LI SIN MAN SELINE and LEE SHU HANG (the executors of the estate of LEE SAI NAM, deceased) v. LI SHU CHUNG AND ANOTHER

HCA 1711/2009

[2018] HKCFI 1365

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1711 OF 2009

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D E C I S I O N

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Appeals before the court

1.  Before the court are the appeals by Mr Li Shu Chung[1] and Li Joseph See Sun[2] (“Ken” and “Joseph” respectively and “Paying Parties” collectively) against 2 orders made by Master K Lo on 17 January 2017 for the issue of interim certificates in respect of parts of the costs claimed against the Paying Parties under various bills of costs (“Bills” collectively) issued by Mr Lee Sai Nam,[3] Allied Ever Holdings Limited,[4] Ms Lee Sin Man Seline[5] and Yuen Hing Enterprise Macao Commercial Offshore Limited[6] (“Mr Lee”, “Allied Ever”, “Seline” and “Yuen Hing” respectively and “Receiving Parties” collectively).

Background

2.  The Bills were issued pursuant to the following costs orders made in this action (“Costs Orders” collectively):

Costs Order	Paying Party or Parties	Receiving Party or Parties
Order dated 19.7.2010 by Master de Souza (“1st Costs Order”)	Ken	Allied Ever
Order dated 15.5.2013 by DHCJ Marlene Ng (“2nd Costs Order”)	Ken	Mr Lee, Seline & Yuen Hing
Order dated 31.5.2013 by DHCJ Marlene Ng (“3rd Costs Order”)	Ken & Joseph	Mr Lee & Seline
Order dated 10.1.2014 by DHCJ Marlene Ng (“4th Costs Order”)	Ken	Mr Lee & Seline
Order dated 9.12.2015 by DHCJ Simon Leung (“5th Costs Order”)	Ken & Joseph	Mr Lee, Seline & Yuen Hing
Order dated 14.3.2016 by DHCJ Simon Leung varying the 5th Costs Order (“6th Costs Order”)	Ken & Joseph	Mr Lee & Seline

3.  Dealing first with Yuen Hing, represented by Christine M Koo & Ip (“CMKI”):

(1)   Pursuant to the 2^nd and 5^th Costs Orders, Yuen Hing filed notice of commencement of taxation on 30 June 2016. 

(2)   By a bill of costs dated 30 June 2016 and amended on 9 August 2016 (“1^st Bill”), Yuen Hing claimed against Ken $3,037,764.50 for the costs awarded to it under the 2^nd and 5^th Costs Orders.

(3)   On 27 September 2016, Ken filed and served his list of objections to the 1^st Bill (“1^st Objections”) by which he set out objections to the extent of $1,705,616,90 which, if all upheld, would reduce the amount of costs payable under the 1^st Bill to $1,332,147.60.

(4)   On 18 October 2016, Yuen Hing applied to set the 1^st Bill down for taxation.

(5)   Both Yuen Hing and Ken requested for taxation with an oral hearing, estimated to require 3 days.

(6)   By letters dated 18 November and 15 December 2016 from CMKI to Ken and Joseph’s solicitors, K & L Gates (“KLG”), Yuen Hing demanded Ken to pay it $1,322,147.60 being the part of the costs claimed by it under the 1^st Bill not objected to by Ken in the 1^st Objections.

(7)   Such demand by letter was not met.  By a summons filed on 6 January 2017 (“1^st Summons”), Yuen Hing applied for an interim certificate for $1,322,147.60 pursuant to Order 62, rule 17(1) of the Rules of the High Court (Cap 4A).

4.  As for the other Receiving Parties, represented by D S Cheung & Co (“DSC”), they filed notices of commencement of taxation and issued 4 bills of costs on 31 August 2016 to claim against the Paying Parties the costs awarded to them under the Costs Orders as follows:

	Costs Order(s) to which Bill was related	Receiving Party or Parties	Paying Party or Parties	Amount of Costs Claimed
“2nd Bill”	5th & 6th Costs Orders	Mr Lee	Ken & Joseph	$6,889,550.30
“3rd Bill”	2nd, 4th, 5th & 6th Costs Orders	Mr Lee & Seline	Ken	$6,945,881.90
“4th Bill”	1st Costs Order	Allied Ever	Ken	$47,878.50
“5th Bill”	3rd Costs Order	Mr Lee & Seline	Ken & Joseph	$121,378.40

5.  On 6 December 2016, the Paying Parties filed and served lists of objections to the 2^nd to 5^th Bills (“2^nd Objections” to “5^th Objections” respectively) setting out objections which, if all upheld, would reduce the amounts of costs payable under the 2^nd to 5^th Bills as follows:

	Amount of Costs Claimed	Amount Of Claimed Costs Objected to	Amount of Costs Payable if All Objections were Upheld
2nd Bill	$6,889,550.30	$4,423,798.40	$2,465,751.90
3rd Bill	$6,945,881.90	$4,404,333.20	$2,541,548.70
4th Bill	$47,878.50	$25,391.20	$22,487.30
5th Bill	$121,378.40	$68,173.30	$53,205.10

For the sake of completeness, regarding the 4^th Bill, Ken also took 2 preliminary objections in the 4^th Objections: (1) firstly that Allied Ever was precluded by Order 62, rule 22(7)(a) from commencing taxation proceedings because the 4^th Bill was out of time having been filed and served more than 2 years after the 1^st Costs Order; and (2) secondly that Ken should alternatively be given a global deduction of 45% off the taxed costs due to Allied Ever’s delay in proceeding with taxation under the 1^st Costs Order.  It will be seen that the second-mentioned objection would affect the quantum of the interim certificate issued in respect of the 2^nd to 5^th Bills.

6.  On 3 January 2017, Mr Lee, Allied Ever and Seline applied to set the 2^nd to 5^th Bills down for taxation.  Both they and the Paying Parties requested for taxation with an oral hearing, estimated to require 4 days.

7.  By a letter dated 22 December 2016 from DSC to KLG, Mr Lee, Allied Ever and Seline demanded the Paying Parties to pay them $5,082,993 being the sum of the parts of the costs claimed by them under the 2^nd to 5^th Bills not objected to by the Paying Parties (i.e. $2,465,751.90 + $2,541,548.70 + $22,487.30 + $53,205.10).  Such demand by letter was not met.  By a summons filed on 11 January 2017 (“2^nd Summons”), Mr Lee, Allied Ever and Seline applied for the issue of an interim certificate under Order 62 rule 17(1), or alternatively interim payment pursuant to the court’s inherent jurisdiction, of $5,082,993.

8.  The applications by the 1^st and 2^nd Summonses (“Summonses”) rest upon the premise that even if the 1^st to 5^th Objections (“Objections” collectively) were all ultimately accepted by the court to the full extent, the Paying Parties would still have to pay the respective amounts sought in the Summonses so the court should now issue interim certificates for those amounts.

9.  Both the Summonses were made returnable before Master K Lo on 17 January 2017 for a 3-minute hearing.  It is fair to say that all the parties treated or were prepared to treat this first hearing as a call-over hearing.  I say so because, before the hearing, the parties’ solicitors exchanged correspondence, which culminated in an agreement for the adjournment of the Summonses for substantive argument to be heard together and for the Paying Parties to file and serve affidavits in opposition to be followed by affidavits in reply by the Receiving Parties, if any, after which there should be no further affidavit without leave of the court.  The only matter on which the parties could not reach consensus was the length of the adjourned hearing, with the Receiving Parties asking for 3 hours and the Paying Parties asking for 1 day.

10.  However, when the Summonses came before Master K Lo on 17 January 2017, she refused to adjourn them for argument and allowed the Summonses there and then by ordering the issuance of the following interim certificates (“Interim Certificates”):

(1)   one for $1,322,147.60 (being the part of the costs claimed under the 1^st Bill) payable forthwith (“1^st Interim Certificate”);

(2)   the other for $2,795,646 (being part of the costs claimed under the 2^nd to 5^th Bills) payable forthwith (“2^nd Interim Certificate”), a breakdown of which is as follows:

(a)   $1,356,163,55 under the 2^nd Bill;

(b)   $1,397,851.78 under the 3^rd Bill;

(c)   $12,368.01 under the 4^th Bill; and

(d)   $29,262.80 under the 5^th Bill.

11.  It can be seen that while the Master allowed the 1^st Summons to the full extent, the amounts she granted under the 2^nd Summons were arrived at after applying a 45% discount to the amounts of costs not objected to in the 2^nd to 5^th Objections.  The Paying Parties have obtained the transcript of the hearing on 17 January 2017 (“Transcript”).  Insofar as I can work out from the Transcript, such discount was applied because of Ken’s claim in the 4^th Objections for a 45% global deduction off the costs taxed under the 4^th Bill.  It is, however, unclear why the amounts claimed in respect of the 2^nd, 3^rd and 5^th Bills to which the Paying Parties have not made the same preliminary objection were subject to the same discount save that the representative of DSC agreed to such deductions for the purposes of the 2^nd Summons.  See page 28F-G.

12.  Mr Wilson Leung, counsel for the Paying Parties, has summarised the Master’s reasons in paragraph 13 of his skeleton submissions dated 20 March 2017 as follows:

(1)   If the receiving party claimed (say) $10 in costs, and the paying party raised an objection in relation to $3, there was no reason why the court should not give “interim judgment” or “partial judgment” on the remaining $7.

(2)   This was because, even if the paying party’s objections were all upheld, the maximum deduction would be $3.  In the Master’s own experience, the court would not reduce the costs further than the extent of the paying party’s objections.

(3)   While the court might reject some of the paying party’s objections and eventually allow more than $7 for the receiving party, this did not prevent the $7 from now being “taxed” costs within the meaning of Order 62, rule 17(1).  This was because the rule referred to any “part”of the receiving party’s costs which had been taxed, and not any “items” of costs which had been taxed.  Thus, the $7 could be regarded as “taxed” at the present stage.

(4)   The interim certificate is a “good way of pressurising even the receiving party to acknowledge or at least consider their position after the interim certificate is given”.

Having reviewed the Transcript, I consider this to be a fair summary of the views expressed by the Master in the course of the hearing on 17 January 2017.  To ensure that the costs for which interim certificates were issued would not be re-opened by another master (i.e. sub-paragraph (3) hereof), Master K Lo directed that the taxation of the Bills should be conducted before herself.

Interim certificates

13.  The power to issue an interim certificate for taxed costs before the conclusion of taxation is derived from Order 62, rule 17(1). I set out the whole rule for the full context:

“17. Interim certificates

(1) A taxing master may from time to time in the course of the taxation of any costs by him issue an interim certificate for any part of those costs which has been taxed.

(2) If, in the course of the taxation of a solicitor’s bill to his own client, it appears to the taxing master that in any event the solicitor will be liable in connection with that bill to pay money to the client, he may from time to time issue an interim certificate specifying an amount which in his opinion is payable by the solicitor to his client.

(3) On the filing of a certificate issued under paragraph (2), the Court may order the amount specified therein to be paid forthwith to the client or into court.” (emphasis added)

14.  There is no dispute that the Interim Certificates were issued in the course of the taxation of the Bills, the same having been commenced by the Receiving Parties’ notices of commencement of taxation in June and August 2016.

15.  Nor is there any dispute that an interim certificate can be issued only for costs which has been taxed. 

16.  In this regard, my attention has been drawn to SY Engineering Co Ltd v Hong Kong Housing Authority [2001] 2 HKC 226.  In that case, the taxing master had begun taxing the receiving party’s bill of costs which ran to 298 pages and claimed for over $25 million, to which the paying party had lodged a 66 page list of objections challenging 550 items.  The taxation could not be finished within the 1½ days allocated and had to be adjourned part-heard.  Before adjourning, the master granted an interim certificate in respect of those costs which had been taxed which amounted to $166,031.  The paying party appealed on the ground that it had already given a $10.5 million bond as security for costs so that there was no basis for ordering the interim certificate. 

17.  In dismissing the appeal, Yeung J (as the Vice President then was) explained at 229D-H:

“Order 62 r 17 empowers a taxing master from time to time in the course of the taxation of any costs by him to issue an interim certificate for any part of those costs which have been taxed.

There was no dispute that when Master Yuen granted the interim certificate, the costs that had been taxed was $166,031. Order 62 r 17 clearly caters for situation whereby the taxing master before the completion of the taxation considers appropriate to order part payment of the costs claimed.

…

Irrespective of the amount of costs sought by the party entitled to be paid, a taxing master should only order interim certificate for the part of the costs which had been taxed.  The reason is obvious.  Once part of the costs had been taxed, the party entitled to be paid should be paid.” (emphasis added)

18.  SY Engineering Co Ltd v Hong Kong Housing Authority is representative of the typical situation in which the court would exercise the power to issue an interim certificate under Order 62, rule 17(1), i.e. where the taxing master has taxed some but not all items of the costs claimed in the receiving party’s bill of costs and has to adjourn the taxation part-heard.

19.  The instant case clearly does not fall within such situation.  The debate before me is whether the Master had taxed any part of the costs claimed under the Bills by the process she went through at the hearing on 17 January 2017.

20.  The challenge by the Paying Parties is one as to jurisdiction, not exercise of discretion.  It is their case that the Master had no power to issue the Interim Certificates as she had not yet taxed any part of the costs under any of the Bills.  She erred in regarding the amounts to be stated in the Interim Certificates as “taxed”.  Although such amounts were equivalent to the amount of claimed costs to which the Paying Parties had not objected, this did not mean that those costs had been “taxed”.  To “tax” essentially means: (1) considering the items of costs claimed by the receiving party; (2) considering the objections raised by the paying party in respect of each item of costs; and then (3) deciding, for each item of costs, the amount which should be allowed.  At the hearing on 17 January 2017, the Master had not started the process of considering the items of costs claimed by the Receiving Parties, and the objections raised thereto by the Paying Parties.  She had not decided, for any item of costs, the amount of costs which should be allowed.  Indeed, the Master accepted that, at the end of the day, she might allow more costs than the amount granted in the interim certificates.

21.  In support, Mr Leung refers to and relies on the following statement by Farwell J (as he then was) in Re Grant, Bulcraig & Co [1906] 1 Ch 124 at 128:

“To tax is to deal seriatim with each item by way of allowance or disallowance. To settle is finally to ascertain the amount (if any) recoverable.” (emphasis added)

22.  Mr Leung also seeks to derive support from the judgment of Registrar Au-Yeung (as her Ladyship then was) in Tsang Sau Hing Beatrice v Yeung Man Loong Maxly [2009] 5 HKC 154 at [1], [2], [7] and [19], which concerned an application made by the receiving parties at the call-over stage of taxation for interim certificates in respect of items of costs in their bills of costs filed for taxation and not objected to in the paying parties’ lists of objections:

“1. In respect of items of bills of costs where the paying party has not raised objections in the list of objections, is the receiving party entitled to interim certificates?

“2. I have no hesitation in answering the question in the affirmative.  Under O 62, rule 17(1) of the Rules of the High Court (Rule 17),

“A taxing master may from time to time in the course of the taxation of any costs by him issue an interim certificate for any part of those costs which has been taxed.”

…

7. Although in SY Engineering Co Ltd v. Hong Kong Housing Authority, the interim certificate was granted pursuant to formal taxation which had gone part-heard, there is no reason why the words of Yeung J are not applicable to the situation where taxation is still at the stage of call-over hearing.  This is because para 1 of PD 14.3 provides that a call-over hearing is to dispose finally of matters where it is apparent that the paying party is no longer interested in or opposing the taxation.  The taxing master can therefore immediately tax and grant an interim certificate for the unopposed items of costs.

…

19. In summary, a taxing master has power under O 62, r 17 of the Rules of the High Court to grant interim certificates for unopposed items in a bill of costs even on the day of the call-over hearing.” (emphasis added)

23.  Mr Alan Kwong (with him Miss Stephanie Wong) for Mr Lee, Allied Ever and Seline and Miss Frances Lok for Yuen Hing, on the other hand, see no reason why an item of partially disputed costs cannot be taxed more than once in stages, firstly at an early stage of taxation for the purpose of Order 62, rule 17(1) based on the extent to which the item is unopposed and then finally at the formal taxation hearing.

(1)   The Paying Parties’ construction that costs is not taxed until the Master has made a final decision on the total quantum allowed in respect of a particular item is against the wording of the rule. 

(a)   First, Order 62, rule 17(1) refers to “any part of those costs which has been taxed”, and not “any items of those costs which has been taxed”. 

(b)   Second, the word “finally” does not appear before the word “taxed” in rule 17(1).  The costs can therefore be taxed by reference to the whole item or a part of it.

(2)   Such construction is also contrary to authority.

(a)   Re Grant, Bulcraig & Co is distinguishable as what Farwell J said was in the context of a taxation between solicitors and client under s 37 of the Solicitors Act 1843, directed by an order for taxation dated 9 December 1904.

(b)   It appears from paragraph 17 of Registrar Au-Yeung’s judgment in Tsang Sau Hing, supra, that she taxed the receiving parties’ bills of costs by deducting from the costs claimed thereby the deductions proposed by the paying parties and issued interim certificates for the differences so arrived at.

(3)   Such construction is not conducive to the attainment of the court’s underlying objectives to increase costs-effectiveness, to ensure that a case is dealt with as expeditiously as reasonably practicable and to ensure fairness between the parties under Order 1A, rule 1(a), (b) and (d).

24.  The issue raised is essentially one of the proper construction of Order 62, rule 17(1).

25.  I have not been shown any definitions of “taxation” or “taxed” in the RHC.

26.  In the absence of any such statutory definitions, given that taxation of costs has been taking place daily in our courts since their establishment, it is in my view reasonable to presume that rule 17(1) was drafted in light of the actual manner in which costs is taxed by the courts.

27.  In this regard, taxation is to be contrasted with summary assessment, where the court takes a “broad-brush approach” and should “not embark on a mini-taxation”: see paragraph 13 of Practice Direction 14.3 on Costs.

28.  As I understand it, at a taxation hearing, the taxing master would have before him the receiving party’s bill of costs and the paying party’s list of objections as well as their respective materials in support or opposition.  As submitted by Mr Leung, the taxing master would (1) review the items of costs claimed by the receiving party; (2) consider the objections raised by the paying party in respect of each item of costs; and then (3) deciding, for each item of costs, the amount which should be allowed.  In short, he would go through the bill of costs and the list of objections and resolve each claim and the objections thereto (if any), item by item. Taxation can therefore be summarised as an item-by-item process whereby the court reaches a decision on what amount of costs to allow on each item of the costs claimed by the receiving party.  An item of costs is taxed when the taxing master decides the amount that should be allowed on it.  The notion subscribed to by Mr Kwong and Miss Lok that an item of costs could be taxed more than once in stages appears to me to be necessitated by their attempts to bring their case within rule 17(1) and therefore begging the question.

29.  I am therefore not with Mr Kwong and Miss Lok in how they seek to distinguish Farwell J’s statement on the nature of taxation in Re Grant, Bulcraig & Co.  While the case was dated and arose from taxation in a different context, it is not suggested that the taxation under s 37 of the Solicitors Act 1843 and directed under the order dated 9 December 1904 was a different process from a taxation under Order 62 as we know it.

30.  That the requirement in rule 17(1) for taxation of the costs for which an interim certificate is issued should be understood as an item-by-item process whereby the court reaches a decision on the amount of costs to be allowed on each item of costs claimed by the receiving party is reinforced by the contrast with rule 17(2).  Under rule 17(2), an interim certificate may be granted in the course of the taxation of a solicitor’s bill to his own client in favour of the client if it appears to the taxing master that in any event the solicitor will be liable in connection with the bill to pay money to the client and if he is able to form an opinion as to amount which he thinks is payable by the solicitor to the client. 

31.  As I see it, the process undertaken by the Master at the hearing on 17 January 2017 was more akin to that provided for in rule 17(2) or the consideration whether to order interim payment on account of costs pending taxation in exercise of the court’s inherent jurisdiction.  It was certainly not taxation in the sense of an item-by-item adjudication on the amount of costs to be allowed on each item of the costs claimed.  She did not refer specifically to any single item of costs, not to mention making any decision on any such item.  Her approach would necessarily entail the taxing master revisiting all the items of the Bills to which the Paying Parties have raised objections at the taxation hearing.   She expressly stated that she might revise any or all of the items upward at the substantive taxation hearing.  All she did at that stage was to indicate a minimum amount which she would probably allow when she eventually taxed the Bills. 

32.  Indeed, as submitted by Mr Leung, there is no reason in principle why a taxing master could not, at the end of the day, reduce the costs further than the extent of the paying party’s objections (e.g. where the paying party is acting in person and has difficulty in formulating proper objections, but it is obvious to the taxing master that a particular item of costs is grossly excessive).  Costs are always in the court’s discretion, not bound by the parties’ positions.  What is being decided here is a point of principle potentially affecting other cases.  It is thus not an answer to say that, in this case, Master K Lo ensured that this would not happen by reserving the taxation of the Bills to herself. 

33.  I have not overlooked the parties’ conflicting readings of Tsang Sau Hing, supra. 

34.  It is accepted by counsel for all parties that, based on Tsang Sau Hing, where there are items of costs that are wholly unopposed, the taxing master is clearly entitled to immediately tax such items as drawn and issue an interim certificate for the amounts of the same under rule 17(1) at the taxation call-over hearing. 

35.  However, what we have here are mostly items of costs that are partially opposed (such as a claim for costs for 10 hours of work by a partner of the receiving party’s solicitors is met with an objection that the work should be done by an assistant solicitor who should take just 5 hours). 

36.  On one hand, the paragraphs cited in paragraph 22 above, especially the words underlined, tend to support Mr Leung’s submission that the taxing master cannot partially “tax” all disputed items up to the extent that they are not opposed and issue an interim certificate under rule 17(1)  for the total amount of the unopposed costs or otherwise based on such amount.

37.  However, as noted by Mr Kwong and Miss Lok,  it appears from paragraph 17 of Registrar Au-Yeung’s judgment that she might have taxed the receiving parties’ bills of costs by deducting from the costs claimed thereby the deductions proposed by the paying parties and issued interim certificates for the differences so arrived at.

38.  I have read Tsang Sau Hing a number of times.  The ambiguity does exist and cannot be resolved on the basis of what is disclosed in the judgment.  If the interim certificates issued in that case did cover the difference between the costs claimed by the receiving parties and the costs objected to by the paying parties across the board, for the reasons stated above, I respectfully depart from Tsang Sau Hing.  I note that the Registrar did not appear to have been addressed on the proper construction of Order 62, rule 17(1), at least not to the same extent as I have been in this case.  Indeed, I note from paragraph 4 of the judgment that the paying parties in Tsang Sau Hing raised no such question of construction.

39.  As for the argument based on the underlying objectives in Order 1A, rule 1, it would have more force if a receiving party could not otherwise obtain early payment of unopposed costs in advance of the conclusion of taxation.  This is, however, not the case, as shown under the next heading. 

40.  Likewise, the risk of temptation to abuse the process of taxation by raising some objections to each and every item of costs that is said to arise from the above interpretation of Order 62, rule 17(1) would be neutralised by the existence of means outside such rule for a receiving party to obtain early payment of unopposed costs in advance of the conclusion of taxation. 

41.  On these notes, I turn to Mr Lee, Allied Ever and Seline’s alternative application for interim payment.

Interim payment

42.  Mr Leung accepts that the court, under its inherent jurisdiction, can order an interim payment of costs: see Re Hawkins Development Ltd [2010] 1 HKLRD 535 at [17]-[19], [24]-[26] per Kwan JA (sitting as an additional judge of the Court of First Instance; and Lau Yue Kui v Philip Chan & Co (a firm), CACV 75/2014, unreported, 29 December 2014, [28(1)-(4)] per Cheung JA.

43.  In support of his submission that this court should itself exercise such jurisdiction by ordering interim payment in the same amount as the 2^nd Interim Certificate, Mr Kwong has drawn my attention to and/or highlighted the following:

(1)   This action has lasted 7 years from 2009 to late 2016.

(2)   Almost each and every interlocutory application was fought.

(3)   The trial of liability, excluding questions on quantum, lasted for 20 days and at which his clients were represented by a team of 2 senior counsel and 1 junior counsel.  A certificate for 2 counsel was granted by the trial judge.

(4)   The latest costs order in question was made in March 2016.

(5)   The costs to which his clients are entitled would include their costs of pursuing the original action and defending the action by counterclaim including costs reserved.  The quantum recoverable would most likely far exceed the amount sought by way of interim payment which is just 55% of the unopposed costs claimed under the 2^nd to 5^th Bills.

(6)   The appeal from the judgment on liability by the Paying Parties was dismissed by the Court of Appeal on 19 January 2017.

44.  These are compelling factors favouring interim payment. 

45.  However, I have been referred to a number of authorities decided by the courts of England and Wales (where the power to order interim payment of costs has been made statutory) before the introduction of a statutory rebuttable presumption in favour of interim payment in 2013: Mars UK Ltd v Teknowledge Ltd [2000] FSR 138; Dyson Ltd v Hoover Ltd (No 4) [2004] 1 WLR 1264; and Blakemore v Cummings Practice Note [2010] 1 WLR 983 (CA).

46.  It is unnecessary for me to go into these cases in any detail save to observe that the discretion to grant or refuse an application for an order for interim payment should be exercised on merits having regard to all the circumstances of the particular case.  Even where the court considers that it could with some certainty fix an appropriate sum, there may still be good reason why it is inappropriate to order interim payment: per Elias LJ in Blakemore at [24].

47.  I have not been shown any cases in which the court dealt with an application for an order for interim payment of costs without reference to evidence from both sides.

48.  In this regard, insofar as the Paying Parties are concerned, the parties did, before the hearing on 17 January 2017, agree on directions for the filing and service of affidavits in opposition by the Paying Parties.  Due to the proximity of the dates of the Summonses and the date of the hearing before Master K Lo and the unexpected turn in which the hearing took, the Paying Parties did not have any or any proper opportunity to place before the court in evidence what they consider to be circumstances material to whether interim payment of parts of the costs claimed in the 2^nd to 5^th Bills should be ordered or not. 

49.  In these circumstances, while I have considerable sympathy with Mr Kwong’s clients, in the interest of procedural fairness, I am not comfortable with shutting out the Paying Parties.  I have not overlooked the fact that Mr Kwong appears to have some answers to the few considerations that Mr Leung has managed to raise in his supplemental skeleton submissions in the short time available to him.  However, I do not feel able to assume that the Paying Parties, if given a proper chance to prepare evidence in opposition, would have nothing else to say.  I agree with Mr Leung that the proper course is to remit Mr Lee, Allied Ever and Seline’s alternative application for an order for interim payment back to the Master.

Dispositions

50.  For the reasons stated above, I allow the Paying Parties’ appeals and set aside the Interim Certificates.  I further remit paragraph 2 of the 2^nd Summons back to the Master.

51.  I also make an order nisi that

(1)   the Receiving Parties should pay the Paying Parties’ costs of their appeals, to be taxed if not agreed on a party and party basis with certificate for counsel;

(2)   Yuen Hing should pay Ken the costs occasioned to him below by the 1^st Summons, to be taxed if not agreed on a party and party basis; and

(3)   the costs of the 2^nd Summons should be reserved pending the determination of paragraph 2 thereof.