BANK OF CHINA (HONG KONG) LTD v. VILLA KING ENTERPRISES LTD

HCMP5727/1999 & HCA15005/1999
(Consolidated)

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 5727 OF 1999

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AND

ACTION NO. 15005 OF 1999

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BETWEEN

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(Consolidated by Order of Master Wong dated 28 February 2002)

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J U D G M E N T

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1. I have before an application for review or an appeal brought by the defendant, Villa King Enterprises Ltd (“the Company”), against an order of Master Levy made on 25 May 2004 whereby the Master confirmed the previous costs taxed on 3 July 2003 in sum of $84,750.66.

2. The history of this litigation is long and protracted.  It started with a simple claim by the plaintiff, Bank of China (Hong Kong) Limited (“the Bank”), against the Company for the default of a loan made to the defendant borrower covered by a mortgage of a property.  This was the subject of a claim in the first action, HCMP No.5727 of 1999.  The Bank also issued a second action, HCA No.15005 of 1999, against Mr Samuel Lai and Mr Lai Man Pan as guarantors of that loan.  The two actions were consolidated by an order of the court on 28 February 2002.  

3. The three defendants, that is, the Company and two Mr Lai, were unhappy with this consolidation and appealed to the court against that consolidation.  After hearing the application, the court, on 22 August 2002, dismissed the defendants’ appeal against this consolidation with costs of the defendants’ appeal to the plaintiff on a party-and-party basis and to be paid forthwith, and to be taxed if not agreed.  That costs order of 22 August 2002 was the subject matter of what then took the parties through a huge amount of court hearings.

4. The aforesaid costs order of 22 August 2002 was taxed by the plaintiff against all three defendants and, on 3 July 2003, as I have said earlier, taxation was completed and Master Levy assessed the sum at $84,750.66.  Less than two weeks later, the Company applied for review of the taxation of costs made by Master Levy.  This was presumably pursuant to Order 62, rule 34 of the Rules of the High Court.

5. The hearing of that review, however, was protracted and there was a first hearing on 1 September 2003, then followed by a second hearing on 10 November 2003, third hearing on 12 March 2004, followed by the fourth hearing on 27 March 2004, then finally by a hearing on 25 May 2004, when Master Levy, after careful consideration, affirmed the costs taxed in the same sum of $84,750.66. 

6. The present application brought by the Company against that 25 May 2004 order of Master Levy was opposed by Mr Wong for the plaintiff on three grounds.  The first is that if the appeal is made pursuant to Order 58, it is out of time.  Secondly, it is said that if it is pursuant to Order 62, rule 35, the High Court, and its High Court Judge, is incompetent to hear it because it does not fall within the requirement laid down in Order 62, rule 35.  Thirdly, it is said that in any event, the Master had correctly assessed the costs and there is really no merit in the appeal.  I would deal with each point in turn.

7. It is not clear whether the appeal is really brought by way of a re-hearing under Order 58.  If it is brought under Order 58, then I agree with Mr Wong that it is out of time.  The reason it is out of time is that the appeal under Order 58 runs from the time the decision was made and it is not necessary to draw up any order.  Therefore time runs from 25 May 2004, and the fact that there may be vacation in August is neither here nor there.  It was therefore long out of time.

8. I now turn to the second point.  Assuming I am wrong and that the appeal was not brought under Order 58 and that it is really by way of an application for review under Order 62, rule 35, then the question is whether the court is faced with the sort of review not sanctioned by the rules.

9. Order 62, rule 34(4) provides that :

“       (4)     A taxing master who has reviewed a decision in respect of any item shall issue his certificate accordingly and, if requested to do so by any party to the proceedings before him, shall state in his certificate or otherwise in writing by reference to the objections to that decision the reasons for his decision on the review, and any special facts or circumstances relevant to it.  A request under this paragraph must be made within 14 days after the review or such shorter period as may be fixed by the taxing master.”

10. Order 62, rule 35 governing review of a taxing master’s certificate by a judge provides :

“       (1)     Any party who is dissatisfied with the decision of a taxing master to allow or to disallow any item in whole or in part on review under rule 33 or 34, or with the amount allowed in respect of any item by taxing master on any such review, may apply to a judge for an order to review the taxation as to that item or part of an item if, but only if, one of the parties to the proceedings before the taxing master requested that officer in accordance with rule 34(4) to state the reasons for his decision in respect of that item or part on the review.”

The important words under Order 62, rule 35 are : “if, but only if, one of the parties to the proceedings …. requested that officer in accordance with rule 34(4) to state the reasons for his decision…”.  It is clear that no party has requested the taxing master on review to state his reasons, and the document before me shows clearly that no request has been made and no reason has been stated.

11. Order 62, rule 35 giving the judge of the High Court a final chance to review can only arise if there is a situation when reasons have been given pursuant to a request.  The judge of the High Court is therefore in a position to look at the reasons and then to see whether the reasons are valid.  He is really not competent to do another taxation or to look at the taxation generally.  That is the reason, for example, why Order 62, rule 35(5) provides for the court in a suitable position to appoint assessors to sit with him to deal with this review arising out of reasons given in respect any particular problem about taxation, or particular item.

12. I therefore come to the view that the application before me for review is incompetent and not within the rules, and I must refuse it.

13. I now turn to the third ground.  

14. Even if I am wrong on the previous two reasons, it seems to me having regard to the document that I have before me (which is the document of the Appointment To Tax with all the items clearly set out and with the original total figure of $140,000) that the taxing master went through it very carefully and taxed down the original bill substantially to $84,750.66.  A taxing master is far more qualified than a High Court judge to deal with this area of costs.  I can see nothing wrong with what she has done.  In fact, I think she has done it extremely well.  Therefore, even on the merits of the case, there is really no basis for the court to come to any other view. 

15. The application for review or appeal by the Company therefore must be dismissed.  I would therefore dismiss the application or appeal with costs.  I am going to assess the costs myself by way of gross sum assessment in lieu of taxation, and I will hear Mr Wong as to what total number of hours’ work have been spent on this appeal/review and then I will determine what the proper sum for costs should be awarded to the Bank against the Company.

                   [Counsel’s submission]

16. It seems to me on the matter of the gross sum assessment that a very large number of hours has been spent by the plaintiff’s solicitors on this matter.  Mr Wong has been very helpful in both presenting the court with a detailed chronology as well as with skeleton argument.  This hearing, which started this morning and has to be adjourned and resumed at 4:40 p.m., runs to now (6:45 p.m.).  The length of the hearing perhaps is an indication of how much the court has to cope with the problems raised by the Company in this appeal/review.

17. It seems to me that a reasonable allowance ought to be given to the plaintiff for the work undertaken.  I assess the number of hours of reasonable work done by the plaintiff in this appeal/review to be eight hours, at the unit cost of $4,000.  I therefore allow the sum of $32,000 for the costs of the appeal/review what has been lodged by the Company, and this sum is to be paid forthwith.