Wong Yu Cho Rolly t/a Marco Polo and China Oversea Technical Development v. Ho Chi Sum and Another

HCA2132/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2132 OF 2005  

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Before: Hon Sakhrani J in Chambers

Date of Hearing : 14 January 2009

Date of Judgment : 21 January 2009

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J U D G M E N T

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1.This is an appeal from the order of Master Lung made on 16 October 2008.  Master Lung was dealing with a gross sum assessment of costs which Registrar Chan, by his order dated 30 June 2006, had ordered to be assessed and to be paid by the plaintiff to the defendants. 

2.Master Lung refused the plaintiff’s application for an adjournment of the assessment of costs and proceeded with the assessment on 16 October 2008.  The costs were assessed at HK$72,000 which included the costs of the hearing before Master Lung.  The plaintiff was ordered to pay the defendants the assessed costs within 14 days.

3.Briefly, the relevant background facts are that the plaintiff is a businessman who carried on different businesses in the name of Marco Polo and China Oversea Technical Development. 

4.On 26 August 2004 the plaintiff commenced DCCJ 4492/2004 (“DCCJ 4492”) in the District Court against the Inland Revenue Department (the “IRD”).  He claimed that the IRD had made a wrong assessment of tax against him, had trespassed into his premises and had illegally frozen his bank accounts.  The IRD counterclaimed in those proceedings for assessed tax in the sum of HK$831,600.

5.In DCCJ 4492 the plaintiff issued a summons seeking an extension of time to file a defence to counterclaim.  The summons was heard by a Master on 27 October 2004.  The plaintiff alleged that the 1^st defendant in this action Mr Ho Chi Sum, Senior Government Counsel acting for the IRD in DCCJ 4492, had agreed with him to a stay of the proceedings in DCCJ 4492.  This was denied by Mr Ho Chi Sum.  

6.The plaintiff alleged that because he was under the impression that DCCJ 4492 was stayed he did not file a defence to the counterclaim.

7.On 30 December 2004 judgment in default of defence was entered by the IRD on the counterclaim in DCCJ 4492. 

8.The plaintiff applied unsuccessfully to set aside the judgment on the counterclaim.  Further applications by the plaintiff for leave to appeal were dismissed.  He also applied for leave to appeal to the Court of Final Appeal.  His application was dismissed by the Court of Appeal.  A further application was made to the Court of Final Appeal which was also dismissed.  He applied for a stay of execution of the default judgment which application was dismissed.  He also applied for a stay of proceedings which was also dismissed.

9.The plaintiff then commenced this action against Mr Ho Chi Sum and the IRD as defendants claiming that Mr Ho Chi Sum was in breach of a verbal agreement made with him in relation to the stay of proceedings in DCCJ 4492.

10.By his order dated 30 June 2006 Registrar Chan struck out the plaintiff’s claims against the defendants in this action and ordered that the action be dismissed.  He also made an order nisi that the costs of the action including the costs of the application and all costs reserved be costs to the defendants to be assessed.  Those costs were assessed by Master Lung on 16 October 2008.

11.By his notice of appeal the plaintiff asks for an order that there be a “stay of proceeding”.

12.The plaintiff submitted that Master Lung was wrong not to grant him an adjournment.  In his letter dated 15 October 2008 addressed to the Master the day before the hearing on 16 October 2008, the plaintiff in paragraph 2 stated :

“Counsel in representation of the plaintiff will be taking over the case, hence the discussion on taxation need to be adjourned as the case is not yet over and the plaintiff is seeking for counterclaim.”

13.The plaintiff was seeking an adjournment of the hearing before Master Lung as he wished to instruct counsel to deal with the matter.

14.Master Lung refused the application for an adjournment.  In my view, he was right to do so.

15.If the plaintiff had wished to instruct counsel to appear for him in the assessment of costs he had ample opportunity to do so well before the hearing before the Master on 16 October 2008.

16.The order for costs was made by Registrar Chan on 30 June 2006 when he struck out the plaintiff’s claims and dismissed the action against the defendants.  On 21 February 2007 the plaintiff’s appeal against the order of Registrar Chan was dismissed by Chung J.

17.As is set out in the chronology in the skeleton arguments of the defendants, a hearing fixed for 26 July 2007 for the assessment of costs had to be adjourned when the plaintiff failed to turn up at the hearing and sent a representative to inform the court that he was sick.  On 20 November 2007, Master Yuen ordered, inter alia, that the defendants could enter default judgment on costs unless the plaintiff filed his List of Objections before 4 pm on 11 December 2007.  As the plaintiff failed to do so, default judgment on costs was entered against the plaintiff.

18.On 4 June 2008 by a consent order made by Deputy Judge L. Chan it was ordered, inter alia, that the default judgment dated 11 December 2007 be set aside and the plaintiff was given leave to file his List of Objections before 4 pm on 17 June 2008.

19.On 13 June 2008 the plaintiff filed his List of Objections.

20.It was only on 15 October 2008 by his letter addressed to Master Lung that he mentioned that he wished to instruct counsel.

21.I would also observe that not only was the plaintiff’s appeal against the order of Registrar Chan dismissed by Chung J on 21 February 2007, his application for an extension of time to appeal against Chung J’s order was refused by Yeung JA on 31 October 2007.  An appeal against the decision of Yeung JA was dismissed by Cheung JA and Lam J on 4 March 2008.  An application by the plaintiff for leave to appeal to the Court of Final Appeal was also dismissed by Cheung JA and Lam J on 29 July 2008.

22.I am satisfied that the plaintiff had ample opportunity to instruct counsel to appear before Master Lung well before 16 October 2008 which was the re-fixed hearing date of the assessment of costs.  In view of the long lapse of time between the order for costs made by Registrar Chan on 30 June 2006 and the re-fixed hearing date of the assessment of costs before Master Lung on 16 October 2008 the Master, in my view, correctly refused the adjournment and proceeded with the assessment.

23.The Master assessed the costs at HK$72,000 which included the 2 hours of the hearing before him.

24.It is important to bear in mind that in making a gross sum assessment of costs, the assessment is carried out on a broad principle basis and is not meant to be a mini taxation of costs (marginal note 62/9/10C Hong Kong Civil Procedure 2009).

25.Where a Government lawyer has conducted the litigation namely, acting as a solicitor in the preparation of the matter for trial and then appearing in court as an advocate, the Government lawyer should charge on an hourly basis for the preparation as a solicitor and for the attendance in court by a solicitor instead of a brief fee and refresher basis (Building Authority v Tam Chung Ching Denis [1997] 3 HKC 260).  And a Government lawyer’s costs should be the same as an independent solicitor’s costs (Building Authority v Business Rights Ltd [1999] 3 HKC 247).

26.Mr Newton Chan, for the defendants, who also appeared before the Master, is an experienced Government Counsel of over 10 years of practice.  Mr Chan has referred me to the Law Society circular 07-653(PA) dated 29 October 2007 dealing with, inter alia, hourly rates allowed for solicitors in party and party taxation of costs in the High Court. 

27.In view of the seniority of Mr Newton Chan, I am satisfied that it would have been reasonable to have assessed his hourly rate for attendance in court at HK$4,000.  That being so, as the HK$72,000 assessed by Master Lung included the 2 hours hearing before him, the costs of the action including the costs of the application before Registrar Chan and all costs reserved were assessed at HK$64,000 ($72,000-$8,000).

28.Out of the sum of HK$64,000 there were court attendances as detailed in the defendants’ Statement of Costs for the gross sum assessment dated 18 June 2007 (“Statement of Costs”).  The court attendances were for a total of 2 hours 43 minutes which, at $4,000 per hour, comes to $10,866.40 as set out in the Statement of Costs.  I am satisfied that it would have been reasonable to assess those court attendances at $10,866.40. 

29.Out of the sum of HK$64,000, the sum of $10,866.40 was a reasonable sum for the court attendances leaving a balance in the sum of HK$53,133.60 which was assessed by the Master for Items B, C1, C2, C3 and E in the Statement of Costs.  The sums claimed for those items in the Statement of Costs amounted to the total sum of HK$82,038 whereas the assessed amount was only HK$53,133.60.  This was about 65% of the amount of HK$82,038 claimed.  Bearing in mind that this was not a mini taxation of costs but a gross sum assessment on a broad principle basis, I see nothing wrong in the Master’s assessment.

30.The plaintiff submitted that the Master failed to consider his List of Objections.  I am unable to accept this submission.  In my view, the Master has taken the List of Objections into consideration when he only allowed about 65% of the amount claimed for Items B, C1, C2, C3 and E in the Statement of Costs.   

31.The plaintiff relied on exhibit 1 to his affirmation of 13 January 2009 and submitted that there has been overlapping and duplication of documents used by the defendants in various actions and proceedings and the time spent as claimed for perusal and preparation of documents should not be allowed.  There is no merit in this point.  As Mr Chan correctly submitted, a perusal of exhibit 1 to the plaintiff’s said affirmation shows that save for the hearing on 8 March 2006, all the other hearings in the other proceedings mentioned there were after the hearing before Registrar Chan on 30 June 2006 when he made the order for costs in the defendants’ favour.  As for the hearing on 8 March 2006, this was a directions hearing where directions were given for the filing of evidence and skeleton submissions and the costs were reserved.  This is clear from the order of 8 March 2006.  The order made by Registrar Chan on 30 June 2006 also dealt with the costs that had been reserved by ordering that the costs of the action including the costs of the application and all costs reserved be to the defendants to be assessed.  I fail to see how there can be any valid complaint that the time spent as claimed in the Statement of Costs for perusal and preparation of documents was duplicated or overlapped with earlier perusal and preparation of documents.

32.I see no valid basis for interfering with the Master’s assessment of costs which, in my view, was reasonable bearing in mind that this was not a mini taxation of costs but an assessment on a broad principle basis.

33.There is no basis for the plaintiff to ask for a “stay of proceeding”.  The proceedings have been concluded with the dismissal of the application for leave to appeal to the Court of Final Appeal on 29 July 2008.

34.The appeal is dismissed.

35.I also make an order nisi that the plaintiff do pay the defendants their costs of the appeal such costs to be taxed on a party and party basis.

The Plaintiff in person, present.

Mr Newton Chan, Government Counsel of Department of Justice, for the Defendants