MEI LIK KO FINANCE LTD v. WONG KONG HEUNG

DCCJ 3063/2022

[2024] HKDC 1770

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3063 OF 2022

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BETWEEN

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DECISION

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Introduction

1.  By a summons dated 20 June 2024, the defendant sought an order from this Court for, as described in the said summons prepared by the defendant, an approval to adjust my judgment dated 12 April 2024 from“將由法庭評定”(to be taxed [by court])” to“簡易程序評估訟費”(costs be summarily assessed).

2.  The defendant has filed an affirmation to support her application on the same date (“the defendant’s affirmation”). Both parties have filed their respective written submissions.

Background

3.  By a summons filed on 3 March 2023, the plaintiff sought summary judgment against the defendant under Order 14 of the Rules of the District Court in respect of the outstanding balance of a loan and the outstanding interest thereon.

4.  The hearing for summary judgment was heard before Master Ho who gave a conditional leave to defend to the defendant that she was to pay HK$238,633 into Court within 28 days from the date of the order on 6 October 2023 (“Master Ho’s order”).

5.  The defendant lodged an appeal against Master Ho’s decision for an unconditional leave to defend (“the appeal”) and the appeal was heard by me. I allowed the appeal and dismissed Master Ho’s order.

6.  Regarding costs, I ordered that costs should follow event. The plaintiff to pay to the defendant the costs of the appeal and the summary judgement application below, to be taxed if not agreed by the parties 「就本上訴申請（包括2023年12月28日聆訊 ) 及於2023年3月3日原告人存檔的傳票申請（包括2023年10月6日聆訊）的訟費需由原告人支付被告人，如與訴雙方未能達成協議，將由法庭評定。」(“the costs order”).

‘Adjust’ the costs order?

7.  The defendant is now seeking to ‘adjust’ the costs order from“將由法庭評定”(to be taxed [by court])” to“簡易程序評估訟費”(costs be summarily assessed). The defendant did not explain what she meant by ‘adjusting’ a costs order. This Court, however, gathered from the defendant’s affirmation and written submissions that the defendant is seeking to vary the costs order.

8.  As shown in the background above, the costs order is not a costs order nisi which allows the parties to vary within the time prescribed in the order. For a costs order absolute, one has to lodge an appeal to challenge it. Thus, the defendant should have sought leave to appeal against the costs order if she so wishes.

9.  Nonetheless, since the defendant is a litigant in person and for sake of completeness in case I am wrong to say the above, I would also give my decision on the defendant’s application.

Defendant’s Affirmation

10.  According to the defendant’s affirmation, the defendant on 28 May 2024 sent to the plaintiff the defendant’s statement of costs and urged the plaintiff to reply on or before 3 June 2024. Since the defendant had not received the plaintiffs’ reply, she made the present application on 20 June 2024.

11.  The defendant further said in the defendant’s affirmation that she has studied the “Guide to General Civil Proceedings in High Court and District Court” (“the Guide”) and encountered a number of problems which are shown as follows:

(a) for taxation proceedings, the information in relation to “the items of work done, by whom and on what dates they were done” was required and the defendant said that she was unable to remember the items of work done by what dates because she has been handling a few legal cases since July 2022 in person;

(b) a “prescribed taxing fee, which is calculated based on the amount of costs claimed in the bill” is required to be paid when you file the Notice of Commencement of Taxation and the defendant said that she did not have money to pay the prescribed taxing fee; and it was unfair to her if she could not proceed the claim for costs because she could not pay the prescribed taxing fee.

12.  By reason of the aforesaid problems, the defendant asked the Court to vary the costs order to “summary assessment of costs”.

Defendant’s Skeleton Submission

13.  At the outset of the defendant’s Skeleton Submission, the defendant blamed the plaintiff for their registration of the loan agreement between the plaintiff and defendant on the land register which in turn disclosing the loan to the public. This, in gist, has caused the defendant inability to refinance loan application and to sell her mortgaged property. It also alerted the other banking or finance institutions to call loan in full. It also caused the “Slander of Title” of her property with which she could not either sell or refinance for cash.

14.  Moreover, she had offered the plaintiff to be the beneficiary of her life policies to replace the registration of the loan agreement but it was rejected by the plaintiff. The defendant said that all these proved her sincerity to repay the loan to the plaintiff.

15.  In the present proceedings, the defendant had no money to appoint a solicitor to represent her, so she started to spend countless hours and lots of money to prepare the information, to sort out the materials, and to xerox the documents for applying the Legal Aid.

16.  At the same time, she had to organize the legal proceedings by herself including making appointments in different agencies or institutions for free legal advice and drafting pleadings and affirmation and other court documents.

17.  Furthermore, the defendant did not have time to earn money, not even doing part-time jobs. Thus, she could not extend her loan period. All her life insurance policies were cancelled and her property has been repossessed by bank.

18.  The defendant concluded that she spent lots of time and money to handle the legal proceedings and at the same time she lost her property, her life policy and all her savings. The defendant said that as a result the plaintiff should compensate the legal costs to her.

Plaintiff’s Skeleton Submission

19.  The plaintiff objected the defendant’s application and argued that there was no agreement on costs between the parties, and the costs should therefore be taxed by the court. Moreover, since there was no order for submissions on costs made by this Court, the plaintiff, citing Order 62 rule 9D(1), argued that the costs of any proceedings shall not be taxed until the conclusion of the action.

20.  Besides, the plaintiff cited Order 62 rule 9C(1) and argued that there were substantial grounds for disputing the sum claimed by the defendant and thus the assessment could not be dealt with summarily. The plaintiff further elaborated that the defendant claimed legal costs of a total sum of HK$1,786,820 which was based on 8,490 hours of preparation work which in turn was equivalent to almost 3 years of the billable time of a solicitor.

21.  Furthermore, the plaintiff said that the defendant has not made any reasonable offer for repaying the loan to the plaintiff and thus argued that it was totally unfair to the plaintiff who was in fact the creditor to the defendant if summary assessment on costs was ordered.

22.  Alternatively, the plaintiff, citing Cheuk Shu Yin v Law Yeuk Kam (No 2) [2018] 2 HKLRD 249, argued that the defendant had no job and there was no evidence of pecuniary loss. Also, the present case was not complicated and therefore the defendant should only be allowed an hourly rate of HK$100 and the numbers of hour allowed should be the time for a solicitor to spend on the work but not the actual time taken by the defendant.

23.  The plaintiff concluded that the costs should be taxed after the conclusion of the action and also that the total sum of assessed costs payable by the plaintiff to the defendant should not be more than HK$3,640 as calculated in plaintiff’s statement of costs if this Court considered summary assessment was appropriate.

Analysis

24.  In this application, despite the wordings ‘adjust the judgement’ used by the defendant, she is in fact seeking to vary the costs order to summary assessment of costs.

25.  Regarding summary assessment of costs, Order 62 Rule 9(4)(b) of the Rules of District Court reads:

“(4) The Court in awarding costs to any person may direct that, instead of taxed costs, that person shall be entitled:

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(b) to a sum of money summarily assessed in lieu of taxed costs.”

26.  It is clear from the above Order 62 Rule 9(4)(b) that an order for summary assessment can only be made by the court which awarded costs. In the appeal hearing, submission on summary assessment of costs should have been made for the consideration of this Court before the costs order was made. No submission was made by the defendant and this Court after much consideration ordered the plaintiff to pay to the defendant the costs of the appeal and the summary judgement application below, to be taxed if not agreed by the parties. And, the costs order was final and application for summary assessment was no longer possible.

27.  Further, again as mentioned in the above, the costs order was not a costs order nisi which could be varied by parties within the prescribed time. The costs order is a final order and an application for variation of it is not an proper avenue to alter the costs order.

28.  In short, the defendant’s application for summary assessment of costs now is not viable.

29.  But, for the sake of completeness, I would deal with the rest of the defendant’s submissions hereinbelow.

30.  Concerning the defendant’s submission that she was not able to remember the items of work done and by what dates, this Court however thinks otherwise since the defendant was able to compile in the defendant’s statement of costs a long list in relation to items of work done and the hours spent on each item. The work done were carefully categorised into 9 items with specific descriptions and the exact number of hours were precisely calculated without round up figures. It is evident that she is capable to meet the said requirement as stated in the Guide and prepare a detailed bill for taxation. The defendant’s statement of costs per se is a good proof of it.

31.  Besides, 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, a bill in the format of a statement of costs can serve the purposes of a bill. (See 釋照月v Secretary for Justice, CACV 221/2017, para. 26) In other words, the defendant as a litigant in person could have commenced the taxation proceedings by submitting the defendant’s statement of costs for assessment. It is not a must for her to retain a law costs draftman to do the assessment.

32.  Further, for bill of costs in the amount of HK$200,000 or below, the assessment will be done by a Chief Judicial Clerk of the Registry who under Order 62 Rule 13 of the Rules of District Court shall have power to transact all such business and exercise all such authority as under rule 21B of this Order may be transacted and exercised by the taxing master and to issue a certificate for any costs taxed by him.

33.  The defendant also submitted that it was unfair to her if she could not proceed her claim for costs simply because she could not pay the prescribed taxing fee to commence the taxation proceedings. Regarding the payment of prescribed taxing fee for Taxation of Costs, Rule 20 of the District Court (Fees) Rules, Cap 336C, stipulates that the fee, on the filing of a notice of commencement of taxation, is only $5 for every $100 of the amount claimed, i.e. 5% of the costs claimed. Moreover, at the end of the taxation proceedings, the paying party will, on top of the award of costs, pay 5% of the amount of the costs awarded to the receiving party. In other words, if the defendant succeeds in claiming the amount of costs sought by her, the paying party, i.e. the plaintiff, would repay the prescribed taxing fees to the defendant.

34.  According to the defendant’s statement of costs, she is claiming a total sum of HK$1,786,820 which was based on 8,490 hours of preparation work. As submitted by the plaintiff, that was equivalent to almost 3 years of the billable time of a solicitor! The costs order only dealt with the costs in the Order 14 application and the appeal against Master Ho’s order. The nature of the dispute was not a complicated one and it related to a loan agreement only. The number of hours spent on preparation was obviously excessive and not genuine. For claiming a sum of HK$1,786,820 as legal costs, a prescribed taxing fee of around HK$89,000 was required. This was not a small amount to pay and it was entirely caused by defendant’s building up the figure for costs.

35.  Furthermore, the defendant submitted that she has spent countless hours and a lot of money in preparing the cases and in seeking free legal advice. She has claimed all these hours, i.e. 8,490 hours in total in the defendant’s statement of costs. As cited by the plaintiff, in Cheuk Shu Yin v Law Yeuk Kam (No 2) [2018] 2 HKLRD 249 which is a Decision on Costs, the Court of Appeal held at para. 4 that if the litigant in person had no job, he may be allowed costs of not more than $200 per hour and the number of hours allowed was the time a solicitor would have spent on that item, not the time the litigant in person has actually taken. This has completely answered the defendant’s claim of 8,490 hours in her statement of costs, i.e. 8,490 hours would not be allowed in any event.

36.  Even putting the defendant’s case to the highest that the claim of HK$1,786,820 as legal costs was a genuine figure, it is still not appropriate to award costs through summary assessment. It was because, apart from the 9 items of work done, defendant’s statement of costs also included an item claiming for defendant’s loss of earnings. With such a detailed categorisation of work done, in particular defendant’s loss of earnings and the extraordinarily long hours spent on the work done, I am of the view that the plaintiff should be given a chance to dispute each item of the defendant’s work done. Moreover, I also think that it is appropriate for a taxing master to assess each item of work done and then work out the final amount of costs payable by the plaintiff.

37.  In the costs order, this Court has made it clear that the plaintiff do pay costs to the defendant, to be taxed if not agreed. There was no agreement made between the parties and it follows that the defendant should have proceeded to commence the taxation proceedings rather than making this application to adjust or vary the costs order.

38.  In defendant’s skeleton submissions, she also described a list of events showing her sincerity to repay the loan to the plaintiff. With respect, these are not relevant to her application to vary the costs order to summary assessment.

Conclusion

39.  For reasons stated aforesaid, I hold that the defendant’s application fails.

40.  Regarding the costs of the present summons, it should follow event, i.e. the defendant should bear the costs of the plaintiff. Since the plaintiff did not file a statement of costs for the defendant’s summons pursuant to the Court’s directions made on 2 August 2024, costs of the present application to be taxed if not agreed.

Order

41.  I make the following orders :-

(1) The defendant’s Summons dated 20 June 2024 be dismissed; and

(2) The costs of the defendant’s Summons dated 20 June 2024 be paid by the defendant to the plaintiff, to be taxed if not agreed.