Pacific Telecom & Navigation Ltd v. Ye Lei

HCA 1018/2019

[2020] HKCFI 656

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1018 OF 2019

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REASONS FOR
SUMMARY ASSESSMENT

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1.On 8 April 2020, I handed down a decision (“the Decision”)[1] in which I allowed P’s application for the Interlocutory Injunctions and determined the Further Evidence Summonses. I ordered that costs of P’s application for the Interlocutory Injunctions (including all costs reserved, if any), as well as costs of the Further Evidence Summonses, be paid by D to P forthwith on an indemnity basis and be summarily assessed on paper.

2.On 17 April 2020, after considering D’s written reply to P’s bill of costs, I summarily assessed the costs at HK$750,000.  On 21 April 2020, D wrote to this court and said that he disagreed with my assessment and would take the necessary step to review or appeal my assessment.  D may take whatever steps as he deems fit to challenge my assessment and I have no comment on what is now being considered by D.  On 22 April 2020, D further wrote to this court asking for reasons for the summary assessment.

3.The court does not have a general duty to give reasons in relation to costs order.  See Eagil Trust Co Ltd v Pigott-Brown [1985] 3 All ER 119. However, since D is now considering to launch a challenge against my assessment, I would provide reasons for the summary assessment. Notwithstanding that the summary assessment has been concluded, I may still provide reasons for the summary assessment to the parties.  See Cheung Hing v Wan Fung Forest Resources Ltd and Another (HCMP 2433/2012, 7 December 2016).

4.The costs provided in my costs order are to be assessed on an indemnity basis.  That being the case, all costs are to be allowed except those unreasonably incurred or of unreasonable amount, the receiving party being given the benefit of any doubt.  See Hong Kong Civil Procedure 2020, Volume 1, §62/App/11.

5.Summary assessment requires a two-stage approach.  If the total costs claimed appear proportionate, then all that is normally required is that each item should have been reasonably incurred and the cost reasonable.  If the overall costs appear disproportionate, then the court would have to be satisfied that each item is necessary and its cost is reasonable.  A sensible standard of necessity should be adopted allowing fully for the different judgments which those responsible for litigation could sensibly come to as to what is required.  While the threshold is higher than that of reasonableness, it should be achievable by a competent practitioner without undue difficulty.  The conduct of the other party is relevant, since a cooperative party could reduce costs, but an uncooperative party could render necessary costs which would otherwise be unnecessary.  See Poon Shu Fan v Wong Tin Yan [2012] 5 HKLRD 512 (CA).

6.A broad-brush approach would be taken by the court in the summary assessment process.  The court would not embark on a mini-taxation.  See PD14.3, para.13.

7.The relevant bill of costs (“the Bill”) is the one annexed to P’s solicitors’ letter dated 25 March 2020.

(1)     The total amount claimed in the Bill is HK$932,522.  In my view, even on an indemnity basis, the total amount claimed is excessive.  I therefore have considered each item set out on the Bill to see whether any item or any amount claimed in any item should be disallowed even on an indemnity basis.

(2)     I am of the view that the hourly rates charged by the fee earners as set out in Item A4 of the Bill are reasonable.

(3)     Items B1 and B2 are reasonable and should be allowed.

(4)     Under Item C1 (attendance on client, D, counsel and others), I am of the view that the time spent by LN, ie 13 hours, is reasonable.  However, the time spent by HTS should be reduced from 32 hours to 13 hours.  For the purpose of opposing P’s application for the Interlocutory Injunctions, numerous allegations have been raised by D against P and some persons relating to P.  In view of the scatter-gun approach adopted by D in opposing P’s application, the time incurred by LN under this item is reasonable.  However, given the in-depth involvement of the handling partner in this item, the time spent by the assistant solicitor on this aspect should be substantially reduced.

(5)     Under Item D1 (preparation of documents), for the reason set out in subparagraph (4) above, I am of the view that the time spent by LN, ie 12 hours, is reasonable.  However, I would reduce the time spent by HTS from 46 hours to 24 hours.

(6)     Under Item D2 (perusal of documents), only LN is involved, and the time spent is 31 hours. Given the complexity created by the numerous allegations put forward by D and the scatter-gun approach adopted by D in opposing P’s application for the Interlocutory Injunctions, it would not be a surprise that LN has to spend substantial time in perusing the documents.  I am of the view that the time claimed under this item is slightly excessive.  I would reduce the time under this item to 28 hours.

(7)     Item D7 is “General care and conduct” by LN. Given the time spent by LN under items C1, D1 and D2, I do not think item D7 should be allowed.

(8)     I am of the view that the amounts claimed under Items D3, D4, D5, D6 and D8 are reasonable and should be allowed.

(9)     Item E1 is the brief to counsel for the hearing on 21 June 2019.  I would allow this item.

(10)     Item E2 is the fee paid to counsel for settling the 3^rd affirmation of Chen.  Since the affirmation was drafted by experienced solicitors, I would only allow HK$10,000 under this item.

(11)     Item E3 is the brief to counsel for attending the substantive hearing of P’s application for the Interlocutory Injunctions. Due to GAP, the hearing did not take place as scheduled.  P’s application and the Further Evidence Summonses have been determined by the court on paper without an oral hearing.  The brief to counsel is to enable counsel to prepare written submissions in relation to all these applications.  Mr Kerby Lau, counsel for P, has provided the court very helpful assistance in his written submissions.  Item E3 should be allowed in full.

8.With all the aforesaid in mind, taking a broad-brush approach, I am of the view that the total of the costs payable by D to P under the costs order made by me on 8 April 2020 should be HK$750,000.