PRACTICE DIRECTION - 14.3
COSTS
A Scope of Application of this Practice Direction
1. Unless otherwise directed by the Court, the following directions apply to civil proceedings in the High Court, the District Court and the Lands Tribunal and costs-only proceedings in the High Court and the District Court.
2. For the avoidance of doubt, Practice Directions appearing at 14.4 (Taxation of Costs in Criminal Cases) and 14.5 (Application for Wasted Costs Order under Order 62 rule 8) continue to apply.
3. Nothing in this Practice Direction shall affect the parties' rights to agree the amount of costs to be paid and to have such costs dealt with by a consent order or consent summons.
B Costs Sanctions
4. The parties have a duty to discuss the items of costs objected to and to try to reach an amicable settlement, narrow down the items in dispute and consider making offers pursuant to Order 62A.
5. In case of failure to observe any of the directions herein, the taxing Master may make the party and / or the practitioner responsible for such failure personally liable for costs.
C Costs Orders in Civil proceedings in the High Court, the District Court and the Lands Tribunal
6. Upon the disposal of any application, cause or matter, the Court may make one of the following orders in respect of the costs of and incidental thereto:
(1) summary assessment of such costs, in which event Part C(1) below applies;
(2) provisional summary assessment of such costs; or
(3) taxation of such costs, in which event Part C(2) below applies.
The Court will give preference to the first two options where an interlocutory application is concerned, unless there is good reason not to do so, e.g. where the paying party shows substantial grounds for disputing the sum claimed for costs that cannot be dealt with summarily.
(1) Summary Assessment of Costs
7. A party who wishes to seek summary assessment of costs should prepare a statement of costs which should, as far as possible, be in the format in Appendix A. This statement should be signed by the party acting in person or his solicitor.
8. Subject to other Practice Directions, the statement of costs should be lodged and served on any party against whom summary assessment is sought together with the skeleton argument for the substantive application.
9. If the party seeking summary assessment of costs is:
(1) on legal aid; or
(2) a person under disability,
the legal representative (or the next friend or guardian ad litem) acting for that party must state in the statement of costs that he waives the right to any further sum of money (including common fund costs) in respect of the costs of the application, cause or matter. [Note: see rule 9C(1)(b) to (c).]
10. Practitioners are reminded that the principle that a receiving party cannot recover a sum in excess of his liability to his own solicitors applies equally to summary assessment. Accordingly, the solicitor for the party seeking costs shall certify on the statement of costs as follows,
"I certify that the amount claimed in this statement of costs does not exceed [the plaintiff's / defendant's] liability for costs to my firm in respect of this [summons / hearing / action, etc.]"
11. Summary assessment will be conducted by the same Judge or Master who has dealt with the substantive application. If he deems fit, the Judge or Master may make an order nisi as to the quantum of costs. If, however, the Judge or Master is unable to make summary assessment on the same day the costs order is made, he may give directions as to its disposal including a direction for a further hearing before him, or disposal on the papers.
12. If the interlocutory application has the effect of disposing of the entire action, the Court may also summarily assess the costs of the action.
13. A broad-brush approach will be taken by the Court in the summary assessment procedure. The Court will not embark on a mini-taxation. Prolixity in contents of a statement of costs is therefore not acceptable. Costs for gathering information and drafting of these statements will generally not be granted.
14. Although the Court may allow the full amount claimed by the receiving party, it will, so far as possible, ensure that the final figure is not disproportionate and / or unreasonable having regard to the nature and circumstances of the application or matter and the underlying objectives stated in Order 1A. The Court will retain this responsibility notwithstanding the absence of challenge to individual items in the make-up of the figure sought. The fact that the paying party is not disputing the amount of costs can however be taken as some indication that the amount is proportionate and reasonable. The Court will therefore intervene only if satisfied the costs are so disproportionate that it is right to do so.
15. The failure of a party, without reasonable grounds, to comply with the above directions will be taken into account by the Court in deciding what order to make about the costs of the interlocutory application and the costs of any further hearings that may be necessitated by such failure.
(2) Taxation
(a) Filing of Bill of Costs Awarded by the Lands Tribunal
16. Where the Lands Tribunal has made an award of costs, the bill of costs in respect of such costs shall be filed:
(1) in the High Court if the Tribunal has ordered that all or part of such costs are to be taxed on the High Court scale;
(2) in the District Court if the Tribunal has ordered that such costs are to be taxed on the District Court scale;
(3) in the Lands Tribunal for provisional taxation by the Chief Judicial Clerk ("CJC") if the amount of the bill of costs is under $200,000.
(b) Format of a Bill of Costs and a List of Objections
17. As far as practicable, a bill shall be drafted as per the format in Appendix B and signed by the receiving party or, if he is represented, by his solicitors. If there are special reasons why this format cannot be used, directions of the taxing Master should be sought before drafting of the bill commences.
(1) The bill should be drafted in Chinese if the proceedings giving rise to the costs order were conducted in Chinese.
(2) Each item in the bill should be given an item number that can be readily referred to without making references to other pages to find out which part or section it belongs to.
(3) The bill should set out the work done in chronological order.
(4) A bill of costs in proceedings by way of writ should be presented by way of stages, each stage defined by dates.
(5) Conferences within each stage should be presented as a total number of hours instead of setting them out one by one. A breakdown of conference time need only be served upon request of the paying party but such breakdown need not be filed.
(6) Communications within each stage should be presented as a total number of hours. It is not necessary to set out letters in and out, or one by one. It is sufficient if the schedule of letters is served upon request of the paying party but such schedule need not be filed.
(7) The solicitor for the party seeking costs shall certify on the bill as follows,
"I certify that the amount claimed in this bill does not exceed [the plaintiff's / defendant's] liability for costs to my firm in respect of this [summons / hearing / action, etc.]"
If the costs of a former firm(s) of solicitors are claimed in the same bill, there should be a certificate signed by the firm of solicitors currently on record that those costs claimed in this bill do not exceed the liability of or costs paid by the receiving party to that former firm(s).
18. As far as practicable, a list of objections shall be drafted as per the format in Appendix C and signed by the paying party or, if he is represented, by his solicitors. If there are special reasons why this format cannot be used, directions of the taxing Master should be sought before drafting of the list of objections commences.
(1) Each item of objection should be given a serial number.
(2) It should also identify and indicate the item on the bill objected to by reference to page number and item number.
(3) The reasons for objection should also be clearly stated. If the objection is based on excessiveness or unreasonableness of the amount claimed the paying party has to suggest, where appropriate, what the reasonable amount is.
(4) The paying party is also required to calculate and indicate the total amount that will be deducted if all his objections for whatever reasons are allowed.
(5) The paying party should also estimate and state the length of time for a taxation hearing in the event a taxing Master directs having one.
(c) Commencement of Taxation Proceedings
19. The proceedings for the taxation of costs is begun by the filing of the Notice of Commencement of Taxation ("NOCT") as per the format in Appendix D and the bill of costs.
20. Notwithstanding paragraph 19, it will not be necessary to re-serve the bill if the same bill has been previously served on the paying party for the purpose of costs-only proceedings or negotiation of settlement. It will be sufficient to make reference to that fact in the NOCT, identifying the bill by date and the date of service.
21. Unless the taxing Master directs otherwise, the following standard directions shall take effect:
(1) Within 28 days after service of the NOCT, the paying party shall file and serve a list of objections, failing which the receiving party may apply to the taxing Master for the bill to be taxed as drawn as provided for in paragraph 23 below.
(2) In the event that no settlement on the whole bill can be reached within 28 days after service of the list of objections, the receiving party shall file and serve an application in the form of Appendix E ("Application to Set Down a Bill for Taxation").
22. If parties agree on directions which are not the same as the standard directions set out in paragraph 21 above, the parties shall file a consent summons to that effect. Any agreed directions will be treated as an important factor although the taxing Master retains a discretion and will consider all the circumstances before making an order.
23. Upon the failure of the paying party to file and serve a list of objections in compliance with the standard directions or the directions approved by the taxing Master, the receiving party may apply for his bill to be taxed as drawn by:
(1) filing an affidavit to prove due service of the NOCT and the bill on the paying party; and
(2) completing Section A of the Application to Set Down and filing the same in Court and serving it on the paying party.
24. The date for filing the Application to Set Down a Bill for Taxation, whether pursuant to the standard directions or otherwise, cannot be postponed without the approval of the taxing Master. The taxing Master will not grant an application for postponement without good reasons being shown to him. The assertion that the parties wish to discuss settlement will generally not be regarded as a good reason as they should have made use of the prior period to so discuss.
25. The receiving party should file the Application to Set Down a Bill for Taxation by the due date even though the paying party has refused to cooperate. Save as to above, the parties are expected to be flexible about reasonable extensions of time for compliance with other directions.
(d) Setting Down of a Bill for Taxation
26. Upon receipt of the Application to Set Down a Bill for Taxation, the taxing Master may:
(1) in appropriate cases, tax the bill as drawn, if he is satisfied that the NOCT and the bill have been duly served on the paying party and the paying party has failed to file a list of objections;
(2) set the bill down for taxation without a hearing ("provisional taxation") by a CJC if the amount claimed in the bill does not exceed $200,000;
(3) set the bill down for provisional taxation by a taxing Master if the amount claimed in the bill exceeds $200,000;
(4) set the bill down (wholly or partly) for taxation with a hearing (whether the amount claimed in the bill exceeds $200,000 or not) if he is satisfied that there is a good reason to do so; and / or
(5) give other directions as he deems fit
and the parties will be notified by a Notice of Setting Down in the form of Appendix F.
(e) Refund of Taxing Fees
27. At all times up to close of taxation, parties are encouraged to settle. Without limiting the general discretion of the taxing Master, taxing fees may be refunded in whole or in part pursuant to Order 62, rule 21D(3) having regard to the time of withdrawal of the bill and in accordance with the following scale:
Time of withdrawal
Percentage of
reductionWithin 2nd week after date of Application to Set Down a Bill for Taxation
90 %
Within 3rd week after date of Application to Set Down a Bill for Taxation
70 %
Within 4th week after date of Application to Set Down a Bill for Taxation
50 %
Within 5th week after date of Application to Set Down a Bill for Taxation
30 %
Within 6th week after date of Application to Set Down a Bill for Taxation
10%
(f) Preparation of Taxation Bundles for Provisional Taxation by a Taxing Master or Taxation with a Hearing
28. A bundle of all documents relating to the items objected to should be lodged with the Court not less than 2 clear days before the date fixed for provisional taxation by a taxing Master or taxation with a hearing.
29. The bundle should be in the following form:
(1) The documents must be marked with the same item numbers as those in the List of Objections to which they relate;
(2) The documents must be arranged in the same sequence as they appear in the List of Objections; and
(3) It is not necessary to divide in and out correspondences and telephone calls into different parts. They can be put into a bundle with dividers demarcating the stages of the proceedings.
(g) Provisional Taxation by a CJC
30. For the avoidance of doubt, paragraphs 28 and 29 concerning the preparation of taxation bundles do not apply to provisional taxation by a CJC.
(h) Provisional Taxation by a Taxing Master
31. If the parties have narrowed down the disputed items, the receiving party shall inform the taxing Master in writing of the remaining items in dispute at the same time as he lodges the taxation bundle in accordance with paragraph 28 above.
32. Unless otherwise directed by the taxing Master, the receiving party should not file any reply to the list of objections.
33. On the appointed date, if satisfied with service, the taxing Master may:
(1) make an order nisi as to whole or part of the bill;
(2) make an order nisi as to the costs of taxation;
(3) direct an oral hearing; and / or
(4) adjourn the provisional taxation to another date with or without further directions.
(i) Proceedings after Provisional Taxation
34. After provisional taxation by a CJC or a taxing Master, the parties will be notified in writing of the amount allowed or disallowed ("the costs order nisi").
35. If no clarification is sought or no objection is made to the costs order nisi within 14 days of the notification, the order nisi becomes absolute. There will be no taxation hearing. Sub-paragraphs 38(3) and (4) will apply. The allocatur can be drafted and sealed accordingly.
36. If any party objects to the costs order nisi, he should apply to the taxing Master in writing for a hearing identifying his objections and giving an estimation of the hearing time.
37. Upon receipt of an application for a hearing, the taxing Master will set the bill down (wholly or partly) for taxation with a hearing and give further directions as he deems fit.
(j) Standard Directions after Taxation
38. At the end of taxation, unless the taxing Master otherwise directs, the following directions shall automatically apply:
(1) The parties shall within 7 days endeavour to agree the amount allowed on taxation.
(2) Failing agreement, the parties shall be at liberty to apply in writing to the Court for clarification and such application shall be dealt with by the taxing Master without a hearing unless otherwise directed.
(3) If agreement is reached or the taxing Master's clarification is obtained, the amount agreed or ascertained is deemed to be accurate and correct. Based on such amount the taxing fees for which the paying party shall reimburse the receiving party shall be calculated and the receiving party shall prepare and submit the allocatur to the Court for approval and issue.
(4) A summary of the allowed amount (see pages 12 to 13 of Appendix B) shall be submitted to the Court in duplicate together with the allocatur.
(3) Costs-only Proceedings in the High Court and the District Court
39. The plaintiff may elect in the originating summons to proceed by way of summary assessment or by taxation:
(1) A claim of costs for $200,000 or less should generally proceed by way of summary assessment, unless there are good reasons not to do so.
(2) A claim of costs for more than $200,000 may proceed by way of summary assessment or taxation.
(3) Parties are reminded that the prescribed taxing fee is only payable upon filing of a NOCT accompanied by a bill of costs for taxation and is not payable upon filing a statement of costs for summary assessment.
(4) A plaintiff who unreasonably seeks taxation or incurs costs of taxation disproportionate to the amount allowed on taxation may be penalized in costs.
40. The originating summons must be accompanied by:
(1) a statement of costs which shall, as far as practicable, be in the format in Appendix A if summary assessment is sought; or
(2) a bill of costs which shall, as far as practicable, be in the format in Appendix B if taxation is sought.
41. Apart from showing compliance with statutory requirements, the affidavit filed in support must briefly describe the claim or dispute to which the agreement to pay costs relates and the terms of settlement.
42. Where a defendant has filed an acknowledgement of service indicating that he will contest liability, the defendant should, at least 3 days before the hearing, file and serve an affidavit setting out the facts supporting his contest of liability.
43. On the return date of the originating summons, the Master may:
(1) make a summary assessment of the costs claimed there and then after hearing oral submissions;
(2) make an order for taxation of the costs claimed, in which event the practice and procedure for taxation set out in Order 62 and Part C(2) of this Practice Direction will apply, save that the plaintiff is not required to file and serve another set of his bill of costs when he files the NOCT;
(3) dismiss the originating summons; or
(4) adjourn the originating summons and give such directions as he deems appropriate.
(4) Fixed Costs
44. Practitioners are reminded that the principle that a receiving party cannot recover a sum in excess of their liability to his own solicitors applies equally to fixed costs recoverable under Order 62, Schedule 2. Accordingly, the solicitor for the party seeking such costs shall endorse on the draft order or produce to the Registry a certificate certifying that the amount claimed does not exceed [the plaintiff's / defendant's] liability for costs in respect of the matter, as follows,
"I certify that the amount of fixed costs claimed for entering this judgment does not exceed [the plaintiff's / defendant's] liability for costs to my firm in respect of this action / counterclaim, etc.]"
D Commencement Date
45. This Practice Direction supersedes the previous Practice Direction 14.3 on Taxation of Costs in Civil Proceedings in High Court and District Court.
46. This Practice Direction shall come into effect on 2 April 2009.
Dated this 12th of February 2009.
| (Andrew Li) | |
| Chief Justice |