MUK CHUNG WING AND ANOTHER v. LEUNG WAI FONG AND OTHERS

HCMP 35/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 35 OF 2011

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D E C I S I O N

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1.  This is a hearing pursuant to Order 62, rule 32C(1)(a) for solicitors to show cause as to why they should not bear wasted costs.

2.  On 11 July 2011, after a Beddoe application, I made an order for costs of, amongst others, the defendants to be borne out of the estate on common fund basis to be assessed on the papers on 10 August 2011.  The defendants were to file and serve their statements of costs by 25 July 2011. D3 and D6 did not put in their statements of costs by the due date.

3.  Over 2 years later, on 26 October 2013, D3-D6 obtained an extension of time from Deputy Judge Mayo for summary assessment of their costs.  The order was not even drafted up by the time the costs statement of D3-D6 was filed.  I thus deferred the summary assessment until Deputy Judge Mayo’s order was filed.

4.  The plaintiffs put in grounds of objection contending, amongst others, that the undue delay of over 27 months in summary assessment warranted a global deduction of 20% or such rate as the court thinks fit in the quantum to be awarded. 

5.  As an order for summary assessment is “in lieu of taxed costs” (Order 62, rules 9(4)(b) and 9A(1)(a)), therefore all the principles applicable to allowing/disallowing costs on taxation will equally apply.  I have made a modest global deduction of 20% of the costs allowed on summary assessment given that the costs claimed on common fund basis were relatively conservative.

6.  The conduct of the solicitors of D3-D6 called for this hearing to show cause for the delay and why they should not bear the deducted costs.

7.  Having heard from Mr Ng, I accept that it was pure oversight on the part of his firm not to have proceeded with the summary assessment as directed.  The oversight was discovered at the trial of this action when counsel attempted settlement and then found that there were many loose ends, including this failure to do summary assessment and failure to deal with costs in prior related proceedings.  In fact, his firm had not received a cent from its clients all along except for counsel’s fees.

8.  Mr Ng very frankly acknowledged and apologized for the inconvenience caused to the court and other parties in having to re-read the documents pertinent to the relevant hearing after such a long lapse of time.

9.  I also accept Mr Ng’s submission that the costs statement shows a humble amount of costs sought ($380,000 compared to over $800,000 claimed by the other camp of defendants).  His clients consulted a senior counsel but briefed only a junior counsel for the substantive hearing of the Beddoe application.

10.  Even taking into account all the points advanced by Mr Ng, I find there to be no valid reason for the delay.  D3-D6 should count itself lucky to have obtained extension of time to do this summary assessment.

11.  Summary assessment is a quick, efficient and cost-saving tool to reduce procedural steps and ensure that the receiving party gets back its costs quickly.  If it is done years later, as in the present instance, the judge or master who handled the substantive matter will be left in a worse position than the taxing master who will have taxation bundles and submissions to assist in his/her decision.  The hearing bundles have now been returned.  This court has to grapple with the documents scattered throughout the file to “reconstruct” the circumstances existing on the date of the substantive hearing before assessing the costs.

12.  Without disrespect to Mr Ng personally, and to sound a clear warning to the profession, I find it necessary to impose a wasted costs order on his firm.  I order that the 20% reduction which I have made from the assessed costs shall not be recoverable from its client or the estate.  The firm will also be barred from recovering interest on profit costs and disbursements for the period from the date of the costs order up to and including today.  This should cause little prejudice to the firm since it has not received a single cent from clients except for counsel’s fees.  Order 62, rule 32C(4) is to be complied with.