Read the full judgment text of CACV 81/2012 on BabelCite. This Court of Appeal judgment was delivered on 9 October 2012 before Cheung CJHC and Kwan JA.
Civil procedure – costs – summary assessment – party and party basis – Mareva injunction discharged – appeal against quantum of costs – whether global sum disproportionate and unreasonable – underlying objectives of Order 1A (cost-effectiveness, proportionality, procedural economy) – two-stage approach: global assessment and item-by-item assessment – Lownds v Home Office adopted as guidance – test of 'necessary or proper' under Order 62 r 28(2) – where global costs appear disproportionate, court must be satisfied each item was necessary and cost was reasonable – modest amount at stake (Mareva freezing assets of about $3.8 million) and straightforward factual issues meant that costs of over $600,000 were disproportionate on party and party basis – solicitors' communications reduced from 57 to 40 hours and professional work from 47 to 33 hours after finding two solicitors substantially involved in every item was not proportionate – counsel of 15 years' call not proportionate for case where opponent was called in 2008; counsel's fees reduced from $246,000 to $137,000 – counsel's fees in party and party taxation now subject to general 'necessary or proper' test, not the old 'excessive and unreasonable' test under former Order 62 paragraph 2(5) – paragraph 62/App/28A of Hong Kong Civil Procedure should no longer be followed – Re Greater Beijing Expressways Ltd (No 4) distinguished as decided under former wording – apportionment of costs between Mareva proceedings and substantive defence rejected as a matter of principle, though any savings may be considered in taxing subsequent costs – plaintiff entitled to costs of appeal despite having earlier been prepared to settle for $400,000, because defendants' best offer of $450,000 still exceeded the amount ultimately assessed by the Court of Appeal – appeal allowed; defendants' costs reassessed at $422,200; plaintiff's costs of appeal assessed at $105,900; security released to plaintiff.
Legal issues: Whether the global sum assessed on summary assessment was disproportionately and unreasonably high · Proper test for counsel's fees in party and party taxation after Civil Justice Reform · Whether costs incurred in opposing a Mareva injunction must be apportioned between injunction and substantive defence
Outcome: Appeal allowed; summary assessment of $614,800 set aside and reassessed at $422,200 (plus interest from 22 November 2011 until payment); costs of the appeal awarded to the plaintiff and summarily assessed at $105,900; security money paid into court released to plaintiff.
Cited by 6 cases · Cites 1 case