THAI THI THANH HONG v. CHUNG WAI KWONG

DCCJ 4437/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4437 OF 2015

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ASSESSMENT OF COSTS

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1.  On 14 June 2016, I granted summary judgment to the plaintiff with costs of the application and of the whole action.  I also directed that parties shall file their respective statement of costs and statement of objection for me to summarily assess the plaintiff’s costs on paper.  This is my decision on the summary assessment of the plaintiff’s costs.

2.  The approach to summary assessment has been laid down by the Court of Appeal in Poon Shu Fan v Wong Tin Yan [2012] 5 HKLRD 512.  It is sufficient to refer to the headnote of the reported judgment at pp  512-514 as follows:-

“(2) As in an ordinary taxation, under O.62 r.28(2) of the Rules of the High Court (Cap.4A) (the RHC), in a summary assessment, party-and-party costs were allowed only if they were ‘necessary or proper’ for the attainment of justice or for enforcing or defending the rights of the receiving party. Pursuant to Practice Direction 14.3, the court adopted a broad brush approach to ensure the final figure assessed was not disproportionate and/or unreasonable having regard to the nature and circumstances of the application or matter and the underlying objectives stated in O.1A of the RHC, even if there was no challenge to individual items. ……

(3) A summary assessment required a two-stage approach. If total costs claimed appeared proportionate, then all that was normally required was that each item should have been reasonably incurred and the cost reasonable. If the overall costs appeared disproportionate, then the court would have to be satisfied that each item was necessary and its costs was reasonable. A sensible standard of necessity should be adopted allowing fully for the different judgments which those responsible for the litigation could sensibly come to as to what was required. While the threshold was higher than that of reasonableness, it should be achievable by a competent practitioner without undue difficulty. The conduct of the other party was relevant, since a cooperative party could reduce costs, but an uncooperative party could render necessary costs which would otherwise be unnecessary. ……

(6) Since Civil Justice Reform in 2009, taxation of counsel’s fees under a party-and-party taxation was no different from taxation of costs and expenses.  The test of ‘necessary or proper’ applied and must take into account the matters set out in para.1(2) of Part II of the First Schedule to O.62 of the RHC, as well as the requirement of reasonable proportionality.  Accordingly, paras.62/App/28(5) (p.1172) and 62/App/28A of Hong Kong Civil Procedure 2012 (p.1172), which referred to the previous pre-CJR ‘excessive and unreasonable’ test under the former para.2(5) of Part II of the First Schedule to O.62 of the RHC, should no longer be followed, ……”

3.  The plaintiff now seeks costs of $189,558.00, comprising solicitors’ profit costs of $39,558.00, and counsel’s fees of $150,000.00 for drafting of pleadings and affirmation, conference, and brief to attend the hearing before me on 26 May 2016.

4.  The defendant’s objections are as follows:-

(1) There should be a reduction of the time for attending on the client from 10 hours to 5 hours, and for attending on the counsel from 3 hours to 2 hours.

(2) There should be a reduction of the time for preparing documents from 3 hours to 2 hours.

(3) There should be a reduction of the counsel’s fees from $150,000.00 to $55,000.00.

5.  I find the plaintiff’s overall claim of $189,558.00 is on the high side.  I agree with the defendant that some reduction is called for.  I have the following observations on the amount claimed by the plaintiff.

(1) First, as the costs in question are assessed on party-and-party basis, only costs that are necessary or proper and reasonable will be allowed.

(2) Secondly, the plaintiff’s case involving a promissory note was simple and straightforward. Her arguments, including those in response to the defendant’s allegations, did not involve complex legal and factual arguments.

(3) Finally, counsel’s brief fee is taxed no differently from other costs and expenses: Hong Kong Civil Procedure 2016 §62/App/28.  One asks what would be the fee a hypothetical counsel, capable of conducting the case effectively, would charge: Hong Kong Civil Procedure 2016 §62/App/31.  Without disrespect to the plaintiff’s counsel, the present case can clearly be competently conducted by a more junior counsel charging lower fees.

6.  Applying a broad brush approach, I allow $122,944.00 as the plaintiff’s costs by way of summary assessment:-

Section B: Manual Work	$1,100.00
Section C: Communication	$16,650.00
Section D: Professional Work	$14,994.00
Section E: Counsel’s fees	$90,000.00
Section F: Other Disbursements	$200.00
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Total:	$122,944.00