WONG YU CHO ROLLY t/a MARCO POLO AND CHINA OVERSEA TECHNICAL DEVELOPMENT v. HO CHI SUM AND ANOTHER

HCA2132/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2132 OF 2005

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J U D G M E N T

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1. This is an appeal brought by the plaintiff against Master Ko’s Order dated 31 July 2009.  Master Ko dismissed the application in the plaintiff’s summons of 30 June 2009 with costs of $2,000 payable to the defendants.

2. The plaintiff’s summons dated on 30 June 2009 was handwritten and not very legible.  The summons is in two parts.  The first part is to “Apply for stay of proceeding [sic]” while the second part is to “adjourn the allocation (Bill No. 1)”.  He finds his support from the case Ling Yuk Sing v Secretary for the Civil Services & Ors (unreported, CACV117/2008), an appeal that is scheduled to be heard on 11 June 2010 in the Court of Appeal.

3. The words “stay of proceeding” call for explanation.  It is useful to note that Mr Wong is the plaintiff here, so the “stay of proceeding” could not mean a stay of the current action.  The only plausible conclusion is that “stay of proceedings” refers to another action not connected with this one.

4. For the 30 June 2009 summons, the plaintiff made an affirmation dated 21 February 2007 (or 21 February 2009, as the content tends to suggest) to clarify his arguments.  I found that the affirmation made by the plaintiff on 13 August 2009 to be quite similar to that affirmation.  I would therefore reproduce the plaintiff’s argument as evidenced by the printed affirmation on 13 August 2009 instead of using the 21 February 2007 (2009) version, which was written by hand.

5. This would also demonstrate that the plaintiff’s contentions are sometimes confused and unintelligible.  I do not venture to correct the mistakes and typos in the affirmation as it will complicate the unintelligible affirmation further :

“…I enclose a copy order made by before Mr. Registrar C. Chan in chambers date of hearing 25^th March 2009 Exhibit No.1 when Department of Justice represents the Government Department.  The Government department (Inland Revenue Department) never pays for the services and charge from to Depart of Justice.  Tax players pay taxes to the Government and the Government pay the salary for the solicitor on counsel and the staff of Department of Justice.  If Department of Justice charges the Plaintiff, it is Double – Charge because the government has already paid.  It has a argument point.  That was Mr. Registrar C. Chan stay and adjourn the case (HCMP 1394 of 2007 Bill).

Similarly with the case, the police cannot charge the cost of time and any proceedings of the case when it finished from the subject because the police are paid by the government.

As a circumfluence, this case is related to the case of CACV 117 of 2009 by Mr. Registrar C. Chan in chambers as a reference date 25^th March 2009 (HCMP 1394 of 2007).  The applicant is Ling Yuk Sing in CACV 117 of 2008 and Respondents are the Secretary for the Civil Service and Permant Secretary for transport and housing (Housing).  The applicant Ling Yuk Sing has currently appealed that the Government Department never pays any cost and the charges to the Department of the Justice.  Because the Department of Justice represents two respondents.  I reckon that CACV 117 of 2008 has great conslitational importance on the issue whether Department of Justice should be entitled to costs as the case between private litigants.  Please take note that I do not intend to pay Department of Justice costs despite the allocation (Bill).  The final outcome judgment of the said case CACV 117 of 2008.  Mr. Registrar C. Chan had an order in the Court stay of proceeding until CACV 117 of 2008 has a new judgment and order, then will make the decision and re-open the hearing in the Court from HCMP 1394 of 2007.

Now, I sincerely hope the Honourable Justice stay the proceeding until the final determination of CACV 117 of 2008 namely the lawfulness or constitutionality of double charges on the Department of Justice (as order by Master C. Chan on 1^st June 2008 – HCMP 1394 of 2007) until the case of CACV 117 of 2008 is re-opened.”

6. At page 53 of the hearing bundle, in the letter by Ms Shirley Lau, Clerk to Hon Cheung JA for Registrar, High Court, with the title “Civil Appeal No. CACV 117 of 2009”, it was found that “The Court would invite submissions on the principles justifying Government lawyers charging the same rate as lawyers in private practice for the purpose of taxation.”  This appears to be the only issue in the upcoming appeal.

7. From the quoted parts of the 13 August 2009 affirmation above, the plaintiff sought to use the CACV117/2008 case in his argument, but he did not inform this Court how that case is related to the present case.  The CACV117/2008 case is, I think, primarily concerned with the quantum of costs which Government lawyers can charge.  It does not help the plaintiff’s argument on “Double Charge”.  In any event I cannot see how a dispute of costs can lead to a stay of proceedings.

8. The plaintiff also relied on the order by Master C. Chan on 1 June 2009 (HCMP1394/2007).  The order reads :

“I adjourn the taxation of Bill No. 1 in this Case to a date to be fixed with 3.5 hrs reserved but on a date not earlier than delivery by the Civil appeal of the decision of the case knows as Ling Ying-Sing v Secretary for the Civil Service (CACV No. 117 of 2008) on point of law relating to taxation of the bill therein.

2.    Costs of today be in the cause of the taxation.” [emphasis supplied]

9. It is apparent that the learned Master was perfectly correct to stay that proceedings pending the outcome of the CACV117/2008 case, because this outcome will materially affect the judgment of the learned Master.

10. The same cannot be said of the present case.  I agree with Mr Newton Chan, Government Counsel for the defendants that what the plaintiff is attempting to do is an abuse of process.  The plaintiff cannot stay the proceedings of another case using the case of HCMP1394/2007 before Master C. Chan, a case that has not the slightest relevance to the present case.  There was also no evidence that shows the learned Master was wrong in awarding $2,000 costs to the defendants.

11. I would therefore uphold Master Ko’s decision and dismiss the plaintiff’s appeal.  The defendants shall have costs in this appeal, to be taxed if not agreed.

HCA2132/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2132 OF 2005  

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J U D G M E N T

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1. This is an appeal from the order of Master Lung made on 16 October 2008.  Master Lung was dealing with a gross sum assessment of costs which Registrar Chan, by his order dated 30 June 2006, had ordered to be assessed and to be paid by the plaintiff to the defendants. 

2. Master Lung refused the plaintiff’s application for an adjournment of the assessment of costs and proceeded with the assessment on 16 October 2008.  The costs were assessed at HK$72,000 which included the costs of the hearing before Master Lung.  The plaintiff was ordered to pay the defendants the assessed costs within 14 days.

3. Briefly, the relevant background facts are that the plaintiff is a businessman who carried on different businesses in the name of Marco Polo and China Oversea Technical Development. 

4. On 26 August 2004 the plaintiff commenced DCCJ 4492/2004 (“DCCJ 4492”) in the District Court against the Inland Revenue Department (the “IRD”).  He claimed that the IRD had made a wrong assessment of tax against him, had trespassed into his premises and had illegally frozen his bank accounts.  The IRD counterclaimed in those proceedings for assessed tax in the sum of HK$831,600.

5. In DCCJ 4492 the plaintiff issued a summons seeking an extension of time to file a defence to counterclaim.  The summons was heard by a Master on 27 October 2004.  The plaintiff alleged that the 1^st defendant in this action Mr Ho Chi Sum, Senior Government Counsel acting for the IRD in DCCJ 4492, had agreed with him to a stay of the proceedings in DCCJ 4492.  This was denied by Mr Ho Chi Sum.  

6. The plaintiff alleged that because he was under the impression that DCCJ 4492 was stayed he did not file a defence to the counterclaim.

7. On 30 December 2004 judgment in default of defence was entered by the IRD on the counterclaim in DCCJ 4492. 

8. The plaintiff applied unsuccessfully to set aside the judgment on the counterclaim.  Further applications by the plaintiff for leave to appeal were dismissed.  He also applied for leave to appeal to the Court of Final Appeal.  His application was dismissed by the Court of Appeal.  A further application was made to the Court of Final Appeal which was also dismissed.  He applied for a stay of execution of the default judgment which application was dismissed.  He also applied for a stay of proceedings which was also dismissed.

9. The plaintiff then commenced this action against Mr Ho Chi Sum and the IRD as defendants claiming that Mr Ho Chi Sum was in breach of a verbal agreement made with him in relation to the stay of proceedings in DCCJ 4492.

10. By his order dated 30 June 2006 Registrar Chan struck out the plaintiff’s claims against the defendants in this action and ordered that the action be dismissed.  He also made an order nisi that the costs of the action including the costs of the application and all costs reserved be costs to the defendants to be assessed.  Those costs were assessed by Master Lung on 16 October 2008.

11. By his notice of appeal the plaintiff asks for an order that there be a “stay of proceeding”.

12. The plaintiff submitted that Master Lung was wrong not to grant him an adjournment.  In his letter dated 15 October 2008 addressed to the Master the day before the hearing on 16 October 2008, the plaintiff in paragraph 2 stated :

“Counsel in representation of the plaintiff will be taking over the case, hence the discussion on taxation need to be adjourned as the case is not yet over and the plaintiff is seeking for counterclaim.”

13. The plaintiff was seeking an adjournment of the hearing before Master Lung as he wished to instruct counsel to deal with the matter.

14. Master Lung refused the application for an adjournment.  In my view, he was right to do so.

15. If the plaintiff had wished to instruct counsel to appear for him in the assessment of costs he had ample opportunity to do so well before the hearing before the Master on 16 October 2008.

16. The order for costs was made by Registrar Chan on 30 June 2006 when he struck out the plaintiff’s claims and dismissed the action against the defendants.  On 21 February 2007 the plaintiff’s appeal against the order of Registrar Chan was dismissed by Chung J.

17. As is set out in the chronology in the skeleton arguments of the defendants, a hearing fixed for 26 July 2007 for the assessment of costs had to be adjourned when the plaintiff failed to turn up at the hearing and sent a representative to inform the court that he was sick.  On 20 November 2007, Master Yuen ordered, inter alia, that the defendants could enter default judgment on costs unless the plaintiff filed his List of Objections before 4 pm on 11 December 2007.  As the plaintiff failed to do so, default judgment on costs was entered against the plaintiff.

18. On 4 June 2008 by a consent order made by Deputy Judge L. Chan it was ordered, inter alia, that the default judgment dated 11 December 2007 be set aside and the plaintiff was given leave to file his List of Objections before 4 pm on 17 June 2008.

19. On 13 June 2008 the plaintiff filed his List of Objections.

20. It was only on 15 October 2008 by his letter addressed to Master Lung that he mentioned that he wished to instruct counsel.

21. I would also observe that not only was the plaintiff’s appeal against the order of Registrar Chan dismissed by Chung J on 21 February 2007, his application for an extension of time to appeal against Chung J’s order was refused by Yeung JA on 31 October 2007.  An appeal against the decision of Yeung JA was dismissed by Cheung JA and Lam J on 4 March 2008.  An application by the plaintiff for leave to appeal to the Court of Final Appeal was also dismissed by Cheung JA and Lam J on 29 July 2008.

22. I am satisfied that the plaintiff had ample opportunity to instruct counsel to appear before Master Lung well before 16 October 2008 which was the re-fixed hearing date of the assessment of costs.  In view of the long lapse of time between the order for costs made by Registrar Chan on 30 June 2006 and the re-fixed hearing date of the assessment of costs before Master Lung on 16 October 2008 the Master, in my view, correctly refused the adjournment and proceeded with the assessment.

23. The Master assessed the costs at HK$72,000 which included the 2 hours of the hearing before him.

24. It is important to bear in mind that in making a gross sum assessment of costs, the assessment is carried out on a broad principle basis and is not meant to be a mini taxation of costs (marginal note 62/9/10C Hong Kong Civil Procedure 2009).

25. Where a Government lawyer has conducted the litigation namely, acting as a solicitor in the preparation of the matter for trial and then appearing in court as an advocate, the Government lawyer should charge on an hourly basis for the preparation as a solicitor and for the attendance in court by a solicitor instead of a brief fee and refresher basis (Building Authority v Tam Chung Ching Denis [1997] 3 HKC 260).  And a Government lawyer’s costs should be the same as an independent solicitor’s costs (Building Authority v Business Rights Ltd [1999] 3 HKC 247).

26. Mr Newton Chan, for the defendants, who also appeared before the Master, is an experienced Government Counsel of over 10 years of practice.  Mr Chan has referred me to the Law Society circular 07-653(PA) dated 29 October 2007 dealing with, inter alia, hourly rates allowed for solicitors in party and party taxation of costs in the High Court. 

27. In view of the seniority of Mr Newton Chan, I am satisfied that it would have been reasonable to have assessed his hourly rate for attendance in court at HK$4,000.  That being so, as the HK$72,000 assessed by Master Lung included the 2 hours hearing before him, the costs of the action including the costs of the application before Registrar Chan and all costs reserved were assessed at HK$64,000 ($72,000-$8,000).

28. Out of the sum of HK$64,000 there were court attendances as detailed in the defendants’ Statement of Costs for the gross sum assessment dated 18 June 2007 (“Statement of Costs”).  The court attendances were for a total of 2 hours 43 minutes which, at $4,000 per hour, comes to $10,866.40 as set out in the Statement of Costs.  I am satisfied that it would have been reasonable to assess those court attendances at $10,866.40. 

29. Out of the sum of HK$64,000, the sum of $10,866.40 was a reasonable sum for the court attendances leaving a balance in the sum of HK$53,133.60 which was assessed by the Master for Items B, C1, C2, C3 and E in the Statement of Costs.  The sums claimed for those items in the Statement of Costs amounted to the total sum of HK$82,038 whereas the assessed amount was only HK$53,133.60.  This was about 65% of the amount of HK$82,038 claimed.  Bearing in mind that this was not a mini taxation of costs but a gross sum assessment on a broad principle basis, I see nothing wrong in the Master’s assessment.

30. The plaintiff submitted that the Master failed to consider his List of Objections.  I am unable to accept this submission.  In my view, the Master has taken the List of Objections into consideration when he only allowed about 65% of the amount claimed for Items B, C1, C2, C3 and E in the Statement of Costs.   

31. The plaintiff relied on exhibit 1 to his affirmation of 13 January 2009 and submitted that there has been overlapping and duplication of documents used by the defendants in various actions and proceedings and the time spent as claimed for perusal and preparation of documents should not be allowed.  There is no merit in this point.  As Mr Chan correctly submitted, a perusal of exhibit 1 to the plaintiff’s said affirmation shows that save for the hearing on 8 March 2006, all the other hearings in the other proceedings mentioned there were after the hearing before Registrar Chan on 30 June 2006 when he made the order for costs in the defendants’ favour.  As for the hearing on 8 March 2006, this was a directions hearing where directions were given for the filing of evidence and skeleton submissions and the costs were reserved.  This is clear from the order of 8 March 2006.  The order made by Registrar Chan on 30 June 2006 also dealt with the costs that had been reserved by ordering that the costs of the action including the costs of the application and all costs reserved be to the defendants to be assessed.  I fail to see how there can be any valid complaint that the time spent as claimed in the Statement of Costs for perusal and preparation of documents was duplicated or overlapped with earlier perusal and preparation of documents.

32. I see no valid basis for interfering with the Master’s assessment of costs which, in my view, was reasonable bearing in mind that this was not a mini taxation of costs but an assessment on a broad principle basis.

33. There is no basis for the plaintiff to ask for a “stay of proceeding”.  The proceedings have been concluded with the dismissal of the application for leave to appeal to the Court of Final Appeal on 29 July 2008.

34. The appeal is dismissed.

35. I also make an order nisi that the plaintiff do pay the defendants their costs of the appeal such costs to be taxed on a party and party basis.

HCA 2132/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2132 OF 2005

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BETWEEN

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Coram : Before Mr. Registrar C. Chan in Chambers

Date of Hearing: 12 May 2006

Date of Judgment: 30 June 2006

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J U D G M E N T

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This is an application by the Defendants to strike out the Plaintiff’s claim and dismiss the action.  It is one of those cases which I regard as unfortunate, where plaintiffs acting in person pursuing various claims, institute one action after another and incur more and more legal costs leading to a path of no return.  There are bound to be duplication of facts and issues.  The other side will almost invariably take the step which the Defendants in this case are now doing --- to strike out the Plaintiff’s claim.

Background

2. The Plaintiff is a very enterprising businessman who embarked upon different trades and carried on different businesses, among which are Marco Polo and China Oversea Technical Development.  He also operated a private museum called Hong Kong Museum of Stone Sculpture & Asian Art.

3. For some reasons on 24 August 2001 three tax inspectors of the 2^nd Defendant visited the Plaintiff’s premises known as Marco Polo Villa in Tai Po.  Subsequently, Notices of Assessment were issued in respect of two years of assessment on the profits of the following firms with taxes payable as follows:

(a) China Oversea Technical Development

(i)	$173,250.00	(1996/1997)
(ii)	$28,350.00	(1997/1998)
	$201,600.00

(b) Marco Polo

(i)	$346,500.00	(1996/1997)
(ii)	$283,500.00	(1997/1998)
	$630,000.00

4. The Plaintiff did not pay the taxes assessed.  On 16 August 2004, a Notice of Recovery was issued to different banks with the Plaintiff’s accounts frozen.  On 24 August 2004, the 2^nd Defendant by its Commissioner wrote to the banks requesting them not to take action upon the Notice on the ground that the 2^nd Defendant was considering the Plaintiff’s claims or objections to the assessments.

DCCJ Action No. 4492 of 2004

5. Two days after, on 26 August 2004 the Plaintiff commenced a District Court action under DCCJ Action No. 4492 of 2004 against the Inland Revenue Department, the 2^nd Defendant herein.  The 2^nd Defendant filed a Defence and Counterclaim on 24 September 2004.  On 20 October 2004, the Plaintiff took out a summons to request for extension of time of 14 days.

6. The summons was heard before Master Ko on 27 October 2004.  The Plaintiff alleged that the 1^st Defendant herein, Mr. Ho Chi Sum, Senior Government Counsel for the 2^nd Defendant had agreed to a stay of proceeding while the 1^st Defendant denied he had such agreement with the Plaintiff.  The 1^st Defendant maintained that after considering the special circumstances of the Plaintiff at that time he agreed to an extension of 28 days only and accordingly the order was made by Master Ko.

7. The Plaintiff alleged that because he was under the impression that the proceeding was stayed he did not file any defence to counterclaim.  Because of the default, the 2^nd Defendant entered judgment on the counterclaim i.e. the amount of tax assessed i.e. $831,600.00.

8. The Plaintiff applied to set aside the judgment before H.H. Judge Chow but was not successful.  He applied for leave to appeal which was refused on 9 September 2005.  He made further attempt to obtain leave from the Court of Appeal.  Again it was refused on 7 March 2006.

DCCJ Action No. 5016 of 2005

9. About a month after leave to appeal was refused by Judge Chow, he commenced two further actions, one in District Court DCCJ Action No. 5016 of 2005 and the other in High Court i.e. the present proceedings.

10. In the District Court action he claimed against the Inland Revenue Department and the 3 inspectors for trespass, invasion of privacy and wrongful entry to the Plaintiff’s residence.  The Defendants in that action have filed their defence and the action is still pending.  The Plaintiff states that the claim in that action is totally different from the present one and the cause of action is also different.  I make no comment thereon and for the purpose of the present proceeding I assume it is the case as the Defendants herein take no issue therein.

High Court Action No. 2132 of 2005

11. In the Statement of Claim in the present action he made reference to the events that happened at the hearing before Master J. Ko in DCCJ Action No. 4492 of 2004 on 27 October 2004.  He also alleged that there was an agreement between him and the 1^st Defendant herein and that the 1^st Defendant as well as the 2^nd Defendant was in breach of the agreement.

12. He also alleged that the 2^nd Defendant was in violation of the Basic Law, contravened the Human Rights and was negligent.  Because of this, the Plaintiff has “suffered and continued to suffer irreparable financial damages, economic loss and special damages”.  He gave no particulars of such violation or contravention or negligence.  I do not think I need go further into those empty allegations.

Plaintiff’s submission

13. The Plaintiff gave various reasons why I should not allow the Defendants’ application to strike out the present claim.  First, there was an application for stay of execution to be heard on 22 June 2006 in respect of DCCJ Action No. 4492 of 2005.  At the time of writing this judgment I was not informed of the result.  I do not consider that the stay of execution, even if successful, would affect my decision.

14. The Plaintiff stated that he was negotiating with the representatives of the 2^nd Defendant to settle the tax assessment and the amount of tax he has to pay.  The process of investigation is still going on.  The judicial proceeding is independent of the negotiation: unless agreement is reached, I do not consider that I should take note of it.

15. He also claims that the Secretary for Justice is investigating into the conduct of the different handling officers of this case.  Again I do not consider that the result of investigation will affect my decision.  Further, I do not have any evidence that such investigation is taking place.

16. The most important point raised by the Plaintiff is that the claim in this action is different from the claim in DCCJ 4492.  In DCCJ 4492, it was a claim about assessment of tax and an investigation into its reasonableness while in the present action it is a claim against the conduct of the 1^st Defendant, a legal officer, an agent for the Inland Revenue Department, the 2^nd Defendant.  He alleged that the officer had not fully disclosed the conversation between the Plaintiff and the 1^st Defendant outside Court and reported the agreement to Master J. Ko and that the officer had also misled Judge Chow at the hearing.

17. I accept the claim is different but the claim depends upon the facts that have been considered and decided by Judge Chow and then by the Court of Appeal at different times.  I cannot re-open the issue which has been decided involving the same parties: the doctrine of res judicata or issue estoppel applies.  It is obvious the claim in the present action must fail.

18. Accordingly, I strike out the Plaintiff’s claims against both Defendants and dismiss the whole action.  Pursuant to Order 42 rule 5B(6), I make an order nisi as to costs:

(a) That the costs of this action (including the costs of the application and all costs reserved) be to the Defendants to be assessed by me, if not agreed, with the following directions:

(i) That the Defendants shall at least 21 days before the hearing of the assessment file and serve a Statement of Costs in the form as suggested by me to the Law Society contained in Circular No. 06-2;

(ii) That the Plaintiff shall within 14 days thereafter file and serve a list of objections;

and  (iii)   That a date be fixed for hearing of the assessment with an estimated length of one hour.

(b) That this order shall become absolute 14 days after the date of this Judgment unless written application has been made to vary this order within the said 14 days.

Wong Yu Cho Rolly, Plaintiff in person.

Mr. Newton Chan, Senior Government Counsel of Department of Justice for Defendants.