NAM CHUN INVESTMENT CO LTD v. THE DIRECTOR OF LANDS

Date of Judgment:  19 March 2007

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 J U D G M E N T

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Mr Justice Ribeiro PJ:

1.  On 15 March 2007, the appellant’s appeal against the decisions of the Acting Registrar (“the Registrar”) on taxation was dismissed on the papers without calling on the respondent.  The reasons for such dismissal are set out below.

The taxation and review by the Registrar

2.  On 21 November 2005, the Court gave judgment in two appeals which were heard together pursuant to an order which I made on 13 October 2005 on a summons issued by the present appellant dated 8 October 2005.  The Court’s judgment is reported as Dragon House Investment Ltd & Another v Secretary for Transport & Another (2005) 8 HKCFAR 668, and the appeals were originally listed as Dragon House Investment Ltd v Secretary for Transport (FACV 13 of 2004) and Nam Chun Investment Co Ltd v Director of Lands (FACV 11 of 2005).  I will refer to them by their original appeal numbers.

3.  Both appeals were dismissed with costs.   The same senior and junior counsel appeared for the respondents in each of the conjoined appeals. However, before the order that the appeals be conjoined was made, counsel had received separate briefs from the Department of Justice (“DOJ”) on behalf of the respondent in each appeal.  After her provisional taxation of the costs of the conjoined appeals, the Registrar made an order nisi allowing in full the fees charged by counsel in each appeal. 

4.  The present appellant (but not the appellant in FACV 13/2004) challenged that order nisi and, after a hearing, the Registrar reduced the amounts allowed for counsel’s fees in FACV 11/2005 by a total of HK$60,000 for the reasons stated in her Reasons for Decision on Taxation dated 5 October 2006.  She accepted the reasonableness of the DOJ’s decision to wait for the printed cases before deciding whether the appeals should be conjoined and therefore accepted that separate instructions to draw up each printed case were justified.  However, she also accepted that the DOJ should have foreseen the possibility of the appeals being conjoined and therefore that it should have taken steps to minimise costs in instructing counsel.  The Registrar therefore considered counsel’s fees afresh, adopting a notional global fee which the DOJ might reasonably have agreed with senior and junior counsel for a single brief to cover the conjoined appeals.  She assessed a notional brief fee for senior counsel at $500,000 and for junior counsel at $250,000, with two refreshers charged at $80,000 and $40,000 per day respectively.  She then arrived at the sum of counsel’s fees to be allowed in FACV 11/2005 by taking half of the aforesaid notional amounts.  This resulted in the abovementioned HK$60,000 reduction.

5.  The appellant was not satisfied and asked the Registrar to review her decision, in particular as to the level of the notional global fee adopted.  In her Reasons for Decision on Review dated 30 November 2006, after going through the arguments advanced, the Registrar concluded that there was no reason to revise the quantum notionally adopted.  Not satisfied, the appellant sought to lodge an appeal to this Court.

The Court’s approach to appeals against decisions taken on taxation 

6.  While rule 60 of the Rules of this Court provides for an appeal against the Registrar’s decisions on a taxation, it must be emphasized that it will only be in wholly exceptional cases that such an appeal would be appropriate.  It is the Registrar, and not the Court, who is best placed to assess the reasonableness of legal costs to be taxed.  It is the Registrar who regularly scrutinizes legal bills and who has the necessary knowledge and experience relating to current levels of costs. 

7.  Taxation is therefore essentially a matter for the discretion of the Registrar and it must be clearly understood that the Court (which as a rule exercises its jurisdiction on any such appeal through a single permanent judge) will refuse to interfere with a taxation decision unless it is shown to have been arrived at under a mistake of law or in disregard of principle; or under a palpable misapprehension as to the facts; or plainly in reliance on irrelevant matters; or to be such as to fall outside the generous ambit within which a reasonable disagreement is possible. 

8.  The motion initiating an appeal must, on its face, set out competent and arguable grounds of appeal in accordance with the foregoing principles.  The motion must identify concisely and with precision grounds together with their factual basis, which if established, would justify the Court’s intervention.  If the motion fails to do so, it will be dismissed on the papers without troubling the other side to respond.

The appeal in the present case

9.  In the present case, the appellant originally took out a motion dated 1 March 2007 which purported to state as grounds for challenging the taxation, that the Registrar “failed to give any or sufficient weight to the appellant’s submissions on the question of quantum on counsel fees (sic)” and that she “erred in failing to have any proper regard to all the relevant circumstances of the case and allowing counsel fees which are excessive and unreasonable.”

10.  It is obvious that those are not competent grounds at all.  They do not disclose any basis for disturbing the Registrar’s exercise of discretion but merely assert that she was somehow wrong.  Because the foregoing guidelines regarding the Court’s approach to appeals against taxation decisions had not previously been laid down, the Court followed the exceptional course of writing to the appellant to point out the deficiency in the original motion, giving it an opportunity to apply for an amendment with a view to placing any valid grounds it might have before the Court.  As indicated above, no such indulgence will be granted in future and a motion which does not disclose viable grounds on its face will simply be dismissed on the papers.

11.  Having heard from the Court, the appellant took out a motion to amend the original motion, attaching a draft amendment.  After review of the Registrar’s decisions referred to above, I concluded that the proposed appeal was unarguable and summarily dismissed the motion to amend, carrying with it the proposed amended motion for an appeal.

12.  The proposed amended motion seeks to raise two matters.  First, it attempts to build on the Registrar’s downward adjustment of counsel’s fees in her Decision of 5 October 2006 where she used a notional global fee as a means of arriving at the quantum of counsel’s fees to be allowed in FACV 11/2005.  The reasoning underlying the draft amended motion runs as follows:

(a) In FACV 13/2004, where no challenge was made to the Registrar’s decision to allow counsel’s fees in full, senior counsel’s brief and refresher of $430,000 and $40,000 respectively had been allowed, as had junior counsel’s brief and refresher of $250,000 and $15,000.

(b) These sums together exceed the half-share of the notional global fee attributed by the Registrar to each of the conjoined appeals by $190,000 in respect of senior counsel and $65,000 in respect of junior counsel.

(c) So, it was argued, the respondent should only be allowed the balance needed to take its overall recovery of counsel’s fees for both appeals up to the notional global amount.  In other words, the appellant in this appeal should be credited with the two excess amounts of $190,000 and $65,000 leading to a further reduction in the quantum of counsel’s fees allowable in FACV 11/2005 by those amounts.

13.  This point rests on a fallacious reliance on the notional global fee and is unarguable.  The respondent incurred the full amount of the briefs and refreshers in each appeal.  The fact that counsel’s fees payable in FACV 13/2004 were not challenged by the appellant in that case has nothing to do with the entirely separate taxation in FACV 11/2005.  The notional global fees were used by the Registrar as a purely hypothetical basis for determining the level of counsel’s fees which should be allowed in the present case.  In consequence, the respondent in the present appeal was only allowed to recover less than the full amount of the fees actually incurred.   If Dragon House Investment Ltd had made a similar application, it might or might not have achieved a similar result.  But the fact that it did not make such an application cannot in any way inure to the benefit of the appellant.   It is simply irrelevant to the taxation process in the present case.

14.  The second point sought to be raised in the proposed amendment is contained in the assertion that: “The learned Registrar also erred in allowing the additional sum of HK$100,000 in favour of the Respondent for settling the printed case for ... FACV 11/2005.”  This is a perfect example of a purported ground of appeal which is incompetent on its face.  Merely asserting that the Registrar erred in making a particular assessment is not a ground at all.  It discloses no basis upon which, if accepted, the Court may consider it proper to disturb the exercise of discretion.  A motion based on such purported grounds will be summarily dismissed.

15.  The appellant failed to demonstrate any viable basis for an appeal and the motion was accordingly dismissed.