KRYSTINA ROBERTSON AND GARY MCLEAN, THE EXECUTORS OF COLIN EDMUND ROBERTSON, DECEASED v. LAM WING SANG

HCPI 519/2017

[2021] HKCFI 778

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 519 OF 2017

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DECISION ON ASSESSMENT OF COSTS

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I. INTRODUCTION

1.  By my decision handed down on 4 February 2021 (“Decision”), I have ordered that costs of and occasioned by the Dispute as defined in paragraph 31 of the Decision, ie whether interest accrued on the sanctioned payment for the periods both before and after 24 December 2019 should be paid to the defendant (“D”) instead of the plaintiff (“P”), be paid by P to D to be taxed if not agreed. By a letter dated 11 February 2021 to the court, P’s solicitors proposed that the costs so awarded to D be assessed on summary basis. By a letter dated 19 February 2021, D’s solicitors confirmed D had no objection that the costs so awarded to D be summarily assessed.

2.  On 24 February 2021, this court granted written directions as follows:

(a)  by consent the cost order granted on 4 February 2021 be varied such that costs of and occasioned by the Dispute be paid by P to D to be summarily assessed;

(b)  D do within 14 days from the date thereof lodge and serve statement of costs not exceeding 1 page pursuant to Practice Direction 14.3;

(c)  P do within 14 days thereafter lodge with the court and serve succinct summary of objections of not more than 1 page in response to the aforesaid cost statement;

(d)  the summary assessment of costs will be by paper disposal (unless otherwise directed).

3.  For convenience, the costs order dated 4 February 2021 in paragraph 1 above as varied by my written directions in paragraph 2(a) above is referred to below as the “Costs Order”, and I adopt herein the abbreviations in the Decision.

4.  On 8 March 2021, D lodged his statement of costs. On 15 March 2021, P lodged their list of objections.

5.  On the party and party basis of assessment of costs, only costs that are necessary or proper and reasonable will be allowed.

6.  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.[1] 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, ……”

7.  I also refer to the following guidance in PD14.3:

“13. A broad-brush approach will be taken by the Court in the summary assessment procedure. The Court will not embark on a mini-taxation. Prolixity in contents of a statement of costs is therefore not acceptable. Costs for gathering information and drafting of these statements will generally not be granted.

14.  Although the Court may allow the full amount claimed by the receiving party, it will, so far as possible, ensure that the final figure is not disproportionate and/or unreasonable having regard to the nature and circumstances of the application or matter and the underlying objectives stated in Order 1A. The Court will retain this responsibility notwithstanding the absence of challenge to individual items in the make-up of the figure sought. The fact that the paying party is not disputing the amount of costs can however be taken as some indication that the amount is proportionate and reasonable. The Court will therefore intervene only if satisfied the costs are so disproportionate that it is right to do so.”

8.  This court notes that the hourly rates of CH and JT are not disputed. This court also agrees with P’s solicitors that (a) the relevant costs for consideration under the Costs Order are costs of and occasioned by the Dispute, and not costs in relation to other matters canvassed at the Hearing and in previous correspondence / communications between the parties, and (b) about 20 minutes of the Hearing should be apportioned for the Dispute.

9.  As will be apparent from the discussion below, P’s solicitors suggest that communications and professional work be limited to time spent by JT (handling solicitor) and not CH (handling consultant). I do not agree. First, this case involves a very significant claim as to quantum, and even the settlement sum is very substantial. CH’s involvement is justified although certain matters can be delegated. Secondly, the accrual period of the interest is extended (ie the Acceptance Letter is dated 24 December 2019 but O80r10 Approval is not granted until more than a year later on 19 January 2021), and the accrued interest is not a paltry sum. Thirdly, even P’s solicitors accept that the Dispute raises a “novel” matter of general principle on which there has been no past clear ruling.

10.  For item B1, D claims photocopying charges of 345 pages x $1 = $345. P’s solicitors suggest that the bundle of pleadings (26 pages) should be discounted as being “not required”, and that out of the 89 pages of the hearing bundle only 11 pages relate to the Dispute. In my view, the bundle of pleadings is relevant for the court cannot deal with the Dispute in vacuo, and the court must put the Dispute in context of the present action. The pleadings are useful to enable the court to place the likely value and significance of the accrued interest in context. Whilst I agree that some stand-alone correspondence are clearly not relevant to the Dispute (eg the letter dated 9 January 2020 by P’s solicitors questioning the propriety of a confidentiality provision), most of the correspondence assists the court by explaining why the accrual period of the disputed interest was so extended, which in turn places the arguments of the parties in context. Further, photocopy charges are not limited to the hearing bundle, but also included copies made at the time when the correspondence by D’s solicitors was issued, and copies made of instructions/brief to counsel. In the circumstances, on a broad-brush basis, I allow $300 under item B1.

11.  As for item B2 (attendance by litigation clerk) and B3 (service of documents), there is no challenge to the claimed sums of $220 and $100, and I award the same.

12.  As for item C1 (attendance on client), D claims 1 hour’s work for CH and 2 hours’ work for JT. P’s solicitors suggest it is appropriate to allow 30 minutes for JT. Given the extended period of over a year from the Acceptance Letter to the O80r10 Approval, it is not surprising that the client is anxious over non-resolution of a significant claim/settlement over an extended period, and there is need to report to client on progress and to advise on steps to be taken over an extended period. Given the matters referred to in paragraph 9 above, I find it is appropriate to award 0.75 hour for CH and 1 hour for JT, ie $4,350 + $3,000 = $7,350.

13.  For item C2 (attendance on other side), D claims 1.5 hours’ work for CH and 3 hours’ work for JT. P’s solicitors suggest it is appropriate to allow 0.5 hour for JT. Given the extended period of over a year from the Acceptance Letter to the O80r10 Approval, and the need to bring up and revisit the matter time and again over such period, the proper and necessary time required must be more than 30 minutes for JT. I allow 1 hour for CH and 1.5 hours for JT, ie $5,800 + $4,500 = $10,300.

14.  For item C3 (attendance on counsel), D claims 1 hour’s work for CH and 2 hours’ work for JT. P’s solicitors suggest it is appropriate to allow 0.5 hour for JT. In my view, proper and necessary time to be spent for liaison with counsel should be 0.33 hours for CH and 0.75 hours for JT as the background of the matter would be clear from the pleadings and correspondence. I therefore allow $1,914 + $2,250 = $4,164.

15.  As regards item D1 (preparation of documents), D claim 0.5 hour’s work for CH and 1 hour’s work for JT. P’s solicitors suggest this item should be minimal given the limited number of relevant documents in the hearing bundle. I am unable to see any need for CH’s involvement in the preparation of the hearing bundle, and I am also unable to discern any other need for preparation of documents when communications with the client, other side and counsel are covered in items B1-3. I allow 0.5 hour for JT for item D1, ie $1,500.

16.  As regards item D2 (perusal of documents), D claims 1 hour’s work for CH and 2 hours’ work for JT. P’s solicitors ask the court to disallow this item altogether. Whilst I agree a lot has been covered under communications with various parties under items C1-3, there are still be documents that require perusal, eg counsel’s written submissions. This is also tied to who should prepare for and attend the Hearing. As seen in paragraph 17 below, I consider it should be CH who should attend the Hearing. That being the case, I allow 0.5 hours for CH under item D2, ie $2,900.

17.  As for item D3 (preparation for and attending hearing), D claim 2 hours for CH and 2 hours for JT. P’s solicitors suggest it is appropriate to allow 1 hour for JT. In my view, the appropriate fee-earner to attend the Hearing is CH. I reiterate that the Dispute is a substantial contention between the parties that has lasted for over a year. I reiterate the matters in paragraph 9 above. However, I take the view that on party and party basis, it is not necessary for CH, who is well-experienced, to be accompanied by JT for the Hearing. I also find it is not required to undertake significant preparation given the involvement of counsel. In the circumstances, I allow 1 hour of CH’s time at $5,800.

18.  As for item E (counsel’s fees), D claims $30,000 as brief for counsel to attend the Hearing. P’s solicitors suggest that since 7 out of 21 pages of counsel’s written submissions and 2 out of 12 authorities cited by counsel relate to the Dispute, and the submissions and brief were dated and/or served very shortly before the Hearing, this court should allow ¼ of the claimed sum of $30,000. In my view, whilst the other disputes may have taken up more pages of counsel’s submissions, it is the Dispute which P also recognises as a “novel” matter having no past clear ruling that should exercise counsel in terms of research and consideration in the formulation of his written submissions and oral submissions at the Hearing. I am persuaded that the apportioned brief for a notional counsel of appropriate seniority in dealing with the Dispute should be allowed $24,000.

19.  Upon considering the items of costs claimed to see whether or not they are appropriate on party and party basis as explained in paragraphs 5-7 above, D’s total costs are assessed at $300 (item B1) + $220 (item B2) + $100 (item B3) + $7,350 (item C1) + $10,300 (item C2) + $4,164 (item C3) + $1,500 (item D1) + $2,900 (item D2) + $5,800 (item D3) + $24,000 (item E) = $56,634.00.