FORDTIME INDUSTRIAL LTD v. YIP SHING LAM t/a TRADITIOAL CHINESE NOODLE

HCMP 1373/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 1373 OF 2014

(ON AN INTENDED APPEAL FROM LDPE NO. 757 OF 2012)

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DECISION ON COSTS

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Hon Kwan JA (giving the decision of the Court):

1. On 25 July 2014, we handed down our decision refusing the respondent leave to appeal to the Court of Appeal. We made an order nisi in favour of the applicant and assessed its costs summarily at $35,000.

2. The applicant applied by letter on 1 August 2014 to vary the gross sum assessment.  The respondent opposed the application by the letter of his solicitors dated 5 August 2014.

3. Represented parties in applications for leave to appeal to the Court of Appeal in civil matters have invariably been directed to submit to the Registry at the same time they lodge their skeleton arguments a statement of costs for the purposes of summary assessment of costs irrespective of whether they intend to seek summary assessment[1].  Pursuant to Practice Direction 14.3 §10, practitioners are reminded that the principle that a receiving party cannot recover a sum in excess of his liability to his own solicitors applies equally to gross sum assessment and the solicitor for the party seeking costs shall certify on the statement of costs as follows:

“I certify that the amount claimed in this statement of costs does not exceed [the plaintiff’s/defendant’s] liability for costs to my firm in respect of this [summons/hearing/action, etc.]”

4. Regrettably, when the applicant’s solicitors submitted their statement of costs on 2 July 2014 (“the Statement of Costs”) with counsel’s skeleton submissions opposing leave to appeal, the Statement of Costs did not contain the certification as required.

5. The Statement of Costs claimed total costs of $200,000, made up of solicitors’ charges of $150,000 and counsel’s fees of $50,000.  We have in our judgment of 25 July criticised this as grossly inflated on any view and taxed down solicitors’ charges to $15,000 and counsel’s fees to $20,000.

6. The applicant’s solicitors have now put forward new materials on which solicitors’ charges should be assessed.

7. For section B of the Statement of Costs, they now claim $344 for photocopying charges and 3 attendances by litigation clerk at $50 each, making a total of $494.  In contrast, the Statement of Costs claimed photocopying charges of $1,000 and attendances by litigation clerk at $3,000.

8. For section C, they now claim 3 hours for a fee earner at $4,000 per hour, in respect of communications with client, other parties and counsel, in the total sum of $12,000.  In contrast, the Statement of Costs claimed 10 hours for the fee earner and another 9 hours for a litigation clerk, making a total of $49,000.

9. In respect of section D, which relates to professional work consisting of drafting, perusal of documents and general care and conduct, they now claim 4 hours for the fee earner, in the total sum of $16,000.  The total amount originally claimed for this section was 24 hours for the fee earner, at the total sum of $96,000.

10. On the basis of the new materials, the applicant’s solicitors submitted that profit costs in the total sum of $28,494 should be allowed to them.

11. We would revise our assessment of the solicitors’ charges in the light of the new materials.  We make no reduction for section B.  We would reduce the fee earner’s time from a total of 7 hours to 6 hours.  Our revised assessment for solicitors’ charges is $24,494.

12. In respect of counsel’s fees, it was submitted that the amount of $50,000 is not excessive to warrant a deduction. In support of this, it was contended that counsel had to refer to all relevant documents in the court below and “large parts of the transcript of the trial”, that the matter carried great importance for the applicant, that the new draft notice of appeal contained 14 grounds and a new paragraph 4 was added, and that the respondent was represented by very experienced Senior Counsel and junior counsel.

13. None of the above carries any weight with us.  As stated in the last paragraph of the skeleton submission of the applicant’s counsel, the leave application is a simple application that should be determined on the basis of written submissions only.  More importantly, as pointed out in our earlier judgment, the draft notice of appeal placed before this court is essentially the same as the draft considered in the court below, with the addition of paragraph 4 as the only change of substance.  The applicant’s counsel was fully familiar with the facts and issues involved, as he was the trial counsel and appeared for the applicant in all subsequent hearings.  His skeleton submission before us is largely similar to his skeleton submission in the leave application before the judge, and does not contain one single reference to any part of the transcript, let alone to large parts of it.  His fee of $50,000 is just marginally less than the combined fees of the very experienced Senior Counsel and junior counsel retained by the respondent.

14. We decline to vary our assessment of counsel’s fees.

15. The outcome is that we set aside our assessment of the applicant’s costs at $35,000 and increase the costs to $44,494.

16. For the costs of the application to vary the gross sum assessment, we have regard to the fact that the respondent is not entirely successful in opposing this application.  We only revise our assessment on the basis of the new materials before us, which should have been placed before the court in the Statement of Costs had this been properly done.  We think it would be fair in the circumstances to make no order as to the costs of this application, and we so order.

[1] Letter of the Chief Judge of the High Court dated 10 August 2012 to the Chairman of the Hong Kong Bar Association, copied to the President of the Law Society