CHUNG YAN WING v. KO HOI SI

DCCJ 2922/2020

[2023] HKDC 643

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2922 OF 2020

------------------------

------------------------

------------------------

DECISION

------------------------

A.  INTRODUCTION

1.  In the Judgment I handed down on 16 December 2022 ([2022] HKDC 1386), I gave directions for (i) summary assessment of the defendant’s costs on indemnity basis; (ii) submissions on whether I should make any wasted costs order against the plaintiff’s solicitors, Messrs Ivan Tang & Co (“ITC”), and Mr Andy Y H Lam, the plaintiff’s former counsel. I also directed that these matters would be disposed on paper.

2.  This is the decision in relation to these matters. In reaching my decision, I have considered (i) the skeleton bill of costs filed by the defendant; (ii) the list of objections filed by the defendant; and (iii) written submissions respectively from the plaintiff, the defendant, ITC and Mr Lam.

B.  SUMMARY ASSESSMENT OF THE DEFENDANT’S COSTS

3.  The defendant asks for $804,898.00 as costs. The bill covers the costs charged by Messrs Yip, Tse & Tang (“YTT”) at $243,000.00, and the costs charged by the defendant’s present solicitors and counsel.

4.  I am most concerned that YTT’s costs are just stated as a lump sum without breakdown as to what work was done. I cannot accept this is the correct way to prepare a bill of costs for summary assessment. YTT represented the defendant from entering appearance to some time towards the end of 2021, after the parties had exchanged their respective witness statements. As such, YTT were the defendant’s solicitors for the substantial part of the interlocutory stage. Without a detailed breakdown as to YTT’s costs, one cannot assess what ought to be the costs to be allowed, even when the costs are to be assessed on indemnity basis like the present case. Even if it may be not appropriate for the defendant’s solicitors to look at YTT’s documents to make a composite bill of costs, they could have asked YTT to prepare a separate bill to be submitted to the court. The defendant has herself to blame (or rather, her solicitors to blame) when the court cannot meaningfully assess all of her costs.

5.  In the absence of any justification for YTT’s costs, all I can do is to presume against the defendant when I consider what ought to be the costs recoverable on an indemnity basis, for work from the entering of appearance to the exchange of witness statement.

6.  I shall consider the defendant’s bill in light of the objections raised by the plaintiff, and itemize my consideration as follows.

7.  First, the hourly rate of the senior solicitor (KH) with 34 years of experience was $6,000.00; the junior solicitor (JCHS) with 3 years of experience was $2,500.00; and the trainee solicitor was $1,500.00. KH’s hourly rate was in particular substantially higher than what the court would allow on party-and-party taxation ($3,860.00). Whilst I bear in mind that the defendant’s costs are to be allowed on indemnity basis, I still think KH’s hourly rate is on the high side. I think $4,500.00 is more appropriate on indemnity basis. I will accept the hourly rates charged by JCHS and the trainee solicitor.

8.  Secondly, the defendant’s solicitors charged $206,500.00 for attendance on the defendant, the plaintiff, and on counsel. I agree with the plaintiff these are excessive. There must have been duplication of work when the defendant changed her solicitors. In any event, I do not think KH’s claim of 18 hours is reasonable either in terms of the time spent, or the suitability of having him to conduct those attendance. I propose to cut down the costs for attendance to $120,000.00.

9.  Thirdly, $214,000.00 is charged for professional work. Similar to the above, I think some reduction is called for the time spent on perusal of documents. And since the defendant’s current solicitors only handled the present case after parties exchanged their witness statement, and the same counsel has been retained by the defendant to oversee the defence, I do not think the solicitors had to spend much time going over all matters from scratch. I allow $125,000.00 for professional work.

10.  I will allow $140,000.00 as counsel’s fee for attending the pre-trial review and the trial. I also allow the costs for manual work and travelling expenses in full, which come to $1,398.00.

11.  Finally, as to YTT’s costs, I bear in mind that much of the work for the defence was done when they still represented the defendant. I also recognise that the Defence and Counterclaim was settled by counsel, the fee for which should form part of the $243,000.00 claimed. I allow $200,000.00.

12.  In summary, I assess the defendant’s costs to be $586,398.00.

C.  WASTED COSTS ORDER

13.  After considering the written submissions, it is my conclusion that no wasted costs order should be made.

14.  I have already referred to the applicable legal principles at §102 of my Judgment, which I shall not repeat here. Since the Judgment, there was a further decision in Cheung Ka Man v Wong Yu Huen [2023] HKDC 370 (HH Judge Andrew Li; 17 March 2023) concerning the court’s exercise of discretion in relation to whether a wasted costs order should be made. I also bear in mind the principles enunciated in that case as well.

15.  The plaintiff filed her submissions by way of the 2^nd Affirmation of Chung Yan Wing dated 11 January 2023 (which was mistakenly stated to be affirmed on 11 January 2013). She exhibited to her 2^nd Affirmation 3 written instructions signed by her on various dates. Of those written instructions, 2 are relevant for the present purpose:-

15.1.  The plaintiff signed a 1-page written instructions on 15 June 2020, ie at the commencement of the present case. She confirmed that (i) she acknowledged that she would face prosecution if the instructions she had given turned out not to be the truth; (ii) her allegation that she had the beneficial ownership of the Property would contradict the declaration she made to the Housing Authority, which constituted a criminal offence; and (iii) she acknowledged that the Housing Authority might use the Statement of Claim or her evidence in subsequent proceedings to prove that she incriminated herself, because she signed a Statement of Truth in the Statement of Claim. She confirmed that she was aware of the legal consequences, and instructed ITC to continue with the present case. The plaintiff signed an identical document again on 30 June 2021.

15.2.  The plaintiff signed another 1-page written instructions on 20 June 2020. She confirmed with ITC that ITC raised doubt as to whether she indeed paid $690,000.00 as the down payment for acquiring the Property. She confirmed that she had no document to provide to ITC to corroborate her allegation. She acknowledged that there would be serious consequences if her allegation was challenged in due course, her credibility might be affected, and there might also be a serious effect on the outcome of the present case. She then instructed ITC to issue the Statement of Claim on the basis that she did pay $690,000.00 as the down payment when acquiring the Property.

16.  On the face on these written instructions, I think it is clear that the threshold for imposing a wasted costs order against ITC and/or Mr Lam has not been met. After considering the submissions from all parties, and remembering that I shall consider the issue of wasted costs summarily, I do not see why I should not accept the plaintiff’s written instructions to ITC on face value.

17.  In light of my conclusion, I think it appropriate for me to keep my reasons brief. Therefore, even though ITC, Mr Lam and the defendant made submissions in length particularly on the merits of the plaintiff’s claim, I do not seek to rehearse and analyse their arguments here. It is sufficient for me to record that I dismissed the plaintiff’s application for leave to appeal to the Court of Appeal, as I did not see any reasonable prospect for the plaintiff to overturn the Judgment on appeal.

18.  Since I decide that wasted costs ought not be ordered after considering the plaintiff’s submissions, I think it is the fairest to make no order as to costs.

D.  ORDERS

19.  I make the following orders:-

(1)  The plaintiff shall pay the defendant’s costs, assessed at $586,398.00; and

(2)  There shall be no order as to costs for the submissions in relation to the issue of wasted costs order.