AVC PROPERTY DEVELOPMENT COMPANY LTD v. JOYFUL GRACE TRADING LTD AND ANOTHER

HCA 529/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 529 OF 2013

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1.  By my Judgment handed down on 21 February 2014, I granted a costs order nisi that the 1^st defendant do pay costs of and occasioned by their appealfrom the order of Master S Kwang dated 3 September 2013 to be summarily assessed and paid forthwith, and further directed that if no application is made to vary the costs order nisi, the 1^st defendant shall within 14 days lodge and serve succinct Points of Objection in respect of the plaintiff’s Statement of Costsdated 2 December 2013, and unless otherwise directed the summary assessment of costs will be by paper disposal.

2.  Neither the plaintiff nor the 1^st defendant filed any application to vary the aforesaid costs order nisi. In the circumstances, the aforesaid costs order nisi is now absolute.

3.  The 1^st defendant has failed to lodge any Points of Objection within the prescribed time. By a letter dated 27 March 2014, the plaintiff’s solicitors informed this court they have not been served with any Points of Objection by the 1^st defendant, and they further invited the court to assess the plaintiff’s costs as drawn in their Statement 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 reaosnable. 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 plaintiff sought a total sum of $91,711 comprising solicitors’ profit costs and disbursements of $41,711 and counsel’s fees of $50,000. Bearing in mind the two-stage approach required for summary assessment, and having considered the nature and scope of the appeal, the affidavits filed in support and in opposition to the summons, the skeleton submissions and list of authorities, what transpired at the appeal hearing, the need for the plaintiff to deal with new grounds of opposition to the application for summary judgment raised by the 1^st defendant, the absence of objection to the plaintiff’s Statement of Costs, and considering all the circumstances, I find that the overall costs claimed by the plaintiff under their Statement of Costs to be proportionate on party-and-party basis and that the items were reasonably incurred and the costs reasonable. I am satisfied that the amount of costs sought by the plaintiff under the various items set out in their Statement of Costs to be necessary or proper.

6.  In the circumstances, the total costs of the plaintiff on their Statement of Costs are assessed as drawn in the sum of $91,711. I therefore order that the 1^st defendant shall forthwith pay costs in the sum of $91,711 to the plaintiff.

(Marlene Ng) Deputy High Court Judge