C. P. Lin and Co. v. Kung Wong Sau Hin

CACV000148/1987

BETWEEN

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Coram: Cons, V-P., Fuad & Power, JJ.A.

Dates of Hearing: 3 and 4 March 1988

Date of Judgment: 11 March 1988

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J U D G M E N T

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Fuad, J.A. :

1. This is an appeal from the decision of Penlington J dated 26th October 1987 whereby he upheld a decision given by Master Perior on 18th September 1987 to strike out an affidavit which was before him in a taxation matter on the grounds that it was scandalous, vexatious and otherwise oppressive.

2. The Respondents to this appeal are a firm of solicitors, C.P. Lin and Co. ("the Solicitors"), and the Appellant is the wife of the late Mr Kung Yeuk Man, of whose estate she was appointed the sole executrix. The Solicitors were instructed to act for her in handling the administration of the estate through the agency of her son Mr. Kung Kwok Wai (David Kung). He dealt with the Solicitors at all material times on behalf of his mother and it was his affidavit which was struck out.

3. The initial instructions to act were given to the Solicitors in October 1981. They were withdrawn at the end of 1983 before the work of administration had been completed.

4. On 27th February 1984 the Solicitors submitted their bill of costs in gross bill sum form for the work they had done, amounting to $605,185. The amount claimed was not paid and the Solicitors took out an originating summons seeking an order for taxation and the payment of the costs as taxed. This was on 1st August 1986.

5. On 15th December 1986 Master Woolley made an order on the taxation and issued A Certificate of Costs on 6th January 1987. On 3rd February 1987. Madam Kung, applied to set aside the taxation on the grounds that she had had no knowledge of the taxation and had, therefore, been absent and unrepresented before Master Woolley. On 24th February the Master refused Madam Kung's   application and two days later she filed a notice of appeal to the Judge in Chambers against that refusal.

6. The matter then came before Barnett J. (then sitting as a Deputy Judge of the High Court) and on 20th March he made an order, by consent, in effect directing, a new taxation.

7. Master Perrior taxed the costs over two days (9th June and 13th July) and allowed the costs as claimed.

8. On 27th July Madam Kung applied for a review of the taxation under R.S.C. 0.62, r.33. The application was made in the manner required by the rules by delivering to the taxing master written objections specifying what was objected to in the bill of costs and stating the nature and grounds of the objections. At the same time a copy of the objections was delivered to the Solicitors who, as they are entitled to do under the rules, through their solicitors, delivered written answers to the objections. This was done on 12th August, a few days out of time, by consent. Then on 9th September the solicitors acting for the Respondents sent the Appellant's solicitors eight pages of their answers to the objections to be substituted for pages in the original version that contained typing errors.

9. On 15th September Mr David Kung's affidavit was filed filet and on the same day a copy was served on the Respondents' solicitors. The appointment to review had been made on 27th July, for 18th September. The Respondents' solicitors wrote on 15th September to the Appellant's solicitors saying that they were astonished to receive their letter with the affidavit. They said that the review was not a re-hearing but a review and affidavit evidence could not be permitted at that stage. On that ground alone they would object to reliance being placed upon the affidavit. If leave to file the affidavit were given, they would ask for leave to cross-examine the deponent. They also complained about the late service - if leave were given to use the affidavit they would have to apply for an adjournment with a costs order in their favour.

10. In reply, the Appellant's solicitors drew attention to the fact that the wording of 0.62, r.34(2) states that on a review the Master "may receive further evidence" maintaining that they were entitled to rely on the affidavit at the review. They said they would arrange for Mr David Kung to be present for cross-examination.

11. On the next day, 16th September, the Respondents' solicitors wrote saying that they were issuing a summons to strike out the affidavit and that they would in any event object to (i) the introduction of new evidence and/or further evidence and (it) to the introduction of such evidence by way of affidavit or otherwise. They pointed out, too, that their senior partner was away in Australia. His comments would be needed and he might have to attend Court if the affidavit was permitted to be relied upon or leave was given to give further evidence orally.

12. The matter duly came before Master Perrior on 18th September and, as we have seen, he ordered Mr David Kung's affidavit to be struck out, and gave the Respondents their costs to be taxed on a solicitor and own client's basis. We do not have a record of any reasons the Master may have given or an agreed note of any such reasons prepared by the parties. It is common ground that Penlington J. was not informed of any reasons given by the Master for his decision.

13. The Judge in Chambers heard the appeal on 26th October and delivered an extempore judgment, later reduced into writing. The judge observed that the Master's notes had not been made available to him. After setting out the background he said: "I proceeded with the hearing of this appeal on the basis that by his order striking out the affidavit, the Taxing Master was refusing to receive such further evidence."

14. In my judgment, despite the absence of any indictation as to the Master's thinking, it was safe to assume that he was both striking out the affidavit and declining to hear any further evidence. Although the order made by the Master makes it clear that it was the form and content of Mr Kung's affidavit which he found objectionable, the powers and discretion of the Master to receive further evidence were argued both before the judge (and later before us).

15. In dealing with a submission made on behalf of the Solicitors that where Mr David Kung's affidavit went beyond mere comment and contention, and stated facts, the judge said these were clearly facts which were known to the deponent before the adjourned hearing of the taxation on 13th July and he had produced no reasons why these matters were not put before the Master then, and went on to say:

"Even though 0.62, r.34 does not contain the same words in relation to further evidence as it is contained in 0.59, r.10, I think the principle is nevertheless the same. It would, in my view, be quite wrong if a party had evidence available at the hearing of a taxing but did not call it and was allowed to do so on review unless there was a good reason for him doing so. While therefore further evidence may be received on a review of the taxing decision, perhaps more readily than on a normal appeal, the criteria laid down in Ladd v Marshall still are applicable. These are that the evidence must be such as it could not have been obtained with reasonable diligence for use at the first  hearing; secondly, that it must be such that it would probably have an important influence on the result of the case, though it need not be decisive and thirdly, it must he apparently credible though it need not be incontrovertible:

16. Later in his judgment, the learned judge referred to the contents of the affidavit and said that large parts of the affidavit could not be received because if they were relevant (which he doubted) they did not "pass the third test in Ladd v. Narshall, i.e. they are not credible. He also said: "Furthermore, overall I do not consider that the affidavit is such as would have an important influence on the result of the taxation."

17. With very great respect, in my view, the Ladd v. Marshall principles have no application to the exercise of a taxing Master's discretion under 0.62, r.34(2) which states:

"(2) On reviewing any decision in respect of any item, a taxing master may receive further evidence and may exercise all the powers which he might exercise on an original taxation in  respect of that item.....

Contrast the Provisions of 0.59, r.10(2) (further evidence receivable by the Court of Appeal on an appeal) and 0.62, r.35(4) (further evidence on review of taxing officer's certificate by a judge). The Master's discretion is not in any way fettered by considerations of this kind. Nor was the judge's on appeal. It is at large and to be exercised upon ordinary judicial principles. In so far as the judge was influenced by the Ladd v. Marshall principles in exercising his own discretion in the matter, he erred in his approach.

18. In my respectful opinion the judge was wrong when he said:

"I am also of the view that while this is an appeal by way of rehearing pursuant to 0.58, the decision to strike out the affidavit was essentially one for the Taxing Master who had done the original taxation and was familiar with the whole matter. Although I am not bound by his decision, I feel that where it is a matter of exercising a discretion of this sort, I should interfere with his discretion only if it was clearly wrong.

19. The judge should have treated the matter as if it was coming to him for the first time, As I read what he said, he went a little further than merely to "....give the weight it deserves to the previous decision of the Master ...' (per Lord Atkin in Evans v. Bartlam [19371 A.C. 473, at p 478. The substantial discretion with which we are concerned, on this appeal is the discretion not of the Master but of the judge. I do not see what weight can be given to the way a master has exercised his discretion when the circumstances do not speak for themselves and the Judge in Chambers has no idea of the reasons for his decision.

20. The learned judge supported the Master's view as revealed only by his Order, that Mr. David Kung's affidavit was oppressive and therefore was rightly struck out. If, as it does, the relevant rule allows further evidence to be adduced at the review, it cannot surely be wrong, in principle, to seek to rely on an affidavit containing the further evidence sought to be produced before the Master.

21. We have been taken right through the challenged affidavit a number of times by opposing Counsel and I am bound to say that I can find no justification for striking out the whole affidavit. This necessary and salutary power must, it seems to me, be used with a measure of caution otherwise a litigant is entitled to feel a sense of grievance. What a deponent says may not, in particular circumstances, carry much weight but that is quite another matter. What he says may be contradicted by other evidence or be the subject of cross-examination which affects or destroys its value or credibility but here the facts were not, on their face, so inherently incredible that they could simply be disregarded.

22. The Solicitors gave long and detailed answers to the objections raised by the Appellant and I do not see why she should not have been allowed, through her son, to put forward facts which, it was hoped, would assist and influence the Master in his decision. The deponent could have been cross-examined, a counter affidavit could have been filed, or oral testimony given. A suitable adjournment could have been asked for, and given, if difficulties arose about the length of time the Respondents had to consider the facts sought to be put forward.

23. Mr. Edward Chan's careful analysis of the contents of the affidavit has persuaded me that, whatever weight might be given to the facts stated, most of the averments were relevant and material either in support of the objections originally raised or to counter some of the answers given to the objections.

24. I am prepared to accept that six paragraphs of the 52 paragraph affidavit (paragraphs 10, 15, 16, 18, 30 and 32) would better have been left out and might properly have been struck out, if that were thought to be necessary (for they could simply have been ignored) but these defects, in my judgment, did not warrant the striking out of the whole affidavit. The Appellant was entitled to a decision by the Master which he did not in effect obtain - whether any of paragraphs I find did not offend should be allowed in evidence (subject to cross-examination) in the exercise of the Master's discretion under 0.62 r.34(2) to receive "further evidence".

25. In my respectful opinion, the learned judge's decision upholding the Master cannot stand, and the appeal should be allowed. The order striking out Mr David Kung's affidavit (except Paragraphs 10, 15, 16, 18, 30 and 32) should be set aside.

26. I propose that the Order we should make is that the matter should be remitted to the Master with a direction to admit the further evidence contained in the remaining paragraphs of the affidavit in accordance with his powers in 0.57, r.34(2), subject to the right of cross-examination, and to continue the review which was aborted accordingly. It will of course be open to the Respondents to invite the Master, in his discretion, to receive any further evidence they may wish to adduce by affidavit or otherwise.

Cons, V.-P. :

27. I agree entirely wⁱth what my Lord has said and with the order he proposes.

Power, J.A. :

28. I also agree that the appeal should tie allowed and with the order proposed.

Representation:

Mr. Edward Chan (T.L. Ip & Co.) for the Appellant.

Mr. Peter Graham (Wilkinson & Grist) for the Respondents.