Lee Yin Keung Jacky v. Lily Fenn & Partners (A Firm)

HCMP 63/2022

[2025] HKCFI 3858

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 63 OF 2022

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BETWEEN

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DECISION

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Introduction

1.By a Notice of Appeal to a Judge in Chambers Against Master’s Decision dated 3 December 2024 (“the NOA”)[1] pursuant to O.58, r.1 of the Rules of the High Court, Cap.4A (“RHC”), the Defendant (“D”) seeks to appeal against the Ruling on Liability (“the Ruling”)[2] and the Order (“the Order”)[3] of Master Hui (“the Master”) given on 20 November 2024.

2.By a Summons (“the Amendment Summons”)[4], supported by the 1^st Affirmation of Shum Lok Him Nelson[5], both filed on 6 June 2025, D applies for leave to amend the NOA. Essentially, P seeks to argue that as the Master had no jurisdiction to make the Ruling and the Order, this court has no jurisdiction to determine the appeal, and the Ruling and the Order should be set aside without embarking on the merits of the appeal.

3.In the late afternoon of 24 June 2025, having had the opportunity to peruse “Defendant’s Skeleton Submissions” dated 23 June 2025 and “Skeleton Submissions for P” dated 24 June 2025, through my clerk, I raised a different “jurisdiction point” with the parties. I invited counsel for the parties to address (with leave to lodge further submissions) the basis upon which this court can hear the appeal/review of the Ruling and the Order of the Master. In particular, I observed:

“1. Notwithstanding D has filed a Notice of Appeal to a Judge in Chambers pursuant to O.58, r.1 of RHC, whether the proper procedure is an application for review of the taxing master’s decision under O.62, r.35 of RHC and not an appeal under O.58 (see Lam & Lai Solicitors v Ho Chun Yan Albert (unrep) HCMP 555/2015, 5 July 2017 at paras 4-5, on appeal, [2018] 2 HKLRD 127, para 11 and Hong Kong Civil Procedure 2025, Vol.1, para 62/2/10 referring to Liu Anissa Mee Ling v Lam, Lee & Lai (a firm of solicitors) (unrep) HCMP 2186/2008, 18 June 2010); and

2. The mechanism for review under O.62, rr.33-35 are firstly, for a review by the taxing master and secondly, before a judge. However, a party may not apply to a judge for an order to review a taxing master’s decision until after its review by the taxing master (see O.62, r.33(1)(b), Hong Kong Civil Procedure 2025, Vol.1, para 62/33/1 and Lam & Lai Solicitors v Ho Chun Yan Albert [2018] 2 HKLRD 127, para 29).”

4.Counsel for the parties further filed supplemental submissions on 25 June 2025 pursuant to my directions/observations.

5.At the hearing before me, Mr Mok SC, leading Miss Fan, counsel, appeared on behalf of D and Mr Lin together with Mr Lau, counsel, appeared on behalf of P. I am most grateful to counsel for the assistance rendered through their written and oral submissions in this matter.

Background

6.At the outset it should be noted that, notwithstanding D’s present contention (essentially, that the Master has no jurisdiction to determine issues of liability in the manner in which he did), prior to the Amendment Summons, D’s stance has always been that the issue of liability and the taxation itself should be determined altogether by a taxing master. As will be seen below, despite the specific issue of whether a taxing master had jurisdiction to determine the scope of retainer being raised on more than one occasion by a judge and by a master, and throughout the hearing before the Master over 6 days spanning 6 months, those representing D never disputed the jurisdiction of the Master. A consent order was previously signed by D’s solicitors for inter alia an order that the scope of retainer and the taxation to be heard in chambers before a taxing master.

7.A brief background of these proceedings was set out in my decision dated 18 February 2025 in relation to D’s application to adduce further evidence for this appeal (see [2025] HKCFI 1101 at §§1-7). For convenience and ease of reference, in this Decision, save as otherwise indicated, I will continue to adopt the abbreviations and definitions in my previous decision.

8.These proceedings were commenced by P by Originating Summons dated 14 January 2022 (“the OS”)[6] essentially to tax the Final Bill (later amended with leave to become the Amended Bill) issued by D to P. The OS specifically referred to s.63 and/or s.67 of the Legal Practitioners Ordinance, Cap.159 (“LPO”).

9.On 27 June 2022, H. Au Yeung J (“the Judge”) made the following orders (“the June 2022 Order”)[7]:

(1) Without prejudice to P to take further action including commencing another court action, leave be granted to P to withdraw paragraphs (6) and (7) of the OS with no order as to costs;

(2) Leave be given to D to file and serve an affidavit on or before 11 July 2022 for the sole purpose of exhibiting an Amended Bill of Costs No. 42715 dated 15 October 2021 (“the Amended Bill”) in which only the work done in relation to HCA 2541/2017, HCA 2544/2017 and HCA 2546/2017, the estate of Lau Mun Tai and the Deed of Family Arrangement dated November 2017 (“the Additional Work”) may be added. Such leave is given without the prejudice to P’s argument that there was no retainer for the Additional Work;

(3) The Amended Bill shall be referred to a Taxing Master for taxation;

(4) D do file and serve an itemized bill for taxation on or before 8 August 2022;

(5) No further affirmation may be filed without leave of the Court;

(6) For the purpose of deciding the scope of the retainer, leave be granted for the parties to cross examine the deponents who had made affirmations herein. Such cross-examination shall be limited to the following factual issues:

(a) Whether the scope of retainer includes the Additional Work;

(b) Whether P had requested D not to reflect the work done in relation to the Additional Work in any of the bills;

(c) Whether Madam Lily Fenn requesting P for a bonus payment in the sum of HK$1,350,000 on 27 September 2021;

(7) The Taxing Master shall certify what shall be found due to or from either party in respect of the Amended Bill and the costs of the reference to be charged (if payable) according to the event of the taxation;

(8) Upon payment by P of what (if any) may appear to be due to D, D do deliver up to P, or as he may direct, all deeds, books, papers and writing in D’s possession, custody or power belonging to P; and

(9) The costs of the hearing today be reserved.

10.From the transcript of the hearing on 27 June 2022 that took place before the Judge[8], it is apparent that the Judge was of the preliminary view that there should be cross-examination to resolve the factual issues and as the resolution of those issues is part of the taxation it should be heard before a master. Despite P’s then counsel Mr Cheung’s initial submissions that it may be better to have a decision by the court in terms of the scope of the bill, having accepted (when asked by the Judge) that the master has jurisdiction to decide whether there was a retainer or not, ultimately agreed that the scope of the retainer and the taxation be dealt with by the master altogether. The Judge then confirmed with the then counsel for D his agreement with the suggested way forward. This led to the making of the June 2022 Order.

11.On 7 March 2023, by a Notice of Setting Down a Bill of Taxation[9], Master Matthew Leung inter alia drew attention of the parties to the case of Mark Sutherland v CRB (a firm) [2022] HKCFI 3382 and directed the parties to submit a joint letter on whether paragraph 6 of the June 2022 Order should be heard by a judge in open court, and if so, what further directions would be proposed.

12.By a joint letter of the parties’ solicitors to Master Matthew Leung dated 28 March 2023[10], it was noted that the parties failed to agree whether paragraph 6 of the June 2022 Order should be heard by a Judge or Master. On this issue, it was noted that P’s position was that it should be heard in court before a judge whereas D’s position was the issues should be heard before a master together with the taxation.

13.By a further joint letter to the Judge dated 25 April 2023[11] (“Joint Letter to Judge”), parties set out in more details their respective position. Essentially, P considered that since the determination of the scope of the retainer would determine the scope of taxation, the scope of the retainer: (1) cannot be summarily disposed of by a master given the substantial factual disputes involved; and (2) if heard by a judge, the remedy for the aggrieved party is to appeal against the decision, the scope of the retainer should be heard by a Judge. D, on the other hand, considered that that scope of the retainer should be dealt with by a master in chambers.

14.Subsequently, the Joint Letter to Judge was placed before the Judge and he directed on 3 May 2023[12] (“the 2023 Directions”) that:

(1) The matter should be heard by a Taxing Master pursuant to paragraphs 3 and 6 of the order dated 27 June 2022. Parties’ attention is drawn to paragraph 62/APP/64 of White Book 2023;

(2) They shall file a Consent Summons accordingly which should be placed before a Taxing Master for approval. Such a Consent Summons shall be filed no later than 5 May 2023.

15.A Consent Summons was filed on 5 May 2023[13] by the parties which provided inter alia that the determination of the issues raised in paragraph 6 of the June 2022 Order and the taxation would be adjourned and set down for hearing in chambers before a taxing master with 4 days reserved and the deponents of the affirmations/affidavits set out therein be produced for cross-examination. By Order of Master Phoebe Man dated 9 May 2023[14], effectively, an order in the terms of the Consent Summons was made.

16.Ultimately, the cross-examination of the deponents took place before the Master on 29-30 May 2024, 6 June 2024, 7 August 2024, 9 August 2024 and closing submissions made on 31 October 2024. This led to the Ruling and the Order of the Master on 20 November 2024.

Discussion

17.In arguing that the Master had no jurisdiction to make the Ruling and the Order, Mr Mok relied heavily on the description and analysis of the taxation proceedings by Au Yeung J in Mark Richard Charlton Sutherland v CRB (a firm) [2023] 1 HKLRD 1. In particular at §60, the learned judge held that:

“Broadly speaking, an application for taxation of a solicitor-client bill involves 2 stages: (i) making an ‘order to tax’; and (ii) the taxation itself after an order to tax is made. Stage 1 usually determines issues of liability. Stage 2 determines the quantum of costs under O.62, r.12(1)(c), although a master may also deal with some issues of liability if they are summarily disposable.”

18.Mr Mok submitted that in distinguishing Stage 1 from Stage 2 decisions, the learned judge made 3 distinctions. Firstly, Stage 1 concerns issues of liability whereas Stage 2 concerns the quantum of costs (see ibid). Secondly, for resolution of issues in Stage 1 by a judge, it is a final judgment made under the OS whereas Stage 2 is a taxation (see §§61 and 73). Thirdly, for resolutions of issues in Stage 1, the aggrieved party may appeal (Mr Mok submitted that it would be to the Court of Appeal under s.14(1) of the High Court Ordinance, Cap.4) whereas for resolutions of issues in Stage 2, there is a review procedure by the taxing master and by a judge under O.62, rr.34-35 (see §61).

19.The learned judge at §71 gave some examples of the issues of liability that may be raised in Stage 1:

(1) Was there a retainer at all? This may raise issues like no intention to create legal relationship, or that someone from a company had no authority to instruct the solicitor;

(2) If there was a retainer, what was its form – oral, in writing, signed or otherwise complied with statutory requirement?

(3) What was the scope of work covered by the retainer? What were the terms of remuneration – lump sum, hourly rates, a cap on fees? Were there implied terms? Had there been changes to the terms (e.g. increase in fees)?

(4) What was the period of the retainer? There may be a dispute e.g. as to whether any termination was communicated to the client/solicitor and when the termination took effect;

(5) Was there a settlement or discount on costs?

(6) Was there a term in the retainer for issuing interim or multiple final bills?

(7) Is taxation as of right or is leave required for taxing the bill(s)?

(8) Should terms be imposed for taxing the bill(s)?

(9) Were there vitiating factors that would have affected the right of the solicitor to recover fees, e.g. misrepresentation, negligence or mistake?

20.At §72, the learned judge further held:

“Whether a master or a judge should deal with the issues depends on nature of the issues and there is no hard and fast rule. In general, a master can deal with issues that can be summarily disposed of: PD 14.2, §§3(6) and (4)[15]. The more substantial issues involving multi-factual and legal disputes, discovery and cross-examination of witnesses should be handled by a judge. In the case of issues under §71(9), it may even be necessary to hive off the issues to a writ action or stay the OS/taxation pending disposal of the writ action.”

21.Mr Mok therefore submitted that in the present case, in particular the determination of issues (b) and (c), which affects the rights or liability of a party, were “Stage 1 decisions”. He submitted that plainly they were not “taxation decisions” or “Stage 2 decisions” which would involve an exercise of a discretion to allow or disallow in whole or in part any item of costs (see wording of O.62, r.33 of RHC). Mr Mok emphasized that “Stage 2 decisions” involve an exercise of a discretion relying on Lam and Lai Solicitors v Ho Chun Yan Albert [2018] 2 HKLRD 127 at §29 (whereby Kwan JA (as she then was) held that a taxation decision is essentially a matter for the discretion of the master). In the present case, Mr Mok submitted that the Master having decided the 3 issues to decide the scope of the retainer exercised no discretion. For instance, he submitted that a determination of issue (c) (i.e. whether LF requested P for a bonus of $1.35M) cannot be more remote from the exercise of discretion in allowing or disallowing a costs item. There would be no discretion involved in the determination. Having decided by a prior substantive decision that a class of work falls outside the retainer in question, the decision to tax off that class of work would not involve any exercise of a discretion, Mr Mok submitted.

22.Mr Mok further submitted that plainly there was a class of decisions of a taxing master which falls outside taxation proper (i.e. is not a taxation decision) and can be the subject of an appeal under O.58 of RHC. He relied on two cases which would illustrate this:

(1) Tin Hau Wui also known as Tang Tin Hau Wui with Tang Fuk Leung as Manager v Ting Wai Ming & Anor [2024] HKDC 2203 where Master Isabella Chu held that the review mechanism in O.62, r.33 was for challenging the exercise of a taxing master’s power in relation to quantification and not the determination of a preliminary issue (see §32); and

(2) 永興工業大厦13/F C-2, C-3, C-4, C-8, C-9, C-10, C-11業主/使用者 v 永興工業大厦業主委員會主席駱韋希 (unrep) LDBM 61/2002, 29 June 2007, where DHCJ To (as he then was) held that for matters outside of taxation, for instance, procedural decision such as the refusal to adjourn, they can be subject to appeal pursuant to O.58 of RHC (see §15).

23.Mr Mok further submitted for this class or character of decision which affects the substantive rights and liability of a party (in particular, in the present case the determination of issue (c) affects LF’s professional integrity and reputation) there is insufficient redress for the limited review under O.62, rr.34 and 35 as opposed to a hearing de novo in the case of an appeal to the Court of Appeal.

24.Mr Mok therefore submitted that the issues determined by the Master were liability issues or a final decision of the substantive rights and obligations. They were “Stage 1 decisions”, which if cannot be summarily disposed of, as evidently it could not have been and required cross-examination, they should have been decided by the Judge. The aggrieved party’s channel of taking the matter further would be to the Court of Appeal. If such issues were to be decided by a master, the only jurisdictional basis to do so was by a trial before Master (in open court) with the consent of parties under O.36, r.1 of RHC such that the aggrieved party’s channel of taking the matter further would also be to the Court of Appeal under O.58, r.2(a) of RHC. This, Mr Mok submitted, would align the appeal route with “Stage 1 decisions” if made by a judge. In the present case, the determination by the Master was not by way of O.36, r.1 as the consent was not written into the court order itself as held to be required in Kwok Ying Lung v Ko Chi Hung & Anor [2001] 3 HKC 480 (CA) at 486B.

25.However, with greatest respect to Mr Mok, I disagree with his submissions that there was no jurisdiction for the Judge to direct the scope of retainer and taxation to be determined by a master:

(1) In so far as reliance is placed on Mark Richard Charlton Sutherland, the learned judge made herself very clear that there was no hard and fast rule whether the issue of liability should be heard by a judge or a taxing master. Whilst the learned judge held that the more substantial issues involving multi-factual and legal disputes, discovery and cross-examination of witness should be handled by a judge, I do not read §72 as saying that a taxing master would not have the jurisdiction to deal with liability issues that cannot be summarily disposed of;

(2) Besides, if there was a rule set in stone that a master could not or should not decide issues that were substantially disputed and involved the cross-examination of witnesses then query the need for express conferment of powers on a taxing master to inter alia examine witnesses in taxation proceedings under O.62, r.14(c) of RHC[16];

(3) In Chen Ningning v King & Wood (a firm) [2020] HKCFI 602, K Yeung J rejected the preposition that the trial of the preliminary issues were conducted pursuant to O.36, r.1 of RHC but rather held that it was conducted pursuant to powers which the Master had under O.62, r.13A and 14 (see §§44-45). Plainly, the learned judge considered that the taxing master had jurisdiction to consider issues of liability otherwise than by a trial under O.36, r.1;

(4) In so far as Mr Mok submitted that no source of the jurisdiction can be identified from the June 2022 Order or RHC for the Judge to confer jurisdiction on the Master, I am of the view that general jurisdiction is conferred on the Registrar and any master by O.32, r.11(1) of RHC which provides:

“The Registrar and any master shall have power to transact all such business and exercise all such authority and jurisdiction as under any Ordinance or by these rules may be transacted and exercised by a judge in chambers except in respect of the following matters and procedures, that is to say –

(a) matters relating to criminal proceedings, other than matters relating to the conditions of admission to bail and an application under Order 70 relating to criminal proceedings;

(b) matters relating to the liberty of the subject other than orders for arrest and imprisonment to enforce, secure or pursue civil claims for the payment of money and orders prohibiting persons from leaving Hong Kong;

(d) subject to paragraph (2), proceedings for the grant of an injunction or other order under Part I of Order 29;

(da) applications under section 27A of the Ordinance (leave to institute or continue proceedings) for leave to institute or continue legal proceedings;

(f) any other matter or proceedings which by any of these rules is required to be heard only by a judge.”

(5) Given that O.106, r.2(2) of RHC expressly provides that any application to the Court under Part VI of LPO may be: (1) disposed of in chambers; and (2) exercised by a judge in chambers, the Registrar and any master can exercise all such authority and jurisdiction of the judge in chambers in an application to the Court under ss.63 and 67 (which are within Part VI of LPO);

(6) Whilst Mr Mok also relied on Chiu Yu Fong v Lau Kwong Wing (unrep) HCA 6099/1999, 24 November 2010, at §§25, 27, 32-33 and submitted that masters can only resolve triable issues by trials by consent under O.14, r.6(2) and O.36, r.1 of RHC, I do not believe that DHCJ L Chan (as he then was) intended to set out exhaustively the matters that can be resolved by masters. Although the learned judge expressly referred to trials by consent under O.14, r.6(2) and O.36, r.1, and assessment of damages under O.37, the words “or otherwise” at §28, indicate that they were not intended to be exhaustive. As for §§32-33, the learned judge was of the view on the facts of that case (concerning the discharge of a charging order by the defendant and there was a dispute whether he had fully paid the plaintiff) the master did not have jurisdiction to conduct the trial and resolve the dispute of the parties without the consent of parties. I do find the dicta of the learned judge can support the proposition advanced by Mr Mok that the general wording of O.32, r.11 (“transact all such business and exercise all such authority and jurisdiction as under any Ordinance or by these rules may be transacted and exercised by a judge in chambers”) is restricted to trials by a master under O.36, r.1;

(7) Mr Mok also submitted that O.32, r.11 and O.106, r.2(2) had to be read with O.28, r.3A of RHC which required all originating summons to be heard in open court unless the Court otherwise directs and this is in line with his submissions that the Master only had jurisdiction to determine the substantive rights and obligations of parties by a trial under O. 36, r.1 in open court. Yet O.28, r.1 provides that the provisions of O.28 is subject, in the case of originating summonses of any particular class, to any special provisions relating to originating summonses of that class made by these rules or by or under any written law. O.106, r.2 plainly provides that the application can be disposed of in chambers. See also PD 14.2, paragraph 3(6) which provides that notwithstanding O.28, r.3A, an application for solicitor-client costs to be taxed under O.106, r.2 is to be placed in the first instance before a Master in chambers (open to public);

(8) Furthermore, Hong Kong Civil Procedure 2025, §62/App/64[17] supports my view (and not as submitted by Mr Mok as demonstrating to the contrary there was no jurisdiction for a taxing master to decide on questions of retainer) that a taxing master has jurisdiction to adjudicate dispute about the terms and extent of the retainer or whether any work falls outside the scope of the retainer if directed by a judge to determine such issue and the taxing master should exercise his power under O.62, r.14 to take evidence on oath. As mentioned above, the general jurisdiction to exercise the jurisdiction that may be exercised by a judge in chambers is conferred on a master by O.32, r.11(1) and the Judge had so directed the Master to do so. The Judge had referred to §62/App/64 in making the May 2023 Direction (which in effect maintained paragraph 6 of the June 2022 Order) and was plainly satisfied that the Master had jurisdiction to determine the issue of the scope of retainer and for such purpose to examine witnesses under O.62, r.14.

26.For all the above reasons, I am of the view that there is no merits to the Amendment Summons and would dismiss it. Moreover, even if I am wrong, if the jurisdiction point which I had raised is a valid one and the NOA should be dismissed, it follows the Amendment Summons should also be dismissed. I now turn to that jurisdiction point.

27.Having heard the further detailed submissions of counsel and given them anxious consideration[18], I am of the view that where any party to taxation proceedings is aggrieved by any decision of a taxing master in taxation proceedings, the proper mechanism is for a review firstly by the same taxing master and then by a judge of the first instance, as provided for in O.62, rr.33-35, and may not resort to appealing under O.58 of RHC. This is the position even where a preliminary issue on liability was decided by a taxing master:

(1) O.62, r.2(1) provides: “This Order shall apply to all proceedings in the Court, except non-contentious or common form probate proceedings and proceedings in matters of prize.”;

(2) O.62, r.33(1) further provides: “Any party to any taxation proceedings who is dissatisfied with the allowance or disallowance in whole or in part of an item by a taxing master, or with the amount allowed by a taxing master in respect of any item – (a) may apply to the taxing master to review his decision in respect of that item; and (b) may not apply to a judge for an order to review the decision until after its review by the taxing master;

(3) In Liu Anissa Mee Ling v Lam, Lee & Lai (a firm of solicitors) (unrep) HCMP 2186/2008, 18 June 2010, the plaintiff was not satisfied with a ruling of a master on the preliminary issues after the master heard oral evidence from those who had given affidavit evidence. The plaintiff intended to appeal by way of an appeal to a judge but the defendant opposed and the parties appeared before the Practice Master for a determination whether it should be by way of an appeal before a judge or by way of review under O.62, r.33. The plaintiff’s counsel had argued that O.62, r.33 only applies after taxation of the bill by the taxing master but as the master only had made a ruling on the preliminary issue which does not involve any item or amount, O.62, r.33 did not apply. The Practice Master rejected this argument and held at §§9-10:

“9. It should be noted that Order 62 rule 2 provides ‘This order shall apply to all proceedings in the Court, except non-contentious or common form probate proceedings and proceedings in matters of prize.’ It is therefore quite clear that Order 58 should not be supplementary to this Order as Miss Chung suggests. It should also be noted that under Order 62, the resolution of the disputes on taxation proceedings will end at the level of the CFI Judge and the matter will not go further to the Court of Appeal. There have been mechanism in Order 62 for reviews, by the taxing master and by the Judge of the First Instance.

10. If the preliminary issues are allowed to be appealed to the Judge under Order 58 of RHC, it seems that the party dissatisfied with the Judge’s decision can take the matter further to the Court of Appeal.”

(4) The reasoning is sound and I am in agreement with the Practice Master;

(5) Mr Mok submitted that the Practice Master did not have the benefit of the analysis of Au-Yeung J in Mark Richard Charlton Sutherland. As mentioned already, great reliance was placed by Mr Mok on §61 and that a resolution of issues in Stage 1 by a judge is a final judgment made under the OS and the aggrieved party may appeal to the Court of Appeal. However, §61, even on Mr Mok’s interpretation, does not support that this court has jurisdiction to hear an appeal against the Ruling and the Order under O.58;

(6) Mr Mok did not strongly submit that the decision in Tin Hau Wui was correctly decided. He expressly disavowed any reliance on the inherent jurisdiction of the court (see §§33 and 36). In any event, with great respect to the learned Master in Tin Hau Wui, I disagree with her view that O.58 can be invoked where the determination of preliminary issue on liability plainly falls within the review regime provided for in O.62, rr.33-35. Her attention was not drawn to the authorities (discussed herein) that I have been. The same goes for 永興工業大厦 and in any event, the case is not of assistance where I am not concerned with any procedural decision of the Master;

(7) In Lam & Lai Solicitors v Ho Chun Yan Albert [2018] 2 HKLRD 127, Lam V-P (with whom Yuen JA agreed) clearly noted that a decision by a taxing master does not fall within a decision of a master in respect of which an appeal can be brought under O. 58. See at §11:

“It is to be noted that taxation is to be conducted by ‘taxing master’. Hence, a decision by a taxing master does not fall within a decision by a master in respect of which an appeal can be brought under O.58 to a judge. The approach of Evans v Bartlam [1937] AC 473, 478 is appropriate for an O.58 appeal. But it is not appropriate for a review under O.62 r.35.”

(8) In the present case, I do not accept the determination of the three issues in order to determine the scope of retainer, in particular whether or not LF had requested a HK$1.35M bonus, was not part and parcel of the “taxation” conducted by a taxing master. With greatest respect, I do not agree with Mr Mok that having made the Ruling, there would or could be no exercise of the Master’s discretion in the taxation of Amended Bill and there has been a final determination of rights and obligations which should be subject to an appeal de novo under O.58. Plainly, the determination of the 3 issues to resolve the scope of retainer would directly or indirectly affect the quantification of costs when there is a taxation proper (which is to follow but has not been completed). In the Final Bill, a sum of HK$1,352,478.70 was claimed for the work done between 17 August 2019 and 11 October 2021 of which HK$1.35M is the profit costs and HK$2,478.70 the disbursement claimed (see the Ruling, §12[19]). Resolution of issue (c) would be relevant to the taxation of the Amended Bill;

(9) Furthermore, in Lam & Lai Solicitors at §§6-7, the nature of taxation proceedings and the role of taxing masters in taxation and consequentially, the need for appellate constraint were emphasized by Lam V-P:

“6. In a taxation hearing before a taxing master, all the working papers of the solicitor involved would be placed before him and he would examine the papers in some detail in connection with any disputed item in a taxation. Assisted by law costs draftsmen, the taxing master can use his expertise in taxation in assessing such materials. The process is akin to one of weighing the evidence at a trial. By the nature of things, this process is not to be repeated before a judge and counsel appearing before him who generally would not have the experience of a taxing master or law costs draftsman in such matters. Like a finding of facts by a judge, a taxing master’s reasons for decision cannot always capture all the minute nuances in his assessment process in coming to a particular finding on a disputed item. In that respect, the observation of Lord Hoffmann in Biogen Inc v Medeva Plc [1997] RPC 1, 45 on finding of facts is equally applicable: …

7. Further, a full blown re-examination of a taxation decision as in the case of a rehearing on appeal from a master to a judge in respect of a procedural or interlocutory decision is not in line with modern litigation ethos as enshrined in our Civil Justice Reform. It is not the practice of the court to list a review before a judge for the same length as the taxation before the taxing master. Expensive and lengthy taxation processes (including review and appeal) is another form of satellite litigation which should be avoided if the utility is not high. Given the relatively lesser experience of a judge in taxation matters, the following justification for appellate constraint given by Lord Neuberger in Re B (a Child) [2013] 1 WLR 1911 on an appeal against a finding of facts are also apposite in the present context:

‘This can also be justified on grounds of policy (party should put forward their best case on the facts at trial and not regard the potential to appeal as a second chance), cost (appeals can be expensive), delay (appeals on fact often take a long time to get on), and practicality (in many cases, it is very hard to ascertain the facts with confidence, so a second, different, opinion is no more likely to be right than the first)’.”

(10) See also per Kwan JA ibid at §29 that the taxing master is the primary decision maker under the statutory mechanism;

(11) Similar sentiments were expressed by the Court of Appeal in CFK v LLL [2003] 3 HKC 190 per Cheung JA at §13 (although concerning O. 62, rr. 33-35 of the Rules of the District Court) in holding that the review mechanism must be invoked and there is no general right of appeal against an allocatur issued by the master after taxation. See at §14: “The review mechanism clearly has a purpose to serve. Taxation of costs may involve numerous items and various amounts of costs. They should clearly be dealt with by the taxing master and the District Judge who may review the taxation with assessors. The Court of Appeal is not the appropriate forum to go into the details of the bills of costs”;

(12) CKF v LLL was applied in Tin Wan Tung v Wong See Yin & Ors (unrep) HCA 167/2011 & HCA 1801/2010, 17 January 2017 by Wilson Chan J in holding that the defendants were misconceived from the beginning in having taken out an appeal under O.58 against “all costs order and the orders of the costs of the taxation” made by the taxing master (see §§9-15). At §§12-13 the learned judge also referred to Leong Yuet Wah & Anor v Wong Wei Lin & Ors (unrep) HCMP 428/2006, CACV 397/2006 & CACV 412/2006, 6 February 2009, where Poon J (as he then was) at §3 affirmed that a party who wishes to challenge a decision made by the taxing master must follow the specific review mechanism in rules 33 to 35 and cannot avail himself of the general right to appeal to a judge in chambers under O.58. He further pointed out that there exists a very good reason for the review mechanism in O.62 at §9:

“When the matter is brought before the master again on review, he can revisit his decision with the benefit of further submissions. If persuaded, he may change his mind. If that happens, the reviewing party will achieve what he wants there and then. If the master confirms his decision and the reviewing party brings the matter further, the master will have to give full reasons for his decision made on review, which will be placed before the judge when the matter goes before him. When the review mechanism is not followed, the taxing master will be deprived of the opportunity of re-considering his decision and the court, his full reasons for the decision that he made on review.”

(13) In my view, to hold that there can be an appeal to the Court of First Instance against a determination of preliminary issue on liability by a taxing master, and further appeal therefrom, prior to the taxation is completed, and bypassing the review mechanism under O.62, rr.33-35, is not in line with the intent behind the review mechanism and the litigation ethos post-CJR to avoid a lengthy and disproportionately costly taxation process and satellite litigation; and

(14) Mr Mok’s complaint that there was insufficient redress and unfairness to LF’s grievances against the Ruling without being allowed a hearing de novo where the Court of Appeal may make different inferences of fact from the taxing master, was clearly the intended consequence behind the statutory review mechanism and is consistent with the CJR objectives.

Disposition and Order

28.Accordingly, for the above reasons, I am of the view that it was misconceived for D to issue the NOA under O.58 of RHC and the NOA should be dismissed. It follows that the Amendment Summons should also be dismissed.

29.Costs should follow the event. I make a costs order nisi that D is to pay to P the costs of the NOA and Amendment Summons, with certificate for two counsel, to be taxed if not agreed. If no application to vary is made within 14 days from the date of handing down of this Decision, the costs order nisi shall become absolute.

Mr Kenny Lin and Mr Kin Lau, instructed by Simon C.W. Yung & Co., for the Plaintiff

Mr Johnny Mok SC leading Ms Fan Tsz Hing Kitty, instructed by Lily Fenn & Partners, for the Defendant