Perception Digital Ltd v. Wang Chuen

HCA 1970/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1970 OF 2012

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BETWEEN

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DECISION ON SUMMARY ASSESSMENT OF COSTS

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1.On 19 August 2013, I gave summary judgment in favour of the Plaintiff against the Defendant.  On costs, I awarded costs of the action including costs of the Order 14 Summons and all costs reserved be to the Plaintiff with Certificate for Counsel to be assessed gross sum on an indemnity basis.  I also directed parties to agree such costs if possible within the next 7 days; failing an agreement, the Plaintiff’s solicitors would file a Costs Statement so that the court will assess the Plaintiff’s costs on gross sum basis.  Apparently, parties were not able to agree on such costs and, thus, the Plaintiff’s solicitors have filed a Cost Statement on 29 August 2013.  The Defendant’s solicitors should file and serve a List of Objection 3 days thereafter. Such List of Objection was only filed late on 5 September 2013.  This is my decision on the summary assessment of costs under the said costs order.

2.It should be noted that under the costs order, the Plaintiff’s costs are to be assessed on an indemnity basis so that all costs shall be allowed except insofar as they are of an unreasonable amount or have been unreasonably incurred and any doubts shall be resolved in favour of the receiving party[1].

3.As pointed out by Mr Justice Chan PJ of the Court of Final Appeal in David John Kennedy v Kelly Chan[2], the receiving party on an indemnity taxation is prima facie entitled to be paid all his costs, provided that they are costs of and incidental to the proceedings subject only to the qualification that any particular item which has been unreasonably incurred or any particular amount which is unreasonable must be excluded[3]. The approach of the taxing master is to decide whether a particular item or particular amount which is being challenged is unreasonable.  He is not required to go through the items and decide whether they are reasonable.  He is required only to adjudicate on items or amount which are said to be so unreasonable as to be excluded[4]. In my view, these principles are also applicable to a summary assessment of costs on an indemnity basis.

4.On the other hand, the Court of Appeal in Poon Shu Fan v Wong Tin Yan[5]has laid down the proper approach for the purpose of carrying out a summary assessment of costs.  I will adopt such proper approach for the assessment in order to ensure that the final figures assessed was not disproportionate and/or unreasonable having regard to the nature and the circumstances of the application or matter.

5.The Plaintiff’s claim here was originally not a complicated one for recovery of loan against the Defendant under a loan agreement dated 1 March 2012 whereby the Plaintiff was the lender and the Defendant was the borrower.  Not because of the purported defences raised by the Defendant, the Plaintiff’s claim should be a straightforward one.  In the circumstances, the Defendant cannot complain that the Plaintiff’s claims on costs are unreasonable simply because the Plaintiff needs to take extra time to respond to the purported defences raised by the Defendant under the Order 14 application.

6.Under the Costs Statement, the Plaintiff claimed a total sum of HK$242,171, of which $40,000 was the Brief to Counsel in attending the hearing including settling the replying affirmation of the Plaintiff.  On an assessment of costs based upon indemnity basis, I am satisfied that such claims are not disproportionate save that some items involving the time for attendances on clients and preparation of documents are, in my view, unreasonable and excessive.

7.It is not the purpose of a summary assessment to carry out a mini taxation.  The court will adopt a broad-brush approach.  I do not propose to deal with each and every item of the Plaintiff’s costs under the Costs Statements which are objected by the Defendant.  I am satisfied that taking into account especially the purported defences raised by the Defendant, the hourly rate claimed by the handling solicitor at $4,000 per hour is not unreasonable.  However, considering the contents of the Plaintiff’s affirmations filed for the Order 14 application and in particular, the replying affirmation, spending 16 hours in total to attend on clients in this case is, in my view, excessive and unreasonable.  I will adjust it down to 12 hours.  For an assessment on indemnity basis, by raising objections by the paying party: “Subject to proof and justification as this case did not involve any complicated question of law and facts”[6] do not, in my view, amount to a competent objection and will not support an argument why the costs incurred are unreasonable and excessive.

8.Further, spending 20 hours in preparation of documents in this case[7] (even taken into account of those documents prepared for service out of jurisdiction) is unreasonable and excessive.  Quite a number of those documents are only simple documents.  I will reduce the time spent to 12 hours in total.  Apart from that, I am satisfied that other parts of the Plaintiff’s costs including counsel’s fees are not unreasonable and no adjustment is made to these items. 

9.At the end, I will round down the Plaintiff’s costs to HK$194,000.  I, thus, make an order that the Plaintiff’s costs under my said costs order are assessed gross sum at HK$194,000 payable forthwith by the Defendant.

Messrs Ching & Co for the Plaintiff

Messrs Massie & Clement for the Defendant