Secretary for Justice v. To Kan Chi and Others

FACV No. 8 of 2000

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 8 OF 2000 (CIVIL)

(ON APPEAL FROM CACV NO. 32 OF 1999)

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Between

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Court: Mr Justice Bokhary PJ, Mr Justice Chan PJ, Mr Justice Ribeiro PJ, Mr Justice Silke NPJ and Lord Millett NPJ

Date of Decision: 4 August 2006

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D E C I S I O N

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Mr Justice Chan PJ:

1.This is the decision of the Court.

2.The former solicitors for the respondents, Messrs Miller Peart, have taken out an application asking to be joined as a party to these proceedings for the purpose of seeking a "clarification" of or alternatively an order setting aside on the ground of irregularity certain orders for costs given by this Court in its judgment handed down on 22 December 2000 disposing of the appeal in this case.

The judgment in the appeal

3.In that judgment, the Court dismissed the appeal of the Secretary for Justice and declared, among other things, that (1) the temple Tsing Wan Kun and its assets including the funds in court ("the Funds") are owned by the t'ong Tsing Wan Kun whose members are members of the Tso and the Clan which are represented by the 1^st and 2^nd respondents respectively; and (2) the temple Tsing Wan Kun is a Chinese temple within the scope of the Chinese Temples Ordinance, Cap 153 and that the Ordinance applies to this temple.

The relevant parts of the Costs Orders

4.When disposing of the appeal, the Court also made certain costs orders ("the Costs Orders"). Apart from ordering the Secretary for Justice to pay the Tso and the Clan 80% of their costs of the claim and counterclaim and their costs of the appeal to the Court of Appeal and of the appeal to this Court, all such costs to be taxed on a party and party basis if not agreed, we also ordered as follows:

(1) … ;

(2) … ;

(3) There be common fund taxation of all of the Tso and the Clan's own costs, the costs so taxed to be paid out of the $40 million mentioned in item (4) below;

(4) Subject to item (5) below, $40 million be paid out of the Funds forthwith to the Tso and the Clan's solicitors on account of and for the purpose of meeting the Tso and the Clan's own costs, taxed on a common fund basis, pending recovery from the Secretary for Justice (the stay [granted by the courts below] of the order for payment out of the Funds being subject to such $40 million payment out and the stay therefore being only on the Funds less $40 million); and

(5) When costs are recovered from the Secretary for Justice the Funds be reimbursed by the Tso and the Clan the $40 million paid out on account of and for the purpose of meeting costs; and if any reimbursement is made within the duration of the stay the money so reimbursed also be subject to the stay for its duration.

Events leading to the present application

5.A dispute has arisen between the respondents and Messrs Miller Peart as to the amount in which the respondents are liable to Messrs Miller Peart for their professional charges in connection with these proceedings. The dispute touches on the true intention and meaning of those parts of the Costs Orders, in particular item (3), which are set out in the preceding paragraph. This has led to a High Court Action issued by Messrs Miller Peart claiming their professional charges.

6.Pursuant to a Consent Order made in that action, the parties wrote to the Court on 3 August 2005 seeking clarification of item (3) of the Costs Orders. In that letter, they sought to ascertain from the Court

"which of the following should represent the true intention of the Court of Final Appeal:-

(a) That Messrs. Miller Peart, solicitors for the 1^st and 2^nd Respondents should only be entitled to costs, fee and disbursement from their clients, the 1^st and 2^nd Respondents on a common fund basis.

(b) That the Costs Order has no effect on the 1^st and 2^nd Respondents' liability to pay costs of their own solicitors, it being provision of an indemnity taxed on a common fund basis to be paid from the funds of Tong Tsing Wan Kun towards the costs, fees and disbursements owed by the 1^st and 2^nd Respondents, to their own solicitors on the solicitor and own client basis of taxation."

7.In a reply dated 26 August 2005, the Court indicated to the parties that it was the first of the two "alternatives". That reply, however, was given by the Court without having had the benefit of any explanation of the nature of the dispute between the parties or the implications of these alternatives. With the benefit of the parties' written submissions, it now appears that neither of these "alternatives" fully reflects the purpose and intention behind the making of the Costs Orders.

8.Subsequently, Messrs Miller Peart took out the present application claiming that they are adversely affected by the Costs Orders "as clarified" by the letter of 26 August 2005 without having been given an opportunity to be heard. Pursuant to the directions given by Mr Justice Chan PJ at a directions hearing, the parties have filed written submissions on the issues arising from this application.

No order on Messrs Miller Peart's application

9.Having considered all the written submissions, the Court is able to give this Decision without an oral hearing. In view of what we are going to say below on the Costs Orders, it is not necessary to make any order on Messrs Miller Peart's application and we make no order in relation thereto.

The purpose and intention of the Costs Orders

10.From the transcript of the appeal, it appears that the Costs Orders were made following the submissions made by Mr McDonnell QC, then leading counsel for the respondents. He invited the Court to make "a provision for solicitor and own client taxation" and also "a provision for payment out to the respondents from the Kun fund pending such taxation on the basis that what is recovered in due course against the Secretary for Justice will be funds of the Kun and subject to any claims by the Chinese Temples Committee." He asked for a payment out of $40 million indicating that the estimate of the total costs was $50 million and that "solicitor and client taxation is unlikely to reduce aggregate bills of $50 million by more than 20 per cent". The Court was also informed that such money "would be applied in paying or reimbursing those who advanced the moneys that have been required to conduct these proceedings".

11.Although the Funds form part of the assets of Tsing Wan Kun, the Chinese Temples Committee has a statutory power and duty, subject to the provisions of the Ordinance, to control the management of Chinese temples in Hong Kong (including the temple in this case) and the administration of their funds. At the time of the Court's judgment, notwithstanding that efforts had been made to ascertain the intention of the Chinese Temples Committee, it was not entirely clear whether it would invoke the provisions of the Ordinance and take any step or action in relation to the Funds. But it was anticipated that if it did, further and prolonged litigation might ensue. The Court was therefore concerned that:

(1) the Funds should be preserved for the time being and that no money would be withdrawn save and except as ordered by the court and for the purpose of meeting the reasonable and necessary expenses incurred and to be incurred for protecting the assets of the t'ong;

(2) the respondents, who are managers of the t'ong and have been responsible for financing the proceedings in protecting the assets of the t'ong, might be out of pocket and have to wait for some time to get reimbursement out of the Funds, notwithstanding a Beddoe's Order which they had earlier obtained; and

(3) the respondents' own solicitors should be paid their professional charges within a reasonable time.

12.With a view to addressing these matters, the Court ordered that there be common fund taxation of the respondents' own costs (item (3) of the Costs Orders), notwithstanding Mr McDonnell QC's request for a solicitor and client taxation; but acceding to his other request, directed that there be payment out of the Funds $40 million to meet the respondents' own costs pending recovery of the costs (on a party and party basis) from the Secretary for Justice which would have to be paid to the Funds (items (4) and (5) of the Costs Orders).

13.The Costs Orders were not intended to affect and do not affect any contractual obligations or entitlements of the respondents and Messrs Miller Peart in relation to each other; nor the respondents' right to have Messrs Miller Peart's bill of costs taxed; nor the respondents' claims as managers to reimbursement from the t'ong either through agreement among members or an application to the court. The Costs Orders are clear enough. There is no need for any clarification or to set aside any part of those orders.

14.We therefore make no order in relation to the present application. In view of the rather peculiar circumstances of this case, we make an order nisi that there be no order as to costs in respect thereof.

Ms Gladys Li SC (instructed by Messrs Johnson Stokes & Master) for the applicant Messrs Miller Peart

Mr Alan Leong SC (instructed by Messrs Dominic Y K Lai & Co.) for the 1^st respondents