Woo Hing Keung Lawrence v. Cef Brokerage Ltd
Read the full judgment text of CACV 148/2007 on BabelCite. This Court of Appeal judgment.
1. This is a review of taxation by the Plaintiff or Appellant or Paying Party (“Paying Party”).
Cites 1 case
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HCCL39/2004 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE COMMERCIAL ACTION NO.39 OF 2004 (formerly High Court Action No. 7335 of 2000) ----------------------
---------------------- CACV148/2007 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO.148 OF 2007 (ON APPEAL FROM HCCL No. 39 of 2004) ----------------------
---------------------- Coram : Before Master Marlene Ng in Chambers (Open to the Public) Dates of Hearing : 23 November, 2009 and 7 January, 2010 Date of Handing Down Review of Taxation: 3 March, 2010 --------------------------------- REVIEW OF TAXATION --------------------------------- I. Background 1.This is a review of taxation by the Plaintiff or Appellant or Paying Party (“Paying Party”). 2.In this case, the Paying Party was a customer of the Defendant or Respondent or Receiving Party (“Receiving Party”), who was engaged in stockbrokerage business. The Paying Party claimed he sold 1,400,000 China Telecom shares through the Receiving Party in the “grey market”. It was expected that China Telecom shares would shortly be offered to the public for subscription and then publicly traded on the stock exchange. However, due to the Asian financial crisis, when China Telecom shares were formally traded, many of the buyers who had agreed to buy such shares from the Paying Party defaulted and refused to take up the shares. The Paying Party claimed that the Receiving Party as his stockbroker should be personally liable to honour the transactions or, to put it in another way, it was liable to cross the “grey market” trades on “opening day”. 3.The Paying Party commenced HCCL39/2004 (“CFI Action”) against the Receiving Party. After an eight-day trial between 17 and 27 October 2006, Stone J rejected the Paying Party’s claim (“CFI Judgment”). The Paying Party appealed to the Court of Appeal (“Appeal Case”). At the appeal hearing on 6 March 2008, the Court of Appeal unanimously upheld the CFI Judgment and dismissed the appeal (“CA Judgment”). The Paying Party being dissatisfied with the result applied for leave to appeal to the Court of Final Appeal (“Leave Application”). At the hearing on 21 May 2008, the Court of Appeal dismissed the Leave Application. 4.At the taxation hearing on 21 and 22 October 2009 (“Taxation Hearing”), the CFI Action and the Appeal Case came before me for taxation of two bills of costs filed by the Receiving Party (“Taxation Bills”) pursuant to costs orders granted by Stone J and the Court of Appeal in favour of the Receiving Party. The present application for review of taxation by the Paying Party is confined to certain items of counsel’s fees in the Taxation Bills that I have taxed at the Taxation Hearing. 5.For easy reference, I shall refer to counsel for the Receiving Party and for the Paying Party as follows :
and I shall further refer to the handling solicitors for the Receiving Party as follows : (a) CWH (admitted in 1976), (b) KW (admitted in 1992) and (c) CL (admitted in 2002). CWH was the overall supervising partner who played a limited role in the handling of the case. KW was the handling partner in charge of the case and CL was an assistant solicitor. 6.In the Paying Party’s Supplemental List of Objections filed on 19 October 2009 (“SLOO”) and his solicitors’ written submissions dated 21 October 2009, a preliminary objection was taken as to the necessity, reasonableness and quantum of fees for instructing two counsel for the CFI Action, the Appeal Case and the Leave Application (collectively, “Legal Actions”). After hearing arguments by the parties’ respective law costs draftsman (“LCD”) at the Taxation Hearing, I ruled in favour of the Receiving Party for employing two counsel for the CFI Action. In respect of the Appeal Case and Leave Application, the Paying Party’s LCD (“P’s LCD”) conceded and abandoned the objection to two counsel. 7.By an Application for Review filed on 5 November 2009 (“Review Application”), the Paying Party raised objections to items 27, 39, 50, 104, 118, 132, 161, 240, 260, 295, 344, 422, 449, 476, 479, 482, 486, 490, 495, 498 and 500 of the Taxation Bill for the CFI Action (“CFI Bill”) and items 57 and 82 of the Taxation Bill for the Appeal Case and Leave Application (“CA Bill”), all of which items concerned counsel’s fees. By his Answer to the Paying Party’s Objections filed on 9 November 2009, the Receiving Party opposed all the above objections and abided by my rulings made at the Taxation Hearing. II. Principles for review of taxation 8.The Paying Party’s application for review of taxation was made pursuant to Order 62 rule 33 of the Rules of the High Court (“RHC”). Under Order 62 rule 34(2) of the RHC, on review of any decision in respect of any item of costs, the taxing master may receive further evidence and may exercise all the powers which he might exercise on an original taxation in respect of that item, including the power to award costs of and incidental to the proceedings before him, and any costs awarded by him to any party may be taxed by him and may be added to or deducted from any other sum payable to or by that party in respect of costs. III. Basis of taxation 9.Order 62 rule 28(2) of the RHC provides that costs allowed on a party and party basis are “all such costs as were necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being taxed”. 10.Hong Kong Civil Procedure 2009 Vol.1 para.62/App/28 at p.1010 provides as follows :
11.In Re Greater Beijing Region Expressways Limited HCCW399/1999 (unreported, 12 May 2004), Barma J described the approach to be adopted in respect of party and party taxation of counsel’s fees as follows :
IV. Two counsel for the CFI Action 12.The Paying Party objected to the Receiving Party employing two counsel for the CFI Action. This was taken as a preliminary objection at the Taxation Hearing and as a general reason for review at the hearing of the Review Application on 23 November 2009 and 7 January 2010 (“Review Hearing”). 13.However, the Paying Party’s written submissions dated 21 October 2009 for the Taxation Hearing conceded that the Receiving Party was entitled to senior counsel’s fees, so my ruling at the Taxation Hearing focused on the issue of whether it was necessary and proper to also employ a junior counsel (“Preliminary Ruling”). But in the course of the Taxation Hearing, notwithstanding the Paying Party’s concession as to the propriety of employing senior counsel, P’s LCD submitted that the Receiving Party was only entitled to recover hypothetical junior and not senior counsel’s fees for certain items of counsel’s fees in the CFI Bill. 14.In respect of such preliminary objection, the Paying Party raised a number of arguments at the Taxation Hearing :
15.A complete answer to the objection in paragraph 14(c) above can be found in JST’s two fee notes respectively dated 21 September and 25 October 2000, which plainly showed that he worked on the CFI Action before he was called to the Inner Bar in 2002. Indeed, both JST and GL were of the Outer Bar throughout their involvement in the CFI Action. 16.In respect of paragraph 14(a)-(b) above, P’s LCD in fact conceded at the Taxation Hearing that on taxation of costs of the CFI Action the taxing master had discretion to determine whether to allow fees for two counsel even in the absence of any certificate for two counsel. Although the Paying Party attempted to resurrect the objection in paragraph 14(a) above at the Review Hearing, Mr Yeung, solicitor for the Paying Party, eventually conceded it was ultimately a matter of the taxing master’s discretion. 17.The leading authority on the principles for the exercise of discretion for two counsel is Xinyuan Trading Co Ltd v NPH Petrochemical Limited HCA18159/1998 and CACV276/1998, Master Poon (as he then was) (unreported, 25 September 2000). Master Poon stated as follows :
18.To better appreciate the parties’ respective arguments, it is necessary to briefly set out the relevant background. Upon commencement of the CFI Action, the Paying Party’s Statement of Claim endorsed on the Writ of Summons was signed by PF and KYT, so the Receiving Party instructed BY and JST to advise and to prepare the Defence. After the Defence was filed on 20 October 2000, the CFI Action became largely dormant until 6 February 2003 when the Paying Party filed the Notice of Intention to Proceed. By that time, the Paying Party employed SW and KP as counsel on the case. As for the Receiving Party, BY and JST were no longer available at that time, so AH and GL were instructed in their place. 19.As discussed above, since P’s LCD conceded it was sufficient for the Receiving Party to employ a senior counsel without a junior, so I delivered the Preliminary Ruling on the basis of such concession and proceeded to adjudicate on the issue of whether it was necessary and/or proper to also employ junior counsel. So the taxation process was not engaged on the issue of whether it was necessary or proper to employ leading/senior counsel for the CFI Action in the original taxation, and consequently the Paying Party was not entitled to seek review on the same. 20.But in case I am wrong, I shall first consider whether it was necessary and/or proper to employ senior counsel for the CFI Action before coming to the issue of junior counsel. 21.The title of senior counsel signifies that counsel has reached a level of seniority, expertise and standing in the legal profession that merits the appointment to silk. Hence, the employment of senior counsel is often regarded as giving a party forensic advantage in more effective deployment of his case through senior counsel’s skill and experience. As to whether in a particular case it is appropriate to harness such benefits by employing senior counsel, the true question to be answered is whether it is necessary and/or proper for the relevant party (eg the Receiving Party in the CFI Action) to retain senior counsel and not whether junior counsel is capable of conducting the case on his own. 22.I cannot agree with the suggestion made by P’s LCD at the Taxation Hearing and/or by Mr Yeung at the Review Hearing that the CFI Action was a simple case based on contract. The CFI Action involved what Stone J described in paragraph 8 of the CFI Judgment as “a significant sum of money”, ie approximately HK$9,000,000.00, and a host of complex issues of mixed fact and law. The trial itself lasted eight days and the CFI Judgment ran to 45 pages and 161 paragraphs. 23.I need only refer to the opening paragraph of the CFI Judgment which succinctly captures the essential complexity and difficulty of the central legal issues that required determination by the court :
As is evident from the CFI Judgment, determination of the above legal issue required inter alia interpretation of the client agreement entered into between the parties, some consideration of the Stock Exchange Rules, and adjudication on what has since been described as the “section 76 defence” (ie the argument that trading of China Telecom shares in the “grey market” fell foul of section 76 of the Securities Ordinance Cap.333 so that any contract that purported to impose an obligation on the Receiving Party to cross the “grey market” trades on “opening day” was unenforceable). In my view, senior counsel’s involvement in rendering legal advice and appearing at trial was plainly called for in such context. 24.Stone J also pointed out in paragraph 16 of the CFI Judgment that the factual background was also unclear and “the court must wrestle with the merits of competing factual assertions”. The Receiving Party’s then account executive and witness who gave oral evidence at the trial of the CFI Action, Mr David Wong (“Mr Wong”), and the Paying Party (being the other witness who gave oral evidence at the trial) firmly disputed what was said during their telephone conversations with regard to “grey market” trading in China Telecom shares. So if Mr Wong’s recollection were correct, then as a matter of contract the terms of agreement struck between the parties would result in finding that the Receiving Party was not liable to the Paying Party on the facts, and the legal issue would then fall away. Paragraph 57 of the CFI Judgment put the matter nicely when it stated that “there is a significant issue of fact at stake, the resolution of which may, or may not, be depositive of the current litigation between these parties; as [SW] sagely remarked during his final submission, if he should lose on the facts his client [ie the Paying Party] will lose this case, but if he should succeed on the facts in itself this does not mean that his client will necessarily win”. 25.Whilst the fact there were witnesses to be examined or cross-examined does not of itself obviously justify the employment of senior counsel, there is no denying that the credibility/reliability of the Paying Party and Mr Wong as factual witnesses had a crucial bearing on the CFI Action, especially when there were in evidence certain transcripts of taped recordings made by the Paying Party of some of his conversations with Mr Wong. In the circumstances, the CFI Action called for special expertise in examining and cross-examining witnesses. I therefore accept it was a proper precaution to employ senior counsel to ensure that the Receiving Party’s case was fully and properly presented to the court. 26.Further, both parties anticipated the necessity for expert evidence in the course of the CFI Action to assist the court, especially expert evidence on securities trading and listing practices in relation to newly listed and/or about to be listed shares. The Paying Party had expert reports from Mr David White (“Mr White”) on the general issue and from Mr Wong Kam Wing on the quantum issue, and the Receiving Party had an expert report from Mr Clive Rigby (“Mr Rigby”). But after hearing arguments at trial Stone J delivered a ruling on the admissibility of expert evidence that resulted in the Receiving Party removing Mr Rigby’s expert report from the trial bundle and in the Paying Party adducing Mr White’s edited report without oral evidence. Mr Wong Kam Wing’s expert report became redundant following agreement between the parties on the calculation of the quantum of damages. In my view, dealing with such expert evidence called for special skill, knowledge and responsibility from experienced senior counsel. 27.The matters in issue were of great importance to the Receiving Party financially (given the amount of the claim) and commercially (given its desire to vindicate its stance and thereby remove any tarnish to its standing as a reputable stockbrokerage firm). The CFI Action was also of general importance to stockbrokers and other players in the market who dealt in “grey market” trading. All these matters point to the necessity and propriety of instructing senior counsel. 28.The next consideration is whether a junior should be instructed in addition to the employment of senior counsel. I accept that with the abrogation of the two counsel rule senior counsel can appear without a junior. But in my view the discussions above also lend justification to the employment of junior counsel for the CFI Action. Although I accept that both JST and GL were at the material times competent juniors in their own right, in view of the complexity and novelty of the legal issues and/or the importance of effective examination and cross-examination of the factual witnesses, I am of the view that it is necessary and/or proper to instruct junior counsel to assist senior counsel in legal research, effective preparation and at trial. 29.It has been suggested that there was no need for two counsel because CWH, KW and CL as experienced solicitors were capable of giving comprehensive and competent instructions to counsel on all aspects of the case. In my view, this is not relevant to the question to be addressed. The reasons for engaging the services of senior counsel together with a junior are quite separate and distinct from the question of whether counsel is fully and properly instructed. Counsel and solicitors have different work to do and different functions to perform, and neither should take credit for the work done by the other (see Juby & ors v London Fire and Civil Defence Authority; Saunders v Essex County Council (unreported, 24 April 1990) QBD, per Evans J). 30.As explained in Xinyuan Trading Co Ltd, the fact that the other side instructed two counsel is a relevant though not conclusive factor in determining whether the decision to instruct leading and junior counsel is appropriate. In the CFI Action, the Paying Party employed two counsel from the start, ie at first PF and KYT and then SW and KP. In my view, this case called for senior and experienced counsel/advocate with proper assistance by a junior in order to give weighty presentation of the parties’ respective case. The Paying Party no doubt recognised this when he employed two counsel. I am of the view that in the context of the CFI Action it was necessary for proper protection of the Receiving Party’s position that it should not have less assistance from counsel than that received by the Paying Party. 31.I am therefore driven to the conclusion that it is necessary and/or proper for the Receiving Party to instruct both senior and junior counsel for the CFI Action. I confirm and maintain my Preliminary Ruling on the review of taxation. V. Two counsel for the Appeal Case and Leave Application 32.Although P’s LCD and Mr Yeung eventually conceded and abandoned the objection to two counsel for the Appeal Case and Leave Application, I would like to take this opportunity to disabuse any misconception that there is no entitlement to fees for two counsel for proceedings in the Court of Appeal if there is no certificate for two counsel. 33.In True Rank Holdings Limited & anor v Lam Ka Chung, William & ors CACV38/2004 and CACV184/2004, Roger VP said at paragraph 13 as follows :
34.In Cheung Sun Lam v Lai Kam Man [2008] 5 HKLRD 1, 3, Rogers VP reiterated as follows :
35.Even after the implementation of the Civil Justice Reform (which period is irrelevant for the CA Bill), Rogers VP re-affirmed the above approach in UDL Holdings Limited & anor v Leung Yuet Keung & anor CACV356/2008 as follows :
This has been reiterated by Rogers VP as recently as in December 2009 in Cheung Cho Kam Sindy (appointed by Order dated 10 May 2005 to act as the representative of the estate of Madam Lau Mei Tai, the deceased) & anor v Cheung Yuet Ying Rose CACV178/2008 (unreported, 8 December 2009) :
36.It is therefore plain from the above that a party is entitled to be represented by two counsel at the Court of Appeal, anda certificate for two counsel is not a prerequisite for claiming fees for two counsel for appeal proceedings. In my view, there is no merit to the Paying Party’s arguments in this respect. VI. Item 27 of CFI Bill 37.Item 27 of the CFI Bill claimed counsel’s fees for consultation in the sums of HK$7,000.00 (BY) and HK$5,000.00 (JST). In item 13 of the List of Objections filed on 11 July 2009 (“LOO”), the Paying Party objected on the ground of “quantum excessive; suggest to reduce by $3,000.00 and $2,000.00 respectively”. At the Taxation Hearing, I reduced BY’s and JST’s fees by the sums of HK$3,500.00 and HK$2,500.00 respectively, which were more than the reductions suggested in the LOO. 38.In the Review Application and the Reasons for Review filed on 23 November 2009 (“Review Reasons”), the Paying Party claimed that since I had allowed HK$28,000.00 for BY to peruse the papers and listen to the taped recordings and HK$10,000.00 for JST to peruse the papers, their fees for consultation were unreasonably excessive in all the circumstances. Mr Yeung referred me to Hong Kong Civil Procedure 2009 Vol.1 para.62/App/40 at p.1012 which provides as follows :
39.BY and JST were instructed inter alia to advise and to prepare the Defence, and for such purpose they obviously had to peruse the papers that accompanied the instructions. Counsel’s fees under this item of costs were not for perusal of papers but for discussion (1 hour) between BY and JST (after their receipt of written instructions from the solicitors for the Receiving Party and after their perusal of the documents annexed thereto) on inter alia (a) the implications of some taped recordings of conversations between Mr Wong and the Paying Party and (b) the shape of possible legal defences that might be raised by the Receiving Party. Given the importance of the taped recordings to the factual disputes and to the credibility of witnesses, and further given the complexity of the case on matters of fact and law, I find it necessary and/or proper for senior and junior counsel to confer together in order to reach a common view on how the defence should run. In the circumstances, I do not see the relevance of the passage in Hong Kong Civil Procedure 2009 in paragraph 38 above. But bearing in mind that the exploration of possible defences at this stage was on a rather preliminary basis, I have on party and party taxation reduced the time required for the consultation. 40.In any event, the Paying Party’s LOO did not challenge the necessity of item 27 of the CFI Bill but only raised objection as to the quantum of fees. At the Taxation Hearing, I have reduced the quantum of counsel’s fees under this head even more severely than sought in the LOO. In my view and given my ruling in Part IV above, counsel’s fees under this item of costs as allowed at the Taxation Hearing were not unreasonable or excessive. I confirm and maintain my ruling at the Taxation Hearing for this item of costs. VII. Item 39 of CFI Bill 41.Item 39 of the CFI Bill claimed for JST’s fees in the sum of HK$10,000.00 for advice on the “section 76 defence”. Under item 18 of the LOO, the Paying Party objected by proposing a reduction of HK$4,000.00. At the Taxation Hearing, I reduced counsel’s fees by the sum of HK$5,000.00, which was more than the reduction suggested in the LOO. 42.In the Review Application and the Review Reasons, the Paying Party complained that JST’s fees allowed at HK$5,000.00 were excessive. It was said that these matters were within the competence and scope of CWH and KW, so counsel’s fees should be disallowed altogether. Mr Yeung referred me to Hong Kong Civil Procedure 2009 Vol.1 para.62/App/29 at p.1010 which provides as follows :
43.I do not see how this argument can help the Paying Party. First of all, on the matter of quantum of counsel’s fees, the Paying Party can hardly be heard to complain that the fees allowed were unreasonable or excessive since I reduced counsel’s fees even more severely than as sugguested in the LOO. 44.Secondly, the “section 76 defence” formed an integral part of the defences ran by the Receiving Party in the CFI Action, and in the written opening submissions of AH and GL for the trial 6 out of 28 pages were on this defence. The CFI Judgment also devoted 4½ pages (see paragraphs 143-153 therein) to the “section 76 defence”. I also agree with KW’s submissions that the “section 76 defence” was no easy subject. In my view, it is entirely appropriate to seek advice from counsel on such defence. 45.Thirdly, even if I were wrong and counsel’s advice on the “section 76 defence” was within the competence of the handling solicitors, it is plain that upon any disallowance of counsel’s fees for this item of costs I should still allow notional solicitors’ profit costs for rendering the necessary advice on the “section 76 defence” and not just disallow the cost for such advice altogether. Given KW’s taxed hourly rate of HK$4,000.00, the sum of HK$5,000.00 I allowed for item 39 of the CFI Bill at the Taxation Hearing merely equated to 1 hour 15 minutes of KW’s time, which I find to be eminently appropriate notional time period for rendering advice on the “section 76 defence”. 46.In reducing counsel’s fee by half for the purpose of party and party taxation, I have borne in mind the fact that there had been some preliminary discussion of the “section 76 defence” at JST’s conference on 10 August 2000 with the instructing solicitors and the Receiving Party (items 35-36 of the CFI Bill), and further discussion of such defence at the conference on 22 August 2000 attended inter alia by BY, JST, the instructing solicitors and the lay client (items 40-41 of the CFI Bill). It appears that after the consultation on 10 August 2000, the Receiving Party’s solicitors took further instructions and sent a fax to JST on 15 August 2000 setting out their views on the further instructions taken and seeking further advice from counsel. JST rendered the subject advice by fax on 18 August 2000, which therefore appeared to be a follow up opinion rather than full advice on a fresh subject matter. The conference on 22 August 2000 enabled BY (amongst other matters discussed) to further refine the advice on this defence. 47.Upon considering the above matters and in light of the discussions in Part IV above, I confirm and maintain my ruling on this item of costs at the Taxation Hearing for the review of taxation. VIII. Item 50 of CFI Bill 48.Item 50 of the CFI Bill claimed for JST’s fees for “settled letter, draft Defence and Joint note” on 29 August 2000 in the sum of HK$25,000.00. In item 25 of the LOO, the Paying Party objected on the ground of “quantum excessive; suggest to reduce $8,000.00”. In item 50 of the SLOO, the Paying Party suggested that this item be taxed off. At the Taxation Hearing, I reduced JST’s fees by HK$5,000.00 under party and party taxation to reflect disallowance of counsel’s fees for settling the letter to the Stock Exchange. 49.Mr Yeung had no quarrel with my disallowance of JST’s fees for settling the letter to the Stock Exchange. But the Review Application and the Review Reasons asserted that the tasks of settling the Defence and preparing the advice by the Joint Note on 30 August 2000 was within the competence and scope of CWH and KW, so the entirety of JST’s fees under item 50 of the CFI Bill should be disallowed. 50.I note the Paying Party did not seek review of taxation in respect of BY’s fees for preparing two Joint Notes and for settling draft Defence allowed in the sum of HK$40,000.00 under item 54 of the CFI Bill. In such circumstances, the Paying Party could not be heard to challenge the necessity or propriety of such items of work. But if it were argued that the handling solicitors could have drafted the Defence and the Joint Note for senior counsel (without a junior) to settle, I reject such contention. 51.In my view, it is eminently appropriate to have both senior and junior counsel draft and settle the Defence and render the Joint Note of advice. As discussed in Part IV above, the complexity of the factual disputes and the novelty of the legal issues made it abundantly proper for two counsel to attend to such tasks. Even though such factor is not conclusive, the fact that PF and KYT drafted/settled the Statement of Claim also suggested it was necessary and/or proper to have two counsel draft the response thereto (ie the Defence) and to advise by the Joint Note. 52.Even if I am wrong and these tasks were within the competence of the handling solicitors, it is plain that upon disallowing JST’s fees I still have to allow notional solicitors’ costs for drafting the Defence and the Joint Note of advice for senior counsel to settle. Given KW’s taxed hourly rate of HK$4,000.00, the sum of HK$20,000.00 I allowed at the Taxation Hearing for item 50 of the CFI Bill equated to 5 hours of KW’s time, which in my view is appropriate notional time for such task. 53.Upon considering the above matters and the discussions in Part IV above, there is no merit to the Paying Party’s objections and I confirm and maintain my ruling for this item of costs at the Taxation Hearing for the review of taxation. IX. Items 104 and 118 of CFI Bill 54.Item 104 of the CFI Bill claimed for AH’s fees for perusing documents on 18 June 2003 (1 day) in the sum of HK$56,000.00. In item 38 of the LOO, the Paying Party objected on the ground “the same should be covered by Brief, suggest this item be taxed off”. In item 38 of the SLOO, the Paying Party challenged “quantum and relevancy”. At the Taxation Hearing, I deducted the sum of HK$16,000.00 to reduce AH’s fees to HK$40,000.00 for the purpose of party and party taxation. 55.Item 118 of the CFI Bill claimed for AH’s fees for perusing documents on 19 June 2003 (1 day) in the sum of HK$56,000.00. In item 40 of the LOO, the Paying Party objected on the ground of “duplication of item 104; suggest this item be taxed off”. At the Taxation Hearing, I deducted a sum of HK$31,000.00 to reduce AH’s fees to HK$25,000.00 for the purpose of party and party taxation. 56.In the Review Application and the Review Reasons in respect of item 104 of the CFI Bill, the Paying Party argued that there was likely duplication of work due to change of leading counsel from BY to AH and such work had been previously charged by BY. The Paying Party referred to item 105 of the CFI Bill being “Preparing Note of Non-admission of documents” (which work was included in the main item for solicitors’ profit costs) and suggested that senior counsel’s fees under item 104 of the CFI Bill “seems [to be for] perusal for advice on “Notice of Non-admission of documents””. Mr Yeung also relied on Hong Kong Civil Procedure 2009 Vol.1 para.62/App/40 at p.1012 referred to in paragraph 38 above. 57.In the Review Application and the Review Reasons in respect of item 118 of the CFI Bill, the Paying Party objected on the basis that there was duplication of work due to change of senior counsel and that the taxed amount was excessive. Alternatively, it was said that if AH’s perusal of documents was for advising on the witness statement of Mr Wong (see item 119 of the CFI Bill), such fees should be disallowed since such work should be within the competence of the handling solicitors. Still further or in the alternative, Mr Yeung submitted that any costs allowed for item 118 of the CFI Bill should be taken into account in assessing the quantum for AH’s brief fee for trial under item 476 of the CFI Bill. 58.As explained above, there was a period of inactivity between 2000 and 2003 in respect of the CFI Action as a result of the Paying Party failing to take further action after the Receiving Party filed its Defence (see paragraph 18 above). When the case picked up speed at the beginning of 2003, BY and JST were no longer available and the Receiving Party employed AH and GL instead. As a result of change of counsel, Instructions to Counsel dated 14 May 2003 were sent to AH, and such instructions required AH to (a) peruse the annexed papers, (b) advise in conference on the strategy and further conduct of the case, and (c) refine on the areas to be covered by expert evidence. Item 104 of the CFI Bill referred to AH’s fees for perusal of about 600 pages of documents listed in the schedule to the Instructions (see item 95 of the CFI Bill). 59.KW argued that quite a lot of documents were involved and that in such circumstances even the guidance in Hong Kong Civil Procedure 2009 Vol.1 para.62/App/40 at p.1012 (see paragraph 38 above) acknowledged that separate charge for perusal of papers might be considered. 60.In respect of item 104 of the CFI Bill, I accept there must be some duplication in the documents perused by BY and AH (eg BY must have perused the Writ of Summons when he and JST drafted/settled the Defence, and BY must have perused some of the documents listed in the Receiving Party’s List of Documents sent to AH), but even ifthere had been no change of counsel it would still have been necessary and/or proper for the same team of counsel to review the earlier papers and to peruse any further documents supplied by the instructing solicitors upon revival of the case after dormancy for over two years. The Paying Party could not be heard to complain since he was the author of the delay. 61.In respect of item 118 of the CFI Bill, AH had to peruse documents not previously seen by BY. On 14 May and 3 June 2003, the solicitors for the Paying Party served on the solicitors for the Receiving Party copies of discovered documents under their client’s List of Documents (see item 97 of the CFI Bill) and Supplemental List of Documents (see item 101 of the CFI Bill). At the Review Hearing, KW explained that the solicitors for the Receiving Party forwarded copies of these documents (which BY had not sighted) to AH for his perusal. As pointed out by KW, these documents included documents relating to the Paying Party’s statement of accounts, transaction records of the subject stock, and tables showing average share price of the subject stock at the relevant times, which were all documentary evidence having a bearing on the Paying Party’s case. I agree with KW that such perusal was certainly not for the purpose of advising on the “Notice of Non-compliance of documents” as suggested by the Paying Party. 62.It is evident from the confidential documents produced by the Receiving Party for the review of taxation of the CFI Bill that the documents submitted for AH’s perusal under item 118 of the CFI Bill also included further documents from the Receiving Party that were relevant to the proceedings (eg comments from Mr Wong on his draft witness statement, notes of meetings between Mr Wong and the solicitors for the Receiving Party, and Mr Wong’s responses to the Paying Party’s pleaded allegations, all of which went to the make-up of the case of the defence). 63.I cannot see how perusal of these documents constituted duplication of work carried out by BY or how such perusal related solely to advising on the witness statement of Mr Wong as suggested by Mr Yeung. In the letter of instructions dated 19 June 2003, AH was requested to advise on overall strategy and conduct of the case and on the issues to be covered by expert evidence in light of the court direction for exchange of expert reports by 28 July 2003. I cannot see how counsel could have properly advised on these matters without perusal of the relevant documentary evidence and/or without being informed as to the likely scope of the factual witness evidence. 64.I find it is necessary and proper for AH to peruse the above documents, but on party and party taxation and upon taking into account the volume of the documents for perusal, I am of the view that such task should have takenless than two days. In reducing AH’s fees by the sums of HK$16,000.00 for item 104 of the CFI Bill and HK$31,000.00 for item 118 of the CFI Bill, I have taken into account any unnecessary duplication of work and considered the appropriate time required for perusal of the relevant papers. 65.Mr Yeung next argued that the Paying Party should not be charged twice for perusal of papers (ie charge for perusal of papers included in AH’s brief fee under item 476 of the CFI Bill and a separate charge for such work under items 104 and 118 of the CFI Bill). 66.But the trial only took place in October 2006, ie more than 3 years after item 104 of the CFI Bill. In this respect, I refer to the guidance Hong Kong Civil Procedure 2009 Vol.1 para.62/App/31 at p.1011 as follows :
67.If counsel is properly engaged to perform work prior to trial which necessarily requires perusal of papers, I do not see why he should not be entitled to charge for such perusal that is separate and distinct from his brief fee for trial (which trial may be years away or which may not happen at all). Mr Yeung eventually conceded he would not take his submissions that far and only urged me to bear in mind the quantum of fees in items 104 and 118 of the CFI Bill when considering AH’s brief fee for trial under item 476 of the CFI Bill. 68.Taking the above matters into account, I am unable to accept the Paying Party’s objection to items 104 and 118 of the CFI Bill as allowed, and I confirm and maintain my ruling on these two items of costs at the Taxation Hearing for the review of taxation. X. Item 132 of CFI Bill 69.Item 132 of the CFI Bill claimed for AH’s fees on 2 July 2003 for “settling draft Statement of David Wong (8 hours)” in the sum of HK$56,000.00. In item 47 of the LOO, the Paying Party objected on the ground of “quantum excessive; suggest this item be taxed off”. In item 47 of the SLOO, the Paying Party objected on the ground that the quantum was excessive. At the Taxation Hearing, I deducted the sum of HK$6,000.00 to reduce AH’s fees to HK$50,000.00 for the purpose of party and party taxation. 70.In the Review Application and the Review Reasons, it was said that to allow AH’s fees of HK$50,000.00 for settling draft witness statement of Mr Wong was unreasonable and in any event too excessive. Mr Yeung submitted that such witness statement was purely factual in nature and could have been drafted by the handling solicitors, so there was no need to involve counsel at all. Mr Yeung referred me to Hong Kong Civil Procedure 2009 Vol.1 para.62/App/37 at p.1012 which provides as follows :
71.As explained above, the CFI Action was a far from simple case; indeed it could be said to be a complex case. I bear in mind the fact that Mr Wong’s evidence was of primary importance as reflected in the detailed analysis of his evidence and the relevant factual findings in the CFI Judgment (see pages 18-28 and paragraphs 71-105 therein). As explained above, if the trial judge accepted Mr Wong’s evidence, the legal issues would fall away and the Receiving Party would succeed at trial. 72.I have read the documents in the confidential bundle lodged for the review of taxation, and am impressed by the diligent and thorough efforts of the solicitors for the Receiving Party in preparing various drafts of Mr Wong’s witness statement, in taking primary factual instructions from Mr Wong, and in making laborious cross-references to the documentary evidence, all of which no doubt enabled senior counsel to focus on the overall scope and thrust of the draft witness statement rather than the fine factual details. But it will be wrong to belittle the great benefit to the Receiving Party’s case in receiving senior counsel’s guiding hand on the presentation of the factual evidence from Mr Wong. 73.Preparation of Mr Wong’s witness statement was also complicated by the fact that he was separately represented by a senior solicitor/partner from another firm of solicitors. Mr Wong’s precaution was understandable. After all, if the court eventually rejected his evidence and the Receiving Party lost the case, there was a real possibility that the Receiving Party might seek indemnity from him for any loss it might have suffered. Such considerations required the Receiving Party to approach the preparation of Mr Wong’s witness statement with care, sensitivity and fairness. 74.In my view, the involvement of senior counsel was justified in the particular context of this case. Indeed, the guidance in Hong Kong Civil Procedure 2009 Vol.1 para.63/App/37 at p.1012 suggested that in more complicated cases counsel’s fees for settling witness statement might be allowed if justified. But bearing in mind that AH was tasked to give overall guidance on the scope and presentation of the evidence to be elicited from Mr Wong rather than on the fine factual details, I reduced his fees by HK$6,000.00 for the purpose of party and party taxation. I do not see any basis to further reduce or tax off this item of costs as suggested by the Paying Party. I therefore confirm and maintain my ruling on this item of costs at the Taxation Hearing for the review of taxation. XI. Item 161 of CFI Bill 75.Item 161 of the CFI Bill claimed for AH’s fees on 14 September 2003 for advice by email in the sum of HK$7,000.00. In item 54 of the LOO, the Paying Party objected on the following ground of “please produce the same for inspection; suggest to reduce $3,000.00”. At the Taxation Hearing, I reduced AH’s fees by the sum of HK$4,000.00 (ie more than the reduction sought by the Paying Party) to HK$3,000.00 for the purpose of party and party taxation. 76.In the Review Application and the Review Reasons, the necessity of such email advice was put in issue. It was suggested that if such email advice was a continuation of AH’s advice on the draft witness statement of Mr Wong, it should be disallowed because counsel should not be so heavily involved in dealing with factual evidence. Mr Yeung submitted that given the seniority and experience of CWH and KW, neither senior nor junior counsel would have been required to render such advice by email. 77.AH’s advice by email was not about further drafting or settling the witness statement of Mr Wong. The advice sought was premised on the comparative analysis of various previous statements given by Mr Wong on key topics prepared by the solicitors for the Receiving Party. In short, AH was asked to address on the forensic implications of such previous statements for the further conduct of the case as well as for the eventual trial (see items 154-160 of the CFI Bill). I consider such advice (which necessitated perusal of the relevant documents) to be crucial to an effective assessment of the intrinsic reliability or otherwise of Mr Wong’s evidence, which went to the heart of the factual dispute between the parties. In my view, this was a task that justified the involvement of senior counsel. However, in view of the concise nature of the advice by email, I have reduced AH’s fees by HK$4,000.00 for the purpose of party and party taxation, which was more severe than the reduction proposed by the Paying Party. In the circumstances, I confirm and maintain my ruling on this item of costs at the Taxation Hearing for the review of taxation. XII. Items 240 and 260 of CFI Bill 78.Item 240 of the CFI Bill claimed for AH’s fees on 11 June 2004 for perusal of papers in the sum of HK$17,500.00. In item 68 of the LOO, the Paying Party objected by suggesting to reduce HK$5,000.00. At the Taxation Hearing, I reduced AH’s fees by the sum of HK$5,500.00 (ie more than the reduction sought by the Paying Party) to HK$12,000.00 for the purpose of party and party taxation. 79.Item 260 of the CFI Bill claimed for AH’s fees on 19 June 2004 for “drafting Note of advice” in the sum of HK$14,500.00. In item 72 of the LOO, the Paying Party objected on the ground that “quantum excessive; Suggest to reduce $6,000.00”. At the Taxation Hearing, I reduced AH’s fees by the sum of HK$6,000.00 (ie the same reduction as suggested by the Paying Party) to HK$8,500.00 for the purpose of party and party taxation. 80.In the Review Application and the Review Reasons in respect of item 240 of the CFI Bill, the Paying Party required the Receiving Party to justify the need to peruse papers which apparently related to preparation of the expert statement of Mr Rigby. Mr Yeung suggested that counsel should maintain forensic independence and not become involved in the preparation of expert opinion, and hence this item of costs should be disallowed. Mr Yeung referred me to Hong Kong Civil Procedure 2009 Vol.1 para.62/App/35 at p.1012 which provides as follows :
Alternatively, Mr Yeung suggested that any costs allowed for perusal of papers under this item of costs should be taken into account in assessing AH’s brief fee for trial under item 476 of the CFI Bill. 81.In the Review Application and the Review Reasons for item 260 of the CFI Bill, it was suggested that since item 262 of the CFI Bill was for attending checklist hearing before Master Lung on 23 June 2004, AH’s Note of Advice was apparently for the purpose of the checklist hearing for which counsel’s involvement was unnecessary. The Receiving Party was requested to justify the necessity of this item of costs. The Paying Party further complained that the amount of HK$8,000.00 as allowed was too excessive. 82.These two items of costs should be put in their proper context. On 9 March 2004, the Paying Party issued a summons for directions for inter alia disclosure of expert reports on the issues as listed therein. Such summons was returnable for argument before Master A Ho on 17 June 2004. On 11 June 2004, the solicitors for the Receiving Party sent instructions to AH and GL for their advice on a number of matters, including the scope of the issues to be canvassed by the experts, specific discovery, etc. Conference was held with AH and GL on 15 June 2004 for verbal advice in advance of the substantive hearing of the aforesaid summons. With the benefit of such verbal advice and the written skeleton arguments prepared by AH, KW attended the substantive hearing of the summons on behalf of the Receiving Party, and KP of counsel appeared on behalf of the Paying Party. On 19 June 2004, AH rendered a formal Note of Advice pursuant to the consultation on 15 June 2004. The checklist hearing was held on 23 June 2004. 83.Counsel’s perusal of papers under item 240 of the CFI Bill related to a table of transactions traded on the material dates prepared by the solicitors for the Receiving Party, a draft statement of Mr Rigby, and documents supplied by the Paying Party pursuant to specific discovery request (eg a table showing sale and purchase of the subject stock by the Paying Party on the material day and the relevant contract notes). KW explained that these documents (which went to show the volume of trading on the subject stock by the Paying Party with the Receiving Party and with other stockbrokers) were relevant to the question of whether the Paying Party were speculating on the subject stock at the material time. KW further argued (and I agree) that such documents were eventually deployed in evidence at the trial, so it was necessary and/or proper for senior counsel to review them. 84.As regards item 260 of the CFI Bill, it was certainly justified for senior counsel to advise on the scope of issues to be canvassed in the expert report (which necessarily would have a material bearing on the eventual trial) in light of the preliminary draft statement of Mr Rigby and the imminent substantive hearing of the Paying Party’s summons for expert directions. AH was not asked to settle the statement of Mr Rigby under this item of costs. Further, it is a pertinent if not conclusive factor that the Paying Party saw fit to instruct KP to appear at the substantive hearing of the summons to address on the scope of issues to be covered by the experts. 85.As regards the other matters raised in the letter of instructions, it is in my view justified for AH to give overall guidance onthe further conduct of the case before the checklist hearing. I also note with interest that the Paying Party did not seek any review of item 244 of the CFI Bill which covered counsel’s fees for inter alia discussion between AH and GL on the letter of instructions of 11 June 2004 and for the conference on 15 June 2004 for “general advice on the position of the case before the checklist hearing on 23.6.04” and for “drafting (1 hour)”. KW submitted that counsel’s fees for the drafting work under item 244 of the CFI Bill in fact related to the written skeleton arguments that in senior counsel’s view should be put forward at the substantive hearing of the Paying Party’s summons on expert directions (see paragraph 82 above). Indeed, the written skeleton arguments used at such hearing were signed by AH. In my view, there is no overlap with the drafting work in item 240 of the CFI Bill. 86.In such circumstances, I am unable to say that perusal of papers under item 240 of the CFI Bill was not necessary or proper. However, having considered the volume of papers to be perused, I have reduced AH’s fees by HK$5,500.00 for the purpose of party and party taxation. In respect of item 260 of the CFI Bill, as explained above, the advice was sought on a number of matters including the scope of expert evidence and the further conduct of the case. In my view, it is proper for senior counsel to confirm and refine his verbal advice at the conference on 15 June 2004 by reducing it in writing, but taking into account the verbal advice rendered in conference, I have reduced AH’s fees by the sum of HK$6,000.00 for the purpose of party and party taxation. 87.I do not see any basis for taxing off or further reduction of counsel’s fees allowed for these two items of costs. I therefore confirm and maintain my rulings at the Taxation Hearing on these two items of costs for the review of taxation. XIII. Item 295 of CFI Bill 88.Item 295 of the CFI Bill claimed for GL’s fees on 11 March 2005 for conference in the sum of HK$7,000.00. In item 81 of the LOO, the Paying Party objected on the ground that “quantum excessive; propose to reduce $3,000.00”. It was suggested that since item 294 of the CFI Bill was for solicitors’ costs incurred by KW (2 hours) and CL (2 hours) for attending conference with GL for listening to the taped recordings (in respect of conversations between the Plaintiff and Mr Wong) and reviewing evidence, there was no need for GL to listen to the taped recordings and item 295 of the CFI Bill should be disallowed altogether. However, at the Taxation Hearing, I have taxed off item 294 of the CFI Bill and reduced GL’s fees under item 295 of the CFI Bill by the sum of HK$3,000.00 (ie the same reduction as suggested by the Paying Party) to HK$4,000.00 for the purpose of party and party taxation. 89.In the Review Application, it was again suggested that listening to the taped recordings were within the scope of work of solicitors and there was no need for GL to listen to the same because he could simply refer to the transcription of the taped recordings. It was further argued that in any event GL’s fees allowed at HK$4,000.00 for such exercise was too excessive. 90.I cannot see how the objection to this item of costs by the Paying Party can stand given that item 294 of the CFI Bill has been taxed off. I have carefully studied the supporting attendance note in the confidential bundle submitted for the review of taxation. Bearing in mind that the taped conversations between Mr Wong and the Paying Party were part of the key evidential material relied on by the Paying Party at the trial, and further given the further progress of litigation which made it important to review such taped conversations in the context of the documentary and witness evidence as disclosed and/or filed up to that stage, it was necessary and proper for junior counsel to listen to the taped recordings and to advice on follow up action upon such review. 91.But even assuming that Mr Yeung’s argument were correct in that listening to the taped recordings was within the competence of the handling solicitors, such exercise would still have taken KW an hour or so, and at his taxed hourly rate of HK$4,000.00, his notional costs would have been the same as (if not more than) the sum of HK$4,000.00 I have allowed for GL’s fees. There is no merit to the Paying Party’s objection, and I confirm and maintain my ruling on this item of costs at the Taxation Hearing for the review of taxation. XIV. Item 344 of CFI Bill 92.Item 344 of the CFI Bill claimed for AH’s fees on 7 July 2005 for “perusal of Clive Rigby’s statement and advice by email” in the sum of HK$12,000.00. In item 87 of the LOO, the Paying Party objected by suggesting reduction of HK$5,000.00. At the Taxation Hearing, I reduced AH’s fees by the sum of HK$5,000.00 (ie the same reduction as suggested by the Paying Party) to HK$7,000.00 for the purpose of party and party taxation. 93.In the Review Application and the Review Reasons, it was suggested that counsel should not have advised on the expert statement of Mr Rigby in order to maintain forensic independence, so AH did not have to render the advice by email and the Paying Party should not be made liable to pay for the same. Mr Yeung referred me to Hong Kong Civil Procedure 2009 Vol.1 para.62/App/35 at p.1012 (see paragraph 80 above). 94.KW informed the court that after crosschecking the confidential primary documents lodged for the review of taxation, the description for item 344 of the CFI Bill was clerically incorrect. Although AH’s fee note dated 2 June 2006 did refer to “perusal of Clive Rigby’s statement and advice by email” on 7 July 2005, such email in fact only advised on the following matters : (a) whether the Receiving Party should amend the Defence to plead certain arguments in the alternative, (b) whether amendments should be made to certain paragraphs of the Defence to make the pleaded defences more prominent, and (c) the estimated length of the trial. By that time Mr Rigby’s statement had already been filed, so the reference to such statement in the instructions was merely to keep senior counsel up to date on the status of the litigation and for seeking senior counsel’s advice on the conduct of the case. 95.Mr Yeung pointed out that ultimately there were no amendments to the pleadings of the Receiving Party, and in any event costs for considering potential amendment of pleadings should not be visited on the Paying Party. 96.In my view, there can be no doubt that it was necessary and proper for AH (whom the Receiving Party intended to brief for the trial) to advise on the estimated length of the trial. As regards the advice on potential amendment of pleadings, I accept it should not have been laid at the Paying Party’s door, and the quantum should properly reflect this. However, I bear in mind that at the Taxation Hearing I have reduced AH’s fees by HK$5,000.00 which is the same as the reduction suggested in the LOO. But since I have disallowed counsel’s fees for advice on potential amendment of pleadings under party and party taxation, I am prepared to further reduce AH’s fees by the sum of HK$1,000.00 to give a final sum of HK$6,000.00 on review of taxation for this item of costs. XV. Item 422 of CFI Bill 97.Item 422 of the CFI Bill claimed for GL’s brief fee for attending the Pre-Trial Review (“PTR”) hearing before Stone J on 1 September 2006 in the sum of HK$35,000.00. In item 99 of the LOO, the Paying Party objected by suggesting reduction by HK$10,000.00. At the Taxation Hearing, I reduced GL’s fees by the sum of HK$5,000.00 to HK$30,000.00 for the purpose of party and party taxation. 98.In the Review Application and the Review Reasons, it was said that all along CWH and KW handled the case with the benefit of counsel’s advice, so the handling solicitor should attend the PTR hearing before the trial judge. It was also argued that in any event the fees allowed in the sum of HK$30,000.00 were excessive. 99.Counsel and not handling solicitors had conduct of the trial. The Receiving Party submitted (and I agree) that it was proper and customary for trial counsel to attend the PTRhearing before the trial judge. Further, although it is a pertinent but not conclusive factor, the Paying Party also instructed KP to attend the PTR hearing before Stone J. 100.I note from the written record of the hearing kept by CL that the issues canvassed at the PTR hearing essentially focused on the readiness of the case for trial, eg the disputed matters that required adjudication at trial, the status of the pleadings, the factual and expert evidence that might impact on the trial, the preparation of the trial bundle, the language of the trial, the transcription of the proceedings, the preparation of opening submissions etc. It is therefore plain that GL should attend the PTR hearing. 101.Given GL’s seniority at the material time and the nature of the hearing which required attending counsel to assist the trial judge by being fully familiar with the case, I am unable to say that counsel’s fees allowed in the sum of HK$30,000.00 was unreasonable and excessive. I therefore confirm and maintain my ruling in respect of this item of costs at the Taxation Hearing for the review of taxation. XVI. Item 449 of CFI Bill 102.Item 449 of the CFI Bill claimed for GL’s fees for conference with the solicitors for the Receiving Party and Perry Luk (“Mr Luk”) on 3 October 2006 in the sum of HK$6,000.00. In item 109 of the LOO, the Paying Party objected on the ground “quantum excessive; suggest to reduce $4,000.00”. At the Taxation Hearing, I reduced GL’s fees by the sum of HK$2,000.00 to HK$4,000.00 for the purpose of party and party taxation. 103.In the Review Application and the Review Reasons, the necessity of such conference with GL was challenged. It was suggested that such conference concerned factual witness evidence that was within the competence of the handling solicitors. Mr Yeung submitted it was unnecessary for counsel to be involved, and in any event the sum of HK$4,000.00 allowed was excessive. Mr Yeung also referred me to Hong Kong Civil Procedure 2009 Vol.1 para.62/App/29 at p.1010 (see paragraph 42 above). 104.The trial was scheduled to start on 17 October 2006. Solicitors for the Receiving Party had had various conferences with Mr Luk for preparation of his witness statement filed on 12 July 2005. Counsel was not involved in drafting or settling Mr Luk’s witness statement and had not met Mr Luk. But since Mr Luk was a witness as to fact for the Receiving Party who might have to give oral evidence and the trial was due to start, it was necessary and proper for junior counsel who had conduct of the trial to meet Mr Luk to see for himself how such witness would have fared when he gave evidence on the key topics. 105.As regards quantum of counsel’s fees, I consider the sum of HK$4,000.00 for a 1½ hour conference both reasonable and appropriate. I reject any contention that such charges were unreasonable and/or excessive. I therefore confirm and maintain my ruling on this item of costs at the Taxation Hearing on the review of taxation. XVII. Item 476 of CFI Bill 106.Item 476 of the CFI Bill claimed for AH’s and GL’s brief fees for the trial in the sums of HK$490,000.00 and HK$240,000.00 respectively. Initem 116 of the LOO, the Paying Party objected on the ground “quantum excessive; suggest to reduce the sums by $200,000.00 and $100,000.00”. At the Taxation Hearing, I reduced AH’s and GL’s fees by the sums of HK$90,000.00 and HK$40,000.00 respectively for the purpose of party and party taxation. 107.In the Review Application and the Review Reasons, the Paying Party challenged the necessity for two counsel, but in Part IV above I have found against him on this issue. The Paying Party complained that prior to being briefed for trial (ie since mid-2003) AH and GL had already charged total sums of HK$370,000.00 and HK$148,250.00 respectively, hence their brief fees allowed at HK$400,000.00 and HK$200,000.00 were excessive. 108.Hong Kong Civil Procedure 2009 Vol.1 para.62/App/31 at pp.1010-1011 provides as follows :
109.I rely on but need not repeat here the discussions above on the array of complex and challenging issues of fact and law in the CFI Action that fell outside the scope of normal litigation over contractual disputes, the involvement of expert evidence, the substantial amount of the claim and the importance of the case to the parties and to the stockbrokerage market. It is obvious that counsel handling the trial would be required to possess and display familiarity with a specialised field. Leading counsel had to prepare a substantial amount of material and to undertake complex cross-examination that required specialised skill. AH and GL prepared 28 pages of written opening submissions (in 12pt font and single spacing) together with a bundle of authorities, and perused and considered the written opening submissions of SW and KP that ran to 26 pages as well as their bundle of authorities. 110.In my view, under item by item taxation, it is not correct to assess counsel’s brief fees by considering what fees had been globally allowed to counsel for past work, which fees must have been allowed on the basis that the work previously performed were necessary and proper and that the level of fees allowed for such work were not unreasonable or excessive. In assessing the appropriate measure of counsel’s brief fees, the taxing master should take into account the work generally remunerated by brief fees (see paragraph 108 above) and the special factors in the particular case that impact on counsel’s brief fees (see paragraph 109 above for the CFI Action). 111.The test posited for counsel’s brief fees envisaged a hypothetical solicitor determining a proper and reasonable fee for a hypothetical counsel competent to do the case and not being in a position to expect a fashionable fee. Since I have concluded that two counsel was appropriate for the CFI Action, the hypothetical solicitor could not have ignored the status of senior counsel that brought with it not only the ability to be instructed in more complex cases but also the ability to demand higher fees. In my view, taking into account the circumstances in the paragraph 109 above and further taking into account the scope of work covered by the refresher and non-refresher fees discussed in Part XVIII below, it could not be said that the brief fees as allowed under the original taxation, ie HK$400,000.00 and HK$200,000.00, were unreasonable or excessive from the perspective of a reasonably careful and prudent solicitor under the test posited above. I therefore confirm and maintain my ruling on this item of costs at the Taxation Hearing on the review for taxation. XVIII. Items 479, 482, 486, 490, 492, 495, 498 and 500 of CFI Bill 112.Items 479, 482, 486, 490, 492, 498 and 500 of CFI Bill claimed for AH’s and GL’s refresher fees for the trial on 18-20, 23-25 and 26-27 October 2006 in the respective daily sums of HK$70,000.00 and HK$35,000.00. Although the CFI Judgment omitted reference to 26 October 2006 as a sitting day (item 498 of the CFI Bill), the court records showed that it was a full-day sitting day. Item 495 of the CFI Bill was said to be AH’s and GL’s fees in the respective sums of HK$70,000.00 and HK$35,000.00 for preparation of closing submissions on a non-sitting day (ie 25 October 2006). 113.The Paying Party’s stance is somewhat confusing :
114.At the Taxation Hearing, I allowed (a) AH’s and GL’s daily refresher fees under items 479, 482, 486, 490, 498 and 500 of the CFI Bill, and (b) their non-refresher fees for item 495 of the CFI Bill as claimed for the purpose of party and party taxation. 115.In the Review Application and the Review Reasons, the Paying Party claimed that the fees in the above items of costs (without distinguishing between refresher and non-refresher fees) were excessive given that AH and GL had been involved at all stages of the proceedings. The Paying Party also relied on the same grounds as his objection to the brief fees under item 476 of the CFI Bill. 116.Although the Paying Party objected to the involvement of junior counsel, I have already ruled in favour of two counsel for the CFI Action in Part IV above. Once such objection against two counsel was removed, there was in fact no complaint from the Paying Party as to the necessity and/or propriety of these items of refresher and non-refresher fees, and the compliant was merely restricted to the matter of quantum. 117.The Paying Party has not explained why his proposal for reduction of the amount of the refresher fees varied from day to day (eg from HK$20,000.00 to HK$30,000.00 and from HK$10,000.00 to HK$15,000.00), and why he did not object to the quantum of the refresher fees for item 486 of the CFI Bill in the LOO and the SLOO. For example, on 23 and 26 October 2006 (items 490 and 498 of the CFI Bill – see paragraph 113(a) and (b) above), the sitting hours were quite similar (10:15am – 4:09pm and 10:15am – 4:36pm) and yet the reductions of counsel’s refresher fees proposed by the Paying Party varied from HK$30,000.00 to HK$20,000.00 and from HK$15,000.00 to HK$10,000.00. 118.Since a refresher fee is an amount allowed to counsel for necessary attendance at a hearing after the first day during ordinary court hours, the Paying Party’s proposed variable reductions of refresher fees are perplexing, and they immediately raise query as to the underlying rationale for the Paying Party’s objection. 119.In any event, even if the level of refresher fees as claimed should be reduced for the purpose of party and party taxation (which I disagree), in my view it is not appropriate to reduce such fees at variable rates. Indeed, refresher fees are charged on a daily basis and do not depend on the burden of a particular day. Inevitably there will be some hard days and some easy days during a trial, but such factor is in-built into the going rate. There is no justification for the taxing master to tinker with the daily rate unless it is plainly and obviously demonstrated that a particular day is easier than other days or vice versa. Here, the Paying Party failed to so demonstrate. 120.In taxation, the amount of a refresher fee is always in the discretion of the taxing master (see paragraph 10 above). In my view, the hypothetically reasonable solicitor who is expected to know the going rate for the hypothetical senior and junior counsel capable of conducting the CFI Action effectively would not have balked at or, in other words, would have offered daily refresher fees of HK$70,000.00 and HK$35,000.00 for AH and GL under items 479, 482, 486, 490, 492, 498 and 500 of CFI Bill. In coming to such view, I take into account the usual work undertaken on sitting days for which refresher fees were charged and the special factors discussed in paragraph 109 above (including arguments on admissibility of expert reports and extensive cross-examination of the Paying Party at trial). I confirm and maintain my ruling on these items of costs at the Taxation Hearing for the review of taxation. 121.Item 495 of the CFI Bill concerned counsel’s fees for preparation of written closing submission on a non-sitting day. As explained in paragraph 116 above, the Paying Party merely challenged the quantum but not the necessity of this item of costs. 122.But in case I am wrong and for the sake of completeness, I refer to the passage cited from Hong Kong Civil Procedure 2009 in paragraph 108 above, which seems to suggest that Loveday v Renton (No.2) [1992] 3 All ER 184 supports the proposition that preparation of written submissions that are necessary for the proper presentation of a party’s case to the court should be remunerated through the medium of the brief and refresher fees. However, this was not a point taken by the Paying Party at either the Taxation Hearing or the Review Hearing. In such circumstances, there is no need for me to deal with such objection, but in case I am again wrong, I will deal with this briefly for the sake of fairness. 123.In my view, the decision of Loveday is of limited assistance because it dealt with taxation of costs of an unsuccessful plaintiff who was legally aided and the taxation was legal aid taxation. Hobhouse J also recognised that although work necessary for the proper presentation of the party’s case to the court would be remunerated through the medium of the brief and refresher fees, such conclusion “does not mean that counsel should not be remunerated for necessary work which is an incident of the proper representation of their client. It means that in a privately funded case a barrister must negotiate a brief fee that is sufficient to cover such work (or make some other special agreement for the delivery of supplemental instructions and/or the agreement of an additional fee ……” (pp.190-191). 124.Since written submissions are necessary work incidental to the proper representation of the client, counsel in a privately funded case should usually be remunerated for such work. But if work which is normally rewarded as part of the brief and refresher fees is taken out and charged as a separate item, I accept it must impact on the brief and refresher fees and cannot add to the overall quantum of counsel’s fees. However, any objection in principle against allowing proper remuneration to counsel for written closing submissions is not sustainable. 125.In the CFI Action, the taking of evidence was completed by the 6th day of trial (24 October 2006). Counsel for both parties had the following day for preparing written closing submissions and they returned to court on 26 October 2006 to make their final submissions. Stone J directed that each party would have a day for their final submissions and that any prolix submissions beyond such deadline would be “guillotined”. I believe a reasonably careful and prudent hypothetical solicitor would be aware of the importance of written submissions having regard to such directions and of the burden on counsel in having to reduce closing submissions to a written form in light of such expectation. The speaking notes for closing submissions by AH and GL comprised 24 pages (104 paragraphs) in single spacing of analysis on the legal issues and discussion of the factual evidence (with extracts from transcriptions of witness evidence during the proceedings and cross-references to the documentary evidence). In the particular circumstances of the CFI Action, I consider that the hypothetical solicitor would recognise that a day spent on the written closing submissions fairly represented the time and effort in producing them. 126.I now turn to the issue of quantum of counsel’s fees for item 495 of the CFI Bill, which is the true objection raised by the Paying Party. In my view, the hypothetical solicitor would have offered the sums of HK$70,000.00 and HK$35,000.00 as AH’s and GL’s fees for such work which I have found would reasonably have taken a day. Even if I have to consider the impact on counsel’s brief fees in respect of the allowance of counsel’s fees for a non-sitting day to prepare written closing submissions, I have already reduced AH’s and GL’s brief fees by HK$90,000.00 and HK$40,000.00 respectively at the original taxation. Given the nature of the case and the issues involved (especially after vigorous cross-examinations of both the Paying Party and Mr Wong) and upon overall consideration of all the elements including the brief and refresher fees and this non-refresher item, and considering the matter afresh, I am persuaded that a reasonably careful and reasonably prudent solicitor upon selecting counsel competent in the field of work to which such fees relate would regard the fees allowed at the original taxation as proper and reasonable. I maintain and confirm my ruling for these items of costs at the Taxation Hearing on the review of taxation. XIX. Item 57 of CA Bill 127.Item 57 of the CA Bill claimed for AH’s and GL’s brief fees for the Appeal Case in the respective sums of HK$500,000.00 and HK$240,000.00. Initem 11 of the LOO, the Paying Party objected on the ground “quantum excessive; propose the Brief fee of [AH] be reduced by $150,000.00 and [GL] in $240,000.00 be taxed off”. At the Taxation Hearing, I reduced AH’s and GL’s fees by HK$100,000.00 and HK$40,000.00 respectively for the purpose of party and party taxation. 128.In the SLOO, the Paying Party added that “For items …… 11 …… of the [LOO], they all relate to the issue of necessity, reasonableness and quantum of instructing two Counsel; it was too luxury for [the Receiving Party] to charge [the Paying Party] for engaging 2 Counsel for conducting the appeal”. However, as explained above, the Paying Party conceded the necessity of two counsel,so I need not consider this ground of objection. 129.In the Review Application and the Review Reasons, the Paying Party argued that the Appeal Case turned purely on matters of law and merely required submissions without any need for cross-examination of witnesses. Further, AH and GL being trial counsel in the court below should be familiar with the case, and hence their brief fees for the Appeal Case were excessive. 130.I bear in mind that in most cases (including the Appeal Case) the level of the brief fees at the trial would be a helpful guide to the appropriate level of the brief fees at the Court of Appeal. Sunnucks v Smith[1950] 1 All ER 550, which case was not cited by KW or Mr Yeung, was a case where the taxing master awarded a lower fee for the appeal, but on a summons to review taxation Vaisey J said at p.552as follows :
131.AH had separately charged for considering the Paying Party’s Notice of Appeal and the Receiving Party’s Respondent’s Notice (item 7 of the CA Bill) and for having conference with the Receiving Party and his solicitors (item 9 of the CA Bill). Likewise, GL had separately charged for the conference and for drafting the Respondent’s Notice (item 10 of the CA Bill). The Paying Party did not seek to review the sums allowed for these items of costs at the original taxation. 132.The brief fees for the Appeal Case covered perusal of documents, drafting skeleton arguments, and preparation for and attendance at the appeal hearing. The written skeleton arguments of AH and GL consisted of 13 pages (12pt font and single line spacing) together with a bundle of authorities. The written skeleton arguments of SW (which AH and GL had to peruse and consider) for the Paying Party consisted of 10 pages again with a bundle of authorities. 133.In my view, the task of senior and junior counsel in the Appeal Case was different from, but no less onerous than, their task in the CFI Action at the court below. Even though they appeared for the Receiving Party in the court below, the resistance to the Paying Party’s appeal was not easy. It is evident from the CA Judgment that SW elaborated the points made by the Paying Party in a new light. As pointed out by Cheung JA, the Paying Party built his case for the appeal on the basis that the Stock Exchange Rules required the Receiving Party “to input the transaction into the AMS and this triggered a corresponding obligation to make good any default by the purchaser”. Hence, the applicability and interpretation of the Stock Exchange Rules were canvassed at length at the appeal, but it was not a subject that the trial judge analysed in any great detail in the CFI Judgment. This new twist in the appeal involved greater work than simply putting forward submissions to uphold the CFI Judgment. I bear in mind the prima facie rule in Sunnucks that counsel’s fee should be the same in both courts above and below, but onthe particular circumstances of the Appeal Case and quite irrespective of Sunnucks, I am unable to find any cogent basis for regarding that the work was of less value in the Court of Appeal than that in the court below, especially when the appeal was heard almost 1½ years after the trial. 134.Mr Yeung argued that the work required for the Appeal Case, eg perusing Notice of Appeal, drafting Respondent’s Notice and attending the appeal hearing, did not justify global fees for counsel of HK$600,000.00. However, Barma J in paragraph 23 of his judgment in Re Greater Beijing Region Expressways Limited said he did not “consider that it is appropriate to aggregate the fees charged by leading and junior counsel and ask whether the total of their fees can be regarded as “excessive and unreasonable””. In that case there was certificate for two counsel, and in the Appeal Case the necessity and propriety of two counsel was conceded. 135.Having re-considered the matter, I am satisfied on the objective test of a hypothetical solicitor briefing hypothetical senior and junior counsel competent to take on the Appeal Case that the brief fees of HK$400,000.00 and HK$200,000.00 for AH and GL respectively allowed under the original taxation were not unreasonable or excessive. I therefore confirm and maintain my ruling on this item of costs at the Taxation Hearing for the review of taxation. XX. Item 82 of CA Bill 136.Item 82 of the CA Bill claimed for AH’s and GL’s brief fees for the Leave Application in the sums of HK$125,000.00 and HK$80,000.00 respectively. Initem 13 of the LOO, the Paying Party objected on the ground “quantum excessive; propose the Brief fee of [AH] be reduced by $40,000.00 and as to [GL], the fee of $80,000.00 be taxed off”. At the Taxation Hearing, I reduced AH’s and GL’s fees by HK$25,000.00 and HK$10,000.00 respectively for the purpose of party and party taxation. 137.In the SLOO, the Paying Party objected to two counsel. But, as explained above, the Paying Party eventually abandoned this ground of objection. 138.In the Review Application and the Review Reasons, it was argued that the Leave Application turned on even more limited points of law than the Appeal Case without any need for cross-examination of witnesses. Since the same trial counsel handled the Appeal Case and Leave Application, they should be well familiar with the arguments, and hence their brief fees were excessive. Further, it was said that conference with counsel had been charged elsewhere in the CA Bill. 139.AH’s and GL’s written skeleton submissions comprised 4 pages and a small bundle of authorities. Although they appeared on behalf of the Receiving Party at the trial in the CFI Action and the appeal in the Appeal Case and were arguably familiar with the various contentions of the parties, it does not mean there was no new work in their preparation for the Leave Application.AH’s and GL’s skeleton arguments were concerned with the principles applicable to an appeal to Court of Final Appeal and for extension of time to comply with statutory limits, and the applicability of such principles to the circumstances of the present case. These are plainly new matters not canvassed in the previous hearings. Further, AH and GL also had to peruse the skeleton submissions (14 pages) and authorities (14 cases) prepared by senior and junior counsel for the Paying Party. I am not persuaded that on the objective test the fees of HK$100,00.00 and HK$70,000.00 allowed at the original taxation for AH and GL were unreasonable or excessive. 140.Mr Yeung again argued that the limited work required for the Leave Application did not justify global counsel’s fees in the total sum of HK$170,000.00. I reject this argument for the same reasons as set out in paragraph 134 above. I therefore confirm and maintain my ruling on this item of costs at the Taxation Hearing for the review of taxation. XXI. Conclusion 141.In short, on the Paying Party’s review of taxation, I confirm maintain the amounts allowed under my original taxation of the Taxation Bills save and except for item 344 of the CFI Bill which I shall allow at HK$6,000.00 instead of K$7,000.00. 142.There is no reason why costs should not follow event. The Paying Party has materially failed in the review of taxation, and the further reduction for item 344 of the CFI Bill took up minimal time at the Review Hearing. In the circumstances, I grant a costs order nisithat the Receiving Party do pay the costs of the review of taxation in respect of item 344 of the CFI Bill and the Paying Party do pay to the Receiving Party costs of the remaining balance of the review of taxation together with any costs reserved all to be summarily assessed. To assist the parties, I apportion 15 minutes of the hearing time of the Review Hearing for item 344 of the CFI Bill. 143.In respect of the summary assessment of the above costs, I hereby grant the following directions :
144.Last but not least, I thank both solicitors for their assistance to the court in the review of taxation.
Mr Sam Yeung of Messrs Rowdget W Young & Co for the Plaintiff/ Appellant/Paying Party. Mr Kenneth Wong of Messrs Woo Kwan Lee & Lo for the Defendant/ Respondent/Receiving Party. |
Cases cited in this judgment
Further hearings and rulings under CACV 148/2007