HKSAR v. WEI BING

[English translation – 英譯本]
HCMA 668/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 668 OF 2011

(ON APPEAL FROM ESCC 2170/2011)

________________

________________

J U D G M E N T

Background

1.  The appellant was the 2^nd defendant of the criminal case in question.  On 16 May 2011, he and two other persons were jointly charged with one offence of Conspiracy to Defraud.  He was not given bail and was held in custody.

2.  During the first two hearings, the appellant was represented by a duty lawyer.  The prosecution asked that no plea be taken.  The case was adjourned and the appellant’s remand in custody continued.

3.  At the 3^rd hearing, which was on 17 June, the appellant was represented by Mr. Tai Siu Ching of W. K. To & Co.  The prosecution still asked for no plea.  The case was adjourned but the appellant was granted bail.

4.  On 15 July, the 4^th hearing was held and the same thing happened.

5.  On 28 July, at the time of the 5^th hearing, the prosecution withdrew the charge and the appellant was released.  He made an application for costs, which was granted by the magistrate.  The appellant applied for a sum of $46,000 and asked that the amount be taxed by a master if the parties could not reach an agreement.  The magistrate considered that he could dispose of the matter there and then.  He granted the application for costs and the amount allowed was $10,000.

6.  The appellant was not satisfied with the amount allowed and applied for a review.

7.  On 5 September, the magistrate granted the application and raised the amount of the costs to $13,000.  He also awarded costs of the review in the sum of $2,000 to the appellant, making a total of $15,000.

8.  The appellant was aggrieved by the decision of the magistrate and appealed under s114 of the Magistrates Ordinance, Cap. 227 of the Laws of Hong Kong.

Grounds of appeal

9.  The grounds of appeal, which were put forward in two written submissions prepared by Mr. Tai, can be summarized as follows:

(1) The magistrate was biased against the legal representative of the appellant when he was making his decision and assessment;

(2) The magistrate erred in using a wrong basis for his assessment, in that at the hearing he remarked that the appellant was entitled to costs which were reasonable and necessary and at the review hearing he still used “reasonable and necessary” as the basis of his assessment, but in his Statement of Findings he changed the basis to “necessary or proper”;

(3) When making his assessment, the magistrate failed to have sufficient regard to the documents submitted by the legal representative of the appellant, and the amount of costs determined by him was based on his unfair and erroneous views on the work done by the legal representative of the appellant and on related documents;

(4) The magistrate failed to make his assessment in accordance with the principles set out in section 15 of the Costs in Criminal Cases Ordinance, Cap. 492 of the Laws of Hong Kong;

(5) The magistrate erred in his judgment as regards the meanings of the phrases “reasonably sufficient to compensate” and “expenses properly incurred”; and

(6) The magistrate assessed the costs in an unreasonable manner and he did it rashly.

Respondent’s reply

10.  Senior Assistant Director of Public Prosecutions Mr. Alex Lee, counsel for the respondent,made a written reply, on which he elaborated at the hearing.

11.  The main points of his submissions are as follows:

(1) The correct procedure to be followed for lodging an appeal against a costs order should be the procedure laid down in section 19 of the Costs in Criminal Cases Ordinance (hereinafter referred to as the “Costs Ordinance”) Cap. 492 of the Laws of Hong Kong;

(2) The main reason for the appellant’s allegation that the magistrate was biased is that at the hearing the magistrate asked the defence to produce a “Form 5D”; however, in the end the magistrate granted the application for costs, which showed that he was satisfied that the defence had complied with the requirements; the complaint made by the appellant about this matter is therefore irrelevant and is not substantiated;

(3) The magistrate’s reference to “reasonable and necessary” when he was speaking at the hearing was just a mistaken choice of words, and his explanation is credible;

(4) The magistrate did not mistakenly use “reasonable and necessary” as the principle of his assessment of the costs;

(5) The magistrate’s assessment was made on a sound basis and the amount is not unreasonable; and

(6) The appellant’s allegation that the magistrate failed to have sufficient regard to all relevant matters is groundless.

Discussion

Procedure

12.  This appeal was lodged pursuant to section 114 of the Magistrates Ordinance, which is only a procedural provision.  The right to appeal from the decision of a magistrate was laid down in section 113.  As far as costs order is concerned, the relevant provision is section 113(3):

“ After the hearing and determination of any complaint or other proceeding which a magistrate has power to determine in a summary way other than a determination or proceeding relating to or in connection with an offence either party thereto may appeal from such order or determination of such magistrate to a judge.”

13.  However, Mr. Lee submitted that an appeal against a costs order should proceed under section 19 of the Costs Ordinance.

14.  The Costs Ordinance came into effect in 1997.  It does not expressly provide that an appeal about costs must be dealt with in accordance with this Ordinance.  The wording used in section 19 is “may appeal”.

15.  The procedural requirements of lodging an appeal under the Ordinance was set out in rule 4 of the Costs in Criminal Cases Rules (hereinafter referred to as the “Costs Rules”).  The wording used is “can appeal ----- in the case of an order made by a magistrates’ court, to the Court of First Instance”.

16.  Mr. Lee asserted that after the Costs Ordinance came into effect, an appeal against a costs order should be lodged according to this Ordinance, because a complete set of procedures, together with principles and factors of consideration were laid down in the Ordinance.  I agree with Mr. Lee’s view.  I consider that an appeal from a costs order should be lodged under section 19 of the Costs Ordinance.

17.  Mr. Lee did not use this as a reason to object to this appeal.  Mr. Tai, for the appellant, agreed that it is proper to adopt the principles of consideration and criteria set out in the Costs Ordinance.  I agree to adjudicate this appeal on the basis of this consensus.

1^st ground of appeal

18.  The appellant complained that the magistrate was biased against his legal representative, and the evidence he relied on was the following conversation between the magistrate and Mr. Tai at the hearing on 28 July:

“Court: Please show me Form 5D.

MR TAI: Form 5, Your Worship, I have not prepared a Form 5D. I have the relevant ... information, receipts.

......

MR TAI: ...... Visits to Lai Chi Kok, 3attendances at court, including requests to the prosecution for certain documents. I have got all the bills and our agreement about the fees to be charged. These can be shown to the court.

Court: Form 5D should be used for the agreement about the fees to be charged. It is a criminal case.

MR TAI: I am sorry. I didn’t use that form, Your Worship. Yes, well ... can I have a moment.

Court: Have you breached the code of ethics?

MR TAI: I have ... I have the relevant ... I didn’t use ... I did not formally use the 5D. Your Worship. I can show you the relevant documents. 1, 2, 3, 4, 4 sheets. On the first occasion, it was done rather hastily, so it was written in longhand. On the next three occasions, I could use a ... the ... On the three other occasions I could use the official forms. I can produce to court the relevant bills. There are three bills in total. The first and the second, and then the third one, which is not made out yet, because it includes today’s hearing.

Court: Ms Tai (prosecutor), do you have any further response?

MS TAI: No further response.

Court: I order that the 2^nd defendant be awarded costs in the sum of $10,000.

MR TAI: I am obliged, Your Worship.”

19.  First of all, there is no mention of anything called Form 5D in the relevant legal provisions.  Rule 5D of the Solicitors’ Practice Rules, Cap. 159H of the Laws of Hong Kong, set out the steps that should be taken by a firm in a criminal litigation.  I believe that the magistrate’s concern was whether this rule was complied with.

20.  When dealing with a costs application, it is usual and reasonable for the court to require production of documentary proofs of compliance with this rule.

21.  That a solicitor has breached the code of professional conduct is a serious allegation.  It must be handled with caution.  However, I do not think that the magistrate was making this allegation.  Moreover, he made the costs order after he perused the documents submitted by Mr. Tai.  Obviously, he was satisfied that what Mr. Tai did was in compliance with the rule.  I do not consider that the magistrate was prejudiced against the defence.

22.  If Mr. Tai thought that the magistrate was making an allegation against him, he was oversensitive.

23.  This ground of appeal is not established.

Other grounds of appeal

24.  I think that the other grounds of appeal can be dealt with together.

25.  At the review hearing, when the magistrate referred to the amount of the costs that should be awarded, he said, “For each legal visit or hearing, it should be $2,000 (being the reasonable and necessary charge).”

26.  In paragraph 12 of his “Decision as to the costs application made by the defence”, he said:

“According to the above-mentioned principle, I find that for each solicitor visit or hearing, the 2^nd defendant is entitled to $2,000 costs (being his ‘necessary or proper’ expense)…… . ”

In the footnote he explained that:

“When I was reading out the reasons for my decision, …… I mistakenly said ‘reasonable and necessary’. This error is hereby corrected.”

27.  Mr. Lee pointed out that both “reasonable” and “necessary” were the words used by Mr. Tai in his submission, that this might be the cause of the magistrate’s mistaken choice of words in his speech and that the magistrate’s explanation was not incredible.

28.  I have no reason to doubt that the remark made by the magistrate was not merely a slip of the tongue.

29.  However, even if the basis of the magistrate’s consideration was whether the expenses were necessary or proper, that was not one of the principles set out in the Costs Ordinance which should be used when considering this matter.

30.  The basis of the costs award in this case is the Costs Ordinance.  Section 15 of the Ordinance provides that:

“General principles

In any criminal proceedings -----------

(a) the costs that may be awarded by virtue of an order shall not be punitive but shall be such sums as appear to a court or a judge reasonably sufficient to compensate any party to the proceedings for any expenses properly incurred by him in the course of those proceedings, including any proceedings preliminary or incidental thereto;

(b) a court or a judge may have regard to any assessment laid before it or him for their assistance by any party to the proceedings of the amount of costs properly so incurred by any such party;

(c)    an order as to costs shall be such as a court or a judge considers just and reasonable; ……”

31.  My view is that after the Costs Ordinance came into effect, any consideration and assessment about an application for costs should be based on this Ordinance.  Whether an authority previous to this Ordinance is still applicable, particularly whether the reasons relied on therein are consistent with the principles set out in this Ordinance, should come under close scrutiny.

32.  An appeal brought under the Magistrates Ordinance and an appeal brought under the Costs Ordinance should be dealt with alike by way of rehearing.[1]

33.  During the rehearing, the fact that the original order was not made by a master in a taxation hearing but by a magistrate according to section 3 of the Costs Ordinance cannot be overlooked.  This procedure is commonly known as summary assessment of costs.

34.  In an appropriate case, it is desirable to assess costs by way of summary assessment, because it saves time and economizes on the use of resources.  I find that in the circumstances of this case it was appropriate for the magistrate to make a summary assessment of the costs.

35.  At a rehearing, I should base my consideration on the evidence and information as they were before the trial magistrate.

36.  The following factors were the basis of this costs application:

(1) Mr. Tai had been to Lai Chi Kok Reception Centre 2 times to visit the appellant[2].

(2) 3 hearings were held in relation to the charge[3].

(3) There were perusal of the prosecution documents and 3 conferences with the appellant; the time spent on each conference was 15 minutes.

(4) There was a review hearing concerning the costs order.

37.  A summary assessment of costs, in which emphasis is placed on efficiency, should not be equated with a taxation conducted by a master; it should not be viewed as a mini taxation of costs either[4].

38.  This procedure is beneficial to both parties to a litigation, because time is saved and expenses are minimized.

39.  In making my assessment, I have considered all the evidence and information which were before the magistrate and the submissions made by the parties.  I have also had regard to the general principles set out in section 15 of the Costs Ordinance and to rule 7 of the Costs Rules.  Strictly speaking, rule 7 is about taxation of costs carried out by the taxing authority, but I believe that the considerations referred to therein should also be taken into account.

40.  Rule 7 of the Costs Rules provides that:

“(1) The taxing authority must consider the claim, any further particulars, information or documents supplied by the claimant under rule 6 and any representation by any interested party and must allow such costs in respect of -----

(a) such work as appears to the taxing authority to have been actually and reasonably done; and

(b) such disbursements as appear to the taxing authority to have been actually and reasonably incurred,

as it considers reasonably sufficient to compensate the claimant for any expenses properly incurred by the claimant in the proceedings.

(2) In taxing costs under subrule (1) the taxing authority must take into account all the relevant circumstances of the case including the nature, importance, complexity or difficulty of the work and the time involved.

(3) For the purposes of this rule, there must be allowed a reasonable amount in respect of all costs reasonably incurred and any doubts which the taxing authority may have as to whether the costs were actually and reasonably incurred or were reasonably sufficient in amount must be resolved against the claimant.

……”

41.  If I think that the appellant was entitled to costs of over $30,000, I must order that those costs be taxed, because the parties did not agree upon the amount of the costs.

42.  It is not difficult to discern that in these legal provisions great importance is attached to whether the relationship between the work done and the amount of the costs is reasonable.  In the description of the factors which the court must consider, the word “reasonably” is used to set the standard for the work done by the legal practitioner and the amount of costs claimed.  Whether an amount is sufficient to compensate depends also on whether it is reasonable. Apart from that, the nature, importance, complexity or difficulty of the work and the time involved must also be taken into account.  The order, as the end result of the exercise, must be just and reasonable.

43.  One must not overlook the express provision that any doubts as to whether the costs were actually and reasonably incurred or were reasonably sufficient in amount must be resolved against the claimant.

44.  Mr. Tai stressed that since the offence was serious in nature and the appellant was a mainlander, who was not familiar with the laws of Hong Kong, it was reasonable and necessary to engage a lawyer.  The appellant conducted himself in a prudent way in that he refrained from instructing a barrister.  Mr. Tai, with his 25 years’ experience and being able to speak Putonghua, was a suitable lawyer to provide legal services to the appellant.

45.  In considering this case, I have the following comments:

(1) It was reasonable for the defendant to engage a lawyer in this case.  Regardless of whether he was a local or a resident of somewhere else in China, it was the same.

(2) The appellant’s instruction of Mr. Tai, who had 25 years’ of professional experience, for providing services to him was an exercise of his right.

(3) I have no doubt that Mr. Tai’s firm did charge the appellant the amounts stated on the bills as solicitor’s fees and that the items of work enumerated on the bills were actually done.

(4) I have no doubt either that the expenses were incurred as a result of the legal proceedings in question.

(5) The nature of the offence was serious; however, the circumstances at the time were such that no difficult legal issue was involved.  In the document called “Chronology”, Mr. Tai used the term “holding charge” to describe what the appellant was faced with at the time.

(6) It was only after the 3^rd hearing held on 17 June that the prosecution preliminarily provided the defence with the facts of the case and disclosed what evidence they had.  It can be seen that prior to that stage the defence had only limited information, and there could not be a lot of difficult and complicated matters for them to do.

(7) After the 1^st legal visit, the appellant was still represented by duty lawyer when he appeared in the subsequent hearing.

(8) What happened at that hearing was no different from what happened at the previous one, i.e. it was immediately adjourned.  There was probably a bail application, but apart from that nothing significant was involved and the time spent was short.

(9) After that hearing, Mr. Tai paid another visit to the appellant and spent almost 2 hours on it.  Mr. Tai said this had to do with the bail application at the next hearing.

(10) The hearing on 17 June was similarly a short one and was quickly adjourned.  No plea was taken.  The appellant was granted bail.  Mr. Tai explained that it was because he had liaised with the prosecution beforehand and they no longer objected to the bail application of the defence.

(11) On 12 July, the prosecution disclosed various documents to the defence, including the prosecution’s allegations, witness statements and the appellant’s written record of interview.  The total number of pages of the documents was 52.  The contents of all of them were easy to understand.

(12) On 13 July, Mr. Tai had a conference with the appellant.  The time spent was 15 minutes.

(13) On 15 July, there was another hearing, at which the case was instantly adjourned.  The appellant’s bail was extended.  What happened at this hearing should be within the expectation of the defence.

(14) On 21 July, Mr. Tai had a conference with the appellant, which lasted 15 minutes.

(15) On 20 July, the prosecution notified the parties in writing that the charge against the appellant would be withdrawn.

(16) On 28 July, the final hearing was held.  The charge against the appellant was formally withdrawn and the appellant made the application for costs.

(17) On 29 July, Mr. Tai had a conference with the appellant, which also lasted 15 minutes.

(18) On 5 September, the review of the costs order was heard.

46.  Mr. Tai submitted that the bills which he produced to the magistrate should not be ignored.  I noticed that, as alleged by Mr. Lee in his reply, the contents of the bills were rather vague.  It was not stated who was responsible for which item of work or how much time was spent.

47.  In my judgment, Mr. Tai was not handling a difficult and complicated case.  The fact is that except for the charge which appeared to involve serious allegations, the matters which the defence had to deal with at the relevant stages, whether they concerned work done in court or preparatory work done before going to court, could be said to be simple and easy.

48.  During the first 2 hearings at which Mr. Tai appeared, what happened was that the case was immediately adjourned.  The purpose of the 3^rd hearing was for withdrawing the charge and the defence was notified in advance.  The costs application involved nothing complicated.

49.  As for the subsequent application for review, although Mr. Tai had to prepare his submission, basically it was simple and easy.  The content of his submission showed that the work he did was mainly to set out his reasons and to collect the documents.

50.  All in all, I am not required to carry out a taxation.  Having considered the above-mentioned legal principles and the relevant facts, I find that the total costs of $15,000 awarded by the magistrate was within reasonable limits and can be regarded as just and reasonable.  The appellant has not put forward sufficient reason to convince me that the amount of the costs was not reasonably sufficient to compensate him for the expenses properly incurred by him in the proceedings in question.

51.  I therefore dismiss the appeal and confirm the original costs order.

Translated by the Judgment Translation Unit of the Judiciary and vetted by Mr. P. Y. Lo, Barrister-at-law.