Deacons v. Impag HK Ltd and Another

DCCJ 2665/2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 2665 OF 2006

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BETWEEN

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Coram: Deputy District Judge W.C. Li in Chambers (Open to Public)

Date of Hearing: 11^th October 2006

Date of Handing Down Decision: 12^th October 2006

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DECISION

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1.The Plaintiff is a firm of Solicitors in Hong Kong and was instructed to act for the 2^nd Defendant herein in High Court Action No. 472 of 2001where the 2^nd Defendant herein was the Defendant. The Plaintiff provided professional services to the 2^nd Defendant and invoices for costs were sent to the 1^st Defendant upon the instruction of those instructing the Plaintiff. The 1^st Defendant is a limited company incorporated in Hong Kong and is a director of the 2^nd Defendant that is also a limited company incorporated in Hong Kong.

2.The Plaintiff was instructed by an international law firm, Norton Rose, in Europe that acted for Impag Toys Europe BV, the mother company of a group of companies of which the 1st and 2^nd Defendants were members of the group. From the correspondence between the Plaintiff and the lawyer of the international law firm (initially Norton Rose and later transferred to CMS Hasche Sigle when the handling “Rechtsanwalt” (lawyer), Dr. Gordian N. Hasselblatt, changed law firms), it was evident that the instructions to act, the proposed hourly rates of the Plaintiff’s charges, and the sending of the Plaintiff’s invoices for payment to the 1^st Defendant were discussed and agreed upon. Some of the correspondence between the Plaintiff and the international law firm were also copied to a person called Coerd Zwijsen who was the person in charge of the 1^st Defendant, and also to a Mr. Paul Mazel who was the main counsel to the 1^st and 2^nd Defendants in the Netherland. The 1^st and 2^nd Defendants were fully aware that the Plaintiff had been instructed to act for and defend the 2^nd Defendant in H.C. Action No. 472 of 2001 and the instructions were given by their mother company in the group which had obviously acted as the agent for the 1^st and 2^nd Defendants in giving these instructions to the international law firm which in turn had instructed the Plaintiff.

3.The 1^st Defendant paid 9 of the Plaintiff’s invoices in full over an extended period of time. They also made partial payment of the Plaintiff’s 10^th invoice. Apart from the 10^th partially paid invoice, 4 other invoices of the Plaintiff remained outstanding leaving a total sum of $283,975.13 unpaid. All 5 invoices were billed on divers dates between 29.11.05 and 28.4.06. That means the 1^st and 2^nd Defendants could ask for leave to have them taxed before payment. However there had never been any demand for taxation of these bills or invoices of the Plaintiff’s costs.

4.The 1^st and 2^nd Defendants have made a joint Defence.

5.The 1^st and 2^nd Defendants raised 3 defences, viz. (1) Impag (1^st Defendant) never agreed to pay Splash’s (2^nd Defendant) legal costs;  (2) the amount claimed was excessive and/or unreasonable and/or unjustified;  and  (3) the 2^nd Defendant did not agree with the Plaintiff the amount of costs to be charged or an hourly rate.

6.The Plaintiff took out summons under RDC Order 14 to enter judgment against both Defendants supported by an affidavit averring that the Plaintiff believed that the two Defendants have no defence to this action.

7.It is hard to accept the 1^st and 2^nd Defendants’ argument that they had not instructed the Plaintiff to act for the 2^nd Defendant in defending H. C. Action No. 472 of 2001. The instructions given by the mother company, Impag Toys Europe BV, in their group of companies to the international law firm were communicated to them, the mother company was clearly acting on their behalf holding out to have the authority to act as their agent in instructing an international law firm to act, which in turn had instructed the Plaintiff. The 1^st and 2^nd Defendant had by their conduct and dealings over an extended period of some 7 months amply shown that they had accepted and ratified the contract in instructing the Plaintiff. In paying 9 invoices of the Plaintiff, the 1^st Defendant had plainly accepted that its agent had validly instructed the Plaintiff to act for the 2^nd Defendant and to bill them for the fees.

8.The defence of excessive fees charged was pleaded but was not pursued in the Defence affidavit in opposition to the Plaintiff’s summons for Order 14 judgment. No particulars as to which parts of the Defence invoices were excessive and/or unreasonable and/or unjustifiable in the defence affidavit had been given. The Defendants’ affidavit had not condescended upon particulars as would be expected.

9.The third argument that the Defendants had not agreed to the hourly rates charged was also incorrect as the international law firm on the Defendants’ behalf had clearly had an understanding with the Plaintiff on the rates to be charged. This was sufficiently demonstrated in the course of the correspondence between the Plaintiff and the international lawyer acting for and on behalf of these 2 Defendants.

10.The 1^st and 2^nd Defendants have therefore not shown that there is a triable issue or that they have an arguable defence to the Plaintiff’s claim. For this reason, the Plaintiff is entitled to have summary judgment on their claim against the 1^st and 2^nd Defendants for the amount due for services rendered together with interest and costs.

11.The Plaintiff asked for interest at judgment rate from the date/s the cause of action arose, that is, 1 month after the date of each of the 5 invoices particularized in the Statement of Claim. It was clear that the 2 Defendants had no defence to deny the claim and interest should rightly be given from the date/s of the cause of action.

12.The Plaintiff also asked for costs of and incidental to the inter-partes Summons for further and better particulars filed on 11^th. August 2006, the cost order of which was cost reserved, and the Plaintiff also asked for costs of and incidental to the hearing for the Order for Direction made on 14^th August 2006, where cost order was again cost reserved. As cost follows the event, I see no reason why the Plaintiff should be not be given costs for those two occasions.

13.I therefore order that final judgment be entered for the Plaintiff against the 1^st and 2^nd Defendants for HK$283,975.13, together with interest at judgment rate from the date of 1 month of the date/s of each of the 5 invoices particularized in the Statement of Claim until the date of judgment herein, and thereafter interest at judgment rate from the date of judgment herein to the date of full satisfaction of the whole judgment amount.

14.I also order costs of and incidental to this action including the costs of this application for summary judgment under Order 14 to be paid by the 1^st and 2^nd Defendants to the Plaintiff, to be taxed if not agreed. The costs of and incidental to the inter partes summons for further and better particulars filed on 11^th August 2006, and the costs of and incidental to the Order for Direction on 14^th. August 2006 are also ordered to be in favour of the Plaintiff to be paid by the 1^st and 2^nd Defendants, to be taxed if not agreed.

The Plaintiff: represented by Mr. G. Shaw from Deacons, the Plaintiff

The 1^st and 2^nd Defendants: represented by Miss Karen Ma instructed by Messrs. Chan, Leung & Co., Solicitors