釋照月 v. SECRETARY FOR JUSTICE AND OTHERS

CACV 221/2017

[2019] HKCA 278

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 221 OF 2017

(ON APPEAL FROM HCMP 496/2017)

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JUDGMENT

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Hon Lam VP:

1.  We handed down our judgment on 10 August 2018 with a costs order nisi. The costs order gave the costs of the appeal to the applicant. Though we have not said so expressly in the judgment, the costs should be taxed if not agreed, see Order 62 Rule 9(1) and Rule 11(1).

2.  There was no application for variation of the costs order nisi within the prescribed time.  The order became absolute on 24 August 2018 according to Order 42 Rule 5(6).

3.  By a notice of 10 September 2018, the applicant sought to commence taxation of costs.  A statement of costs of 13 August 2018 had been sent to solicitors for the 3^rd defendant by post on 16 August 2018 and lodged with the Court on 10 September 2018.  The statement of costs was prepared in a format for summary assessment.

4.  On 19 October 2018, the applicant issued an application to fix a date for taxation of his costs.  On 26 October 2018, a staff of the Registry notified the applicant that there were some procedural errors in his application.  He was told that he had to amend the date of a document and pay the fees for taxation. 

5.  The applicant responded by a letter of 26 October 2018, in which he objected to the return of his documents.  He said he sought summary assessment of his costs.  He also supported his application by a set of skeleton submissions of 26 October 2018 in which he stated at paragraph 1 that he applied for summary assessment of his costs.

6.  This prompted a reply from the Registrar of Civil Appeals on 7 November 2018.  In that reply, the Registrar drew the applicant’s attention to the distinction between two different options.  The first is an application for summary assessment, the second is an application for commencement of taxation.  The reply was also copied to solicitors for the 3^rd defendant.

7.  However, the Registrar did not alert the applicant to the fact that summary assessment was no longer possible given that an order for summary assessment can only be made by the Court which awarded costs (see Order 62 Rule 9(4)(b) of the Rules of the High Court) and we did not make such order in our costs order nisi of 10 August 2018 which had since become absolute.

8.  In response to the directions of the Registrar, the applicant filed a summons on 22 November 2018 seeking an order for summary assessment and supported the same by an affirmation of the same date.  

9.  On 4 December 2018, the summons of 22 November 2018 came before Master G Chan.  In light of the significance of that hearing, we have obtained a transcript of the hearing. 

10.  At the beginning of that hearing, the applicant told the master that he applied for summary assessment.  After confirming with him that he really sought summary assessment (as opposed to taxation), the master rightly pointed out to him that order for summary assessment had to be made by the judge who made the costs order, viz he had to come back to the Court of Appeal to seek that order.

11.  The master also alluded to the possibility that as he had not sought summary assessment at the hearing of the appeal, it might no longer be viable.

12.  The master then explained to him the process of ordinary taxation and why his notice of 10 September 2018 was not adequate for commencement of taxation due to the wrong format of the bill and his failure to pay the taxing fee in accordance with Order 62 Rule 21(5). 

13.  The applicant told the master that after reading the letter of 7 November 2018 he thought he could choose between summary assessment and taxation.  He decided to opt for summary assessment.

14.  After the master reiterated to him the procedural difficulties of summary assessment and the progress of taxation, the applicant said he sought to withdraw the summons of 22 November 2018 and intended to proceed by way of taxation with the payment of taxing fee.

15.  There was subsequently a change of mind on the part of the applicant.  Instead of proceeding for taxation with the payment of taxing fee, the applicant filed a summons on 7 December 2018 seeking an order for summary assessment and supported the same by an affirmation of the same date.

16.  Upon receipt of that summons, solicitors for the 3^rd defendant wrote to the Registrar and contended that summary assessment was no longer viable and that the costs should be taxed.

17.  The applicant replied on 23 December 2018 stating that he acted in accordance with the directions of the Registrar and the master in applying for an order for summary assessment.  He also said he did not appreciate the distinction between summary assessment and taxation. Having said that, he referred to PD 14.3 providing that costs for interlocutory proceedings should be fixed by summary assessment.

18.  On 4 January 2019, solicitors for the 3^rd defendant lodged a set of submissions reiterating that by virtue of the expiration of time for variation of the costs order nisi of 10 August 2018, the only viable route is taxation.

19.  The Court made the transcript of 4 December 2018 available to the parties and invited the applicant to lodge supplemental submissions in light of the same and to respond to the submissions of 4 January 2019.

20.  The applicant lodged supplemental submissions on 10 February 2019.  As explained in his submissions of 10 February 2019, he changed his mind and did not adopt the stance he took before the master (viz going for taxation as opposed to application for summary assessment).  He issued the summons of 7 December 2018 (asking for summary assessment) because he took the view that notwithstanding the time lapse he could seek extension of time to ask the Court of Appeal to entertain his application for summary assessment which was appropriate in view of PD 14.3 and Order 1A Rule 1.

21.  He also accepted that he had failed to comply with the rules in handling the costs matter.  He however urged the Court not to adopt a rigid approach (citing Islamic Republic of Iran Shipping Lines v Phiniqia International Shipping [2015] 1 HKLRD 44 at [4]).  He reiterated that he had submitted his statement of costs very soon after the judgment of 10 August 2018 was handed down.

22.  We also noted that the costs he asked for in that statement of costs was $159,963 of which $29,763 were disbursements.

23.  In our judgment, it is unfortunate that a simple matter of fixing the costs awarded in favour of the applicant has taken so much procedural twists and turns.  The applicant served the notice of commencement of taxation on 10 September 2018, after having served his statement of costs on the solicitors for the 3^rd Defendant on 14 August 2018.

24.  Though he did not pay the taxing fee in accordance with Order 62 Rule 21(5)[1], it does not affect the validity of the notice of commencement.  We cannot see any basis for saying that the non-payment of taxing fee would render the notice ineffective.  At the same time, the registry can demand the payment of that fees before proceeding further with the taxation.  There is no need for the date of the notice to be amended or for the notice to be served again.

25.  Thus, taxation proceedings had already been commenced.

26.  In a case where the receiving party is a litigant in person, there is not much point in insisting on the format of a bill for taxation as prescribed.  In most cases (other than those the party had at some stage been legally represented), a bill in the format of a statement of costs can serve the purposes of a bill.

27.  With the service of the notice and the bill on the 3^rd Defendant, the latter should respond to the same in accordance with Order 62 Rule 21(6) within 7 days of such service.  The 3^rd Defendant had not done so.  Nor did the 3^rd Defendant file and serve a list of objections within 28 days as required under Rule 21(1) of PD 14.3.

28.  The complication of the matter was occasioned by the confusion of taxation with summary assessment.  As explained at [1] and [2] above, the costs order became an order absolute on 24 August 2018.  Though the Court does have the power to extend time, once a costs order nisi has become absolute it is not simply a matter of extension of time.  By reason of the combined effect of Order 42 Rule 5(6) and Order 2 Rule 4, the applicant needs to obtain relief under Order 2 Rule 5 before the effect of the order absolute can be overturned, see Poon Ching Man v Lam Hoi Pun [2016] 3 HKLRD 815 at [42].

29.  The applicant did not apply for relief.  Even if he were to make such application, it is unlikely for relief to be granted given the lapse of time and the availability of taxation as a remedy to him.

30.  It is a misconception on the part of the applicant that the process of taxation must be a long drawn out complicated one.  Given the amount he sought, the matter can be dealt with without any hearing pursuant to Order 62 Rule 21B by a Chief Judicial Clerk under Order 62 Rule 13.  In light of what we said above, he could resume the process of taxation by payment of the taxation fees.

31.  The applicant was also mistaken in regarding this matter as an interlocutory application.  The costs we are concerned with are costs of the appeal.  The appeal was brought against a striking out of his statement of claim, which is not classified as interlocutory matter, see Order 59 Rule 21(2)(b).  We express no view on whether the Court will give a summary assessment if he had placed before us a statement of costs at the hearing of the appeal.  We are however of the clear view that in the present circumstances, the matter should go for taxation as suggested above.

32.  For these reasons, we dismiss the summons of 7 December 2018 without prejudice to the resumption of the taxation proceedings commenced by the notice of 10 September 2018.  For the purpose of the taxation proceedings, we direct the applicant to pay the taxation fees within 14 days from the handing down of this judgment and upon notification of such payment, the 3^rd Defendant shall have 28 days to file a list of objections.

33.  If the applicant does not pay the taxation fees as directed, he would be deemed to have abandoned the taxation proceedings.

34.  Regarding the costs of the summons, we would only give half of the costs of it to the 3^rd Defendant as we are of the view that the 3^rd Defendant was in default in not responding to the notice of commencement and in not filing the list of objections.  Though they succeed in resisting the summons seeking summary assessment, those acting for the 3^rd Defendant had not been forthcoming with their objections to taxation and the bill of costs.  The half costs of the 3^rd Defendant shall be taxed at the same time of the taxation of bill of the applicant and there shall be mutual set off of the two taxed amounts.