Sports Connection Pte Ltd v Asia Law Corp and another

• Jurisdiction: Singapore
• Judge: Steven Chong J
• Judgment Date: 23 July 2010
• Neutral Citation: [2010] SGHC 206
• Citation: [2010] SGHC 206
• Docket Number: Originating Summons No 1076/2009/C
• Published date: 22 September 2010
• Hearing Date: 29 December 2009,29 March 2010,01 April 2010
• Plaintiff Counsel: Samuel Chacko & Peter Wadeley (Legis Point LLC)
• Date: 23 July 2010
• Defendant Counsel: Kevin Lee Ming Hui (Samuel Seow Law Corporation) forsecond Respondent.,Axel Chan (Attorneys Inc LLC)
• Court: High Court (Singapore)
• Subject Matter: Professional Costs,Legal Profession

Steven Chong J: Introduction

Sports Connection Pte Ltd (“the Applicant”) applied by Originating Summons (“OS”) to tax various invoices raised by two law firms, in respect of professional fees for their conduct of Suit No 630 of 1999 (“the Suit”). The two law firms are Asia Law Corporation (“the first Respondent”) and Samuel Seow Law Corporation (“the second Respondent”).

All the invoices relate to work done for the Applicant in connection with the Suit. The invoices rendered by the first Respondent were covered by the following four proforma invoices:

	Date	Amount
1	04.1.07	$49,650.41
2	08.6.07	$64,876.28
3	14.1.08	$68,199.24
4	04.5.09	$4,854.41

In respect of work done by the second Respondent, the fees charged were covered by the following invoices:

	Date	Amount
1	24.3.08	$27,193.66
2	26.5.08	$44,606.66
3	23.7.08	$15,108.47
4	21.8.08	$3,508.57
5	22.9.08	$3,317.00
6	16.1.09	$28,884.91
7	16.1.09	$135,715.62
8	05.2.09	$2,141.54

As a number of the above invoices have been paid and/or were delivered more than 12 months prior to the OS, an order for taxation can only be justified if “special circumstances” can be shown to exist. In this context, in deciding whether to order taxation of such invoices, I was mindful to strike a balance “between the need, on the one hand, to protect the client and... on the other hand, to protect the solicitor against late ambush being laid on a technical point by a client who seeks only to evade paying his debt.” ‒ per Ward LJ in Ralph Hume Garry (a firm) v Gwillim [2003] 1 WLR 510 at [32(4)] (“Ralph Hume Garry”), which was cited with approval in Ho Cheng Lay v Low Yong Sen [2009] 3 SLR(R) 206 at [16].

Conduct of Suit No 630 of 1999

In April 1999, the Applicant commenced the Suit against its former solicitors, M/s Swami & Narayan, for failing to properly register a trademark in Malaysia. The original solicitors instructed by the Applicant to commence the Suit were M/s Harry Elias & Partners. Subsequently, conduct of the Suit was taken over by M/s Netto & Magin LLC. The Suit was then stayed pending determination of the litigation against the parties who had infringed the Applicant’s trademark in Malaysia. In January 2005, the Applicant succeeded in its various actions in Malaysia. Thereafter the Applicant restored the Suit and subsequently obtained interlocutory judgement against M/s Swami & Narayan by consent on or about 26 August 2005.

In August 2006, the conduct of the Suit was yet again transferred, this time to the first Respondent. The solicitor who had conduct of the Suit was one Anis Shahiran B Md Ibrahim (“Mr Shahiran”)

In January 2008, Mr Shahiran left the first Respondent and joined the second Respondent. The Applicant then transferred the conduct of the Suit to the second Respondent, and Mr Shahiran continued to have charge of the matter.

In January 2009, Mr Shahiran left the second Respondent and rejoined the first Respondent. The Applicant then transferred the conduct of the Suit back to the first Respondent, and Mr Shahiran continued to be the lawyer in charge. It was clear that the Applicant followed Mr Shahiran to whichever firm he joined since he remained in continuous conduct of the Suit from August 2006 until 12 August 2009 when the Applicant transferred the conduct of the Suit to M/s Legis Point LLC. By the time Legis Point LLC took over, the proceedings were completed with the Applicant recovering only a fraction of the amount it had originally claimed in the assessment hearing. The present OS was filed by Legis Point LLC.

The Decision

I heard the OS over two days on 29 December 2009 and 29 March 2010. On 1 April 2010, I delivered my brief oral grounds and made the following orders: The first Respondent to deliver a bill of costs for taxation covering work done under the fourth proforma invoice. The second Respondent to deliver a bill of costs for taxation covering work done under the seventh and eighth invoices. That there be no order of taxation for the bill of costs covering work done under the first three proforma invoices of the first Respondent and the first six invoices of the second Respondent. Costs of this OS to be paid by the Applicant to the first and second Respondents fixed at $150 each inclusive of disbursements.

The Applicant being dissatisfied with my orders has since filed an appeal against my decision. I now provide the grounds for my decision.

The Issues

Before me, the Respondents made the following submissions to oppose the OS: There was a written agreement on costs between the Applicant and the first and second Respondents respectively. More than one year had elapsed since delivery of some of the invoices to the Applicant, and furthermore, some of them had already been paid by the Applicant. The Applicant was estopped from applying for taxation of the invoices because it had negotiated for payment by instalment and had paid most of the invoices.

Were there any written agreements on costs between the Applicant and the first and second Respondents

Section 111 of the Legal Profession Act (Cap 161, 2009 Rev Ed) (“LPA”) provides as follows:

Agreement as to costs for contentious business

111. —(1) Subject to the provisions of any other written law, a solicitor or a law corporation or a limited liability law partnership may make an agreement in writing with any client respecting the amount and manner of payment for the whole or any part of its costs in respect of contentious business done or to be done by the solicitor or the law corporation or the limited liability law partnership, either by a gross sum or otherwise, and at either the same rate as or a greater or a lesser rate than that at which he or the law corporation or the limited liability law partnership would otherwise be entitled to be remunerated. (2) Every such agreement shall be signed by the client and shall be subject to the provisions and conditions contained in this Part.

Under s 111 of the LPA, a solicitor is entitled to enter into an agreement on costs with the client at a higher rate than what he would normally charge, ie at a premium. The enforceability of such agreements on costs is governed by s 113(3) of the LPA which provides that an agreement on costs may be enforced “if it appears to the court or Judge that the agreement is in all respects fair and reasonable”. Agreements on costs are therefore not subject to taxation if they are “fair and reasonable”. This is a different threshold for taxation of fees that are billed in the absence of an agreement on costs.

The second Respondent relied on two documents as evidence of a written agreement on costs. The first is a document titled “Repayment Agreement” dated on 10 February 2009 where Yee Kok Chew (“Mr Yee”), a director of the Applicant, was required to acknowledge personal liability for arrears of fees in the sum of $309,688.60 payable to the second Respondent. This agreement was not signed because the liability for the invoices was the Applicant’s and not Mr Yee’s. It was then redrafted for Mr Yee to acknowledge on behalf of the Applicant but it was not signed either.

In my view, the second Respondent’s submission that there existed a written agreement on costs was a non-starter since neither of the two repayment agreements was actually signed by the Applicant as required under s 111 of the LPA. The fact that the repayment agreements were prepared and sent to the Applicant for signature coupled with the Applicant’s refusal to sign the draft repayment agreements would in itself suggest the absence of an agreement on costs.

Separately, the first Respondent’s claim that an agreement on costs existed between the parties was, as admitted in its affidavit, based on an agreement that is “partly oral, partly by conduct, and partly in writing”. The claim was premised on a letter from the first Respondent to the Applicant dated 3 August 2006 which contained an estimate of the legal costs and disbursements. The first Respondent argued that in accordance with this letter: (a) the first Respondent had sent invoices to the Applicant detailing the work done; (b) the Applicant had negotiated with the first Respondent to pay the invoices in instalments; (c) the Applicant had continued paying the invoices over a period of two and a half years without any complaints; (d) the above therefore evidenced an agreement between the parties on costs.

However, even taking the first Respondent’s case at its highest that there was an agreement (either orally or by conduct) between the parties on costs, it nonetheless did not satisfy the requirements under s 111 of the LPA. Section 111 of the LPA requires a written agreement on costs that is signed by the client before taxation of the bill of costs can be excluded. Any failure or omission by the law firm in satisfying these mandatory requirements would preclude it from enforcing the agreement on costs.

In the present case, the letter documenting the first Respondent’s estimate of fees was admittedly not signed by the Applicant. Even if the Applicant had by its conduct agreed to the estimate provided by the first Respondent, this does not change the fact that the formal requirements of s 111 of the LPA have not been satisfied.

In Chamberlain v Boodle & King [1982] 1 WLR 1443 (“Chamberlain”), the English Court of Appeal held that an agreement could only amount to a contentious business agreement under s 59 of the Solicitors Act 1974 (Cap 47) (UK) (which is in pari materia with s 111 of the Legal Profession Act) if it was specific in terms and signed by the client. In that case, the defendants had proposed to the plaintiff an hourly rate of £60 to £80 for lawyers of...