HYPER ICE, INC v. YELL GROUP LTD AND ANOTHER

HCIP 56/2019

[2022] HKCFI 2973

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

INTELLECTUAL PROPERTY PROCEEDINGS NO 56 OF 2019

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REASONS  FOR  TAXATION  REVIEW  DECISION

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1.  This was the plaintiff’s application to review my rulings made in taxation of the party-and-party costs claimed in the plaintiff’s bill of costs filed herein on 12 August 2021. (the “Bill”)

Brief Summary of Proceedings

2.  In this case the plaintiff claimed against the defendants for infringing its intellectual property rights.

3.  The plaintiff issued the writ herein on 11 October 2019. Statement of claim was filed on 26 November 2019.

4.  The defendants filed their defence on 10 March 2020 and filed request for further and better particulars of the statement of claim (the “Request”) on the same day.

5.  The plaintiff filed its reply as well as answer to the Request (the “F&BP”) on 26 May 2020.

6.  On 12 August 2020, the defendants made a sanctioned payment to settle the plaintiff’s claims.

7.  On 7 September 2020, the plaintiff accepted the sanctioned payment and this case was settled.

8.  The plaintiff commenced this taxation pursuant to order 22 and order 62 rule 10(5) of the Rules of the High Court and filed the Bill on 12 August 2021.

9.  The Bill was taxed by me at the hearing held on 11 July 2022 (the “Hearing”).

10.  On 25 July 2022, the plaintiff applied for review of taxation in respect of item 3 in section B of the Bill and filed its objections to taxation (the “Objection”) on the same day.

11.  The defendants filed their answers to the plaintiff’s appointment of review on 8 August 2022.

12.  The review hearing took place on 5 September 2022 (the “Review”) when I allowed the review of item 3 in section B of the Bill and at the same time reviewed my previous taxation rulings in respect of items 14 and 15 in section A of the Bill.

13.  At the Review, Mr Ho, law costs draftsman acting for the defendants, asked for written reasons for decision for the Review. This is the reasons for my decision.

Review Items

14.  The plaintiff sought review on my taxation ruling on item 3 in section B of the Bill. This was an item claiming for fee of Mr Ling Chun Wai of counsel (“LCW”). The plaintiff claimed $126,000 under this item. At the Hearing, I allowed $35,000.

15.  In the Bill, item 3 in section B was described as follows:

“Counsel’s fee for settling Reply; settling Answers to Requests for F&BP (agreed fee for two rounds of drafting) (including the fees of Ms Stephanie Wong) (21-26.5.20) and additional time spent on further revisions and receiving new instructions; attending Zoom calls (including the fees of Ms Stephanie Wong) (28.2.20 – 20.5.20) ($138,500 but agreed at) 126,000” (Emphasis added)

16.  The pleadings in issue were the reply and the F&BP.

17.  At the Hearing, Mr Wong, law costs draftsman for the plaintiff, informed the court that the reply and the F&BF were drafted by Ms Ruby Yeung (“RY”), the principal of the solicitors acting for the plaintiff. RY claimed 3 hours under item 14 in section A of the Bill for “preparing” the F&BP and claim another 3 hours under item 15 in section A of the Bill for “preparing” the reply. Item 15 was stated as “including review of evidence and considering counsel’s settled draft” (emphasis added).

18.  At the Hearing, I allowed 2 hours of RY’s time claimed in each of items 14 and 15 in section A of the Bill on the basis that the reply and the F&BP were drafted by RY and settled by counsel. I also allowed $35,000 as counsel fee under item 3 in section B of the Bill for settling of the reply and the F&BP.

19.  In the Objection, the plaintiff raised for the first time that: “Ms Stephanie Wong of counsel preparing the draft Reply and Answer to Request for F&BP and Mr Ling Chun Wai of counsel settle them.”

20.  Mr Wong informed the court at the Review that the plaintiff’s solicitors confirmed that the reply and F&BP were drafted by Ms Stephanie Wong (“SW”) and settled by LCW. RY only considered the pleadings drafted by SW and settled by LCW.

21.  As the reply and the F&BP were in fact drafted and settled by counsel, I was prepared to review my ruling made at the Hearing on item 3 in section B of the Bill. However, if item 3 in section B was to be reviewed on such grounds, items 14 and 15 in section A of the Bill had to be reviewed at the same time. The plaintiff simply should not get the best of both worlds. Mr Wong agreed.

Item 14 in section A

22.  In this item RY claimed 3 hours for preparing the F&BP. This item was previously taxed on the basis that the F&BP was drafted by RY and settled by counsel. The F&BP was a 10-page (excluding the signing page and the back-sheet) document. Two hours were allowed at the Hearing for RY to draft the document and to consider the draft settled by counsel.

23.  As the F&BP was drafted and settled by counsel, it was neither proper nor necessary for RY to spend 3 hours to consider the document bearing in mind that RY was the one who prepared the writ with indorsement of claim (2 hours were allowed under item 7 in section A of the Bill at the Hearing) and drafted the statement of claim (4 hours were allowed under item 10 in section A of the Bill at the Hearing). RY was at the material times a solicitor with over 30 years’ experience charging at $4,000 per hour. Furthermore, another 40 minutes had been allowed under item 13 in section A of the Bill at the Hearing for RY to consider the Request.

24.  At the Hearing, about 44 hours were allowed for RY to communicate with the plaintiff and another 5 hours were allowed for RY to communicate with counsel in stages 1 and 2 referred to in the Bill (ie covering periods before filing of the first timetabling questionnaire).

25.  In the premise, as RY had only considered the F&BP drafted and settled by counsel, I was of the view that proper or necessary time allowed should be 45 minutes. Accordingly, I reviewed my taxation ruling on item 14 in section A of the Bill and allowed 45 minutes of RY’s time claimed under this item at the Review.

Item 15 in section A

26.  In this item RY claimed 3 hours for preparing the reply. This item was previously taxed on the basis that the reply was drafted by RY and settled by counsel. The reply was a 7-page (excluding the annex, statement of truth and back-sheet) document. Two hours were allowed at the Hearing for RY to draft the document and to consider the draft settled by counsel.

27.  As the reply was drafted and settled by counsel, it was neither proper nor necessary for RY to spend 3 hours to consider the document bearing in mind that 6 hours had been allowed under items 7 and 10 in section A of the Bill for RY to prepare the writ and draft the statement of claim.

28.  Furthermore, another 2 hours had been allowed for RY to consider the defence and its appendices under item 12 in section A of the Bill.

29.  As pointed out above, substantial time had also been allowed for RY to communicate with the plaintiff and counsel at the material times.

30.  In the premise, as RY had only considered the reply drafted and settled by counsel, I was of the view that proper or necessary time allowed should be 45 minutes. Accordingly, I reviewed my taxation ruling on item 15 in section A of the Bill and allowed 45 minutes of RY’s time claimed under this item at the Review.

Item 3 in section B

31.  In this item the plaintiff claimed that LCW spent 10.5 hours and SW spent 34.5 hours. The time claimed by SW was on top of her claims for $20,000 for settling the statement of claim under item 1 in section B of the Bill (which had been allowed in full at the Hearing) and $2,500 ($1,000 was allowed at the Hearing) for reviewing and settling listing questionnaire, summary of facts and issues and proposed directions under item 2 in section B of the Bill.

32.  In the Objection, the plaintiff broke down item 3 into two parts and claimed $56,250 ($22,500 for LCW and $33,750 for SW) for preparing the reply and $82,500 ($30,000 for LCW and $52,500 for SW) for preparing the F&BP.

33.  At the Hearing, I allowed $35,000 under item 3 in section B of the Bill on the basis that the F&BP and the reply were drafted by RY and settled by counsel. As the plaintiff had clarified that the aforesaid pleadings were in fact drafted and settled by counsel and considered by RY, I agreed to review my previous ruling on this item.

34.  Item 3 in section B of the Bill covered fees of both LCW and SW. In the Objection, the plaintiff provided breakdown of works done by counsel. It could be seen that both counsel had been involved in all items of the works. There was bound to be duplication of works when both counsel spent time to peruse the same documents or attend the same conference. However, no certificate for two counsel had been granted to the plaintiff in this case and I did not consider that it was proper or necessary for two counsel to be involved in the preparation of the reply and the F&BP for this case. I reviewed this item on the basis that the works were done by a single counsel who had acquired background knowledge of this case from settling the statement of claim, the listing questionnaire, the summary of facts and issue and the proposed directions, fees for which had been allowed under items 1 and 2 in section B of the Bill.

35.  At the Hearing, I allowed $35,000 for item 3 in section B of the Bill on the basis that the reply and the F&BP were drafted by RY and settled by counsel. I had reviewed above items 14 and 15 in section A of the Bill to take into account the fact that RY did not draft the documents but only considered the documents drafted and settled by counsel. As such, I should review the amount which should be allowed under item 3 in section B of the Bill on the basis that both documents were drafted and settled by counsel who had had background knowledge of this case due to previous involvement in settling the documents referred to in [34] above.

36.  When I allowed $35,000 under item 3 in section B of the Bill at the Hearing, I had already taken into account time taken by counsel in communicating with instructing solicitors to take instructions on settling the Reply and the F&BP. As the documents were in fact drafted and settled by counsel, I should have allowed further time for counsel to do the drafting and take drafting instructions from instructing solicitors. I considered that $10,000 should be allowed to counsel for drafting the documents and a further $10,000 should be allowed to counsel for taking drafting instructions. After reviewing this item, I revised my ruling by allowing $55,000 instead of $35,000 under item 3 in section B of the Bill.

Costs and conclusion

37.  In respect of costs for this review application, although I allowed the plaintiff’s application to review item 3 in section B of the Bill and increased the amount allowed, I am of the view that the Review was necessitated by the plaintiff failing to provide accurate information to the court at the Hearing. As such, the plaintiff should bear the costs for this review application.

38.  I assessed such costs by summary assessment at $6,150.

39.  To conclude, I allowed the plaintiff’s application to review item 3 in section B of the Bill but at the same time also reviewed items 14 and 15 in section A of the Bill. I revised the time allowed to RY under items 14 and 15 in section A of the Bill from 2 hours each to 45 minutes each and revised the amount of counsel fee allowed under item 3 in section B of the Bill from $35,000 to become $55,000.

40.  I also ordered the plaintiff to pay the defendants’ costs for this review application assessed by summary assessment at $6,150.