Asm Assembly Automation Ltd and Another v. Chan Lo Kwan and Another

HCA 7622/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 7622 OF 1999

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BETWEEN

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Coram : Before Master Kwan in Chambers

Date of Review of Taxation : 18 April 2006

Date of Handing Down : 29 April 2006

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Review of Taxation

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1.This Review of Taxation raised the question about the extent to which the receiving party’s counsel’s fees can be allowed under an order for costs in these terms “Costs of and occasioned by this adjournment be to the 1^st and 2^nd Defendants with certificate for 2 Counsels and such to be taxed if not agreed and be paid forthwith”.  The costs order was made by the Judge at the start of a hearing of the defendant’s Summons when he allowed the plaintiff’s application for an adjournment.

2.I taxed as much of the Bill as possible, but adjourned to consider the effects of the phrase “Costs of and occasioned by this adjournment”. I eventually handed down a Decision.

3.In my written Decision dated 21 March 2006 I reminded the parties that I had not received the assistance to be expected, and had been put in a difficult position because no cases or authorities were cited in argument as to the meaning and effect of the phrase “costs of and occasioned by the adjournment”.

4.I was driven to conducting my own research, and to formulate my own “test”.  I framed that the test to decide whether an item can be regarded as “costs of and occasioned by the adjournment” in this way:

“Would this item of costs have been incurred by the receiving party irrespective of whether there was an adjournment?” If the answer is “Yes”, then the paying party should not be liable for that item of costs. But if the answer is “No”, then the paying party should be liable for it.”

5.Applying the test, I concluded that the receiving party’s counsel’s fees (items 45 & 46) were not “costs of and occasioned by the adjournment” and disallowed the same.  I stated that both senior and junior counsel would have attended the hearing on 28 January 2005 in any event, and those counsels’ fees would have been incurred irrespective of whether the Summons was adjourned.  (See paragraph 16 of the Decision dated 21 March 2006.)

6.The receiving party had no quarrel with, and accepted the test that I had formulated for phrase “costs of and occasioned by the adjournment”.  However, the receiving still sought to argue that counsel’s fees ought should be allowed within the terms of the costs order made by the Judge.

7.The receiving party brought this review only in relation to Counsel’s fees.

The argument of the receiving party

8.Put briefly, the argument of the receiving party is this.  It must be inherent in the Judge’s order for such costs to be allowed because the Judge made a point of certifying the matter to be fit for 2 counsels.  It would not be unfair to allow an amount in relation to counsel’s brief fees for attending on 28 January 2005 since the paying party’s objection only went to quantum.  The paying party had suggested that counsels’ fees be allowed on the basis of refreshers.  Therefore it was the understanding of both sides that the costs order provided for an amount to be allowed for counsels’ fees, the only issue was the appropriate sum to be allowed.    

9.The receiving party had confirmed at the review that he accepted the test formulated at paragraph 13 of the Decision dated 21 March 2006.  He merely objected to the result when the test was applied to counsel’s fees.  As I understand it, the receiving party was saying that, in the ambit of the order, the words of the test as applied to counsels’ fees should have the effect of extension and inclusion rather than restriction and exclusion of counsels’ fees.

10.I could not accept that submission.  It is not logical and necessitated an unwarranted contortion or unnecessary violence to the language of the test.

11.But even though I did not agree with the submission of the receiving party, I could see that the proverbial man on the Clapham Omnibus (or the man on the MTR bound for Chai Wan) might find it unfair if the “innocent party” to the adjournment was to be totally denied his counsels’ fees in the light of the Judge’s costs order.  The proverbial man on the Clapham Omnibus would ask (not unreasonably) why the Judge would bother to provide a certificate for the fees of two counsels if he had not intended to permit the taxing master to allow this.

12.Revisiting the costs order made, I decided that it was possible for the order to be interpreted so as to allow for counsel’s fees, but without contorting the language as suggested by the receiving party.

13.I decided that it was possible to look at the costs order made by the Judge to be comprised of two separate and distinct parts.  The first part would comprise of the words “Costs of and occasioned by this adjournment be to the 1^st and 2^nd Defendants”; and the second part of order would comprise of the words “ with certificate for 2 Counsels…”.

14.Looked at in this manner, the formulated test would apply to all items of costs and disbursements saving and excepting counsels fees.

15.Having reached the conclusion that, applied in such a manner would not cause unfairness to the paying party, I decided to review my decisions as to Items 45 & 46, where sums of $300,000 and $50,000 were claimed for senior and junior counsel’s fees as I am now satisfied that counsels’ fees can be viewed as a discrete and separate item, and not be subjected to scrutiny as either “costs of the adjournment” or “costs occasioned by the adjournment”.

16.In the circumstances, the claims for counsel’s fees can be allowed and the appropriate quantums to be scrutinized afresh.

17.In deciding on the appropriate amounts to be allowed, I have recalled the arguments on quantum by the parties as argued in the hearing on 17 February 2006; I bear in mind that this decision is made in a review of taxation; and I bear in mind all the submissions made since the original taxation hearing.

18.In all the circumstances I find that in relation to Item 45 the sum of $164,000 should be allowed for senior counsel’s fees.  I accept and agree with all the reasons put forward in the receiving party’s application for review.

19.In all the circumstances I find that in relation to Item 46 the sum of $50,000 should be allowed for junior counsel’s fees.  I did not think it fair to allow $60,000 on review when only $50,000 was claimed originally.

20.As to the costs of the Review, I believe the fairest order would be “No Order as to the costs of the Review”.  I believe that it is fair because the review was necessitated because both sides were inadequately prepared to argue the phrase “the costs of and occasioned by the adjournment”.  If solicitors for the parties had researched the issue and had attended at taxation to assist, then I am certain the Review would not have been necessary.

Mr A Cheung, Law Cost Draftsman of Messrs K M Lai & Li for Defendants

Mr M Wong, Law Cost Draftsman of Messrs William W L Fan & Co for Plaintiffs