Lam and Lai Solicitors v. Ho Chun Yan Albert

CACV 172/2017

[2018] HKCA 199

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 172 OF 2017

(ON APPEAL FROM HCMP NO 555 OF 2015)

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DECISION ON COSTS

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Hon Kwan JA (giving the decision of the court on costs):

1.On 28 February 2018, we handed down our judgment allowing the appeal of the plaintiff from the judgment of Deputy High Court Judge Saunders arising out of the second review of a taxation of costs by a taxing master. We varied the judge’s order by which he taxed off the costs of one of the two partners claimed in the plaintiff’s bill and replaced it with an order that the costs of one partner and the costs of a notional junior solicitor equivalent to half of the costs of a partner be allowed in respect of the 64 items objected to.

2.We made orders nisi as to the costs of the appeal and below.  We awarded the costs of the appeal to the plaintiff without any deduction, with a certificate for two counsel.  We declined to disturb the judge’s costs order of the review applications before him and before the taxing master, which were awarded to the defendant, with a certificate for two counsel.

3.By a summons issued on 6 March, as amended on 9 March 2018, the defendant sought leave to vary that part of the costs order nisi by which the costs of the appeal were awarded to the plaintiff, asking instead there should be no order as to the costs of the appeal.  In short, the defendant wishes to retain that part of the costs order nisi favourable to him and to vary that part of the order against him.  The summons is opposed by the plaintiff.

4.We directed the summons be dealt with on paper and submissions have been served under the directions made on 9 March.  Our directions are clear.  We regret to say the defendant’s legal team did not comply with the direction that any reply submission on his part should not be more than three pages.  We were given a reply submission double the page limit.  In future, any submission not in compliance with the page limit will be returned to the party concerned unread.

5.The reasons for awarding the costs of the appeal to the plaintiff in the costs order nisi were set out in §61 of my earlier judgment:

“In my view, notwithstanding that the plaintiff did not succeed in restoring the master’s review decision in its entirety, I would regard the plaintiff as substantially successful and it is necessary for the plaintiff to bring this appeal to set aside the judge’s decision. I also take into account the judge’s error in failing to consider whether a junior solicitor may justifiably be engaged with a senior solicitor might well be attributable to the way the case was argued before him, in that the defendant’s challenge was confined to the fact of duplication. …”

6.These grounds were advanced by the defendant in contending that the above order should be varied to no order as to costs: (1) the plaintiff was only partially successful on appeal; (2) its argument that the taxing master did not err in principle and his decision should not be disturbed was rejected by this court; (3) the plaintiff never asked for the reduction of any costs claimed for two partners and only accepted this court’s suggestion in the course of argument of replacing the costs of one partner by the costs of a notional junior solicitor equivalent to half of the costs of a partner; (4) the legal fees allowed by the taxing master were reduced by a substantial amount, i.e. half of the costs of a partner, and this court awarded costs materially less than the costs awarded pursuant to the taxing master’s order.

7.We do not think it fair to make no order as to the costs of the appeal in all the circumstances, for the reasons given in the earlier judgment, and are not persuaded by the defendant’s submissions that the costs order nisi should be varied on any or all of the grounds as mentioned above.  It is a sterile argument to keep harping on the fact that since the plaintiff was allowed only half of the second partner’s costs, the outcome on appeal should therefore be regarded as more favourable to the defendant instead of to the plaintiff.  It could equally be said that since costs allowed by the judge’s order was increased by half of a partner’s costs, the costs ultimately awarded to the plaintiff were increased by a substantial amount.

8.The whole package of the costs order nisi should be considered.  It gives recognition that neither party is wholly successful in costs.  And in declining to disturb the costs awarded by the judge to the defendant in the two review applications, we have given sufficient recognition to the fact that the plaintiff’s primary position that the taxing master’s decision should not be disturbed was rejected by us.

9.We would mention two other matters.

10.First, the plaintiff submitted that the defendant’s challenge to the approach on review by a judge of taxation of costs in Chan Yin Na v Union Medical Centre Limited [2011] 5 HKC 158, which necessitated members of this court to deal with the controversy at some length in our separate judgments, is a further reason why it lies ill in the defendant’s mouth to suggest there should be no order for the costs of the appeal.

11.The defendant submitted in reply it was not his position to advocate a taxation de novo on review by the judge and stated that this issue was raised by the plaintiff in §5 of its submission served in the appeal, which misquoted §7 of the decision of the judge.

12.If the defendant was indeed not advocating the approach of a taxation de novo, this was not made clear or sufficiently clear in its skeleton argument served in the appeal.  The relevant parts of his counsel’s submission suggesting the contrary have been quoted in my earlier judgment at §28.  Given the stance of the defendant on this issue, which is nebulous at best, it is necessary for this court to address the issue on the proper approach, to lay the matter at rest.

13.We have re-read §15 of the defendant’s skeleton argument served in the appeal, in which the allegation of misquotation of §7 of the judge’s decision was made.  With respect, the complaint of misquotation is not to the point.  The part put in quotation marks in §5 of the plaintiff’s skeleton argument was taken from §23 of Chan Yin Na.  The judge had accepted the parties’ agreement on the proper approach as decided in Chan Yin Na and recorded what the parties agreed on this in §7 of his decision.  So even though the words in quotation marks were not actually taken from the decision of the judge, they were taken from a judgment that he and the parties had agreed with.  The complaint of misquotation is immaterial and of no consequence.

14.We agree with the plaintiff that the defendant’s stance on the proper approach to be taken by a judge on a taxation review is further reason why it is inappropriate to make no order as to the costs of the appeal.

15.Second, in the reply submission of the defendant, it was mentioned in the last paragraph that in the event this court is minded to award costs of the appeal to the plaintiff, this court should consider apportioning the costs in the appeal in such proportions to reflect that the plaintiff has failed to restore the master’s decision in allowing the full costs of two partners.

16.This submission is not acceptable.  The defendant’s summons, which has been amended once on 9 March, only asked for “no order as to costs of the appeal”.  Awarding part of the costs of the appeal to the plaintiff as an alternative was not mentioned in the summons, or even in the first submission served by the defendant on 16 March.  The opposite party had no opportunity to respond to this alternative suggestion.  In any event, we have fully considered this aspect and are not persuaded that the plaintiff should be deprived of part of its costs of the appeal.

17.We dismiss the summons to vary the cost order nisi.

18.As to the costs of the application to vary the costs order nisi, there is no reason why costs should not follow the event.  We order the defendant to pay the costs of the plaintiff in this summons.  We will grant a certificate for two counsel.  The costs order of the present application is an order nisi.

Written submissions by Mr Bernard Man SC and Mr Byron Chiu, instructed by Lam and Lai, for the Plaintiff (Appellant)

Written submissions by Ms Margaret Ng and Mr Leonard Chow, instructed by Chui & Lau, for the Defendant (Respondent)