YUAN CHU CHEN AND OTHERS v. CHEN MIN CHUN AND OTHERS

HCA 1714/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1714 OF 2015

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D E C I S I O N

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1.  This is an appeal by the 1^st and 3^rd Defendants (Defendants) against the summary assessment of costs made by Master S Lo on 17 January 2017 in respect of the costs awarded in favour of the Defendants after dismissing the Plaintiffs’ application to amend the Amended Statement of Claim on 19 December 2016.

2.  The Statement of Costs put before the learned Master by the Defendants for summarily assessment was in the total sum of HK$811,770.05.  In response, a Statement of Objections was filed by the Plaintiffs.  The assessment of the Master was in the sum of HK$193,000 (Assessment).  The parties were notified of the Assessment by way of a letter from the clerk of the Master.  The letter referred to the Statement of Costs and the Statement of Objections having been placed before the Master.  However, no reason for the Assessment was contained in the letter.

3.  At the first hearing of this appeal on 27 April 2017, in light of the complaint made by the Defendants about the lack of reason for the Assessment, they were invited by the court to write to the Master to obtain the same.  It should be noted that in light of the Statement of Costs, the Statement of Objections and the figures which were arrived at by the Master, it was self-evident that the Assessment was made after a process of evaluation.  The Defendants did not suggest otherwise.

4.  The invitation of the court was supported by the Plaintiffs and agreed by the Defendants.  On 9 May 2017, the reasons for the Assessment (Reasons) were provided by the Master.  Mr Ng, who appeared for the Defendants, agreed that it is legitimate for this court to refer to the Reasons for the purpose of this appeal. 

5.  I should say at the outset that I see no issue on the lack of reason provided with the Assessment on 17 January 2017.  In the context of summary assessment of costs, it is not unusual for the tribunal to have provided no reason: see, eg, Poon Shu Fan v Wong Tin Yan, CA, [2012] 5 HKLRD 512.  Indeed, even in cases of taxation of costs, reasons are not usually given, but will be provided in the event of a review of the taxation.

6.  The matter is put beyond doubt by the recent judgment of G Lam J in Cheung Hing v Wah Fung Resources Ltd [2017] 1 HKLRD 493.  The court has no general duty to give reasons in relation to costs orders, and O.42, r.5B(1) does not preclude the court from giving reasons for its costs assessment at a later stage when it becomes necessary to do so.

7.  In the context of an appeal from a master’s costs order, it is essential to obtain the reasons for the order because this court will not allow such an appeal unless the order is unreasonable or the master had erred in law: Hong Kong Civil Procedure 2018, vol 1, rubric 58/1/6.  This is consonant with the test adopted by the Court of Appeal for an appeal against a summary assessment of costs by a judge: Poon Shu Fan, supra.

8.  The parties are in agreement that this court should apply the test set out in Poon Shu Fan, and I shall do so.

9.  One of the main arguments advanced by Mr Ng is that the Assessment equated to a 76.22% reduction of the costs claimed by the Defendants.  I am not attracted by the argument.  It is a matter of substance, not percentage, as to the amount of costs which could be recovered by the Defendants as the winners of the contested amendment application on a party-and-party basis.  Otherwise, there will be a premium for making unrealistic claims for costs.

10.  I cannot agree with the Defendants that, on a global approach[1], the Assessment was disproportionately low.  I bear in mind that it was an amendment application resisted successfully on the technical ground that the amendment sought to introduce a claim which was not covered by the writ (see para 4 of the Reasons). 

11.  I next deal with the 3 main complaints of the Defendants in respect of the deductions made by the Master.  Firstly, the Master disallowed the costs associated with the expert evidence on Panamanian law adduced only by the Defendants.  The Master did not rely on such evidence and saw no need for it.  I was taken to some parts of the transcript of the hearing before the Master by Mr Ng.  With respect, I am unable to see that the view taken by the Master on the necessity of the expert evidence is erroneous. The fact that the evidence was only adduced by the Defendants speaks volumes. 

12.  Secondly, I agree with the Master that the total time and costs claimed by the Defendants’ solicitors (about 78 hours) were highly excessive, bearing in mind the nature of the application in question.

13.  Thirdly, counsel’s fee in the total sum of HK$301,500 was reduced by the Master to HK$90,000 based on his knowledge and experience as a taxing master.  With respect, I agree with the Master that this claim was quite excessive in the context of a 3 hour contested amendment application before a master. 

14.  I am unable to see any valid ground for this appeal, and it is dismissed with a costs order nisi in favour of the Plaintiffs, to be taxed if not agreed.