KINETICS MEDICAL AND HEALTH GROUP CO LTD AND OTHERS v. DR TSE IVAN CHEONG YAU

HCA 1115/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1115 OF 2010

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DECISION ON ASSESSMENT OF COSTS

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1.  At the 2^nd Pre-trial Review (“2^nd PTR”) hearing on 30 April 2013, I declined to allow the plaintiffs to adduce or rely on the documents listed in Schedule 1 Part 1 of their Supplemental and 2^nd Supplemental Lists of Documents at trial. I also granted a costs order nisi (which is now absolute) that the plaintiffs shall pay costs of and occasioned by their application to adduce and rely on the aforesaid documents to the defendant to be summarily assessed and paid forthwith, and I apportioned 90% of the hearing time at the 2^nd PTR hearing for such purpose (“Cost Order”). On 8 May 2013, I handed down my Reasons for Decision (“Reasons”). This is the decision on summary assessment of costs under the Cost Order. I shall adopt the abbreviations in the Reasons.

2.  Since costs under the Cost Order are assessed on party and party basis, 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 (see Order 62, rule 28(2) of the Rules of the High Court).

Items C1 and C3

3.  Under these items, the defendant claims $16,000 being 4 hours spent by the handling solicitor LSY for attendance on client and $8,000 being 2 hours spent on attendance on counsel.  I note that the plaintiffs’ Supplemental and 2^nd Supplemental Lists of Documents were filed on 27 March and 17 April 2013 respectively.  Given (a) the imminence of the plaintiffs’ further discovery to the 2^nd PTR scheduled on 30 April 2013 and indeed also to the trial scheduled to commence on 21 May 2013, (b) the absence of any proper application for leave to adduce and rely on the newly discovered documents by the plaintiffs, and (c) the lateness of Kwan’s affirmation, it is understandable that there would be a flurry of activity on the part of the defendant and his legal representatives to marshall their response to the same.  As evident from paragraphs 20-30 of the Reasons, there was paucity of explanation on the part of the plaintiffs for the delay until Kwan’s affirmation.

4.  There is no merit to the suggestion by the plaintiffs that the subject application was simple because most of the 309 pages of newly discovered documents were the defendant’s documents, and that the defendant therefore did not have to spend time on them.  The question here is not whether the newly discovered documents were the defendant’s documents, but how the late discovery and/or potential deployment of these documents would impact on the imminent trial and on the defendant’s response thereto.  These concerns have been dealt with in the Reasons and will not be repeated here.

5.  I find that instructions had to be taken from the defendant on the plaintiffs’ newly discovered documents.  But it must not be forgotten that counsel was involved all along.  Indeed, Mr Ng of counsel had attended the 1^st Pre-trial Review (“1^st PTR”) on behalf of the defendant, and was then expected to be the trial counsel.  Indeed, under Item E2 below, there was a conference with Mr Ng and Mr Lui.  Given direct involvement of counsel, I am not persuaded that LSY need to incur 4 hours for Item C1.  I am of the view that the appropriate time is 2.5 hours at $10,000.

6.  I also accept that the defendant’s solicitors would have to liaise and attend conference with counsel.  As seen in the discussion for Item E2 below, I allow 1.5 hours for conference with counsel.  Taking into account other necessary communication with counsel, I allow Item C3 in full for $8,000.

Item C2

7.  The defendant claims 2 hours of LSY’s time for attendance on the other side and my clerk.  As evident from Part II of the Reasons, it is plain there were correspondence by the defendant’s solicitors with the court and with the plaintiffs’ solicitors arising from the plaintiffs’ newly discovered documents.  However, I consider 2 hours of time spent by LSY excessive. I allow 1 hour of LSY’s time at $4,000.

Item D2

8.  The defendant claims 2.5 hours of LSY’s time for perusal of documents.  In my view, the newly discovered documents and the subject application happened during a brief time window and there was involvement of counsel.  Time has been allowed for attendance on client to take instructions and for conference with counsel.  I am not persuaded that LSY should or would need to spend 2.5 hours for detailed perusal of the documents given counsel’s direct involvement.  However, I accept he should have an overall understanding and appreciation of the nature of the documents disclosed.  I allow 1 hour 30 minutes of LSY’s time at $6,000.

Item D3

9.  The defendant claims $2,000 for half hour spent on preparation for hearing by LSY.  Given the involvement of counsel and the conference with counsel shortly before the hearing, I consider 15 minutes by the handling solicitor at $1,000 to be necessary or proper.

Items E2 and E3

10.  There was a conference with counsel Mr Ng (20 years’ experience) and Mr Lui (1 year’s experience).  Mr Ng was unavailable for the 2^nd PTR hearing, so Mr Lui was engaged to attend such hearing.  But for the late application by the plaintiffs to seek leave to adduce and rely on their newly discovered documents at trial, the 2^nd PTR was expected to be (and was indeed) uneventful such that it would have been appropriate to have Mr Lui attend such hearing.

11.  Mr Ng’s fees for the conference and perusal of papers were $15,000 being Item E2.  Mr Lui’s brief in the sum of $10,000 for attending the 2^nd PTR hearing as well as for attending the pre-hearing conference was discounted by 10% pursuant to the Costs Order to $9,000 (Item E3).

12.  I do not agree that Mr Lui’s fees are excessive bearing in mind that they are inclusive of the conference.  I allow $9,000 for Item E3 in full.

13.  The plaintiffs claim it was unnecessary for Mr Ng to attend the conference because he would not attend the 2^nd PTR hearing.  I disagree.  As evident from the 1^st PTR hearing, Mr Ng was expected to be the trial counsel.  The unexpected late discovery and application to adduce and rely on the newly discovered documents by the plaintiffs took the defendant by surprise, and it is necessary or proper for the defendant to seek trial counsel’s advice on the impact of such late discovery on the trial in order to determine whether (and if so how) to resist the plaintiffs’ late application.  However, given Mr Lui’s involvement, much of the preparatory groundwork in analysing the documents should have been undertaken by Mr Lui beforehand, and Mr Ng’s role essentially should be for giving forensic advice.  In the circumstances, I consider a 1.5 hours’ conference with brief review of papers at $10,000 to be necessary or proper for Item E2.

Conclusion

14.  The total costs of the defendant on his statement of costs are assessed at $51,800 (being HK$10,000 (C1) + HK$4,000 (C2) + HK$8,000 (C3) + HK$6,000 (D2) + HK$1,000 (D3) + HK$3,800 (D4) + HK$10,000 (E2) + HK$9,000 (E3)).  I therefore order that the plaintiff shall forthwith pay costs in the sum of $51,800 to the defendant.