Lie Han Ji v. The Registrar of the Hong Kong Institute of Certified Public Accountants

CACV 265/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 265 of 2009

(ON APPEAL FROM THE DECISIONS OF THE

DISCIPLINARY COMMITTEE OF THE HONG KONG INSTITUTE

OF CERTIFIED PUBLIC ACCOUNTANTS DATED

20 OCTOBER 2009 AND 13 MARCH 2010)

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BETWEEN

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Before:  Deputy High Court Judge Lok in Chambers

Date of Hearing: 29 August 2013

Date of Decision: 7 October 2013

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DECISION

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1.This is an appeal against the decision of Master J Wong (“the Master”) dated 17 June 2013 made in taxation proceedings in respect of the costs of a civil appeal.

Background

2.The respondent, the Registrar of the Hong Kong Institute of Certified Public Accountants, brought disciplinary proceedings against the appellant resulting in two decisions by the Disciplinary Committee of the Institute dated 30 October 2009 and 13 March 2010 (“the Decisions”). The appellant appealed against the Decisions to the Court of Appeal and his appeal was dismissed by a judgment handed down on 9 March 2012.  An award of indemnity costs was made by a decision of the Court of Appeal dated 24 April 2012.

3.The respondent commenced taxation proceedings against the appellant and submitted the bill in respect of those costs (Bill No. 1).  The substantive taxation hearings took place before the Master on 19 & 25 February 2013.  On 30 April 2013, the Master issued the allocatur (“the Allocatur”) in the sum of $404,798.67.  By a summons dated 14 May 2013 (“the Summons”), the appellant sought a review of the taxation and a stay of all taxation proceedings pending the result of the appeal to the Court of Final Appeal.

4.On 17 June 2013, the Master dismissed the Summons.  The appellant now appeals against the decision of the Master.

5.This appeal is made pursuant to O 58 of the RHC which is conducted by way of a rehearing.  Under O 58 r 1(5), no further evidence (other than evidence as to matters which have occurred after the date on which the judgment, order or decision was given or made) may be received on the hearing of an appeal under that rule except on special grounds.  As there is no such special ground in the present case, I would not consider the contents of the new affirmation filed by the appellant after the hearing before the Master on 17 June 2013.

6.There is also a Bill No. 2 in respect of the respondent’s costs for the appellant’s application for leave to appeal against the judgment of the Court of Appeal.  Bill No. 2 was provisionally taxed by the chief judicial clerk on 19 February 2013.  The appellant has also made application for a hearing to object to this provisional taxation, and no hearing date has yet been fixed for this hearing.  Bill No. 2 is not the subject matter in this appeal.

The application for stay of taxation proceedings

7.I first deal with the application for the stay of the taxation proceedings.

8.On 24 October 2012, the Court of Appeal dismissed the appellant’s application for leave to appeal to the Court of Final Appeal.  The appellant subsequently applied by motion to the Court of Final Appeal for leave to appeal which was finally dismissed by an order dated 16 August 2013.

9.Since no leave has been granted to appeal against the judgment of the Court of Appeal, there is reason to stay the taxation proceedings pending further appeal.  In addition, the Master had no power to stay the execution of the costs order made by the Court of Appeal, and so the Master was right in refusing the appellant’s application for stay of the taxation proceedings.

The application for review of taxation

10.I then turn to the Master’s decision in refusing the appellant’s application for review of taxation.

11.The taxation of the respondent’s Bill No. 1 was concluded on 25 February 2013.  The appellant applied for review of taxation on 14 May 2013 which was after the issuance of the Allocatur on 30 April 2013.

12.O 62 r 33(2) of the RHC provides:

“An application under this rule for review of a taxing master’s decision may be made at any time within 14 days after the conclusion of the taxation in which that decision was made or such shorter period as may be fixed by the taxation master:

Provided that no application under this rule for review of a decision in respect of any item may be made after the signing of the taxing master’s final certificate dealing with that item.”

13.As the appellant applied for review of taxation after the issuance of the Allocatur, the Master has no power to conduct review of taxation under O 62 r 33.  Despite that, the appellant prays in aid of the provision contained in O 62 r 16(1)(b) which reads as follows:

“(1) A taxing master may –

(a) ... … …

(b) extend the period provided by rule 33(2) beyond the signing of the taxing officer’s certificate by setting the certificate aside; and

(c) … … …”

14.Apart from such provision, O 62 r 17A(3) empowers the taxing master to set aside an allocatur for “good reasons”, and r 17B entitles the taxing master to set aside or vary his decision for “good reasons” if the paying party fails to raise any objection to a bill of costs or to appear at the taxation hearing.

15.The appellant also relies on the case of A Solicitor v The Law Society of Hong Kong, unreported, CACV 236 of 2004 (decision of Saw J on 2 May 2007).  In that case, the appellant was ordered to pay the costs of the respondent after his appeal was dismissed by the Court of Appeal.  The appellant did not appear in the taxation call-over hearing and the master taxed one of the respondent’s bills as drawn.  There was then some correspondence exchanged between the court and the appellant, in which the appellant indicated his intention to challenge the taxed bill.  The master then sealed the allocatur, and after that, the appellant applied for review of taxation.  The master held that he had no power to do so under O 62 r 33(2) after the issuance of the allocatur.  Upon appeal, Saw J held that the master had power under O 62 r 16(1)(b) to extend the time for review of taxation after the sealing of the allocator by setting aside such final certificate.  Based on the facts of that case, Saw J set aside the allocatur and ordered the bill to be taxed again.

16.To me, it is not easy to reconcile the provisio in r 33(2) with the express power to extend the time for review of taxation after the issuance of the allocatur under r 16(1)(b).  If the court always has the power to extend the time for review of taxation, one would wonder why it has to be expressly stipulated in r 33(2) that no review of taxation may be allowed after the issuance of the allocatur.

17.One may argue that if the paying party, like the appellant in A Solicitor, does not have the opportunity to lodge his objections to the bill of the receiving party, he should be given the chance to have the bill be taxed again even after the issuance of the allocatur.  On the other hand, if the paying party has fully argued his objections in the taxation hearing, then under r 33(2), he should lose the right for review after the issuance of the allocatur.

18.This may be an attractive proposition.  However, looking at the express wordings in the two provisions, it is clear that the taxing master has a wide discretion to extend the time for review of taxation under r 16(1)(b), and so there appears no justification to limit the discretion of the master in the manner as stated above.  Despite that, in order to give effect to the provisio in r 33(2), I am of the view that if the paying party has had the opportunity to argue his objections in the taxation hearing, he has to establish a strong reason before the master would exercise the discretion under r 16(1)(b) to extend the time for review after the issuance of the allocatur.  It is also consistent with the approach stated in rr 17A(3) and 17B, under which an applicant has to establish “good reasons” before taxing master would exercise the discretion to set aside the allocatur.

19.It is not possible for the court to lay down any rigid guideline as to what amounts to a strong reason, and the master has to consider the facts and merits of each individual case in determining whether to extend the time for review after the issuance of the allocatur.

20.In applying for extension of time for review, the position of the applicant is similar to any other party who is seeking an extension of time in appealing against a decision of the court.  The same considerations should therefore apply.

21.In Hong Kong Civil Procedure 2013, the learned authors said the following about the principles for extension of time for appealing at §59/4/9:

“It is entirely in the discretion of the court to grant or refuse an extension of time. The factors which are normally taken into account in deciding whether to grant an extension of time serving a notice of appeal are: (1) the length of the delay; (2) the reasons for the delay; (3) the chances of the appeal succeeding if time for appealing is extended; and (4) the degree of prejudice to the potential respondent if the application is granted … … … The modern authorities disapprove of a rigid and mechanistic approach which focuses on the reasons for the and length of the delay. Instead the court must consider all the circumstances and decide whether the overall justice of the case requires the exercise of the discretion to extend time … … …”

22.In justifying the delay in making the review application, the appellant explains that he has misunderstood the provision in r 33(2).   He construed the phrase “conclusion of the taxation” as meaning the issuance of the allocator, and hence the 14 days’ period should have started to run from the issuance of the Allocatur on 30 April 2013.  That also explains why he had made the application for review on 14 May 2013.

23.In the affirmation filed on 14 May 2013 in support of the Summons (“the Supporting Affirmation”), the appellant claimed that he had indicated his objection to the Master about the taxed Bill No. 1 shortly after the taxation hearings.  Further, he had been wrongly advised by the staff of the Resource Centre for Litigants in Person that he could make the application for review within 14 days of the sealing of the allocatur.

24.I do not accept these to be good reasons.  If one reads the whole provision of r 33(2) including the provisio, “14 days after the conclusion of the taxation” cannot mean 14 days after the issuance of the allocatur, otherwise the provisio does not make sense.  The phrase “conclusion of the taxation” must mean the conclusion of the taxation hearing.

25.The appellant is not a person who is not able to handle the technicalities of legal proceedings.  As pointed out by the Master in his oral reasons (a record of which is contained in the respondent’s skeleton submission), the appellant is a registered accountant and he was able to handle his appeal and taxation proceedings by referring to various procedural rules and cases.  Further, he was also able to compile a proper bundle for the appeal hearing before myself.  In such circumstances, it is very difficult for me to accept that the appellant could have made a mistake like this.

26.Even if the mistake made by the appellant was a genuine one, I do not think that the court should allow the extension of time for the review.  One of the main considerations in such kind of applications is the merits of the appeal or the review.  In this regard, the appellant has summarised his objections to Bill No. 1 in the Supporting Affirmation as follows:

(i)   in the intended appeal to the Court of Final Appeal, the appellant would challenge the authority of the respondent’s solicitors to act on behalf of the respondent, and so the court should not have proceeded with the taxation of Bill No. 1 in the meantime;

(ii)   the respondent had failed to provide signed receipts for counsel’s fees;

(iii)   the Master had refused to deduct the time unreasonably incurred by the respondent’s solicitors in the preparation of hearing bundles;

(iv)   the Master had refused to deduct the time unreasonably incurred by the respondent’s solicitors in respect of some “mysterious communications”; and

(v)   the counsel’s fees and solicitors’ costs allowed in the taxation proceedings were excessive and unreasonable.

27.There is no merit in point (i) stated in the preceding paragraph as there would be no further appeal to the Court of Final Appeal.

28.The other points relate to the quantum of the individual items allowed in taxation.  Although I do not have the benefit of full written reasons given by the Master for justifying each of the items taxed, the Master spent two days to tax the relatively short Bill No. 1 submitted by the respondent. According to the oral reasons given by the Master, the appellant objected to almost every item in the Bill and the hearing was conducted in a very detailed way.  Taking into account the actual time spent in the whole taxation, I have no reason to doubt the observation of the Master in this regard.

29.The Master taxed the respondent’s Bill No. 1 in the amount of $404,798.67.  Taking into account that Mr Eugene Fung, a very senior junior counsel by that time, had been briefed to conduct the hearing on behalf of the respondent and that the respondent’s costs were to be taxed on indemnity basis, the total quantum of the taxed costs allowed by the Master can be said to be excessive.  Further, two days had been spent on the taxation of Bill No. 1, and a review of such taxed Bill may well take another two days (even if the review can be heard together with the taxation of Bill No. 2).  Substantial costs would be incurred for the review hearing, and the respondent may have to wait for a long time for the recovery of its costs.  In such circumstances, it would not be fair to the respondent if the appellant is allowed to have the review at this stage.  As provided for in the provisio of r 33(2), there should be some finality to the taxed bill after the issuance of the allocatur. Unless there are some very good reasons, the court should not grant extension of time for the review.  To me, the appellant has not even come close to the threshold.

30.Based on the aforesaid, I would exercise the discretion against the appellant and refuse his application for extension of time for review by setting aside the Allocatur.  I therefore dismiss the appeal.  I also make an order nisi that the appellant do pay to the respondent the costs of this appeal, which shall be made absolute 14 days after the date of the handing down of this Decision.

The appellant, in person, present

Mr John Hickin of Mayer Brown JSM, for the respondent