LIU KAM HOI AND OTHERS v. LIU PING KUEN, the personal representative of the estate of LIU FUN KEE

HCA 6728/1998

[2018] HKCFI 1701

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 6728 OF 1998

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REVIEW OF TAXATION

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Introduction

1.  This is a review of taxation.

Background

2.  For the present purpose, it suffices to know that the action was originally set down to be tried for 4 days from 13 January 2015.  However, shortly before the trial, on 23 December 2014, the defendant issued a summons seeking to, among others amend his pleadings and adduce his 2^nd supplemental witness statement.

3.  The learned Judge heard the summons on the first day of the trial.  He reserved his decision overnight.  On the second day, he allowed the summons and further awarded costs to the plaintiffs.

“8.  Costs of and occasioned by the Defendant’s Summons, including the costs of the hearing thereof, be to the Plaintiffs on an indemnity basis to be taxed if not agreed;

9.  ...

10.  Costs thrown away by the adjournment of the Trial of this Action be to the Plaintiffs on an indemnity basis to be taxed if not agreed; and

11.  The costs under paragraphs 8 and 10 above be paid forthwith with certificate for two counsel.”

4.  Pursuant to the costs order, the plaintiffs (hereinafter called “the receiving party”) sought to recover their costs.  Parties appeared before me for the substantive taxation. The defendant (hereinafter called “the paying party”) later applied for a review of 10 items. Here is my decision.

Preliminary matter

5.  At the outset of the review, Mr. Yu (LCD for the paying party) asked for leave to add an alternative ground to object quantum on 4 items out of the 10. Mr. Lee (LCD for the receiving party) objected to it.  At the moment, to save costs and time, I allowed the application on a de bene ease basis.  After thought, I have decided to refuse it.

a)  The application came very late.  No formal summons was issued, not to mention supporting affidavit to explain the reason.

b)  Quantum was fully argued at the taxation.  The paying party adduced no new evidence to contradict those having produced by the receiving party.

c)  A rehearing of the same argument having spent at the taxation did not help the paying party at all in the review.

The Review

6.  For easy reference, I will deal with the review under 3 broad grounds: (a) double counting, (b) costs of the proceedings, and (c) quantum.

Double counting – items 28 and 31

7.  Half of the items under the review (items 11a, 12a, 28, 30 and 31) complained that “[They] will be double‑counted in the final taxation of the whole case”. 

8.  When Mr. Yu came to items 11a, 12a and 30, he told me that his client had decided to withdraw them for review.  Hence, only 2 items (items 28 and 31) were left in this category.  They were fees spent by junior counsel. I allowed them as follows.  

“	28	Conference with Instructing Solicitors on 30.10.2014 (2hrs)	$9,000	($9,000 claimed)
	…
	31	Conference with Instructing Solicitors on 30.12.2014 (3.5 hrs)	$7,875	($15,750 claimed)
	...”

9.  At the taxation, I dealt with all counsel fees on preparation of the trial at one go (from items 27 to 35).  They included the fees involving both senior and junior counsel, as well as those before and after the issuing of the summons on 23 December 2014.  Mr. Lee produced to me all supporting privileged documents, including conference notes, to show how those time and costs were spent.  I allowed some in full, allowed some in half (taxed off the remaining completely or suggested that the remaining half should go to the main bill, if applicable), taxed off some completely.

10.  Briefly, I dealt with items 28 and 29 together because both were time spent by junior counsel with the instructing solicitors on general preparation of the case for trial.  I made no deduction on the former but taxed off the latter completely.  I took the view that the matters having been discussed at the 2 conferences could have been finished in one and it also fell within “costs thrown away” because the same had to be “re‑done” again when the trial would resume later.  I was not persuaded by Mr. Yu at the review to change my mind.

11.  As to item 31, it was time spent by junior counsel with the instructing solicitors after the issuance of the summons.  It touched on the summons itself as well as general preparation of the case.  I taxed it off by half because of both quantum and only part of it was covered by “costs of and occasioned by the Defendant’s Summons ...”. I further suggested that the remaining half would go to the main bill later, if applicable. I do not see how the argument of double counting can help the paying party.

Costs of the proceedings – items 16, 40, 41 and 42

12.  The remaining 5 items (items 15, 16, 40, 41 and 42) relied on “This document had been used in the trial and costs of the item shall be included in the taxation of the whole case” as ground for review.

13.  Mr. Yu told me during his submission that item 15 would be withdrawn.  As to the other 4 items, there are costs spent by the receiving party to deal with the amendment of pleadings and filing of supplemental witness statements of the paying party.

"	No.	Description	Scale Cost
	15	Supplemental Witness Statement of Liu Wai Man filed on 11.02.2015 (9 pages) Drafting (to include considering settled version from Counsel) (KMT – 3 hrs)	C	$27.00
			F	$110.00
			S	$50.00

No.	Description	Senior Counsel	Junior Counsel
40	Settling Supplemental Witness Statement of Liu Wai Man on 27.01.2015		$15,000.00
41	Settling Re-Re-Re-Amended Reply and Defence to Counterclaim on 27.01.2015		$18,500.00
41	Reviewing papers; Settling Re-Re-Re-Amended Reply and Defence to Counterclaim and Supplemental Witness Statements on 10&11.02.2015 (7 hours)	$63,000.00

.....”

14.  At the taxation, I was referred to the proposed amendments of pleadings and supplemental witness statement in the summons.  After the application was allowed, the receiving party proceeded to prepare the amendments to their pleadings and supplemental witness statement, as directed and allowed by the learned Judge.  They were therefore “costs ... occasioned by the Defendant’s Summons”.  I further went through the drafting/settling of the documents by the instructing solicitor, junior and senior counsel.  Given further that costs were awarded on indemnity basis, I allowed all of them in full.

15.  At the review, both LCDs and I were able to locate some assistance on the phase of “occasioned by”.  It meant “items of costs that were directly attributable to the [summons issued by the paying party]” and the crux lie on “whether the receiving party would have incurred the items of costs irrespective of the [summons issued by the paying party] (para 62/1/3 (13) of HKCP 2018 at p.1207).  My attention was further re-drawn to the meaning of costs awarded on indemnity basis, namely, all costs were to be allowed except those unreasonably incurred or of unreasonable amount, the receiving party being given the benefit of any doubt (para.62/App/11 of HKCP 2018 at p.1286)

16.  With these principles in mind, I consider that the total time spent by both Counsel (senior counsel – $63,000: 7 hours x $9,000 each, junior counsel – $15,000 + $18,500: about 7.5 hours x $4,500) and the instructing solicitor ($12,000: 3 hours x $4,000) on the supplemental witness statement (in Chinese) of 9 pages and the amended pleadings (about 5 pages of substantial amendment out of a document of 10 pages) could never be unreasonable.

17.  Mr. Yu tried to argue that the amendments done by the receiving party went outside the scope caused by the paying party.  It was a new point which he did not take up at the taxation.  When I tried to test it by asking him to provide particulars, there was no further submission thereof. 

18.  Hence, the paying party also fails me on these 4 items at the review.

Quantum– items 16, 40, 41 and 42

19.  As I said, the paying party only sought to challenge quantum (again) at the hearing of the review.  No new evidence or point was raised.  Such argument has to be dismissed in procedure and in substance.

Disposal of the review

20.  To conclude, the review is withdrawn and dismissed, as aforesaid. 

Costs

21.  Parties agreed that costs followed event.  I also had the benefit of their preliminary submissions on lump sum assessment of the costs of review.  In the circumstances, there will be an order nisi that the paying party shall pay the receiving party costs of the review, including costs reserved, summarily assessed at $12,100.

LCD (call‑over + hearing + preparation) $1800 x 4 hour	$7,200
Solicitor $5,800 x 0.5 hour	$2,900
Miscellaneous	$2,000
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	$12,100