Sam Woo Bore Pile Foundation Ltd v. Necso China State-hip Hing Joint Venture

HCMP 1664/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. HCMP 1664 of 2007

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BETWEEN

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Coram : Before Master B Kwan in Chambers (Open to the Public)

Date of Hearing: 3 July 2008

Date of Ruling: 23 July 2008

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R U L I N G

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1.The Bill of Costs of the receiving party (the Applicant) filed into Court on 3 September 2007 was listed before me for taxation on 3 July 2008.

2.That Bill comprised of only 2 items of costs.  The main costs item was Item 26 on page 8 of the Bill, seeking $1,017,500 for the fees of the Claims Consultant Mr K.O. Wong.  Directions were given on 3 July 2008 for the further conduct of this item of costs.

3.This ruling relates to the other item of costs, for the modest sum of $66,522.40.

4.This claim of $66,522.40 related to the costs of the firm of Messrs Baker & McKenzie, who acted as solicitors for the receiving party for one month only, from 5 October 2006 to 6 October 2006. (“the Baker & McKenzie costs”)

5.The paying party argued that it should not be made to pay for the costs of the preparation of the Bill where it related to the Baker & McKenzie costs, as it was wholly unnecessary to prepare a Bill with a breakdown of those costs.

6.The crux of the argument was that it was simply not necessary for the Messrs Baker & McKenzie costs to be drafted and cast in a formal bill of costs at all.

7.The solicitors for the receiving party had sought a sum of $66,522.40 in respect of the Baker & McKenzie costs.  The solicitors for the paying party made them an offer of $42,322 in a letter dated 25 January 2007.

8.The receiving party chose not to consider the offer of $42,332 and instructed their solicitors to draft a detailed itemized Bill setting out the breakdown of the sum of $66,522.40 for the information of lay client.  I did not think that this purpose of casting an itemized Bill was reasonable.  I agreed with the paying party that it was unnecessary.  I believe that any reasonably competent solicitor should have been able to work out and explain the offer to the lay client, using the back of an envelope.

9.Furthermore, the time and money spent in casting the Bill was not proportional to the amount involved.  At issue were two small sums, of (a) $66,522.40 (the sum claimed); and (b) $42,332 (the sum offered in settlement).  It was out of proportion to have an itemized Bill drafted at a cost of $9600 (6 hours at $1600) for the solicitors to advise lay client on whether to accept the offer.

10.I did not accept the alternative reason given by the solicitor for receiving party for having an itemized Bill drafted in relation to “the Baker & McKenzie costs”.  He submitted that an itemized Bill was necessary because he thought that the offer of $42,332 had “lapsed” due to passage of time and due to his counter-offer.  There was no good reason why he could not have made a quick telephone call to the other side to verify the situation even if he thought that the offer of $42,332 might have been withdrawn or had lapsed.

11.For all the reasons given ante, I rule in favour of the paying party.

12.I find that there was no good reason put forward in the submission of Mr Chan (on behalf the receiving party) to explain why it had cast an itemized Bill to claim the Baker & McKenzie costs.

13.In the circumstances, the costs of the preparation of the Bill filed on 3 September 2007 are disallowed.

Mr. W. Chan of Messrs Leung, Chan & Pang for Applicant

Mr. R. Foley of Messrs Pinsent Masons for Respondent