TSIANG RICHARD AN KAI v. CHINA HAOHAN GROUP LTD AND ANOTHER

HCA 2139/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2139 OF 2012

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D E C I S I O N  ON  COSTS

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I. INTRODUCTION

1.  By a consent order dated 29 July 2013 (“the Order”) :

(1) the plaintiff’s Order 14 summons dated 24 January 2013 against the 2^nd defendant (“the O14 Summons”) was withdrawn;

(2) the 2^nd defendant was excused from taking further part in the plaintiff’s summons dated 22 May 2013 for setting aside the default judgment entered against the 1^st defendant on 28 January 2013 (“the Setting Aside Summons”);

(3) the plaintiff do pay the 2^nd defendant costs of the two Summons (including costs reserved) forthwith, to be summarily assessed if not agreed; and

(4) the summary assessment be disposed on paper without a hearing.

2.  The 2^nd defendant has filed a bill of costs for each of the O14 Summons and the Setting Aside Summons.  The plaintiff has filed two lists of objections in response. This is the summary assessment on paper.

II. GENERAL PRINCIPLES

3.  In approaching the summary assessment, I bear in mind the following general principles.

4.  First, this is a party and party taxation, which is the narrowest basis for taxation.  On that basis, there shall be allowed all such costs as were necessary or proper for the attainment of justice or for enforcing or defending the rights of the receiving party, and no more.  See Order 62, rule 28(2), Rules of the High Court, Cap 4A.  All charges merely for conducting litigation more conveniently may be called luxuries and are not allowed : See Hong Kong Civil Procedure 2013, Vol 1, para 62/App/6 at p 1175.

5.  Second, in dealing with solicitors’ costs, as a general rule :

(1) Work which can be and should have been properly done by an unqualified person will only be allowed at his rate.

(2) Work can and should have been done by a more junior solicitor will only be allowed at his rate.

(3) Only one fee earner will be allowed for a particular item of work, eg, drafting pleadings or attendance at court.  When a junior solicitor did the work under the supervision of a partner, the taxing authority will bear in mind, inter alia, the possibilities of duplication of work, the time spent by the solicitor and the partner respectively, and the overall costs incurred as compared to those incurred by a single fee earner.  The costs attributable to the solicitor or the partner may be reduced or taxed off where appropriate.

See Hong Kong Civil Procedure 2013, Vol 1, para 62/App/21 at p 1178.

6.  With these general principles in mind, I first consider the bill of costs for the O14 Summons.

III. COSTS FOR THE O14 SUMMONS

7.  Four fee earners are engaged :

Fee earner	Year of Admission	Hourly Rate
Mr Chong Moon Hing, partner ("CMH")	1996	HK$4,000
Mr Lau Kam Tai, assistant solicitor ("LKT")	2011	HK$2,000
Ms Zhang Huan, trainee solicitor ("ZH")	(2ndyear)	HK$1,300
Mr Wong Chun Fung, trainee solicitor ("WCF")	(2ndyear)	HK$1,300

8.  The plaintiff took no issue on the hourly rates claimed but queried the necessity to engage four fee earners.  I will deal with this particular objection below when I come to the items concerned.

III1.        Item B – Manual Work

9.  The parties agreed on this item.  I allow it at HK$1,858.

III2.        Item C – Communication including conference, telephone calls and letters

10.  The breakdown of this item is as follows :

C1	Attendance on client	CMH LKT ZH	3.6 hours 8.1 hours 6.9 hours	HK$14,400 HK$16,200 HK$8,970
C2	Attendance on other side	CMH LKT ZH	0.4 hours 3.9 hours 0.4 hours	HK$1,600 HK$7,800 HK$520
C3	Attendance on counsel	CMH LKT ZH	0.7 hours 3.0 hours 0.9 hours	HK$2,800 HK$6,000 HK$1,170
C4	Attendance on court	CMH LKT WCF	0.3 hours 0.7 hours 0.2 hours	HK$1,200 HK$1,400 HK$260
			Sub-Total	HK$62,320

11.  Bearing in mind the principle which I set out in paragraph 5(3) above applies, the necessity to engage the trainees when LKT, a junior solicitor, was already doing the work under the supervision of CMH, is unjustified.  The costs claimed by the trainees are all disallowed.

12.  CMH spent 5 hours on attendance, which is accepted by the plaintiff.  I allow his costs at HK$4,000 x 5 = HK$20,000 in full.

13.  LKT claimed a total of 15.7 hours on attendance.  That is excessive.  I will allow 4.5 hours for attending on client, 2 hours for attending on other side, 2 hours on attending counsel and 0.5 hours for attending on court, totaling 9 hours.  His costs allowed on attendance are HK$2,000 x 9 = HK$18,000.

14.  The total amount allowed on Item C is HK$38,000.

III3. Item D – Professional Work

15.  This item consists of 4 major components.

III3.1. Item D1.1

16.  Item D1.1 is on preparation of documents :

D1 Preparation of documents

D1.1	Affirmation of Chong Moon Hing (08.03.2013)	CMH ZH	1.8 hours 2.8 hours	HK$7,200 HK$3,640
D1.2	Consent Summons (08.03.2013)	CMH ZH WCF	0.2 hours 0.5 hours 0.8 hours	HK$800 HK$650 HK$1,040
D1.3	Affirmation of Kang Yi (in Chinese) (15.04.2013)	CMH LKT ZH	1.3 hours 18.1 hours 25.1 hours	HK$5,200 HK$36,200 HK$32,630
D1.4	Certified English translation of the Affirmation of Kang Yi (15.04.2013)	LKT ZH	5.2 hours 32.4 hours	HK$10,400 HK$42,120
D1.5	Affirmation of Lau Kam Tai (15.04.2013)	LKT	0.3 hours	HK$600
D1.6	Affirmation of Liu Fengliang (in Chinese) (25.04.2013)	CMH LKT ZH	0.2 hours 0.6 hours 0.8 hours	HK$800 HK$1,200 HK$1,040
D1.7	Certified English translation of the Affirmation of Liu Fenglia ng(25.04.2013)	LKT ZH	0.4 hours 1.9 hours	HK$800 HK$2,470

(a) Item D1.1

17.  The affirmation referred to in D1.1 was filed by CMH on 8 March 2013 in opposition to the O14 Summons.  It outlined the 2^nd defendant’s case and asked for leave to file further affirmation in opposition as the responsible officers of the 2^nd defendant ordinarily resided in the Mainland and time was required to take further instructions.

18.  The plaintiff argued that the affirmation was unnecessary as the application to file further evidence was dealt with by way of a consent summons filed on 8 March 2013 (Item D1.2) and should have been addressed in correspondence.  However, I disagree.  I doubt if the plaintiff would be prepared to accept the 2^nd defendant’s request to file further evidence in opposition in the absence of any initial evidence filed in opposition.  The plaintiff next argued that the affirmation was not reasonable as all the evidence given by CMH was in any event repeated in the affirmation filed by Kang Yi (Item D1.3).  Again I disagree.  As an initial opposing affirmation and for the purpose of applying for leave to file further evidence, it must set out in some substance the 2^nd defendant’s case.

19.  CMH spent 1.8 hours on this affirmation.  I find it reasonable and allow his costs claimed, that is, HK$4,000 x 1.8 = HK$7,200, in full.  Engaging ZH a trainee for drafting a partner’s affirmation is unjustified.  ZH’s costs are disallowed.

(b) Item D1.2

20.  The plaintiff argued that the costs in connection with the consent summons were reserved.  As the 2^nd defendant was asking for an indulgence to which the plaintiff agreed, costs should be in favour of the plaintiff.  This argument is entirely misconceived because according to the Order, the 2^nd defendant is entitled to have all the costs reserved, which must include the costs reserved by the consent summons.

21.  Three earners were involved in dealing with the consent summons.  This is clear “luxury”.  I will only allow the costs claimed by CMH, that is, HK$800.

(c) Item D1.3

22.  This is the substantive affirmation filed in opposition to the O14 Summons.  It consists of 18 pages with 11 exhibits.  Some part repeated what CMH had already said in his affirmation (Item D1.1).  As such, there must be some duplication of work, which must be reflective in the costs allowed.

23.  For CMH, I will reduce the time claimed by him to 1 hour.  His costs are allowed at HK$4,000.

24.  ZH’s involvement was excessive when LKT claimed to have already spent 18.1 hours on the work.  As a trainee, her role can only be very limited.  The plaintiff submitted that assuming she was responsible for collating the exhibits, she should be allowed to claim 30 minutes.  I agree.  I allow ZH’s costs at HK$1,300 x 1/2 = HK$650.

25.  The time spent by LKT is excessive.  I will only allow 10 hours.  His costs allowed are HK$2,000 x 10 = HK$20,000.

(d) Items D1.4 & D1.7

26.  These items relate to the translation of Kang Yi’s affirmation.  As rightly submitted by the plaintiff, the translation ought to have been properly done by translation specialists.  Engaging solicitors and trainees is not justified.  The costs allowed should be calculated on the notional fee charged by the translator tasked to do the work.  According to the quotation from a translator submitted by the plaintiff, the estimates fees for translating the two affirmations are HK$13,000.  Based on this quotation, I will allow the costs for these two items at HK$13,000.

(e) Item D1.5

27.  It is allowed in full at HK$600 upon the plaintiff’s agreement.

(f) Item D1.6

28.  ZH’s costs should be disallowed as her engagement is unjustified.

29.  The plaintiff agreed with CMH’s costs at HK$800, which is allowed.

30.  LKT spent 0.6 hours on this affirmation.  I will allow 30 minutes.  His costs are allowed at HK$1,300 x 1/2 = HK$650.

III3.2. Item D2 – Perusal of documents

31.  This item is :

D2.1	Summons (24.01.2013)	CMH LKT ZH	0.1 hours 0.1 hours 0.3 hours	HK$400 HK$200 HK$390
D2.2	Affidavit of Tsiang Richard An Kai (24.01.2013)	CMH LKT ZH	0.6 hours 4.1 hours 3.6 hours	HK$2,400 HK$8,200 HK$4,680
D2.3	2nd Affidavit of Tsiang Richard An Kai (20.05.2013)	CMH LKT ZH	0.3 hours 1.3 hours 2.0 hours	HK$1,200 HK$2,600 HK$2,600
D2.4	2nd Defendant's Skeleton Submissions (20.05.2013)	CMH LKT ZH	0.3 hours 1.2 hours 1.1 hours	HK$1,200 HK$2,400 HK$1,430
D2.5	2nd Affidavit of Jeffrey Haydn Lane (21.05.2013)	CMH LKT ZH	0.1 hours 0.1 hours 0.5 hours	HK$400 HK$200 HK$650
D2.6	Plaintiff's Skeleton Argument (21.05.2013)	CMH LKT ZH	0.2 hours 0.5 hours 0.9 hours	HK$800 HK$1,000 HK$1,170

Involvement of ZH is unjustified.  Her costs are disallowed in full.

32.  The plaintiff adopted a broad brush approach in objecting the time spent by CMH and LKT.  Although I have considered each and every document, bearing in mind this is a summary assessment, I will adopt a similar approach.  Having done so, I agree with the plaintiff’s objection and allow the time spent by CMH and LKT at 1.5 and 3 hours respectively.  The total costs allowed are HK$4,000 x 1.5 + HK$2,000 x 3 = HK$12,000.

III3.3. Items D3.1 and D4.1

33.  This is the preparation for hearing before Master Ho on 11 March 2013 and the attendance of the hearing :

D3.1	Preparation for Hearing before Master Ho (11.03.2013)	CMH ZH	0.2 hours 0.5 hours	HK$800 HK$650
D4.1	Hearing before Master Ho (11.03.2013)	CMH ZH	0.8 hours 0.8 hours	HK$3,200 HK$1,040

34.  The hearing before Master Ho was to deal with the consent summons (Item D1.2).  On any view, the consent summons was simple and straightforward.  CMH did not need the assistance of ZH.  ZH’s costs are disallowed in full.  5 minutes for the preparation and 15 minutes for attending the hearing by CMH are allowed.  His costs allowed are HK$4,000 x 1/3 = HK$1,333.

III3.4. Items D3.2 and D4.2

35.  These items are:

D3.2	Preparation for Hearing before Hon Poon J(23.05.2013)	CMH LKT ZH	0.2 hours 0.9 hours 0.4 hours	HK$800 HK$1,800 HK$520
D4.2	Hearing before Hon Poon J (23.05.2013)	CMH LKT ZH	0.1 hours 0.1 hours 0.1 hours	HK$400 HK$200 HK$130

36.  They concern the hearing before me on 23 May 2013, which was attended by counsel.  The attendance by CMH is already sufficient, which means that the involvement of LKT and ZH is unjustified.  Their costs are disallowed.  For CMH, the time for preparation is 10 minutes and attendance is 5 minutes, totaling 15 minutes.  His costs allowed are HK$4,000 x 1/4 = HK$1,000.

III4. Item E – Counsel fees

37.  Counsel, who was called in 2005, charged a brief fee of HK$60,000 for the hearing before me on 25 May 2013.  The plaintiff raised no objection.  This is allowed in full.

III5. Item F – Other disbursements

38.  This is the court fee for certified English translation at HK$1,512 which is agreed by the plaintiff.  This is allowed in full.

III6. Total costs allowed

39.  The total costs allowed on the O14 Summons are HK$163,403.

IV. COSTS OF THE SETTING ASIDE SUMMONS

IV1. Item B – Manual work

40.  This is photocopying charges at the sum of HK$30.  This is allowed in full.

IV2. Item C – Communication including conference, telephone calls and letters

41.  This consists of attendance on client by LKT at HK$400 and attendance on counsel by CMH at HK$400 and LKT at HK$400 respectively.  The amounts claimed are reasonable and allowed in full.

IV3. Item D – Profession Work

42.  There are three items.

IV3.1. Item D1 – Perusal of documents

43.  This item is :

D1.1	Summons (22.05.2013)	CMH LKT ZH	0.1 hours 0.1 hours 0.2 hours	HK$400 HK$200 HK$260
D1.2	2nd Affidavit ofJeffrey Haydn Land(22.05.2013)	CMH LKT ZH	0.1 hours 0.3 hours 0.5 hours	HK$400 HK$600 HK$650
D1.3	Plaintiff's Supplemental Skeleton (22.05.2013)	CMH LKT ZH	0.2 hours 0.2 hours 0.8 hours	HK$800 HK$400 HK$1,040

44.  ZH’s involvement is unjustified.  Her costs are disallowed.

45.  For the time spent by CMH and LKT, the time allowed on a broad brush approach for both CMH and LKT is 20 minutes.  Their total costs are allowed at (HK$4,000 + HK$2,000) x 1/3 = HK$2,000.

IV3.2. Items D2 and D3

46.  These concern the hearing before me on 23 May 2013 :

D2.1	Preparation for Hearing before Hon Poon J (23.05.2013)	CMH LKT	0.1 hours 0.1 hours	HK$400 HK$200
D3.1	Hearing before Hon Poon J (23.05.2013)	CMH LKT ZH	0.3 hours 0.3 hours 0.3 hours	HK$1,200 HK$600 HK$390

47.  As I have said, since the hearing was attended by counsel, the attendance by CMH is already sufficient.  The involvement of LKT and ZH is unjustified.  Their costs are disallowed.  For CMH, the time for preparation is 10 minutes and attendance is 5 minutes, totaling 15 minutes.  His costs allowed are HK$4,000 x 1/4= HK$1,000.

IV4. Total costs allowed

48.  The total costs allowed on the Setting Aside Summons are HK$4,230.