Eric Edward Hotung v. Ho Yuen Ki and Others

HCA571/2003, HCMP2820/2002
& HCMP4511/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 571 OF 2003

-----------------------

BETWEEN

-------------------------

AND

MISCELLANEOUS PROCEEDINGS NO. 2820 OF 2002

-----------------------------

--------------------------------

BETWEEN

-----------------------

AND

MISCELLANEOUS PROCEEDINGS NO. 4511 OF 2002

-----------------------------

-----------------------------

BETWEEN

-----------------------

(Actions consolidated pursuant to the Order of
Deputy High Court Judge To dated 10 April 2003)

Before : Deputy High Court Judge Mayo in Chambers

Dates of Hearing : 17, 18 and 20 November 2008

Date of Judgment : 27 November 2008

-----------------------

J U D G M E N T

-----------------------

1.This is an appeal against the decision of Master de Souza who made a ruling on a taxation he was conducting.

2.The taxation was undertaken pursuant to an order made by Tang JA (as he then was) sitting as an additional judge of Court of First Instance.

3.The judge ordered that the costs of the consolidated action should be to the 2^nd, 3^rd and 5^th defendants. 

4.The Bill of Costs before the master was the bill of the 2^nd defendant.

5.It was claimed that there had been a settlement between the plaintiff of the one part and the 3^rd and 5^th defendants of the other part.  This is an issue which is contested between the parties.  I will deal with this later.  

6.Put simply, the main issue which has to be determined is whether the retainers of the 2^nd, 3^rd and 5^th defendants with the two firms of solicitors acting for the defendants was a joint or several liability assumed by the defendants or was the liability joint and several.

7.Mr Chain, for the plaintiff, contended that there were either several retainers with each of the defendants or simply a joint retainer whereas Mr Egan, for the 2^nd defendant, argued that the retainer was a joint and several retainer for all of the defendants.

8.The master held that the retainer was a joint and several retainer.

9.I think that it is true to state that there was very little difference between the parties concerning the master’s analysis of the law on the subject of joint ownership.

10.The problem which arose was the application of the law to the facts of the present case.

11.I do not accordingly intend to comment in any depth upon the master’s analysis of the law, save to state that in my view his analysis is correct and I adopt it.

12.As to the application of the law, I will deal with this in some detail.

13.A convenient starting point is to consider the retainers which were entered into with the two solicitors firms. 

14.The first in time was the retainer with Messrs Stevenson Wong & Co. :

“Dear Sirs,

Re: Hotung Enterprise Limited

Hotung Investment (China) Limited

This letter states the agreement of Stevenson, Wong & Co. concerning our representation of you in Hong Kong in the above matter.  Please read this agreement in its entirety, and, if you have any questions concerning the terms set forth below, discuss them with us before you sign this agreement.

(A)    We will keep time records based upon hourly rates charged.  Our charges for fees are based exclusively on the amount of time spent on your matter.  The hourly rate of our Mr. Angus Forsyth is HK$3,500.00 and the hourly rate of our Ms. Patricia Lam is HK$3,000.00.  Our trainee solicitor’s hourly rate is HK$1,000.00 per hour.  Our Mr. Angus Forsyth will be the principal solicitor in charge of your matter.  You may also be billed for other support staff at rates of not more than HK$1,200.00 per hour.  Should there be any legal proceedings commenced under your instructions, our charges for fees will be based upon the schedule of the rates of all fee earners in the Litigation Department annexed hereto.  The firm’s rates are subject to increase as our overhead increases.  You will receive written notice in advance of any increase in the hourly rates.

(B)     Each solicitor or support staff records the amount of time spent and a description of the service performed at the conclusion of the specific period of service.  To enable you to monitor and budget for costs as necessary, we shall deliver interim bills to you at regular intervals.

(C)    We bill in 0.1 hour increments.  We do not bill for a minimal amount of time spent on a task, such as brief telephone calls, unless enough of such brief tasks accumulate during the course of a day to warrant the billing of 0.1 of an hour.

(D)    We charge for waiting and travel time (for meetings, hearings, etc.) since this is time which we otherwise could be devoting to another client.

(E)     You agree to pay Stevenson, Wong & Co. as initial deposit and retainer fee the amount of HK$50,000.00 (Payment Instruction attached).  It is understood that this will cover the payment of time spent in this matter thus far and additional time as billed, until the deposit is exhausted.  The deposit paid presently may not cover all of the fees that will be required in your case.  We have the right to request an additional deposit from you at such time as the initial deposit is exhausted.  If you do not pay the additional deposit at such time as we require the same, we reserve the right to cease performing legal services on your behalf and, where appropriate, to withdraw from your case.  In entering into this agreement, you agree to permit us to withdraw if you do not pay the additional deposit or some other mutually agreeable arrangement cannot be worked out to provide for payment to us of additional fees.

(F)     As we have indicated, we will bill you at regular intervals even though you have paid a deposit.  The statement will show a credit balance due to you until such time as the deposit has been exhausted, and will thereafter reflect a debit balance, which in fact, is a balance due to this office from you.  Our bills or statements to you are in substantial detail.  IF YOU HAVE ANY QUESTION ABOUT ANY ITEM ON THE STATEMENT, PLEASE CONTACT US UPON RECEIPT OF THE STATEMENT TO DISCUSS ANY QUESTION YOU MAY HAVE.  If we do not hear from you, we will assume that you have no question concerning the bill.  Any amounts due must be paid at that time.  Additionally, like other commercial organizations, we reserve the right to charge interest on bills not paid within 30 days from date of presentation at the rate of 1% per month.

(G)    In addition to solicitors’ fees, during the course of your case other costs will be incurred for which you will be responsible.  Those costs which are separately billed to you are items such as barrister’s fees, court filing fees, costs of service of process, secretarial overtime, outside messenger fees, international long distance telephone and fax, photocopying (@HK$3 per copy), transcripts of court proceedings, etc.  You are immediately and separately responsible for all costs incurred in your case.  We do not advance costs on behalf of our clients.  You must pay for such items in advance when requested by us.  By way of example, if it is appropriate for a barrister to be instructed in your case at a particular time we may require you to pay those fees to us prior to instructing the barrister.  Even though you may have paid us a deposit, we reserve the right to ask you for the payment of cost items separate and apart from your deposit.

(H)    You agree that Stevenson, Wong & Co, shall have a lien for its fees and costs, including those incurred in collecting such fees, upon all property you receive in the disposition of this case.

(I)      Our years of experience in this field of law has taught us that it is impossible to quote a fixed fee or even a reasonable estimate of total fees.  The nature of the cases themselves are frequently compounded by the personalities of the respective parties and respective solicitors and barristers.  We will be pleased, from time to time, to discuss our then analysis of the generalized scope of your potential additional fees.

(J)      Costs of litigation are always in the discretion of the Court but the general approach is that the unsuccessful party is ordered to bear their own costs and to pay their opponent’s costs, subject to assessment of the latter by the Court.

(K)    Any award granted in litigation in your favour against another party does not affect your primary responsibility for payment of costs you incur with us in the proceedings.  We will give you specific advice about the costs implications of any particular dispute at the outset of any proceedings and as the case progresses.

(L)     We reserve the right to terminate the retainer in the event of any of the following circumstances:-

(1)   Non-payment of an outstanding bill where a request for payment has been made;

(2)   Where we consider that there is a complete breakdown in the trust and confidence between us;

(3)   Where to continue to act would be in breach of the Solicitor’s Rules of the Professional Conduct or any law or enactment; and/or

(4)   Where we are unable to obtain clear instructions from you

(M)    If you have any question or concern about any provision of this retainer agreement, you should consult with another solicitor prior to signing it.  By signing it, you are indicating that you fully understand and approve of all of the terms and provisional hereof.

(N)    This agreement represents our entire understanding and agreement with respect to the matters recited herein.  There have not been any oral promises, representations, or statements inconsistent with or in addition to the terms hereof upon which you are relying in entering into this agreement.  Furthermore, no amendment or modification may be made hereto except in writing signed by both of us.

(O)    This Agreement is made and entered into under the laws of Hong Kong, and shall in all respects be interpreted, governed and enforced under and pursuant to those laws.

Please countersign this agreement so that we will have a mutual memorandum of our understanding.

Yours faithfully,”

And then from December 2004 with Messrs Oldham, Li & Nie :

“Dear Sirs and Madam,

Re: Instructions to Oldham, Li & Nie (the “Firm”): HCA571 of 2003

Thank you for your instructions in relation to the above.

We would like to inform you of the terms of business which are as follows :-

Responsibility for work

1.       Mr. Stephen John Peaker will carry out most of the work on this matter personally and may be assisted from time to time by an Associate or a Legal Executive who can undertake the more routine and time-consuming work.  We wish to make it clear however, that Mr. Stephen John Peaker is the solicitor of the Firm with ultimate responsibility for your case.  If for any reason he is not available, then in the first instance you should contact any Associate or Legal Executive who you know is familiar with your matter, the Client Service Manager, or any Partner.

Fees

2.       Our charges are calculated according to various factors provided for by the Legal Practitioners Ordinance, primarily reflecting the time expended in carrying out your instructions and the seniority and experience of the handler concerned.  Each solicitor and Legal Executive is allocated an hourly rate and this forms the basis of our charges to you.  This Firm’s hourly rates are published regularly and are altered from time to time as fee earners are recruited or leave the Firm, the latest scale is attached herein.  When new solicitors or legal executives join the Firm their charging rates will in general be based upon the hourly charging rate then applied to other such fee earners of similar qualifications and experience.

3.       Throughout the course of our retainer we may require not less than HK$20,000 from you on account of our own fees and also disbursements which we are likely to incur on your behalf.  As your instructions, whether contentious or non-contentious, progress and monies on account are used up we will request further sums from you to ensure that a balance is maintained throughout the duration of our retainer.

4.       From time to time we shall submit interim fee bills to you setting out our costs and disbursements and all the fee notes of Counsel received by us to date for settlement.  Usually interim bills will be delivered on a monthly basis or upon completion of recognized stages in your instructions or at a time we think appropriate by virtue of the value of work done up to that date or the length of time that may have elapsed since receipt of your initial instructions or delivery of our previous bill.  We may in our absolute discretion use any costs on account or other funds deposited with us to settle any such interim or final bills.

5.       It is your right to seek a taxation of any of the bills received within 30 days of delivery.  After 30 days, a taxation can be ordered if you apply to the court but the Court has the power to impose terms at its discretion.  We require all our bills, whether interim or final to be settled within 30 days.  Thereafter all outstanding sums due to us, whether they be our own costs or disbursements will be subject to interest at the rate of 2% per month.

6.       For overseas clients, our bills and requests for fees on account must be paid by Telegraphic Transfer to our account below.

The Hongkong & Shanghai Banking Corporation Limited
Exchange Square Branch
One Exchange Square
Central, Hong Kong
Account Name:	OLDHAM, LI & NIE,
	SOLICITORS
Hong Kong Dollars Account No.	062-293097-002
Multi Currency Account No.	062-3-604675
Swift Code:	HSBCHKHHHKH

(Please quote our file ref. No.)

Lien

7.       Without affecting any lien to which we are otherwise entitled at law over any of your funds, papers and other property in our possession:-

(a)   We shall be entitled to retain by way of lien any of your funds, property or papers which are from time to time in our possession or under our control until all costs, disbursements and interest due to the Firm have been paid;

(b)   Our lien shall continue notwithstanding that we cease to act for you in accordance with Clause 8.

Termination of retainer

8.       There may be certain circumstances, which might include for example, a case where we are unable to obtain proper instructions from you, or where our interim bill or request for costs on account has not been paid or where a conflict arises in which we would not be able to continue acting for you.  Obviously we hope that such a situation would not arise, however, in such circumstances we reserve the right to cease to act for you and if appropriate to apply to the court to be removed from the court record as acting for you.

Orders for costs

9.       For your information, in civil litigious matters in Hong Kong, the Courts normally order the unsuccessful party to pay the successful party’s costs.  However, the costs that are recoverable from an opposing party are generally only 60% to 80% of the costs that you would have actually paid to us.  Further there may be difficulties enforcing any such costs order.  Accordingly, we should emphasize that notwithstanding any order for costs made in your favour the primary contractual obligation for payment of our legal fees remains with you.

Agreement

10.     If there are any terms in this letter which are not clear to you, please raise such queries with us as soon as possible, otherwise we shall consider that by us continuing to act for you that you understand and accept these terms.

11.     As confirmation that you would like us to proceed on this basis, we should be grateful if you would sign the extra copy of this letter enclosed and return it to us.

Client Service Manager

12.     It is our commitment to provide not only sound advice to assist you with your legal situation but to live up to our firm’s service standards in all regards.  To this end we have appointed a Client Service Manager who may from time to time contact you to enquire as to the service the firm is providing and ensure that we are implementing our service and quality commitment of PRACTICAL LEGAL SOLUTIONS – ON TIME – NO EXCUSES.  You may address to him any query you may have relating to your appointment of Oldham, Li & Nie as your legal adviser.  We look forward to being of assistance to you.

Yours faithfully,”

15.It will immediately be apparent that both firms of solicitors had only one reference for the files which had been opened and that the letters were addressed to the 2^nd and 3^rd defendants.  The fact that they acknowledged the retainers separately only came about as a consequence of the two sons being resident in different parts of the world.

16.What is not evident on the face of the letters is that for all practical purposes, the interest of all the defendants was very similar.

17.It can be seen from Tang JA’s lengthy judgment that the plaintiff who is the father of the personal defendants was seeking to revoke trusts he had set up some years previously in favour of his children.

18.It is true that there was a slight difference in that the trusts for the sons and the trusts for the daughters had different trustees, but I do not consider that any material significance attaches to this.

19.Mr Chain sought to argue that the burden of establishing that a joint and several liability was being assumed by the different clients lay upon the party seeking to invoke it.  He made much of the fact that there was no reference to this in either of the retainer letters.

20.In fact, I think there was in the Messrs Stevenson Wong retainer at para. G.

21.That paragraph which deals with disbursements clearly contemplates that each of the clients is responsible for payment of out of pocket expenses and I agree with Mr Egan’s submission that it would be odd if payment of disbursements was a joint and several liability whereas payment of profit costs was simply a several commitment.  I accept, however, that this is by no means a conclusive argument.

22.For the most part, Mr Chain placed heavy reliance on old cases, several of them dating back to the early part of the 19^th century.

23.He also placed reliance upon a passage in Joint Obligations by Professor Glanville Williams, Butterworth 1949, at para. 2 :

“§2  General rule for creation of joint liability

To turn now to the mode of creation, a promise is joint when a single promise is made by two or more persons without works indicating that each is to be bound individually as well as jointly.  If there are such words, the contract is joint and several.  The presumption is that a contract made by two or more persons is joint, express words being necessary to make it joint and several.  Just as in the law of property a tenancy by two is presumed to be joint unless there are words of severance, so in the law of contract a promise by two is presumed to be joint unless there are words making it joint and several.”

24.With respect, I do not think that the approach adopted by Mr Chain is very helpful in the light of recent authorities which lay down an entirely different methodology.

25.Lord Hoffmann said, at p. 114 of Investors Compensation Scheme Ltd v. West Bromwich Building Society [1998] 1 All ER 98 :

“In the Court of Appeal, Leggatt LJ said, on the authority of Alice Through the Looking Glass, that the judge’s interpretation was ‘not an available meaning of the words’.  ‘Any claim (whether sounding in rescission for undue influence or otherwise)’ could not mean ‘Any claim sounding in rescission (whether for undue influence or otherwise)’ and that was that.  He was unimpressed by the alleged commercial nonsense of the alternative construction.

My Lords, I will say at once that I prefer the approach of the learned judge.  But I think I should preface my explanation of my reasons with some general remarks about the principles by which contractual documents are nowadays construed.  I do not think that the fundamental change which has overtaken this branch of the law, particularly as a result of the speeches of Lord Wilberforce in Prenn v Simmonds [1971] 3 All ER 237 at 240-242, [1971] 1 WLR 1381 at 1384-1386 and Reardon Smith Line Ltd v Hansen-Tangen, Hansen-Tangen v Sanko Steamship Co [1976] 3 All ER 570, [1976] 1 WLR 989, is always sufficiently appreciated.  The result has been, subject to one important exception, to assimilate the way in which such documents are interpreted by judges to the common sense principles by which any serious utterance would be interpreted in ordinary life.  Almost all the old intellectual baggage of ‘legal’ interpretation has been discarded.  The principles may be summarised as follows. 

(1)   Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract. 

(2)  The background was famously referred to by Lord Wilberforce as the ‘matrix of fact’, but this phrase is, if anything, an understated description of what the background may include.  Subject to the requirement that it should have been reasonably available to the parties and to the exception to be mentioned next, it includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man. 

(3)   The law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent.  They are admissible only in an action for rectification.  The law makes this distinction for reasons of practical policy and, in this respect only, legal interpretation differs from the way we would interpret utterances in ordinary life.  The boundaries of this exception are in some respects unclear.  But this is not the occasion on which to explore them. 

(4)   The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words.  The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean.  The background may not merely enable the reasonable man to choose between the possible meanings of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must, for whatever reason, have used the wrong words or syntax (see Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] 3 All ER 352, [1997] 2 WLR 945. 

(5)   The ‘rule’ that words should be given their ‘natural and ordinary meaning’ reflects the commonsense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents.  On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had.  Lord Diplock made this point more vigorously when he said in Antaios Cia Naviera SA v Salen Rederierna Ab, The Antaios [1984] 3 All ER 229 at 233, [1985] AC 191 at 201 :

‘… if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business common sense, it must be made to yield to business common sense.’”

26.Lord Hoffmann commented in a similar vein at p. 296 in Jumbo King Ltd v. Faithful Properties Ltd & Others [1999] 2 HKCFAR 279 :

“I have some doubt about whether the principle for construing reservations applies to a DMC.  The grant is the assignment of the undivided share.  The DMC is, as its name says, mutual.  The parties contract as covenantor and covenantee and do not reserve anything.  But whether or not the principle applies, it is only a last resort to resolve an ambiguity.  In the present case, I do not think that there can be any doubt about what the parties intended.  In my respectful opinion, the judge’s approach was far too narrow and literal.  The construction of a document is not a game with words.  It is an attempt to discover what a reasonable person would have understood the parties to mean.  And this involves having regard, not merely to the individual words they have used, but to the agreement as a whole, the factual and legal background against which it was concluded and the practical objects which it was intended to achieve.  Quite often this exercise will lead to the conclusion that although there is no reasonable doubt about what the parties meant, they have not expressed themselves very well.  Their language may sometimes be careless and they may have said things which, if taken literally, mean something different from what they obviously intended.  In ordinary life people often express themselves infelicitously without leaving any doubt about what they meant.  Of course in serious utterances such as legal documents, in which people may be supposed to have chosen their words with care, one does not readily accept that they have used the wrong words.  If the ordinary meaning of the words makes sense in relation to the rest of the document and the factual background, then the court will give effect to that language, even though the consequences may appear hard for one side or the other.  The court is not privy to the negotiation of the agreement—evidence of such negotiations is inadmissible—and has no way of knowing whether a clause which appears to have an onerous effect was a quid pro quo for some other concession.  Or one of the parties may simply have made a bad bargain.  The only escape from the language is an action for rectification, in which the previous negotiations can be examined.  But the overriding objective in construction is to give effect to what a reasonable person rather than a pedantic lawyer would have understood the parties to mean.  Therefore, if in spite of linguistic problems the meaning is clear, it is that meaning which must prevail.”

27.I have no doubt that this is the approach which should be adopted.

28.Namely, what is required is to attempt to find out what was the intention of the parties when the contracts were entered into.

29.It is apparent from the affidavit evidence that the 2^nd defendant who is a New York qualified lawyer was under the impression that the commitment he was entering into was a joint and several obligation.

30.There is also affidavit evidence from Mr Stephen Peaker, a partner in Messrs Oldham, Lie & Nie, that it was his impression that the clients were entering into a joint and several obligation.

31.Unfortunately, the evidence of the 3^rd defendant who was also representing the 5^th defendant is at the best equivocal.  I do not consider that it can be relied upon.

32.It is also helpful to consider the practical realities of the situation.

33.I do not agree with Mr Chain’s submission that it would be preferable for a solicitor conducting a case of this nature to deal with each client separately and only bill them for their share of the work undertaken.

34.A good example of the difficulties which might be encountered, if this approach was adopted, is the way in which in this case the different defendants made haphazard payments of costs from time to time.

35.The pattern of these payments strongly indicates to me that it was the intention of the defendants and their solicitors to defend this litigation together and that it was in their common interest to do so.

36.Some assistance can also be derived from passages appearing in the 4^th edition of Halsbury’s Laws of England, Butterworth 1983 and Cordery on Solicitors, Issue 40.

37.Paragraph 89 in Vol. 44 of Halsbury reads :

“89.  Joint and several retainers.  Retainers by two or more persons may be either joint or several, depending upon the intention of the parties and the nature of the business¹.  In the former case each party is liable for the whole of the costs incurred for the benefit of himself or any of the other parties to it², while in the latter case each party is only liable for his proportion of the costs incurred on behalf of all³.  Where, however, a retainer joint in form is in fact joint and several, and the work done enures for the benefit of all, for instance in a partition suit, each party to it will be liable for the whole costs incurred⁴.

1 See e.g. Hall v Meyrick [1957] 2 QB 455, [1957] 2 All ER 722, CA, where a man and woman who had lived together for fifteen years instructed a solicitor to prepare wills conferring mutual benefits, and there were held to be several retainers. 

2 Burridge v Bellew (1975) 32 LT 807.

3 Re Colquhoun, ex parte Ford (1854) 5 De G M & G 35; Re Allen, Davies v Chatwood (1879) 11 Ch D 244; Ellingsen v Det Skandinaviske Co [1919] 2 K B 567, CA; Keen v Towler (1924) 41 TLR 86.  Cf. para. 182, post (taxation).

4.Furlong v Scallan (1875) 9 IR Eq 202.  As to partition actions, see REAL PROPERTY, vol. 39, paras. 554 et seq.”

38.In Cordery, at section 3 on the Contract of Retainer, it is stated :

“9      JOINT AND SERVERAL RETAINERS

[429]

Where the retainer is joint, each client is liable for the whole of the solicitor’s costs¹.  On a several retainer each client is only responsible for his own portion of the costs².  The advantage to the solicitor of a joint retainer is that he can recover all the costs from any solvent party.  A judgment obtained against one party to a joint retainer will not bar a subsequent action against another party³.

[1] Burridge v Bellew (1875) 32 LT 807.

2 Elingsen v Det Skandinaviske Compani [1919] 2 KB 576,CA.

³ Civil Liability (Contributions) Act 1978, s 3.

[430]-[440]

Where a solicitor is acting for joint litigants the retainer is presumed to be joint until the contrary is shown¹.  A retainer which is joint may be construed to be joint and several, for example, where a solicitor is retained by two tenants in common².  If the matter is unclear the question of whether a retainer is joint or several is to be decided by the court in an action or on a reference to a taxing master³.

1 Starving v Cousins (1835) 1 Gale 159.

2 Furlong v Scallan (1875) IR 9 Eq 202.

3.Burridge v Bellew (1875) 32 LT 807.”

39.I have no doubt on considering all of the relevant factors that it was the intention of the defendants and the two firms of solicitors who represented them that the liability under the retainer was a joint and several liability.

40.The next matter to consider is the settlement, it was alleged, that the plaintiff entered into with the 3^rd defendant in relation to the payment of costs ordered by the judge.

41.To me, the most important point to bear in mind is that there is no evidence upon which weight can be attached from the plaintiff of the existence of a settlement.

42.The only evidence there is is hearsay evidence given in affidavit from by his solicitor, Mr Chan.

43.As pointed out by Mr Egan, it would have been a simple matter for the plaintiff to state on oath or affirmation that there was a settlement and provide particulars of it.

44.As I have indicated earlier in this judgment, I do not consider that I can attach much weight to the 3^rd defendant’s evidence as it seems to change to suit his convenience from time to time.

45.I am not satisfied that the existence of a settlement has been proved.

46.A further matter has to be considered in this connection.  Mr Chain submitted that if was held that the retainer was a joint and several retainer, the plaintiff might find himself called upon to make payment over and above the amount ordered by Tang JA.

47.I do not see how this could arise.

48.While I accept that when one is considering the situation relating to joint ownership, one normally considers it in the context of the liabilities being assumed by the various parties.

49.However, this is not always the case.

50.Here, we have a situation where an order is being made for costs to be payable to the 2^nd, 3^rd and 5^th defendants.  I have no doubt that the concept of joint ownership embraces both positives as well as negatives.

51.Here, if, as I do, I hold the relationship is one of joint and several liability, this would also mean that if the plaintiff discharges his obligation to one of the defendants he discharges it to all.

52.If a demand is subsequently made upon him for payment by one of the defendants, all that he need do is to produce a receipt evidencing the payment to one of the other defendants, and that is the end of the matter so far as he is concerned.

53.The other defendants would then look to the defendant who had received the payment to account to them.

54.So far as the alleged settlement was concerned, even if I had held that it had been established, it would have made no difference to this judgment as the judge’s order was that in the event that costs could not be agreed they must be taxed.  It is beyond doubt that the 2^nd defendant has at no time agreed costs with the plaintiff.

55.In any event, there should be no problem in this case as I understand that it is unlikely that any of the parties are insolvent.

56.Mr Egan informed me from the Bar that the lion’s portion of the costs would go to his instructing solicitors as a number of bills remained outstanding.

57.As payments had been made to the solicitors in a haphazard fashion, there could be an accounting exercise between all the defendants if any moneys were left over.

58.The outcome of all of this is that I am satisfied that the master came to the correct decision on this taxation and this appeal must be dismissed and I so order.  I make an order nisi that the 2^nd defendant will have his costs of this appeal.

Mr Benjamin Chain, instructed by Messrs Sit, Fung, Kwong & Shum, for the Plaintiff (HCA571/2003)

Mr Kevin Egan, instructed by Messrs Oldham, Li & Nie, for the 2^nd Defendant (HCA571/2003)