SMITH FREEHILLS (A FIRM) v. CHEN TE KUANG MIKE AND ANOTHER

SMITH FREEHILLS (A FIRM) v. CHEN TE KUANG MIKE AND ANOTHER

The retainer terms established monthly billing payable within 30 days and authorising monthly bills as final in their own right; on the facts each monthly bill was a final bill. The first bill had been paid and more than 12 months had elapsed so the Court had no power to allow taxation of it. The clients had bona fide objections to the remaining eight bills and the solicitors' partial failure to comply with the Code of Conduct (Chapter 4.12) constituted special circumstances justifying leave to tax those bills; the Court therefore granted leave to tax the eight bills subject to procedural conditions and stayed the O.14 action pending taxation.

Citation
SMITH FREEHILLS (A FIRM) v. CHEN TE KUANG MIKE AND ANOTHER
Parties
Plaintiff (hca 3071/2015); Defendant (hcmp 1275/2016): Herbert Smith Freehills (a firm); 1st Defendant (hca 3071/2015) and 1st Plaintiff (hcmp 1275/2016): Chen Te Kuang Mike; 2nd Defendant (hca 3071/2015) and 2nd Plaintiff (hcmp 1275/2016): Chen Te-Ming
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
27 October 2016
Case Number
HCA3071/2015
Procedural Posture
Solicitors' Claim for Unpaid Bills (summary Judgment O.14) and Clients' Originating Summons for Leave to Tax Under Section 67 of the Legal Practitioners Ordinance / Combined Hearing on O.14 Summary Judgment and Taxation Application; Decision on Leave to Tax and Related Procedural and Costs Orders by Registrar
Outcome
Application to tax the first bill refused; leave granted to tax the remaining eight bills under conditions; O.14 summary judgment proceeding stayed and action stayed pending taxation; costs orders made in favour of the clients in part.
Legal Topics
Summary Judgment (o.14), Taxation of Solicitor's Bill, Legal Practitioners Ordinance Section 67, Retainer Terms and Final Vs Interim Bills, Professional Conduct Obligations (code of Conduct), Costs Allocation
Source Language
EN
Civil Procedure Legal Costs and Taxation Legal Profession Regulation Contract Law Summary Judgment (o.14) Taxation of Solicitor's Bill Legal Practitioners Ordinance Section 67 Retainer Terms and Final Vs Interim Bills +2 more

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Parties

Herbert Smith Freehills (a firm)

Plaintiff (hca 3071/2015); Defendant (hcmp 1275/2016)

Chen Te Kuang Mike

1st Defendant (hca 3071/2015) and 1st Plaintiff (hcmp 1275/2016)

Chen Te-Ming

2nd Defendant (hca 3071/2015) and 2nd Plaintiff (hcmp 1275/2016)

Procedural Posture

Solicitors' Claim for Unpaid Bills (summary Judgment O.14) and Clients' Originating Summons for Leave to Tax Under Section 67 of the Legal Practitioners Ordinance / Combined Hearing on O.14 Summary Judgment and Taxation Application; Decision on Leave to Tax and Related Procedural and Costs Orders by Registrar

Legal Issues

  1. 1 Whether each monthly bill was a final bill or interim bill (affecting s67 categorisation)
  2. 2 Whether clients are entitled to leave to tax under s67 and whether special circumstances exist
  3. 3 Whether the first bill is taxable given payment and passage of time

Ratio Decidendi

The retainer terms established monthly billing payable within 30 days and authorising monthly bills as final in their own right; on the facts each monthly bill was a final bill. The first bill had been paid and more than 12 months had elapsed so the Court had no power to allow taxation of it. The clients had bona fide objections to the remaining eight bills and the solicitors' partial failure to comply with the Code of Conduct (Chapter 4.12) constituted special circumstances justifying leave to tax those bills; the Court therefore granted leave to tax the eight bills subject to procedural conditions and stayed the O.14 action pending taxation.

Court Disposition

Application to tax the first bill refused; leave granted to tax the remaining eight bills under conditions; O.14 summary judgment proceeding stayed and action stayed pending taxation; costs orders made in favour of the clients in part.

Orders

  • Application to tax Bill 1 refused (no power to tax paid bill after >12 months)
  • Leave granted to clients to tax Bills 2–9 (eight bills)