Gibson, Dunn & Crutcher (a firm) v Sunshine Success Global Inc [2026] 1 HKLRD 83; [2025] HKCFI 4567 (Vincent Chen, Timothy Lam)

Vincent Chen and Timothy Lam represented the 1st and 2nd defendants in Gibson, Dunn & Crutcher (a firm) v Sunshine Success Global Inc [2026] 1 HKLRD 83; [2025] HKCFI 4567.

S were solicitors for D1 and D2. By this originating summons, S sought the taxation of five bills of costs totaling HK$5.65 million and interim payment pending taxation. The interim payment sought was (i) to S of 100% of outstanding disbursements and 50% of outstanding fees; and (ii) into court of 20% of the total outstanding fees. A total of at least US$50,000 and HK$8,165,845.48 has already been paid by Ds to S. The outstanding sum billed under the five bills was about HK$5.65 million. D1 and D2 refused to pay the outstanding sum, 44% of which related to HCA 1289/2022 against D2 while 56% of which related to HCCT 85/2022 and other proceedings against D1. In those two cases, S was on record for less than 7 months, and the majority of the work they did for Ds was to oppose applications for injunctive relief against them.

The engagement letter and terms of retention each contained an arbitration clause providing for the resolution of “any and all disputes, claims or controversies arising out of or relating to this agreement, our relationship, or the services performed or any other matter or thing” by way of HKIAC arbitration. Clause 15.8 of the terms of retention provided that “[n]othing in this paragraph shall displace any statutory provision for taxation of fees under the Legal Practitioners Ordinance and if there is any dispute regarding fees, you have the right to require fees to be taxed.”

S’s application was opposed by Ds on the following four grounds: (i) D1 and D2’s liability to pay S was several (the Several Liability Ground); (ii) S’s professional negligence disentitled them to any remuneration (the Negligence Ground); (iii) the five bills did not conform with the statutory formalities under s.66 of the Legal Practitioners Ordinance (Cap.159) (the Statutory Formalities Ground); and (iv) interim payment would stifle Ds’ ability to participate in taxation (the Financial Ability Ground). Ds asked that the originating summons be stayed pending the resolution of their negligence claim (i) by turning the originating summons into a writ action; (ii) by trial of a preliminary issue within these taxation proceedings; or (iii) in arbitration.

Held, declining to make an order for interim payment, taxation was to be done by the court but staying the originating summons pending resolution by arbitration of the Several Liability Ground and the Negligence Ground, provided that Ds commence arbitration within 21 days of the handing down of this judgment, failing which S was at liberty to restore the originating summons for hearing before the court, that:

(1) Adopting the approach in Assaubayev v Michael Wilson & Partners Ltd as the Court understood it, taxation of the five bills should, subject to any questions of liability to be resolved at Stage 1 of the two stages of taxation of solicitor-client bills, be done by the court instead of being referred to arbitration (Assaubayev v Michael Wilson & Partners Ltd [2014] 6 Costs LR 1058, Sutherland v CRB (a firm) [2023] 1 HKLRD 1, Lee Choi Ho v Messrs Collin Ng & Co Solicitors [2024] HKCFI 3732 applied; Fung Hing Chiu Cyril v Henry Wai & Co [2018] 1 HKLRD 808 considered). (See paras.46-61.)

(2) S accepted that the Several Liability Ground raised a dispute that fell within the scope of the arbitration clause. This ground was arguable and should be referred to arbitration (Hotung v Ho Yuen Ki [2009] 1 HKC 377 considered). (See paras.63-65.)

(3) The Negligence Ground, too, was accepted by S as raising a dispute that fell within the arbitration clause. It was arguable and inappropriate for summary resolution. The allegations of negligence made by Ds were “wholesale”, going to “the heart of the matter”, rather than “contained”. Their resolution required proper pleadings, witness statements and cross-examination to resolve, and was wholly unsuitable for a taxing master. In accordance with the spirit of Cl.15.8, the Negligence Ground should be referred to arbitration, but taxation was to be done by the court (Jones v Richard Slade & Co [2023] 1 WLR 383 applied; Sutherland v CRB [2023] 1 HKLRD 1, Feakins v Burstow [2006] PNLR 6, Million Honour Trading Ltd v Mak Lai Hing Daisy (HCA 1852/2009, [2014] HKEC 753) considered; The Papa De Rossie (1878) 3 PD 160, Re Massey v Carrey (1884) 26 Ch D 459, Nicholas Drukker & Co v Pridie Brewster & Co [2006] 3 Costs LR 439 distinguished). (See paras.66-91.)

(4) Service of the five bills was by email. The whole purpose of the procedure for the service of a bill was to ensure that the right person received it. Neither D1 nor D2 were prejudiced by the five bills having been served by email. Both of them were legally represented, and had had full opportunity to advance their cases. The Court being satisfied as to delivery of the five bills, the Statutory Formalities Ground was not established (Winston & Strawn v Tai Ding Century Ltd [2018] HKCFI 2506, Deutsche Bank AG v Sebastian Holdings Inc [2024] KB 804 considered). (See paras.92-99.)

(5) The Financial Ability Ground was relevant only to the claim for interim payment. As such, this ground had no merit because Ds had simply failed to produce any evidence as to their financial condition. An interim payment order would reduce the incentive for Ds to engage in delaying tactics, and diminish the injustice to S if Ds did engage in such tactics. On the other hand, Ds’ case could not be said to be wholly unmeritorious. The outcome could potentially cause S to have to repay all costs already received from Ds. There was no informed basis for the Court to assess whether S could still recover a substantial amount as claimed, after having already received the equivalent of HK$8.5 million for an interlocutory matter. Considering all the circumstances, the Court should decline to make an order for interim payment (Baker & McKenzie v Grande Holdings Ltd [2011] 3 HKC 510 (CFI), [2013] 1 HKLRD 63 (CA), Lau Yue Kui v Philip Chan & Co (CACV 75/2014, [2014] HKEC 2141) applied). (See paras.100-108.)

Application

This was the application by the plaintiff solicitors’ firm against former clients for taxation of five bills of costs and interim payment pending taxation.

[The above is excerpted from the headnote to the report in HKLRD.]