C. ART LTD v. ABILITY MANUFACTURING LTD

1989, No. A1006

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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MASTER'S ANSWERS ON REVIEW OF TAXATION

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1. Pursuant to an order for costs made by Mr. Justice Nazareth on 20th June 1989, the Plaintiff's bill of costs was taxed by me on a party and party basis on 12th and 17th January 1990.

2. Objections to certain items allowed on taxation were filed by the Defendant on 3rd February 1990 and answers thereto were filed by the Plaintiff on 16th February 1990.

3. Having heard both parties by their representatives, Mr. Robin Bridge for the Defendant and Miss Edith Tang for the Plaintiff, on 21st March 1990, I now give written answers to the objections which shall also stand as my certificate under Order 62 rule 34(4).

Objections Nos.1 and 2

Items No.2 and 3

4. These relate to a conference with Counsel on 18th February 1989 to settle the statement of claim, prior to the commencement of proceedings.

5. This falls to be considered in two parts. First, whether it was necessary for Counsel to settle the statement of claim at all, the Plaintiff having the services of a competent solicitor experienced in these matters; and second, whether it required a conference.

6. Mr. Bridge maintains that neither comes within the definition of a step that is "necessary and proper for the attainment of justice" in the definition of party and party costs in O.62 r.28(2).

7. I find, however, that this definition includes action taken by a prudent solicitor, protecting the rights of his client, and instructing a specialist counsel to settle the statement of claim in proceedings where it is intended that he will be briefed to appear at trial, and stand by those pleadings, except in the most simple and straightforward proceedings, must fall within that definition.

8. Whether a conference was necessary is another matter.

9. In the normal course of events instructions should be sent to counsel with all the papers in the case to settle the pleadings, and if he requires a conference he will ask for one.

10. On reviewing the solicitor's file, I can see no good reason for a conference other than a general discussion of the matter which is clearly not allowable on a party and party taxation.

11. I accordingly allow the objection in so far as it relates to the solicitor's attendance and disallow item no.2 in toto.

12. Counsel however is entitled to a fee for settling the statement of claim and I therefore allow his fee at item no.3 as it stands.

Objection Nos.3 and 4

Item Nos.32 and 33

13. These relate to a conference with Counsel on 9th May 1989 on which Mr. Bridge's views are set out in his written reasons for objections.

14. It is clear from the solicitor's attendance note that a number of matters were before counsel for his consideration and advice, namely letters from the Defendant's solicitor requesting particulars and discovery, procedure to be followed, the defence having now been filed, and in particular whether to proceed with an application under O.14, and the preparation and settling of affidavits in support of such an application.

15. I consider all these matters unobjectionable on a party and party taxation, and having already reduced the time allowed at the hearing of the taxation to 1½hours, the objections are rejected.

Objection Nos.5 and 6

Items Nos.55 and 59

16. These items were disallowed on taxation as being unnecessary where the Defendant is legally represented, so this is in effect an objection to item no.90, the main item, in that time allowed therein for drafting these affidavits should be disallowed and the overall time reduced accordingly.

17. However, I can find no part of item 90 referable to drafting these affidavits, and I am informed by Miss Tang that the time for drafting was omitted in error.

18. There is therefore no basis for this objection which is accordingly rejected.

Objection No.7

Item No.69

19. This conference with counsel was considered necessary by the Plaintiff's solicitor as a result of the service by the Defendant of a proposed amended defence and an affirmation, two days before the 0.14 hearing.

20. While I agree with the necessity of providing copies to counsel for his perusal, the brief having already been delivered, on reflection I cannot agree with the necessity of a conference and this item is therefore disallowed and the objection upheld.

Objection No.8

Item No.90

21. The objection to this item is somewhat unusual in that it is contended by Mr. Bridge that, although it was an action which warranted the attention of a solicitor of Mr. Yu's experience and seniority, he should not have done all the work, or the Defendant should not be expected to pay for his time for work which could have been done by a more junior member of his staff.

22. My attention was not drawn, however, to particular sections of this item suitable for other staff, and I was asked to make a notional subdivision of the total hours allowed into senior and junior solicitors' time in a ratio of two thirds to one third.

23. Having reviewed this whole item, I am satisfied that the time allowed was properly allowed, and except where parts of the work done can be shown clearly to be inappropriate for a senior solicitor who has the conduct of the proceedings, all work necessarily done by the solicitor concerned must fall within the scope of party and party costs. This objection is accordingly rejected.

Objection No. 9a

Item No.91(a)

24. The reasons for this objection are as set out in the written objections.

25. At the hearing of this review Mr. Bridge sought to add a third reason, namely that the investigation could have been conducted by a clerk or other junior staff of the Plaintiff's solicitors and did not require a professional investigator.

26. Although I would not be in any event accept the submission of additional grounds of objection which have not been served on the other party in accordance with the rules, I find no merit in that ground, having studied the evidence and report supplied by the investigator, and considering the skill and experience necessary to acquire such evidence, and its necessity for the proper prosecution of this action.

27. I similarly reject the ground that it was done prior to the issue of the writ. By the very nature of the action it could not have been done at any other time, and is clearly necessary for the conduct of the proceedings.

28. I draw further support for this view from the judgment of Lord Hanworth M.R. in Pêcheries Ostendaises (SA) v. Merchants Marine Insurance Co. [1928] 1KB 750 where he says, at p.757, that it appeared to him:-

"... that there is power in the Master to allow costs incurred before action brought, and that if the costs are in respect of materials ultimately proving of use and service in the action, the Master has a discretion to allow these costs, which he probably will exercise in favour of the party incurring them, because they have been made use of during the course of the action."

29. The third reason raises a different point in relation to this item, and that is that the item is properly special damages, not costs and should be claimed as such.

30. The judgment of Mr. Justice Nazareth included an order that there be the usual enquiry as to damages sustained by the Plaintiff, who has not sought to enforce the provision and, I understand, does not intend to, being satisfied with the injunctive and other relief granted.

31. Mr. Bridge referred me to British Motor Trade Association v. Salvadori [1949] CL.556 in support of his contention that the proper course would be for the Plaintiff to proceed to an enquiry as to damages and claim this item then.

32. However, the facts of that case are very different from those here, and while Roxburgh J. held that those costs of investigation which could not be recovered as costs in the aution could be recovered as special damages, it was nowhere decided that expenses such as these could not be recovered as costs.

33. As a matter of common sense it is absurd to suggest that both parties should proceed to an enquiry as to damages and incur further couts far in excess of the sum sought to be recovered, where it is possible to deal with the matter on taxation. To so deal with it, I only have to be satisfied that they fall within the definition of "costs of and incidental to" the proceedings as envisaged by S.52A of the Supreme Court Ordinance Cap.4, and, as is apparent from what I have said above, I am so satisfied.

34. Indeed, were I to concur with Mr. Bridge's contention, there is a real danger that the Plaintiff would not recover these costs at all. As Sir Robert Megary V.C. said in Ross v. Caunters [1979] 3 All E.R. 580 at p.601:-

"It also seems to me that there is apple authority for saying that a successful plaintiff cannot obtain, in the guise of damages, any costs which, on a party and party taxation of costs, are disallowed by the taxing Master."

35. This would, in my view, be a grave injustice to the Plaintiff, and I therefore reject this objection.

Objection No.96

Item No.91(b)

36. The reasons for this objection are, firstly, that there was no order under Order 38 part IV, and, secondly, that, as with the previous objection, it is properly special damages, not costs.

37. With regard to the second reason, I repeat my answer to the last objection.

38. As to the lack of an order under Order 38 Part IV, the answer, in my view, is simple. That part of the rules relates to expert witnesses, and personnel of the investigators are not expert witnesses, they are professional witnesses. They are not called to give opinions, as are experts, but to give evidence of facts they have discovered.

39. Order 38 Part IV is not applicable and the objection is rejected.

Objection No.10

Item No.99

40. This objection is made on the basis that, having allowed half an hour at item 93 for the solicitor approving the bill, further time for reviewing the file, preparing for taxation and compiling the documents to be lodged in Court should not be allowed at a partner's rate.

41. In view of the fact that it was the costs draftsman who appeared on the taxation, and who therefore is more likely to have prepared for the hearing, I have some sympathy with this, and I accordingly allow one hour of her time at $600.00, thereby taxing off a further $150.00.

42. In view of the comparatively minor part of this review in which the Defendant has been successful, I consider it appropriate that I make no order as to costs, but I make this an order nisi with liberty to either party to seek an appointment within 14 days if they wish to make further representations.