Ruth Yoeh Yu Wang v. Victoria Y. Chan

HCMP000071/1988

1988, No. M.P. 71

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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BETWEEN

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Coram: The Hon. Mr. Justice Mayo in Chambers

Date of Hearing: 10 & 11 May 1988

Date of Delivery of Judgment: 17 May 1988

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JUDGMENT

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1. This is an appeal against the decision of Master Chan who ordered that six bills of costs which were delivered by the Defendant to the Plaintiff should be taxed.

2. Before dealing with the merits of the appeal, I would observe that the Defendant has accepted that the last two bills of costs namely bills Nos. 8148 and 8149 both of which were delivered on 24th December, 1987 should be taxed.

3. The application was made by the Plaintiff pursuant to the provisions contained in s. 67 subsection (1) and subsection (2) of the Legal Practitioners' Ordinance Chapter 159. S. 67(1) and (2) provide:

4. The six bills of costs relate to work which was undertaken by the Defendant in connection with the Plaintiff's matrimonial affairs. The work undertaken by the Defendant related to the Plaintiff's divorce and ancillary relief.

5. The majority of the work was in connection with the financial provisions which were agreed between the Plaintiff and her husband.

6. The work was not entirely simple and straightforward as the Plaintiff's husband did not possess very much in the way of assets himself. He is, however, the son of a very wealthy family and both he and the Plaintiff had enjoyed a high standard of living.

7. The work covered by the six debit notes was undertaken over a period of approximately seven months from May 1987 to December 1987.

8. The Defendant in a letter dated 20th May, 1987 informed the Plaintiff that it was her practice to require her clients to make payments on account of costs. This was agreed by the Plaintiff.

9. It maybe helpful to set out a table which was prepared by the Plaintiff's present Solicitors which shows the amounts which were claimed by the Defendants in the six debit notes and the amounts of payments made by the Plaintiff to the Defendant on account of costs. As can be seen this was done by way of a running account.

TABLE SHOWING RUNNING ACCOUNT
		Bill
	Date	Prof. charges	Disbs	Payment	Running a/c
A.	23 May			$10,000	+$10,000
1.	30 Jun	$13,000	743.10
		($13,743.10)			-$3,743.10
B.	6 Jul			$10,000	+$6,256.90
2.	17 Aug	$11,000	87
		($11,087)			-$4,830.10
C.	18 Aug			$100,000	+$95,169.90
3.	1 Sep	$108,000	49,573
		($157,573)			-$62,403.10
D.	11 Sep			$100,000	+$37,596.90
4.	9 Oct	$121,000	27,209
		($148,209)			-$110,612.10
E.	15 Oct			$40,000
				$73,000	+2,387.90
5.	24 Dec	$31,000	378
		($31,378)			-$28,990.10
6.	"	$15,000			-43,990.10

10. The summons which was before Master Chan was issued on 13th January, 1988.

11. The first question which has to be decided is whether the provisions for time under s. 67(1) have been complied with for all of the said bills or only in respect of the last two which were delivered on 24th December, 1987.

12. Mr. Rodway for the Defendant submitted that each of the bills was separate and distinct and that the one-month period began to run from the time when the Defendant delivered each bill to the Plaintiff notifying her that an appropriate transfer had been made from the funds which the Defendant held on her behalf.

13. Miss Yuen for the plaint Plaintiff contended that all of the bills constituted a series of bills and time did not begin to run until the last bill in the series was delivered.

14. Lord Denning considered a similar problem in Chamberlain v. Boodle & King (1) at p. 1446:

"The next point in the case is whether the bills were four separate bills or whether they were one. If they were four separate bills, the client would have to demand taxation of each within a month of receipt. If they were one bill, divided into separate parts, as long as he demands taxation within a month of the final account, then he has a right to taxation.

We were referred to one or two cases on this point. First, In re Romer & Haslam [1893] 2 Q.B. 286: and the latest was a case in this court on March 6, 1980, of Davidsons v. Jones-Fenleigh, The Times, March 11, 1980. Putting it quite shortly, as Bowen L.J. said [1893] 2 Q.B. 286, 298, it is a question of fact whether there are natural breaks in the work done by a solicitor so that each portion of it can and should be treated as a separate and distinct part in itself, capable of and rightly being charged separately and taxed separately. Applying that simple test, it seems to me that over this short time - the end of November 1978 to the beginning of May 1979 - this was one continuous dealing and work done by a solicitor, not dividing itself naturally or otherwise into any breaks at all. When the bills were delivered, they were delivered each time as part of the running account - "account rendered" being carried on in each to the next. I agree with the judge on this point too that this should be regarded as one bill in respect of one complete piece of work although divided into parts. As this is one bill, and the client demanded taxation within the month, he is entitled to have the whole of it taxed. "

15. I have no doubt in considering the present case in the same way as Lord Denning considered the situation in Chamberlain v. Boodle & King that the six bills of costs all were in a series and in reality related to the same matter.

16. In coming to this conclusion, I have borne in mind in particular the subject matter of the legal advice which was given. As I have already stated all of the services rendered by the Defendant were in connection with the Plaintiff's matrimonial affairs and it is being unduly artificial to attempt to differentiate between the work referred to in any one bill rather than taking the matter as a whole.

17. Just in case I am wrong in coming to this conclusion, I think that it may be helpful to consider whether I would have been prepared to find that the Plaintiff had succeeded in establishing "special circumstances" such as are referred to in the proviso to the section.

18. What constitutes special circumstances will depend upon the individual facts of every case.

19. Mr. Rodway took me through a number of 19th century cases from which it was apparent that the Courts were reluctant to find that excessive charges by themselves constituted special circumstances. The modern approach would seem to be rather more relaxed. Cross J., as he then was, had this to say at p. 504 of In re a Solicitor ⁽²⁾

"It remains for me, therefore, to consider whether the plaintiff has shown the existence of special circumstances such as could have entitled him to an order for taxation under the solicitors Act, 1957, if the case had been heard before December 22, 1960. At one time it was thought that the only circumstances which could justify an order to tax a paid bill were pressure accompanied with over-charges or over-charges so gross as to be evidence of fraud, but in In re Norman 6 the Court of Appeal rejected the idea that there were any hard and fast rules on the subject. That does not, of course, mean that a judge can properly send a paid bill for taxation without regard to the state of mind of the client when he paid it simply because he thinks it contains or may contain some over-charges. He must take into account the circumstances of the payment on the one hand and the size of the over-charges or possible over-charges on the other hand. Broadly speaking, I think it would be true to say that the more pressure or protest there was at the time of payment the smaller the over-charges need be to justify an order to tax, while conversely the less pressure or protest there was the larger the over-charges or possible over-charges must be. "

20. I do not think in the present case it could in any way be suggested that the Defendant applied any pressure upon the Plaintiff to pay the said bills.

21. However, I have no doubt that when the bills are considered carefully they are redolent with over-charge.

22. I say this because it is evident from the text of the subject matter of the bills that the Defendant has included a large number of items of what I think can best be described as clerical duties or functions.

23. In the initial correspondence which was exchanged between the parties, the Defendant advised the Plaintiff that it was her practice to charge $2,000 per hour for her time.

24. It is evident to me that the Defendant has included in the bills a number of items of work which were obviously undertaken by her subordinate staff.

25. In affidavits the Defendant has to an extent attempted to justify this practice by referring to the necessity of her supervising her staff. I do not think that this explanation begins to justify a number of the items referred to in the bills and I am satisfied that if a taxation is undertaken of all the bills, it will be demonstrated that the charges which have been levied are grossly excessive.

26. Another way of looking at this matter is to have regard to the overall nature of the services which have been performed by the Defendant.

27. All that has been done has been a fairly protracted series of negotiations together with the drafting of various documents. Also, of course, was the work which was undertaken to obtain the ex-parte injunction against the Plaintiff's husband in the context of the family companies which had interests in the properties which it was intended to preserve.

28. It was also necessary to brief counsel and a considerable amount of time and energy was expended to this end. Also there was the necessity of agreeing draft documents both with the Plaintiff and her husband's legal representatives. In addition to this, it was necessary for the Defendant to attend in Court to represent her when the decree nisi of divorce was pronounced and the financial settlement between the parties was sanctioned.

29. However, I have little doubt that the Defendant will find it difficult, perhaps impossible, to justify the total costs which are claimed in the bills. I have been advised by Miss Yuen that no issue is taken in respect of the disbursements which have been incurred.

30. In coming to the conclusion I have, I have also borne in mind what I regard as being the rather unsatisfactory nature of the bills which were delivered.

31. It is only in bill 8148 dated 24th December, 1987 that any attempt is made to include the time units which have been maintained by the Defendant for the specific items which make up the bills. In the other bills there is simply a commentary of the work undertaken with a global figure for the time taken inserted at the end of the bill.

32. Having regard to the very large sums which were being claimed in some of the other bills I am by no means satisfied that a sufficient explanation has been given for the amounts claimed. All of this would indicate to me that the bills have not been justified and on their face appear to be excessive or to adopt the terminology which has been used in the past in this connection redolent with overcharge.

33. As I have indicated even if the application had been out of time I would have been disposed to find that special circumstances had been established. The result of all of this is that I order that the bills subject to this application must be taxed. Accordingly this appeal is dismissed. I will hear the parties on costs.

Representation:

Miss Maria Yuen (Fairbairn Catley Low & Wong) for plaintiff/respondent

Mr. Gilbert Rodway, Q.C., & Miss Jacqueline Leong (David Tong & Co.) for defendant/appellant

(1) 1982 1 WLR 1443

(2) 1961 1 Ch. 491