TIN WAN TUNG v. WONG SEE YIN AND OTHERS

HCA 167/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 167 OF 2011

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AND

HCA 1801/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1801 OF 2010

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(Consolidated by Order of Master S Kwang dated the 4th day of December 2013)

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DECISION ON COSTS

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1.  By a Decision handed down on 17 January 2017 (the “Decision”), I dismissed the defendants’ (i) Taxation Appeal and (ii) Stay Summons.

2.  In paragraphs 35 and 36 of the Decision, I ordered that: –

“35. … the costs of the applications be paid by the defendants to the plaintiffs forthwith, such costs are to be taxed on an indemnity basis if not agreed.

36. The above order as to costs is nisi and shall become absolute in the absence of any application within 14 days to vary the same.”

3.  By letter dated 19 January 2017, the plaintiffs’ solicitors writing on behalf of the plaintiffs applied for summary assessment of their costs of the Taxation Appeal and the Stay Summons pursuant to Order 62, rule 9A of the Rules of the High Court, in order to obviate yet another long and drawn out taxation process which had led to the Taxation Appeal in the first place.

4.  In relation to the plaintiff in HCA 167/2011 who is legally aided, his solicitors have confirmed and undertaken in the said letter, pursuant to Order 62, rule 9C(1)(b) of the Rules of the High Court that their firm and Mr Michael Liu of counsel would waive any claim for the common fund costs difference from their aided client in respect of the costs of the Taxation Appeal and the Stay Summons.

5.  On the other hand, the plaintiff in HCA 1801/2010 is not legally aided.

6.  The plaintiffs’ application to vary the costs order nisi is opposed by the defendants, who have submitted their objections by letter dated 1 February 2017.

7.  Pursuant to directions of this court, the plaintiffs have lodged their submissions in reply on 7 February 2017.

8.  As pointed out by the plaintiffs, it is one of the objectives of the Civil Justice Reform to afford the successful party more expeditious recovery of costs by increasing utilisation of the summary assessment of costs where possible in interlocutory proceedings in lieu of the conventional order for costs to be taxed.

9.  As noted in Practice Note 62/9A/1 of the Hong Kong Civil Procedure 2017, Recommendation 88 of the Working Party on Civil Justice Reform stated that: –

“The court should, whenever appropriate (whether as a response to an unwarranted application or unwarranted resistance to an application, with a view to saving costs or otherwise), make a summary assessment of costs when disposing of interlocutory applications.”

10.  In considering the defendants’ objection to the plaintiffs’ application, I was indeed astonished to note that the defendants have asked this court to “review his decision” again after the Decision on the Taxation Appeal has already been handed down.  I merely gave the parties an opportunity to make representations on the costs order nisi that I had made, not to ask for a wholesale review of the Taxation Appeal again, for which arguments had already been fully ventilated.  It is not meant to allow the defendants to have a second bite of the cherry by repeating and regurgitating the same arguments which had already been considered by the court before dismissing the Taxation Appeal.

11.  Having considered carefully the defendants’ objections in their letter, I agree that the defendants have failed to show that they have “substantial grounds for disputing the sum claimed for costs that cannot be dealt with summarily”, in terms of Order 62, rule 9C(1)(a) of the Rules of the High Court.  They have merely repeated many of the unwarranted allegations they have made in the course of the taxation, taxation review and the Taxation Appeal itself.

12.  Accordingly, I would allow the plaintiffs’ application to vary the costs order nisi so that the plaintiffs’ costs can be summarily assessed on an indemnity basis and payable forthwith in lieu of taxation.

13.  Practice Note 62/9/10 of the Hong Kong Civil Procedure 2017 sets out helpful guidance as to the proper approach in the summary assessment of costs, citing Poon Shu Fan v Wong Tin Yan [2012] 5 HKLRD 512: –

“First, the court will take a global approach, which will indicate if the total sum claimed is or appears disproportionate - if the costs as a whole are not disproportionate, then all that is required is each item of costs should be reasonably incurred. Where the costs as a whole appear disproportionate, the court will need to be satisfied that each item was necessary. In this regard, a ‘sensible standard of necessity’ must be adopted - this requires the need to take into account the different judgments of those responsible for litigation as to what is required. The conduct of the other party is also ‘highly relevant’, as by their co-operation, costs can be reduced, or if they are unco-operative, costs may be increased. In this context, it is acceptable for the paying party to have to pay for otherwise unnecessary expenses made necessary by their unco-operativeness.” (Emphasis supplied)

14.  In their “Statement of Costs for Summary Assessment”, the plaintiffs’ solicitors costs for the Taxation Appeal and the Stay Summons are stated to be HK$171,366.70 in total, to be shared equally between the 2 plaintiffs (ie HK$85,683.35 for each plaintiff).  In respect of HCA 167/2011, the plaintiff was also represented by Mr Michael Liu of counsel, who has submitted his Fee Note for HK$221,000.

15.  In my view, the amounts claimed by the plaintiffs do not appear to be disproportionate, having regard to the nature of the applications, the complexity and sheer volume of the issues raised by the defendants, and the volume of the papers involved.

16.  Having come to that view, all that is required is that each item of costs should be reasonably incurred.

17.  Adopting a broad-brush approach, and without embarking on a mini-taxation, I would summarily assess the plaintiffs’ solicitors costs for the Taxation Appeal and the Stay Summons at HK$133,900 in total, to be shared equally between the 2 plaintiffs (ie HK$66,950 for each plaintiff).  In respect of HCA 167/2011, I would further allow the sum of HK$196,000 by way of counsel’s fee.

18.  Accordingly, I would vary the costs order nisi made on 17 January 2017 to the effect that: “The defendants do pay the plaintiffs’ costs of the Taxation Appeal and the Stay Summons on an indemnity basis within 14 days from the date hereof, as summarily assessed below: –

(1) In respect of HCA 167/2011, at HK$196,000 as counsel’s fee and HK$66,950 as the plaintiff’s solicitors’ costs; and

(2) In respect of HCA 1801/2010, at HK$66,950.”