Lam Wai Kong v. Lam Ying Kit

HCAP 28/2018

[2024] HKCFI 3181

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE ACTION NO. 28 OF 2018

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D E C I S I O N

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Introduction

1.This is the substantive hearing of the Defendant’s appeal against Master D. To’s decision on costs dated 18 April 2024 (the “Costs Order”).

2.In the Costs Order, the learned Master ordered the Defendant to pay the Plaintiff forthwith the Plaintiff's costs of and incidental to the Defendant’s application for an extension of time, with the Plaintiff's costs summarily assessed at HK$75,000 with certificate for counsel.

3.This is a very simple appeal which turns on very narrow issues which touch on the learned Master’s exercise of discretion on costs.  The Defendant’s stance is that the learned Master exercised her discretion by applying incorrect legal principles.

Procedural History

4.On 18 April 2024, the hearing before the learned Master (“the Hearing”) was about the Defendant’s application for time extension for his handwriting expert to examine the alleged Will and consequential time extensions to take other steps needed for the preparation of the handwriting expert report (the “Application”).

5.Mr Yim for the Plaintiff pointed out that this is not the first time extension application which the Defendant has taken out with regards to handwriting expert evidence:

(1)  On 26 July 2023, Master Hui made an order appointing handwriting experts for both the Plaintiff and the Defendant, as well as specifying a timeline for examining handwriting specimens, exchange of expert report, without prejudice meeting of experts etc. (the “Handwriting Expert Report Timeline”).

(2)  During the first CMC which took place on 12 October 2023, Master D To made an order pushing back the Handwriting Expert Report Timeline.

(3)  The Defendant later decided to change his handwriting expert.  The Plaintiff did not obstruct the Defendant at all, and consented to the Defendant’s application.  (See the Consent Order dated 20 December 2023.)

(4)  Later, the Defendant pointed out that his expert needed more time to examine the handwriting specimens.  The Plaintiff did not object.  By the consent order dated 26 January 2024, the Plaintiff consented to the time extension sought by the Defendant as long as there was no impact on subsequent deadlines in the Handwriting Expert Report Timeline, which would necessarily affect milestone dates, including the next CMC.

(5)  The deadline for the Defendant’s expert to examine handwriting specimens was extended from 24 January 2024 to 21 February 2024.

(6)  However, the Defendant subsequently on 10 April 2024 took out a time summons, seeking to push back the deadlines in the Handwriting Expert Report Timeline for examining handwriting specimens and other subsequent items for at least three months. 

(7)  When the above was happening during the period from 26 July 2023 to 18 April 2024, the Plaintiff has tried his best to cooperate with the Defendant, even going so far as to issuing letters reminding the Defendant (i) of various deadlines and (ii) to take various procedural steps (such as applying to the Probate Registry to inspect the original alleged Will).  It is the Plaintiff’s case that, however, the Defendant has all along been uncooperative.

6.At the Hearing, parties’ position on costs were as follows:

(1)  The Defendant did not dispute liability as to costs, but disputed quantum.

(2)  The Defendant submitted that arguments on costs should be adjourned to a later date.

(3)  The Defendant submitted that he had not sought numerous time extensions, as this was the first time the Defendant sought a time extension for examination of the original alleged Will in specific.  Therefore, the Defendant’s position was that the Application was the same as a standard time extension application; the standard costs order should be made, i.e. HK$1,040 payable to the Plaintiff forthwith.

(4)  Further, the Defendant’s position was that the Plaintiff could have been represented by a more junior counsel at the hearing, albeit that at the Hearing, the Defendant was also represented by a junior counsel. 

(5)  On the other hand, the Plaintiff’s stance was that the Defendant should pay the Plaintiff’s costs of the Application on an indemnity basis.

7.Having heard the parties’ submissions, the learned Master  made the following decisions:

(1)  She did not agree to adjourn the issue of costs to another hearing, but instead decided to deal with costs by way of an immediate summary assessment.

(2)  She pointed out that she did not regard the Application as a simple time summons and that the Court would consider the whole background of the case leading up to the Application and would not consider the Application alone.

(3)  Finally, she ordered the Defendant to pay the Plaintiff’s costs of and incidental to the Application, summarily assessed at HK$75,000, to be paid forthwith, with certificate for counsel.

8.Mr Yim for the Plaintiff submitted that as a matter of fact, as at the day of the appeal hearing before this Court, the Defendant has still failed to comply with paragraph 3 of the Order made at the end of the Hearing, thereby causing further delays and dire consequences to the further conduct of this action.

Legal principles relating to the Appeal

9.In general, an appeal from master to judge in chambers proceeds as a hearing de novo.  However, a costs appeal from master to judge in chambers is different: an appellant has to point out how the master’s costs order was unreasonable or where the master erred in law.  See Gee Fung Yin v Gee Fung Kuen and Anor HCA 1940/2015 (unreported, 28 April 2017)at §§3 and 18:

“3. In general, a judge in chambers will not allow an appeal from a master’s costs order unless it is unreasonable or the master erred in law. The appellant must show that the master either failed to take into account proper matters or took into account matters that should not have been taken into account [see: Hoddle v CCF Construction Ltd [1992] 2 All ER 550; Practice Note 58/1/6 of the Hong Kong Civil Procedure 2017].

…

18. ….  I agree that the plaintiff’s submissions are basically a re-run of her arguments before the master, and this is not the correct approach on an appeal on costs.”

10.In Poon Wong Yee See v Lo Sau Woon Diana[2021] HKCFI 3410 at §5, the Court held that:

“5. In Chen Ningning v King & Wood (a firm) unrep, HCMP 163 of 2012, 16 April 2020, K Yeung J cited with approval the following approach to appeal against a master’s costs Order as follows:

‘59. In Hoddle v CCF Construction Ltd [1992] 2 All ER 550, Morland J observed at 550h-551b observed [sic] that:

‘In my judgment it would be highly undesirable as a matter of general principle that a judge in the position that I am in today should intervene and make different orders as to costs from that made by a master, unless it can be shown by the appellant that the master demonstrably erred in the exercise of his discretion in the order that he made. If it can be shown that the master took into account matters that he should not have taken into account or failed to take into account matters that he should have taken into account, in those circumstances the judge in chambers would be entitled to vary the order made by the master, but in my judgment it would not be in the interests of justice if judges in chambers entered into detailed examination of all the matters that were before the master in order to decide whether they would have come to the same decision as the master. Generally speaking, in my judgment, judges in chambers should not allow appeals against costs orders by masters, unless it can be shown that the order made was unreasonable or erred in law or, as I have indicated, either failed to take into account proper matters or took into account matters that should not have been taken into account.’ (emphasis added)

60.    Hoddle was applied in Man Fong Hang v Man Ping Nam and Ors, HCA 7935/1998 (unrep, 26 September 2002) per Deputy Judge A Cheung (as he then was) at §16.’”

The Defendant’s Grounds of Appeal

11.The Defendant relies on the following grounds of Appeal:

(1)  The Hearing is a simple 3-minutes Time Summons, where only the length of the extension to be granted to the Defendant was in dispute.  Considering the CJR objective of increasing cost-effectiveness of proceedings, the appropriate costs should be the usual rate of HK$1,040 instead of the ordered HK$75,000; and the ordered HK$75,000 is excessive (“Ground 1”).

(2)  At the Hearing, neither the Plaintiff nor the Defendant can be said to be fully successful in their applications.  The degree of success of parties should be taken into account when deciding on costs.  As such, even if costs are to be assessed beyond HK$1,040, a partial order for costs should be made, and the Plaintiff should only be allowed 50% of the assessed cost of HK$75,000 (“Ground 2”).

(3)  Specific criticisms can be raised against various items of costs:

(i)    Item E1 of the Plaintiff’s Statement of Costs: “Brief to counsel” should not have been allowed because a counsel should not have been appointed in the first place given the lack of complexity in the Hearing.  The only dispute being the length of extension at the Hearing, and it is common that time extension applications are disposed of within a 3-minute hearing.  In the alternative, for the same reasons along with the reason that the Defendant only instructed a counsel called in 2021, if a counsel should have been appointed, the Plaintiff engaging a counsel called in 1986 is unnecessary (“Ground 3”).

(ii)   Item C2 of the Plaintiff’s Statement of Costs: “Attendance on other side” is manifestly excessive as many of the letters are neither necessary nor relevant.  Item C2 should also be handled by a more junior solicitor (“Ground 4”).

(iii)  Item C4 of the Plaintiff’s Statement of Costs: “Attendance on expert” is not necessary nor proper (“Ground 5”).

(iv)  Item D1 of the Plaintiff’s Statement of Costs: “Preparation of Shek’s affirmation” is not necessary (“Ground 6”).

(v)   Item D2, D3 and D6 of the Plaintiff’s Statement of Costs: “Perusal of Documents”, “Preparation for Hearing” and “Attending Hearing” can be handled by a junior associate or a trainee solicitor (“Ground 7”).

(vi)  Item D4 to D5 of the Plaintiff’s Statement of Costs: “Drafting Statement of Costs for Summary Assessment” and “General care and conduct and reviewing and approving Statement of Costs for Summary Assessment” should not be included in the statement as such costs are generally not granted (“Ground 8”).

(vii) Item B2 of the Plaintiff’s Statement of Costs: “Manual Work”, the costs of filing of documents should not be charged on an hourly basis, instead, a rate of $110 should be charged (“Ground 9”).

Analysis and Determination

12.First, I agree that as an appellant for an appeal against a costs order from master to Judge in Chambers, the Defendant has to prove that the learned Master “either failed to take into account proper matters or took into account matters that should not have been taken into account”,or where she was “unreasonable” or “erred in law”, see Gee Fung Yin, supra at §18.  It is established law that it is not for this Court to decide whether to allow the appeal on the basis that the master should have exercised her discretion differently .

13.I am of the firm view that none of the Defendant’s grounds relate to matters which the learned Master should or should not have taken into account, or unreasonableness or errors in law.  They are all within the discretion of the learned Master and there is nothing wrong as a matter of law.

(1)  Grounds 1-7 merely set out how the learned Master should have exercised her costs discretion better: whether the usual rate of time summons apply, whether costs to follow the event (and to what extent), whether a certificate of counsel should be granted, and whether each sub-item in the Plaintiff’s Statement of Costs should be granted and at what amount.  In my view, it is not the Court’s function to reassess the learned Master’s assessment unless the assessment is unreasonable.

(2)  I also agree that Ground 4 to 9 provide criticisms on specific items in P's Statement of Costs.  I do not consider it right for this Court to embark upon an item to item consideration of costs.  This is contrary to the nature of summary assessment, where the Court takes a broad-brush approach instead of an item-by-item review, see Poon Shu Fan v Wong Tin Yan & Anor [2012] 6 HKC 428at §12.

14.I have no hesitation that this appeal should be dismissed for two broad reasons.  First, the Defendant itself engaged junior counsel to attend the contested hearing for an application for time extension.  I agree that usually time summonses are attended by solicitors and the usual costs is HK$1,040.  However, this is not an immutable rule.  There are cases which merits the attendance of counsel.  In the present case, the Defendant itself engaged junior counsel, this, by itself, shows that this is not a run of the mill application.  It has complexity.  Indeed, as a matter of fact, the parties spent about an hour before the learned Master.  The parties had anticipated complex arguments before the learned Master and hence counsel were engaged.  I am of the view that the Defendant cannot argue that counsel’s attendance is unnecessary when it engaged counsel to make the Application in the first place.

15.Once the engagement of counsel is justified, the next issue is quantum.  I am of the view that one cannot simply just look at the year of call of the junior counsel.  Mr Yim only charges HK$40,000 for the contested hearing which included his preparation and skeleton submissions.  I consider the sum of HK$40,000 to be very reasonable.

16.The Plaintiff asked for HK$93,278.28.  The learned Master taxed that to HK$75,000.  This is entirely within the range of the learned Master’s exercise of her discretion.  I do not see how that can be said to be unreasonable.

17.First, in general, a Master making a costs order has a wide discretion, which a Judge should be circumspect with interfering with.  See Chen Ningning v King & Wood [2020] HKCFI 602 at §§62-63：

“62. In Chan Shun Kei v Hong Kong Construction (Hong Kong) Ltd, CACV 192/2014 (unrep, 7 March 2016), Lam V P observed in §22 that:

“ It must be stated at the outset that this court should acknowledge that costs is very much a matter of discretion of the judge and we should be circumspect in interfering with the same.  The established approach is that this court will only interfere when it is satisfied that the decision of the judge is either wrong in principle or plainly wrong, see Ho Shu Kwong v Chiang Chun Yuan [2002] 3 HKLRD 419.  The rationale for this approach was explained by Woo JA (as he then was) in Ho Shu Kwong.  The trial judge is the best person to exercise the discretion on costs because he is most familiar with the conduct of the case at the trial and the impact of the success and failure on each issue canvassed before him.  In a way it is like an appeal against findings of fact.  As explained in numerous judgments (see e.g. China Gold Finance Ltd v CIL Holdings Ltd CACV 11 of 2015, 27 November 2015), an appellate court is institutionally disadvantaged from re-assessing a decision of this nature as if it is hearing the matter in the first instance.  Thus, this court should examine whether a primary judge committed any palpable error in the exercise of the discretion on costs.  In the absence of such an error, the mere fact that the appellate judges might have exercised the discretion in a different manner is not a sufficient ground to warrant interference with the decision of the primary judge.”

63. While Chan Shun Kei was an appeal against a costs order made by a judge after trial, the circumspection explained by the Court of Appeal is in my view equally applicable to the present appeal where the Master has undertaken the Trial of the Preliminary Issues, which for all practical purposes resembles a trial.” (emphasis added)

18.This is especially in light of the special expertise a Master has with regards to the issue of costs as compared to that of a judge.  See Chan Yin Na v Union Medical Centre Limited[2011] 5 HKC 158 at §24：

“24. Personally, I am tempted to say, coming, as I do, to the Bench after many years of practice at the Bar, that I have the necessary knowledge and experience relating to the current level of costs, in general, and the current level of barristers’ fees, in particular, to deal with a review of taxation afresh. However, after the passage of some years, that knowledge and experience will become less and less relevant. Most, if not all High Court judges, unless recently appointed from the Bar or the solicitors’ branch of the legal profession, are likely to consider that they lack the necessary knowledge and experience of the current level of costs to deal with the matter of taxation of costs as a hearing de novo. No doubt that knowledge and experience will increase as we make more and more summary assessments of costs in interlocutory matters. However, increasing knowledge and experience of interlocutory costs may not sufficiently equip the High Court Judge to deal afresh with the taxation of the costs of trial preparation and of the trial proper.” (emphasis added)

19.Secondly, under O.62 r.9A, the learned Master had the power to determine costs of the Application by way of summary assessment.  In Kwai Tak Ming(supra) at §11:

“With the historical background of O 62 r 9A, it becomes clear that it is a norm now for the court to make summary assessment of costs under O 62 r 9A for interlocutory applications on the broad-brush approach and the payment of the costs should be immediate, usually within 14 days of the order, unless there are special reasons not to so order.” (emphasis added)

20.In Seridom Servicios Integrados Idom S.A.U. v Heng Wen Trade Co. Ltd and Ors[2019] HKCFI 761 at §§15-17:

“15. Whether or not to order immediate quantification/payment of costs in an interlocutory application is quintessentially a matter within the court’s discretion. Lam J (as he then was) in Midland Business Management Ltd v Lo Man Hui (No 2) explained as follow:

‘9. Under Civil Justice Reform, the court is encouraged to order immediate payment of costs of interlocutory proceedings and if possible by way of summary assessment of costs. The objective is to discourage unnecessary and disproportionate interlocutory applications. It is recognised that the lack of immediacy of orders to pays costs “in the cause” or “in any event” weakens costs as a sanction against unwarranted applications or resistance, see paras.529-536 of the Final Report of the Chief Justice’s Working Party on Civil Justice Reform.”

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17. Thus, the considerations relevant to deciding whether or not to make an order for immediate quantification/payment of costs in interlocutory applications included (a) the extent to which the proceedings on taxation (or assessment) were severable and self-contained from the rest of the action, (b) the justice of making such an order having regard to the effect on the respective parties’ cash flow, (c) whether the amount at stake was sufficient to justify the expense of a separate taxation (or assessment) for it rather than bringing it on the final taxation, and (d) the possibility that there might be no trial.” (emphasis added)

21.I agree with Mr Yim for the Plaintiff that the Application was “severable” and self-contained from the rest of the action.  Further, adjourning the issue of costs to another hearing would have incurred more costs, which would not be proportionate with the costs incurred in the Application. 

22.Thirdly, the learned Master can legitimately depart from the standard costs order.  The Court should instead take into account all the circumstances of the case, such as the factors listed in O.62 r.5.  See Waxman(supra)at §19:

“Summing up on the post-CJR position, I think the court has much wider discretion as to costs in interlocutory proceedings. Unlike other proceedings, the general rule of costs following the events do not apply. The court is entitled to take into account all the circumstances of the case, including those set out in r 5, to make such order as it thinks fit. In the exercise of its discretion, the court may take the issue-based approach or may take into account merit of the parties’ case or the possible outcome of the action. The circumstances of interlocutory proceedings are so numerous that it is impossible to make any general rule. Costs to follow the event and costs be to the successful party’s costs in the cause are obvious options.” (emphases added)

23.O.62 r.5 lists some of the factors a Court can consider, including the conduct of the parties:

“(1) The Court in exercising its discretion as to costs shall, to such extent, if any, as may be appropriate in the circumstances, take into account—

(aa) the underlying objectives set out in Order 1A, rule 1;

…

(e) the conduct of all the parties;

…

(2) For the purpose of paragraph (1)(e), the conduct of the parties includes—

(a) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

(b) the manner in which a party has pursued or defended his case or a particular allegation or issue;

(c) whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim; and

(d) conduct before, as well as during, the proceedings.”

(Emphasis added)

24.I agree that in making the Costs Order, the learned Master was perfectly entitled to take into account the conduct of the parties, including the conduct before the Application.  The learned Master could and indeed concluded that the Application was not a standard time extension and order the party seeking indulgence from the Court to pay a higher scale of costs, departing from the standard costs order of HK$1,040.  The Court has made similar costs orders before.  For example, see Cosimo Borrelli v Allen Tak Yuen Chan HCMP 2174/2014 (unreported, 12 February 2015) at §§3 and 7, where the Court regarded the application as “not just any time summons” and ordered costs of HK$65,000.

25.From the procedural history of the Application, Mr Yim for the Plaintiff submitted that it is clear that the Defendant has taken a cavalier attitude towards the Court’s mandated deadlines and generally has an uncooperative attitude.  Since the learned Master was entitled to consider this background when making the Costs Order, and conclude that this was not a standard time extension, which necessitated a costs order that departed from the standard one.  I agree.

26.Fourthly, on the quantum of the costs, I agree with Mr Yim’s most detailed and helpful submissions and do not seek to repeat the same here save to say that I do not find anything wrong with the learned Master’s assessment.

27.In respect of Mr Nip’s submission that none of the parties are wholly successful in their applications at the Hearing, and thus the Plaintiff cannot be said to be a successful party warranting the Defendant to pay all his costs, I am of the view that the learned Master was perfectly entitled to come to the view that the Plaintiff was largely successful in resisting the Defendant’s application, albeit that a limited extension of time was granted.  In any event, it must be remembered that it was the Defendant who was applying for an indulgence from the Court and it is only normal that he had to bear the costs of such indulgence.

28.On Ground 3, I really do not see any merits in arguing that the learned Master was wrong in granting a certificate for counsel when the Defendant itself has engaged counsel.  In any event, I am satisfied that this is a matter suitable for the engagement of counsel.  The Defendant took out a time summons with a supporting affidavit of Cheng Kwok Hung Samuel filed on 9 April 2024.  It ran into 62 pages (including exhibits).  The Plaintiff’s counsel lodged submissions (8 pages) on 16 April 2024 to deal with the Defendant’s grounds for the Application as set out in the said affidavit.  At the Hearing, the Defendant was also represented by counsel who lodged written submissions on 17 April 2024, the day before the Hearing.

29.For Ground 4 to 9, they are disputes on individual items on the Schedule of Costs.  As I said above, first, it fails entirely within the discretion of the learned Master to make a reasonable summary assessment.  Secondly, for the detailed reasons as set out in Mr Yim’s Skeleton Submissions which I do not need to repeat here, I agree with the learned Master’s assessment.

30.In particular, as set out in Kwai Tak Ming v KS Capital One Ltd & Ors[2015] 4 HKC 22 5at §11, when the Court assesses costs in summary assessment, the Court takes a broad-brush approach and generally costs are payable forthwith.  See also Poon Shu Fan(supra) at §§12-18, which stresses that when conducting a summary assessment, the Court does not conduct a mini-taxation but looks at costs globally instead of an item-by-item review.

Disposition

31.For all the reasons stated above, I hereby dismiss the Defendant’s appeal.

32.I also make an order that the Defendant is to pay the costs of and occasioned by this party to the Plaintiff, to be taxed if not agreed, on a party to party basis.

33.Finally, I thank Mr Yim and Ms Lai for the Plaintiff and Mr Nip for the Defendant for their kind assistance.  

Mr Valentine Yim and Ms Myranda Lai, instructed by Y.K. Lau & Chu, for the Plaintiff

Mr Thomas Nip, instructed by Cheng & Co., for the Defendant