First Laser Ltd v. Fujian Enterprises (Holdings) Co Ltd and Another
Read the full judgment text of HCA 4414/2001 on BabelCite. This High Court CFI judgment was delivered on 30 July 2014.
1. There are two reviews of taxation before this Court, both on fees of Counsel.
Cites 2 cases
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HCA 4414/2001 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE HIGH COURT ACTION NO 4414 OF 2001 _________________________ BETWEEN
_________________________ CACV 126/2008 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIAL APPEAL NO 126 OF 2008 (ON APPEAL FROM HCA NO 4414 OF 2001) _________________________ BETWEEN
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____________________ TAXATION REVIEWS ____________________ Introduction 1.There are two reviews of taxation before this Court, both on fees of Counsel. Background 2.The facts of the parties’ disputes are complicated. 3.For the present purpose, very briefly, the Plaintiff (the Respondent and paying Party) is a Macau Company and the Defendants (the Respondents and Receiving Parties) are window companies of Fujian Provincial People’s Government. 4.In 1996, the Plaintiff entered into agreements with the 1st Defendant to purchase, inter alia, 51% of shares in Fujian Casix Laser Inc. (福建華科光電有限公司). It was said that the Plaintiff paid (or was deemed to have paid) the price in March 1998 but the 1st Defendant failed to transfer the shares. Approval was not obtained from the relevant PRC government authorities for the transfer. The 1st Defendant further sold the shares to a third party for US$60 million, of which was received by the 2nd Defendant. 5.Two pieces of litigation arose.
6.The two set of proceedings went on simultaneously and the PRC proceedings concluded first in December 2004. The 1st Defendant won. 7.Under the proceedings herein, parties raised a number of difficult issues of law, including whether HK or PRC law should apply, the legal effect of the PRC judgment on the HK proceedings, and so forth. 8.After a trial for 10 days in February 2008, the trial judge entered judgment for the Plaintiff with costs. 9.The Defendants took up the matter to the Court of Appeal. 10.In the meantime, the Plaintiff proceeded to have its costs taxed. After taxation before a master for 3 days in January 2010, the sums of about $1.4 million and $3.2 million were taxed for the profit costs and disbursements respectively. 11.However, the Defendants won their appeal in January 2011. The judgment below was set aside and an issue of restitution under PRC law was remitted to the trial judge for determination. 12.Although the Plaintiff further brought an appeal to CFA but the same was later dismissed. 13.In the circumstances, the Plaintiff not only cannot recover any costs from the Defendants, but also has to pay for them in all three levels of the Court. I dealt with both the bills of the Defendants in the Court of First Instance and in the Court of Appeal for 10 days. 14.The Defendants thereafter brought review of 4 items of counsel fees under the two bills, particulars of which are as follows. HCA 4414/2001
CACV 126/2008
At the review, Mr. MC Law of Counsel acted for the Defendants and Mr. P Chu of LCD acted for the Plaintiff. Upon hearing from them, I reserved my decisions to be handed down. I now do so. 15.In assessing counsel fee, as in the original taxation as well as in the present review, I asked myself to bear in mind of the relevant principles from the White Book 2014 at pages 1190 - 1194, in particular the followings general principles.
… Specific Fees
What was necessary and incidental to the preparation for representation at trial, and hence not chargeable separately, depending on the circumstances of the case. Where counsel was duly instructed to perform other work, in other words, work which was quite separate from the preparation for representation at trial and which was “necessary or proper” within the meaning of O.62 r.28 (2), such work could be claimed as a separate and discrete item of counsels… ” 16.Mr. Law made a number of general observations. I agree with them and indeed they were accepted by me at the taxation.
However, at the same time, I also noted:
17.With the above in mind, despite the diligence of Mr. Law, I am afraid that he has not been able to persuade me to change my views at the taxation. Brief for Trial and Preparation of Closing Submissions 18.Senior Counsel was called to HK bar in the year of 1978, and Junior Counsel, in 1997. At the material times, their respective hourly rates were about $15,000 and $2,800. I took the view that they fell within the usual ranges though the one with Senior Counsel was at the high end and that of his Junior, the low one. By the time when the case went before the trial judge, SC and JC had been allowed fees by me for over $1,000,000 and $300,000 respectively (out of fees charged for over $2,000,000 and $1,000,000). 19.The case was set down for hearing of 20 days. 12 trial bundles consisting pleadings, 8 witness statements (1 for the Plaintiff and 7 for the Defendants), documents and expert reports on PRC law and handwriting. Counsel on both sides prepared, inter alia, detailed skeletons with substantial authorities. 20.The trial eventually only lasted for 10 days. The Plaintiff’s counsel spent the first 3 days for opening submissions, followed by 5 days for 3 witnesses and then, 2 days for closing submissions of both parties. 21.At the taxation, I adopted a hypothetical approach, i.e. under party and party taxation, Counsel should have spent the following hours and levied their brief fees accordingly.
I further allowed both Counsel a refresher based on 7 hours of work each day (i.e. 5 hours of court hearing and 2 hours for preparation, discussion, and so forth). 22.As I had allowed time for Counsel to prepare final skeleton submissions in the brief fees, I did not allow any extra fees for preparation of closing submissions. Brief for Appeal and Supplemental Brief thereof 23.When the Defendants took the matter to the Court of Appeal, the Senior Counsel at the trial below was about to retire. It necessarily caused a change of leader. Two new Senior Counsel were brought into the picture, charging hourly rates of $6,000 and $10,000 respectively. The Junior Counsel was retained. However, though they won the appeal, only certificate for two Counsel was allowed. 24.The appeal was scheduled to be heard for 5 days in June 2010. The Defendant’s Senior Counsel took up half of the time for his oral submissions. Then, in the middle of submissions by the Plaintiff’s Senior Counsel, he sought to amend its Respondent’s Notice. The Defendants also asked for leave to file Rejoinder. 25.Upon consideration, the Count of Appeal eventually allowed the applications but the appeal was left part-heard and had to be re-fixed for another 3 extra days in August 2010. Counsel for the Defendants then charged a supplemental brief for the resumed hearing. 26.Again, I adopted the hypothetical approach in assessing Counsel’s brief.
As to refreshers, I also allowed them on 7 hours of work each day and as such, the sums of $70,000 and $24,500 respectively for both Senior and Junior Counsel. 27.In allowing the above brief fees and refreshers, I asked myself to bear in mind the fees having charged and allowed by me for Counsel at the trial. And of course, further fees were spent by Counsel to take up the matter to the Court of Appeal, including perusal of papers, advising in conferences, preparing affirmations, joint note of advice and (supplemental) notice of appeal as well as attendance before the trial judge for one day. Under the relevant CA bill, before it came to the brief, Senior Counsel claimed over $500,000 and Junior Counsel, about $450,000. After taxation, I allowed them at about $400,000 and $100,000 respectively. 28.Supplemental brief is unusual as applications to amend notice of appeal, respondent notice, etc. at the substantive hearing are probably not uncommon even though they are highly discouraged especially after CJR. However, I was persuaded at the taxation that the “changes” in the middle of the appeal fell outside the original scope of work anticipated by Counsel when they agreed with their brief fees. Upon going through the new skeletons as submitted by both sides, I allowed an extra 10 hours of work to be spent by both Counsel. Hence, the supplemental Briefs were allowed at $170,000 ($10,000 x 10 + refresher at $70,000) and $59,500 ($3,500 x 10 + refresher at $24,500). The Review 29.At the Review, I had the assistance from the junior counsel who conducted the trial and appeal. Mr. Law also prepared a short skeleton explaining to me how complex the issues were with highlights at the number of trial bundles and authorities having deposed at different stages of the proceedings. 30.Mr. Law had an uphill battle. 31.As pointed out by Mr. Chu, LCD for the Plaintiff, there was no new material before me at the review. There was also no allegation that discretion of this Court was exercised wrongfully at the taxation. Those matters mentioned by Mr. Law had been fully ventilated before the Court at the taxation for 10 days. 32.It is undisputable that the facts and law involved is complex. 33.Mr. Law specifically suggested that the trial was shortened by 10 days because of the reasonable stance taken by his clients and word done by Counsel. However, the Court of Appeal apparently took quite a different view when they deprived the Defendants for 45% of the costs in the action below by their Decision on costs handed down on 14 June 2011. Paragraph 5 thereof states that:
34.It is also indisputable that the team of counsel acting for the Defendants did an excellent job. However, when it comes to taxation on party and party basis, one has to bear in mind paragraph 62/App/6 at p.1186 of HKCP 2014:
At the end of both the taxation and the review, I remained of the same view that the team of counsel for the Defendants, in respond to the highly demanding clients, had provided luxurious services accordingly. They therefore should be fully remunerated, but only on solicitor and own client scale, but not party and party scale. 35.In the circumstances, the Reviews are dismissed. Parties agreed that costs of the review should follow the event and had no objection for a gross sum assessment by me in the form of order nisi. To wrap up the matter, I therefore allow the sum of $12,900 to the Plaintiff.
Such costs order nisi will become absolute within 14 days from the date hereof.
Mr. Law Man-Chung of Counsel, instructed by Messrs. Paul Hastings, solicitors for both defendants. Mr. P. Chu of LCD, instructed by Messrs. Mayer Brown JSM, solicitors for plaintiffs. |
Cases cited in this judgment
Further hearings and rulings under HCA 4414/2001