Oldham, Li & Nie, Solicitors v. Wong Lin Chooi

DCCJ 5076/2004

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 5076 OF 2004

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BETWEEN

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Coram :  H.H. Judge Chow in Chambers

Hearing date :  7^th and 22^nd June, 2005

Date of handing down Decision :  16^th August, 2005

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Decision

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1.Before this Court, there are two applications taken out by the Defendant.  The first application is to set aside the summary judgment entered against the Defendant by Master J. Ko on 22^nd April, 2005, for the sum of $208,661.00, and the second application is to transfer this action to the Court of First Instance.

2.In this case the Plaintiff instituted its claims on 24^th September, 2004, against the Defendant for $208,661.00 for work done, services rendered and money paid by the Plaintiff as the Defendant’s solicitors for and on behalf of the Defendant, and at her request, the particulars of which are contained in the Plaintiff’s two bills of costs (Bill Nos. 037/2004 and 463/2004) delivered to the Defendant on or about 12 January, 2003 and 30 April, 2004, in the sums of $194,091.00 and $14,570.00 respectively.  The Defendant in her defence put up the defence that the Plaintiff’s charges are unfair and unreasonable as regards both the amounts charged and the items for which such charges are claimed, that the Defendant was never advised by the Plaintiff to tax the bills in dispute, and that despite demands, the Plaintiff had refused to produce copies of the bills to the Defendant’s solicitors.

3.The Defendant contended that the District Court has no jurisdiction to assess the taxation of costs pursuant to section 67 of the Legal Practitioner Ordinance, the Cap. 159 (“the Ordinance”), citing the case of Kao, Lee & Yip (a firm) v. High View Properties Ltd. & Anor [1998] HKLR 555.  Section 67(1) and (2) read:

“	(1)	On the application, made within 1 month of the delivery of a solicitor’s bill or a foreign lawyer’s bill, of the party chargeable therewith the Court shall, without requiring any sum to be paid into court, under that the bill shall be taxed, and that no action shall be commenced thereon until the taxation is completed.
	(2)	If no such application is made within the period mentioned in subsection (1), then, on the application of the solicitor or the foreign lawyer, or of the party chargeable with the bill, the Court may, upon such terms, if any, as it thinks fit (not being terms as to the costs of the taxation), order-
		(a)	that the bill shall be taxed;
		(b)	that, until the taxation is complete, no action shall be commenced on the bill, and any action already commenced be stayed:
		Provided that –
		(i)	if 12 months have expired from the delivery of the bill, … no order shall be made on the application of the party chargeable with the bill except in special circumstances……………”
		(Underlines provided)

4.The Court referred to in section 67 is the Court of the First Instance.  In the case of Kao, Lee & Yip, the respondents applied to the District Court under section 67 of the Legal Practitioners Ordinance for orders for the taxation of bills of costs for non-contention business delivered to them by the appellants, a firm of solicitors.  The District Court judge granted the respondents the relief they sought.  On appeal, the Court of Appeal held that, in view of the definition of the word “court” in s.2, the District Court had no jurisdiction to entertain application under section 67 and to make orders under that section; the applications by the respondent were misconceived.  But the decision in that case has no application in the present proceedings.  The provision under section 67(1) of the Ordinance is only invoked upon the application of the party chargeable with the bill within the stipulated period referred to under that subsection, whereas the provision of subsection (2) is only invoked upon the application of the party named in that subsection.  There has been no application under section 67 by the Defendant.  Therefore the provisions of section 67 have not been invoked; hence, there is no issue relating to any taxation of the bills in question.

5.The Defendant contended that there are triable issues in this case and attempted to show particulars of how unreasonable the alleged legal costs and disbursements were.  But all these matters should be dealt with by a taxing master if there were an application under section 67, and such application were successful.  In order to have the bills taxed, the Defendant has to make an application to the High Court, and then the taxing master will deal all the factual disputes.  Only under that situation then the taxing master will decide whether the Plaintiff’s charges are unfair and unreasonable as regards both the amounts changed and the items for which such changes are claimed.  Such issues can only become triable issues before a taxing master when section 67 is invoked, upon the necessary application of the party concerned.  In the absence of such an application, the occasion to consider these matters simply does not arise.  A District Judge or Master has no jurisdiction to look into these matters, as rightly submitted by the Defendant.  In its written submission the Plaintiff stated that in the hearing before Master J. Ko on 21^st April, 2005, the Defendant’s solicitor had given her personal undertaking to submit the bills for taxation at the beginning of the hearing, but she had later withdraw her undertaking at the end of the hearing.  As the Defendant refused to undertake to proceed the matter to taxation, the learned Master gave judgment in the sum of $208,661.00.  There was no application under s.67, and the situation has not changed when the appeal came before me.  Therefore  the Defendant by its defence had not raised any triable issues which the learned Master had the power to consider.  He had no alternative but to enter judgment in favour of the Plaintiff.  He did not err in making the order for summary judgment.  The appeal to set aside his order must be dismissed, and I make such an order accordingly.

6.Section 32(1) of the District Ordinance provides that the District Court has jurisdiction to hear any determine any action founded on contract, quasi-contract or tort where the amount of the Plaintiff’s claim does not exceed $1,000,000.  The Plaintiff’s claim is a claim for services rendered to its client under a service contract.  Its claim falls squarely within the ambit of section 32(1), and is therefore within the jurisdiction of the District Court.  Since the District Court has jurisdiction to adjudge on the Plaintiff’s claim, the application to transfer the case to the Court of First Instance must be dismissed, and I dismiss it accordingly.

Costs

7.I make an order nisi for costs, to be made absolute in 14 days’ time, that the Defendant is to pay costs of this application to the Plaintiff, to be taxed, if not agreed.

The Plaintiff : represented by Ms. J. Cheuk of Messrs. Oldham, Li & Nie, Solicitors

The Defendant: represented by Mr. Gary Kwan, instructed by Messrs. S.Y. Chu & Co., Solicitors.

Appeal by the defendant to Court of Appeal allowed. Please refer to CACV319/2005 dated 1 March 2006