EISEKI INTERNATIONAL CO., LTD v. TAO-TI INTERNATIONAL CO., LTD

HCMP3825/2003
and HCA3656/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO.3825 OF 2003

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BETWEEN

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And

ACTION NO.3656 OF 2003

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(HEARD TOGETHER)

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J U D G M E N T

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1. I have before me an application for gross sum assessment arising out of the judgment I gave on 30 March 2006 and pursuant to my order which I made on that day for costs of the actions in relation to the two actions should be borne by Eiseki International Co. Ltd (“Eiseki”) reserving the costs of the joint action against Rosa Foods Co. Ltd (“Rosa”). 

2. The hearing before me is to determine two aspects of the costs.  One is what should be the costs of these two actions so far as against Eiseki is concerned.  The other determination is what proportion of that costs against Eiseki is attributable to the period up to 30 September 2004.  That date is important because that was the date when the solicitors, Messrs S.H. Chan & Co., ceased to act for Eiseki and that is also the date when the former solicitors ought properly to cease to be responsible for any possible costs of the action.

3. Various schedules had been put before me, principally from the defendants.  I can summarize by saying that the total costs of the two actions against Eiseki is put by the defendants at a figure of roughly $1.5 million.  The former solicitors had suggested to the court that such costs is too high and that there is a large amount of unnecessary work, both in terms of hours as well as in terms of unit charge.  The suggestion is that the partner should not be charging at $4,000 but at a somewhat lower figure and that some of the figures for the assistant solicitors should not be at these suggested figures of $2,200 for Ms Yip and $2,400 for Ms Li.

4. I think there is a great deal of substance in the submission of the former solicitors case.  This is the case where I think counsel had substantial involvement.  I rarely see a case where there is more care and attention being lavished by leading and junior counsel.  I am grateful of course for their assistance.  But having said that the amount of lavish attention by counsel must considerably reduce the amount of time solicitors need to spend on the case.

5. In my view, having regard to all these circumstances, a figure of $1.2 million for costs is more appropriate than the $1.5 million proposed by the defendants.

6. As to the question of apportionment between the costs incurred before 30 September 2004 and the costs incurred after, I take on board the point made by Mr Ling that the bulk of the affidavit evidence was prepared before that date.  I think on Eiseiki’s side three out of seven, on the defendants’ side the proportion is much higher, that is preparation of the affidavits before the September 2004 date. 

7. But having said that if one looks at the court appearances, certainly my involvement with this case was after the September 2004 date.  I think I first became involved in December 2004 and the large number of court appearances before me were of course all after that date. 

8. The defendants’ figure that they relied upon shows an apportionment of about 45% of the costs that they are claiming was for work done before September 2004, and 55% for the subsequent period.  The comparable analysis by the former solicitors shows a proportion of 35-65%.

9. In my view, the great bulk of the costs must have been incurred and very large amount of costs incurred after the September 2004 date.  It seems to me that the 35-65% is a better reflection of the costs aspect.  It therefore follows that if $1.2 million is the right figure, that 35% of that is $420,000.  That ought to be in my view the total costs liability of the former solicitors, S.H. Chan & Co., and this is my determination of the gross sum assessment.  I do not know arising out of this, what is the implication because I have not heard proper submission from counsel of S.H. Chan & Co. for net payment to the defendants. 

10. There is a sum in court of $1 million.  That million had been paid in pursuant to I think three or four orders of security of costs.  I think that sum of money should be paid out immediately to the defendants.  As to whether there is after payment out of that sum still any outstanding liability of the former solicitors to the defendants, that is a matter at the moment I will not make any determination.  If the parties wish to seek any direction or order, they can come back to me for such determination.