Ngan Wun Yeung v. The Lok Sin Tong Benevolent Society Kowloon and Another
Read the full judgment text of HCPI 536/1997 on BabelCite. This High Court CFI judgment was delivered on 12 November 1999.
1. This is a review of my decisions on the taxation of the Plaintiff's bill of costs concerning several items of counsel's fees.
Cited by 7 cases · Cites 1 case
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HCPI000536/1997 1997 No. PI - 536 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ____________
_____________ Coram: Master Poon in Chambers Date of hearing: 12 & 14 October 1999 Date of handing down of decision: 12 November 1999 _______________________________ Decision for Review of Taxation _______________________________ Introduction 1. This is a review of my decisions on the taxation of the Plaintiff's bill of costs concerning several items of counsel's fees. Brief Facts 2. The present action arose out of a traffic accident happened on 7th December 1990. The Plaintiff was then a student of a school operated by the 1st Defendant and situated at the corner of Lung Kong Road and Carpenter Road, Kowloon City. At about 12:40 p.m. on that day, he was run down by a vehicle driven by the 2nd Defendant on Carpenter Road outside the school premises and suffered personal injury. The 3rd Defendant was the owner of the vehicle. 3. In February 1994, the Plaintiff (suing by his father as the next friend) issued proceedings against the Defendants. The 1st Defendant was alleged to have been negligent in, inter alia, failing to properly supervise students outside the school premises after school. The matter was contested and on 23rd March 1998, proceeded to trial before Seagroatt J. On the 4th day of the trial, the parties reached a settlement. By consent, judgment was entered for the Plaintiff in the sum of HK$1.35 million with costs against all the 3 Defendants to be taxed on a common fund basis, if not agreed, and the Plaintiff's own costs to be taxed in accordance with the Legal Aid Regulations. Taxation 4. On 9th March 1999, the taxation of the Plaintiff's costs came before me. After hearing submissions, I taxed the bill. A summary of the counsel's fees claimed inter partes and allowed is as follows:
Application for Review 5. It is in connection with items 373, 383, 663, 666, 668 and 670 that Mr. Pirie, Counsel for the Plaintiff, now seeks to review my decisions. It should be noted that although the review is made in the name of the Plaintiff, it is Mr. Pirie who is dissatisfied with my decisions. In fact, I am told by Mr. Chan of the Legal Aid Department ("LAD") that the Plaintiff does not personally authorize this application and that LAD takes a neutral stance. Presumably, both the Plaintiff and LAD are not dissatisfied. In order to understand why this review can still be lodged in these circumstances, one has to turn to the Legal Aid Ordinance, Cap.91 ("the Ordinance") and the Legal Aid (Scale of Fees) Regulations ("the Regulations"). As it also has a bearing on the costs of the review, it is desirable to set out the statutory scheme in more details. 6. Section 19 of the Ordinance provides, inter alia, that a court may make an order of costs in favour of an aided person. The costs, though payable to the aided person by virtue of a court order, shall be paid to the Director of Legal Aid ("the Director") unless he directs otherwise: Section 19A(1)(a). Upon receipt of all moneys paid to him under Section 19A, the Director shall retain any sum paid by virtue of an order for costs made in the aided person's favour: Section 19B(1)(a)(i). The Director will then pay the solicitor and counsel such fees and costs as may be prescribed: Section 20. However, there is a limit to the extent of the Director's liability. For the purpose of this review, I will only set out the position on counsel's fees. 7. Under Regulation 4 of the Regulations, the fees payable by the Director to counsel acting for an aided person shall be such as may be allowed on taxation or, in default of taxation, as may be fixed by the Director, not exceeding such amount as in the opinion of the Director would have been allowed if there had been taxation. In short, fees payable by the Director to counsel acting for an aided person is determined either by a taxing master in taxation or, in the absence of taxation, by the Director. This applies to the aided client's own costs as well as to the inter partes costs payable to him by the other party to the proceedings. Accordingly, if counsel's fees are taxed at the inter partes taxation of the aided client's bill of costs, the Director is only liable to pay to counsel the taxed fees and nothing more. 8. Contrast this with a non-legal aid case. Fees payable to counsel acting for a party is a matter of agreement between them. Counsel is normally entitled to his fees in full irrespective of the outcome of taxation. The paying party has to pay the fees as allowed to the receiving party. Any difference between the fees claimed and allowed is to be borne by the receiving party himself. If dissatisfied, the receiving party may apply for a review under Order 62 rule 33, Rules of the High Court. Counsel will rarely take an interest in taxation or any subsequent review. For he will have his fees paid in full any way. 9. Naturally, there are cases where counsel acting for an aided person is dissatisfied with the amount of fees payable to him after taxation. The statue therefore provides for a route where counsel may seek to ventilate his grievance. This can be found in Regulation 12 of the Regulations which provides:
10. In the present case, while maintaining a neutral stance, the Director nevertheless gives his authority under Regulation 12 upon a personal undertaking by Mr. Pirie on the costs for the review. 11. Mr. Pirie submits, in his written submission and briefly in his oral submission, that counsel is entitled as of right once a legal aid certificate is issued to have his fees taxed. I must confess that I have reservations over this and fail to see its relevance. For present purposes, it is not necessary to address this submission any further. What is material here is that the Director has already given his approval for review. 12. I now turn to the substance of the review. Basis for taxation: Common fund 13. The inter partes taxation is on a common fund basis: see the costs order of Seagroatt J. This is the basis on which I taxed the bill. However, Mr. Pirie submits that I seemed to have acted on a party and party basis instead. In this connection, he refers to C Art Ltd. v. Ability Manufacturing Ltd. [1990] 1 HKC 407. There, Master Woolley was dealing with a taxation on a party and party basis. In the course of his judgment, the learned Master referred to the meaning of the party and party basis and applied it to the facts before him. There was no discussion on the common fund basis, let alone its difference with the party and party basis. I fail to see how it can assist Mr. Pirie in this respect. 14. The two bases of taxation are defined in Order 62 rule 28(2) and (4):
15. Their distinguishing features, together with those of other bases of taxation, are admirably summarized by Megarry V.C. in EMI Records Ltd. v. Cameron Wallace Ltd. & Another [1982] 2 All ER 982 at 983:
16. In Halsbury's Laws of England, Vol. 37, para.746 at p.576, the learned editors deal with the common fund basis as follows:
17. Gibbs v. Gibbs, supra, is cited in support of the last sentence. However, it must be read with caution. Firstly, in EMI Records Ltd. v. Cameron Wallace Ltd. & Another, Megarry V.C. made it clear (at 989) that where the taxation is on the common fund basis, the taxing master will include nothing unless he considers that it satisfies the requirement of 'a reasonable amount in respect of all costs reasonably incurred'; that the rules do not give the benefit of any doubt to the receiving party; and that nothing is included unless it satisfies the words of inclusion. An enhanced figure will be allowed only if it satisfies the reasonableness test. 18. Secondly, the effect of Gibbs v. Gibbs had been substantially watered-down since the subsequent case of Lyon v. Lyon [1952] 2 All ER 831 when the English Court of Appeal held that if the full value of the work done had been allowed on a party and party basis, a taxation on the common fund basis could not allow anything more. There, a wife (legally aided) was successful in her divorce petition against her husband. He was ordered to pay her costs of the suit on a party and party basis. The wife's own costs were to be taxed on a common fund basis. The taxing master, having concluded that the costs taxed on a party and party basis represented the full value of the work done, declined to allow the wife's solicitor any extra amount in respect of the same work on the common fund basis. Dismissing the appeal made in the name of the wife but in effect by her solicitor, the Court of Appeal took the view that Gibbs v. Gibbs did not go so far as to suggest that a larger allowance than the full value of the work done should be properly allowed even on a common fund basis. 19. After Lyon v. Lyon, the practical difference between taxation on the party and party basis and the common fund basis is said to be this:
See The Notes for Guidance on the Taxation of Civil Costs issued in July 1984 by the Lord Chancellor's Department in England, at Para. 12. The rules governing taxation in England had since been substantially amended. Hong Kong, however, has not followed suit. Accordingly, The Notes, though issued some 15 years ago, still carries significant weight here. 20. Mr. Pirie further submits that in taxing a bill on a common fund basis, I should adopt a two-stage process: (1) to decide what should have been allowed on a party and party basis, and (2) then to consider what items should be transferred to the common fund and then assess. 21. It is not clear if it is counsel's submission that in taxing the inter partes costs on a common fund basis, the court should first decide the amount allowable on a party and party basis and then top it up with an extra allowance. He does not elaborate on this point. If this is what he meant, it is clearly wrong. And I did not tax the present bill in this manner. If what he meant is the general approach in legal aid taxation, I wish to mention this. A bill in such a taxation has four columns itemizing, on the one part, theinter partes profit costs and disbursements and, on the other, the profit costs and disbursements incurred on behalf of the aided person. The latter part is commonly described as "Common Fund", presumably after the basis for taxation of such costs under Section 20A of the Ordinance. However, it should be borne in mind that it is in fact the own costs of the aided person. In taxing such a four-column bill, the court will:
There is no specific order for (1) and (2). One may proceed before another and they may even take place at the same time during the hearing. The taxing master will decide which is the best way to proceed. 22. When taxing inter partes costs on a common fund basis, as is in the present case, the court will have regard to its definition in Order 62 rule 28(4) and the relevant principles which I have sought to summarize above. Reasonableness is always the starting point: there shall be allowed a reasonable amount in respect of all costs reasonably incurred. The basic questions are:
In searching for an answer, the court shall have regard to all the relevant circumstances of the case, and in particular to:
See Para. 1(2) of Part II, 1st Schedule, Order 62. 23. Further, in connection with counsel's fees, the court will bear in mind Para. 2 in the same Part II, in particular to sub-paragraph (5) which provides: "Every fee paid to counsel shall be allowed in full on taxation, unless the taxing master is satisfied that the same is excessive and unreasonable, in which event the taxing master shall exercise his discretion having regard to all the relevant circumstances and in particular to the matters set out in paragraph 1(2)." 24. Lastly, the benefit of doubt as to whether costs have been reasonably incurred or are unreasonable in amount are accorded to the paying party: EMI Records Ltd. v. Cameron Wallace Ltd. & Another, supra, at 989. 25. This is how I taxed the bill and will deal with this review. Infant's interest 26. The Plaintiff is an infant. Mr. Pirie submits that counsel is entitled to more generous treatment in the case of an infant on legal aid as the responsibilities are more onerous. He cites Francis v. Francis & Dickerson [1955] 3 All ER 836 as an example. It was a divorce case in which the husband presented the petition on the ground of adultery. The wife was legally aided. She suspected the husband had also committed adultery. Solicitors acting for her caused inquiries to be made. Counsel's advice was sought and he concluded that there was as yet insufficient material to justify an amendment to the pleading. In the subsequent taxation of the wife's bill, the registrar disallowed certain costs and disbursements in connection with the inquiries and counsel advice thereon. On review before Sachs J., the issues concerned the duty of a solicitor acting for an aided person and the proper principles of taxation to be applied. I fail to see how this case supports Mr. Pirie's proposition. 27. I do not accept as a general proposition that an infant plaintiff in a legal aid case will necessarily make counsel's duty more onerous. Mr. Pirie does not explain why it is so in the present case. Here, the action was settled. In order to ensure the adequacy of settlement, Seagroatt J. had already ordered a common fund taxation. (See also Tai Chau Yung & Another (intended administratrices of the estate of Kiung Kar Woo, the deceased) v. Ng & Another [1999] 2 HKLRD 549 where Suffiad J. says that the practice of awarding costs on a common fund basis should be adopted with much more regularity in cases where a settlement is reached in favour of an infant or patient plaintiff on legal aid.) 28. Mr. Pirie says that in taxing the bill, I am or should be making an adjudication between counsel's rights and the Plaintiff's. This may be so if I am reviewing the Plaintiff's own costs or considering an application to transfer part of the counsel's fees under review from the inter partes column to the Common Fund column or vice versa. For, like other similar cases, the Plaintiff's own costs will be taken out from the damages recovered. But I am not. The Plaintiff's interest will not be affected by the outcome of the review at all. I therefore do not consider this submission valid. 29. I now turn to the individual items under review in the sequence they appear in the bill. Particular Items (1) Item 373: Letter to police dated 18th April 1997 ("the Letter") 30. This is a letter issued in the name of the assigned solicitors to an Inspector Ho of the Mong Kok Police Station, asking, inter alia, if the police had provided education and training lectures to schools regarding road safety. Mr. Pirie explains that he drafted it because he had a personal friend in the police station, from whom he might be able to obtain information which the solicitors had failed to get. However, he concedes that at the end nothing useful was obtained from the police. 31. The Letter could have been written by any reasonably competent solicitor. As I understand him, Mr. Pirie does not argue otherwise. He seeks to justify his work on the ground that in legal cases, he often found it easier for him to get on with the job because of the time required and inconvenience incurred to confirm instruction from solicitor and LAD. The same can be said of the Letter. He had been instructed to draft it and should be entitled to a fee commensurable to that of a senior solicitor. 32. I do not wish to comment on counsel's general practice in dealing with legal cases. Insofar as the Letter is concerned, I do not accept that it was reasonable for him to draft it. By a simple telephone call, Mr. Pirie could have easily given all the particulars of his friend to the solicitors. They would then follow up the matter with him, including writing the Letter. I have considered the contents of the Letter. I do not think any weight can be usefully added to it by counsel drafting it. In the end, nothing useful was obtained. On the clear authority of Cheng Ma Choi v. Tai Fong Textile Finishing Work Ltd. PI No.563 of 1995 (Seagroatt J., unreported), counsel's fees for drafting the Letter are not allowed: see P.7 of the Judgment. (2) Item 383: Viewing video 33. It was Mr. Pirie's advice to video-taped how other schools marshalled students on pavements outside the school premises after school. It was thought that if other schools had good systems, such tapes might help to establish liability on the 1st Defendant. A Central Claims Service was instructed to take the video tapes on two schools. Eventually they produced a tape containing about 20 minutes edited footage. The maker of the tapes also prepared two reports on, inter alia, his observation when the tapes were taken. I have read the reports. They contain, inter alia, rather detailed observation on the road crossing arrangements adopted by the schools. 34. Mr. Pirie submits that he had to consider the video tapes because the tapes were fairly inconclusive. However, it was his own view in the Further Advice on Evidence dated 12th May 1997 ("the Further Advice") that the tapes "speak volumes about what some schools do to safeguard their children.". 35. In my view, counsel is not entitled to a separate charge for viewing the tapes. The maker's reports are indicative of the contents of the tapes. The tapes themselves are short. The time spent on viewing the tapes should not be considerable. Further, counsel viewed the tapes for the purpose of giving further advice. That he did when the Further Advice was rendered. The fees for such advice, claimed at $20,000 and allowed at $15,000 under item 386, should include the viewing of the tapes. (3) Item 663: Brief for Attending Trial 36. In assessing counsel's brief fee it is always relevant to take into account what work the fee, together with any refreshers, has to cover. The brief fee covers all the work done by way of preparation for representation at the trial and attendance on the first day of the trial: Loveday v. Renton (No.2) [1992] 3 All ER 184. 37. Mr. Pirie first submits that counsel is entitled to charge a fee within his usual range. In this connection, he refers me to his experience in dealing with personal injury cases and some of the fees he had charged and allowed on taxation. He also cites Simpsons Motor Sales (London) Ltd. v. Hendon Corporation (No.2) [1965] 1 WLR 112. Pennycuick J. stated at 118 that a proper measure for counsel's fees was to estimate what fee a hypothetical counsel, capable of conducting the particular case effectively but unable or unwilling to insist on the particular high fees sometimes demanded by counsel of pre-eminent reputation, would be content to take on the brief; but there was no precise standard of measurement, and the taxing master or the Judge must, using their knowledge and experience, determine what was the proper figure. I accept that the fees usually charged by counsel is relevant. But it is only one of the many factors that I have to take into account. 38. London Chatham & Dover Railway Company v. South Eastern Railway Company LT, 20 July 1989 is also cited. That case recognized the well known principle that in fixing the remuneration of counsel and the number of counsel employed, the amount of the money issue involved, and the commercial importance of the case should be properly taken into consideration. Again, these are only some of the factors a taxing master needs to consider. 39. Mr. Pirie further submits that in determining his brief, I should compare the fees charged by other counsel acting for the Defendants, one of whom is a senior counsel. He relies on Lord High Chancellor v. Wright & Another [1993] 4 All ER 74. There, Garland J. held that when determining defence counsel's fees in a criminal case in the Crown Court the fee paid to counsel for the prosecution is 'other relevant information' within the meaning of the Legal Aid in Criminal and Care Proceedings (Costs) Regulations 1989 to which regard may be had. That case is clearly distinguishable. First, it is a criminal case. Secondly, the court was concerned with the construction of a particular regulation. I would, with respect, prefer and adopt the approach approved by Pennycuick J. in Simpsons Motor Sales (London) Ltd. v. Hendon Corporation (No.2), supra, at 120:
Therefore, I decline Mr. Pirie's request to compare the fees paid to the Defendants' counsel with his own. 40. Mr. Ho for the Defendants submits that Mr. Pirie had been briefed to attend the Pre-trial review on 15th July 1997. It seems that Mr. Ho seeks to rely on Paras. 2(5) and 1(2)(g) of Part II, 1st Schedule, Order 62. (See P.8 above.) However, the Pre-trial review was actually attended by a solicitor. The hearing before Cheung J. on 9th January 1998 for which Mr. Pirie was briefed to appear relates to the 1st Defendant's application to strike out certain witness statements filed on behalf of the Plaintiff. 41. It is submitted that the present case was the first of its kind in Hong Kong in the sense that a school was sued for negligence when it failed to properly supervise students outside the school premises after school. It may well be so. But I do not subscribe to Mr. Pirie's submission that the present case was particularly difficult. Indeed, in the Further Advice, after referring to Barnes v. Hampshire C.C. [1969] 3 All ER 746, he concluded that on the 1st Defendant's liability, "it is straightforward negligence just to let the children go". On other issues, the present action did not differ much from other ordinary personal injury cases involving infant victims of road accidents. 42. In determining the quantum, I have borne in mind all the relevant circumstances. I am of the view that a fee of HK$100,000 is excessive and unreasonable and HK$80,000 is the reasonable figure. Having heard and considered submissions on review, I am not persuaded otherwise. 43. Items 666, 668 & 670: Refreshers 44. Arguments similar to those advanced in connection with the brief are made. Considerations are also similar. I will not repeat either of them here. 45. Mr. Pirie raises an additional point on the so-called usual practice of charging a refresher at 50% of the brief. He says he had only charged 40% on the basis of HK$100,000. I am not aware of the court approving the practice, if it ever exists, of fixing the refresher at a certain percentage of the brief. In taxation, the amount of a refresher fee is always in the discretion of the taxing master: see Para.2(4) of Part II, 1st Schedule, Order 62. 46. Having regard to all the relevant circumstances and the submissions on review, I maintain the view that HK$40,000 is unreasonable and excessive and HK$25,000 is the reasonable figure. Conclusion & Costs 47. For the above reasons, this application for review fails in its entirety and I dismiss it accordingly. 48. The final matter that I have to decide is the costs for the review. The Defendants will certainly have their costs. But who should be liable? Upon my invitation, the parties have already made their submissions. 49. Although the review is brought in the name of the Plaintiff, he does not authorize it. Nor does he have any interest in the outcome. In the circumstances, the Plaintiff should not be liable. The same can be said of the Director who maintains a neutral stance, although he has in fact given approval for making the application. The review is in substance brought by Mr. Pirie. But I do not think I have the power, under either the rules or inherent jurisdiction, to order costs against counsel personally. 50. As seen at P.4 above, the review is brought under Regulation 12 of the Regulations and Regulations 10 and 11 shall apply as if the assigned solicitors were the person dissatisfied. If the review is made by an aided person dissatisfied with the taxation under either Regulation 10 or 11 and fails, he has to bear the costs. Since the assigned solicitors are now treated as if they were the person dissatisfied, they should likewise bear the costs. In my view, it is a scenario clearly envisaged by the Regulations. I wish to make it clear that in ordering costs against the solicitors personally, I am not exercising my power under Order 62 rule 8 to sanction them for dereliction of duty. 51. Accordingly, there will be an order nisi that the costs of the review be paid by Messrs. Munro Claypole & Reeves to the Defendants, to be taxed if not agreed. The order will become absolute after an expiration of 14 days from the date of handing down of this judgment. 52. Because of his neutral stance, there will be no order for the Director's costs of the review. I am told that no costs have been incurred on behalf of the Plaintiff. Thus, there will be no order in this respect.
Representation: Mr N Pirie instructed by Munro Claypole & Reeves for the Plaintiff Mr H Ho (Law Costs Draftsman) instructed by Fairbairn Catley Low & Kong for the 1st Defendant, and instructed by Hoosenally & Neo for the 2nd and 3rd Defendants Mr E Chan of the Legal Aid Department for the Legal Aid Department |
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