CITIBANK (WEST), FSB v. EMERALD WORLDWIDE HOLDINGS INC LTD AND ANOTHER

HCA97/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 97 OF 2002

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D E C I S I O N

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1. At the Summons day on 26 March 2004, on the plaintiff's application, I discharged the ex parte mareva injunction order granted on 19 January 2004 and extended by the Order dated 6 February 2004 with costs to the plaintiff. The plaintiff applied for gross sum costs under Order 62 rule 9(4)(b) of the Rules of the High Court, and handed up a bill of costs. I reserved the decision on the assessment of the amount, which I now give.

2. The costs covered by this assessment relate to the application for the ex parte Order, the return date of the inter partes summons on 6 February 2004 and the second hearing on 26 March 2004, at which the order for discharge was made. The plaintiff's bill of costs comes up to $211,044.20. This amount does not include the costs on the mechanical preparation of the order of 26 March 2004, which should be in the region of $177, as the order is likely to consist of no more than 3 pages. No counsel fee is claimed.

3. Under the bill of costs, time costs are claimed for four fee earners. The main fee earner and handling solicitor is GL. He is also the solicitor who appeared at all the three hearings. He was admitted in 1996 and had some 8 years' experience when he handled the case. He therefore has considerable post-admission experience. That being the case, the involvement of another solicitor (IS) with similar practising experience in Hong Kong does not appear to me to be justified on a party-and-party taxation. In particular, 5 hours of IS's time for care and conduct cannot be justified.

4. In terms of the hourly rate, the claimed rate of $1,053 for litigation clerk is above the rate usually allowed for litigation clerk by taxing master. The appropriate rate is $1,000.

5. For the ex parte application and the first hearing of the inter partes summons, GL claims 34.5 hours and 8 hours of work respectively. He additionally claims 13.6 hours for correspondence with client, HSBC, the garnishee, the defendants and the court.

6. I reduce the time claimed to 27.5 hours, 4 hours and 7 hours respectively, having regard to the following matters:

(1) The factual background of the case and the application, as appears from the affidavit leading the application, is not complicated.

(2) The exhibits are straightforward, consisting essentially of US Court papers, bank and company search documents.

(3) There is no unusual feature in the Order sought, which is modeled fairly closely on the specimen order in the Practice Direction.

(4) The defendants had not filed any opposing affidavit. Other than appearing by solicitor at the first hearing of the inter partes summons, at which agreement was reached on the directions to be given, the defendants had not taken any active step to contest the ex parte Order.

(5) GL, as noted above, is of considerable experience.

(6) There are bound to be duplications of work and time between the preparation and drafting of the Statement of Claim, which is outside the scope of the present costs order, and those of the injunction papers.

(7) The total time spent for the first inter partes hearing is too long, having regard to the previous preparation and work undertaken for the ex parte hearing and there was no indication that it would be a contested hearing. The skeleton submission lodged was substantially the same as that used for the ex parte application.

(8) The large number of correspondence with client, if relates solely to the injunction application, is excessive on a party-and-party taxation. If it is inclusive of matters on the general aspects of the case, then it is outside the scope of the present costs order.

7. Rounding up the figure, the time costs to be allowed for the ex parte application and the first hearing on the inter partes summons is $108,000. The attendances for filing and service, the mechanical preparation costs together with the disbursement are allowed at $7,000. The total costs for the ex parte application and the first hearing on the inter partes summons are assessed at $115,000.

8. As for the preparation and work relating to the hearing on 26 March 2004, I reduce the time of GL from 4.5 hours to 1 hour plus another 1/2 hour for the hearing. There was no opposition and the plaintiff was moving for a discharge of the injunction. The preparation work is minimal when the time for correspondence has been separately claimed.

9. Insofar as time is claimed for the preparation of the bill of costs, another fee earner RC has claimed 7 hours, most of which, I believe, is related to the drafting of the bill. Two points are relevant. Firstly, on a party-and-party taxation, fees of two fee earners are not normally permissible for any one item of work. Secondly, the costs for preparation of bill of costs should be assessed by reference to the hourly rate of a law costs draftsman, i.e. $1,600.

10. Noting that RC's hourly rate is $2,106, which represents 1.5 times that of a law costs draftsman, I reduce RC's time to 4 hours. This is equivalent to 6 hours of a law cost draftsman's time, which in the circumstances of this bill, is the appropriate amount of time to be allowed.

11. The time costs for the hearing on 26 March 2004 is allowed at $11,100. The costs on service and filing and mechanical preparation is allowed at $577. The total costs therefore amount to $11,677.

12. To conclude, the gross sum to be awarded on the plaintiff's ex parte application and the inter partes summons under Order 62 rule 9(4)(b) is $126,677 (i.e. $115,000 + $11,677).