LEUNG PO PO AND CHENG KAM CHAU (Joint Tenants) v. OLYMPIC LEADER INTERNATIONAL LTD

DCCJ 5004/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 5004 OF 2013

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DECISION

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1.  This is the 1^st defendant’s summons to vary the costs order nisi I made to the Decision dated 19 April 2016, namely, the third party do pay 85% of the 1^st defendant’s costs of the appeal, to be taxed if not agreed.

2.  The 1^st defendant first seeks certificate for counsel for the hearing of the appeal.  There is no dispute to the complexity involved in the appeal and both sides were represented by counsel.  I therefore grant certificate for counsel for the hearing of the appeal.

3.  The 1^st defendant also seeks summary assessment of costs.

4.  The proper approach to summary assessment of costs has been laid down by the Court of Appeal in Poon Shu Fan v Wong Tin Yan [2012] 5 HKLRD 512.  For present purpose, it is sufficient to refer to the useful summary in the headnote of the reported judgment at pp 512-514 as follows:-

“(2) As in an ordinary taxation, under O 62 r 28(2) of the Rules of the High Court (Cap 4A) (the RHC), in a summary assessment, party-and-party costs were allowed only if they were 'necessary or proper' for the attainment of justice or for enforcing or defending the rights of the receiving party. Pursuant to Practice Direction 14.3, the court adopted a broad-brush approach to ensure the final figure assessed was not disproportionate and/or unreasonable having regard to the nature and circumstances of the application or matter and the underlying objectives stated in O 1A of the RHC, even if there was no challenge to individual items. ……

(3) A summary assessment required a two-stage approach. If total costs claimed appeared proportionate, then all that was normally required was that each item should have been reasonably incurred and the cost reasonable. If the overall costs appeared disproportionate, then the court would have to be satisfied that each item was necessary and its costs was reasonable. A sensible standard of necessity should be adopted allowing fully for the different judgments which those responsible for the litigation could sensibly come to as to what was required. While the threshold was higher than that of reasonableness, it should be achievable by a competent practitioner without undue difficulty. The conduct of the other party was relevant, since a cooperative party could reduce costs, but an uncooperative party could render necessary costs which would otherwise be unnecessary. ……

(6) Since Civil Justice Reform in 2009, taxation of counsel's fees under a party-and-party taxation was no different from taxation of costs and expenses. The test of 'necessary or proper' applied and must take into account the matters set out in para 1(2) of Part II of the First Schedule to O 62 of the RHC, as well as the requirement of reasonable proportionality. Accordingly, paras 62/App/28(5) (p 1172) and 62/App/28A of Hong Kong Civil Procedure 2012 (p 1172), which referred to the previous pre-CJR 'excessive and unreasonable' test under the former para 2(5) of Part II of the First Schedule to O 62 of the RHC, should no longer be followed, ……"

5.  Here the 1^st defendant sought a total sum of HK$54,440 comprising solicitors profit costs and disbursements of HK$19,667 and counsel’s fees of HK$35,000.

6.  I bear in mind the two-stage approach required for summary assessment.  Having considered the nature and scope of the Appeal, the affidavits filed in support and in opposition of the Summons, the skeleton submissions and list of authorities, what transpired at the appeal hearing, the involvement of counsel in this matter, and considering all circumstances, I find that the overall costs claimed by the 1^st defendant under their statement of costs appeared to be on the high side on party and party basis.  I thus go on to see if each item have been reasonably incurred and the cost reasonable.

7.  I allow the costs charged under Part B for the manual work at HK$227.

8.  For Part C, I allow the hourly rate charged by the solicitors at HK$2,600 (admitted in 1995) and HK$1,280 (admitted in 2016) respectively, which are the usual hourly rate allowed on a party and party taxation.  For the time incurred by the solicitor in relation to attendance on client, I would allow 1 hour instead of 2.  The time incurred for attendance on other side (0.5 hour) and attendance on counsel (0.5 hour) are reasonable.  Thus the total costs allowed under Part C is HK$2,600 x 2 = HK$5,200.

9.  For Part D, the total time allowed is 2 hours by Mr Lau (at HK$2,600 per hour), and 2.25 hours by Mr Ng (at HK$1,280 per hour) which means the costs allowed is HK$5,200 + HK$2,880.

10.  The total allowed for solicitor’s costs is thus HK$227 + HK$5,200 + HK$5,200 + HK$2,880 = HK$13,507.

11.  For Part E on counsel’s fees, Ms Lee has 7 years of experience.  She charged a total of HK$35,000 for the appeal hearing.  Taking a global view of the matter, I think a reasonable figure would be HK$30,000.

12.  For the above reasons, I summarily assess the 1^st defendant’s costs for the appeal hearing at HK$43,507 (HK$13,507 + HK$30,000).  85% of HK$43,507 comes to HK$36,981.  I further order the third party to pay the 1^st defendant the costs assessed forthwith.

13.  Prior to the hearing for the variation of the costs order, the third party did not indicate its stance.  Solicitors acting for the third party only informed the court and the solicitors acting for the 1^st defendant its list of objections at the beginning of the hearing.  Further, solicitors acting for the third party indicated that it raised no objection to the 1^st defendant’s summons (including the costs of the application to be paid by the third party to the 1^st defendant), I thus award costs of this hearing against the third party.  I summarily assess the 1^st defendant’s costs for this hearing at HK$6,000, to be paid by the third party forthwith.