Tai Hing Cotton Mill Ltd v. Liu Chong Hing Bank Ltd and Others
Read the full judgment text of HCA 1488/1978 on BabelCite. This High Court CFI judgment was delivered on 30 June 1982.
1. In late September and early October 1980, Mr. Rokison, Q.C., of the London Bar represented Liu Chong Hing Bank Limited (L.C.H. Bank) on its successful application to the Hong Kong Court of Appeal for the setting aside of an order made by a judge at first instance to the effect that the Defence filed by L.C.H. Bank in the proceedings brought against it by Tai Hing Cotton Mill Limited (Tai Hing Cotton) should be struck out pursuant to 0.18 r.19 on the ground that its disclosed no reasonable cau
Cited by 6 cases
|
HCA001488/1978
Costs - Party and party taxation - Whether expenditure for travelling time, air-fares and hotel accommodation for London counsel allowahle.
IN THE SUPREME COURT OF HONG KONG HIGH COURT ____ BETWEEN
_____ Coram: Hon. Rhind, J. Date: 30 June 1982 ___________ JUDGMENT ___________ 1. In late September and early October 1980, Mr. Rokison, Q.C., of the London Bar represented Liu Chong Hing Bank Limited (L.C.H. Bank) on its successful application to the Hong Kong Court of Appeal for the setting aside of an order made by a judge at first instance to the effect that the Defence filed by L.C.H. Bank in the proceedings brought against it by Tai Hing Cotton Mill Limited (Tai Hing Cotton) should be struck out pursuant to 0.18 r.19 on the ground that its disclosed no reasonable cause of defence. Costs followed the event. 2. The fee marked on the brief for Mr. Rokison to appear on that appeal was the equivalent of HK$60,000 (£5,000 converted at the then rate of £1 = HK$12), plus daily refreshers of the equivalent of HK$4,800. 3. On a party and party taxation before Master McLelland, no challenge was made to Mr. Rokison's brief fee, as marked, nor to the refreshers. 4. However, challenge was made to three heads of disbursements related to the bringing of Mr. Rokison to Hong Kong on this brief. 5. Firstly, a claim was made for the time spent by Mr. Rokison flying to and from Hong Kong. A day each way at the rate of $3,000 per day made a total of $6,000 under this head. Secondly, there was his air-fare, which, first class, came to $25,905. Thirdly, were his accommodation expenses while in Hong Kong: for a suite in a first class hotel the expenses amounted to $12,015. 6. On a review of his taxation, Master McLelland totally disallowed all those three heads of disbursements. The appeal before me is concerned with whether he was correct in so doing. 7. I accept that all of those disbursements are of a type and at a level almost invariably, if not invariably, incurred when a Silk from London is briefed to appear in Hong Kong. The travelling fee for the day flying to and for the day flying from Hong Kong is at the rate of from half to two thirds of the daily refresher. 8. The solicitor instructing Mr. Tang thought she had a vague recollec-tion of a London Silk who had been paid merely for economy air travel and who did not get a whole suite, but neither Mr. Li nor Mr. Tang had over heard of London Silks settling for this more modest scale of comforts on their journies to and from Hong Kong. 9. First class air travel and accommodation in a suite in a first class hotel are both clearly in accordance with the style to which London Silks are accustomed. I regard it as befitting their rank that they should be accorded those particular benefits. 10. Thus then, to sum up, it can be seen that the usual practice is for London Silks to be paid two days travelling time at from half to two thirds of their daily refresher rate, first class air fares, and accommoda-tion in a suite in a first class hotel. 11. L.C.H. Bank will already have paid out those expenses. The question before me is whether it can now require Tai Hing Cotton, the loser in the Court of Appeal, to shoulder them. 0.62 r.28(2) lays down the principles which the Court is to apply on a party and party taxation:
12. That sub-rule needs to be read in conjunction with paragraph 2(5) of Part II of the First Schedule to 0.62, which is as follows:
13. For a full understanding of diet sub-paragraph, reference needs also be made to a further sub-paragraph of Part II, namely 1(2) which is as follows:
14. From the pests of the Rules just cited, it will be seen that, on a taxation, L.C.H. Bank would be entitled to the disputed items for counsel if it could be said they were necessary or proper for the attainment of justice or for defending its rights. 15. Authority for what costs in relation to counsel can be regarded as "necessary or proper" is to be found in Simpsons Motor Sales (London) Ltd. v. Handon Corporation (No. 2).(1) Both counsel before me agreed that case correctly laid down the measure for determining whether the disputed items of expenditure were "necessary or proper". The measure is determined by estimating what a hypothetical counsel capable of conducting the case effectively would be content to take on the brief. This hypothetical counsel does not insist upon the particularly high fees sometimes demanded by fashionable counsel. In making its estimate, the court has to rely on its knowledge and experience. 16. Having arrived at its estimate of what this effective (yet not necessarily fashionable) hypothetical counsel would be content to accept, the court looks at the case in hand to see how much is being asked for the actual counsel who conducted it. If the fees being claimed are within the range of what the court has estimated for its hypothetical counsel, they will be allowed; otherwise, they will be disallowed, pro tanto. 17. It becomes necessary to ask what calibre of counsel was required to ensure L.C.H. Bank effective representation in its proceedings before the Court of Appeal. L.C.H. Back was one of three banks being sued in the same action by Tai Hing Cotton for a total of just under HK$5.7 million in respect of allegedly wrongful debits made to Tai Hing Cotton's accounts with those banks which had honoured Tai Hing Cotton cheques forged by one of Tai Hing Cotton's employees. 18. Of that sum of approximately $5.7 million, $3,082,214 represented what L.C.H. Bank had paid out on 54 forged cheques between November 1977 and March 1978, $836,692 represented what the second defendant bank had paid out on 110 forged cheques between January 1975 and February 1978, and the balance of $1,772,822 represented what the third defendant bank had paid out on 145 forged cheques between August 1975 and January 1978. 19. All three banks pleaded the same defence which was to the effect that they were not liable for the allegedly wrongful debits, as Tai Hing Cotton was wholly or in part to blame on account of its negligence in the supervision of its employee. 20. That defence found no favour with the judge at first instance who struck it out on the application made under 0.18 r.19. 21. In reaching the conclusion he did, the learned judge placed reliance on dicta from the House of Lords in London Joint Stock Bank v. Macmillan(2) to the effect that it was only if the customer was negligent in the drawing of the cheque itself that the bank would be justified in debiting the customer's account for a forgery. In that case the customer had been -negligent in the actual drawing of the cheque he had left gaps on the cheque sufficiently large for his fraudulent employee to fill in additional figures. Thus, observations made by the House of Lords to the effect that it is only negligence in relation to the manner of the drawing of the cheque which affords the bank a defence were in the nature of obiter dicta, albeit of very high persuasive authority. 22. Further support for the course adopted by the judge at first instance was afforded by the New Zealand Court of Appeal decision in National Bank of New Zealand Ltd. v. Walpole and Pattorson Ltd.(3) Relying on the dicta in London Joint Stock Bank v. Macmillan, the New Zealand Court of Appeal held that as between banker and customer, the customer is under no duty to exercise reasonable care in the general course of his business to prevent forgeries on the part of his employees. 23. Counsel for the bank before the New Zealand Court of Appeal had sought unsuccessfully to argue firstly that changes in the law of negligence wrought by cases such as Donoghue v. Stevenson(4) and Hedley Byrne Co. Ltd. v. Heller and Partners Ltd.(5) and secondly the need for development of judicial policy to suit current conditions justified a departure from the principle laid down in 1918 in London Joint Stock Bank v. Macmillan, with the result that the courts should now recognize a general duty on employers to exercise care in the conduct of their businesses. 24. Without having to go as far afield as New Zealand, the learned judge at first instance could also find direct authority for the course he took in the decision of his learned brother, Leonard, J. (as he then was) in Asien-Pazifik Merchant Finance Ltd. v. Shanghai Commercial Bank Ltd.(6) of 1978. 25. In the course of an argument designed to persuade Leonard, J. that a customer owes a general duty to his banker to prevent forgery of his cheques, basically the same arguments which had failed to find favour with the New Zealand Court of Appeal in the case just referred to were trotted out. In addition to Donoghue v. Stevenson and Hedley Byrne v. Heller, another landmark decision in negligence was cited to Leonard, J. - Home Office v. Dorset Yacht Co.(7) 26. Despite the addition of the Dorset Yacht case, Leonard, J. was no more minded to interfere with the law as laid down by the House of Lords in London Joint Stock Sank v. Macmillan than the New Zealand Court of Appeal had been. 27. Bearing in mind the weight of authority supporting the learned judge in the court below, whoever represented L.C.H. Bank before the Court of Appeal obviously had an uphill struggle on his hands. However, it was not a particularly heavy or complex case to have to argue. On a comparatively narrow negligence issue, counsel for L.C.H. Bank had to persuade the Court of Appeal that this was not a clear and obvious case for striking out. 28. What calibre of counsel was called for to ensure the effective carrying out of this task? 29. Mr. Li for L.C.H. Bank does not dispute that there are at the Hong Kong Bar Leaders equal to the carrying oat of that task. I would go further and say that nearly all, if not all the Hong Kong Leaders would have been fully competent to give effective representation to L.C.H. Bank on that particular appeal. 30. As explained to me, there was nothing novel in the argument presented ￡o the Court of Appeal. Mr. Rokison followed the same lines of argument which had been pioneered in the National Bank of New Zealand Ltd. case and the Asien Pazifik Merchant Finance Ltd. case. 31. Certainly, as a specialist in commercial law Mr. Rokison was well qualified to present the appeal. However, highly specialised knowledge of commercial law was not really necessary for this particular appeal. Any competent Common Law Leader need not have felt he was straying out of his depth here, for the problem was essentially one of how far the law of negligence extends. 32. That there are Hong Kong Leaders quite capable of effectively agruing the points raised before the Court of Appeal is vouchsafed by the fact that in the Asien Pazifik Merchant Finance Ltd. case a Hong Kong Leader fore shadowed the arguments that I understand Mr. Rokison was content to use before the Court of Appeal. 33. In the very recent case of Lam Yin Fei etc. v. Hang Lung Bank Ltd.(8), there is not the slighest indication that Hong Kong Leaders have found any difficulty in effectively representing their clients on what is essentially the same issue as arose in the present case. 34. A11 of the above leads me to the conclusion that counsel sharing the essential characteristic of the hypothetical counsel capable of effective representation in this particular case are available in the Hong Kong at the local Bar. 35. Judging from the attractive and lucid way in which both Hong Kong counsel before me explained the issue which had been before the Court of Appeal, I have every confidence that either of them, on his own, could effectively have conducted L.C.H. Bank's case before the Court of Appeal, but I will, nonetheless, presume that this hypothetical effective counsel which I have found to exist in Hong Kong is a Leader. 36. At this point, it becomes necessary to enquire what this hypothetical Hong Kong Leader would be content to accept by way of fees for his representation. It will be recalled that the fee on Mr. Rokison's brief in September 1980 was $60,000, and, in addition, there were the three items of travelling time, air fare and hotel accommodation totalling $43,920. 37. Guidance on what this hypothetical Hong Kong Leader might have been contented to accept is furnished by what actually happened at first instance on the Summons to Strike Out. When that Summons was first before the Court, Mr. Oswald Cheung, Q.C. held the brief for L.C.H. Bank. That was in November 1979. His fee on brief was $30,000, plus refreshers of $6,000 per day. Mr. Oswald Cheung conforms admirably with the hypothetical Leader I have been speaking about. On the other side, the Leaders were Mr. John Swaine and Mr. Charles Ching. Both of them hold their own with this hypothetical Leader. My information is that the fees on their briefs were lower than Mr. Oswald Cheung's. I have not been told what their refreshers were. 38. My conclusion is that in this case the hypothetical Hong Kong Leader would have been more than content to accept the $60,000 Mr. Rokison got on his brief. However, there would have been no need to pay the Hong Kong Leader anything for travelling time, air fares or accommodation. 39. To my mind, $60,000 was well up at the top end of or even beyond the range of what the hypothetical Hong Kong Leader would have wanted for his brief fee then. Tai Hing Cotton has not cavilled at paying that sum as the brief fee for its winning opponent's London counsel. I cannot see any conceivable basis on which in this case it could be asked to pay anything in respect of the disputed items, for those disputed items are well outside the range of what it would cost for the hypothetical counsel. 40. This was meant to be a test case to find out whether a successful party in the Hong Kong courts can include in his taxed party and party costs the disputed items of expenditure for bringing a Leader from England. All I can say is that in the particular circumstances of the case before me he cannot. However, had the circumstances been appropriate, I would have been perfectly willing to allow such items of expenditure. If, for example, the case were of a type where no counsel capable of effective representation was available from the Hong Kong Bar, I would have allowed the disputed items. Moreover, if it turned out in a particular case that the combined costs of brief fee, and expenses of travelling time, air fares and accommodation were about the same for London counsel as for the hypothetical Hong Kong counsel's brief fee alone, then I would regard it as proper to allow London counsel's expenses. On the view I take, it is artificial to consider overseas counsel's brief fee in isolation from the other items of expenditure involved in getting him here. The court should look at the global figure of overseas counsel's brief fee and other expenses for the purpose of comparing the price of overseas counsel with the hypothetical counsel. 41. For the reasons set out above, the appeal from the learned Master's taxation is dismissed.
(1) [1965] I W.L.R. 112 (2) [1918] A.C. 777 (3) [1975] 2 N. Z.L.R. 7 (4) [1932] A. C. 562 (5) [1964] A.C. 465 (6) [1978] H.C.A. 4403 (7) [1970] A.C. 1004 (8) H.C.A. 3037 of 1980 Representation: Mr. Robert Tang (Therese Chow & Co.) for plaintiff Mr. Andrew Li (Deacons) for 1st defendant/appellant |
Other judgments that cite this case