Lau Yu Shing v Chan Wing Hung Philip
Court of Appeal
Civil Appeal No. 35 of 2011
Yuen, Kwan and Chu JJA
Legal Profession
24 March 2014

Legal profession —bill of costs — whether, under ss.65 to 68, third parties could only apply for taxation of bill of costs that solicitor had already delivered to party chargeable — Legal Practitioners Ordinance (Cap.159) ss. 65–68

F died in 1933 leaving eight sons. As a result of a deed of family arrangement, each of the sons became the beneficial owner of agricultural lands in the New Territories owned by F’s estate. After their deaths, the Government resumed part of the lands which were allocated to the third and seventh sons. Through D, a solicitor representing the administrator of F’s estate, the compensation for the resumption (the “Compensation”) was agreed. D received and held the Compensation for the administrator. D demanded from the estates of the third and seventh sons represented by Ps, payment of $300,000 as costs for non-contentious work for the resumption. Ps responded that D’s costs were excessive and repeatedly asked D to render a bill of costs and have it taxed. Eventually, D sent to Ps’ solicitors a bill of costs entitled “Fifth Draft” in the amount of $492,630 and indicated that there were further items of work and time spent, which would not be pursued if Ps were to agree to pay $300,000. Ps subsequently issued an originating summons seeking an order that D deliver a bills of costs for work done in obtaining the Compensation so they could tax it. The Judge held that Ps were persons liable to pay D and entitled under s. 68(1) of the Legal Practitioners Ordinance (Cap. 159) (the “LPO”) to apply for taxation of the bill, even though the letters of administration granted to Ps were limited to immovable property. Section 68(4)(b) of the LPO provides that “the Court may, if it orders taxation of the bill, order the solicitor ... to deliver to the applicant a copy of the bill ...” D appealed, arguing that on a proper construction of ss.65–68 of the LPO, as third parties, Ps could apply for taxation only of a pre-existing bill of costs which D had “delivered” to the party chargeable and not a bill which he had yet to render to his client.

Held, dismissing the appeal, that:

  • There was no merit in the construction point. First, there was nothing in either s. 68(1) or (2) of the LPO to limit the right of third parties to apply for taxation to cases where the solicitor had already delivered a bill to the party chargeable with the bill.
  • Second, as for the reference in s.68(4) to the delivery of “a copy of the bill”, the third party taxation under s. 68 was a taxation, not of the solicitors’ bill between the third party and the solicitor, but as between the solicitor and his client (ie, the party chargeable with the bill). Thus normally, a bill would be rendered to the solicitor’s client first. There was no warrant for construing s. 68(4) as limiting the scope of s. 68(1) and (2) to cases where the solicitor had already rendered a bill of costs to his client.
  • Third and importantly, the purpose of s. 68(1) and (2) was to give to a third party a right to tax the solicitor’s bill for which he was liable to pay. The two provisions were important safeguards for the third party’s liability to the solicitor for his costs, which might be less than that for which the client was liable. D’s construction would defeat completely the purpose of s. 68(1) and (2) and was not justified, as the third party would not be able to challenge the solicitor’s bill if the solicitor and his client were to reach an agreement on the amount of costs and/or to agree to dispense with the rendering of the bill.

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