YUNG TAI YIN v. CHAN YUEN TUNG AND ANOTHER

HCPI 1225/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 1225 OF 2014

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DECISION ON SUMMARY ASSESSMENT OF COSTS
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1.  On 4 November 2015, I handed down my Decision and dismissed the plaintiff’s appeal against the order of Master Leong dated 14 September 2015 (“Order”) for striking out the plaintiff’s claim against the 2^nd defendant (“D2”) at paragraph 4 of the Statement of Claim (“SoC”) with liberty for the plaintiff (“P”) to apply to amend the SoC and to re-add D2 as needed within 63 days from the date thereof, ie on or before 16 November 2015.

2.  By my Decision, I also granted a costs order nisi that P do pay D2’s costs of and occasioned by the Appeal (with all costs reserved, if any) to be summarily assessed and paid forthwith (“Costs Order Nisi”).  Such Costs Order Nisi had been made absolute since there was no application to vary the same within 14 days from the date of my Decision.  For convenience, I shall adopt the abbreviations in my Decision.

3.  D2 lodged its statement of costs on 25 November 2015.  By the Decision, I gave directions for P to lodge/serve list of objections within 7 days after D2 lodged/served its statement of costs.  P failed to do so, so I proceed to deal with the summary assessment of costs.

4.  The proper approach to summary assessment of costs has been laid down by the Court of Appeal in Poon Shu Fan v Wong Tin Yan [2012] 5 HKLRD 512.  For present purpose, it is sufficient to refer to the useful summary in 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, ……”

5.  Here, D2 sought a total sum of $137,730 comprising solicitors’ profit costs and disbursements of $67,730 and counsel’s fees of $70,000. 

6.  I bear in mind the two-stage approach required for summary assessment.  Having considered the nature and scope of the Appeal, the affidavits filed in support and in opposition of the Summons, the skeleton submissions and list of authorities, what transpired at the Appeal Hearing, the involvement of counsel in this matter, and considering all circumstances, I find that the overall costs claimed by D2 under their statement of costs appeared to be disproportionate on party and party basis.  It is therefore necessary to consider each item to be satisfied whether or not it “was necessary and its costs reasonable” on the sensible standard of necessity as explained by the Court of Appeal.  For the purpose of the summary assessment herein, I shall adopt a broad-brush approach pursuant to paragraph 13 of Practice Direction 14.3 as it is inappropriate to conduct any mini-taxation.

HOURLY RATES

7.  D2 claimed the hourly rates for CKHW (consultant admitted in 1999), ATCA (trainee solicitor) and litigation clerk were $4,000, $1,100 and $1,000 respectively. 

Item B2

8.  Under this Item, D2 claimed for attendances by the litigation clerk in the total sum of $1,000 (1 hour).  I do not understand why costs for filing and serving documents are claimed on hourly rate basis.  According to Part 1 of the First Schedule of Order 62 of the RHC, the cost of each attendance for unqualified staff to file and serve documents is $110.  In the circumstances, I allow a sum of $220 under this Item.

Item B3

9.  Under this Item, D2 claimed 3 hours of time spent by ATCA for transcribing the audio-recording of the Master Hearing.  However, on 17 October 2015 I dismissed the Adjournment Summons and made clear the transcript of the Master Hearing was unnecessary.  I also granted a costs order nisi in respect of the Adjournment Summons that there be no order as to costs.  This Item is disallowed.

Item C1

10.  Under this Item, D2 claimed $4,000 being 2 hours of time spent by CKHW for attendance on client.  Since the Appeal was by way of hearing, necessary liaison between D2 and their solicitors would include reporting on the Appeal, engaging counsel and reporting on outcome of the Appeal.  Taking all these matters into account, but considering the nature and scope of the Appeal, I find 2 hours excessive and allow 1½ hours of work by CKHW on party and party basis.  I therefore allow $6,000 for this Item.

Item C3

11.  D2 claimed 2 hours of time spent by CKHW ($8,000) and 0.5 hour of time spent by ATCA ($550) on attendance on counsel.  Counsel engaged to appear for D2 at the Appeal was the same counsel who appeared before Master Leong at the Master Hearing, and hence was well familiar with the matter. Again, since the Appeal was by way of rehearing, I am unable to see why 2 hours were required for liaison with counsel for the Appeal.  It must be borne in mind I granted a costs order nisi that there be no order as to costs in respect of the Adjournment Summons.  On party and party basis, I allow 1 hour of time spent by CKHW and 0.5 hour of time spent by ATCA.  In the circumstances, I allow $4,550 under this Item.

Item C4

12.  D2 claimed 1 hour of time spent by CKHW ($4,000) and 0.5 hour of time spent by ATCA ($550) for attendance on court.  I am unable to see why such time would have to be incurred, especially when there was no cost order in favour of D2 in respect of any request for adjournment of the Appeal Hearing and/or any request for audio-recording of the Master Hearing.  In the circumstances, I allow $550 under this Item.

Item D2

13.  D2 claimed 2 hours of time spent by CKHW ($8,000) for perusal of documents.  Whilst I agree that time would be required for perusal of the Notice of Appeal and the P 3^rd Aff, such documents, which were homemade by P (who was not legally represented), were not complicated.  Putting aside references to matters concerning the Adjournment Summons, counsel’s skeleton submissions and list of authorities for the Appeal Hearing were in substance similar to those that counsel used for the Master Hearing.  Bearing in mind CKHW (who was not the advocate at the Appeal Hearing) was well familiar with such contents, I am not persuaded he would have required significant time for perusal.  Likewise, review of P’s hearing bundle was not a complicated task.  I am not unconvinced the aforesaid perusal exercise required 2 hours.  On party and party basis, I allow 1.5 hours of CKHW’s time or $6,000 for this Item.

Item D3

14.  D2 claimed 2 hours of time spent by CKHW ($8,000) for preparation for hearing.  There was only one Appeal Hearing attended by counsel, and such hearing was just 1½ months after the Master Hearing.  I am unable to see how such intensive preparation can be justified as being necessary or proper, or indeed proportionate.  In my view, necessary or proper costs for review of the file to refresh would be 0.5 hour of CKHW’s time or $2,000.

Item D4

15.  D2 claimed 1.5 hours of time spent by CKHW ($6,000) for “considering the law and legal research”.  The Appeal was by way of rehearing and (putting aside matters concerning the Adjournment Summons) even counsel’s written submissions for the Appeal did not raise any new matter of law.  I am unable to see what legal research would be necessary or proper for the Appeal.  I disallow this Item.

Item D5

16.  D2 claimed 4 hours of time spent by CKHW ($16,000) for court attendance.  But the Appeal Hearing only lasted from 10:35 am to 12:30 pm (ie about 2 hours).  On party and party basis, waiting time for court hearing will not be allowed (see Hong Kong Civil Procedure 2016 Vol 1 para 62/App/21 at p 1236).  I therefore allow 2 hours at CKHW’s rate in the sum of $8,000.

Items F1 and F2

17.  D2 claimed travelling expenses of $600 and “postage and other miscellaneous expenses” of $100.  But likewise under party and party basis, such disbursements are not allowed.

CONCLUSION

18.  The total costs of D2 on their statement of costs are assessed at $100,950 (being $200 (B1) + $220 (B2) + $6,000 (C1) + $330 (C2) + $4,550 (C3) + $550 (C4) + $3,100 (D1) + $6,000 (D2) + $2,000 (D3) + $8,000 (D5) + $70,000.00 (E)). I therefore order that P shall forthwith pay costs in the sum of $100,950 to D2.