LI ZHUO MING v. HUAYAO BIO-TECHNOLOGY HOLDING GROUP LTD

HCA 2701/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2701 OF 2004

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D E C I S I O N

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This decision is made on assessment of the Defendant's costs pursuant to Order 62 rule 9(4)(b) of the Rules of High Court (Cap. 4).  On 10 April 2006 I made an order that the action be discontinued and the costs of the action be to the Defendant to be assessed by me.

2. On 10 July 2006 the Defendant lodged a Statement of Costs claiming a total sum of $372,488.  I was rather surprised by the amount claimed as the case only reached the stage of checklist review and there was hardly any preparation for trial.

3. I conducted a hearing of the assessment of the costs.  The case was essentially handled by Mr. Liu Kin Sing, a partner of the solicitor firm for the Defendant, with more than 10 years' standing as solicitor at the material times.  I have no objection to his claim for a charge out rate of $4,000 per hour.  He was assisted by a trainee solicitor who was in his second year of articleship: I allow $1,300 per hour for her.

4. For item B relating to Mr. Liu's communication with different persons including client, the other side and court etc., Mr. Liu claims 47 hours 20 minutes.  I have read the pleadings and the other court documents.  I do not share the view of Mr. Liu that it is a complicated case particularly, for a solicitor of over 10 years' standing.

5. The Plaintiff in this action claimed that pursuant to a certain loan agreement the Defendant owed him a sum of US$4 million.  The Defendant denied liability.  In response to an O. 14 application the Defendant filed a detail affirmation in Chinese alleging that because of certain arrangement the Plaintiff was not the true lender of the loan and that the Plaintiff was not entitled to the claim.

6. Of the 47 hours that Mr. Liu claims, 24 hours were spent for his trip to Shangdong to take instructions.  I must remind myself I allow the costs on party and party basis i.e. I only allow those costs as were necessary or proper for defending the rights of a party.  Undoubtedly, it is better to take instructions face to face at a meeting.  With the modern technology in communication I do not find it necessary.  Apart from expedience, Mr. Liu has given no other reason.  In fact, on several occasions the persons in charge of the Defendant company visited Hong Kong and gave instructions.  I do not allow a greater part of those 24 hours.

7. Mr. Liu produced an information pamphlet and newspaper cuttings trying to impress me that the “joint venture” and arrangement behind the scene were very complicated.  It might be so but the central theme is to defend the claim for the loan advanced with evidence.  I estimate for all communications including taking clients and correspondence with other side etc. the time required to be 15 hours.

8. The trainee solicitor claims 14 hours 45 minutes.  Upon enquiry, I was told that 13 of those hours is spent on translation to facilitate those responsible to understand the contents of the court documents.  Both English and Chinese are official languages.  A party to any proceedings can choose to use either of the official languages.  The other party being served with a document can make a written request asking for supply of a translation under Section 5 of the High Court Civil Procedure (Use of Language) Rules (Cap. 5C).  The Defendant has made no such request.  I do not find it proper for the Defendant to do the translation and incur such costs.  I do not allow the 13 hours.

9. In the item under Preparation of Documents, the trainee solicitor claims 4 hours in total for drafting the defence and also the answer to request for further and better particulars of the defence.  Mr. Liu told me that he spent 3 hours on approving the draft defence and another 2 hours on the answer.  The general practice is only one fee earner will be allowed for doing a particular item of work.  I see no justification for two persons working on them, specially under the present circumstances: the defence has only 4 pages and the answers to the requests also about 4 pages.  I trust Mr. Liu has completely redrafted the documents prepared by the trainee: I do not allow the time claimed by the trainee solicitor.

10. As to the time claimed by Mr. Liu for preparation of documents, I allow 14 hours instead of 22 hours 30 minutes.  The only complicated document is the affirmation of Xu Dongfeng written in Chinese and filed on 7 March 2005.  The rest of them are relatively short and simple or have the contents derived from that affirmation.  The claim of 22 hours 30 minutes is very excessive.

11. Mr. Liu claims 13 hours 45 minutes for perusing documents including (i) court documents filed by both sides together with exhibits and (ii) documents supplied by client.  I invited him to give me those falling within the latter category.  As stated earlier, Mr. Liu gave me an information pamphlet and some newspaper cuttings.  I do not find they are relevant.  Neither do I find many documents are involved in defending this case.  I allow 6 hours.

12. As to the rest of the items, I allow in full except Postage, Travelling Expenses and Miscellaneous.  The solicitor charge out rate suggested by the Law Society of Hong Kong has already included postage and travelling expenses.

13. I find that Statement of Cost have not included the following and I wish to add them into my assessment:

Engrossment of documents:	$2,000
Attendance for filing and serving documents:	$700

14. The sums I would allow are as follows:

B	Communication
	Mr. Liu (para. 7)	15 hrs x $4,000	=	$60,000
	Trainee (para. 8)	1 hr 45 min x $1,300	=	$2,275
C1	Preparation of Documents
	Mr. Liu (para. 10)	14 hrs x $4,000	=	$56,000
	Trainee solicitor (para. 9)		=	$0
C2	Perusal of Documents
	Mr. Liu (para. 11)	6 hrs x $4,000	=	$24,000
C3	Preparation for hearing
	Mr. Liu	2 hrs x $4,000	=	$8,000
	Trainee solicitor	30 mins x $1,3000	=	$650
C4	Hearing
	Mr. Liu	25 mins x $4,000	=	$1,667
	Trainee solicitor	10 mins	=	$217
E1	Photocopying			$1,365
E2	Search Fee			$645
E3	Postage, Travelling Expenses & Etc. (para. 12)			$0
F	Unpaid Gross Sum Costs after setting off			$500
G1	Engrossment of Documents (para. 13)			$2,000
G2	Attendances for filing & serving documents (para. 13)			$700
	Total:			$158,019

15. Accordingly I assess the Defendant's costs for this whole action in the sum of $158,019.

16. Pursuant to Order 42 rule 5B I make an order nisi for costs that there be no order as to costs for the hearing of assessment.  The reasons are that more than half of the costs claimed has not been allowed by me and that had the claim not been so excessive, I could have made the assessment on paper without a hearing as the Plaintiff has not lodged any list of objections as directed by me.