LAU SIU LUN v. GLORY SKY PRECIOUS METALS LTD AND OTHERS

DCCJ 2061/2019

[2021] HKDC 1172

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2061 OF 2019

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DECISION

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1.  The 1^st Defendant (“D1”) took out this application to appeal from Master’s decision on costs awarded in its favour. It was an order of Master J Leung made on 10 June 2021 that the total costs be assessed at HK$1,500 on indemnity basis whilst the Statement of Costs prepared by D1 asked for HK$14,010 (the “June Order”). The June Order was made in respect of a summons taken out by the D1 on 14 May 2021 (“the May Summons”) saying that the Plaintiff had failed or refused to comply with an order from Master Leung dated 26 April 2021 (“the April Order”).

2.  In fact, there was a history on interlocutory applications taken out by the parties before the May Summons. A summons was taken out by D1 on 30 March 2021 fixed to be heard on 26 April 2021 whereby the Plaintiff was asked to provide a Further and Better List of Documents (the “March Summons”).  In response, the Plaintiff on 14 April 2021, before the return day, filed and served on D1 a Further and Better List of Documents (the “F&BLD”). Nonetheless the March Summons proceeded to be heard on 26 April by Master J Leung as scheduled.  Apparently, the F&BLD was not verified as required. After the hearing, the Plaintiff was granted leave to verify the F&BLD within 7 days from date of the April Order. Argument on costs was adjourned to 31 August 2021.  This is the April Order made in respect of the March Summons.

3.  Upon Plaintiff’s failure to comply with the April Order within time, D1’s solicitors took out the May Summons asking that “the action be dismissed forthwith with costs or that the Plaintiff be debarred from adducing the documents under Part 1 Schedule 1 of the said List of Documents”.  The May Summons was opposed by the Plaintiff.  Mr Chan of Chan & Tsu acting for the Plaintiff filed an affirmation in opposition on 3 June 2021 saying that the F&BLD filed by the Plaintiff was in full compliance with the April Order. It also said the relief asked for was too drastic.

4.  The May Summons proceeded to hearing on 10 June 2021.  An order was made by Master Leung that unless the Plaintiff files and serves an affidavit verifying the F&BLD before 24 June 2021, the Plaintiff be debarred from adducing documents in part 1 Schedule 1 thereunder.  After perusing the Statement of Costs amounting to $14,010, costs were awarded to D1 on indemnity basis and summarily assessed at HK$1,500 to be paid forthwith.  This is the subject order now under appeal.

5.  For the purpose of this appeal, Mr Ching has on behalf of D1 lodged a 16-page skeleton submissions with 21 paragraphs on the procedural history. There was also one document bundle containing more than 100 pages of court documents (the “Court Documents Bundle”) and another bundle of authorities. Due to the history of interlocutory applications made prior to the June Order, it took time for the court to trace the path up to then even with the assistance of the skeleton submissions.  In his skeleton submissions Mr Ching asked the court to take the hearing-afresh approach[1]. On 8 September 2021, he fairly put in a supplementary submissions saying that the proper approach should be that in general, a judge in chambers will not allow an appeal from a master’s costs order unless it is unreasonable or the master erred in law[2].

6.  At the hearing of this appeal, Mr Ching brought up some legal principles about assessment on indemnity basis.  Order 62 rule 28(4A) of the Rules of the District Court provides:-

“(4A) On a taxation on the indemnity basis all costs shall be allowed except in so far as they are of an unreasonable amount or have been unreasonably incurred and any doubts which the taxing master may have as to whether the costs were reasonably incurred or were reasonable in amount shall be resolved in favour of the receiving party; and in these Rules the term the indemnity basis (彌償基準) in relation to the taxation of costs shall be construed accordingly.”

7.  It is Mr Ching’s submissions that under those principles the court should only disallow costs which were of an unreasonable amount or had been unreasonably incurred when costs were awarded on indemnity basis.

8.  Mr Ching referred the court to the Statement of Costs which had been put before Master Leung on 10 June 2021[3]. It was submitted by Mr Ching that the summary assessment made on indemnity basis at the rate of HK$1,500 could not be correct.  Mr Ching went through the Statement of Costs with the court and confirmed that for item D1, Preparation of Documents, the work done included preparation of the May Summons and the Statement of Costs.  Item D2, Perusal of Documents included reading of Mr Chan’s Affirmation at the length of 4 pages[4] where he asked for 30 minues.  D3 was for Preparation for Hearing estimated for 3 minutes.  He was called in 1993 and therefore allowed to HK$3,860 for an hour. 

9.  I have read the transcripts of the May Summons hearing (the Transcripts”)[5] which recorded the reasons for Master Leung’s assessment at HK$1,500. From the Transcripts, it is clear that Master Leung has considered the following:

i.  The Plaintiff had failed to comply with the April Order to verify the F&BD by an affirmation;

ii.  The Plaintiff’s stance in resisting the May Summons was unreasonable;

iii.  Findings in (i) and (ii) above warranted a costs order on indemnity basis;

iv.  It was a 3-minute chambers hearing on a procedural matter and Mr Ching was over-qualified for dealing with the same. A lawyer with post-qualification of 7 to 8 years was able and competent to deal with the application, hourly rate at HK$3,000 allowed;

v.  Paper work and all the work concerned including attendance at hearing and preparation to be half-an-hour, hence costs assessed at HK$1,500.    

10.  I have perused the Statement of Costs and done my own assessment to see for a result. I agree with Master Leung that costs should be assessed on indemnity basis. I however find Master Leung generous on the hourly rate set for further assessment. Mr Ching said he is the only lawyer in the firm.  That is not relevant.  

11.  The time allowed for work done by Master Leung, i.e. 30 minutes, could not be said to be unreasonable in the light of the nature of the non-compliance complained of. The fact that another master or judge might allow more or less time for the same work is not sufficient to allow the appeal.  The court has to be satisfied that Master Leung has either failed to take into account proper matters or taken into account irrelevant matters. Having read the reasons set out by Master Leung, I do not see that the order made was unreasonable or that she has erred in law. For this reason, this appeal is refused.

Costs

12.  Costs should follow the event. I take into account that Mr Yuen attended the hearing because the handling solicitor was unable to do so for unforeseeable reasons. Mr Yuen could not be blamed for not being able to assist the court on the history of the previous interlocutory applications. I therefore make an order nisi that costs of this appeal be to the Plaintiff summarily assessed at HK$1,000 to be paid forthwith. The order nisi shall become absolute unless either party asks for variation of the same within 14 days from the date hereof.