Lam Rogerio Sou Fung v. Ku Ling Yu John t/a Messrs John Ku & Co.

HCMP 1916/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1916 OF 2007

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BETWEEN

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Coram : Master de Souza in Chambers

Dates of Hearing :   2-3, 9 & 11 February and 18 March 2009

Date of Handing Down Decision   :   23 December 2009

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DECISION

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I. INTRODUCTION

1.By summons dated 4 March 2008, Mr. Rogerio Lam, the Plaintiff (“Mr. Lam”) sought orders for wasted costs against the Defendant pursuant to RHC O.62 r. 8(1). The solicitor of the Defendant retained by Mr. Lam was at all times one Mr. John Ho (“Mr. Ho”). Mr. Ho and Mr. Lam have known each other since the 1980s. They were the principal protagonists in the proceedings before me.

2.These proceedings arose in solicitor client taxation in respect of two bills of costs issued by the Defendant who had acted as one of Mr. Lam’s solicitors in High Court Action No. 2576 of 2005 (“the High Court Action”). The High Court Action instituted by one George Tan, a notorious enough name, (“Mr. Tan”) was a libel suit against Mr. Lam. Mr. Lam had apparently communicated with Christie’s, the auctioneers asserting ownership over certain Chinese antiques for which Mr. Tan had sought buyers by public auction in Hong Kong, questioning the integrity of and claiming that Mr. Tan had defrauded him. In defence, Mr. Lam pleaded justification and qualified privilege. He also added a substantial counterclaim for the return of the antiques in question. Mr. Tan subsequently discontinued the High Court Action but the counterclaim remains extant.

3.On 31 January 2008, Master Levy directed that the Defendant’s bills be taxed pursuant to the Legal Practitioners Ordinance, Cap. 159. This was shortly followed by Mr. Lam’s present summons under O. 62 r.8(1) for wasted costs orders against the Defendant.

4.On 29 May 2008, I ordered, inter alia, the filing of a list of issues to be determined under the summons and the filing of affirmations. A further direction was issued on 8 September 2008 that the deponents of the affirmations (Paul Starr excepted) attend for cross-examination. In the event, the list of issues was filed and both Mr. Lam and Mr. Ho were duly cross-examined vigorously.

5.In essence, the list of issues concerned but two main areas of complaint by Mr. Lam. These were:

(i)  The Defendant’s disclosure of certain privileged documents of his without his consent, informed or otherwise in the High Court Action.  This Mr. Lam asserted led to unnecessary and costly enquiries, the costs of which should be borne by the Defendant;

(ii)  The Defendant’s ill-founded advice to him to pursue common fund costs upon Mr. Tan’s discontinuance of the High Court Action.

II. the applicable procedure and principles

6.One commences with the guidance to be drawn from the decision of the Court of Final Appeal in Ma So So v Chin Yuk Lun & Another [2004] 3 HKLRD 294. I make no apology for setting out the relevant portions of the judgment of the Chief Justice in extenso. At page 299 et seq, he most helpfully summarized the correct approach:

“1.  In The proper conduct of litigation by the legal profession is essential to the administration of justice.  This appeal concerns the position of solicitors.  They are officers of the court and owe duties to the court in the conduct of proceedings.  The court has an inherent jurisdiction to supervise their conduct and to impose sanctions where the solicitor concerned has acted in breach of his duties to the court.  The sanctions include ordering the solicitor concerned to be personally liable for the costs for which his client or an opposite party would have been responsible.  The jurisdiction to make such orders is commonly referred to as the wasted costs jurisdiction: Myers v Elman [1940] AC 282, Ridehalgh v Horsefield [1994] Ch 205 at p.227B-E.

The rule

2.  The High Court’s wasted costs jurisdiction is regulated by O.62 r.8 of the Rules of the High Court (Cap.4, Sub.Leg.) (the rule).  The rule provides:

Subject to the following provisions of this rule, where in any proceedings costs are incurred improperly or without reasonable cause or are wasted by undue delay or by any other misconduct or default, the Court may make against any solicitor whom it considers to be responsible whether personally or through a servant or agent an order:

(a)   disallowing the costs as between the solicitor and his client; and

(b)   directing the solicitor to repay to his client costs which the client has been ordered to pay to the other parties to the proceedings; or

(c)   directing the solicitor personally to indemnify such other parties against costs payable by them.

3.  The orders contemplated in (a) and (b) of the rule relate to the solicitor and his own client.  The order contemplated in (c) renders the solicitor liable to indemnify other parties to the proceedings against costs payable by them.  Before any order can be made, the solicitor must be given a reasonable opportunity to appear before the court and show cause why the order should not be made: O.62 r.8(2).

4.  This appeal concerns the exercise of the jurisdiction under the rule.  The order made in this case was an order made against an opposite party’s solicitor under (c) of the rule.  It is appropriate to take this opportunity to lay down the principles which should guide the exercise of this jurisdiction, in relation to both a party’s own solicitor and an opposite party’s solicitor.  It is important to appreciate the purpose and nature of this jurisdiction as well as to recognize its limitations.  Whilst the rule provides the court with a useful and salutary sanction over solicitors, one must be careful not to allow the jurisdiction to give rise to costly satellite litigation.

In any proceedings

5.  The jurisdiction is only exercisable where the solicitor was responsible for conduct of the kind prescribed by the rule in any proceedings.  So, where the solicitor’s conduct complained of did not relate to any proceedings but related only to the conveyancing transaction which gave rise to subsequent proceedings, the jurisdiction was not engaged: AIE Co Ltd v Kay Kam Yu [1997] HKLRD 161.  The rule is at present confined to solicitors, although its extension to barristers has been recommended.  See Recommendation 97 of the Final Report on Civil Justice Reform (March 2004) at p.303.

The approach

6.  In considering the exercise of the jurisdiction under this rule, the court should approach the matter by dealing with the following questions:

(1) Whether the solicitor was responsible for (i) acting improperly or without reasonable cause or (ii) for undue delay or any other misconduct or default in any proceedings.

(2) Whether such conduct of the solicitor caused costs to be incurred or wasted.  This is a question of causation.  The causal link between the solicitor’s conduct and the extent of costs incurred or wasted must be established.

(3) Whether the court should exercise its discretion to make an order.

Compare Ridehalgh v Horsefield at [1994] Ch 205 at p.231F.

Compensatory and punitive

7.  The jurisdiction is compensatory. Any order made is directed towards compensating the party concerned, whether the solicitor’s own client or another party, for the costs incurred or wasted as a result of the solicitor’s conduct. An order made under the rule could not exceed the amount of the costs so incurred or wasted. But the jurisdiction should also be regarded as punitive. In the absence of any order, the party concerned would be liable for the costs incurred or wasted and there would be no question of the solicitor being liable for such costs. An order would, however, shift the burden of such costs from the party concerned to the solicitor. To that extent, the order is in effect punitive. See Harley v McDonald [2001] 2 AC 678 at para.49, Davy-Chiesman v Davy-Chiesman [1984] Fam 48 at pp.61-62.

Summary jurisdiction

8.  It is fundamental to understand that the jurisdiction under the rule is a summary jurisdiction and should be strictly confined to questions which are apt for summary determination. As Lord Hope pointed out in the Privy Council in Harley v McDonald [2001] 2 AC 678 (at para.50):

As a generalrule allegations of breach of duty relating to the conduct of the case by a barrister or solicitor with a view to the making of a costs order should be confined strictly to questions which are apt for summary disposal by the court. Failures to appear, conduct which leads to an otherwise avoidable step in the in the proceedings or the prolongation of a hearing by gross repetition or extreme slowness in the presentation of evidence or argument are typical examples. The factual basis for the exercise of the jurisdiction in such circumstances is likely to be found in facts which are within judicial knowledge because the relevant events took place in court or are facts that can easily be verified. Wasting the time of the court or an abuse of its processes which results in excessive or unnecessary cost to litigants can thus be dealt with summarily on agreed facts or after a brief enquiry if the facts are not all agreed. Scope for the making of a costs order that will compensate as well as penalize is then likely to be found in making an order against the practitioner that will indemnify the opposing litigant against costs incurred as a result of the breach of duty that would otherwise not be recoverable.

In that case, the Privy Council was concerned with the inherent jurisdiction of the courts of New Zealand which related to both barristers and solicitors.

9.  Questions which are apt for summary disposal are usually clear cases: Orchard v South Eastern Electricity Board [1987] QB 565 at p.572E. As Lord Woolf observed in Wall v Lefever [1998] 1 FCR 605 at p.614, it should be used where the need for such an order is “reasonably obvious”; when there is “a clear picture” of the fault of the lawyer. In Ridehalgh v Horsefield [1994] Ch 205 at p.238H, Sir Thomas Bingham MR (as he then was) observed that hearings under this summary jurisdiction should be measured in hours, and not in days or weeks and cautioned that judges should be astute to control what threatens to become a new and costly form of satellite litigation.

10.  As the the House of Lords observed in Medcalf v Mardell (Wasted Costs Order) [2002] UKHL 27 (at para.24):

Save in the clearest case, applications against the lawyers acting for an opposing party are unlikely to be apt for summary determination, since any hearing to investigate the conduct of a complex action is itself likely to be expensive and time-consuming …”

7.As to the exercise of the court’s power and the procedure to be adopted in such applications, the Chief Justice further advised:

“13. Ultimately, it is important to appreciate that the summary jurisdiction under the rule is discretionary.  The court may make an order.  It is not bound to do so and the aggrieved party has no right to an order.

14. The court’s discretion operates at two distinct stages.  Taking them in the reverse order, at the second stage, even where the court is satisfied that the solicitor had committed conduct of the kind prescribed in the rule and that such conduct had caused costs to be incurred or wasted, the court is not bound to make an order.  But where it declines in its discretion to make an order, it must give sustainable reasons: Ridehalgh v Horsefield [1994] Ch 205 at p.239E-F.

15. But the court’s discretion also operates at an earlier stage.  Initially, the court is invited by the applicant to call on the solicitor to show cause as required by O.62 r.8(2).  The court should not proceed automatically.  It has a discretion whether to proceed further and may decline to do so: Ridehalgh v Horsefield [1994] Ch 205 at p.239D.

16. In exercising its discretion at this first stage, the court has to take into account the strength of the prima facie case shown by the applicant.  Obviously, the stronger the prima facie case shown, the greater is the inclination to proceed.  Bust a most important matter the court has to consider is the proportionality of the exercise.  The rule enables an aggrieved party to obtain compensation from the solicitor concerned for costs incurred or wasted.  The court should compare (i) the costs likely to be incurred in litigating the application under the rule and (ii) the amount of the costs sought.  The likely costs to be incurred in litigating the application would depend on many matters including the nature of the allegations, the extent to which there are undisputed facts and the requirements of procedural fairness (see para.22 below).  If such costs are likely to be relatively high compared to the amount of costs sought, the court should give this matter great weight and in an appropriate case, it would be a proper exercise of discretion to decide not to proceed further.  This would be so whether or not the applicant has a separate cause of action against the solicitor in respect of the conduct in question.

17. …

18. In considering the exercise of its discretion at the first stage, the court should give the solicitor an opportunity to be heard.  At this juncture, it is open to the solicitor to maintain that he should not be called upon to show cause.  The court would be assisted by what the solicitor has to say on matters such as the requirements of procedural fairness, the extent to which facts relied on by the applicant are disputed and the likelihood of obtaining a waiver of privilege from his client where that my be involved.

Procedure

19. …

20. Applications may be made in a variety of circumstances and the court must decide the appropriate procedure to be followed to meet the requirements of the individual case.  The procedure must of course be fair.  But having regard to the nature of the jurisdiction, it should be as simple and summary as fairness permits.

21. The solicitor concerned should be informed of the allegations made against him: the conduct complained of, how such conduct caused costs to be incurred or wasted and all other circumstances relied on.  Depending on the nature of the allegations made, further directions may have to be considered.  Elaborate pleading should be avoided.  So should the formal process of discovery: Ridehalgh v Horsefield [1994] Ch 205 at p.238G-H.  The judge would have to consider how to treat the findings of fact already made in his judgment, whether affidavits should be ordered, and whether oral evidence should be directed, including the possible recall of witnesses in the proceedings.  It would have to be borne in mind that the solicitor was not a party to the proceedings and did not have the right to cross-examine or call evidence: Bahai v Rashidian [1985] 1 WLR 1337 at pp.1343B and 1344C-F.

22. The requirements of procedural fairness are relevant to the exercise of the discretion at the first stage when deciding whether the application should be allowed to proceed further (see para.16 above).  As has been stated, the procedure should be as simple and summary as fairness permits.  But where procedural fairness requires an elaborate procedure which is likely to lead to costly litigation, the court would have to give the risk of disproportionate costs great weight in deciding whether to proceed further.  As has been stated, questions apt for summary disposal are usually clear cases.  The more elaborate the procedure, the more likely it is that the court may conclude that the matter is not appropriate for determination in the summary jurisdiction: Harley v McDonald [2001] 2 AC 678 at para.54.

Burden of proof

23. Where the court exercises its discretion at the first stage deciding that the application should proceed further, the burden of proof does not shift to the solicitor.  The burden remains on the applicant.  It is for him to satisfy the court that an order should be made.  However, where the court calls upon the solicitor to show cause, having satisfied itself that the applicant has shown a strong prima facie case, the evidential burden may, depending on the circumstances, shift to the solicitor: Ridehalgh v Horsefield [1994] Ch 205 at p.239B; Bahai v Rashidian [1985] 1 WLR 1337 at pp.1342H-1343B.”

8.It is important to remember that not all defaults of a solicitor in the discharge of his duty to a client will attract the sanction under O.62 r.8.  The exercise of the court’s jurisdiction “does not depend on dishonesty, personal obliquity or behaviour such as would warrant disciplinary action being taken.  While mere mistake or error of judgment may not necessarily be enough, misconduct, default or even negligence will be if this is serious or worse still, gross.  See here: Myers v Elman [1994] Ch 205 at p.227 and KB Chau & Co (a firm) v China Finance Trust and Investment Corp & Another [1995] 2 HKLR 567 at pp.573, 577”, per Ma JA in Yau Chiu Wah v Gold Chief Investment Ltd & Another [2003] 3 HKLRD at p.565D-E.

9.With the above in mind I turn then to address the application.

10.The requisite two-stage approach has been conducted in the instant case.  On the evidence before me, there was more than sufficient material for the application to proceed and to require the Defendant to show cause as to the making of a wasted costs order.  I have considered the strength of Mr. Lam’s prima facie case that crystallized upon the filing of the list of issues on 10 June 2008.  I have also considered the proportionality of the exercise comparing the amount of costs at stake as far as Mr. Lam was concerned with the likely costs of pursing the application to determination.  It was plain to me that Mr. Lam’s exposure on costs both on a solicitor client basis as well as the orders against him made in favour of the opposite party was considerable, fully warranting this exercise.

11.It was against this background that further directions were given, including the examination of Mr. Lam and Mr. Ho. At every stage, I was alive to the need to ensure procedural fairness between the competing parties whose interests were closely watched and safeguarded by their respective counsel. The Defendant was fully apprised of the case against it and had ample opportunity to present its case against the making of the orders sought by Mr. Lam.

III. Disclosure of Privilege Documents

12.Mr. Lam’s complaint in this regard is set out in paragraphs 28 to 49 of his affidavit dated 23 November 2007. It concerned the discovery of two privileged advices of Mr. Graham Harris of counsel in Mr. Lam’s Defendant’s List of Documents dated 30 June 2006 in the High Court Action. That these two documents were patently privileged had only latterly been accepted by Mr. Ho. His initial stance was that they were not covered by legal professional privilege as they were given prior to the Defendant being retained by Mr. Lam: see paras 23-24 of Mr. Ho’s 2^nd affidavit. This no doubt throws some light on Mr. Ho’s thought process at the time when the List of Documents was compiled and later filed.

13.Mr. Lam asserted that he had not been consulted prior to discovery of the documents, had not consented to the discovery by list nor had he been properly or otherwise advised on the matter at the material time. The privilege was his and he did not authorize any waiver. Mr. Ho’s evidence and testimony were to contrary effect.

14.Both Mr. Lam and Mr. Ho were closely pursued in cross-examination on the issue. Mr. Lam was adamant when he testified that he had never been consulted or shown the List of Documents. He had no opportunity to provide any input. Had he been asked, he said he would likely not have waived privilege. His counsel submitted that the material in the documents were in any event of no significant evidential value to the High Court Action and would accordingly not have been discoverable had the matter been properly looked at.

15.Mr. Ho’s evidence was to the effect that he had consulted Mr. Lam on the matter, advising against discovery. However, Mr. Lam insisted on proceeding arguing that the documents would somehow assist his case and embarrass Mr. Tan in the process. Mr. Ho testified that throughout the retainer, Mr. Lam, a most difficult and demanding client, was “the commander in chief”, demanding to be consulted on every step to be taken and insisting his input had to be considered. In short, Mr. Lam was calling the shots. He also said that Mr. Lam, with his experience of litigation, was never slow to seek second opinions from other people, including accountants.

16.Mr. Ho’s recollection of events was in my view rather poor and did not sit well with contemporaneous documents. He said the discussion of the List of Documents occurred in consultation with Mr. Lam on 27 June 2006. There were no contemporaneous conference notes, which should have been taken and kept. His own bill of costs did not support this in the narrative relating to the two conferences that took place on that day. In neither of the meetings was Mr. Lam’s presence noted. There was, however, a fee-note from junior counsel, Mr. Michael Yan which suggested that a conference with Mr. Ho and Mr. Lam on that day did take place. Mr. Yan was in court but no steps were taken to elicit further information from him.

17.Mr. Lam denied ever attending the meeting on 27 June 2006 when discovery was canvassed. His recollection was solid compared to Mr. Ho’s even with due allowance to the fact that these events had occurred some years previously and that Mr. Ho was not a well individual as he had let on. Where their evidence conflicted, I preferred the evidence of Mr. Lam. Mr. Lam clearly had a vested interest but I am satisfied that his evidence was essentially reliable and truthful. Had he been properly advised on discovery and had in fact insisted on waiver, his email to Mr. Ho dated 1 September 2006 (exh. P1) would not have been in these terms:

“  As I do not have the original document list you compiled and filed and I was given to understand you chose the one you saw fit and I have no idea what is meant by I have or I don’t have! So I am not going to say something that I am not certain of! R”.

This brusque email was in response to Mr. Ho’s email eliciting confirmation whether he had other documents in his possession, custody or control.

18.On the evidence, I am satisfied to hold that the privileged documents were disclosed without Mr. Lam’s informed consent. I also find that he had not been advised of the consequences of such discovery. Had he been duly consulted, it would have been likely that the documents would not have been included in the Defendant’s List of Documents. In my view, this tantamounted to a serious dereliction of duty on the part of Mr. Ho. Whilst what had transpired did not amount to misconduct gross or otherwise, not properly advising Mr. Lam in regard to discovery did constitute a serious case of negligence on the part of Mr. Ho, with escalating costs consequences for Mr. Lam.

19.This most inapt handling of discovery by Mr. Ho, not surprisingly, led to further requests for discovery by Mr. Tan through his solicitors, Messrs. Fred Kan & Co (“Fred Kan”) with further costs engendered entirely unnecessarily as submitted by counsel for Mr. Lam. Also not surprisingly, counsel submitted that all these consequential unnecessary costs were wasted for which Mr. Ho and his firm should be responsible to meet.

20.Further discovery was first sought by Fred Kan in their letter dated 13 July 2006. The items requested were not discovered so Fred Kan issued a summons on 8 August 2006 for discovery of the same items. These were subsequently provided voluntarily by Mr. Lam.

21.There was considerable misunderstanding of what was sought by the latest round of discovery on the part of Mr. Ho as submitted by Mr. Lam’s counsel. Item 2 of the summons of 8 August 2006 requested discovery of “contemporaneous materials” mentioned in Mr. Graham Harris’ advice of 26 November 2006, (“the first advice”). Mr. Ho seemed to have had considerable difficulty comprehending what those documents were as was evident in his cross-examination. He gave different versions of what he understood to have been sought. In his affirmation, he said “My advice to Mr. Lam was that ‘contemporaneous materials’ might refer to the antique items being counter-claimed by Mr. Lam against GT which were also touched upon by Graham Harris in his ‘advice’ ”. Yet in his communication with and in the draft affirmation sent to Mr. Lam, he clearly thought that documents referring to criminal allegations against Mr. Tan were in issue.

22.This confusion let to the unnecessary filing of further affirmations both by Mr. Lam and Mr. Tan. These were costs that would not have been incurred and wasted had Mr. Ho had a proper understanding of what was sought at the time.

23.On 21 September 2006, Fred Kan in an attempt to minimize costs which Mr. Tan was clearly entitled to seek and have, wrote requesting costs of $70,000. Instead of agreeing to pay costs subject to taxation, Mr. Ho advised Mr. Lam on 28 September 2006 and 10 October 2006 that Fred Kan’s offer should be rejected. It then became necessary for the hearing on 19 October 2006 to proceed before me with two counsel representing Mr. Lam no less and just on the issue of costs. Counsel was instructed on the advice of Mr. Ho.

24.At the hearing, I ordered that the costs of Mr. Tan’s summons of 8 August 2006 and of the hearing on 4 September 2006 be to Mr. Tan in any event, taxed absent agreement. I further ordered that there be no order for costs of that day’s hearing. Once again, Mr. Lam had been exposed to further and unnecessary costs, such costs including briefs for his own counsel and this had come about because of the very poor handling of the case by Mr. Ho. These were all wasted costs. He was at the very least seriously negligent in the way he processed Fred Kan’s legitimate request for documents and for costs as also in the related advice he offered Mr. Lam.

25.Having carefully considered the evidence, I find that this is a proper case to exercise my discretion to order the Defendant to bear all those costs referred to above. The Defendant had wholly failed to show cause why it should not be responsible for all those costs. I am satisfied that Mr. Lam had discharged his onerous burden in the regard.

iv. The Costs of Discontinuance

26.On 4 June 2007, Master Kwang granted Mr. Tan leave to discontinue his libel action on terms, with the costs of defending the libel claim to Mr. Lam, taxed if not agreed. The costs of the summons for discontinuance dated 27 March 2007 up to 31 March 2007 were awarded to Mr. Lam with the costs thereafter up to and including the hearing before the master and the hearing on 3 April 2007 to Mr. Tan, taxed if not agreed with certificate for two counsel. Mr. Lam was therefore lumbered with a hefty bill not only for his own two counsel and solicitor but also a significant portion of Mr. Tan’s costs. Mr. Tan was represented senior and junior counsel.

27.This was yet a further example of Mr. Ho’s less than adequate handling of a simple application to discontinue that resulted in very substantial costs exposure for Mr. Lam.

28.It is trite that upon discontinuance of a claim, the defendant will have his costs of meeting the claim on party and party basis unless there are exceptional circumstances. Yet, Mr. Ho’s stance was that Mr. Lam should not agree to discontinuance without costs on the common fund basis. There were no special features in the circumstances of this case taking Mr. Tan’s application out of the ordinary so that a different scale of costs was warranted. Master Kwan obviously came to the same conclusion and he was most justified to do so.

29.It seems clear that Mr. Ho in correspondence appeared to have thought that dismissal rather than discontinuance would offer greater benefit to his client. There was no documentary evidence such as attendance notes or emails suggesting that Mr. Lam had at the material time been properly advised in this respect.

30.In the witness box, Mr. Lam said he would never discuss money matters on the telephone. He recalled that Mr. Ho had made more mentions of common fund than party and party costs. He was certain that he had not been advised that special circumstances had to be present to obtain a more favorable level of costs. He was unable to recall any occasion when common fund costs had been explained to him by Mr. Ho or anyone else. Nor did he recall any specific occasion when the consequences of not succeeding in obtaining common fund costs had been canvassed.

31.Mr. Lam’s litany of complaints was justified. Mr. Ho had failed dismally to represent his interest in respect of discontinuance. In the process, huge additional costs that Mr. Lam now complained of have been incurred as a result of Mr. Ho’s serious failings. All these costs should be laid at the doors of the Defendant. I consider that in the circumstances, it is fair and proper that they should be borne also by the Defendant, it having failed to show cause against such an order being made.

v. Conclusion

32.Given my ruling above, I shall make an order in terms of paragraph 1 of Mr. Lam’s summons dated 4 March 2008. He shall have his costs of the application including all costs reserved in respect thereof, taxed if not agreed with certificate for counsel.

33.As to the basis of taxation, I consider it right and proper to order that it should be on a full indemnity basis. The order for costs shall be nisi with liberty to apply within 14 days hereof.

Mr. Douglas Lam instructed by Messrs. Lo & Lo for Plaintiff.

Mr. Ernest Koo instructed by Messrs. John Ku & Co. for Defendant.