THE JOINT AND SEVERAL TRUSTEES OF THE PROPERTY OF SO CHING WAN v. ASSEN LTD (IN LIQUIDATION) AND OTHERS

HCB 4475/2002

[2025] HKCFI 6046

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 4475 OF 2002

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BETWEEN

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REVIEW OF TAXATION

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Application

1.  This is a taxation review.

Background

2.  For the present purpose, I set out the following relevant background.

3.  On 1 August 2024, the Applicant issued a summons seeking leave to appeal out of time against:

(a)  the Judgment of DHCJ Reyes SC dated 18 March 2024, and

(b)  the Decision of Master Lai (as he then was) to dismiss a discovery summons so that the 2^nd to 4^th Respondents would be ordered to provide discovery to the Trustee.

4.  Mr Alan Tang filed his 14^th Affirmation to support the summons.

5.  Upon consideration, on 2 August 2024, the learned Deputy Judge issued the following directions, drawing up a timetable for the parties.

“1. The summons be dealt with by paper;

2. The Applicant do to file its submissions in support by 9 August 2024;

3. The Respondents do reply by 16 August 2024; and

4. The Applicant do respond to the respondent by 23 August 2024.”

6.  On 9 August 2024, as directed, Mr George Chu of Counsel submitted his skeleton, list of authorities and hearing bundle before the Judge. The Judge considered the papers. On the same date and he decided to dismiss the summons right away without submissions from the Respondents.

7.  After the weekend, on 12 August 2024, the Clerk to the Judge informed parties by fax in the morning at about 10:30 a.m. as follows.

“Having read the Applicant’s submissions, I do not think that I need to consider submissions in reply from the Respondent.

The Applicant’s submissions do not disclose any basis for granting leave to appeal, let alone granting leave to appeal out of time. The Applicant’s explanation for the delay in applying for leave (see Applicant’s Skeleton paragraphs 3 & 4 and 14^th Affirmation of Tang Chung Wah paragraphs 5 – 12) does not justify extending time in which to apply for leave. In any event, the proposed grounds of appeal have no prospect of success. The proposed appeal would be on a matter which is essentially procedural in nature (discovery) and within the discretion of the judge hearing the application. Further, the Applicant’s case on my supposed bias (actual or apparent) (a case which has not previously been raised before the court) strikes me as contrived and artificial.”

8.  Pursuant to the related costs order, on 27 February 2025, the 2^nd to 4^th Respondents commenced the taxation and filed their bill. They sought a total sum of about $128,000, including costs of taxation.

9.  Although the bill fell under the sum of $200,000, it did not go before taxation by a chief judicial clerk under O 62 r 13 of the Rules of High Court (Cap 4A) as the Applicant raised preliminary arguments.

10.  The Applicant objected to them and argued, inter alia, that:

(1)  The fee earner in the bill (called “KC”) was a solicitor with 30 years’ standing. He should not be dealing a straight- forward time summons without proper delegation to junior solicitors. Only a solicitor of 5 – 6 years PQE was appropriate. The total time spent by KC was also grossly excessive and unreasonably excessive.

(2)  Given that the Judge made an outright dismissal of the application, it was most unlikely for the legal team of the 2^nd to 4^th Respondents including counsel to give advice or commenced work on written submissions in response. There ought not to be have been significant work. No counsel certificate was granted by the Judge and there was no hearing required.

11.  Parties appeared before me on 9 June 2025 for the substantive taxation hearing. I dealt with the bill item-by-item, save to adopt a gross sum approach on certain items of communication (no 9.1.1-2 and 9.3.1-6 thereof), with consensus from parties.

(1)  I ruled that KC was entitled to deal with the matter without delegation. He was also entitled to charge at $5,800 per hour.

(a)  The application was not a simple time extension application. It in fact sought retrospective leave to appeal against the Decision of the Judge months ago. It went to explain the delay and substance of the matter (eight (8) reasons were included by way of Annex in the summons explaining what and how the Judge erred in his Decision). The 14^th Affirmation of Mr Tang contained 30 paragraphs and 56 exhibits running up to 86 pages (including 61 pages of transcript for hearing before Master Lai on 18 July 2022).

(b)  Upon receiving it, KC not only read it but also saw fit (which I agreed) to conduct a small legal research on case law on the matter.

(c)  The timetable drawn up by the Judge was tight. KC had been handling the matter for some time. He had the background knowledge and understood how it developed and evolved. Delegation to a more junior solicitor would require time for KC to explain and give instructions. The junior had to read papers to understand, and KC had to spend time to supervise.

(d)  Of course, I also noted that KC saw fit to seek assistance with a counsel, albeit relatively junior (called in Hong Kong in 2007). With KC’s understanding and background of the case, the time spent by him on each of time claimed should be and were indeed were examined carefully. Appropriate deductions were made accordingly.

(e)  In the end, with the documents produced to me in the taxation bundles, I made the following rulings upon the time claimed by KC.

1.1  Objection withdrawn (20 minutes - considering the summons).

1.2  No deduction (1 hour - legal research)

2.  1.5 hours off (from 3 hours - considering supporting 14th Affirmation of Mr Tang)

3.1  No deduction (5 minutes - considering draft index to bundle)

3.2  No deduction (5 minutes - considering amendments to index)

3.3  10 minutes off (from 15 minutes - considering index / documents)

4.  No deduction (30 minutes - considering Skeleton of Applicant)

5.  1 hour off (from 1.5 hours - considering Authorities of Applicant)

6.  No deduction (5 minutes - considering Decision of the Judge)

7.  2 minutes off (from 5 minutes - considering Note of Order)

8.  2 minutes off (from 5 minutes - considering Order)

9.1.1  15% off globally (from a total of 2 hours 4 minutes)

9.2.1  2 minutes off (from 5 minutes of letter written)

9.2.2  2 minutes off (from 5 minutes of letter received)

9.3.1-6 15% off globally (from a total of 3 hours 32 minutes)

9.4.1  2 minutes off (from 5 minutes of letter received)

9.5.2  2 minutes off (from 5 minutes of letter received)

10.  10 minutes off (from 30 minutes - perusing/reviewing documents)

11.  No deduction (10 minutes - General care and conduct)

(2)  As to fees of counsel, he charged $30,000. With the evidence as contained in the taxation bundle[1] before me, I was satisfied that counsel did prepare the draft reply over the weekend and KC only informed Counsel of the further directions of the Judge after draft reply had been prepared. I was also satisfied that it was necessary and proper for KC to look to counsel for assistance, it was reasonable for counsel to start preparing his skeleton over the weekend, and the amount of fees charged was reasonable.

(3)  At the end, I also allowed some costs for taxation for LCD and KC.

The Review

12.  On 23 June 2025, the Applicant filed a summons seeking for a review of taxation. From the supporting document lodged on the same date, the Applicant was repeating almost all the objections raised at the taxation. At the call-over hearing on 11 July 2025, LCD for the 2^nd to 4^th Respondents did not propose to file a written reply. After discussion, I adjourned the matter for substantive argument with 2 hours reserved.

13.  Parties appeared before me on 10 November 2025. Mr Tang acted in person and Mr B Leung, LCD continued to represent the 2^nd to 4^th Respondents.

14.  Mr Tang said that the sums after taxation were still excessive, for basically 2 reasons.

(1)  KC was over-qualified for the matter before the Deputy Judge. It did not fall under the necessary or proper test. KC should have been delegated the job to a junior solicitor, as compared to one enjoying $5,800 per hour.

(2)  No Counsel fee should be granted. Paragraph (3) of Part II to the First Schedule of Order 62 of the Rules of High Court (Cap.4A) was referred to, and it stated that:

“No costs shall be allowed in respect of counsel appearing before a master in chambers, or of more counsel than one appearing before a master in open court or a judge or the Court of Appeal, unless the master or judge or the Court of Appeal, as the case may be, has certified the attendance as being proper in the circumstances of the case.”

15.  Mr Leung disagreed.

(1)  In allowing the fee earner charging at $5,800, the Court had already taxed down the time that such fee earner should have been spent. One did not forget that Mr Tang himself was charging more than $6,000 per hour as a professional trustee in the proceedings herein.

(2)  The interpretation of Mr Tang over the said paragraph (3) was not correct. No counsel certificate was necessary.

16.  Mr Tang replied that it was not fair to compare his hourly rate with the solicitor as they were performing different tasks. He maintained that there was no hearing and no counsel certificate was granted, and therefore, no counsel fee was payable at taxation.

17.  Upon hearing from them, I reserved my decision so that I would hand it down in about 6 weeks.

18.  Here it is.

Ruling and reasons

19.  The review is misconceived and to be dismissed.

20.  Regarding the 2 specific points raised by Mr Tang:

(1)  As a matter of principle, delegation of work to junior staff should be done if it was appropriate to do so. It depends on a number of different consideration, including the nature of job, time to explain and give instructions, degree of supervision required, etc. In the present case, KC had handled the matter for some time and he had knowledge on the matter. He could take up the matter without spending too much time. Delegation to a more junior staff would require time for KC to explain and give instructions, the junior to read earlier papers to understand, and it would took time for KC to supervise. Hence, I maintained my view and deductions made at the taxation. Repeating the arguments having rejected by me does not help Mr Tang.

(2)  With respect, Mr Tang misunderstood the provision referred to in paragraph 14 (2) above. It is only applicable to situation wherein there is a hearing before the Court. If the Master, the Judge or the Court of Appeal does not grant a certificate for (more) counsel for hearing before him, her or them when it is necessary to do so, no brief fee or refresher fee is to be recovered at taxation. In the present case, as there was (and would in any event) be no hearing to be held, the issue of certificate for counsel simply did not arise. However, it does not follow that Court shall not allow counsel fee for preparation of skeleton, etc. at taxation. The job indeed falls squarely upon the taxing master at taxation after considering all the available evidence and information before him or her. I made my decision at the taxation. I remain of the same view in the present review.

Costs

21.  There is no reason why costs should not follow the event. I also see fit to have the costs summarily assessed to wrap up the matter before me. Half an hour for KC and 3 hours for Mr B. Leung, LCD are necessary and proper fees to deal with the Review ($5,800 x ½ + $1,800 x 3).

Conclusion

22.  To conclude, I make the following orders.

(1)  The review is dismissed.

(2)  There be an order nisi, to be made absolute within 14 days from the date hereof, that the Applicant do pay the 2^nd to 4^th Respondents costs of the Review, summarily assessed at $8,000.