WING FUNG CREDIT LTD v. LAM SIN YEE

DCMP 2843/2025

[2026] HKDC 1596

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 2843 OF 2025

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DECISION ON COSTS

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1.  On 29 July 2026, this Court handed down a decision (“the Decision”) on, inter alia, D’s XXN Summons and P’s OS[1] in these proceedings. Substantive reliefs sought by P, including vacant possession of a car parking space legally owned by D, were granted. At paragraphs 68.5-68.6 of the Decision, I made an order nisi that D shall pay P’s costs of the proceedings (including the reserved costs) on solicitor-and-client basis, to be taxed if not agreed. But I also ordered at paragraph 68.7 that parties might seek to vary the costs order nisi within 14 days from the date of the Decision.   

2.  By a letter dated 5 August 2026, P sought to vary the costs order nisi for the costs mentioned in paragraphs 68.5-68.6 of the Decision to be summarily assessed in lieu of taxation. A statement of costs was attached to that letter, and procedural directions for the lodgement and service of statements of objection and reply were proposed.

3.  In response to the Court’s query, D expressed in a letter/submission dated 17 August 2026 that she objected to P’s proposed approach and requested the Court to stick to the procedure of a formal taxation if P’s costs are to be assessed. Detailed reasons in support of this stance were given. At the same time, D confirmed that she does not dispute the costs order nisi and said she understood that the order has “become absolute” from her perspective as “no application to vary the same having been made within the 14-day period stipulated”. In other words, D has accepted that she has liability to pay P’s costs and the scale of costs is solicitor-and-client; she just insists on having formal taxation, rather than summary assessment, as the mechanism for arriving at the quantum of the costs P has spent on these proceedings using that scale if the parties are unable to agree.

4.  Further letters/submissions were then received from P and D on 19 August 2026 and 21 August 2026 respectively. As indicated in this Court’s previous written directions, this Court will first hand down a decision on whether P’s proposal of summary assessment shall be adopted, hence the present decision.   

5.  Having considered all the letters/submissions, I agree with P that summary assessment should be adopted.  I will give my brief reasons why summary assessment is suitable for this case and why certain points made by D do not persuade me that taxation is more suitable.

6.  Under Order 62, rule 9(4)(b) of the Rules of the District Court (Cap. 336H), the Court in awarding costs to any person may direct that, instead of taxed costs, that person shall be entitled to a sum of money summarily assessed in lieu of taxation. The availability of summary assessment is not limited to costs of interlocutory applications. That said, under Order 62, rule 9C(1)(a), no direction for summary assessment may be made if the paying party shows substantial grounds for disputing the sum claimed for costs that cannot be dealt with summarily.

7.  In this regard, I agree with P that the points expressed in D’s letters/submissions do not show why the costs of these proceedings cannot be dealt with summarily:

7.1.  D said the costs claimed are disproportionate to the financial interest of the substantive dispute, which was a point I commented on in the Decision. Those comments were made for public awareness (as the Decision was published) and parties’ reflection of their own acts/omissions. It is one thing for the Court to question whether parties acted wisely in the past to incur a disproportionate amount of costs before the matter came to substantive argument; it is another thing to decide whether such costs were actually incurred and should be compensated by the losing party in favour of the winning party; 

7.2.  P is right to say that, exactly because the substantive monetary claim is small (which, according to D, has been paid), the Court should not allow the parties to indulge in incurring more costs before this matter is finally resolved. There is no doubt that both parties (not just one party) are bound to incur more costs, and may potentially be liable to pay more costs of the other side, if the procedure is taxation as opposed to summary assessment;

7.3.  If D just means these proceedings should, by reason of the small size of the substantive monetary claim, be uncomplicated and thus the amount of costs claimed by P is not justified, even on solicitor-and-client basis, D can be assured that this Court will not ignore this factor during a summary assessment of costs;

7.4.  Some points mentioned by D in opposition to summary assessment (e.g. this Court’s comment on what P could have done better in the substantive proceedings at paragraph 66 of the Decision) go to the issue of who should be the paying party of costs and/or the proportion of costs to which a winning/receiving party should be entitled (Order 62, rule 9(4)(a)). Such points should not feature in the next task to be disposed of by the Court, i.e., determining the quantum of the costs P has spent on this matter; 

7.5.  As stated in the Decision, those “conduct” factors have been considered before this Court made the costs order nisi. If D means P should not be entitled to 100% of its costs spent but just say 70% of its costs spent because of such “conduct” factors, D should vary the costs order nisi that D is to pay P’s costs of the proceedings. Yet, as aforesaid, D has chosen to categorically confirm that she does not dispute the costs order nisi, and D’s time to vary the costs order nisi has now expired;

7.6.  I also agree with P that, at this stage of the proceedings, it is inappropriate for D to refer to, in her letter/submission, any amount of costs apparently mentioned by P in the course of negotiation between the parties at an earlier stage. P indicated that the same was stated in “without prejudice” correspondence. If there is indeed any such correspondence, this Court will not look at them, at least not at this stage before the amount of costs has been quantified[2]. In principle, such correspondence is inadmissible for the present purpose. It is also inappropriate for D to refer to her allegations against her former solicitors. It has no relevance to the amount of costs P has incurred and what should be the mechanism to determine it; and

7.7.  Other points raised by D against the necessity of specific items of P’s statement of costs can be taken into consideration in the process of summary assessment (e.g., the quantum of items D10-D13 of P’s statement of costs dated 5 August 2026 at HK$33,650 in total). Taxation is not the only mechanism to entertain such arguments. But on a side note, D should appreciate that the applicable scale of costs in this case is solicitor-and-client, which was contractually agreed in the Mortgage. This scale is more generous than the usual party-and-party scale.    

8.  Most importantly, I accept P’s point that as these proceedings were begun by OS, the structure of P’s costs entitlement is relatively straightforward. P’s costs just consist of the preparation/perusal time of those court documents/exhibits I have read, solicitors’ communications with client/opposite side, their attendance of court hearings and some minimal manual work/disbursement. As I heard the OS twice in April 2026, considered the documents in the hearing bundle at some length and written a rather detailed judgment, I am obviously in a position to assess costs summarily. A summary assessment by me will promote procedural economy and save time and costs.

9.  Lastly, it is said in paragraphs 39(1)-(2) of Practice Direction 14.3 that costs-only proceedings claiming an amount of costs below HK$200,000 should generally proceed by way of summary assessment, whereas a claim for more than HK$200,000 may proceed by either summary assessment or taxation. The present proceedings are certainly not costs-only proceedings, and P’s statement of costs attached to its first letter has already revealed a grand total of HK$263,159.00 (which is not inclusive of the present application for variation of costs order and the subsequent summary assessment process). But by drawing an analogy, it seems to me that for a costs claim which is unlikely to be significantly above HK$200,000 (say below HK$300,000), the Practice Direction has indicated that summary assessment may be the more preferable option between the two.

10.  Having considered the competing views, I decide to adopt summary assessment to determine the quantum of costs P can recover from D on solicitor-and-client basis. The costs of, incidental to and occasioned by the four letters sent by the parties in August 2026 on the issue of whether taxation or summary assessment should be adopted shall be costs in the cause of the summary assessment.

11.  Although D has already covered certain points/arguments against the numbers of hours P’s solicitors have incurred for particular tasks in her opposition to the use of summary assessment, I will still give D a chance to lodge and serve one more round of written opposition to P’s statement of costs. I hereby give the following directions:-

11.1.  The costs order nisi at paragraphs 68.5-68.6 of the Decision be varied, such that the costs of the proceedings which D shall pay P, on solicitor-and-client basis, are to be summarily assessed by this Court in lieu of taxation;

11.2.  P should revise its statement of costs dated 5 August 2026 to set out its updated amount of costs incurred, including those spent on arguing the issue of taxation or summary assessment and preparing this revised statement, and lodge/serve it within 7 days from the date the present decision is handed down;

11.3.  D shall lodge/serve her written opposition to P’s revised statement of costs within 21 days thereafter. In such written opposition, D shall set out in tabular form her opposition to individual items (e.g., the hourly rates of fee earners, whether they were indeed involved in particular tasks and the hours spent on particular tasks etc.) clearly. She may also include the amount of her own costs spent on this costs matter after the Decision was handed down;

11.4.  P may (but not must) lodge/serve its written reply to D’s written opposition within 14 days thereafter; the reply may contain the additional costs P has incurred to prepare this reply.

12.  Upon receiving the aforesaid written statement, opposition and reply, this Court will summarily assess (i) the amount of the costs of the proceedings (up to the handing down of the Decision) which P can recover from D and (ii) the liability and quantum of the costs of the summary assessment itself.