CHAN LUEN v. CHAN KWONG CHI AND OTHERS

HCA 1038/2018

[2020] HKCFI 485

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1038 OF 2018

_____________

_____________

______________________________________________

DECISION ON VARIATION OF COSTS ORDER NISI

AND SUMMARY ASSESSMENT OF COSTS

______________________________________________

1.  On 20 November 2019, I handed down a decision[1] striking out parts of the Amended Defence and Counterclaim because the defendants had failed to comply with an unless order to provide further and better particulars thereof, but dismissed the plaintiff’s summons to enter judgment (“the Judgment Summons”). I also made an order nisi that the defendants are to pay the costs of the plaintiff for the Judgment Summons including the hearing before me, to be taxed if not agreed.

2.  By Summons dated 29 November 2019, the plaintiff applies for a variation of the costs order nisi by replacing the order for costs to be taxed with an order for the summary assessment of the costs of the plaintiff, to be paid forthwith by the defendants.

3.  The plaintiff submits a statement of costs which, together with disbursements, amount to a total of HK$228,000.

4.  By a document dated 24 January 2020 titled “Ground for Objection to Plaintiff’s Statement of Costs for Summary Assessment”, the defendants object to various items in the plaintiff’s statement. They do not object to summary assessment by me and I agree that it is appropriate for me to do so.

5.  The plaintiff has replied to the defendants’ objections by a document dated 5 February 2020.  He also submits a statement for additional costs for this application for variation for HK$57,500.

6.  In Re Silver Faith Holdings Ltd[2], DHCJ Marlene Ng (as she then was), said:

“19. The proper approach to summary assessment of costs had been laid down by the Court of Appeal in Poon Shu Fan v Wong Tin Yan.[3] For the present purpose, it is sufficient to refer to the useful summary in the headnote of the reported judgment at pp 512-514 as follows:

‘(2) As in an ordinary taxation, under O.62 r.28(2) of the Rules of the High Court (Cap.4A) (the RHC), in a summary assessment, party‑and‑party costs were allowed only if they were “necessary or proper” for the attainment of justice or for enforcing or defending the rights of the receiving party. Pursuant to Practice Direction 14.3, the court adopted a broad‑brush approach to ensure the final figure assessed was not disproportionate and/or unreasonable having regard to the nature and circumstances of the application or matter and the underlying objectives stated in O.1A of the RHC, even if there was no challenge to individual items. ......

(3) A summary assessment required a two-stage approach. If total costs claimed appeared proportionate, then all that was normally required was that each item should have been reasonably incurred and the cost reasonable. If the overall costs appeared disproportionate, then the court would have to be satisfied that each item was necessary and its costs was reasonable. A sensible standard of necessity should be adopted allowing fully for the different judgments which those responsible for the litigation could sensibly come to as to what was required. While the threshold was higher than that of reasonableness, it should be achievable by a competent practitioner without undue difficulty. The conduct of the other party was relevant, since a cooperative party could reduce costs, but an uncooperative party could render necessary costs which would otherwise be unnecessary. ......

(6) Since Civil Justice Reform in 2009, taxation of counsel’s fees under a party-and-party taxation was no different from taxation of costs and expenses. The test of ‘necessary or proper’ applied and must take into account the matters set out in para.1(2) of Part II of the First Schedule to O.62 of the RHC, as well as the requirement of reasonable proportionality. Accordingly, paras.62/App/28(5) (p.1172) and 62/App/28A of Hong Kong Civil Procedure 2012 (p.1172), which referred to the previous pre-CJR “excessive and unreasonable” test under the former para.2(5) of Part II of the First Schedule to O.62 of the RHC, should no longer be followed, ......”

21. For the purpose of the summary assessment herein, I shall adopt a broad-brush approach pursuant to paragraph 13 of Practice Direction 14.3 as it is inappropriate to conduct any mini-taxation.”

7.  I therefore would also adopt the two-stage approach. On this basis, it does appear to me that the figure of HK$228,000 is disproportionate for a matter such as the present, and the same applies to the figure of HK$57,500 for the variation application.

8.  I have considered carefully all of the aforesaid documents and the submissions on both sides.  It would appear to me that the main reasons for the rather high amounts are: (i) the involvement of two partners in the firm of solicitors acting for the plaintiff and (ii) the level of counsel’s fees having regard to the nature of the application and his seniority. To instruct counsel to reply on costs also appears to me to be unnecessary.  While I note the submissions of the plaintiff that there was no duplication of work between the two partners, the overall amount of time spent by them in total also appears to me to be excessive.

9.  Having considered the submissions carefully, and without undertaking a mini-taxation, I allow a sum of HK$160,000 in total being the costs of the Judgment Summons and the variation, to be paid by the defendants forthwith.