LAU YU SHING AND ANOTHER v. PHILIP CHAN WING HUNG

HCMP 263/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 263 OF 2010

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BETWEEN

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D E T E R M I N A T I O N

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1.  This is assessment of costs on 2 bills pursuant to my order dated 25 March 2011. The assessment is on trustee basis so that no costs will be disallowed except in so far as those costs or any part of their amount should not, in accordance with the duty of the trustee or personal representative as such, have been incurred or paid, and should for that reason be borne by him personally: Order 62, rule 31(2).

2.  A broad brush approach is adopted instead of a detailed item by item analyses of the costs claimed.  The Defendant has filed lengthy submission and reply submissions.  Much of the contents have been either rehearsed at the hearing of the originating summons or reflected in the documents in the taxation bundle.  The argumentative and minute approach in the Defendant’s written submissions is simply not conducive to the efficient disposal of this matter.  By far, the most useful piece of information is a one-page summary (in attachment “PC-1”) which breaks down the costs claimed into 8 categories.

A Recap of the Background

3.  The first offer from the government was in 1996 and the offer accepted by the Plaintiffs was in the year 2003. There was some pressure of time as the offer of the government specified a time for claim / acceptance. The work included consideration of the government’s offer, a valuation report, the relevant legislation; making a counter offer and considering a second offer of the government which was readily accepted in 2003.  The background of the litigation which led up to the Court of Final Appeal should not be ignored as it was against this background that the Defendant carried out the work for the Administrator that formed the subject of the bills in question. 

4.  The matter involved not only questions on resumption of land and negotiation for higher compensation.  Once the compensation was agreed upon, there were other tasks such as proof of title, administration and distribution of estate.  Government formalities had to be dealt with.

5.  Three lots of land were involved.  They were not registered in the name of the Ancestor but 3 sons on trust for him.  Proof of title to the lands resumed was required.  All the title deeds were lost and title had to be proved by way of statutory declaration of loss of all relevant title deeds.

6.  There had to be proof of entitlement from the estates of several fongs to be able to collect and distribute the compensation.  There were persons who had died long ago with problems over grants of probate or letters of administration. There was also the need for drafting vesting orders and proper release and indemnity to the administrator.

Fee Earners and Hourly Rates

7.  In my view, it was justified to engage a senior solicitor, Mr Chan, as the main handler in view of the matters stated in the 4 preceding paragraphs. The hourly rate of Mr Chan was agreed by the Administrator and the majority in value of the beneficiaries in this case and there were signed documents to that effect as far back as 1995.  A similar rate was charged by Mr Chan on other clients.

8.  In 1995, the hourly rate in a party and party taxation for a solicitor of over 10 years’ experience was $3,200, which was increased to $4,000 by 1997.  Given the experience of Mr Chan in similar matters and the nature of the work in compensation claim, the hourly rate of $5,500, is till very high.  As this is assessment of costs on trustee basis, I shall not reduce the hourly rate of Mr Chan.

9.  As for the other 2 fee earners, their hourly rates, though high (compared to what was usually allowed on party and party taxation), are again not unreasonable.  The work was pre- and post-1997 and adopting a flat rate throughout these 15 years is acceptable. 

Quantum of Costs

10.  The 2 bills are for $492,630 and $78,650 respectively but the Defendant demands only for $300,000 and $47,895 respectively from the Plaintiffs.  These demanded amounts were said to be what the Administrator considers the Plaintiffs’ estates should “contribute” towards the costs for the bill rendered to the Administrator on 6 March 2009 and a similar proportion was adopted for the 2^nd bill. This represents 60.9% of the billed amounts.

11.  The bills presented the items of work in chronological order and were well supported by documents and attendance notes. The documents involved were not voluminous and were in 3 bundles.

12.  The document PC-1 has summarized the costs claimed into 8 categories, being correspondence and attendances on:

(i) Preparation of claim;

(ii) Administrator;

(iii) 3 firms of solicitors for the fongs involved;

(iv) Plaintiff’s solicitors for their clients only;

(v) Government and the Plaintiffs relating to queries from the government;

(vi) Preparation of documents for proving title;

(vii) Researches, checking outstanding matters and miscellaneous matters;

(viii) Care and conduct.

13.  With regard to (i), (v), (vi) and (vii), one appreciates the ingenuity of Mr Chan in seeking a higher offer from the government.  However, with the experience he professes to have, the amount of time spent in these 4 items was much on the high side.

14.  With regard to (ii), the need to take instructions from the Administrator was not great.  The communications between the Defendant and him was principally to keep him informed (rather than to take detailed instructions).  Writing covering letters for such purpose does not require such a senior solicitor as a matter of principle.

15.  With regard to item (viii), the bulk of the work was said to have been done by Mr Chan who required no supervision.  There was little that can be claimed for care and conduct as a matter of principle.

16.  Save for these few categories of work for which quantum should be reduced as a matter of principle, the rest are matters that require pure quantum adjustment.

17.  I will add that the 2 bills presented work that sprawled over almost 13 years between 1996 and 2008; and for about 2 years between March 2009 and February 2011.  The length of time spent is itself no indication of the complexity of a matter.  There were time intervals in between items of work, ranging from days to months and even years (e.g. items 43 and 44 in the 1^st bill).  Whilst I allow some reading up for refreshing of memory in between items of work that were months apart, discounts in terms of time will be made where it appears that there was no good reason for inaction on the part of the Defendant.

18.  The Plaintiffs suggested reducing the total time spent by the Defendant by 75%.  I regard that as too great a reduction having considered the nature of the work involved.  I assess the overall costs under the 1^st bill to be $350,000 and the 2^nd bill to be $45,000.  Applying the same percentage used by Mr Chan, the Plaintiffs shall pay $213,150 and $27,400 to the Defendants for the 1^st and 2^nd bills respectively.

19.  The disbursements in the sum of $1,051 are allowed in full.

Conclusion

20.  I assess the costs to be paid the Plaintiffs to be $213,150 + $1,051 disbursements for the 1^st bill and $27,400 for the 2^nd bill. 

21.  There will be an order nisi that costs for this assessment should be to the Defendant to be assessed summarily on 29 July 2011 at 9:30 am on the papers without attendance.  The Defendant shall file and serve a statement of costs by 21 July 2011.  The Plaintiff shall file and serve grounds of objection by 28 July 2011.