SCHINDLER LIFTS (HONG KONG) LTD v. NIKKO SERVICES LTD

DCCJ2263 / 2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO.2263 OF 2013

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Decision
On Summary Assessment of Costs

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Introduction

1. This is a case related to a contract dispute (“the second hand parts agreement) which has been determined in DCCJ1569/2008; being dissatisfied with the judgment, the Defendant applied and obtained leave to appeal.  During an adjournment of the appeal (CACV 250/2010), the parties entered into a written agreement settling the appeal (“the settlement agreement”). The Plaintiff instituted the present proceedings to enforce the settlement agreement, the Defendant attempted to counterclaim alleged damages related to the second hand parts agreement which had been determined in DCCJ1569/2008. 

2. After the exchange of pleadings, the parties took out three summonses in total, and they were referred as the First summons (taken out by the Plaintiff), Second summons and the Third summons (both taken out by the Defendant) in my Decision dated 26^th November 2013.  Out of the three summonses, the two substantive applications being the Plaintiff’s application for security for costs against the counterclaim and the Defendant’s application for striking out the claim.  All the summonses were heard on 22^nd November 2013.

3. During the course of discussion, the Defendant applied to withdraw his counterclaim, the Plaintiff has no objection but requested to have the counterclaim dismissed; the Defendant has no objection to this cause.  That being the case, the Amended Counterclaim was dismissed and no order was made for the Plaintiff’s application for security of costs. The parties has no objection that the costs should follow the event and to have the costs related to the counterclaim and the security of costs application summarily assessed but the Defendant requested time for payment. 

4. The Decision for all the summonses was handed down on 26^th November 2013.  By paragraph 9 of the order, the costs related to the dismissal of Amended Counterclaim and the application for security of costs to the Plaintiff.  The Costs to be assessed summarily and the Plaintiff  is to submit his statement of Costs to court with copy to the Defendant within 7 days from the date of the order and the Defendant is to submit his comment within 7 days thereafter.  Summary assessment is to be conducted by way of paper disposal.  In the same order, various costs orders nisi were made related to other applications.

5. The parties complied with the direction; expect the Defendant in addition to commenting on the quantum also made submission as to other matters.  The Plaintiff in response written to the court with copy to the Defendant requested the court to ignore the Defendant’s material which goes beyond the issue of the quantum of the relevant costs and costs orders nisi.  The order for summary assessment was made with consent from both parties. Summary assessment was discussed during the 22^nd November hearing, namely, the quantum of the costs related to the dismissal of Amended Counterclaim and the application for security of costs to be assessed by this court; thus any of the Defendant’s material which goes beyond the quantum of that costs order will be ignored. 

General

6. The Defendant filed his Counterclaim on 2 August and the Plaintiff’s Defence to the Counterclaim was filed on 16 August 2013.  The Defence to Counterclaim is concise with only two paragraphs relying on res judicata and the rule in Henderson v Henderson. 

7. Thereafter the Defendant filed his Amended Counterclaim on 28 August 2013, it appears that the Plaintiff was not aware of the Defendant’s Amended Counterclaim; the Plaintiff’s application for security for costs filed on 27 September 2013 was still referring to the Counter-claim.  Yet the only amendment to the Amended Counterclaim, is an additional paragraph (paragraph 21 of the Amended Counterclaim) stating that the Defendant is requesting the same damages in the appeal, should the Court of Appeal grants judgment in his favour, the Defendant would withdraw his counterclaim in the District Court.

8. The only affidavit filed by the Plaintiff for the First and the Second summonses is one page in length, for application for security for costs he referred to two affidavits which were prepared for the appeal and the order of Chu JA in the appeal made on 22 March 2012 and Chu JA’s Reasons for Decision of 30 March 2012 in the appeal; while for the application for striking out he referred to one affidavit.  And there is only one paragraph in the Plaintiff’s written submission related to security for costs.

9. The first hearing of the First and the Second summonses was on 15^th October 2013, and were adjourned for argument on 22^nd November 2013, the draft order for the hearing on 15^th October 2013 was prepared by the Defendant; time being the Defendant took out the Third summons which was also fixed to be heard on 22 November 2013.  As mentioned above the only affidavit filed by the Plaintiff dated 21 October 2013 was only referring to a number of affidavits filed in connection with the appeal CACV 250/2010. The Defendant commented generally that the Plaintiff has made minimal preparation for the application for security for costs.

Summary Assessment

Hourly rate

10. Mr Shaw for the Plaintiff was admitted in 1988, he is the handling solicitor of the case.  The usual hourly rate adopted for solicitors with experience over 10 years is from $2,100 to 2,600, with the nature of works in question; I considered the appropriate hourly rate is $2,500.

Manual Work

11. In view of the volume of photocopy related to the Counterclaim and security for costs, for item B1 I allowed the amount of photograph charges $450 in full.  For item B2 (litigation clerk attendance), I consider the rate of $110 is appropriate, I allow the following:

1. The filing of the Defence to Counterclaim,

2. The filing of the First Summons, as the substantive application for that summons is the application for security for costs,

3. Half of the filing of the Plaintiff Affidavit dated 21^st October 2013, as it covers the application for striking out,

4. The submission of the Plaintiff’s Submission and hearing bundles for the various applications, as it mainly for the application for security for costs,

5. The submission of the Plaintiff’s statement of costs for summary assessment, making a total of $495.

Communication

12. Taken into account of the ground of the Counterclaim, the content of the Defence to Counterclaim, the grounds for application for security for costs, and the necessary consequential communication, I consider the quantum claimed is excessive and for all the communications, I allowed a lump sum of 1 hour.

Preparation of documents

13. After considering the ground of the Counterclaim, the content of the Defence to Counterclaim, the grounds for application for security for costs, and the statement for costs, I consider the quantum now claimed for item D1is excessive, and I allowed a lump sum of 45 minutes.

Perusal of documents

14. Although the Defendant has filed and served voluminous documents to the Plaintiff, many of which were repetitive and documents of the appeal, I consider the quantum now claimed for item D2 is excessive, and I allowed a lump sum of 4 hours.

Preparation of hearings

15. There were two hearings, one for the call over of the First and the Second summonses, and one for the argument during which the Third summons was also disposed of.  After considering the nature of the application and the grounds relied by the Plaintiff,  I consider the quantum now claimed for item D3 is excessive, and I allowed a lump sum of 45 minutes.

Hearing

16. According to the court’s record, the hearing time for the First and Second summonses on 15^th October 2013 is 22 minutes, as there were two substantive applications, I considered it is just to apportion half of the time to the application for security for costs.  And according to the court’s record, the hearing time for the argument, the costs matters and direction for summary assessment related to the dismissal of Amended Counterclaim and the application for security for costs is 70 minutes.  Thus for item D4 I allow a total of 81 minutes.

Summary

17. After the Plaintiff served the statement of costs to the Defendant, the Defendant made a lengthy Comment which goes beyond the issue of quantum, of which the Plaintiff sees fit to respond.  I consider it is appropriate to allow a further 30 minutes for the consequential works related to the Defendant’s Comment.  Thus the costs liable by the Defendant in relation to the dismissal of the Amended Counterclaim and the application for security for costs are assessed and allowed at $21,820.  The breakdown is as follows:

Items	Rate/Time allowed	Costs allowed
A4 Fee earner	$2,500 per hour
B Manual work
B1	$450
B2	$495
Sub-total		$945
C Communications	1 hour	$2,500
D Professional work
D1	45 minutes	$1,875
D2	4 hours	$ 10,000
D3	45 minutes	$1,875
D4	81 minutes	$3,375
Sub-total	6 hours 51 minutes	$17,125
Consequential works	30 minutes	$1,250
	TOTAL	$21,820