NG CHUNG YING DAYDES v. TANG MAN KIT otherwise known as TANG MAN KIT, TERRY AND ANOTHER

HCMP 1439/2021

[2022] HKCFI 3090

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1439 OF 2021

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DECISION
ON COSTS

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1.  By my Decision handed down on 29 July 2022[1], I dismissed P’s Summons for the appointment of interim receiver pending determination of the Originating Summons (the “OS”). I made a costs order nisi (the “Costs Order Nisi”) that P shall bear the costs of the Summons, to be summarily assessed, with certificate for 2 counsel.

2.  By letter of 11 August 2022, P sought an order that the Costs Order Nisi be varied from what it was to Ds’ costs in the cause.  By letter of 12 August 2022, Ds objected.

3.  By order of 18 August 2022, I refused the application and made the Costs Order Nisi absolute, and gave further directions for summary assessment on the papers.  The reasons I gave parties are as follows:

(a)  The Summons has been contested.  P was unsuccessful in the application. Whilst I am prepared to accept that serious issues to be tried has been established, I have expressed the view that there are good bases in support, against P’s case, of the various conclusions which I have set out in the Decision.  I have expressed the further views that it is neither just nor convenient to appoint any interim receiver, and that the demands of justice are against the application.  At this stage on the adjudication of P’s application for variation, I express my further view that in the light of the matters which I have highlighted at §87, and particularly when read in the light of my views on the specific issues, P’s application for appointment of interim receiver was bound to fail.

(b)  In the context of an application for interlocutory injunction, I recognize that costs to follow event is but one option.  But equally, it is not necessarily the case that a successful defendant will only be awarded their costs in the cause – see for example Melvin Waxman v Li Fei Yu [2013] 6 HKC 424 at §17. 

(c)  On the facts of this case, and on merits, I am of the view that the costs order nisi is the fair and correct one.

4.  Ds on 25 August 2022 lodged their Statement of Costs.  Costs in the total amount of HK$2,888,048 are claimed.

5.  By letter of 2 September 2022, P:

(a)  lodged his List of Objections;

(b)  submitted that the amount of costs claimed is large, that part of them related to the OS, that any assessment at this stage would require apportionment, that there should be no piecemeal assessment on the Statement of Costs, and that summary assessment may prejudice P;

(c)  the Court was invited to consider whether it is appropriate to refer the matter to formal taxation.

6.  By letter of 7 September 2022, Ds objected to formal taxation.

7.  I refer to Order 62 rule 9C(1)(a).  P has not shown any“substantial grounds for disputing the sum claimed for costs that cannot be dealt with summarily”:

(a)  No point of principle has been shown.  The mere fact that the sums involved are substantial is not sufficient;

(b)  Any costs incurred on the defence of the OS only may not be regarded as necessary and proper for the defence of the Summons.  If any costs necessary and proper for the defence of the Summons overlap with those incurred for the defence of the OS, those costs may be allowed at this stage but if appropriate and necessary be disallowed when it comes to assessment or taxation of the costs for the OS.

8.  I decline P’s invitation to refer the matter to formal taxation.

9.  P has made 3 general observations/comments:

10.  “Disproportionate of costs claimed for an interlocutory Summons and workdone for the main action might have been wrongfully included into the Bill”:

(a)  This is in gist the first general observations/comments;

(b)  I will consider below whether the costs claimed are disproportionate and if so whether to apply a more stringent test of necessity as P has submitted;

(c)  On a party and party basis of assessment, costs that are necessary or proper for the attainment of justice or for enforcing or defending the rights of the receiving party are allowed in a summary assessment – Poon Shu Fan v Wong Tin Yan [2012] 5 HKLRD 512, §12.  Even if some of the costs claimed overlap with those incurred for the preparation of the OS, they may still be allowed if the test of “necessary or proper” is passed.  As I have stated above, if necessary, those costs may be disallowed or adjusted when it comes to assessment or taxation of the costs for the OS.

11.  “Engagement of most Senior Counsel not necessary”:

(a)  This is in gist the second general observations/comments;

(b)  In the present case, I am satisfied that the engagement of a Senior Counsel by Ds is justified;

(c)  I am however not dictated by the amount of the fees actually claimed by counsel, Senior or otherwise.  I am guided by the principles at §62/App/31 of the Hong Kong Civil Procedure 2022, which I apply.

12.  “Most of solicitors’ costs should be discounted to reflect the fact that most of the workdone were relating to the main action and only a small potion to the [Summons]”:

(a)  This is in gist the third general observations/comments;

(b)  I accept Ds’ reply that even if Counsel is engaged, a solicitor should not allow his own skill and judgment to be entirely dominated by counsel;

(c)  However, I will bear this general observation/comment in mind when considering whether the fees claimed are necessary or proper, and whether unreasonable duplication of works have been involved.

13.  I proceed to assess the costs:

Item	Assessment	Allowed (HK$)
B1	Photocopy charges Noting the nature of the charges claimed, the number of pages involved, and with no breakdown of other manual work said to have involved having been provided, I assess the claimed amount downwards.	13,000
C	Solicitor 1.      2 solicitors (WS & AL, admitted respectively in 2005, 2020) and one legal executive (LE) are involved; 2.      A total of 226 man-hours (WS x 52, AL x 77 and LE x 97) are claimed. That in my view is disproportionate; 3.      There have been duplications of work; 4.      Given the involvement of 1 leading counsel and 2 juniors, the time for perusal of documents and preparation for hearings are in particular clearly excessive; 5.      Whilst I have ordered that the costs for the variation of Costs Order Nisi should be borne by P, Ds’ objection comprised only a short letter, and the claim for HK$27,000 is excessive; 6.      In my view, and taking a broad brush approach, the necessary, proper and reasonable amount of man-hours are WS x 30, AL x 50 and LE x 55.	405,500
D1	Senior Counsel 1.      I accept P’s objections that part of the earlier fee notes in the total sum of HK$619,373 (for advice, consultation, conferences and drafting) are not necessary or proper for the Summons.  I assess it downwards by 50%; 2.      With respect, and despite the seniority of Mr Wong, the brief of HK$750,000 on top of the earlier fee notes is excessive.  I assess it downwards to HK$400,000; 3.      The refresher for a half-day continuation hearing is excessive.  I assess it downwards to HK$150,000.	860,000
D2	Junior Counsel 1.      Similarly, I assess down the earlier fee notes by 50%; 2.      I assess the brief fee down to HK$135,000; 3.      I assess the refresher down to HK$50,000.	333,000
E	Other Disbursements I assess the same at HK$5,000.	5,000
Total		1,616,500

14.  I hence summarily assess the costs of the Summons at HK$1,616,500.