Chak Choi Kwan v. Daisy Lai and Others

HCA 1241/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 1241 OF 2015

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BETWEEN

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DECISION ON SUMMARY ASSESSMENT OF COSTS
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1.On 6 November 2015, I handed down my Decision and dismissed the plaintiff’s summons to seek orders under “Cap 4A O 14A”, “Cap 8 s 78” and “Cap 4A Default (sic) Pleadings O 19 r 9” (“Exhibit Summons”) but without prejudice to any objection that he might wish to raise as to the admissibility of the Exhibit (as defined in paragraph 13 of the Decision) as a true copy of his JD Application (as defined in paragraph 3(a) of the Decision) for the purpose of the defendants’ summons for security for costs filed on 8 July 2015 and the plaintiff’s Notice of Appeal filed on 24 August 2015.

2.By my Decision, I also granted a costs order nisi that the plaintiff do pay the defendants costs of the Exhibit Summons to be summarily assessed and paid forthwith (“Costs Order Nisi”).  Such Costs Order Nisi had been made absolute since there was no application to vary the same within 14 days from the date of my Decision.  For convenience, I shall adopt the abbreviations in my Decision

3.The defendants had lodged their statement of costs dated 22 October 2015.  By the Decision, I gave directions for the plaintiff to lodge/serve list of objections within 21 days from the date of the Decision.  The plaintiff failed to do so.  So I proceed to deal with the summary assessment of costs.

4.The proper approach to summary assessment of costs has been laid down by the Court of Appeal in Poon Shu Fan v Wong Tin Yan [2012] 5 HKLRD 512.  For present purpose, it is sufficient to refer to the useful summary in the headnote of the reported judgment at pp 512‑514 as follows:

“(2) As in an ordinary taxation, under O.62 r.28(2) of the Rules of the High Court (Cap.4A) (the RHC), in a summary assessment, party-and-party costs were allowed only if they were ‘necessary or proper’ for the attainment of justice or for enforcing or defending the rights of the receiving party. Pursuant to Practice Direction 14.3, the court adopted a broad‑brush approach to ensure the final figure assessed was not disproportionate and/or unreasonable having regard to the nature and circumstances of the application or matter and the underlying objectives stated in O.1A of the RHC, even if there was no challenge to individual items. ……

(3) A summary assessment required a two-stage approach. If total costs claimed appeared proportionate, then all that was normally required was that each item should have been reasonably incurred and the cost reasonable. If the overall costs appeared disproportionate, then the court would have to be satisfied that each item was necessary and its costs was reasonable. A sensible standard of necessity should be adopted allowing fully for the different judgments which those responsible for the litigation could sensibly come to as to what was required. While the threshold was higher than that of reasonableness, it should be achievable by a competent practitioner without undue difficulty. The conduct of the other party was relevant, since a cooperative party could reduce costs, but an uncooperative party could render necessary costs which would otherwise be unnecessary. ……

(6) Since Civil Justice Reform in 2009, taxation of counsel’s fees under a party-and-party taxation was no different from taxation of costs and expenses. The test of ‘necessary or proper’ applied and must take into account the matters set out in para.1(2) of Part II of the First Schedule to O.62 of the RHC, as well as the requirement of reasonable proportionality. Accordingly, paras.62/App/28(5) (p.1172) and 62/App/28A of Hong Kong Civil Procedure 2012 (p.1172), which referred to the previous pre-CJR ‘excessive and unreasonable’ test under the former para.2(5) of Part II of the First Schedule to O.62 of the RHC, should no longer be followed, ……”

5.Here, the defendants sought a total sum of $41,500 comprising solicitors’ profit costs and disbursements. 

6.Several matters are of note.  First, I am satisfied the hourly rate sought by the defendants is not disproportionate and unreasonable for assessment of costs on party and party basis.  Secondly, I accept it was necessary or proper for the defendants to prepare a hearing bundle since the one prepared by the plaintiff was not in accordance with the relevant practice direction and hence unhelpful in the conduct of the hearing of the Exhibit Summons.  Thirdly, I am unconvinced that review of the hearing bundle index, dramatis personae and chronology of events prepared by the plaintiff would require 2 hours, especially when WYY had conduct of the present action on behalf of the defendants all along.  Fourthly, WYY was involved in both the preparation of the skeleton submissions as well as preparation for hearing. I am persuaded that given the subject matter of the Exhibit Summons, 4 hours spent for preparing the skeleton submissions was rather on the high side on party and party basis.  Further, given WYY’s effort in preparing the skeleton submissions which were finalised on 22 October 2015, I do not agree that on party and party basis she would need 2 hours to prepare for the hearing.

7.I propose to adopt a broad-brush approach and not deal with each and every item of the statements of costs since it is not the purpose of a summary assessment of costs to carry out a mini-taxation.  I bear in mind the two-stage approach required for summary assessment.  Having considered the nature and scope of the Exhibit Summons, the affirmations filed in respect of such summons, the skeleton submissions, what transpired at the hearing, the non‑involvement of counsel in this matter, the matters noted in the above paragraph, and considering all circumstances, the overall costs claimed by the defendants under their statement of costs appeared to be somewhat on the high side on party and party basis for the items discussed in the above paragraph.  Upon considering the items of costs claimed to see whether or not they were “necessary and its costs reasonable” on the sensible standard of necessity as explained by the Court of Appeal, the total costs of the defendants on their statement of costs are assessed at $38,000.  I therefore order that the plaintiff shall forthwith pay costs in the sum of $38,000 to the defendants.

The plaintiff acting in person and present

Ms Wen Yan Yu, of Mayer Brown JSM, for the defendants