ERIC EDWARD HOTUNG v. HO YUEN KI AND OTHERS

HCA 571 OF 2003 & HCMP 2820/2002
& HCMP 4511/2002 (Consolidated)

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 571 OF 2003

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(Consolidated by the Order of Deputy High Court Judge To dated 10th April 2003)

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DECISION ON REVIEW OF TAXATION

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Background

1.  Review of counsel’s refresher forms the subject matter of what Mr. Chain, counsel for the Plaintiff has convenient termed the 1^st Review.  The 2^nd Review touches upon an entirely, and perhaps more thorny issue.  It will be the subject of another, later decision as the matter is currently being argued.

The argument

2.  Mr. Chain has contended that Mr. Egan’s refreshers for representing the various defendants before the trial were excessive and unreasonable.  He drew a comparison with the refreshers charged by the Plaintiff’s counsel, Mr. McCoy.  Mr. Egan’s daily refresher was $70,000 as against Mr. McCoy’s of just $40,000.

3.  Mr. Chain further submitted that it was legitimate to take into consideration the refreshers paid by his client.  It was, he urged, a relevant factor.

4.  Mr. Peaker for the 2^nd Defendant said such a comparative approach was wrong in principle.  Fees paid to opposing counsel cannot be a yardstick by which the reasonableness or otherwise of counsel’s refresher should be determined.

Determination

5.  O. 62 Part III (Fees to Counsel) of the appendix affords a convenient starting point.  The relevant paragraphs of 62/App/28 provide (2008 ed.):

(4)  A refresher fee, the amount of which shall be in the discretion of the taxing master, shall be allowed to counsel, either for each period of five hours (or part thereof), after the first, during which a trial or hearing is proceeding or, at the discretion of the taxing master, in respect of any day, after the first day, on which the attendance of counsel at the place of trial if necessary.

(5)  Every fee paid to counsel shall be allowed in full on taxation, unless the taxing master is satisfied that the same is excessive and unreasonable, in which event the taxing master shall exercise his discretion having regard to all the relevant circumstances and in particular to the matters set out in paragraph 1(2).  They are:

(a)  the complexity of the item or of the cause or matter in which it arises and the difficulty or novelty of the questions involved;

(b)  the skill, specialized knowledge and responsibility required of, and the time and labour expended by, counsel;

(c)  the number and importance of documents (however brief) prepared or perused;

(d)  the place and circumstances in which the business is transacted;

(e)  the importance of the cause or matter to the client;

(f)  where money or property is involved, its amount or value;

(g)  any other fees and allowances payable to counsel in respect of other items in the same cause or matter, but only where work done in relation to those items has reduced the work which would otherwise have been necessary in relation to the item in question.

6.  This was a sufficiently complex and heavy piece of litigation to have warranted the engagement of counsel of the calibre and experience of Mr. McCoy and Mr. Egan in the trial before Hon Tang JA sitting as an additional judge of the Court of First Instance.  The documentation counsel had to peruse was undeniably extensive.  At issue was the alleged right of the Plaintiff to revoke the two trusts set up for his children, the personal defendants in the suit.  Huge sums of money were at stake and the matter was plainly of considerable significance to the clients.  The cross-examination skill of Mr. Egan undoubtedly contributed to the result that was achieved.

7.  I remain mindful that this review (as was the actual taxation) is on the party and party basis.

8.  The rubric under 62/App/31 warned against treating the fee paid by the other party as a yardstick on party and party taxation.  Mr. Chain submitted that that was a mis-reading on the part of the learned editors of the decisions of Simpsons Motor Sales (London) Ltd v Hendon Borough Council [1965] 1 W.L.R 112 and Ngan Wun Yeung v Lok Sin Tong Benevolent Society, Kowloon & Ors [2000] 2 HKC 404.  He argued that the authorities did not go that far.  Rather, they justified taking Mr. McCoy’s refreshers into consideration.

9.  I do not agree that there has fairly speaking been a mis-statement of the effect of the two decisions in any way.

10.  In Simpsons Motor Sales (London) Ltd, Pennycuick J in addressing the complaint premised on a numerical comparison of counsel’s briefs, commented:

“The point does not admit of much elaboration, but I must answer in conclusion certain specific points taken by Mr. Harman.  First, he naturally stresses the fact that the plaintiff company’s leader, who was also counsel of high caliber, was content to accept 400 guineas only upon his brief for the plaintiff company.  This is certainly a factor of weight but not, I think, by any means conclusive.  In the ordinary course of events it often happens that the clerks to counsel of comparable degree ask for rather different fees, but I do not think that in these circumstances one is justified without more ado in saying that one counsel has asked too much. It can equally be said that the other has asked too little.  The truth is that there is no exact figure which can be said to represent the proper fee.  I agree with the taxing master’s comment that it is not a sound principle of taxation to treat the fee paid by the other party as the appropriate yardstick; indeed, the application of such a principle would lead to obviously undesirable consequences.” (at 119H-120A-B) (emphasis mine)

11.  The decision was followed in the Ngan Wun Yeung case.  In assessing counsel’s brief fee on an application for review, Master Poon, as he then was, stated:

“Mr Pirie further submits that in determining his brief, I should compare the fees charged by other counsel acting for the defendants, one of whom is a senior counsel.  He relies on Lord High Chancellor v Wright & Anor [1993] 4 ALL ER 74.  There Garland J held that when determining defence counsel’s fees in a criminal case in the Crown Court the fee paid to counsel for the prosecution is ‘other relevant information’ within the meaning of the Legal Aid in Criminal and Care Proceedings (Costs) Regulations 1989 to which regard may be had.  That case is clearly distinguishable.  First, it is a criminal case.  Secondly, the court was concerned with the construction of a particular regulation.  I would, with respect, prefer and adopt the approach approved by Pennycuick J in Simpsons Motor Sales (London) Ltd v Hendon Corp (No 2), supra, at p 120:

I agree with the taxing master’s comment that it is not a sound principle of taxation to treat the fee paid by the other party as the appropriate yardstick; indeed, the application of such a principle would lead to obviously undesirable consequences.

Therefore, I decline Mr Pirie’s request to compare the fees paid to the defendants’ counsel with his own.” (at 416H-417C)

12.  It is therefore patent that the court when assessing what is the appropriate brief fee to allow on taxation may take into consideration the fees paid to other counsel in the case.  Such is relevant, albeit not conclusive information that would be of some assistance in the exercise.  As a matter of principle, the same approach is equally applicable to a determination of the reasonable level of the refresher.

13.  In assessing Mr. Egan’s refresher, I have considered Mr. McCoy’s remuneration as also on what fee a hypothetical counsel capable of conducting the case effectively, but unable or unwilling to insist on the high fees demanded by counsel of pre-eminent reputation, would be content to accept instructions.  I have equally taken into consideration the various factors adumbrated in 62/App/28.

14.  I find on review that Mr. Egan’s daily refresher is neither unreasonable nor excessive given the nature of the litigation.  The review is therefore dismissed with costs to the 2^nd Defendant, taxed if not agreed.