MESSRS BAKER & MCKENZIE v. HENNEX INDUSTRIES LTD AND OTHERS

DCMP 809/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 809 OF 2014

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DECISION

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1.  This is a summary assessment on costs by way of paper disposal.

Background

2.  The applicant took out an inter pleader application for the stakeholder money in relation to a sale and purchase of shops Nos 1 – 10 and all Ground Floor and the Entire Floor and Offices Nos 1 – 16 on the 2^nd Floor and the External Walls of the First Floor and Second Floor of Tonnochy Towers, Nos 250 – 274, Jaffe Road, Wanchai, Hong Kong (“the Properties”).

3.  The 1^st and 2^nd claimants were vendors.  The 4^th claimant was the purchaser and the 3^rd claimant was a nominee.  The applicant is the solicitors for the 3^rd claimant.

4.  At time of the sale and purchase of the Properties, it was discovered two building orders were issued by the Buildings Authority.  In the Provisional Sale and Purchase Agreement dated 22^nd October 2010, the 1^st and 2^nd claimants warranted to make good the said building orders by carrying out necessary works, or to reimburse the 3^rd and 4^th claimants at a reasonable costs to comply with the same.

5.  By consent, parties agreed $300,000 shall be deducted from the balance price as stakeholder money.  On 26^th January 2011, a sum of $300,500 was deducted from the balance of the purchase price and was deposited with the Applicant. The additional $500 was meant to settle the fees for obtaining certified copies from the Land Registry.  Parties agreed this $500 does not form part of the stakeholder money.

6.  The 1^st and 2^nd claimants did not carry out the necessary works, the 3^th claimant appointed Kenji Engineering Co Limited to complete the necessary works at a total cost of $260,000.  The 3^rd claimant further demanded a sum of $4,089.09 as administrative costs for carrying out the same.

7.  The 1^st and 2^nd claimants disputed the sum of the works.  They agree to pay $66,700 only and such sum was released to the 4^th applicant on or about 9 September 2013.

8.  Negotiation between parties to dispose of the remaining stakeholder money was unsuccessful.  The applicant took out an interpleader application by way of an originating summons on 28 March 2014 for disposal of the stakeholder money.  The originating summons was returnable on 5 May 2014 for further directions.

9.  I am given to understand the 3^rd claimant agreed to waive the administrative costs $4,089.09.

10.  Parties agreed in the directions hearing that (i) the 1^st and 2^nd claimants agreed to pay a further sum of $40,000 to the 3^rd and 4^th claimants; and (ii) the disputed sum was $193,800[1].  

11.  The applicant is directed to pay the agreed disputed sum into court.

12.  The costs of the applicant be assessed summarily by way of paper disposal.  The applicant filed a statement on costs on 19 May 2014; the 1^st and 2^nd applicants filed an opposition on 29 May 2014.  The 3^rd and 4^th applicants filed an opposition on 3^rd June 2013. Further requisition was raised on 6^th June 2014 to the applicant and was answered on 16^th June 2014.

SUMMARY ASSESSMENT

Part A: Hourly Rate

13.  The applicant submitted the fee earners’ rate at $2,600 and the rate of litigation clerk at $650.  Named fee earners are Anthony Poon (admitted in 1981) and Roberta Chan (admitted in 2004).  

14.  The 1^st and 2^nd applicants opposed their involvement because (i) the supporting affirmation was deposed by Yu Hang Sang Pricilla; and (ii) this is a straightforward application which could be done by a more junior solicitor at an hour rate of $2,200. The 1^st and 2^nd claimants did not comment on the rate of the litigation clerk. The 3^rd and 4^th claimants submitted a reasonable competent solicitor of 5 years of PQE with an hourly rate in the range of $2,100 - $2,350 is appropriate.

15.  It is the applicant’s choice to name their fee earners, there is no hard fast rule that a senior solicitor could not handle a case without complexity, only that the time spent should be considerably lower than that of a junior solicitor.  I accept $2,600 as the hourly rate of the fee earners.

Part B: Manual Work

16.  The 1^st – 4^th claimants have no objection to the sum $1,384.  

Part C: Communication including conference, telephone calls and letters

17.  The costs included internal communication of the applicant and attendance on the solicitors of the other parties. The applicant spent 4.8 hours.  

18.  The 1^st and 2^nd claimants suggested 1.3 hours.  The 3^rd and 4^th claimants suggested 1.1 hours.

19.  I agree with the 1^st – 4^th claimants that the fees charged by the applicant are on the high side.  Nevertheless, having the benefit to learn the background of this application, the time spent by the applicant should not fall as low as 1.1 hours.  I shall tax off 1.5 hours from 4.8 hours, ie 3.3 hours be allowed.

Part D: Professional Work

20.  The applicant claimed 15 hours, in particular, 13.2 hours for perusal and preparation of documents, research; and 1.8 hours for preparing and attending hearing on 5 May 2014.  

21.  The 1^st and 2^nd applicants suggested 5.5 hours; the 3^rd and 4^th claimant suggested 5.6 hours.

22.  Bearing in mind this is a straightforward application, I agree the time of perusal, preparing documents and research is excessive. I also note the time for attending the hearing on 5 May 2014 was only 50 minutes.

23.  For perusal, preparation and research, I tax off 5 hours, ie allow 8.2 hours.

24.  For preparation and attending hearing on 5 May 2014, I tax off 0.8 hour, ie allow 1 hour.

Disbursement

25.  The applicant seeks $500 for costs of obtaining certified copies. The 1^st and 2^nd claimants opposed on the ground that no certified copies can be found in this application. The 3^rd – 4^th claimants agreed to this sum.

26.  I recall parties have set aside a sum of $500 specifically for disbursement of obtaining certified true copies. The applicant clarified in an answer to my requisition that it has not obtained certified true copies of the two discharge orders from the Land Registry up to the commencement of this application, the sum of $500 was never utilized. The Applicant applies to withdraw the claim of $500 under this head.

Conclusion

27.  The applicant’s costs be summarily assessed at $33,884[2].

28.  The following directions given on 5^th May 2014 do stand:

(i) The assessed costs of the Applicant shall be paid out from the disputed sum forthwith;

(ii) The assessed costs of the Applicant shall be in the cause of the interpleader proceedings.

[1] $300,500 - $66,700 - $40,000 = $193,800

[2] Part A: Hour rate: $2,600; Part B: $1,384; Part C: $2,600 x 3.3 hours = $8,580; Part D: $2,600 x 9.2 hours = $23,920; Part E: withdrawn. Total: $33,884.