XCHRX THE J FASTER

HCAJ 365/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY JURISDICTION

ACTION NO. 365 OF 1998

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Admiralty Action in rem against:
the ship "J FASTER" (St Vincent and the Grenadines Flag)

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J U D G M E N T

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1. This is the hearing of the gross sum assessment of costs under Order 62 Rule 9(4)(b) pursuant to the order that I made on 14th October whereby I discharged the warrant of arrest and entered judgment in favour of the Defendants against the Plaintiff in the action.

2. The Defendants now seek the costs against the Plaintiff for the costs of the action and for the necessary application made to the court leading to the Order of 14th October. In support of the application for the gross sum assessment by the court, Holmans on behalf on the Defendants put before me a revised schedule of costs whereby the total costs claimed by the Defendants against the Plaintiff come to the figure of HK$1,133,374.20, namely HK$1.13m. This figure was strenuously resisted by the Plaintiff.

3. The Plaintiff put forward to the court their own schedule of costs which they have done pursuant to my direction and that showed the Plaintiff's costs for the Action and for the application at the figure of HK$283,700.73. The breakdown which HK$60,000.00 for the counsel's fee with balance for the profit costs of Sinclairs of about $220,000. The breakdown in the revised schedule of costs of the Defendants showed the disbursement costs of the Defendants at a figure of HK$255,114.20 or just over a quarter of million dollars and the profit costs of the Defendants shown at HK$878,260.00. So roughly, the profit costs of Holmans for the Defendants is 4 times the profit costs of Sinclair Roche for the Plaintiff. This huge disparity is of course troubling.

4. Mr. Chung for the Defendants sought to explain to the court the huge disparity by saying that the amount of work that the Defendants had done was hugely more than the amount of work required to be done by the Plaintiff. I accept that in this Action, the Defendants' solicitors had to undertake a certain amount of work by travelling to China to take written statement or affidavit evidence from the Chinese witnesses. But Mr. Chung exaggerated the amount of work required to be done.

5. The Plaintiff's solicitors requested that the Defendants' solicitors produced for the court's inspection what are called interim bills, namely actual bills which had been sent out by Holmans to the clients. This has now been done and I have looked at the bills. The first bill of Holmans to the Defendants was in December and covered the work done from November to December and the total bill came to HK$164,800.00 of which something like just under HK$10,000.00 was for disbursement. The second bill of July 1999 covered work done from January to July 1999 and the bill was for the sum of US$32,169.00 which included a small disbursement of just under US$2,000.00. The total two bills which had been sent by Holmans to the Defendants which I understand had been paid by the Defendants, therefore come to just over HK$400,000.00 or if you take away the disbursement from that, the profit costs under the first two bills of Holmans would be something like $390,000. What is likely to be the third bill of Holmans to the Defendants. Now the third bill it seems to me, having regard to the additional work required to bring it up to the hearing on the 14th October could not possibly be anything like even the second bill. I am mistaken when I said it cannot possibly look like the second bill. That would be true if you do not include in the third bill the disbursements because the disbursements of the Defendants which was said at HK$250,000.00 is not much not disputed. I suspect the third bill would be something like HK$240,000.00 or may be HK$250,000.00 for disbursements and possibly another HK$200,000.00 for profit costs.

6. The difficult question in this case is assuming the total three bills of the Holmans to Defendants would be HK$400,000 for the first two bills plus HK$450,000 for the third bill including disbursements or a total of $850,000 for the three Holmans bills, what ought to be a proper figure that the court should award by way of gross sum assessment? There is no doubt in my mind having looked at the various bills that there is a substantial amount of over-servicing by the Defendants. If you only look at the bills and you look at the number of people working on it, it seems to me that a very substantial discount ought to be given. The first bill, for example, also reflects the hourly rate very much in excess of that in the second bill. In the case of Dr. Zhou, the difference between the hourly rate for the first bill and for the second bill is something approaching 50%.

7. I have carefully thought about all the work that have been done by the Defendants and having gone through the material in the course of the hearing on the 14th October and looking at the material to refresh my memory, it seems to me that, putting aside the question of disbursements which is not really disputed, the profit costs of Holmans for the Defendants, really cannot possibly be justified on the basis of four times that of Sinclair Roche. Doing the best I can, it seems to me that a figure of profit costs to Holmans in the sum of HK$440,000.00 is very reasonable in the circumstances. So the order therefore I make is that the gross sum assessment which I award to the Defendants is in the amount of $440,000 plus $250,000 or namely a figure of $690,000 and that is the sum which I award.