Chang King To v. Cheung & Choy, A Firm of Solicitors

CACV 257/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVI l appeal no. 257 of 2014

(ON APPEAL FROM HCA 785 OF 2014)

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J U D G M E N T

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Hon Yuen JA:

1.This is the plaintiff’s appeal from a decision of DHCJ Mayo given on 21 November 2014 striking out the amended statement of claim and dismissing the action with an order nisi that the plaintiff pay the costs of the action.

Background

2.The action arose against the backdrop of the following facts which have been set out in the affirmations and exhibits filed by the parties.  Most of the facts are uncontroversial, save where indicated, in which event I have identified the person who made the allegation.

The Property

3.1.In 1985, Madam Wong Shuen Yuk (“Madam Wong”), who was born in 1929, acquired a unit (“the Property”) in a development then in the process of construction as joint tenants with her husband.  Unfortunately her husband died before completion. 

3.2.Madam Wong and her husband had three sons: the plaintiff, Terry and Clarence.

3.3.On completion of the Property in 1987, it was assigned to Madam Wong as joint tenants with the plaintiff who was her eldest son. 

3.4.The plaintiff emigrated to Australia in 1990.

3.5.Madam Wong lived in the Property with Clarence (and later his girlfriend who became his wife). 

3.6.In 2005, the Property was mortgaged, with Madam Wong, the plaintiff and Clarence named as “the borrower”.  Banking facilities were similarly granted against the security of the Property in 2009.

3.7.After 20 years in Australia, in 2010 the plaintiff returned to Hong Kong and stayed at the Property with Madam Wong, Clarence and his girlfriend.  This led to some unhappiness. 

3.8In September 2010, there was a dispute between the plaintiff and Clarence and his girlfriend during which there was a scuffle.  The plaintiff then moved out of the Property. 

1^st Notice of Severance

4.1.According to Simon Cheung (“Mr Cheung”) of Cheung and Choy, a solicitors’ firm (“the Solicitors”), in July 2011 he was telephoned by Madam Wong, who had been his client previously.  Madam Wong instructed Mr Cheung to sever the joint tenancy of the Property.

4.2.Pausing here, it should be noted that the plaintiff’s counsel Mr Gary Lam accepts that at law, solicitors can act for one joint tenant in effecting a severance without the consent of the other joint tenant.  Obviously it follows that the solicitors so effecting the severance do not purport to act for the other joint tenant. 

5.1.On 26 July 2011 the Solicitors sent a Notice of Severance (“the 1^st Notice of Severance”) to the plaintiff by email. 

5.2.This Notice referred to the unit as “Room 1601” and named only the development but not the street on which it was situate. 

5.3.The email said, among other things, that the original document has been posted to the plaintiff.

6.1.That evening the plaintiff emailed the Solicitors a number of times, saying, among other things, that he disagreed with, and will contest, what was said in the Solicitors’ email.  He also asked the Solicitors “if I need to find a lawyer to talk to you”.

6.2.The next day, the Solicitors replied to the plaintiff by email saying:

“Please be advised that you are at liberty to consult legal opinion with respect to this matter. If you are minded to engage a firm of solicitors to act on your behalf, kindly pass the Notice for their perusal and direct future correspondence to us directly”.

29 July 2011 e-mail

7.1.On 29 July 2011 the plaintiff sent an email to the Solicitors saying:

“Ms Wong shows me this morning the original letter you referred to in your email to me.

She maintains that she has not instructed you to write the letter to change the status of the ‘Joint Tenants’ arrangement already exists for the said property.

We further agree today that we do not want to change the Joint Tenants arrangement, especially not unilaterally as what seems to have happened now.

We would seek consult upon hearing back from you, if you cannot represent us in the matter”.

The plaintiff typed only his name as the sender of the email, but a paper copy was signed by himself and (according to him) Madam Wong, and posted to the Solicitors. 

7.2.The Solicitors did not respond. 

8.The plaintiff then visited a free legal website and consulted a solicitor whom he got to know through the website. 

9.1.Subsequently, shortly after midnight on 20 September 2011 the plaintiff emailed the Solicitors saying:

“Following our independent legal advice, [Madam Wong] and I would like to make an urgent appointment with you on 21 September 2011 at 2:00 pm in your office to discuss about the instruction that you mentioned you have received”. (Emphasis added).

9.2.The Solicitors replied that afternoon saying they were taking instructions from their client and would let him know if they had authority to meet him.

9.3.The plaintiff sent two emails in reply, the first asking if Madam Wong was the client from whom the Solicitors took instructions.  The Solicitors did not respond.  Within the hour the plaintiff sent a second email saying:

“So you are saying [Madam Wong] is not your client ... or you know more than one [Madam Wong] and you need to confirm.

This [Madam Wong] will bring her Hong Kong ID card to the meeting with you, hopefully tomorrow.

[Madam Wong] repeats that it is a urgent meeting with you that we seek”.

9.4.The Solicitors did not respond.  Nor did the plaintiff, or Madam Wong, visit their office the next day. 

Chinese instructions

10.1.According to Mr Cheung, on 21 November 2011 Madam Wong went to his office together with her son Terry.  He recognised her and checked her identity card which was identical to the copy kept in his office records. 

10.2.According to Mr Cheung, “she clearly and unequivocally repeated her earlier instructions to sever the joint tenancy with the Plaintiff in respect of the property”.  Mr Cheung instructed his staff to type out her instructions in Chinese which (according to him) Madam Wong signed in his presence, which instructions (“the Chinese instructions”) stated:

“I, [Madam Wong], address: [the Property], (Hong Kong Identity Card No. [redacted in this judgment]) hereby appoint Cheung & Choy to be the solicitors representing me and handling legal matters for me, including the issue of notice to sever joint ownership (Notice of Severance) to [the plaintiff] in relation to [the Property] so as to sever the property severally and jointly owned (“joint tenancy”) by [the plaintiff] and I and then convert it into tenancy in common (“tenancy in common”) as the type of ownership”.

11.1.According to Land Registry records, on 5 January 2012 the 1^st Notice of Severance was delivered to it for registration, but registration was withheld.

11.2.According to the Solicitors, registration was withheld as the description of the Property in the 1^st Notice did not conform exactly with the description of the Property in the Land Registry which referred to the unit as “Unit 1 on the 16^th Floor”, rather than “Room 1601", and which contained the name of the street as well as the development.

2^nd Notice of Severance

12.1.On 24 February 2012 the Solicitors sent another Notice of Severance (“the 2^nd Notice of Severance”) by email and post to the plaintiff.  In this notice, the description of the Property conformed exactly with the Land Registry description.  This notice also added: “the legal capacity of [the plaintiff] and [Madam Wong] in respect of [the Property], formerly as joint tenants of the Property], now becomes tenants-in-common in equal shares”.

12.2.This 2^nd Notice was registered in the Land Registry on 28 February 2012.  It has remained on the register ever since.

“To Whom It May Concern” document

13.1.The following day (29 February 2012), the plaintiff drafted a document saying:

“ To Whom It May Concern

This is to say that I, [Madam Wong] have not instructed, nor paid Cheung & Choy Law Firm to write the two “Notice of Severance” dated 26 July 2011 and 24 Feb. 2012 (Copies attached).

I do not know the email address of [the plaintiff].

And I have not received any copy of the letters as stated (cc. Client); the copies attached are provided by [the plaintiff]”.

13.2.According to the plaintiff, this document was drafted by him at Madam Wong’s request and was signed by her.  It was dated 29 February 2012 and was posted to the Solicitors.

13.3.The Solicitors did not respond.

Search of Land Register

14.1.According to the plaintiff, he conducted an online search of the Property on 14 March 2012 and saw that the 1^st Notice of Severance had been withheld from registration. 

14.2.As at that date however, the 2^nd Notice of Severance had already been registered.  No steps were taken by Madam Wong in respect of this registration, even though by this time (on the plaintiff’s case) she had consulted other solicitors (see para. 9.1 above).

Madam Wong’s incapacitation

15.About 1½ years later, in August-September 2013 Madam Wong unfortunately fell injuring her head and became mentally incapacitated.  A doctor certified her in October 2013 as being “mentally confused and failed MMSE” (Mini Mental State Examination).

16.There have been no dispositions of or dealings with the Property.

Legal proceedings 

17.1.In March 2014 the plaintiff instructed solicitors who commenced correspondence with the Solicitors. 

17.2.In May 2014 the plaintiff issued a writ against the Solicitors, suing them for

(a)  slander of title, and

(b)   breach of a duty of care which he alleged they owed to him.  The particulars of negligence pleaded were as follows:

“The Defendant failed properly or at all to ascertain the identity of the person who purported to be Madam Wong and who had given oral instructions to the Defendant over the phone only and had signed an instruction letter dated 21^st November 2011 [the Chinese instructions] only without proof of her identity”.

17.3.It should be noted that the plaintiff has made no allegations of fraud or dishonesty against the Solicitors. 

17.4.The relief claimed were as follows:

(1)  a declaration that the 2^nd Notice of Severance is null and void for all intents and purposes;

(2)  an order that the 2^nd Notice of Severance be vacated from registration at the Land Registry; and

(3)  “damages to be assessed”.  There were no allegations or particularsof loss or damage.

Strike-out

18.The Solicitors applied to strike out the statement of claim and to dismiss the action:

(1)  under O.18 r19(1)(a) Rules of the High Court on the basis that it failed to disclose a reasonable cause of action;

(2)  under the other bases stated in O.18 r.19(1), and as an abuse of process under the inherent jurisdiction of the court. 

Alternatively they sought an order under Order 14A RHC that there be a determination that the plaintiff’s claim fails on the ground that the Chinese instructions authorised the Solicitors to serve and register the 2^nd Notice of Severance, and the claim was therefore without any factual or legal basis. 

DHCJ Mayo’s judgment

19.1.DHCJ Mayo heard the summons on 12 November 2014 and handed down a Decision on 21 November 2014. 

19.2.For reasons set out in the Decision, the learned judge held:

(a)  the Solicitors did not owe any duty of care to the plaintiff, and hence the action for negligence could not succeed (paras.25 - 34), and

(b)  there was no suggestion that the Solicitors had any motive to cause damage maliciously towards the plaintiff, and hence the action for slander of title could not succeed (paras. 35 - 38).

19.3.Accordingly the judge struck out the amended statement of claim and dismissed the action. As the judge had considered the evidence, it was clear that the striking out was not based on the ground stated in O.18 r.19(1)(a).

19.4.The judge also gave an order nisi that the plaintiff should pay the costs of the action.

20.1.On 4 December 2014, the Solicitors applied to vary the costs order nisi for an order that the costs be taxed on an indemnity basis. 

20.2.On 5 December 2014 DHCJ Yee gave directions for written submissions. 

20.3.Only the plaintiff has provided written submissions pursuant to those directions.  The Solicitors did not file or serve any submissions in reply. 

20.4.No order on the application to vary has yet been made. 

Appeal

21.The plaintiff’s notice of appeal indicated that he is not appealing the strike-out of the slander of title cause of action.  This court therefore only needs to deal with the action in negligence.

Discussion

22.1.I shall deal with the second ground of appeal first.  It was contended that the judge erred in ruling (in paras. 40-41 of the judgment) on the credibility of the witnesses’ evidence before discovery, interrogatories and cross-examination.

22.2.Paragraphs 40-41 stated as follows:

“40. The only evidence that can call in question the evidence of Mr Cheung in his affidavit concerning his knowledge and relationship with Madam Wong is the written statement signed by her stating that she had not given instructions to the defendant to sever the joint tenancy.

41. Unfortunately on account of her medical condition it would not appear that she would be able to give evidence in court which would contradict what Mr Cheung deposes to”.

22.3.Reading these paragraphs in the context of the Decision, it is clear that the learned judge was not making a ruling on the credibility of any witnesses’ evidence. It is true that the plaintiff has pointed out an error in Mr Cheung’s first affidavit, viz. he said it was after the withholding of registration of the 1^st Notice of Severance that he advised Madam Wong in November 2011 to issue a second one, but according to the Land Registry record, the 1^st Notice was only submitted for registration on 5 January 2012.  However there was no allegation of fraud or dishonesty against Mr Cheung, so there is no credibility issue in the strict sense of the word, and all that the plaintiff can say is that Mr Cheung’s evidence is not accurate. 

22.4.In any event, in relation to the meeting that Mr Cheung had on 21 November 2011 culminating in the Chinese instructions, there was indeed no evidence before the learned judge contradicting Mr Cheung’s evidence, eg evidence indicating that Madam Wong was not in Hong Kong on the day.  As the judge noted, the only evidence that called in question Mr Cheung’s evidence was the To Whom It May Concern document, and Madam Wong would herself be unable to give evidence in court.

22.5.As Mr Lam accepted, the facts narrated by the learned judge in the paragraphs specified in the second ground of appeal were correct.  In my view the judge’s observation on the state of the evidence before him was justified by those facts.

23.1.I now come to the first ground of appeal.

23.2.No doubt in recognition of the well-established principle that striking out is an exercise of discretion, the plaintiff has sought to contend that the judge has erred in law.  Mr Lam has submitted that the judge had failed to apply the test of “reasonable foreseeability, sufficient close proximity and justice and reasonableness and/or the incremental approach” in deciding whether the Solicitors owed a duty of care to the plaintiff. 

24.Before I discuss the cases to which Mr Lam has referred us, the following matters should be noted. 

25.First, Mr Lam accepts that a joint tenancy may be severed at any time by one joint tenant (acting by himself or through solicitors) without the consent of the other, and if Madam Wong had given instructions to sever the joint tenancy, the plaintiff cannot claim against the Solicitors.  His case is predicated upon the basis that Madam Wong did not give those instructions. 

26.1.Second, Madam Wong must have been aware of the 2^nd Notice of Severance, as it was already registered when the plaintiff did his search of the Land Register in March 2012.  There is no evidence that the plaintiff had kept this information to himself and there is no reason why he would not have informed Madam Wong of the registration.

26.2.The point to note is that if the severance was not done on her instructions, she could take steps to reverse it (ie take steps to vacate the registration). She could have done so in the 1½ years between the registration and her incapacity, and even now a next friend may be appointed to act for her.  I will return to this point in my discussion of the “will” cases Ross v Caunters [1980] Ch 297 and White and another v Jones and another [1995] 2 AC 207 below. 

27.It was against the backdrop of the matters set out above that the plaintiff commenced legal proceedings against the Solicitors.  His case (as formulated by Mr Lam) is that before the Solicitors accepted the retainer to issue a notice of severance, they were under a duty to him (although he was not their client) to ascertain the identity of the person giving those instructions.  As noted above, this case must be premised on the person giving the instructions not being Madam Wong, because if she had given those instructions, the plaintiff can have no possible claim against the Solicitors.

28.Mr Lam recognised that there are no direct authorities for this claim but he submitted that it is reasonably arguable because the courts have been adopting an incremental approach to the development of the common law regarding solicitors’ duties to non-clients.

29.Mr Lam referred us to three cases where solicitors have been held liable to non-clients.

30.1.In White v Jones,a solicitor delayed the preparation of a will for a client, in the course of which the client died, leaving his proposed beneficiaries without their intended legacies.  The client’s estate had a valid claim against the solicitors for negligence but it suffered no loss.  The intended beneficiaries had suffered loss, but did they have a valid claim? 

30.2.The House of Lords first considered Ross v Caunters where a solicitor had negligently failed to advise his client, a testator, that he (the testator) should not ask the spouses of intended beneficiaries to witness the execution of his will.  As events transpired, the testator did ask the husband of an intended beneficiary to witness the will, with the result that the gift to that intended beneficiary became void.  She sued the solicitors for the loss of the intended legacy and Megarry VC held the solicitors were liable.

30.3.The House of Lords then considered whether Ross v Caunters (which was a first instance decision given in 1980) was still good law after more recent developments in the House of Lords in negligence law, such as Murphy v Brentwood District Council [1991] AC 398 (where a district council was held not liable to a householder for a negligent building inspection) and Caparo Industries Plc v Dickman [1990] 2 AC 605 (where a company’s auditors were held not liable to potential investors for a negligent audit).

30.4.The House of Lords in White v Jones held that the intended beneficiaries who undoubtedly suffered loss did have a valid claim against the solicitor.  The latter’s duty of care to the client extended to the client’s intended beneficiaries.

30.5.In the Court of Appeal, Steyn LJ had held at p239 that “... the requirements of foreseeability, proximity and justice, which are needed to establish a duty, together with the concepts of breach, causation, loss and remoteness, are adequate to contain liability of the Ross v Caunters type within acceptable limits”. (Emphasis added).

30.6.In the House of Lords, the majority emphasised that in a “will” situation, there would be no remedy at all for the solicitor’s negligence if it were to be held that he was not under a duty to the intended beneficiaries.  At p262 D-F, Lord Goff discussed the situation of an inter vivos gift which, due to a solicitor’s negligence, was not effective for its purpose.  He held the intended donee had no claim against the solicitor.  Then at p268 C-E, Lord Goff said:

“... the nature of the transaction [the preparation of a will] was such that, if the solicitors were negligent and their negligence did not come to light until after the death of the testator, there would be no remedy for the ensuing loss unless the intended beneficiary could claim. In my opinion, therefore, your Lordships’ House should in cases such as these extend to the intended beneficiary a remedy under the Hedley Byrne principle by holding that the assumption of responsibility by the solicitor towards his client should be held in law to extend to the intended beneficiary who (as the solicitor can reasonably foresee) may, as a result of the solicitor’s negligence, be deprived of his intended legacy in circumstances in which neither the testator nor his estate will have a remedy against the solicitor. Such liability will not of course arise in cases in which the defect in the will comes to light before the death of the testator, and the testator either leaves the will as it is or otherwise continues to exclude the previously intended beneficiary from the relevant benefit”. (Emphasis added).

30.7.The significance of the nature of the transaction shown in the italicized passage above is also underscored in the following passage from Lord Browne-Wilkinson’s speech (at p276 D-E):

“Further, negligence in the preparation and execution of a will has certain unique features. First, there can be no conflict of interest between the solicitor and client (the testator) and the intended beneficiary. There is therefore no objection to imposing on the solicitor a duty towards a third party there being no possible conflict of interest. Second, in transactions inter vivos the transaction takes immediate effect and the consequences of solicitors’ negligence are immediately apparent. When discovered, they can either be rectified (by the parties) or damages recovered by the client”.

30.8.It is clear therefore that the House of Lords held that the solicitor owed a duty to the intended beneficiary, only because it was reasonably foreseeable from the nature of the transaction (the preparation of a will) that the solicitor’s client (or more accurately, his estate) could not claim against the solicitor for loss suffered by the intended beneficiaries, and it would thus have been unjust for his negligence to go unremedied.  With respect I do not see how this case assists the plaintiff.  The present proceedings are premised upon Madam Wong not being the Solicitors’ client, and as discussed later, there are other remedies available.

31.1.The second case that Mr Lam prayed in aid was Penn v Bristol & West Building Society and Others [1996] 2 FCR 729.  In that case, a house was owned by a husband and wife as joint tenants.  The house was mortgaged and the title deeds were held by the mortgagees (which I will refer to as “Bank 1”). 

31.2.The husband and his business partner were in debt and thought up a scheme to obtain funds.  Through the partner’s introduction, the husband instructed solicitors in a purported sale of the house by himself and his wife.  The solicitors prepared documents on which the husband forged the wife’s signature.  On the assumption that the wife had signed the documents (but without having made contact with her), the solicitors obtained the title deeds from Bank 1.  The husband then purported to sell the house to a person posing as a purchaser, who obtained funds by purportedly mortgaging the house to another bank (Bank 2)

31.3.The wife later divorced the husband, and sued him, the “purchaser” and the solicitors who had put through the sale.  Her case against the husband and the “purchaser” was that as her signature had been forged, the transaction was a sham, and her interest in the house remained intact.  I shall discuss her case against the solicitors later.  There were also counterclaims by Bank 2 which are irrelevant to this discussion.

31.4.Judge Kolbert, sitting as a judge in the Chancery Division, held that as the wife’s signature on the documents of sale had been forged, her title to the house had never been affected.  Notwithstanding that however, she had suffered loss because she had been receiving social security for payment of the mortgage interest payable to Bank 1, and for a period of time, the Department of Social Security did not make payments to her because it was thought that she had sold the house.  She claimed against the solicitors for the loss of those payments. 

31.5.In respect of the wife’s claim against the solicitors, the judge held that they owed her a duty of care.  Even though it turned out that in fact she was not their client (their assumption that she was being incorrect), she was reasonably and necessarily within their contemplation when they put through the purported disposition of the couple’s title in the house.  They breached the duty of care when they put through the sale without contacting her for authority, even though their suspicions were aroused by a number of matters, such as the fact that they were originally instructed by the business partner who was the first intended “purchaser”, a subsequent change of “purchaser” from the business partner to the eventual “purchaser”, a reduction in the sale price, and the payment of the deposit directly from the “purchaser” to the husband, etc (p742). 

31.6.Accordingly the solicitors were held liable to the wife for any interest payments that she could not recover from the Department of Social Security (p759G). 

31.7.That result is not surprising.  If a solicitor negligently fails to check if he is acting for a person and purports to dispose of her property, it is obvious that if that person suffers loss as a result, the solicitor should be liable to her.  Such a claimant would satisfy the requirements of foreseeability, proximity and justice which are needed to establish a duty owed to her.  But that is not the present case.  The plaintiff’s case is not that the Solicitors owe a duty to Madam Wong.  His case is that they owe a duty to him personally.

32.1.The last case relied upon by Mr Lam is John Edward Harris v Nantes & Wylde (A Firm) [1997] ECC 570.  In this case the claim alleged was as follows.  A property was held by a step-mother and a step-son as tenants in common.  The step-mother devised a fraudulent scheme whereby she instructed solicitors (whom she and the step-son had earlier instructed to acquire the property) to transfer the step-son’s interest to her.  The solicitors made no attempt to contact the step-son and sent the documents to the step-mother who forged the step-son’s signature on them.  Having thus acquired the property in her sole name, the step-mother sold the property and pocketed the proceeds.  As the step-son was unable to recover any money from the step-mother, he instituted a claim against the solicitors. 

32.2.The English Court of Appeal held in a strike-out appeal that there was a reasonably arguable case that the solicitors owed a duty of care to the step-son and that their negligence caused the latter’s loss.  Mummery LJ (with whom the other justices of appeal agreed) held that it was reasonably arguable that in putting through the conveyance of the legal estate held by both co-owners as trustees for sale into the sole name of the step-mother together with an assignment of the step-son’s beneficial interest to the step-mother, the solicitors “either acted or purposed to act” for both of them (para. 29).  He said (paras. 29-30):

“[29] ... Mrs Harris [the step-mother] could not, as a trustee of the legal estate, properly act without the concurrence of Mr Harris [the step-son]. Mr Corp [the solicitor] could not properly act for her, as a trustee conveying the legal estate, without also acting for Mr Harris in relation to the conveyance of that estate.

[30] ... in those circumstances, it is reasonably arguable that Mr Corp owed a duty of care to Mr Harris, either (a) because Mr Harris was his client, or (b) because Mr Harris was in a situation of sufficiently close proximity to Mr Corp to give rise to a duty of care to him”.

32.3.I have noted earlier that (as Mr Lam accepts) a solicitor can effect a severance of a joint tenancy on the instructions of only one joint tenant and without the consent of the other.  In doing so, the solicitor clearly does not act or purport to act for the other joint tenant.  That being the case, I do not see what assistance the plaintiff can derive from this case either.

33.1.Thus of the three cases cited by Mr Lam, it will be seen that the latter two concerned situations where the solicitors had acted or purported to act for the persons suffering loss.  It is only in the wills cases (Ross v Caunters and White v Jones) that the claimants were not persons for whom the solicitors purported to act.  However the duty of care arose in those cases only because of the unique nature of a will, where it was reasonably foreseeable that the clients’ estates could not sue (as they had suffered no loss) and the persons who suffered loss would not otherwise have been able to sue.  Absent the finding of a duty of care owed to the intended beneficiaries, there would have been no remedy for the solicitors’ negligence.

33.2.That is not the situation here at all.  If Madam Wong had not instructed the Solicitors to sever the joint tenancy and if she had suffered loss as a result of the Solicitors’ act, she could and can institute proceedings against them. She has not done so (whether personally during the 1½ years before her incapacity or through a next friend since then).  If the plaintiff is in any doubt as to the nature of the interest he holds in the property, he can seek a declaratory judgment against his co-owner Madam Wong.  These are just some of the remedies open to Madam Wong and the plaintiff respectively.  Mr Lam accepts that to be the case.  His only response was that if his client sued Madam Wong, there may be costs implications.  But there are costs implications in all litigation, including the plaintiff’s claim against the Solicitors.

Order

34.For the reasons set out above, in my view DHCJ Mayo was right to have struck out the statement of claim and dismissed the action, and the appeal should be dismissed with costs.  The plaintiff’s own costs are to be taxed in accordance with Legal Aid Regulations.  I shall deal with the basis of costs as between the parties in the following paragraphs. 

Costs

35.First as to the costs below, the application to vary the order nisi has not been determined following the directions given by DHCJ Yee.  Although the claim has been struck out, the proceedings and the way they were conducted cannot be said to have been an affront to the court.  Accordingly I take the view that DHCJ Mayo’s order as to costs should not be varied. 

36.As for the costs of the appeal, I have to say that the plaintiff’s pursuance of the appeal may be described as oppressive.  He has had the benefit of his case considered by the judge below and he was well aware that remedies other than the pursuit of this action are available to him, and yet he has continued to vex the defendants.  In these circumstances, I take the view that the costs of the appeal should be paid on an indemnity basis. 

Hon Kwan JA:

37.I agree with the judgment of Yuen JA.

Hon Barma JA:

38.I agree with the judgment of Yuen JA.

Mr Gary Lam, instructed by Tsangs, assigned by Director of Legal Aid, for the plaintiff

Mr Nigel Kat SC, instructed by Fred Kan & Co, for the defendant