Coutinho, Caro & Co v. Shiu Wing Co Ltd

IN THE SUPREME COURT OF HONG KONG

ORIGINAL JURISDICTION

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Coram: Mr. Registrar Mayo in Chambers.

Date of Judgment: 17th October, 1973.

Mr. E.M.I. Packwood of Messrs. Deacons, Solicitors for the Plaintiffs.

Mr. M.H. Jackson-Lipkin instructed by Messrs. Mak & Poon, Solicitors for the Defendant.

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REVIEW OF TAXATION

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1. I originally taxed the Plaintiffs' bill of costs on a party and party basis on the 13th July, 1973, pursuant to the Judgment which was entered by Mr. Justice Li on the 16th March, 1973. On the 26th July, 1973, the Plaintiffs lodged written objections to my taxation and I now propose to reduce to writing my decision on the Review which was heard on the 15th October, 1973. For the sake of clarity, I propose dealing with each of the objections as they were argued before me as this method seems to be the most convenient.

2. Objections 1 and 2 which relate to items 78 and 79 of the bill.

Item 78 reads as follows:-

"Attending Conference with Counsel discussing Summons for Directions and Interrogatories (engaged 45 mins.) (114)"

$75.00

Item 79 reads as follows:-

"Paid Counsel's fee for conference, settling Summons for Directions and Interrogatories".

$500.00

In his submission to me Mr. Packwood did not really provide me with any material over and above the reasons for the objections which were set out in the objections I have referred to. He did, however, emphasize that no provision had been made in the bill for advice on evidence and that being the case that I should give sympathetic consideration to these two items. In reply Mr. Jackson-Lipkin referred me to items 69 to 73 on the bill which included items for instructions to Counsel to draft Interrogatories and Counsel's fee for so doing. Mr. Jackson-Lipkin argued that it was excessive on a party and party taxation to claim an additional amount for Counsel to settle Interrogatories when advice on Interrogatories had already been allowed. He also argued that it was unreasonable on a party and party taxation for Counsel to settle a Summons for Directions. Having given this matter further consideration, I am satisfied that I was correct on the taxation in disallowing items 78 and 79 in toto. It is essential for a Taxing Master to have regard to the items as claimed. The fact that no fees were claimed in respect of Counsel's advice on evidence seems to me to be irrelevant. If such an item had been claimed, it would, of course, have received consideration in the normal way. It was not claimed and that seems to me to be the end of the matter. Quite clearly, a solicitor must bear a large part of the burden in preparing a case for trial and unless exceptional circumstances can be shown to exist, I would not normally allow a settling fee to be allowed for Counsel settling a Summons for Directions. Although a Summons for Directions is an important procedural step in litigation, it is usually a matter which is dealt with by solicitors exclusively. As Mr. Jackson-Lipkin has pointed out, I did at items 69 to 73 allow items in respect of advice on Interrogatories and I am satisfied that it would be unreasonable on a party and party taxation to allow for such advice and also to allow for a conference on the Interrogatories.

3. Objections 3 and 4 being items 184, 188, 194, 198, 200, 204, 208, 213, 262, 264, 266, 271, 273, 275, 279, 281, 285, 289, 291, 293, 296, 300, 302, 304, 306, 308, 310, 312, 316, 318, 320, 325. These items relate to Counsel's brief fee and refreshers. The brief fee which was claimed was $10,000,00 and the refreshers were for $2,500.00. I disallowed $4,000.00 on the brief and $1,000.00 on each of the refreshers. Mr. Packwood argued that I should take cognizance of the fact that leading Counsel and junior Counsel were briefed by the Defendant and that Mr. Swaine had himself conducted the case for the Plaintiffs. Mr. Packwood invited me to consider Counsel's fees on a more generous basis for this reason. I doubt whether I should attach much weight to this. As I understand the position, the factors which I must weigh when considering discretionary items in a bill are laid out in Part II of the First Schedule of Order 62 of the Rules of the Supreme Court. Sub-paragraph (2) of paragraph 1 of Part II sets out the matters which the Taxing Master shall have regard to. There is no reference in this sub-paragraph (2) to the legal representation which has been engaged by the other party to the proceedings. The sub-paragraph which comes nearest to this is sub-paragraph 2(b) of paragraph 1. In sub-paragraph 2(b) the Taxing Master is required to have regard to "the skill, specialised knowledge and responsibility required of, and the time and labour expended by, the solicitor or counsel." I spent a considerable amount of time in perusing all of the documentation which was available to me concerning this case. I am satisfied that the case was not without its complexities and difficulties and it would have required a fair degree of skill on the part of Counsel to adequately present all of the relevant material. In addition to this, the amount of money involved in the case was fairly substantial. If Queen's Counsel had been instructed, I would have had no hesitation in allowing fees for both a leading Counsel and a junior. The fact, however, remains that no leading Counsel was briefed. I am satisfied that it is necessary for me to have regard to conditions which prevail in Hong Kong at the present time. Mr. Swaine has a high reputation as a barrister and it might even be said that he is regarded in the community as being a fashionable barrister. The question, however, which has to be considered by the Taxing Master is whether a litigant is entitled to recover Counsel's fees on a party and party taxation where he has seen fit to engage the services of a fashionable barrister. At one extreme it could be said that if a barrister has been called to the Bar he is qualified to appear before the Courts and handle cases which are given to him. In any event, other than pupillage requirements, no limitations are placed upon the barrister restraining him from practising. I would not for a moment suggest that it would be realistic to tax even a party and party bill on the basis that every case could be adequately presented by the most junior barrister. It does, however, appear that a degree of moderation should prevail. As I have said, the present case was not an entirely simple or straightforward case. In my view, a solicitor would be failing in his obligations if he did not take steps to brief a barrister of some seniority to conduct the case. I doubt, however whether it is justifiable for the solicitor to brief perhaps one of the most fashionable barristers to present this case. There would undoubtedly be a number of barristers who could have conducted a case of this nature available whose fees would be less than those asked by Mr. Swaine. In fact, on further considering the brief fee and the refreshers, I think that I have allowed a sufficient amount on these items. In some cases a Queen's Counsel will only ask for a brief fee of $5,000.00 or less and often a Queen's Counsel's refresher will not amount to more than $1,500.00. Having regard to all the circumstances, I am satisfied that the amounts which I allowed on the taxation for these items were fair and reasonable and accordingly I do not propose altering these amounts.

4. Objections 5,6. 7 and 8 being items 334, 335, 336 and 337. These items which are disbursement items relate to expenses claimed in respect of three of the Plaintiffs' witnesses, Messrs. Hunziker, Arndt and Hummel, and for the Plaintiffs' agent, Mr. Voremberg. I must say immediately that the manner in which supporting vouchers were produced to me at the taxation was less than satisfactory. I was produced a statement of account from Messrs. Controll-Co. M.B.H., a Hamburg company, which engaged the services of Mr. Hunziker, and various schedules which claimed amounts due to the other witnesses. The amounts were claimed in Deutch marks and a considerable amount of time was taken up on the taxation in converting these amounts to Hong Kong dollars and attempting to ascertain what amounts claims related to and the manner in which the amounts were formulated. I propose dealing with each of the witnesses separately.

5. Mr. Hunziker's Expenses. These were claimed at $63,784.31. Mr. Hunziker is a surveyor and gave evidence as an expert witness. He gave evidence from the 8th to the 11th of December and from the 14th February to the 21st February. So far as I can discern from the accounts which were submitted, Mr. Hunziker's expenses are claimed for his attendance in Hong Kong from the 1st December to the 17th December, 1972, and from the 10th February to the 6th March, 1973. In addition to this, two return air flights from Europe are included in the claim. The first point which has to be considered is the amount of time which should properly be allowed for Mr. Hunziker's attendance in Hong Kong. The hearing of the case was unfortunately protracted as a result of the necessity of the proceedings being adjourned in December for several months as it became evident during the trial that a large volume of the Plaintiffs' documents had not been discovered. While it is true that there may have been faults or deficiencies on the Defendant's part, I am satisfied that the main reason for the adjournment was the unsatisfactory preparation of the Plaintiffs' case. Quite possibly this was not the fault of the Plaintiffs' Solicitors and complications may have arisen due to the fact that the Plaintiffs are not resident within the jurisdiction. The fact remains, however, that there was a breakdown in communications and it would be quite unjust to saddle the Defendant with the costs and expenses which were thrown away as a result of the adjournment. When the proceedings were adjourned, the question of costs was reserved and there is no specific direction in the Judgment I have referred to as to the manner in which these costs should be dealt with. It therefore appears that it is necessary for me as Taxing Master to scrutinise these expenses myself and make whatever determination in respect there of which seems most appropriate. In any event, I am only prepared to allow one return flight from Europe and the cost of such a flight claimed in the bill is HK$6,962.00. As I have said, I am not prepared to penalize the Defendant with the consequences for the adjournment. This being the case, it is necessary for me to work out in my own mind how long it would have been necessary for Mr. Hunziker to remain in Hong Kong if the case had been properly prepared and no adjournment had been necessary. He would, of course, be entitled to remain in the Colony Juring the duration of the periods when he gave evidence. Also I consider that it is reasonable that several days should be added to this time to enable Mr. Hunziker to confer with the instructing solicitors on the evidence he was going to give. In addition to this, I also allowed a further period of time to enable Mr. Hunziker to give technical advice to the Plaintiffs' legal advisers particularly during the time when a Mr. MeKenzie was giving evidence. All in all, I originally allowed 17 days for Mr. Hunziker's attendance in Hong Kong. I have not heard any submission from Mr. Packwood on the Review which persuades me that I was wrong in the amount of time I allowed for this witness. Mr. Packwood simply reiterated the statement contained in the objections which were lodged to the effect that the whole of the 41 days when Mr. Hunziker was in the Colony should be allowed. He did not attempt to analyse the position or justify any period of time over and above the period of 17 days which I allowed and which I consider to be a generous allowance. Mr. Packwood did, however, refer me to the passage which appears on page A1 52 in the Fourth Edition of Butterworths Costs which refers to the situation which arises where witnesses are improperly detained in Court. With respect, I do not think that the situation which is outlined in that paragraph has any relevant application to the circumstances in this case. Having decided the period of time which is proper for this witness, it is now necessary to consider the allowances which should be payable to him. I am satisfied that expenses should be allowed for Mr. Hunziker being accommodated in a hotel. Mr. Packwood has submitted to me that it was appropriate and proper that Mr. Hunziker should have stayed at the Hong Kong Hilton Hotel. It appeared from the vouchers submitted in respect of some of the other witnesses' expenses that the cost of accommodating a guest at the Hong Kong Hilton Hotel is $138.00 for a single room. It is a well known fact that the Hong Kong Hilton Hotel is an American hotel forming part of a chain of international hotels which are prestige hotels. I do not see how accommodation in such a hotel can possibly be justified on a party and party bill. I have caused some enquiries to be made as to the cost of a single room in a number of respectable second class hotels. It is quite clear from these enquiries that it would be a simple matter to accommodate a guest in one of these hotels at less than $100.00 per day for board only. I am therefore satisfied that the allowance I made on the taxation of $100.00 per day was fair. As I have allowed 17 days, the total amount I have allowed for hotels is $1,700.00. If anything, I may have been too generous in this allowance. After considerable difficulty I managed to establish from the vouchers submitted to me that an allowance of DM 600 per day was allowed to Mr. Hunziker by Controll-Co. M.B.H. I had some difficulty in reconstructing the notes which I made at the taxation as many of the calculations were effected on an electronic calculator, and accordingly there was no note as to how the figures were made up. I note that I allowed the sum of HK$15,708.00 for allowances in respect of Mr. Hunziker. I am satisfied that this allowance included both a subsistence allowance and an allowance to be payable to him as salary as an expert witness. It would appear that I have accepted the claim at DM 600 per day and have multiplied this factor by 17 and converted it to Hong Kong dollars. On considering this-aspect of the matter, I also took into account the fact that on the voucher which I marked as Exhibit B which was produced to me there is a claim for DM 9,529.74 in respect of a survey report of Messrs. Controll-Co. which was apparently undertaken by Mr. Hunziker. In estimating the amount of professional fees which should be payable to Mr. Hunziker, it is obviously necessary for me to take into consideration the Moneys which have been payable in respect of the surveyor's report which was prepared by him. At the taxation I attempted to determine a fair and reasonable amount which should be payable for this surveyor's report. I must admit that it is not a simple task for a Taxing Master to attempt to determine how much should be payable for such a report. Unfortunately, I do not possess any specialist knowledge in the fields in question and it is difficult for me to determine how much time and effort was expended in the preparation of the report. It was my opinion that the amount which was being claimed could not be justified. I did not receive much assistance from either Mr. Packwood or Mr. Jackson-Lipkin in ascertaining how much should be allowed for this report, but I did not think that it could have taken more than 50 hours of Mr. Hunziker's time to prepare the report including all preparatory work which may have been required. I was not therefore prepared to allow more than HK$10,000.00 for this report. I am satisfied that my assessment of the position was correct. In passing, I would observe that the claim for this report has been duplicated and has been included at item 342 on the bill. Item 342 is one of the items where an objection has been lodged by the Plaintiffs and I find it more convenient to deal with this item here rather than dealing with it at the end of the Review. As I have said, I propose allowing this amount at HK$10,000.00 and as I have allowed it under Mr. Hunziker's expenses, I will totally disallow it at item 342. A further observation I would make is that I do not think that it is proper for me to allow any amounts which relate to Mr. Hunziker attending upon his principals in Europe. The total of the figures I allowed on taxation in respect of Mr. Hunziker's expenses was HK$34,370.00. I tond to think on further reflection that I have been unduly generous in the allowances I have made for these expenses. However, at the Review Mr. Jackson-Lipkin made it clear that he did not wish to advance any arguments in favour of further reductions being made on the amounts which are being claimed under the bill and this being made on the amounts which are being claimed under the bill and this being the case, I do not propose interfering with the amounts I allowed on the taxation.

6. Mr. Arndt's expenses. These were claimed at $19,055.52. I propose adopting a similar approach towards Mr. Arndt's expenses as to that I have outlined for Mr. Hunziker. I hold that only one flight can be allowed for Mr. Arndt and that only 17 days can be allowed for him. I also allowed hotel expenses for him at $100.00 per day. I note in the vouchers that an amount of DM 53 per day for subsistence was claimed for this witness who is not an expert witness. This figure converts to HK$81.00 per day, and I allowed this figure as claimed. If this figure is multiplied by 17, the total subsistence expenses for Mr. Arndt amount to HK$1,377.00. I allowed one return air fare from Europe for Mr. Arndt at a cost of $6,962.00 which bring the total expenses for this witness to $10,039.00. I do not see any reason to justify me in varying the amount I allowed for this witness.

7. Mr. Hummel's expenses. These were claimed at $12,063.46. The only point which arises concerning Mr. Hummel's expenses is the amount of time allowed for this witness. I hold that 9 days was a sufficient time for this witness and again I see no reason for departing from the decision I made on the taxation. As regards the manner in which these amounts were made up, I would adhere to the principles I have set out above. I therefore do not propose making any alteration to the amount I allowed on the taxation.

8. Mr. Voremberg's expenses. Mr. Voremberg is apparently the Far East representative or agent of the Plaintiffs. He did not give evidence during the case and, as I understand the position, his role in the litigation was simply to give instructions to the Plaintiffs' solicitors. A whole bundle of vouchers were made available to me in support of a claim which was made in the bill for expenses incurred by Mr. Voremberg amounting to $44,867.05. This voucher vouched a multitude of expenses including accommodation at the Hong Kong Club, bar bills, air passages to and from Kuala Lumpur and Singapore and many other incidental expenses. I regard a large part of this claim as being impertinent. I refer particularly to the substantial liquor accounts. The only conclusion which can be drawn from this claim is that the Defendant is being asked to indemnify the Plaintiffs for all losses which Mr. Voremberg claims to have incurred as a result of his assisting the Plaintiffs in the litigation. I have had the greatest difficulty in understanding how any claim for these expenses could possibly be justified. I do not see what contribution Mr. Voremberg made to these proceedings. Nor do I understand why it was not possible for Messrs. Deacons, the Plaintiffs' Solicitors, to obtain their instructions from the Plaintiffs direct. Mr. Voremberg does not appear to have any specialist qualifications and I do not think that he could offer any material contribution to the dialogue between the Plaintiffs and their Solicitors. I am satisfied that it would be quite inequitable to allow Mr. Voremberg's expenses on this bill and it is my opinion that I was correct on the taxation in disallowing the whole of the claim which was made for Mr. Voremberg's expenses. I am not aware of any precedent for such an amount to be allowed in a bill of costs.

9. Objection 9 - Item 342. I have already commented on this item when dealing with Mr. Hunziker's expenses. For the reasons I have given above, I propose disallowing this item in toto as it is duplicated in the expenses claimed in respect of Mr. Hunziker.

10. It will be noted that I have not allowed any additional moneys in respect of the deductions I made on the taxation. This being the case, I propose making an Order that the costs of this Review shall be to the Defendant. I do not, however, prepose making a certificate for Counsel as it is not customary for Counsel to appear on a taxation.

Dated the 17th day of October, 1973.