HORNOR RESOURCES (INTERNATIONAL) CO LTD v. SAVVY RESOURCES LTD

HCA335/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 335 OF 2010

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DECISION
ON ASSESSMENT OF COSTS

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General

1.  The costs to be assessed are the plaintiff’s costs of: (i) the ex parte application for Mareva injunction on 5 March 2010; (ii) the plaintiff’s summonses dated 8 March 2010 for the continuation of the injunction; and (iii) the defendant’s summons dated11 March 2010 for the discharge of the injunction.  The two summonses were returnable on 12 March 2010 and the substantive hearing took place on 19 March 2010.  The evidence involved, which takes the form of 8 affirmations from both sides, is quite substantial.

2.  By the Decision on 21 April 2010, I granted a certificate for two counsel and directed for summary assessment of the plaintiff’s costs. 

3.  The plaintiff’s statement of costs claims a total sum of $827,462.

4.  The plaintiff’s costs are awarded on party-and-party basis.  As such, only costs that are necessary or proper for the attainment of justice or for enforcing or defending the taxing party’s rights will be allowed: Order 62 rule 28(2) of Rules of the High Court, Cap.4A. 

Fee earners’ hourly rates

5.  Item A4:  The hourly rate of LJL ($4050) is opposed. LJL was admitted in 2002 and is a partner of the firm. The rate usually allowed on taxation for a solicitor of similar seniority is $3500.  It was pointed out that he had substantial pre-qualification experience, having worked for 9 years with another solicitors firm and was engaged in maritime arbitration work and teaching.  I accept that in appropriate cases, pre-qualification experience may justify upward adjustment of the hourly rate of a fee earner.   Notwithstanding this, I do not consider there is justification for allowing the hourly rate of LJL at $4050, which is even higher than the rate usually allowed on taxation for practitioners of over 10 years’ qualification.  The hourly rate of LJL is allowed at $3500.   

6.  As for the hourly rates of the other fee earners, the plaintiff agrees to the reductions proposed by the defendant.  Hence, the hourly rates are allowed at $2500 for ZFW, $3000 for TW and $1300 for PL.

Communications

7.  Item C1 Attendance on client: Between the four fee earners, a total of 32 hours and 39 minutes is claimed.  While acknowledging that the urgent and important nature of the injunction, having regard to the duration of the ex parte application and the two summonses, which was about three weeks, the time spent on attendance on client is excessive on party-and-party basis.  Each of the time of LJL and ZFW is reduced to 10 hours.

8.  Item C2 Attendance on other side: 4.9 hours of ZFW’s time is claimed.  I consider this is a reasonable time.      

9.  Item C3 Attendance on counsel and commenting on submissions: Between the three qualified fee earners, a total of 19.5 hours is claimed.  The senior counsel and the first junior counsel have substantial seniority and experience, including experience on interlocutory injunction applications.  On party-and-party basis, the time incurred on attending counsel and dealing with counsel’s submissions is excessive.  I will allow LJL’s time at 4 hours and ZFW’s time at 7 hours. 

10.  Item C4 Attendance on law costs draftsman: Relying on paragraph13 of Practice Direction 14.3, the defendant contends that the costs of drafting statement of costs and communication with law costs draftsman should not be allowed.  Under paragraph 13, the costs for gathering information and drafting statements of costs will generally not be granted.  This is because summary assessment of costs is not an occasion for mini-taxation and prolixity in contents is not allowed.  The receiving party is not required to give a detailed and meticulous bill of costs.  Hence, the Practice Direction has prescribed a format for the statement of costs.  While I accept the plaintiff’s argument that the court retains a discretion over the costs of drafting the statement of costs and/or the engagement of law costs draftsman, there has to be exceptional circumstances, and this should be rare, for allowing such costs.  I do not agree that paragraph 13 is directed only at short interlocutory applications.  It should be noted that if complex calculations are involved, for example where there are tedious issues of apportionment, then it maybe that it is not an appropriate case for summary assessment. 

11.  The plaintiff argues that a lot of work has been carried out in the present case and it is proper to instruct law costs draftsman to prepare the statement of costs and to advise on costs submissions.  I do not consider the volume of work involved is unusually large for interlocutory injunctions of the kind.  I do not accept there is justification for departing from the general position that the costs of and relating to the drafting and preparation of statement of costs are not allowed on summary assessment of costs.

12.  This item is therefore disallowed. 

13.  Item C6 Attendance on banks: A total of 10 hours is claimed, with 9.1 hours incurred by ZFW and 54 minutes by PL.  It is explained that there are many letters between the banks and the plaintiff’s solicitors and the banks had raised many questions.  The plaintiff is however prepared to accept a 20% reduction.  I note in this case the plaintiff’s solicitors will need to communicate with banks both in connection with the ex parte Mareva injunction and the variations of it ordered on 12 March 2010.   Despite that, the incurrence of 10 hours on dealing with the banks within a short span of two weeks from the date the ex parte order was granted to the substantive hearing cannot be said to be necessary or proper costs.  I allow 5 hours of ZFW’s time and 30 minutes of PL’s time.

Professional work

14.  Item D1 Plaintiff’s summonses and affirmations:  A total of 15.3 hours (3 hours for LJL and 12.3 hours for ZFW) is claimed.  The statement of costs refers to a summonses dated (or filed on) 6 March 2010.  There is no summons dated or filed on that date.  Only the writ of summons was filed on 6 March 2010.  The costs of preparing the writ of summons, however, are costs of the action and should not be included in the costs of the ex parte application or costs of the applications to continue/ discharge the injunction.   

15.  Eight affirmations had been filed on behalf of the plaintiff in relation to the ex parte application and the applications to continue/ discharge the injunction.  Although some of the affirmations are short ones, I accept considerable time was required to prepare them, including collating the exhibits.  Hence, after excluding the time for the writ of summons, I allow LJL’s time at 2.5 hours and ZFW’s time at 10 hours.

16.  Item D2 Defendant’s summons and affirmations: LJL and ZFW each claims 2 hours, totaling 4 hours, for this item. The defendant says excessive time is claimed.  Having regard to the fact that one summons and five affirmations (some of them with lengthy exhibits) had been served on behalf of the defendant, I consider the time claimed not excessive.  The item is allowed in full. 

17.  Item D3 Reviewing documents and preparing hearing bundles: ZFW claims 6 hours in total for the three hearings on 5, 12 and 19 March 2010.  It is not disputed that time for collating, paginating and copying hearing bundles cannot be separately claimed.  Time will only be allowed for the drafting of the index and checking that the bundles are in order.  On this basis, the time for the hearing bundles for the three hearings are allowed at 0.5 hour, 0.5 hour and 1.5 hours,totalling 2.5 hours.

18.  Item D5 Searches: ZFW claims 2.2 hours, but the plaintiff is prepared to accept a 10% reduction.  While agreeing that it is necessary to conduct some searches, I consider the appropriate time should be limited to 1 hour.

19.   Item D7 Hearings: On party-and-party taxation, time incurred in waiting is generally not recoverable.  According to the court record, the hearing on 5 March lasted for 17 minutes (5:13 pm to 5:30 pm) and that on 12 March 2010 lasted for 44 minutes (10:10 am to 10:54 am).  Hence, LJL’s time is allowed at 0.3 hour and that of TW for 12 March 2010 is allowed at 0.75 hour.  The time of TW for 19 March 2010 (5 hours) is allowed as claimed.

20.   Item D8 Care and conduct: Considering the short duration and, on the other hand, the amount of activities that had taken place, I allow 15 minutes of LJL’s time.

Counsel fees

21.  Item E1, E3 to E5, E7 & E8 Counsel brief fees: I acknowledge counsel brief fees are on the high side, but I do not consider they are excessive in light of the urgency of the matter, the limited time and the amount of papers and work involved.  I allow counsel’s brief fees as claimed.

22.  Items E2 and E6 Counsel half refreshers: The plaintiff justifies the half refreshers for senior and junior counsel on the basis that the hearing had overrun.  Presumably this is referring to the substantive hearing of the applications to continue or discharge the injunction on 19 March 2010.  Although the hearing finished at 5:09 pm, it did not spill over to another day.  There is no basis for claiming a refresher, whether it is a half or full refresher.  These items are disallowed.      

Other disbursements

23.  Items F1 and F2 Quangxi Qidi Law Firm & Stamford Law: On the basis of the explanations given by the plaintiff, I accept the work conducted by these agents were necessary and relevant.  These items are allowed.

24.  Item F3 Court fees: The fees for issuing the writ is costs of the action and do not come within the costs of the ex parte and inter-partes applications.  Only the fees for the issue and sealing of the injunction order (i.e. $1045) are allowed.

25.  Item F4 Law costs draftsman’s fees: For the reasons set out in paragraph   above, this item is not allowed.

Summary

26.  The total costs of the plaintiff on thse statement of costs are assessed and allowed at HK$ 647,862. The breakdown is as below:

Items	Time allowed	Amount allowed (HK$)
B.    Manual work                   B1          B2          Sub-total		7,374            1,400            8,774
C.    Communications           C1           C2           C3           C4           C5           C6           Sub-total	LJL:   3500 x 10 hrs ZFW: 2500 x 10 hrs TW:   3000 x 1hr PL:    1300 x 9/60 hr ZFW:  2500 x 4.9 hrs  LJL:    3500 x 4 hrs ZFW:  2500 x 7 hrs TW:    3000 x 1 hr Nil ZFW: 2500 x 36/60hr ZFW: 2500 x 5 hrs PL:    1300 x 0.5 hr	35,000           25,000             3,000                195           12,250           14,000           17,500            3,000                  0            1,500            12,500                650           124,595
D.   Professional work           D1           D2           D3           D4           D5           D6           D7           D8           Sub-total	LJL:   3500 x 2.5 hrs ZFW: 2500 x 10 hrs LJL:   3500 x 2 hrs ZFW: 2500 x 2 hrs ZFW: 2500 x 2.5 hrs ZFW: 2500 x1 hr ZFW: 2500 x 1 hr ZFW: 2500 x 24/60hr LJL: 3500 x 0.3 hr TW:  3000 x 5.75 hrs LJL: 3500 x 0.25 hr	8,750            25,000              7,000              5,000              6,250              2,500              2,500              1,000              1,050            17,250                 875            77,175
E.   Counsel fees           E1           E2           E3           E4           E5           E6           E7           E8           Sub-total		180,000                      0             65,000             55,000           103,000                      0             13,000             15,000           431,000
F.   Other disbursements           F1           F2           F3           F4           Sub-total		2,350             2,923             1,045                    0             6,318
Total		647,862