A respondent's obligation to pay costs under the LPA permits taxation of a solicitor's bill, even if the six-month limitation period is breached, unless special circumstances exist to justify the delay.

Ravinthran Paramaguru JCA:

Introduction

[1] This is an appeal against the decision of the High Court that allowed the respondent's application to tax a solicitor's bill under s 126 of the Legal Profession Act 1976 ( LPA ).

Brief Background Facts

[2] The respondent is a law firm. It was made a third party by its former client, ie Brightdale Sdn Bhd in a civil suit filed in the Shah Alam High Court in June of 2015. The respondent notified its insurer, Pacific & Orient Insurance who is also the insurer for all lawyers under the Bar Council's Professional Insurance Indemnity Scheme. The insurer appointed Mr Leong Wai Hong of M/s Skrine to act for the respondent. Subsequently, Mr Leong Wai Hong discharged himself and a fee of RM5,000.00 was paid to M/s Skrine. By August of 2016, parties in the legal suit were attempting to settle the dispute. On 16 August 2016, the insurer appointed Mr Wong Hok Mun of M/s Azim, Tunku Farik & Wong who are the appellant herein to represent the respondent in the matter that was pending settlement. But in an e-mail dated 21 October 2016, the respondent informed the appellant about the settlement effort and requested Mr Wong Hok Mun to "stand down" until there is clear indication that the matter is going to trial.

[3] The settlement negotiations eventually bore fruit and the consent judgment between all parties was recorded on 2 February 2018. Before the settlement was concluded, the insurer forwarded M/s Azim, Tunku Farik & Wong's bill in the sum of RM13,684.60 to the respondent. On the same day, the respondent replied to the insurer to say that the bill was excessive, exorbitant and unreasonable. Attempts to settle the matter between appellant and respondent failed. The insurer demanded payment of the bill via email dated 12 June 2018. The respondent brought the matter to the Bar Council Professional Indemnity Insurance Committee and a meeting was held between all parties. The respondent was informed by the said committee on 27 September 2018 that they were at liberty to tax the bill if they wished. The respondent also requested for a detailed bill but was informed by the committee that the request was declined by Mr Wong Hok Mun.

[4] The respondent filed the instant originating summons to tax the bill under s 126 of the LPA . The learned High Court allowed the application and hence this appeal by the appellant. The reasons given by the learned High Court Judge may be summarised as follows:

(a) The respondent is liable to pay the fees although the party chargeable under the insurance contract is the insurer;

(b) It follows that the respondent has a right to tax the Bill of Costs;

(c) Although the six-month period had expired, there were special circumstances;

(d) The reason is that the bill gave no details and that it was excessive and unreasonable.

Issues

[5] Having regard to the submissions of the parties, the issues that arise in this appeal are;

(a) Privity of Contract;

(b) Whether application to tax was time-barred?

(c) Whether special circumstances exist?

Privity Of Contract

[6] Whether the respondent has the right to tax the Bill of Costs is a major point of contention between the parties. Although, taxation of costs between opposing parties for Court ordered costs has been done away within the Rules of 2012, under the LPA , a disputed Bill of Costs issued by an advocate and solicitor may be taxed upon the application of the party chargeable or a party liable to pay. Section 126 provides as follows:

126. An order for taxation of costs to be made within six months of delivery of bill of costs

(1) An order for the taxation of a bill of costs delivered by any advocate and solicitor may be obtained by a petition as a matter of course by the party chargeable therewith, or by any person liable to pay the cost either to the party chargeable or to the advocate and solicitor, at any time within six months from the delivery of the bill, or, by the advocate and solicitor after the expiration of one calendar mon