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HCPI 567/2005
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
ACTION NO. 567 OF 2005
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| BETWEEN |
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LEUNG LIN KO |
Plaintiff |
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And |
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YEUNG CHUN HUNG trading as CHUN HUNG ENGINEERING COMPANY |
1st Defendant |
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(振洪工程公司) |
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HOP FAT CONSTRUCTION CO. LTD. |
2nd Defendant |
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(合發建築有限公司) |
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HIP HING CONSTRUCTION CO. LTD. |
3rd Defendant |
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(協興建築有限公司) |
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Date of Defendant’s Submissions : 3 October 2007
Date of Plaintiff’s Submissions in Opposition : 17 October 2007
Date of Defendant’s Submissions in Reply : 27 October 2007
Date of Reading : 11 December 2007
Date of Decision : 28 December 2007
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D E C I S I O N
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Application
1. This is an application for variation of costs order nisi.
Background
2. The Plaintiff’s (“The Receiving Party’s”) Bill was filed on 26 January 2007. Parties negotiated for settlement. On 22 March 2007, the Defendant (“the Paying Party”) offered:
“To split the difference between the parties and as a last attempt to reach settlement, we are instructed to further increase our offer up to HK$292,600.00 for profit costs. Such offer is inclusive of any interest accrued and any taxing fee to be adjudicated by the Court.
Disbursements are agreed at HK$80,615.00 plus interest of HK$2,763.68.”
3. The Receiving Party declined it and counter-offered on 27 March 2007 for:
“Your client’s offer in the sum of HK292,600.00 for the profit costs inclusive of interest and taxing fee is still unrealistic and the same is not acceptable to our client. As a last-ditch effort to settle this matter in lieu of taxation, our client is prepared to accept a lump sum of HK$310,000.00 plus interest and taxing fee in full and final settlement of his claim for costs in this case. If the figure of HK310,000.00 is acceptable to your client, we shall seek the Director of Legal Aid’s instructions to waive the interest on the profit costs. Furthermore, according to our law costs draftsman, the taxing fee to be charged by the Court at this stage will be around HK$13,800.00 which is not substantial and your client should seriously consider paying the same.”
4. Regrettably, no consensus was reached and I heard the substantive taxation on 6 August 2007. After taxation, before taking into account the costs of taxation, I allowed profit costs at $269,997.00 and disbursement, $80,615.00. I further made an order nisi that the Paying Party should also bear the costs of taxation.
5. Later, the Paying Party applied to vary the order nisi, arguing that:
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(a) |
The taxing fee should be ignored so that the Receiving Party had not beaten the offer, or |
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(b) |
Even if taxing fee were to be taken into account, the offer was beaten by a few thousands only because it was the “tradition” or “practice” of this Court to give 50% discount on taxing fee, and |
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(c) |
The solicitors acting for the Receiving Party should therefore be held liable to pay personally costs of taxation from 23 March 2007. |
6. The Receiving Party disagreed. On 4 October 2007, with parties’ consent, I directed the matter to be determined by paper disposal. Both parties have duly filed their skeletons. Time was allocated on 11 December 2007 for me to go through them in my chambers.
Discussion
7. Upon consideration of the evidence authorities and submissions before me, I have decided to dismiss the application. My reasons appear in below.
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(a) |
In my view, in the present case, taxing fee must be included in calculating whether the offer has been beaten or not. The reason is simple. The offer made was inclusive of taxing fee to be levied by the Court. The Decision of the Hon Cheung J (as he then was) in Lam Shi Sheung v Kin Wah Eng & Another in HCPI 596/1997 cannot help the Paying Party because the calderbank offer therein did not include taxing fee. |
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(b) |
If taxing fee shall be taken into account, then, how much? Is there a practice of this Court to exercise his discretion to reduce only 50% of the usual taxing fee levied? I do not think so. |
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(i) |
To start with, with respect, the authority relied upon by the Paying Party, Centaline Property Agency Limited v Ho Wing Chung Jackson in DCCJ 13630/1999, did not support its case. As pointed out by the Receiving Party, the said authority touched only on the interpretation as to “an appointment to tax” but never the alleged practice on reduction of taxing fee. |
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(ii) |
In my experience, I have no doubt that this Court encourages and supports amicable settlement. While I agree that reduction of taxing fee may constitute one of the factors to be considered in negotiation in settlement, parties should only refer to the Law Society Circular 06-634 (PA) for the practice. If the matter is not settled before the call-over hearing, they can only then depend on discretion of the Court. By discretion, I mean the exercise of the individual judgment of each taxing master according to the facts of each particular case. There is no such practice or tradition of “50% discount”. |
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(iii) |
The Receiving Party asked this Court to exercise his discretion because the offer was beaten by a few thousands only. He relied on the deminimis principle. I have no quarrel on the principle but do not agree that it is applicable herein. Each case depends on its own case. In our case, both parties tried their best to settle the matter. It was a pity that settlement could not be reached. However, they came close to it. Paying Party offered $292,600, all inclusive while Receiving Party, $310,000, all exclusive. The difference was small. Hence, when eventually the Receiving Party beat the offer by about $6,000, I do not consider that he should be deprived of the costs of taxation. |
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(c) |
To make a solicitor personally liable for costs is a punishment for costs incurred improperly/without reasonable cause or costs wasted by undue delay/misconduct. There is no evidence before this Court justifying the making of such as order directing the solicitors of the Receiving Party to bear the costs. |
Costs
8. I further direct that the Paying Party shall bear the costs of Receiving Party in relation to costs of the variation application, including costs reserved on 4 October 2007, to be summarily assessed (0.5 hour reserved, if necessary) by me failing agreement within 14 days from today.
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(Jack Wong)
Master of the High Court |
Messrs. Cheng, Yeung & Co. for the Plaintiff.
Messrs. Chu & Lau for the 1st to 3rd Defendants
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