XCHRX LAI MAY HING v. LAI SAI FUK

HCA14170/1997

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.14170 OF 1997

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J U D G M E N T

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1. This is an appeal by the defendant from the order of Master Barnes made on 19 September 2000 whereby she dismissed the summons of the plaintiff dated 25 July 2000 pursuant to Order 62, rule 22(HK)(1).

2. What happened was this. On 16 March 1999, by the judgment of Cheung J, a costs order was made in favour of the plaintiff. The defendant, therefore, has an obligation to pay any costs that may be taxed or agreed.

3. The party apparently took some time to discuss the question of the amount of costs to be paid, but by 31 May 2000 the defendant's solicitors were writing to the plaintiff's solicitors demanding the taxation bill. That was followed by another letter of 28 June 2000 from the defendant's solicitors requesting the same. By letter dated 4 July 2000, the plaintiff's solicitors informed the other side that the bill was being prepared and would be available as soon as possible. By summons dated 25 July 2000, the defendant applied to the court. On 10 August 2000, the bill of costs was filed by the plaintiff but no appointment was obtained by the plaintiff for taxation of costs.

4. The statutory scheme in relation to taxation of costs is set out under Order 62. It seems to me that Order 62, rules 21(HK) and 22(HK) are relevant. Rule 21(HK)(1) and (2) reads as follows :

"(HK)(1) A party entitled to require any costs to be taxed shall file in the Court his bill of costs and shall obtain from the taxing master an appointment to tax.

(HK)(2) Not less than 7 days' notice of such appointment to tax together with a copy of the bill of costs shall be served by such person on every person entitled to be heard on taxation."

Rule 22(HK) provides as follows :

"(HK)(1) If, within one month after an order of the Court requiring the payment of any costs to be taxed, the person entitled to payment thereof has neither agreed the amount of such costs with the person liable to pay the same nor served upon such person a notice of appointment to tax in accordance with rule 21, the taxing master, on the application of the person liable to pay such costs and on not less than 7 days' notice to the person entitled to payment thereof, may order that the person entitled to payment of the costs shall proceed to taxation in accordance with rule 21 within such period as the taxing master may order.

(2) If within the period ordered by the taxing master or any extension thereof granted by a taxing master, notice of appointment to tax has not been served in accordance with rule 21 and the amount due has not been agreed between the parties, the order of the Court requiring payment of the costs shall thereupon be wholly discharged."

5. It will be seen that the statutory scheme operates on the basis that if a party who has a costs order in its favour has not filed the bill of costs and, more importantly, has not filed or given notice of the notice of appointment to tax, then the paying party has the right to apply to the court for an appropriate order requiring the winning party to proceed to taxation within a certain number of days. The sanction under such order made is rule 22(HK)(2) because if there is non-compliance with it, then the costs order will become discharged, and that is what gives the teeth to the sanction of the court.

6. On 19 September, when the hearing took place before Master Barnes, there was no appointment made by the plaintiff to tax, although there was already filed the bill of costs. It seems to me that the statutory scheme points forcefully upon the court to exercise its obligation to make an order requiring taxation within a certain number of days. The court might have been told what is going to happen, or that an appointment is going to be made. The court should therefore make an order, and certainly the court should not dismiss the summons in the face of protracted disagreement by the parties on costs. The master, unfortunately, dismissed the application and made no order as to costs. It seems to me that that was the wrong order to make.

7. The defendant, faced with that order, had no choice but to appeal and, by the Notice of Appeal dated two days later, i.e. 21 September, the defendant appealed to the judge in chambers. On 29 September, the plaintiff gave the notice of appointment to tax. So, in a sense, therefore, para.1 of the Notice of Appeal of the defendant becomes redundant because there he was asking for a time limiting the plaintiff to give a notice of appointment to tax. The costs order, however, is still very much alive and that is really the subject of today's appeal.

8. Having regard to what I have said about the correctness of the defendant to take out the summons and to seek the necessary order from the court pursuant to Order 62, rule 22(HK)(1), it seems to me that the proper costs order ought to have been costs in favour of the defendant.

9. In the circumstances, I allow the appeal and the costs of the summons ought to have been awarded to the defendant. Having regard to what had happened, it seems to me that the costs of the appeal must also be given to the defendant. I propose to proceed to assess the costs so ordered by me, both here and below, by way of gross sum assessment under Order 62, rule 9(4)(b) and I will hear the parties on this.

[Submissions on costs]

10. This is my gross sum assessment of the costs order that I made earlier in favour of the defendant covering both the defendant's costs of the summons that was heard by Master Barnes, as well as the appeal to this court, both sets of costs had been awarded by me earlier to the defendant.

11. The summary of the costs that had been given to me by the defendant in respect of both the summons and the appeal shows, to my mind, a gross duplication and exaggeration, and a reasonable cost should reduce considerably what is sought in the defendant's costs summary document. The total costs in that document comes to $155,900, consisting of :

(a)	15 hours of work of the partner Mr Ng at $3,200 for the summons	$48,000
(b)	10 hours of work of Mr Ng, at the same rate, for the appeal	$32,000
(c)	10 hours of work for the assistant solicitor Mr Pang at $2,200 an hour	$22,000
(d)	5 hours of work of legal executives, covering both the summons and the appeal, at $1,200 an hour	$6,000
(e)	Mechanical preparation	$6,000
(f)	Photocopies of 800 pages at $3 per page	$2,400
(g)	Counsel fees	$39,500
	Total :	$155,900

12. In my view, both the unit cost, as well as the hourly rate, should be considerably reduced and I basically accept the submission of Mr Ko for the plaintiff. In my view, the following should be the appropriate costs and time spent :

(a)& (b)	10 hours of work of the partner Mr Ng at $3,000	$30,000
(c)	3 hours of work for the assistant solicitor Mr Pang at $2,000 an hour	$6,000
(d)	2 hours of work of legal executives, covering both the summons and the appeal, at $1,000 an hour	$2,000
(e)	Mechanical preparation (disallowed)	-
(f)	Photocopies of 600 pages at $3 per page	$1,800
(g)	Counsel fees	$20,000
	Total :	$59,800
	(round up to $60,000)

13. The gross sum assessment of the costs order made by me earlier today in relation to the summons of the defendant, as well as the appeal of the defendant, is therefore assessed at the gross sum of $60,000 and that is to be paid immediately.