BANK OF CHINA (HONG KONG) LTD v. THE OWNERS OF THE DUMB STEEL LIGHTER OR VESSEL CAPITAL NO.33 (Licence No.2176V)

HCAJ114/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NO.114 OF 2005

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Admiralty action in rem against the Dumb Steel Lighter or
vessel “CAPITAL NO.33” (Licence No.21767V)

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J U D G M E N T

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1. I have before me a gross sum assessment dispute in relation to the various costs incurred by various parties in various actions in this piece of litigation against the vessel. 

2. The Bank of China (“the Bank”) as mortgagee has a claim against the vessel.  It entered judgment and Gold Harvest (H.K.) Limited (“Gold Harvest”) intervened in that Bank of China action.  The Gold Harvest has a claim against the vessel.  It eventually got judgment and the Bank of China intervened in that action.  Now everything else had been settled and all questions have largely been agreed except in relation to the matter of the quantum of the various costs.

3. What I am going to say is by reference to the draft order kindly provided to the court by Mr Coleman for the plaintiff and I am going to do it by reference to the items set out there.  So far as that draft order is concerned, it can be seen that there is dispute in relation to paragraph 2(d), (g), (h) and paragraph 5.  I am giving my decision by reference to the way the argument proceeded and consider each of the items in dispute.  

4. The first item in dispute was the reasonable costs of intervention by Gold Harvest in the Bank’s action.  The Bank had already obtained judgment although the vessel had not yet been sold and the proceeds of sale had not yet been known when Gold Harvest intervened.  The amount put forward under that category is a composite figure because it includes the costs of today.  I will strip out of the costs of today and deal with that separately.

5. It seems to me, having regard to the nature of intervention, that the assessment must be done on the basis of what would have been the reasonable costs of intervention by solicitors who are familiar with this kind of work rather than to penalise the defendant for Gold Harvest engaging solicitors and counsel who are not familiar with admiralty work.  It seems to me that, taking all these factors into account, a fair assessment of the costs of intervention by Gold Harvest in the Bank’s action would be assessed at $50,000 and this is the amount I assess under Item (d)i as a new category in the draft order of Mr Coleman. 

6. The other major item of dispute is in relation to the costs of the action of Gold Harvest in their own action and in this respect I make no distinction between costs incurred for equipment and costs incurred for the loss of profit.  Costs of equipment claimed largely succeeded, and costs of loss of profit largely did not succeed.  Again I will strip out of the draft figure put before the court for costs of today.  Today’s costs will be separately dealt with. 

7. It seems to me that I should be as generous as I can in relation to that set of costs of Gold Harvest in its own action.  A lot of work had to be done.  It is an unusual set of proceedings.  There are two parts to the claim, one is proprietary, the other is not proprietary.  We have to spent quite a bit time on this and eventually it did lead to the parties sensibly agreeing on a resolution of the action.  I would allow a generous assessment of that claim at the figure of $480,000. 

8. So far as Item (h) is concerned, namely the costs of the Bank in intervening in the Gold Harvest action, of course a lot more work had to be done by the Bank because of the complexity of the claim.  So one cannot quite equate the costs of intervention by the Bank in the Gold Harvest action with the costs of intervention by Gold Harvest in the Bank’s action.  Doing the best as I can, I would allow a sum assessed at $140,000 to the Bank’s intervention in the Gold Harvest action.

9. It only then left for me to assess what should have been the reasonable costs of today incurred by the two parties and this is said to be under a new category of Item i(a) and i(b).  I think each party should have the same costs and both to succeed against the proceeds of sale.  I will assess each party’s costs of today against the proceeds of sale at $60,000.