DAVID KONG v. PINE GROWTH MANUFACTURING CO LTD AND OTHERS

HCCW 321/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING UP PROCEEDINGS NO. 321 OF 2006

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REVIEW OF TAXATION

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Review

1. There are two applications for review of taxation before me.

Background

2. On 24 June 2006, the Applicant commenced the present winding up proceedings against the 2 subject companies on just and equitable grounds.  They were opposed.  The matter were later complicated as the 2nd and 3rd Respondents took out applications of striking out as well as validation orders.  In turn, the Applicant asked for an appointment of provisional liquidators.

3. Fortunately, the whole dispute was eventually resolved by a buying out of the shares of the Applicant by the 2nd and 3rd Respondents, leaving the question of costs to be argued.  By a decision of 18 December 2007, Barma J. ruled in favour of the Applicant and awarded him costs of the 2 proceedings, to be taxed on a party-and-party basis, if not agreed.

4. Substantive taxation of the 2 bills came before me on 15 October and 20 November 2007.  The Respondents were not satisfied with some of my rulings.

(a)     The hourly rates of a partner and a solicitor acting for the Applicant, as well as

(b)     A few items of Counsel fees allowed by me.

5. I heard the reviews of taxation on 29 January 2008.  Mr. M. Cheng of Messrs. C.L. Chow & Macksion Chan represented the 2nd and 3rd Respondents and Mr. D. Law of LCD acted for the Applicant.  Having heard from the parties, I reserved my decision to be handed down.  I now do so.

Decision

6. Upon thoughts, I am not persuaded that I should be reviewing any of my decision in taxation.  The review is therefore dismissed.

Hourly rate of AH

7. Mr. Alfred Hau (“Mr. Hau”) was and is the partner of the firm of solicitors acting for the Applicant.  He was admitted in 1989 and enjoyed a post qualification experience of over 17 years when he handled the present proceedings.  At the taxation, I allowed him to charge at $4,000 per hour throughout the bills.  Mr. Cheng told me that it was too much and suggested a reduction of $500.  He said that Counsel had been brought into the matter from the very beginning of the proceedings, assisting in settling letters and virtually all affirmations.  Further, Mr. Hau showed no expertise herein.

8. In assessing the hourly rate of a solicitor in taxation, I ask myself to bear in mind the principles as stated in paragraph 62/App/22 at page 1001 of HKCP 2008.  The following factors were and are noted by me.

Hourly rate of EC

9. Ms. Eva Chan Bing Wah (“Ms. Chan”) was one of the solicitors handling the proceedings for the Applicant.  She was admitted in 2005, and so, she belonged to the category of “newly admitted” solicitor under the said Law Society Circular.  Usually, she is entitled to an hour rate of $2,000 under taxation.  In the present case, she claimed $2,500 and I allowed the same.  Mr. Cheng sought to reduce it to $2,000.

10. I still consider that $2,500 per hour is appropriate in this particular situation.  In so doing, I was and am aware that $500 was added to Ms. Chan on top of her rate usually allowed by this Court.

11. Briefly, as a matter of fact, Mr. Hau ran his case by teamwork, he and Ms. Chan.  Throughout the Bills, very often, he and Ms. Chan charged for the same items.  I took the view that such costs could not be recovered by party-and-party taxation. I taxed off over 90% of the time claimed by Ms. Chan under the Bill, leaving only 2 scattered hours in the Bills.  On these occasions, Ms. Chan was on her own dealing with correspondences documents and so forth without any supervision.  With greater responsibility on each of these attendances, I believed that it should justify an uplifting of Ms. Chan’s hourly rate to the next category of “2-4 years”.

Counsel fee

12. Mr. Cheng objected my allowance of Counsel’s assistance in researching, advising over phone and conference as well attending with client taking instructions.  They are contained in the list of objection, numbered 4, 5, 9, 10, 11 and 39.  To cut short the long story, it was submitted that these matters were within the competence of the solicitor Mr. Hau.  Further or alternatively, the time charged by Counsel was excessive.

13. However, with respect to Mr. Cheng, other than the above general propositions, he provided no particulars to persuade me to change my mind.  Upon reviewing the relevant attendance notes, conference notes as well as documents settled by Counsel, I remain of the view that Mr. Hau only looked to Counsel at appropriate junctures.  As to Counsel fee, it is trite law that once this Court has agreed that the involvement of Counsel falls within the “necessary or proper” test, the quantum thereof should only be disturbed if they were excessive and unreasonable (paragraph 22/App/28A at page 1002, HKCP 2008).  In this respect, Mr. Cheng has not been able to persuade to think otherwise.

14. At the hearing of the review, in relation to the said objection no. 4, Mr. Cheng raised a new point that there was no communication between solicitor and counsel when the fee was levied.  In this respect, Counsel’s fee note and other contemporaneous documents were produced to me during taxation, the new observation of Mr. Cheng is insufficient to ask me to accept that this particular item on the counsel fee note is not a genuine one.

Research on law by the solicitor

15. In the original bill, Mr. Hau asked 6 items for conducting legal research, totaling 8 hours.  I dealt with them one after the other by going through the copies of research done and considered by him.  I did not tax off anything on the 1st item, but deducted the 2nd one completely.  I further reduced quite some substantial time on the remaining 4 items by more than half.  In the present review, Mr. Cheng asked me to tax off the 1st item completely.  I decline to do so.

Costs

16. I have not heard from the parties on the question of costs.  However, it appears that there is no reason to depart from the general rule.  I therefore order that the 2nd and 3rd Respondents shall bear the costs of the Applicant in the 2 reviews of taxation, to be summarily assessed by me with 30 minutes reserved, failing agreement within 21 days from the date hereof.