ERIC CHAN & CO (a firm) v. WONG KWOK WANG WARREN

DCCJ1155/2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1155 OF 2008

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DECISION ON COSTS

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Introduction

1.  By my Judgment handed down on 31May 2016, I dismissed the defendant’s summons dated 12 January 2016 for payment out to the defendant of the balance amount of the money in court, and for damages for the grant of an interlocutory Mareva injunction, and ordered the defendant to pay the plaintiff’s costs of the summons. I further directed summary assessment of those costs.

2.  Before the handing down of the judgment, the plaintiff had lodged on 29 March 2016 his statement of costs for summary assessment, and by his letter of 27 June 2016, he confirmed the adoption of the said costs statement.  The defendant, pursuant to my directions, lodged a statement of objections on 8 July 2016.

3.  In his costs statement, the plaintiff claims a total amount of $175,349 for his costs.

4.  In his objections, the defendant, apart from arguing that the plaintiff’s costs are grossly excessive and unreasonable, further contends that it is unfair for him to be ordered to pay the plaintiff’s costs in light of the mistake the plaintiff had made in his earlier application for a Mareva injunction order. He suggests that the court should have made an order for each party to bear their own costs.

5.  The defendant’s objection about the unfairness of the costs order, in my judgment, is clearly untenable.  The costs order, in ordering the defendant to pay costs, was made on a nisi basis.  Since no application was made to vary the nisi costs order within the stipulated time, it became absolute. It is therefore no longer open to the defendant to run the aforesaid argument.

6.  I will now assess the plaintiff’s costs with regard to the defendant’s objections to the amount of the costs. 

Item A4: Fee earners’ hourly rate

7.  The plaintiff (EC) is the only fee earner. He was admitted in 1995 and charges $2,600 per hour at the District Court scale, which is the rate usually allowed on a party –and- party taxation for a qualified fee earner with 10 or more years of post-qualification experience.    I do not agree with the defendant’s argument that EC’s costs should be capped at $500 per hour as a result of the mistake he made in his application for a Mareva injunction about the meaning of the “costs in the cause” orders.    I consider the rate of $2,600 reasonable and allow the rate as claimed.

Item B1: Photocopy charges

8.  Order 62, First Schedule, Part I, Item 1A of the Rules of the District Court (Cap.336H) prescribes $1 per page for copying of documents.  The documents EC refers to are 4 sets of documents listed in item D1, namely the plaintiff’s 18^th affirmation (73 pages), the plaintiff’s skeleton submission (19 pages), the list of authorities (33 pages) and a supplemental list of authorities (9 pages), totalling 134 pages. The defendant objects to the supplemental list of authorities. The supplemental list of authorities relates to the issue of whether costs should be ordered on an indemnity basis, which is wholly irrelevant to the defendant’s summons.  Thus, the charges for the 9 page supplemental list of authorities should be disallowed. Thus, the number of pages of copies allowed should be 125 pages (134-9).  The charges at $1 per page for 3 sets should therefore be $375 (125 x 3 x $1).

Item B2: Attendances of litigation clerk

9.  The defendant challenges the costs of attending court to file and serve the supplemental list of authorities. In the light of my decision regarding the supplemental list of authorities in §8 in the preceding paragraph, the amount to be allowed should be adjusted accordingly, namely $216 ($72 x 3) for lodging/filing documents; and $75 ($25 x 3) for serving documents.  Since there is no challenge to the amount of $97 for the filing and serving of the statement of costs, I therefore allow a total sum of $388 for this item.

Item C: Attendances on the defendant

10.  The 35 minutes claimed for the two letters to the defendant is agreed. Thus I allow the amount of $1,517 in full.

11.  The defendant however objects to the 30 minutes claimed for the three letters (i.e. 10 minutes for each letter) to the defendant. The defendant says they are short cover letters consisting of only one or two lines for effecting service by post.    For this type of short letter, the time claimed is not excessive. I allow this item in full.

Item D1: Preparation of documents

12.  A total of 17 hours and 15 minutes were claimed for preparing the plaintiff’s affirmation in opposition to the defendant’s summons, the skeleton submission, the list of authorities and the supplemental list of authorities. For the reasons given in §8 above, the time claimed (30 minutes) for the supplemental list of authorities should be disallowed.  EC himself is the plaintiff in these the proceedings. Thus, he would have been familiar with the issues of the defendant’s summons. It is noted that the contents of affirmation were mostly extracted from the materials from the previous hearings as evidenced by, for example, the two exhibits to the affirmation, namely transcripts and judgment of the previous hearings. Thus, I regard the 8 hours claimed for the preparation of the affirmation in opposition excessive and consider 3 hours to be a reasonable amount of time spent.

13.  As for the 8 hours claimed for the skeleton submission, I too find the time claimed excessive. While I acknowledge the effort the plaintiff had made in his written submission, I consider that the time spent on a party-and-party basis is excessive.  A reasonable time is 4 hours.

14.  Lastly as to the time spent on the List of Authorities (30 minutes), I consider that it is not unreasonable for EC to attend to the work. I will allow it. 

15.  A total of 7 hours and 30 minutes in the total sum of $19,500      will be allowed for this item.  

Item D2: Research

16.  A total of 10 hours is being claimed for the two lists of authorities. Having regard to the fact that EC, albeit acting in person, is a practising solicitor with more than 10 years’ post- qualification experience, I consider the time claimed excessive.  Having disallowed the costs in connection with the supplemental list of authorities, I consider 2 hours as reasonable for the list of authorities.  The total sum allowed for this item is $5,200.

Item D3: Perusal of and considering documents

17.  A total of 29 hours for perusing and considering the defendant’s summons, the defendant’s 12^th affidavit (supporting affidavit), the defendant’s 13^th  affidavit (affidavit in reply), the defendant’s hearing bundle and the judgment is claimed. The contents of the documents involved are mostly a repetition of the previous applications and orders, which EC should have been extremely familiar with given his close involvement with the proceedings.  In the circumstances, I regard the time claimed to be excessive and consider 6 hours to be a reasonable amount of time.  Thus, I allow $15,600 for this item.

Item D4: Preparation for hearings

18.  A total of 5 hours is claimed for the preparation for the hearing. Since EC had not only all along been closely involved with the proceedings, he had also personally prepared every single document for the hearing.  In the circumstances, I consider 5 hours excessive and allow 2 hours for the preparation.  The amount thus allowed is $5,200.

Item D5: Hearing including call-over and directions hearing

19.  The 4 hours 45 minutes claimed for the hearing are agreed, thus the total amount of $12,350 is allowed in full.

Conclusion

20.  In conclusion, the costs of the plaintiff on the defendant’s summons are assessed at $61,430. The breakdown is as below:

Item	Description	Time allowed	Amount allowed (HK$)
A4	Hourly rate of fee earner @ $2,600
B1	Photocopy charges		375
B2	Attendances of litigation clerk		388
C	Attendances on defendant	65 minutes	2,817
D1	Preparation of documents	7 hours 30 minutes	19,500
D2	Research	2 hours	5,200
D3	Perusal of and considering documents	6 hours	15,600
D4	Preparation for hearings	2 hours	5,200
D5	Hearing	4 hours 45 minutes	12,350
	Total		61,430