is perfectly entitled to act in person but he cannot thereby make the proceedings more expensive for his opponent. That learned judge would, we think, have approved what we are minded to call the ceiling test applied here by the taxing master by comparing his result with a notional taxation of a solicitor's bill, as indeed do we.

16. For these reasons we allow the appeal, set aside the order of 18th December 1989 and restore the taxing master's certificate. In handing down this judgment we make an order nisi that the respondent pays the appellant costs of this appeal.

Representation:

Malcolm Merry (M/s Boase & Cohen) for the Plaintiff/Appellant

Jonathan Shaw (M/s Wilkinson & Grist) for the Defendant/Respondent