Lee Siu Hong t/a Hong Lee & Co. (A Firm) v. The Law Society of Hong Kong and Others

HCA 2216/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 2216 OF 2013

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BETWEEN

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REVIEW OF TAXATION

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Background

1.On 30 November 2015, I taxed the 1^st defendant’s bill of costs of this action filed on 6 March 2015 (“Bill No 2”) pursuant to the Order of Deputy High Court Judge Seagroatt dated 23 June 2014, which struck out the plaintiff’s Amended Statement of Claim and dismissed the plaintiff’s action against the 1^st defendant with costs to the 1^st defendant to be taxed if not agreed.

2.The plaintiff is not satisfied with some of the taxed items and filed a summons dated 11 December 2015 to review my taxation in respect of the items listed in the Schedule attached to the summons.  However, some of the items listed in the Schedule (namely Items 5.4 to 5.20, 17.1, 20.3, 24, 33.3.1 to 33.3.3, 33.4.3 and 33.5.1 to 33.5.3) were actually agreed by the parties at the taxation hearing.  The plaintiff seemed to have forgotten about the agreement on these items and wrongly included them in the Schedule.

3.At the call-over hearing of the review application on 28 January 2016, after the 1^st defendant reminded the plaintiff about the agreed items, the plaintiff agreed to withdraw the review in respect of those agreed items.

4.However, at the substantive review hearing on 7 September 2016, the plaintiff proceeded to argue on those agreed items that had been withdrawn. The plaintiff had to be reminded by the court and the 1^st defendant again that those items had been withdrawn.  It seems that the plaintiff did not make a record of the withdrawn items.  Nevertheless, the plaintiff agreed not to proceed with the agreed and withdrawn items after the reminder.

5.Thus, I will only deal with the remaining items in the Schedule which have not been withdrawn.

Items 6 & 7

6.The plaintiff disputes the 1^st defendant’s entitlement to Items 6 & 7 because he claims that these 2 items had nothing to do with the 1^st defendant.  Item 6 is for the 1^st defendant to consider the summons dated 28 February 2014 that was issued by the 2^nd and 3^rd defendants to strike out the plaintiff’s claim against them.  Item 7 is for the 1^st defendant to consider the supporting affidavit for this summons.  The 2^nd and 3^rd defendants’ summons was for an application to strike out the plaintiff’s claim against them, which was similar to the one taken out by the 1^st defendant, and the two applications were ordered to be heard together by Master Levy on 19 March 2014.

7.As the two applications were ordered to be heard together, I am of the view that it was reasonable and necessary for the 1^st defendant to consider the 2^nd and 3^rd defendants’ summons and supporting affidavit at least to see what the 2^nd and 3^rd defendants’ application was about.  I do not think that the 1^st defendant could simply ignore the 2^nd and 3^rd defendants’ application when it was ordered to be heard together with its own similar application.  It is just a matter of how much time the 1^st defendant should spend for considering the 2^nd and 3^rd defendants’ application.

8.However, the plaintiff contends that as Master Hui in his taxation of the 2^nd and 3^rd defendants’ bill of costs (“Bill No 1”) ruled that the 2^nd and 3^rd defendants were not concerned with the 1^st defendant’s case and taxed off the corresponding items in respect of the 1^st defendant’s summons, I should do the same.

9.First of all, I am not bound by Master Hui’s decision in respect of Bill No 1 and I do not know his reasons for taxing off certain items in Bill No 1. Secondly, as pointed out by the 1^st defendant, Master Hui in fact allowed certain items in Bill No 1 that were related to the 1^st defendant’s case, and it seems clear that Master Hui did not rule that the 2^nd and 3^rd defendants were not entitled at all to any of the costs that was concerning the 1^st defendant’s application.

10.Hence, I do not agree with the plaintiff that I should simply follow Master Hui’s approach in taxing off Items 6 & 7.  As said, I find it reasonable and necessary for the 1^st defendant to consider the 2^nd and 3^rd defendants’ application when the two applications were ordered to be heard together, but it is just a matter of how much time the 1^st defendant should spend for such consideration, which goes to the quantum of these two items.

11.The plaintiff contends that the quantum of these two items were excessive even after my taxation.  In Bill No 2, the 1^st defendant claimed 5 minutes for Item 6 and 3 hours for Item 7.  I taxed them down to 2 minutes and 30 minutes respectively.   The 2^nd and 3^rd defendants’ summons (Item 6) has 2 pages and 3 paragraphs.  I do not think that 2 minutes for considering such a summons is excessive at all.  The supporting affidavit (Item 7) has 14 pages and 35 paragraphs as well as 8 exhibits (all together 70 pages).  Although I do not think that the 1^st defendant was required to go through them in detail, it would still take some time for the 1^st defendant to read through the contents, and 30 minutes for doing that is by no means excessive.

12.In the premises, I will not revise these two items.

Item 14

13.In the Schedule, the plaintiff stated that he disputes the 1^st defendant’s entitlement to Item 14, but at the hearing, he confirms that he only disputes the quantum for Item 14.

14.Item 14 is for the 1^st defendant to consider the plaintiff’s affirmation in opposition to the 1^st defendant’s striking out application.  The affirmation has 33 pages and 83 paragraphs as well as 7 exhibits (all together 263 pages).  The 1^st defendant claimed 12 hours for this item.  I taxed it down to 6 hours.

15.The plaintiff contends that the 1^st defendant is familiar with the facts and evidence of the case as well as the grounds of the plaintiff’s claim and the exhibits.  He also refers to Reyes J’s order dated 15 December 2011 and submits that there should not be duplication of costs when the documents and evidence had been considered in other proceedings.  Thus, the plaintiff suggests that only 1 hour should be allowed for this item.

16.Nevertheless, Messrs Deacons were only instructed to act for the 1^st defendant for the first time in these proceedings and they were not involved in any previous proceedings concerning the same subject matter.  It is not right for the plaintiff to suggest that they were aware of the facts, evidence, grounds of claim and exhibits beforehand.  Even if the 1^st defendant itself was aware of these matters, it does not mean that its solicitors would have the imputed knowledge of these matters and need not go through the affirmation in detail. 

17.The affirmation is lengthy and involves complicated factual issues.  I do not think that 6 hours for considering the affirmation is excessive at all. Thus, there is no reason for me to revise this figure.

Item 15

18.Again, in the Schedule, the plaintiff stated that he disputes the 1^st defendant’s entitlement to Item 15, but at the hearing, he confirms that he only disputes the quantum for Item 15.

19.The plaintiff’s contention in respect of Item 15 is the same as those for Item 14, namely the 1^st defendant is familiar with the facts and evidence of the case and they had been considered in other proceedings.  Thus, the plaintiff submits that only 15 minutes should be allowed for this item.

20.As aforesaid, Messrs Deacons were only instructed to act for the 1^st defendant for the first time in these proceedings and hence there could not be any duplication of work.

21.Item 15 is for the 1^st defendant to consider the plaintiff’s affirmation in opposition to the 2^nd and 3^rd defendants’ striking out application, which has 31 pages and 83 paragraphs as well as one exhibit with 15 pages.  As aforesaid, it is reasonable and necessary for the 1^st defendant to go through this document even though it may not be directly related to the 1^st defendant’s case.

22.The 1^st defendant claimed 3 hours for this item and I allowed it in full.  Judging from the length of this affirmation and the complicity of the matters raised in the affirmation, I agree that it is reasonable to spend 3 hours to go through the affirmation even after taking into account that it may not be related to the 1^st defendant’s case directly.

23.Thus, I do not find it necessary to revise the figure for this item.

Item 16

24.The plaintiff disputes both the 1^st defendant’s entitlement and the quantum for Item 16.  Item 16 is for the 1^st defendant to consider the 2^nd and 3^rd defendants’ reply affidavit in their striking out application against the plaintiff.   The plaintiff contends that the reply affirmation has nothing to do with the 1^st defendant’s case, and the 1^st defendant is familiar with the facts and evidence of the case.  Hence, there was duplication of work. 

25.As aforesaid, I find it reasonable and necessary for the 1^st defendant to go through the documents (even though they were related to the 2^nd and 3^rd defendants’ case) when the two applications were heard together.  The 1^st defendant may not need to go through the documents in detail but it is still required to go through them to see what it is about.  It is just a matter of quantum.  There was also no duplication of work as aforesaid when Messrs Deacons was only first instructed in these proceedings.

26.The plaintiff relies further on the Note (Exhibit P2) prepared by Deputy High Court Judge Seagroatt when he declined to assess the costs summarily and referred the costs to taxing master for taxation.  However, Deputy High Court Judge Seagroatt only mentioned that there were questionable items in the statement of costs of the 1^st defendant without specifying which items.  He also made it clear that the taxing master is not bound by his views.  Thus, I do not see how this Note could advance the plaintiff’s contention any further.

27.As to the quantum, the reply affidavit has 9 pages and 26 paragraphs as well as 1 exhibit with 15 pages.  The 1^st defendant claimed 1 hour 15 minutes for this item and I taxed it down to 30 minutes.  I do not consider 30 minutes to go through this affidavit as excessive at all.  Thus, there is no need to revise this item at all.

Items 20.5, 20.6, 20.7 & 20.9

28.The plaintiff disputes Items 20.5, 20.6, 20.7 & 20.9 on the same grounds as mentioned above for the other items, namely the 1^st defendant is familiar with the facts and evidence of the case as well as the grounds of his claim, and there was duplication of work.  I reject all these arguments as above mentioned and I will not repeat the same here.  The only new ground mentioned for these items is that the 1^st defendant’s counsel was familiar with the facts and evidence of the case and had appeared in other proceedings concerning the same matter.  The plaintiff submits that all these items should be taxed off.

29.However, even though the 1^st defendant’s counsel was familiar with the case, it does not mean that the 1^st defendant’s handling solicitor was not required to consider the documents in question.  Item 20.5 is for the 1^st defendant’s solicitor to consider the 2^nd and 3^rd defendants’ skeleton submissions.  The solicitor may not need to consider the submissions in great detail but it is still necessary for the solicitor to know what the arguments were about.  The skeleton submissions have 11 pages and 50 paragraphs.  The 1^st defendant claimed 1 hour and I taxed it down to 30 minutes.  I do not consider it excessive at all.

30.Item 20.6 is for the solicitor to consider the 2^nd and 3^rd defendants’ list of authorities.  Again, the solicitor may not need to go into the details of these authorities, but she should have some ideas of the authorities.  There were 10 authorities in the list and the 1^st defendant claimed 4 hours for considering them.  I taxed it down to 1 hour.  I do not consider this amount as excessive at all.

31.Item 20.7 is for the solicitor to consider the 2^nd and 3^rd defendants’ supplemental list of authorities which contains only one case.  Likewise, the 1^st defendant’s solicitor should have some idea of the case but it is not necessary for her to go into detail.  The 1^st defendant claimed 20 minutes for this item and I taxed it down to 10 minutes.  I do not find it excessive at all.

32.Item 20.9 is for the solicitor to consider the plaintiff’s written submissions in respect of the 2^nd and 3^rd defendants’ application.  The written submissions have 15 pages and 39 paragraphs.  Again, the 1^st defendant’s solicitor was not required to study the submissions in detail, but she must have some ideas of the submissions raised. The 1^st defendant claimed 30 minutes for this item and I taxed it down to 20 minutes.  I do not consider this amount as excessive at all.

33.In the circumstances, I do not accept that these items should be taxed off or adjusted in any way.

Items 33.1.4, 33.1.5, 33.1.6, 33.1.7 & 33.1.10

34.The plaintiff disputes Items 33.1.4, 33.1.5, 33.1.6, 33.1.7 & 33.1.10 on the grounds that the documents were irrelevant to the 1^st defendant’s application for striking out, the 1^st defendant was already familiar with the facts and claim, the work done was for the 1^st defendant’s own benefit but this is a party and party taxation only.

35.Item 33.1.4 is for the 1^st defendant’s solicitors to consider a whole bundle of documents concerning the case.  This bundle of documents is necessary for the 1^st defendant’s solicitors to know the background facts of the case.  Without these background facts, it would be difficult for the 1^st defendant’s solicitors to take out the striking out application on behalf of the 1^st defendant.  Thus, I do not agree that it is irrelevant to the 1^st defendant’s striking out application.  As mentioned above, there is no ground to suggest that Messrs Deacons were familiar with the facts and claim of the case, as they were first instructed by the 1^st defendant in these proceedings.  It is not reasonable at all to say that the 1^st defendant’s solicitors studied these documents for their own benefit, as it is part and partial of their work for the 1^st defendant in these proceedings.  Thus, it should be allowed on party and party taxation.

36.The 1^st defendant claimed 3 hours at the senior solicitor’s rate, but I only allowed 3 hours at the junior solicitor’s rate.  I think it is only necessary for the junior solicitor instead of the senior solicitor to go through these documents.  However, the plaintiff suggests that this item should be allowed for 30 minutes at the senior solicitor’s rate.  I do not see any logic in this suggestion.  These documents were for background information.  A junior solicitor was already capable enough to do the job.  As there were quite a number of documents, 3 hours is not excessive at all for going through all these documents.  Thus, there is no need to revise this item.

37.Item 33.1.5 is for drafting Case Notes.  These Case Notes were actually summaries of the background facts of the case.  I find it necessary for the solicitors to prepare these summaries after studying the relevant documents for the case.  It made the preparation of the striking out application easier, as it would not then be necessary to go back to all the documents again to retrieve the background facts.  In fact, some of the summaries were used to prepare the documents in the striking out application.  Thus, they were relevant to the striking out application and should be allowed on party and party taxation.

38.As to the quantum, the 1^st defendant claimed 5 hours at the junior solicitor’s rate and 6 hours 36 minutes at the litigation clerk’s rate. I only allowed 3 hours at the junior solicitor’s rate and 2 hours at the litigation clerk’s rate.  The plaintiff suggests only 1 hour to be allowed for the junior solicitor and the charge for the litigation clerk should be taxed off. I see no basis for the plaintiff’s suggestions.  Judging from the Case Notes prepared, I find that the amounts allowed by me were reasonable and there is no reason to revise them.

39.Item 33.1.6 is for updating the Case Notes.  I find it necessary to update the Case Notes when new information came in.  By the same token, the updated Case Notes were necessary for preparing the striking out application and hence the costs should be allowed on party and party taxation.

40.As to the quantum, the 1^st defendant claimed 2 hour 30 minutes at the junior solicitor’s rate, but I allowed only 1 hour at the junior solicitor’s rate.  The plaintiff suggests that it should be allowed for 15 minutes at the litigation clerk’s rate.  I find no basis for this suggestion. Judging from the updated Case Notes, I think 1 hour at the junior solicitor’s rate is reasonable and there is no reason to revise it.

41.Item 33.1.7 is for drafting List of Documents.  As there were so many documents involved, I find it reasonable and necessary for the solicitors to draft the List of Documents so as to prepare the striking out application in a proper and efficient manner.  Without such a list, it would be difficult to refer back to these documents when the striking out application was prepared. Thus, this item should also be allowed on party and party taxation.

42.As to the quantum, the 1^st defendant claimed 3 hours at the junior solicitor’s rate and I allowed it only at the litigation clerk’s rate, as I believed a litigation clerk would be able to handle this work.  The plaintiff suggests only 1 hour should be allowed.  Again, I do not find any basis for this suggestion.  Judging from the length of the list and the number of documents involved, 3 hours at the litigation clerk’s rate is reasonable and should not be revised.

43.Item 33.1.10 is for considering a letter of Messrs Lo, Wong & Tsui to the 1^st defendant dated 12 June 2014 and a table showing the allowance of each and every disputed item on costs.  They were concerning the costs of intervention and the costs of the disciplinary proceedings, which were in fact part of the disputed issues mentioned at the striking out application as can be seen from the written submissions.  They were clearly relevant to the striking out application and should be included in party and party taxation.

44.As to the quantum, the 1^st defendant claimed 30 minutes at the junior solicitor’s rate and I allowed only 20 minutes.  The plaintiff suggests that it should be taxed off, but as I find the documents relevant to the striking out application, there is no reason to tax off this item.  I also find it reasonable for the solicitor to spend 20 minutes on these documents and hence there is no reason to revise it.

Item 33.4.2

45.Item 33.4.2 is for perusing a total of 12 emails and letters received from the solicitors for the 2^nd and 3^rd defendants.  They were concerning the proceedings in question.  The plaintiff disputes the entitlement and quantum of this item on the ground that they had nothing to do with the 1^st defendant, the work done was for the 1^st defendant’s own benefit, there was duplication of work and they were irrelevant.  I simply fail to see how the plaintiff could make up all these grounds.  These were the documents received by the 1^st defendant in these proceedings concerning the two applications that were ordered to be heard together.  The 1^st defendant simply could not ignore these documents and they were clearly relevant to the proceedings.  There was also no duplication of work involved.  Thus, this item should not be taxed off as suggested by the plaintiff.

46.As to the quantum, the 1^st defendant claimed 52 minutes at the junior solicitor’s rate.  I taxed it down to 23 minutes.  I think this is already a very reasonable amount and there is no reason to revise it.

Item 34

47.Item 34 is for the solicitors to conduct legal research for the case. The plaintiff disputes the entitlement and quantum on the ground that the 1^st defendant’s counsel was familiar with the facts, evidence and claim, as well as the 1^st defendant’s own legal position and case.

48.Even if the 1^st defendant’s counsel was familiar with all these matters as alleged by the plaintiff, it does not mean that the solicitors do not need to conduct their own legal research.  The solicitors had their own duty towards their client in making sure that the application was supported with legal authorities.  Thus, I see no basis to tax off this item as suggested by the plaintiff.

49.As to the quantum, I find it reasonable for the solicitors to spend 2 hours on legal research and hence I allowed the amount as claimed by the 1^st defendant.  I see no reason to revise this amount.

Items B.1.1 & B.1.2

50.Item B.1.1 is for counsel’s brief fee in the sum of $100,000 for appearing before Deputy High Court Judge Seagroatt on 12 June 2014, and Item B.1.2 is for counsel’s brief fee in the sum of $25,000 for appearing before the same judge on 23 June 2014.  In fact, as pointed out by the 1^st defendant, the brief fee of $100,000 was inclusive of counsel’s time costs for settling two affidavits and attending telephone discussion with instructing solicitor as well as attending various correspondence between solicitor and counsel and perusal of documents of not less than 581 pages.  The brief fee for the hearing on 23 June 2014 was actually a refresher.

51.The plaintiff contends that the brief fee of $100,000 was excessive and there was duplication of work as the same counsel appeared also in CACV 188/2012.  The hearing on 19 June 2014 only took 20 minutes and the substantive hearing on 23 June 2014 took 1 hour and 24 minutes.  When the hearing was fixed, the plaintiff suggested 2 hours were enough for the hearing of both striking out applications but the 1^st defendant suggested 3 hours to be reserved, and it was the 1^st defendant’s suggestion that both applications should be heard together so as to save time and costs.  Thus, the plaintiff suggests that the brief fee for 19 June 2014 should be $60,000 and the brief fee for 23 June 2014 should be $15,000.

52.The counsel involved was of 14 years experience and judging from the complexity of the case, I think it is appropriate to instruct counsel of such seniority to handle the case.  The counsel might be familiar with the background of the case, but it was still necessary for her to prepare all the arguments concerning the striking out application.  The actual hearing time was not important as the preparation would have been done despite the actual short duration of the hearing.  As the brief fee was inclusive of all the other work done, and with the seniority of the counsel, I think the amount of $100,000 was reasonable and not excessive for an application of this nature and complexity. Thus, I allowed the amount as claimed and I do not think that it should be revised.

53.As to the brief fee for the hearing on 23 June 2014, it was in fact a refresher.  I think it is also reasonable for the counsel to charge $25,000 as refresher for a case like this.  Thus, there is no reason to revise this amount either.

Conclusion

54.By reasons aforesaid, I find that there is no merit at all in this review application.

55.I therefore order as follows: -

(a) The summons dated 11 December 2015 be dismissed.

(b) Costs order nisi: The plaintiff do pay the 1^st defendant costs of the summons dated 11 December 2015 to be summarily assessed on papers.  The 1^st defendant do submit and serve its Statement of Costs within 14 days hereof and the plaintiff do submit and serve its Statement of Objection on Costs within 14 days thereafter.

Mr Hong Lee of Hong Lee & Co for the plaintiff

Mr B Leung, LCD, instructed by Deacons, for the 1^st defendant