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

CACV 306/2019

[2024] HKCA 1189

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 306 OF 2019

(ON APPEAL FROM HCB 4475/2002)

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D E C I S I O N

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1.  The applicant has taken out the summons dated 28 August 2024 (“the Stay Summons”)  to stay the enforcement of (1)  the allocatur dated 15 February 2024 in respect of the 2^nd to 4^th respondents’ taxed bill dated 6 June 2021 (“the Bill”), and (2)  Master So’s costs order dated the 13 May 2024.  

2.  To properly understand the context of this stay application, it is necessary to bear in mind the following events.

(1)  The allocatur dated 15 February 2024 was made after a review of taxation before Master So and after Master So handed down her decision on review on 27 November 2023.

(2)  On 12 March 2024, the applicant took out a summons pursuant to Order 62 rule 35 to review Master So’s review on the taxation of the Bill (“the Review Summons”).  That summons was ordered by consent to be adjourned for substantive argument to a date to be fixed before a judge in chambers. 

(3)  Subsequently, the applicant failed to fix a date for substantive argument on two occasions in April 2024. 

(4)  More than four months later, the applicant took out the Stay Summons on 2 September 2024.

(5)  In response, the 2^nd to 4^th respondents took out a summons to dismiss the applicant’s Review Summons on 5 September 2024 (“the Dismissal Summons”).  This summons was taken out because no substantive hearing had yet been fixed by then by the applicant.  In particular, by a letter dated 11 September 2024, the solicitors for the 2^nd to 4^th respondents wrote to the applicant’s solicitors to say, amongst other things, that the Review Summons had already been effectively restored by the 2^nd to 4^th respondents’ taking out of the Dismissal Summons to be returnable on 5 December 2024. 

(6)  There was no response to the 2^nd to 4^th respondents’ solicitors’ letters dated 11 September 2024.  At the hearing, Mr George Chu, on behalf of the applicant, informed the court that the applicant’s solicitors did receive the letter and considered that in the light of the contents of the letter, it was no longer necessary for the parties to proceed to fix another hearing for the determination of the Review Summons. 

3.  I agree with the 2^nd to 4^th respondents’ submission that their Dismissal Summons should be determined first.  In determining that summons, it is necessary for the court to properly consider the merits of the applicant’s Review Summons.  In this connection, contrary to the applicant’s submission, I do not think the Dismissal Summons is tantamount to a striking out application.  The Dismissal Summons is essentially the flip side of the applicant’s Review Summons.  If the Review Summons has no merits, it must be dismissed, which is what the 2^nd to 4^th respondents are contending for in the Dismissal Summons.

4.  I note that sufficient notice has been given to the applicant that his Review Summons would need to be substantively determined at today’s hearing.  First, the applicant’s solicitors were informed about the Review Summons by the letter from the 2^nd to 4^th respondents’ solicitors dated 11 September.  Further, as I said earlier, the court would need to assess the merits of the Review Summons in the context of determining the Dismissal Summons, which is before the court today.  Third, counsel for the 2^nd to 4^th respondents have included in their skeleton detailed submissions on the lack of merits in the Review Summons, which the applicant must deal with in order to demonstrate that the Review Summons has merits.

5.  I therefore start by considering the Review Summons and the Dismissal Summons.  According to the scope of review at Annex 1 to the Review Summons, the applicant relies on the following four broad grounds to support his review: (1)  the Master ruled on the “preliminary issues” without giving written reasons; (2)  the Master was wrong to allow the fees of the senior junior counsel;  (3)  the fee earners’ hourly rates and the time spent were excessive, and (4)  there was duplication of work.  These broad grounds are taken from paragraph 12 of Mr Lung’s skeleton and Mr Chu orally accepted them at the hearing as an accurate summary of Annex 1. 

6.  As to the first ground, that is whether the Master ruled on the “preliminary issues” without giving written reasons, I see no merit in it.  It is clear from [19] of the Review Decision that Master So considered the issues concerning the hourly rates of the solicitors and whether their time was grossly excessive were “matters for consideration at taxation”, and were therefore not “preliminary issues” as contended for by the applicant.

7.  As to the second ground, the applicant contends that the Master was wrong to allow the fees of the senior junior counsel.  Specifically, the applicant argues that the Master should only have allowed the fees of the most junior counsel but disallowed the fees of the middle junior.  The applicant asserts in Annex 1 that when three counsel are instructed “the ordinary rule is that the middle junior is not included” for the purpose of taxation.  

8.  I am unable to accept these submissions.  The applicant has not referred to anything to support his assertion that there is an “ordinary rule” in taxation that the middle junior’s fee is not included when a receiving party instructed three counsel and obtained a certificate for two counsel. 

9.  The applicant’s assertion is also contrary to what Deputy High Court Judge Reyes SC said in a related decision given on 18 March 2024 ([2024] HKCFI 851)  where his Lordship at [12] said that it “does not mean that, if a certificate for two counsel is granted, a master should treat the certificate as covering the very junior counsel’s complimentary charge rather than the fees of the senior junior counsel’s briefed”. 

10.  At the hearing, Mr Chu fairly accepted that he could not maintain that there is an ordinary rule that the middle junior’s fee is not included when a receiving party instructed three counsel and obtained a certificate for two counsel. 

11.  Instead, at the hearing, Mr Chu refers to the Court of Appeal’s decision in Cheung Sun Lam v Lai Kam Man [2008] 5 HKLRD 1 and submits that Rogers VP at [6] and [7] laid down a principle which a taxing master must follow when taxing counsel’s fees.  In particular, Mr Chu submits that the taxing master needs to assess the respective notional fees of the leading and junior counsel and assess them by reference to the assistance provided by the junior counsel to the leading counsel. 

12.  In my view, these arguments do not advance the applicant’s case on counsel’s fees any further.  First, it is not a point raised in Annex 1 of the Review Summons and was not raised in the applicant’s two skeletons filed before the hearing. 

13.  In any event, as pointed out by Mr Lung, Master So, in [193] of her Review Decision, expressly said that she had taken into account all the relevant circumstances including seven different factors when considering the discretionary costs, including counsel’s fees.  The seven factors were taken from Part III of the First Schedule to Order 62.  In considering the seven factors, it seems to me that the learned Master would have had to consider the matters which were referred to by Rogers VP in the Cheung Sun Lam case. 

14.  The applicant’s third ground is that the fee earners’ hourly rates were excessive.  It is important to be reminded of the correct approach of this court in considering the review of a taxing master’s certificate under Order 62 rule 35. 

15.  As Kwan JA said in Lam and Lai Solicitors v Ho Chun Yan Albert [2018] 2 HKLRD 127 at [23] and [29]: “a review of taxation by a judge under [Order 62 rule 35] is not a hearing de novo, and the judge should only interfere with the decision of the taxing master in limited circumstances: if it is shown to have been arrived at under a mistake of law, or in disregard of principles, or under a palpable misapprehension as to the facts, or plainly in reliance on irrelevant matters, or to be such as to fall outside the generous ambit within which reasonable disagreement is possible”.  At the hearing, Mr Chu accepts that this court is bound by the Court of Appeal’s decision. 

16.  In Annex 1 of the Review Summons, the applicant refers to the hourly rates of two fee earners with the initials “KC” and “TS” at different periods of time and suggests that such rates should be reduced.  I note that the applicant has not identified the precise basis for challenging the Master’s decision in adopting such rates. 

17.  Master So considered the hourly rate issue in [29] to [43] of the Review Decision.  In particular, the learned Master said at [36] that “Whether the hourly rate is clearly excessive depends on the circumstances of each case” and “When considering the hourly rates of KC and KC1, I have considered a number of factors, including the background and circumstances of this case, the complexity of issues involved in the appeal, which was heard by the Court of Appeal, the nature of the work involved and the possibility of delegating to junior staff”. 

18.  I am not satisfied that the applicant has identified sufficient material to support how the Master was wrong in law in coming to her decision in relation to the hourly rates of the fee earners.

19.  I note that the applicant in paragraph 12 of his 3^rd affirmation suggested that the Master was wrong in ignoring the indemnity principle.  But this is not a point mentioned in Annex 1 of the applicant’s Review Summons.  In any event, in [49] of the Review Decision, Master So referred to the “indemnity principle” and said that the court can and should, unless there was evidence to the contrary, assume that the certificate in the bill of costs shows that the indemnity principle has been complied with.  The applicant has not in any way explained how Master So was wrong in law in this regard. 

20.  Accordingly, I see no merit in this ground of complaint. 

21.  I now deal with the applicant’s fourth and last ground, which is concerned with the fee earners’ time and whether there was duplication of work.

22.  In paragraph 19 of their skeleton submission, counsel for the 2^nd to 4^th respondents have identified various matters which Master So had considered in the fee earners’ time and the issue concerning duplication of work.  The applicant has not identified any error in the Master’s approach which merits this Court’s intervention. 

23.  It seems from Mr Chu’s submission that the real complaint that the applicant is making is that the taxed costs are excessive and that the applicant wishes the Court to give a more generous discount.  But this is not the purpose of the review under Order 62 rule 35. 

24.  However, as I have already said, this court can only interfere with the decision of the taxing Master in limited circumstances.  And this is something which the applicant should be well aware of.

25.  In a decision given by Deputy High Court Judge Reyes SC on 18 March 2024 involving the same parties ([2024] HKCFI 851), the learned judge at [18] said that he could not “substitute assessments as to what [he] would have thought reasonable in place of the evaluations which [the taxing master] conducted” and “absent any error in principle or law or some glaring misapprehension of facts ... [he was] not in a position to disturb [the taxing master’s] taxation”.

26.  For all these reasons, it does not appear to me that any of the applicant’s grounds in the Review Summons has any merits.  The applicant’s Review Summons should therefore be dismissed.  And the Dismissal Summons is allowed. 

27.  The remaining thing to deal with is the applicant’s Stay Summons.  Now that the Review Summons has been dismissed, the applicant can no longer seek to stay the enforcement of the allocatur and the costs order pending the outcome of the Review Summons.  It follows that the Stay Summons must also be dismissed.

28.  I will now hear the parties on costs.