De Coro Ltd (in Liquidation) v. Luca Ricci

HCA 594/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 594 OF 2010

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BETWEEN

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Before: Master S. Kwang in Chambers

Date of Hearing: 21 September 2011

Delivery of Ruling: 1 November 2011

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RULING ON GROSS SUM ASSESSMENT OF COSTS

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1.On 21 September 2011, I heard the Defendant’s summons for security for costs against the Plaintiff and gave an order in favour of the Defendant.  I also awarded costs of the application including costs of the hearing and all costs reserved with certificate for counsel to the Defendant.  Under my said order, such costs will be assessed gross sum if parties cannot agree the same within 14 days.  Apparently, parties could not agree such costs and, by consent summons dated 11 October 2011, both parties invited me to assess such costs gross sum on papers without a hearing.  I acceded to the said request and gave consequential directions.

2.The Defendant’s solicitors had produced a costs statement at the end of the said hearing.  List of objections by the Plaintiff was filed on 19 October 2011 while the Defendant’s reply to such objections was filed on 21 October 2011.

3.It is not intended under the gross sum assessment of costs for the Court to conduct a mini taxation.  Thus, parties are not expected and required to file and serve detailed arguments as if a full taxation be conducted with full grounds of objections and reply.  The Court, in conducting a gross sum assessment of costs, would adopt a broad-brush approach taking into account of all the underlying objectives under Order 1A of the Rules of High Court and the conducts of the parties. 

4.The nature of the present application for security for costs is not a complicated one.  If not because of the Plaintiff trying to argue the merits of its claim, the Court could dispose of the summons readily and without much difficulties.  It is just because the Plaintiff wished to argue merits of its claim, the Defendant had to respond to the same by affidavits.  I take into account these special features of this case when I assess the Defendant’s costs of the application gross sum.

5.In general, I agree with the Plaintiff’s solicitors that on a notional solicitor’s basis, this case does not require a senior solicitor to handle all matters arising out of this application.  In my view, the case could be handled by a solicitor of about 5 to 6 years of experience with an hourly rate of HK$3000.

6.I am not prepared to deal with each and every objection raised by the Plaintiff under its list of objections.  It defeats the purpose of a gross sum assessment of costs.  It can be said that times spent by the Defendant’s solicitors in both communications and preparation of documents including drafting the Defendant’s affidavits and skeleton submissions are excessive.  These works could be done by the said notional solicitor of 5 to 6 years of experience instead of by solicitors over 10 years of experience as claimed.  I would respectively allow 5 hours for communications and another 9 hours for preparation of documents and hearings.

7.For counsel, the brief fees claimed at $50,000 are not excessive.  I discount such brief to $40,000 on ground that we spent time on the date of hearing to deal with the defective Defendant’s affidavits, the time of which the Defendant should not be entitled to recover.

8.Taking into account of the above, I assess the Defendant’s costs of the application under my order dated 21 September 2011 at a round sum of $100,000.

Mr Malcolm Kemp (instructed by Messrs Stephenson Harwood) for the Plaintiff

Mr Jose Antonio Maurellet (instructed by Messrs Tanner De Witt) for the Defendant