DEYI INVESTMENT LTD v. MACJIN INFO COM TEK., LTD AND ANOTHER

HCA 587/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 587 OF 2014

______________

______________

____________________________________

SUMMARY ASSESSMENT OF COSTS

____________________________________

1. By a Decision handed down on 9 October 2015, I allowed the 2^nd defendant’s application to set aside leave for the service of the concurrent writ of summons on the 2^nd defendant out of the jurisdiction in South Korea (“Setting Aside Application”) and dismissed the plaintiff’s application for leave to further amend the re-amended statement of claim (“Amendment Application”) as against the 2^nd defendant. 

2. I also made an order nisi that the plaintiff should pay the 2^nd defendant’s costs of both applications to be summarily assessed.

3. The 2^nd defendant claims $304,194.98 and $44,400 for the Setting Aside Application and the Amendment Application respectively.

4. The plaintiff has made objections which, if accepted, would according to my reckoning reduce the 2^nd defendant’s costs to $174,164.16 and $13,000 for the Setting Aside Application and the Amendment Application respectively.

5. In making summary assessment of costs, the court follows a two-stage approach.  The court will first take a global approach, which will indicate if the total sum claimed is or appears disproportionate.  If the costs as a whole are not disproportionate, then all that is required is each item of cost should be reasonably incurred.  Where the costs as a whole appear disproportionate, the court will need to be satisfied that each item was necessary, adopting a “sensible standard of necessity” which take into account the different judgments of those responsible for the litigation as to what is required.  See Hong Kong Civil Procedure 2017, volume 1, paragraph 62/9/10, citing Poon Shu Fan v Wong Tin Yan [2012] 5 HKLRD 512.

6. Dealing first with the 2^nd defendant’s costs of the Setting Aside Application, the amount claimed ($304,194.98) does not appear to me to be disproportionate, having regard to the nature of the application, the complexity of the issues raised and the volume of the papers involved. 

7. In this connection, it is ironic that the plaintiff itself claimed $381,380 in the statement of costs lodged by it in respect of the same application before the hearing on 27 August 2015.  This suggests to me that the plaintiff (or those acting for it) had either grossly inflated the plaintiff’s costs before the outcome of the application was known or been very unreasonable in the objections made to the 2^nd defendant’s statement of costs after losing the argument, neither of which is acceptable.  Having reviewed the Hearing Bundle and the parties’ respective costs statements, I am inclined towards the view that the bulk of the plaintiff’s objections are unreasonable and deliberately so.  For instance, while claiming a total of 6 hours spent by a partner and associate for attendance on the opposite party, the plaintiff would allow only 8 minutes and 3 hours respectively for the same work done by a consultant and a senior associate of the 2^nd defendants’ solicitors. Another example is the objection to the photocopying charge at $1 per page when the plaintiff applied the same rate in its own statement of costs.  Needless to say, I strongly disapprove of such approach.

8. I now turn to the individual items to see if they were reasonably incurred.

9. I allow photocopying charges at $1 per page.

10. A main theme of the plaintiff’s objections is that the hours claimed to have been spent on a particular item of work by a member of the team assigned by the 2^nd defendant’s solicitors to the case should be reduced because of duplication with the work done by another.  In particular, the plaintiff makes the blanket suggestion that all the works done by the 2^nd defendant’s solicitors’ associate and trainee solicitor were duplication so that all the associated costs should be disallowed.  The basis for such a conclusion is not apparent to me.  The fact that the 2^nd defendants’ solicitors had allocated more personnel to the case than the plaintiff’s solicitors did, without more, does not mean that they did overlapping works.  The only exception is the attendance in court by both a consultant and a trainee solicitor on 27 August 2015.  However, I consider it not unreasonable for the supervising fee earner to be assisted by a trainee at a substantive hearing of this nature.  In other instances, I have reviewed the hours claimed by the 2^nd defendant’s solicitors to have been spent on each task against the hours claimed by the plaintiff’s solicitors for the same task.  I can see no apparent overlap between the contributions by different members of the team.  Indeed, in most cases, the plaintiff’s solicitors claimed more hours than the 2^nd defendant’s solicitors.  I accept the 2^nd defendant’s solicitors’ explanation that each of their consultant / senior associate / associate / trainee solicitor was assigned to conduct work suitable to be done by him/her without duplication.

11. The only deduction that I would make relates to the hourly rate applied to the works done by the 2^nd defendant’s solicitors’ senior associate.  I agree with the plaintiff that the appropriate hourly rate should be $3,000, having regard to the senior associate’s experience post-admission in Hong Kong as at the relevant time (about 6 years) and the scale rates normally applied by the court on party and party taxation.  The differences can be summarised as follows:

Work Done by Senior Associate	Claimed at $4,000/hour	Allowed at $3,000/hour
Attendance on client – 10 hours 14 minutes	$40,933.33	$30,700.00
Attendance on counsel – 56 minutes	$3,733.33	$2,800.00
Attendance on other side – 6 hours	$24,000.00	$18,000.00
Perusal of documents – 3 hours 30 minutes	$14,000.00	$10,500.00
Preparation of documents – 4 hours 50 minutes	$19,333.33	$14,500.00
Preparation for hearing – 5 hours 18 minutes	$21,200.00	$15,900.00
Total:	$123,199.99	$92,400

12. The total difference is $30,799.99 ($123,199.99 - $92,400), which I deduct from the claimed amount of $304,194.98 to give $273,394.99 for the Setting Aside Application.

13. Turning then to the Amendment Application, first, the same reduced hourly rate should be applied to the works done by the senior associate.

14. Second, I have reviewed (a) the affirmation of Seok Wan Jeon dated 25 August 2015 which contained only 2 substantive paragraphs making the point that Bongho Suh’s employment with the 2^nd defendant ceased on 24 August 2012 and producing the one page “Personal Information Summary” in respect of Suh and (b) the Affidavit of Jonathan Allan Denniss dated 25 August 2015, the sole purpose of which was to exhibit the said affirmation of Seok wan Jeon.  In light of the contents of these affidavits, I agree with the plaintiff that the 4 hours 12 minutes and 1 hour 30 minutes claimed for the preparation of these affidavits by the senior associate and the trainee solicitor respectively should be reduced to 2 hours for the senior associate only.

15. In consequence, the costs to be recovered by the 2^nd defendant for the Amendment Application should be $25,150, arrived at as follows:

Work Done	Claimed	Allowed
Attendance on client by Senior Associate – 2 hours 20 minutes	$9,400.00	$7,000.00
Attendance on counsel by Senior Associate – 1 hour 12 minutes	$4,800.00	$3,600.00
Attendance on other side by Senior Associate – 1 hour 21 minutes	$5,400.00	$4,050.00
Perusal of documents by Senior Associate – 30 minutes	$2,000.00	$1,500.00
Preparation of documents by: Senior Associate – 4 hours 12 minutes reduced to 2 hours Trainee – 1 hour 30 minutes – not allowed	$16,800.00   $3,000	$6,000.00   Nil
Attendance at hearing by Consultant and Trainee – 30 minutes	$3,000.00	$3,000.00
Total:	$44,400.00	$25,150

16. I order the plaintiff to pay the 2^nd defendant costs in the amount of $298,544.99 ($273,394.99 + $25,150) within 14 days from the date hereof.