HongKong Henson Industrial Limited v Victorian Ferries Pty Ltd (No 2) [2022] FCA 29

Federal Court of Australia

HongKong Henson Industrial Limited v Victorian Ferries Pty Ltd (No 2) [2022] FCA 29 File number: QUD 297 of 2021

Judgment of: COLVIN J

Date of judgment: 27 January 2022

Catchwords: COSTS - order made for enforcement of arbitral award - where costs ordered to be assessed on a lump sum basis - application of established principles

Cases cited: Cao v Apollo Phoenix Resources Pty Ltd (No 3) [2019] FCA 1779

Division: General Division

Registry: Queensland

National Practice Area: Commercial and Corporations

Sub-area: International Commercial Arbitration

Number of paragraphs: 9

Date of last submissions: 21 December 2021 (Applicant)

Date of hearing: Determined on the papers

Counsel for the Applicant: Ms EM Kwan

Solicitor for the Applicant: King & Wood Mallesons

Counsel for the Respondent: The Respondent did not appear

ORDERS QUD 297 of 2021

BETWEEN: HONGKONG HENSON INDUSTRIAL LIMITED Applicant

AND: VICTORIAN FERRIES PTY LTD Respondent

order made by: COLVIN J DATE OF ORDER: 27 JANUARY 2022

THE COURT ORDERS THAT:

1. On or before 25 February 2022, the respondent do pay the applicant's costs of and incidental to the application on a party and party basis fixed in the sum of $58,375.34. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

COLVIN J: 1 HongKong Henson Industrial Limited (HK Henson) sought and obtained orders for the enforcement of a foreign arbitral award made in Singapore. Orders were made for the costs of and incidental to the application to be assessed on a lump sum basis. HK Henson now seeks an order for those costs to be assessed in the amount of $68,375.34 inclusive of applicable GST. The respondent was given an opportunity to make submissions on the costs assessment but it has not made any submissions. 2 The application to enforce the award was initially opposed and directions were made for a notice of opposition and affidavits. This necessitated preparation for a contested hearing. Affidavits and submissions were provided by HK Henson on that basis. They included an affidavit from Ms Ji who was located in the mainland of the People's Republic of China. The applicant also addressed the appropriate approach to her evidence where there were restrictions imposed by Chinese domestic law upon allowing oral testimony or cross-examination by video-link. Steps were also taken to prove the Australian currency conversion for the award. 3 An issue also arose as to whether it was sufficient for the purposes of the proceedings for a copy of the contract containing the arbitral agreement to be relied upon in circumstances where the applicant was unable to produce an original signed and sealed version or a certified copy of such version. Detailed submissions were provided on that issue. 4 In the result, on the day of the hearing, there was no substantive opposition. 5 An affidavit has been provided which conforms to the requirements of the Court's Costs Practice Note (GPN-Costs). The deponent is an experienced practitioner and is qualified to provide the affidavit. I am satisfied that it is a sufficient and proper basis to make the assessment. Broadly speaking, the amount claimed is 65% of solicitors and counsel's costs and 95% of disbursements with a further discount of 10% on the basis that the assessment is to be made on a lump sum basis. 6 The principles to be applied were helpfully summarised by Markovic J in Cao v Apollo Phoenix Resources Pty Ltd (No 3) [2019] FCA 1779 at [21]-[29]. The approach is practical and flexible. It must be logical, fair and reasonable. It requires consideration of the costs actually incurred as well as the application of considerations of proportionality of a costs award to the subject matter of the proceedings as well as due recognition of the complexity of the particular case. 7 In the present case, the judgment that was entered in respect of the award was for more than AU$3,000,000 plus interest. The application was initially opposed requiring HK Henson to prepare on that basis. There were issues that required particular consideration that were of a kind that would not usually arise. 8 Subject to one matter, the affidavit material supports the approach of providing a broad percentage discount to the actual costs in order to assess a reasonable amount on a lump sum basis. The discount proposed accords with the range of such discounts. The matter qualifying that view concerns the time spent by a solicitor of less than five years experience, being approximately 109 hours at a rate of $350 per hour or $38,150. This represents two and half weeks full-time work where substantial time is also claimed by a senior associate (40 hours at $710.00 per hour) and where counsel was briefed. I consider that the discount for reasonableness on a party and party assessment to be applied to this part of the costs should be more than that outlined in the affidavit and would allow a further discount of $10,000 in respect of those costs. 9 On the above basis, I assess the costs of the application on a lump sum basis in the amount of $58,375.34 inclusive of applicable GST and will make orders for payment of the amount as assessed. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Colvin.