TAIBAO INVESTMENT AND MANAGEMENT (HONG KONG) COMPANY v. KARY ENTERPRISES (HOLDINGS) LTD AND ANOTHER

CACV 279/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 279 OF 2013

(ON APPEAL FROM HCA NO. 642 OF 2011)

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BETWEEN

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DECISION ON SUMMARY ASSESSMENT OF COSTS

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1.  On 6 June 2014, the plaintiff’s appeal herein was by consent ordered to be dismissed with costs to the 1^st defendant to be assessed summarily.

2.  Pursuant to the directions of the court, the 1^st defendant had provided a statement of costs and the plaintiff had provided its objections to it.

3.  The 1^st defendant’s costs of the appeal including the costs of the application for security of costs come up to $302,831.

4.  Several general points have to be made about this summary assessment:

(1) The basis of the assessment of the 1^st defendant’s costs is party-and-party. Generally speaking, only the fees of one fee earner will be allowed on any piece of work done.

(2) This appeal is against the Decision of Chung J dated 12 December 2013 ordering the plaintiff’s claim against the 1^st defendant to be struck out.  The appeal is closely related to HCMP3445/2013, in which the plaintiff sought leave from the Court of Appeal to appeal against Chung J’s earlier decision of 28 May 2013, reversing the Master’s order granting leave to the plaintiff to amend the statement of claim.  The application was dealt with on paper.  On 9 April 2014, Yeung VP and Cheung JA dismissed the leave application with costs against the plaintiff.    

(3) The issues in this appeal, as appeared from the notice of appeal, are straightforward and relate primarily to legal arguments on procedure. 

(4) This appeal has a short history. After the notice of appeal was served on 24 December 2013, the 1^st defendant issued an application for security for costs on 9 January 2014 which was fixed to be heard on 25 June 2014.  On 5 June 2014, the consent summons to dispose of the appeal and the security for costs application was filed.

(5) Although the exhibits to the affirmations in support of the security for costs application are voluminous, they are not complex.  Many of the exhibits are court documents and bill of costs in the court below.

5.  The second to fifth points are relevant to considering the amount of time incurred by the fee earners especially with regard to drafting and perusal of papers and also preparation for the case.

6.  In my view, the following items in the 1^st defendant’s statement of costs call for reduction:

(1) C1 to C4: attendances on client, the plaintiff, counsel and the court 

  A total of 11.25 hours is claimed (2.75 hours by AS and 8.5 hours by AK).  In the light of points (4) and (5) in paragraph 4 above, the amount of time spent is excessive on a party-and-party basis.

(2) D1: Preparation of documents

  A total of 27 hours was incurred for the work on five documents (18 hours by AS, 6 hours by AK and 3 hours by trainee solicitor (TS)). First, this clearly suggests a fair amount of duplication of work among the fee earners.  Second, with counsel being involved throughout and had charged a total of $51,200 for drafting documents, the time and costs claimed is excessive.  Third, with counsel being retained, any fee for revision of draft skeleton submissions is not to be allowed on party-and-party assessment.

(3) D2: Perusal of documents

  A total of 26 hours was incurred for this item (18 hours by AS and 8 hours by AK).  The time incurred is rather excessive because of points (2) to (5) in paragraph 4 above and having regard to the fact that this is a party-and-party assessment.  It should further be borne in mind that the appeal was concluded well before the hearing of the security for costs hearing and the appeal did not proceed to any hearing.  The necessity to read (or at the very least to read in depth) the documents, hearing bundle, submissions and authorities for the hearing before Chung J is not apparent.  

(4) D3: Preparation for hearing  

  Both AS (2 hours) and TS (4 hours) incurred time on preparing the bundles for the hearing of the application for security for costs.  This is clearly a duplication of the work.

(5) E2 and E3: Counsel’s fee for perusal of documents and conference

  Given that counsel was throughout involved in the litigation, and had already charged for conference, perusal of paper could not be recovered as a separate item on party-and-party assessment.

7.  Having regard to the reasons set out in paragraph 6 above and taking a broad-brush approach, I assess the costs of the 1^st defendant to be paid by the plaintiff to be in the sum of $180,000.