Glendon Rowell v. Pacific International Insurance Co. Ltd.

HCCT000002/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDINGS NO. 2 OF 200

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Coram: Master H.C. Wong in Chambers

Date of Hearing: 27 April 2001 & 19 July 2001

Date of Reasons for Decision: 29 August 2001

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RULING ON PRELIMINARY ISSUE OF REVIEW OF TAXATION

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1.The defendant (paying party) applies for a review from a full taxation hearing under Order 62 rule 33 of the Rules of High Court Cap. 4. In accordance with rule 33 (2), on 13 March 2001, the defendant filed a list of 38 objections of the 88 originally objected items taxed at the taxation held on 15 September, 12 October, 14 December 2000 and 27 February 2001. In the objections filed for review, the nature and grounds of the objection in each case are largely on quantum. In compliance with O.62 R.33 (4), the plaintiff (receiving party) delivered the answer to the objections in writing.

2.As the reasons for objections filed for the review are on the ground of excessiveness of the item in each case, I invited the parties to address me on the jurisdiction in the procedure of review on taxation of costs by the taxing master of the High Court. I am grateful to solicitors for the plaintiff and the defendant for making their submissions in writing.

3.After considering O.62, rules 33 and 34 RHC and the authorities referred to by the parties, I have come to the following conclusions.

4.O.62, r. 33 RHC provides that:

5.Under O.62, r. 33 (2) and the authority of Harrison v. Harrison and Others [1955] Ch. 260, [1955] 1 All ER 185, application for review of taxation may be made before the signing of the taxing master's certificate dealing finally with that item. In this matter, an application for review was lodged within time and leave and directions were given on 27 April 2001.

6.O.62, r. 34 (2) provides:

"On review any decision in respect of any item, a taxing master may receive further evidence and may exercise all the powers which he might exercise on an original taxation in respect of that item, including the power to award costs..."

7.In the case of Harrison v. Harrison and Others [1955] 1 All ER 185, Jenkins L.J. referred to the House of Lords case of Chapman v. Chapman [1954] 2 All ER 798 [1954] A.C.429, and held on p. 192 G-H of the report:

"When a judge has pronounced judgment he retains control over the case until the order giving effect to his judgment is formally completed. This control must be used judicially and not capriciously."

8.In the Harrison case, an application was made to the Chancery Division of the High Court for approval of a scheme varying the trusts of a settlement on behalf of infants and unborn and unascertained persons. A judge in chambers made an order approving the scheme following a decision of the Court of Appeal in a similar case. Before the order was perfected, the House of Lords reversed the decision of the Court of Appeal and held that the court had no jurisdiction to make an order sanctioning variations in the trusts in such cases. The Judge thereupon recalled his order, adjourned the case into court for further argument and there dismissed the summons. On appeal, the Court of Appeal held that the judge was entitled so to recall the order on his own initiative, whether the order was originally made in chambers or in open court.

9.Under O.62, rules 23 and 34, the taxing master has the jurisdiction to review his decision upon application by the parties under the rules set out therein. Furthermore, on review, the taxing master has wide discretion, he may consider further evidence and may exercise all the powers which he may exercise on an original taxation in that item, and may award costs of and incidental to the proceedings before him.

10.The U.K. Order 62, rules 33 & 34 have been amended by legislation in 1999, while the Hong Kong rules remained unchanged and no rule 33 (6)-(7) have been added to the Hong Kong O.62 r.33. Consequently, the jurisdiction and procedure of review of taxation of costs in Hong Kong under O.62, rules 33 & 34 differs from the present U.K. Order 62 rules 33 & 34. Though rule 33(1)-(4) are similar to the U.K. rule 33 (1)-(4), the U.K. rule 33 (5) is now completely different from the Hong Kong rule 33(5). The U.K. rule 33(5) provides that:

The review by the taxing master from a decision from the taxing officer's decision in the U.K. is by way of rehearing under Order 62, r.33(7). Rule 34 (2) of the U.K. Order 62 provides for the jurisdiction and procedure of review by the taxing master under rule 33, it states:

As the changes to O.62, rules 33 & 34 in U.K. have not been followed in Hong Kong, in Hong Kong, therefore, one has to apply the jurisdiction and procedure under the Hong Kong rules 33 & 34. It follows that literature published in the U.K. on the subject prior to the U.K. 1999 amendments are relevant. In this respect, I have been referred to the 3^rd edition (1998) of Cook on Costs page 291, on the procedure in the U.K. before the 1999 changes to rules 33 & 34. The then Direction 1.18 of the U.K. SCTO Practice Direction 2 of 1992 provided for the form the application for review should take, and it states:

Hong Kong has no similar Practice Direction as Direction 1.18, the pre-1999 rule 33. However, due to the similarity of the old U.K. and the Hong Kong rule 33 one may look to the pre-1999 U.K practice for an interpretation of rule 33 for purposes of reference.

11.Unlike the present U.K. procedure under O.62, r.34(2), fresh evidence may be produce on the review in Hong Kong. The Hong Kong Civil Practice 2001 page 874 Order 62/34/1 refers to the Court of Appeal case of Kung Wong Sau Hin v. C.P. Lin & Co. [1988] 2 HKLR 209 and states that:

12.Under the Hong Kong rule 33, unlike the amended U.K. rule 33(5), review of the taxing master's decision does not require leave which will only be granted where a point of principle of general importance is involved. For this reason, under the existing Hong Kong Order 62, rules 33 and 34, the review does not operate in the form of a rehearing as in the U.K. (see the U.K. Order 62, rule 33 (7)).

13.Provided the objecting party states clearly the nature and grounds of objection, giving the authorities relied on and evidence in support, the taxing master has a wide discretion in the matter on the hearing of the review. In the review of taxation in Smart International Industrial Limited v. Twinkle Step Investment Limited HCA 9883 of 1997 and CACV 201 of 1998 (unreported decision handed down on 15 August 2000) Master B. Kwan found that O. 62 r.33(3) have not been adhered to and ruled in favour of the plaintiff and struck out an application for review where the objections filed on review an exact replica of the objections filed in the original taxation.

14.Mr. Clement for the plaintiff submitted that since there was no fresh evidence raised by the objector in the grounds of objection, no purpose can be served in a de novo hearing of submissions and evidence already advanced. Further, that O. 62, r.33(3) requires the defendant to say why the decision is wrong. While Mr. Shaw submitted on behalf of the defendant that the procedure of review is to allow either party to nominate items taxed to be reconsidered by the taxing master in more detail. It is not known if further evidence will be raised at the hearing.

15.I reject the submission that a review of taxation is just another opportunity for the taxing master to consider the items in more detail. Parties are not entitled to ask for a review of any items taxed without good reasons in support. Rule 33(3) states clearly that the nature and grounds of objection in each item has to be specified on the application for review. Where there are no fresh evidence or argument relating to the item taxed and where the list of objection fails to specify the nature and grounds of objection, the objector would have failed to satisfy O.62, r.33. Under rule 33 and the authority of Harrison v. Harrison & ors. (see in paras.7 & 8 above), where rule 33 has been complied with, a review will take place. As the taxing master has a wide discretion on review in admitting fresh evidence and can exercise all the powers he has at the original taxation under rule 33 at the review, I am of the view that the objector may raise such fresh evidence that are relevant at the review and give such further reasons as to why he says the taxing master's decision was wrong. The review is not meant to be a re-examination of the same arguments at the original taxation hearing and the objections on review must be specific for the receiving party to answer them.

16.For the aforesaid reasons, I allow the review of taxation to resume and shall hear the objector's grounds of objection on review in each item in this matter.

Representation:

(1) Mr. Clement of Messrs. Massie & Clement for the Plaintiff.

(2) Mr. Shaw of Messrs. Deacons for the Defendant.