KAN WAI CHUNG AND OTHERS v. HAU WUN FAI AND OTHERS

HCA811/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 811 OF 2010

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 868 OF 2013

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D E C I S I O N

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1.  This is the taxation review hearing brought by the defendants to review the plaintiffs’ Bill of Costs dated 3 June 2013 taxed by me on 8 August 2014.

2.  The bill was prepared by the plaintiffs pursuant to the Order of the Court of Appeal dated 7 February 2013 (“the said Order”) whereby the defendants were ordered to pay the plaintiffs costs of the appeal (in CACV 43 of 2012 on appeal from HCA 811 of 2010) and below on party‑and‑party basis, save the plaintiffs’ costs of preparing the hearing bundles for the appeal be disallowed.

3.  At the substantive hearing of the taxation of the bill, the defendants asked that the hearing be adjourned for their clarification with the Court of Appeal as to whether under the said Order, the defendants need to pay the costs of the plaintiffs below in relation to the setting aside of the default judgment.

4.  Subsequent to the adjournment, despite the defendants’ request, Court of Appeal refused to make clarification.  In the letter dated 20 February 2014, Court of Appeal replied that:-

“...The costs order in the formal order as drawn up correctly reflects the costs order made by the court, and it is now far too late to seek to re‑open the matter. The taxation should therefore be carried out in accordance with the costs order as it stands. ”

5.  In fact, the said Order reads:-

“UPON READING...appeal from the order of the Honourable Mr. Justice Poon made on the 6^th day of February 2012, whereby it was ordered that the Plaintiffs’ default judgment dated 30^th October 2020 be set aside, appeal of the Defendants against the Decision of Master R. Lai dated 11^th October 2012 be allowed, that the Statement of Claim be struck out, and the action dismissed with the costs of Defendants of the action including the costs of their appeal [before Poon J] and the setting aside application and the costs before the Master be to the Defendants with certificate for two counsel.

AND UPON READING the said Order

IT IS ORDERED that this appeal be allowed to the extent that the order striking out the Plaintiffs’ claim and dismissing the action is set aside

IT IS FURTHER ORDERED that there will be a cost order nisi that costs of the appeal and below be paid by the Defendants to the Plaintiffs to be taxed on party‑and‑party basis. ”

6.  In the judgment of the Court of Appeal, they mentioned explicitly they will not disturb the setting aside of the default judgment by Poon J.

7.  Although the Court of Appeal did explicitly deny the Plaintiffs’ entitlement to the costs of the preparation of the appeal bundle, in the said Order, they did not mention that the Plaintiffs are only entitled to part of costs below, it follows therefore that they are entitled to the whole of the costs below.  The Defendants did not seek to vary the costs order nisi given by the Court of Appeal, the same is therefore made absolute and are binding on the defendants.

8.  The defendants’ interpretation of the said Order, that the plaintiffs are not entitled to costs below if they should relate to setting aside of the default judgment, is flawed.  They are adding words to the said Order.  It must be remembered that costs is always a matter of discretion of the court.  The fact that the Plaintiffs did not succeed in full the whole appeal does not entail a necessary consequence that they are not entitled to full costs below.

9.  The Defendants adopted the objections raised in the Appointment to Review as their submission for the review.

10.  In the Appointment to Review dated 19 August 2014, Defendants objected to items 5, 6, 15, 18, 20, 21, 24 and 28 solely by the reason of the said Order not covering these items, as they relate to setting aside of default judgment, by reasons aforesaid, I refused to accept these objections and I maintain my rulings on these items.

11.  Likewise, the defendants objected to the costs allowed to the plaintiffs for the following items, for reason that certain percentage of these items of work attributed to application for setting aside the default judgment, such as 20% for item 16, 25% for item 37, 20% for item 38 and 50% for item 63 and 50% for item 64, certain letters for item 65.  Again, for reasons said earlier, I refuse to accept these objections.  I maintain my rulings on these items.

12.  The additional ground of objection for item 63 is that as the appeal was on paper, few instructions were required.

13.  This bill of costs covered period from the Notice of Intention to enter Judgment on 15 June 2010 to June 2012.  During this period, default judgment was entered against the defendants, affidavits were filed including that of some of the plaintiffs, appeal was subsequently lodged by the defendants seeking to strike out the plaintiffs’ statement of claim and dismissing plaintiffs’ action, application by defendants was made to set aside the defendant judgment entered, affirmations were prepared by both sides for these applications, discussion as to briefing of counsels and choice of counsels are all necessary.

14.  The hearing before Mr. Justice Poon, as he then was, would decide whether to set aside the default judgment already entered in favour of the plaintiffs and further whether to strike out the plaintiffs’ statement of claim and dismiss his action.  If the defendants succeed, the plaintiffs will be denied the fruits of the judgment already in hand and he will also be denied of having his claim heard in court.  The appeal therefore is of paramount importance to the plaintiffs.

15.  The plaintiffs’ solicitors need to take full instructions from the plaintiffs in preparing affirmations for the hearing as well as explaining and advising the plaintiffs throughout the progress of the case.

16.  I maintain my rulings of 7 hours for solicitors conferences as the same is necessary.

17.  Coming to the dispute on counsel fees allowed.

18.  Defendants objected to part of the counsel fee of Mr. Y.C. Mok as they relate to the setting aside of default judgment and therefore not covered by the said Order.  For the same reasons above, I refuse to accept this ground of objection.

19.  They further submitted that brief of counsel, should cover all the work done by way of preparation for representation at the trial and attendance on the 1^st day of trial.  They say the counsel is not normally entitled to be remunerated separately for necessary work which is incidental to the proper representation of the client.

20.  Further, they say the brief fee of $250,000 is excessive.  Mr. Mok is not a Senior Counsel but his brief fee at $250,000 may exceed those of quite a number of Senior Counsels.

21.  As said by the Plaintiffs, the Defendants were represented by two strong teams of counsels.  The 1^st, 3^rd, and 4^th Defendants were represented by Mr. Rimsky Yuen SC leading Ms. Zabrina Lau whereas the 2^nd Defendant was represented by two senior junior Mr. K M Chong and Ms. Emma Wong.

22.  Voluminous documents were first sent to counsel, the trial bundles consist of well over 2,500 pages of copied documents which consist also of other pleadings and documents in HCA 1517‑1521 of 2005 of which neither the instructing solicitors nor counsel had participated.

23.  A lengthy Plaintiffs’ (Respondents’) Skeleton Argument as well as the List of Authorities consisting of 26 cases and authorities was compiled by counsel.

24.  According to the plaintiffs, Mr. Mok had accepted the Brief on the basis that he would be assisted by a junior counsel.

25.  Mr. Y.C. Mok is a very senior junior counsel, called to the bar in 1975 and is a well respected successful barrister. Although he has not taken silk, it does not mean the counsel fee that he fetches must be lower than that of senior counsel.

26.  I had previously allowed counsel fee of $250,000 as his brief and another $50,000 for his work done within the period commencing from nearly 2 weeks prior to his day in court which includes his formulating arguments, engaging in discussion with the junior counsel by telephone and email on various occasions.

27.  Mr. Mok only charged $60,000 for his refresher.

28.  I have reconsidered the counsel fee allowed for brief under this item and I maintain my rulings at $250,000.

29.  Upon reconsideration as to the $50,000 counsel fee, the work was done within 2 weeks of the hearing date and was performed after delivery of the brief, and having regard to the fact that the same can be considered as preparation for representation at the trial and attendance on the first day of trial. (Hong Kong Civil Procedure 2015 Vol. 1, para.62/APP/31 p.1212)

30.  I have decided to tax off the sum.

ITEM 3 IN SECTION B

31.  Defendants said counsel is not entitled to be remunerated separately for the preparation of final submission, that they should have been included in the brief of refreshers: Loveday v. Renton (No.2) [1992] 3 All E.R. 184.

32.  Plaintiffs said that in this case, the Plaintiffs’ Reply Submissions was prepared and lodged pursuant to the directions made by Mr. Justice Poon at the end of the hearing on 8 November 2011.  When negotiating the Brief, both counsel and the instructing solicitors were not aware of or have expected the need for preparation of a full Reply Submission.

33.  Counsel had to review the Supplemental Skeleton Reply and the 5^th List of Authorities of the 2^nd Defendant, the Reply Submissions for D1, D3 and D4 before preparing this Reply Submission.

34.  It was said by Mr. Mok that the 22 pages documents were the result of 32 hours work.  I do not doubt either his integrity or his ability and therefore conclude such work is necessary in preparing the submission, $80,000 for this item means $2,500 per hour.

35.  In the circumstances of this case, I accept that the preparation of this Reply Submission, a full submission, should not be counted as being included in the brief fee or the refresher as in the normal case where skeleton arguments are to be included in the brief or the refresher.

36.  I therefore maintain my ruling on this item.

COSTS

37.  As the defendants fail to succeed on most of the items under review, I made an order nisi that they shall pay the plaintiffs 85% of the costs of the review for this bill, the same to be summarily assessed.

38.  The plaintiffs do lodge and serve within 7 days after the order nisi is made absolute the statement of costs for summary assessment and the defendants shall lodge and serve their comments thereto within 7 days thereafter.