Law Tsoi and Another v. Lo To and Others

HCA001294/1975

(Consolidated with High Court Action No. 1294/75 pursuant to the Order of Mr. Registrar Barnett dated the 26th day of May, 1976.)

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Coram: Garcia, J. in Court

Date of Judgment: 19th April, 1980

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JUDGMENT

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1. These are applications for review under Order 62 rule 35 of the Rules of the Supreme Court of the Registrar's taxation of a Bill of Costs,

2. The Bill of Costs which runs to some 131 pages was taxed on 9th November, 1979 and subsequently the Registrar reviewed his decisions on objections lodged by both parties on 21st December, 1979. This review is concerned with the latter decisions made by the Registrar.

3. The total amount of the Bill after taxation is $1,295,480.98 and the items in dispute, although forming a very small proportion by number of the items set out in the bill, refer to some $900.000 of the bill.

4. The case out of which the Bill of Costs arose relates to a dispute over the assets of a family partnership consisting of many properties and limited companies. It is common ground that the case was of great complexity and it was originally set down for trial for a period of three months although it has been submitted that if it had gone on to its conclusion, the time taken would have been nearer six months. The actual trial commenced On 12th September, 1978 but the action was settled on 28th September, 1978, and part of the order of compromise was that the plaintiffs have their costs to be taxed, if not agreed.

5. The first item in dispute is that of: taking instructions to act" for which the amount drawn up in the bill was $80,000 divided up as follows:-

6. The Registrar taxed off this item by $25,000, that is, he allowed the Assistant Solicitor $150 per hour instead of the $250 claimed in the Bill. The plaintiff objected to this reduction on the ground that the Registrar had misdirected himself in not having borne in mind: -

7. On the other side, that is, the defendant, the amount allowed was objected to for the reason that the Registrar had satisfied himself that 300 hours were spent on the item without the production of any evidence to substantiate that this amount of time was spent by the plaintiff's solicitors or that such time as was spent was reasonable and necessary in the prosecution of the case.

8. The Registrar's answer to the plaintiff's objections is: -

"I allowed $150 per hour for an assistant solicitor and made a reduction accordingly to this item. Most of this work was done in 1974 when remuneration was lower than it is now. The complexity and nature of the case was reflected in the number of hours allowed."

9. To the defendant his answer is as follows: -

"After considering the submissions made, the lengthy period covered by the litigation and in particular the voluminous documents and exhibits produced to me I was satisfied that 300 hours was reasonable for this item."

10. As for the rates allowed by the Registrar in respect of this item, it has been submitted on behalf of the plaintiff that those rates are low for the type of cases for which such costs were charged but taking into account the Report on Costs. Increases in solicitors' offices, that is, from 1974 to 1979, drawn up by Messrs. Peat Marwick Mitchell & Co. for the Law Society of Hong Kong and dated 16th November, 1979, the rates which the Registrar arrived at are, in my opinion, reasonable and were not wrong in principle. The Registrar had an opportunity of ascertaining from the documents produced to him the amount of time spent on the work set out in Item 1 of the Bill, and I cannot say that he was wrong in coming to the conclusions he has reached. The complaint has been made that the rates allowed were far too low and the number of hours charged far too long. I do not think that these are bases upon which I should disturb his findings.

11. The next items which the Registrar considered and taxed off are Items 1553 and 1555. Subsidiary to these two items which refer to the employment of a third counsel by the plaintiff are Items 1673(c) and 1680(b). Objection was taken to these items having been disallowed by the Registrar in that the latter had failed to take into account the special circumstances of the case which required the proper employment of three counsel and that he had exercised his discretion improperly by refusing to allow three counsel.

12. The Registrar's answer to this objection is:-

"I allowed fees for two counsel but not a third counsel. It appeared to me that whilst this case was one of unusual bulk and complexity it was not so exceptional as to allow three counsel, The bulk and complexity was reflected more in the amount allowed for solicitors' fees."

13. The plaintiff submits that the criteria for the employment of three counsel in the case were present, namely that it was a special case, it was of considerable commercial importance, vital so far as the plaintiff was concerned because he had been deprived of all the assets of the partnership by his brother, the defendant, the value of the assets was estimated between $200,000,000 to $300,000,000 there was a vast number of documents involved, the trial had been set down for 3 months, and that the case involved an enormous amount of detail and a protracted examination of scores of transactions stretching over 14 years and examination of partnership accounts over some 40 years with attendant charges of conspiracy and bribery.

14. It was also submitted that on both sides three counsel were employed, both third counsel being Chinese, so that the latter would be able to advise on the bulk of documents which were in the Chinese language. The plaintiff has referred to the following paragraph at page A195 of Butterworths on Costs in support of his claim for the employment of three counsel:-

15. The Registrar agreed that the case was one of unusual bulk and complexity but considering the principles outlined was he wrong in exercising his discretion in disallowing a third counsel? The submission that because the defendant employed three counsel is not a criterion for a third counsel's employment by the plaintiff to be charged in the present Bill of Costs nor has it been demonstrated that his employment was essentially necessary to do justice to the case. I do not think that because the bulk of the documents were in Chinese, the employment of a third counsel to extract relevant details from such documents is in any way justified. It has also been rightly said that counsel are employed for their forensic rather than their linguistic ability and skill. I cannot say that the learned Registrar was wrong in exercising the discretion he did, the overall principle being that such employment must be essentially necessary to do justice to the case nor must it be forgotten that the case in Court lasted 16 days most of which were taken up in working out terms of compromise or settlement. I therefore affirm his decision on these two items and the subsidiary items which he has taxed off in relation on these two items and the subsidiary items which he has taxed off in relation to the employment of the three counsel.

16. The Item No. 1671 "Preparation for trail" is the largest item in the Bill, the amount claimed being $950,000. The learned Registrar taxed off the sum of $290,000, and objections have been levelled at him by to both parties. The plaintiff's objection is that by (i) reducing by 100 hours the number of hours for a partner (ii) allowing only $200 per hour for an assistant solicitor and (iii) allowing only $400 per hour for a partner, the learned Registrar did not taken into sufficient account the special circumstances of the case. The Registrar's reply to this was:-

"I considered the allowed amount adequate in the circumstances. As stated in the cross-objection herein the plaintiff was unable to prove this item in detail. In computing the hourly rate I had regard to the fact that this work commenced about 1974 and continued through subsequent years when remuneration was lower."

I have no doubt that in considering this particular item, the learned Registrar would have had constantly in mind the complexity of the case as the details of these are set out in the Bill which run to 12 closely typewritten pages. The amount of $950,000 is made up as follows:-

17. Assistant Solicitor 1,5000 hours

18. Partner 1.000 hours at

19. The learned Registrar taxed off this item by reducing the number of hours from 2,500 to 2,400 and reducing the hourly rate by $100 for the assistant solicitor and partner respectively. The total sum he arrived at is $660,000, the amount taxed off this item being $290,000. His notation on the Bill is "-50,000 (as to hours)" and "-$240,000 (as to rate)". It appears that he has allowed a total of 2,400 hours for both the assistant solicitor and partner and taxed off the sum of $100 from each of the said hourly rates, and in particular reducing the time spent by the partner to 900 hours. The defendant objects to the very large number of hours which has been claimed in the Bill in respect of this item and Mr. Taylor compares the number of hours which his firm's members spent on the case, that is, about 1,470 hours. As the employment of a third counsel by the defendant is no criterion for a similar expenditure by the plaintiff, so also there is no co-relation between the number of hours spent by the plaintiff's solicitors and that of the defendant's solicitors and this has been recognised by the learned Registrar. Referring again to the abovementioned Report on Costs Increases in solicitors' offices from 1974 to 1979 I cannot say that the hourly rate of $200 for an assistant solicitor and $400 for a solicitor partner for the period from 1974 to 1978 to be unreasonable even having regard to the special circumstances of this case. Here again I see no reason for disturbing the figure of $660,000 which the Registrar has allowed for this item.

20. The last two items which had been taxed off and to which objections were put by the plaintiff are Items 1673(a) - "Counsel's brief to Mr. Kidwell, Q.C. (inclusive of advice and refreshers) $150,000", and 1680(a) "Paid counsel's refreshers to Mr. Richard Mills-Owens $16,000." The amount originally taxed off Mr. Kidwell's brief and refreshers was $55,000 but it appears from the Bill and from the Registrar's answers to the objection regarding this item that he restored that sum, allowing $205,000 on this item. The defendant, however, submits that because the trial lasted only 8 days the brief fee and refreshers which were agreed with Mr. Kidwell on a global basis ought to be scaled down to $130,000. I do not see any merit in this submission since these fees had already been agreed with counsel on the basis that no matter how long the trial lasted, he would be paid those fees. Has the Registrar exercised his discretion wrongly or has he misdirected himself? I think not and he has a wide discretion as Taxing Master so far as such fees are concerned.

21. Objection has been taken by the plaintiff to the amount of $16,000 taxed off on Item 1680(a), i.e. Mr. Richard Mills-Owens' refreshers. Mr. Mills-Owens submits that the rule is that "the Taxing Master has a discretion in bringing into computation the whole or such part as he thought proper of the time spent by counsel in interviewing the judge at his invitation in his private room and of the time spent by counsel during the hours normally occupied by the trial in discussing a possible compromise or settlement of the action." He further submits that on those principles the Registrar had misdirected himself in reducing the amount charged for refreshers from $32,000 to $16,000. It is difficult to see how the Registrar arrived at the latter figure since it has no reference to the number of days between the start of the trial and the settlement of the action. I think the Registrar should review this item and this matter is remitted back to him to reconsider this item in the light of the principles set out in that passage.

22. The defendant objects to the allowance of $60,000 brief fee to Mr. Mills-Owens (Item 1673(b)) because it was excessive and that it was intended to include work done preparatory to the trial and such work had been duplicated in part by reason of the fact that $75,700 had already been allowed to Mr. Mills-Owens in respect of such preparatory work. The Registrar considered this item to be reasonable following arguments in respect of the brief fee paid to Mr. Kidwell. Mr. Taylor submits that this fee should be reduced by 30% since the fee was to take into account trial work. In considering what would be a reasonable fee on a party and party basis, the fee paid to leading counsel should be taken into account. I cannot say that the Registrar has exercised his discretion wrongly in respect of this claim and this item is allowed.

23. In general the Court will not lightly interfere with the Registrar's discretion as Taxing Master unless serious errors are committed and I cannot find, except for the item of Mr. Mills-Owens' refreshers, that he had not exercised his discretion properly.

Representation:

Mr. Ronny Tong (Denton, Hall & Burgin) for Applicant/Plaintiff.

Mr. A.R. Taylor of J.S.M. for Respondent/Defendant.