BILLION EXPRESS INDUSTRIAL LTD v. TSANG HUNG KONG

HCA 2740/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO. 2740 OF 2008

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BETWEEN

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R U L I N G

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APPLICATION

1.  On 23 May 2012, I handed down a Decision dismissing the Defendant's Summons to strike out the present action on the ground of lack of authority to sue.  I also made a costs order nisi against the Defendant that he shall pay to the Plaintiff the costs of the Summons (previously reserved by Fung J) and the costs of the trial before me, to be taxed if not agreed.

2.  At the trial before me, the Plaintiff was represented by senior and junior counsel.  In making the costs order nisi, I have not made any provision for certificate for 2 counsel.

3.  By a letter dated 6 June 2012, the Plaintiff through its solicitors applied to me for a certificated for 2 counsel.  In its letter, the Plaintiff's solicitors stated their grounds of application as follows:

"The trial before the Learned Recorder lasted 3 days during which there were extensive cross examination of the parties called by the Plaintiff and the Defendant.  More importantly, the legal issues involved in the trial are very complex and unsettled, as can [be] seen from the skeleton submissions of the counsel for the parties, and the ruling on this preliminary issue by the Learned Recorder will have significant impact on the continuation of the main trial in the above action for relief and claims for damages of substantial quantum....  In the circumstances, it is our view that it was reasonable for us to brief 2 counsel for the trial ...."

4.  The Defendant responded to the Plaintiff's application by a letter dated 7 June 2012.  They argued that there was no legal basis for a certificate for 2 counsel to be granted.  The argument was put by the Defendant's solicitors in the following manner:

"We feel obliged to point out that the only available provision to be relied upon in seeking Counsel certificate is in paragraph 2(3) of Part II of First Schedule to Order 62, Rules of High Court.  It however refers to costs to "be allowed in respect of.... more counsel than one appearing before a judge in chambers".

The hearing was held in open court before a judge and thus there is no need and indeed no rule upon the Plaintiff can seek a certificate of two Counsel for an open-court hearing before the learned Recorder.  The costs relating to the fees of two Counsel should normally be dealt with by the taxing master, or if so opted by the Plaintiff for a summary assessment, by the learned Recorder.

Other than the lack of mechanism upon which the certificate of two Counsel may be issued, we confirm that the Defendant has no comments on the submissions made by the Plaintiff." (underline added)

5.  It can be seen from the above that the only point taken by the Defendant in response to the Plaintiff's application is a legal point.  Apart from the legal point, the Defendant has made it clear that he has no comments to the submissions made by the Plaintiff.

6.  As the legal point raised by the Defendant may, if it is correct, have some significance regarding the judge's power to grant certificate for 2 counsel under the High Court Rules, I have decided to give more detailed  reasons for my ruling on the Plaintiff's application.

LEGAL BASIS FOR A GRANT OF CERTIFICATE FOR TWO COUNSEL

7.  In my view, there is a fundamental error in the legal point taken by the Defendant.  Before the Civil Justice Reform, paragraph 2(3) of Part II of the First Schedule to Order 62, of the Rules of High Court ("old rule") provided as follows:

"No costs shall be allowed in respect of counsel appearing before a master in chambers, or of more counsel than one appearing before a judge in chambers, unless the master or judge, as the case may be, has certified the attendance as being proper in the circumstances of the case." (underline added)

8.  This provision, however, was changed in 2008 as part of the Civil Justice Reform.  Amongst the changes introduced by the Rules of the High Court (Amendment) Rules 2008 (LN 152 of 2008) was the amendment made to paragraph 2(3) of Part II of the First Schedule to Order 62.  As a result of the amendment, the current paragraph 2(3) ("new rule") provides as follows:

"No costs shall be allowed in respect of counsel appearing before a master in chambers, or of more counsel than one appearing before a master in open court or a judge or the Court of Appeal, unless the master or judge or the Court of Appeal, as the case may be, has certified the attendance as being proper in the circumstances of the case." (underline added)

9.  It appears that the submissions of the Defendant's solicitors were made - in my judgment mistakenly - based on the old rule.  Under the new rule, costs of 2 or more counsel appearing before a judge will not be allowed unless the judge grants a certificate of 2 (or more) counsel. That is so whether the appearance before the judge is in chambers or in open court.

10.  The new rule has the effect of tightening the allowance for counsel's fees.  Whereas a certificate for 2 (or more) counsel is only required under the old rule for appearance before a judge in chambers, under the new rule such a certificate is required where the appearance is before a judge in open court, or even before the Court of Appeal.  The costs of 2 or more counsel is generally not allowed before a judge or the Court of Appeal unless their attendance has been certified by the judge or the Court of Appeal as proper in the circumstances of the case.  It does not matter whether the hearing before the judge or the Court of Appeal is one held in open court or in chambers.

11.  As the Defendant's submissions are apparently based on the old rule, it is mistaken and I reject the same.

THE PRESENT CASE

12.  It follows from the above that there is a proper legal basis for the Plaintiff's application.  The making of the application is also necessary as otherwise costs of two counsel will not be allowed under the new rule even if the hearing in question is a trial in open court.  Under the new rule, I am entitled to grant certificate for 2 counsel if I consider that the attendance by 2 counsel is proper in the circumstances of the case.

13.  Apart from relying on the legal point mentioned above, the Defendant has not made any other submission in opposition to the Plaintiff's application.  However, a certificate for 2 counsel is not granted merely because there is no effective opposition.  Before acceding to the Plaintiff 's application, I need to be satisfied that the attendance of 2 counsel was indeed proper in the circumstances of this case.

14.  I am not convinced that the crossexamination required in this case was so extensive as to justify the engagement of a team of 2 counsel.  Nor do I think that the facts of this case, or the evidence at trial, are particularly complicated.

15.  I am however satisfied that the legal issues raised in the present case are complex and involved principles that are not wellsettled. I am indebted to both Mr Chan S C (for the Plaintiff) and Mr Chiu (for the Defendant) for their helpful assistance at trial, particularly in regard to the legal submissions.  I consider that extensive legal research was justified, and indeed required, in the present case.  I also accept that the issue of authority to sue is an important issue to the parties in that the way it is determined will have a significant impact on the further conduct of this action and the ultimate resolution of the dispute between the parties. The Defendant has not contended otherwise.  In all the circumstances I am satisfied that it was proper for the Plaintiff to instruct senior and junior counsel to conduct the trial.

16.  I am thus prepared to approve the Plaintiff's application by certifying that the attendance of 2 counsel was proper in the circumstances of the present case.  I will accordingly grant the certificate for 2 counsel sought by the Plaintiff.