German Pool (Hong Kong) Ltd v. Dong Woo Industrial Co Ltd

HCA 166/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 166 OF 2008

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Before: Deputy High Court Judge Carlson in Chambers

Closing Date of Written Submissions: 12 September 2008

Date of Ruling (Handed Down): 9 October 2008

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R U L I N G

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Introduction

1.The Defendant having succeeded in this matter and having obtained an order for costs in its favour has asked for a certificate for two counsel.  This is resisted by the Plaintiff.

2.The application raises two distinct aspects.  Firstly, whether I should recall my order and secondly if, in the circumstances, I decide that I should do so whether, on the merits, the case warrants the grant of a certificate for two counsel, the Defendant having been represented by a silk and a junior of standing.

Should the Order Be Recalled

3.There is no doubt that I have an inherent jurisdiction to recall my judgment before the order that would come from it is entered and sealed.  See HKCP 2008, O.20 r.11/8 at page 397.  This jurisdiction is one which should be exercised judicially and not capriciously, cautiously and sparingly and in circumstances that are out of the ordinary, extraordinary or exceptional.  See Re Harrison’s Shares (1955) Chancery 260 per Jenkins LJ at page 284 and Stewart v Engel [2000] 3 All ER 518 per Sir Christopher Slade who emphasised that whilst the power to recall a judgment was a useful one, it should be exercised cautiously and sparingly.

4.In this case, there is an unusual circumstance which Mr Lam in his written argument has referred to and which has ultimately persuaded me that I should recall my judgment to enable the matter to be argued on its merits.  It is this.  Immediately after I had heard the substantive argument on 18 August 2008, I rose having indicated that I would be delivering my judgment on the following day.  In order to save costs, I released counsel from attending on the delivery of judgment.  When I returned to my room, my clerk came with a message from counsel for the Defendant to the effect that they would wish to apply for a certificate for two counsel in the event that the Defendant were to obtain an order for costs in its favour and I was asked whether I would like to return to court to hear argument on the matter.  I indicated through my clerk that I would be inclined to grant such a certificate in that event and that I did not need to hear argument on the matter.

5.On the following day having delivered judgment as a result of which the Defendant was completely successful, I award it costs.  The solicitor representing it on that occasion asked for certificate for two counsel which was resisted by the Plaintiff.  I am bound to say that I had forgotten what I had indicated through my clerk on the previous day and refused the certificate.  Now that Mr Lam has correctly reminded me of what occurred, it seems to me that I should recall my judgment and allow the argument to be made on the Defendant behalf, resisted as it is by the Plaintiff.  Given the message sent out by me through my clerk, the Defendant would have been entitled to believe that it would be given a certificate for two counsel on the following day.  It should now be allowed to make that argument.  It strikes me that what occurred on 19 August must be considered exceptional or out of the ordinary whichever way one would wish to describe the situation.  I will therefore re-open the application and consider the question afresh on its merits.

The Merits

6.The test to be applied on whether the instruction of a leader, in addition to a junior, has been justified is set out in the judgment of Master Poon, as he then was, in Xin Juan Trading Co. Ltd v NPH Petrochemical Ltd, unreported HCA 18159/1998, the material parts of which are helpfully reproduced in HKCP 2008 at 62/App/48, page 1005:

“In Hong Kong, where the taxation is on the party and party basis, it has been held in Xin Juan Trading Co. Ltd v. NPH Petrochemical Ltd, unreported, HCA No. 18159 of 1998 and CACV No. 276 of 1998, Master Poon, that Juby v. London Fire and Civil Defence Authority; Saunders v. Essex C.C., unreported, April 24, 1990, referred to in the Supreme Court Practice 1999, para. 62/A2/12 does not apply.  The master, after ruling that it was justified to employ a senior counsel for the appeal, disallowed the fees of the junior counsel.  After distinguishing the Juby case, the master stated the approach thus:

‘In the absence of a court order whether to allow two counsel on taxation is a matter of the taxing master’s discretion.  The Court of Appeal will not interfere unless it can be shown that the master has erred in principle: Gorfin v. Odhams Press Ltd. [1958] 1 All E.R. 578, CA.

After the abrogation of the two counsel rule, the client and his solicitor, when instructing counsel, have to decide whether to instruct a leader and if so, whether to instruct a junior also?  Depending on the choice made, the client will be represented either by a junior counsel alone, or by leading counsel alone, or by both.  On taxation, the taxing master has to determine whether or not the costs were necessary or proper and he must necessarily do so after the event, when leading counsel was in fact instructed.  Because leading counsel can now accept instructions without a junior, the first step is to ask whether it was necessary or proper to instruct a leader, even if one counsel was required or actually briefed.  In this connection, the following factors are relevant:

(1)  the nature of the case;

(2)  difficult questions of fact or law;

(3)  the complexity, difficulty or novelty of the issues involved;

(4)  the skill, specialised knowledge or expertise required for the case;

(5)  where money or property is involved, its amount or value;

(6)  the importance of the matter to client;

(7)  the general importance of the case, of example as affecting other case;

(8)  if a junior counsel had already been instructed, the experience, competency and seniority of that junior;

(9)  whether the other side has instructed a leader: see British Metals Corporation Ltd. v. Ludlow Brothers (1913) Ltd. [1938] Ch. 774.

The above list is not exhaustive.  Depending on the circumstances, other reasons why a leader is required may exist.

The next question is if a leader is instructed, should a junior be instructed also.  Again, the taxing master will have to decide if the employment of the junior was necessary or proper in the circumstances.  Particular reasons why a junior may be necessary or proper include:

(1)   assisting with the proper preparation of the case, for example, when the case was complex or heavy documentation is involved;

(2)   assisting with the court proceedings by, for example, examining or cross-examining some witnesses, or dealing with a certain part of the case, for example, expert evidence or damages, etc;

(3)   carrying out legal research on difficult or novel questions of law.

Again, these reasons are not exhaustive.  Other may exist.  But I do not think that senior counsel’s own wish to have a junior to assist him is relevant.  Instructing a junior is justified only if the interests of lay client require so: cf. para.3, Annex 6 of the Hong Kong Bar Code.

Where a junior counsel has been instructed first and a leader is subsequently instructed, the same questions arise, namely, was it necessary or proper to instruct the leader and if so, was it necessary or proper to instruct or to retain the junior.  The relevant factors are the same.’”

7.In this matter, I have no doubt that applying these considerations it was entirely reasonable for the Defendant to have instructed specialist leading counsel.  The consequences of an ex parte injunction being obtained against it would have been highly damaging and for this reason alone, I would have though that this would have justified a leader particularly where the Plaintiff had come ex parte in circumstances where it should have made its application inter partes having given proper notice to the Defendant.

8.Equally, at the substantive hearing in August, the matter was of sufficient importance and difficulty to warrant a leader.

9.The more difficult question is whether having opted for a leader, which I have found to be justified, it was necessary to also instruct a junior given the nature of the hearings involved.  These two hearings were interlocutory and the papers were not particularly bulky nor was the law especially complex requiring research to be conducted by two counsel.  Additionally, no witnesses were to be called, some of which the junior might have been expected to examine or cross-examine had that been the case.  It seems to me that this was a case which whilst justifying a leader did not in addition call for the instruction of a junior.  Accordingly, I will certify the case as fit for the instruction of leading counsel only on both substantive occasions in February and August.  The unsuccessful Plaintiff should not have to bear the cost of the Defendant’s junior as well. 

Costs

10.As to the costs of this argument which has been conducted in writing, in which the Defendant has only been partially successful I will direct that there be no order as to costs.

Jonathan Chang instructed by Messrs Benny Kong & Yeung, for the Plaintiff

Douglas Lam instructed by Messrs T C Foo & Co., for the Defendant