National Court of Papua New Guinea

All other arguments raised by the applicant on lack of pleadings etc are misleading and misconceived.

This now takes me to the applicant’s cross-claim which pleads the Retainer that was in existence between the respondent and the applicant and which is now the subject of the proceedings before the Lawyers Statutory Committee. By subject, I refer to the applicants principal’s actions in relying on the Retainer to deduct monies for the applicants legal fees, and for which the LSC has now charged him i.e his actions being unprofessional and unethical.

The defence and cross-claim dated 1st October, 2001 and filed on 11th October, 2001 by the applicant, seeks these reliefs;

1. A declaration that the sum of K2,248,620.00 was properly transferred into the cross-plaintiff’s operating account in satisfaction of outstanding legal fees entitlement were consistent with Retainer Agreement and Letter of Authority of the Board dated 31st August, 1999.
   
2. An order that the cross-defendant pay the cross-plaintiff forthwith the sum of K3,127,435.48 being outstanding fees under the Retainer Agreement.
   

The orders of 19th December 2003 were for summary judgment and for a complete audit of the files and for costs to be taxed. Therefore, it is obvious that only after taxation and audit, that monies will then be shown to be owing or overcharged. As submitted by the respondent, either party will then or may take the appropriate step/s i.e for the both parties to move for judgment, if necessary, on the monies owing. This appears to be the sensible approach.

Notwithstanding the above, the position at law is also that upon entry of summary judgment, the court has effectively found there to be either a lack of a Defence or no Defence. Justice Kandakasi noted this in his judgment when he held that;

"The material before me consists of the affidavit material filed in support of the application by the plaintiff as well as Mr Paraka’s affidavit which essentially admits to everything that has been pleaded in essence. There is not a single reference to there being a Defence on the merits and he ought to be given the opportunity to be heard on the defence before judgment. Instead the affidavit, in the crux of it, is simply showing or speaking to or deposing to discussions entered into between the parties where the plaintiff appears to have said, yes, you ought to repay in a certain way. But there seems to be no agreement reached, it only concerns repayment. Liability therefore is not the subject of the negotiations it seems to be a foregone conclusion from the affidavit of Mr Paraka himself that the money ought to be repaid to the plaintiff. In these circumstances, I do not see what is the need, what is the purpose, for not granting judgment..." (see pgs. 26 and 27 of National Court (Wgni) transcripts of application for summary judgment heard by Kandakasi .J on 19 December 2002), marked annexure ‘B’ and attached to Paul Paraka’s affidavit sworn on 22nd July, 2004).

The above statement supports the well established principle, that before entry of summary judgment, an applicant must show or establish the following two elements;

1. evidence of the facts proving the essential elements of the claim;

and

2. that the plaintiff or some responsible person gives evidence that in his belief there is no defence.
   

(see Bruce Tsang v Credit Corporation (PNG) Ltd [1993] PNGLR 112, and followed in Curtain Bros (Qld) Ltd & Kinhill Kramer Pty Ltd v the State [1993] PNGLR 285).

Mr Paraka filed an affidavit in that application which the learned judge considered. Clearly, there has not been a procedural error for the applicant to rely on s. 185 of the Constitution.

I dismiss these submissions as being misconceived and having no merit.

Mistakes

Furthermore, in its submissions under O. 12 R. 8 (5) of the NCR, the applicant submits that the National Court has power to set aside or vary a judgment or order if such powers are available or are found in Statute Law or Common Law. In submitting that and relying on re Swire, Mellor v. Swire (1885) 30 Ch.D.239, Counsel for the applicant submits that the same court can revisit its own decision and rectify its own error or mistake. The applicant’s lawyer submits that the orders that have been "mistakenly made" are orders numbered 2 and 3 which relate to the audit and taxation of the applicants files.

The applicant’s lawyer submits that these are mistakes because order no. 2 is not claimed as a relief in the Statement of Claim and is not supported or preceded by any pleadings. The applicant’s lawyer also submits that in relation to order no. 2, the auditing of files and trust accounts are functions vested in the PNG Law Society pursuant to part VII (s. 75 – 79) of the Lawyers Act 1986 and that the matter should have been referred to the PNG Law Society and not through the courts.

In relation to order no. 3, the applicant’s lawyer submits that it was not pleaded as a relief in the Statement of Claim and furthermore, that it was not supported by any pleadings in the Statement of Claim. He submits that there is no known process described as the taxing of files which is known in law or the rules of practice of the court. He submits that what is known is the taxing of costs of lawyers in that a party can make an application to the Registrar for the lawyers bills to be taxed, not to the court.

He submits that orders 2 and 3 cannot be granted on an application for summary judgment pursuant to O. 12 R. 38 of the National Court Rules as this provision deals with monetary or damages claims and that orders 2 and 3 are neither monetary nor are they damages claims. He submits that the supporting affidavits of Patricia Taureka and Ces Iewago sworn on 27th February 2002 and 28th February 2002 respectively and filed in support of the plaintiff’s application for summary judgment do not depose to evidence supporting orders sought in paragraphs 2 and 3 of the Notice of Motion. The applicant’s lawyer submits that the orders 2 and 3 are interlocutory in nature and they are not final. They serve as a "means" to an "end" and that therefore there is no utility or purpose for which those orders were intended to serve. He submits that despite the fact that the respondent made submissions for summary judgment to be entered, that there was never any argument presented in support of orders 2 and 3, that the orders made by Justice Kandakasi, were erroneous and without basis. He submits further that because no cause of action was pleaded in the Writ of Summons and Statement of Claim in support of orders 2 and 3, that the respondent could not traverse in his Defence or raise any form of defence to it. He submits that therefore these are mistakes made by the learned judge and that the court should set aside by exercising its inherent powers.

This court must firstly appraise itself on the nature of a ‘mistake’. This principle was discussed in the case In the matter of the Organic Law or National Elections and in the matter of Returns for the Southern Highlands Provincial Electorate: Dick Mune v Paul Poto SC 508 dated 21 September 1996, cited to me by applicant’s counsel. It is a case where three Election Petitions were heard together by the same judge after agreement by the counsel, because they all raised the same or similar facts and issues. The learned judged handed down his decision in respect of the three petitions after he considered only one ground, whereupon he then dismissed the whole three petitions. He did not consider the other grounds upon which the petitions were based. This error was noted by the lawyers for the petitioner who then filed a subsequent application before the same judge to reinstate the petitions in relation to the hearing of the balance of the grounds stated therein. The Judge heard the application and reinstated the petitions. In reinstating the petitions, the trial judge said;

"...the question has arisen as to whether or not I am able to stay my own judgment or and vary it. I think that fairness and justice quite simply dictates that if there has been an error in the final ruling and the orders made thereby are able to be corrected and parties find no prejudice, then there is no great difficulty in doing that. So in respect of that petition of Paul Poto I acknowledge that I have overlooked the balance of the petition which remain to be dealt with in several stages so that it is not difficult to amend the judgment in respect of that. I therefore vacate my ruling that that petition is dismissed. It is unsuccessful only in respect of the ground of the loss of ballot boxes...the balance of the petition therefore remain to be dealt with".

The respondent then sought judicial review under s. 155 (2) (b) of the Constitution challenging the reinstatement of the petitions The Supreme Court held;

"The National Courts inherent power in that section is to review decisions of subordinate courts, semi-judicial and administrative tribunals. Where the National Court makes a mistake, the Supreme Court may correct that mistake by virtue of its appellate powers or where (there is) no appeal provision is provided, by virtue of its inherent power in section 155 (2) (b) of the Constitution...".

In that case, the Supreme Court found that s. 220 of the Organic Law on National Elections was not applicable to the power of the National Court to rectify a mistake and that therefore, was not in conflict with common law principles. It found that common law principles were applicable and that the trial judge had power to reinstate the petition.

The Supreme Court found that the trial judge had erred when he dismissed the whole of the petition after considering only one ground. What he should have done was simply dismiss the particular ground in question then deal with the other grounds in the petition. The applicant’s lawyer in relying on Swire, Mellor v. Swire (supra) submit that an order, even when passed and entered, may be amended by the court so as to carry out the intention and express meaning of the court at the time when the order was made, provided the amendment be made without injustice or on terms which preclude injustice.

Swire, Mellor v Swire (supra) set the threshold for mistakes to be corrected at common law when Bowen L.J said inter alia;

"...An order as it seems to me, even when passed and entered, may be amended by the court so as to carry out the intentions and express the meaning of the court at the time when the order was made, provided the order be made without injustice or on terms which preclude injustice...When there was any mistake which could be ascribed to the officers of the court, judgments at common law could always be amended in the term, and in some cases after the term in which they were pronounced."

Furthermore, in Dick Mune v Paul Poto (supra), the Supreme Court considered whether it had inherent jurisdiction at common law to rectify a mistake in order to avoid injustice. After it found that it did, it decided on the applicability of schedule 2.2 of the Constitution, as to whether the Common Law principles were;

a) inconsistent with a Constitutional Law or statute; or

b) inapplicable or inappropriate to the circumstances of the country; or

c) inconsistent with any custom.

However, because counsel before that court did not raise the applicability of schedule 2.2 as an issue, that the Supreme Court only focused on s. 220 of the Organic Law on National Elections which states effectively that;

"A decision of the National Court is final and conclusive and without appeal, and shall not be questioned in any way".

Again, this is not simply a case of rectifying a mistake. If counsel for the applicant was of the firm view that certain grounds were not properly pleaded and that the trial judge did not consider these submissions, then the appeal court is the appropriate forum to deal with this issue, not the National Court where the applicant seeks to obtain a remedy in the guise of a ‘mistake’. What occurred before Kandakasi .J is not a ‘mistake’ that falls within the ambit of the rule in Swire, Mellor v Swire (supra), nor am I sitting as a single Judge of the Supreme Court to then exercise my inherent powers under s. 155 (2) (b) of the Constitution. (see Dick Mune v Paul Poto (supra)).

Furthermore, as to the lack of pleadings in relation to orders no. 2 and 3, I note that paragraph 11 to 21 of the Statement of claim in WS 1165 of 2001 and paragraph (c) of the pleaded relief sought, form the basis of the court’s orders. Clearly, the statement of claim does plead the matters that enabled the judge to make the orders he made. I do not agree with applicants lawyers that the lack of pleadings is a mistake and must be amended. Again, the applicant’s submissions would be more appropriately made in an appeal court, not this court.

I find these submissions to be misconceived and misleading and will not accept them.

Orders 3 and 4 sought in the applicant’s Notice of Motion - Stay of trial judge’s order.

The orders sought in the defendant’s Notice of Motion seek to stay all of the trial judge’s orders including the orders relating to taxation and audit of the bills of costs until the determination of the cross-claim.

In this case, judgment was given for a sum of monies to be paid, this was appealed against and a stay pending hearing of the appeal was also granted by the Supreme Court. However the appeal was dismissed and the stay orders expired. Subsequently, the applicant paid the judgment amount.

The applicant submits that the trial judge granted the orders he made despite the fact that Defence and Cross-Claim were on foot. Mr Nii for the applicant submits that when the learned judge made those orders, he did not strike out the Defence and Cross-Claim and did not address them. The applicant submits that it is only fair that the court grant this stay to allow the cross-claim to be determined.

The issue to be firstly determined is whether the court did or did not deal with the cross-claim in its reasons.

The law on applications for summary judgment is very clear in that the court will only make an order for summary judgment if the Defence is without merit and is not arguable. On the grant of summary judgment, the effect is that there is no defence. The applicant submits that the learned judge did not deal with the cross-claim after grant of summary judgment. Paul Paraka deposes to this at paragraphs 14 and 15 of his affidavit sworn on 28th April, 2004. These state;

"14. Whilst I have paid the Judgment debt in full together with interest and costs in a total sum of K3,063,885.32, I still have my defence and cross-claim on foot.

15. The conclusion of the proceeding by way of Summary Judgment, and the appeal from the judgment being dismissed on technicalities, namely for want of prosecution, effectively means that the substantive issues as to whether or not the Retainer Agreement and the Letter of Authority of 31st August 2001 are valid, and therefore the issue as to whether or not I had lawfully retained the proceeds of the Judgment debt in proceedings WS no 262 of 1999, are yet to be determined by the court, in my cross-claim which is still on foot. In fact the court did not determine those issues when granting summary judgment. The transcript of the proceedings confirms this."
    

At further paragraphs of that affidavit, Mr Paraka deposes as to how it was that the respondent was seeking payment of K2,248,620.00. He deposes to the Retainer in existence then and the arrangement entered by the applicant and the respondent. He deposes that based on that Retainer, his employed lawyers and him performed work for the respondent for which invoices were periodically rendered and paid. He deposes that on 31st August 1999, the respondent through its then Managing Director authorized the applicant to transfer to its operating account any monies held in trust for the respondent to pay unpaid legal fees for services rendered. However, on or about September 1999, the respondent’s incoming Acting Managing Director Mr John Ban terminated this agreement. Mr Paraka deposes that at the end of December 1999, the total fees owing to the applicant by the respondent board was K953,364.78. At this time, the applicant in WS 262 of 1999 for the respondent succeeded in recovering outstanding rental for a building owned by the respondent board, the Era Rumana Building. The court awarded K2,248,620.00, which monies were paid into the applicant firm’s Trust Account in three installments. These judgment monies were applied by the applicant toward payment of outstanding legal costs owing to the applicant by the respondent, under the Retainer. The applicant advised the respondent of these deductions, by its letter of 14th July, 2000, addressed to the respondents principal legal officer. The applicant submits that even after deduction and settlement of its outstanding legal costs, the applicant was still owed K265,694.30 by the respondent.

However, after entry of summary judgment and in satisfaction of Justice Kandakasi’s orders, the applicant paid K3,063,265.32 to the respondent on 14th April, 2004. Mr Nii for the applicant submits and agrees that after that payment, there is nothing to stay. He submits that the applicant asks only that the court make orders in terms of paragraph 5 of the applicant’ s Notice of Motion which is that the respondent, or its lawyers, Gadens Lawyers, pay into court the sum of K3,063,265.32 being the amount claimed on the cross-claim. The applicant submits that upon payment of these monies into the National Court’s Trust Account, the National Court can then proceed to grant orders sought in paragraph 3 of the Notice of Motion i.e to stay the trial judge’s orders of 19th December, 2002.

The respondent opposes the applicant’s application to stay the hearing of the Statutory Committee on several grounds. These are that;

(a) The court has completed matters the subject of the Statutory Committee’s complaint and that the court’s involvement was always irrelevant;

(b) The court lacks jurisdiction to injunct the investigative process of the Lawyers Statutory Committee;

(c) It is not an appropriate situation for an injunction to be granted, given the principles applicable to the granting of interlocutory injunctions;

(d) The complaint/matter before the Lawyers Statutory Committee is not "sub judice" before the Supreme Court or National Court.

In relation to the first point, Mrs Nongorr for the respondent submits that the court has made a final ruling on the question of whether or not the applicant was entitled to take the respondent’s judgment monies and has ordered the applicant to repay the amount to the respondent. The applicant appealed, the appeal was dismissed, and the court system will never again be required to consider the question of whether or not the applicant wrongfully took the funds off the respondent.

In relation to the second point, the plaintiff submits there is no possibility of the facts before the Statutory Committee ever going before the court.

The respondent submits that although there is a cross-claim, it is in relation to the question of whether or not any legal fees are outstanding from the plaintiff to the respondent. It further submits that after the audit and taxation of the files, the parties will then know whether there are any monies owing to the applicant and that determination of the cross-claim cannot affect the question of whether or not the applicant took or was entitled to take the funds the subject of the complaint to the Statutory Committee. Mrs Nongorr for the respondent submits that the court has ruled that the applicant was not entitled to those monies and will never again consider that issue.

Mrs Nongorr submits again that the issue of the cross-claim is irrelevant to the matters ruled on by Justice Kandakasi and which are the subject of the complaint to the Statutory Committee.

In relation to the court’s powers to injunct the investigation, the respondent’s lawyers submit that the Lawyers Act does not contain provisions that allow the National or the Supreme Court to injunct the investigation or hearing by the Lawyers Statutory Committee. Mrs Nongorr further submits that neither the Supreme Court Rules nor the National Court Rules contain provisions that will allow a court to interfere with the investigations or hearings of the Lawyers Statutory Committee. Mrs Nongorr submits that the Supreme Court and National Court have an inherent jurisdiction to control proceedings in court but the proceedings sought to be controlled are not before the court but before the Lawyers Statutory Committee. The respondent submits that the Lawyers Statutory Committee is an administrative tribunal and the National Court does have the power to review final decisions of the Lawyers Statutory Committee pursuant to the provisions of Order 16 of the National Court Rules which will only be utilized once a final decision is made and all other remedies exhausted. The court was referred by the respondents lawyer to Simon Ketan v. Lawyers Statutory Committee [2001] N2290 where it was held that an investigation by the Lawyers Statutory Committee cannot be injuncted by the National Court nor can it be the subject of review unless it is completed and a final decision has been made. (See also Rimbink Pato v. Anthony Manjin (SC622)). In Wilson Kamit v. Marshall Cooke [2003] N2369, where the applicant made application for leave for Judicial Review and sought an injunction to restrain the report and proceedings, the court held that it was inappropriate to interfere with the Commission completing its process.

Having canvassed both the applicant’s and respondents’ lawyers’ submissions, I now refer to the transcript of the proceedings to assist me in determining whether the trial judge did or did not deal with the cross-claim.

The applicants filed Defence and Cross-Claim, pleads the Letter of Authority and Retainer. It seeks declaratory orders that K2,248,620.00 was properly transferred into its operating account and that the respondent should pay it K3,127,435.48, monies due to it under the Retainer. His Honour dealt with the issue of whether the monies were rightly or wrongly transferred when he said at pg. 18 of the transcripts;

"...so the question really would be one of, did you keep the POSF notified of the progress and the settlement or eventual judgment in the WS 262 of 1999? And then keeping them notified and advised of the application of the proceeds and in other words accounting for monies received and you say applied towards your costs. Quite apart from this, I cannot see any authority for you to apply summarily assessment and take from any monies you might have held in trust for a claim of damages or loss of business. That letter does not give any authority on that."

The transcripts also show a long dialogue between Mr Nii for the applicant and the learned judge from pgs. 18 to 20 of the transcripts, when, at pg. 20 of the transcripts and in reference to part 4 (h) of the Retainer, His Honour said;

"Clauses such as this are unenforceable. They amount to penalty. You can only get reasonable amount for any breach of contract and the reasonable amount is specified an amount calculated and if the court is of the view that this is reasonable, yes. But a blanket provision for payment of the balance of the contract is penalty, it cannot be enforced. That is the effect of that judgment...".

The respondents’ lawyer also addresses the effect of the Retainer and letter of authority in his submissions which are covered at pg. 20 and lines 10, 20 and 30 of the transcripts.

In his ruling, at pgs. 27 and 28 of the transcript, His Honour said;

"...It is not well and good enough for a lawyer to receive money and then automatically apply monies received on behalf of the client towards the payment of his cost without the specific instructions of the client on a bill of costs rendered for those monies to be paid out for monies received. As I said, it would be futile for us to allow this matter to progress any further than to resolve by way of summary judgment application which I grant for these brief reasons ... As I say, the growing concern here is the retainer had expired or has terminated rather and all monies received thereafter belong to that of the client and the lawyer had no right to deal with them in the way he saw fit, without that retainer agreement subsisting." (my emphasis)

The submissions raised by Mr Nii are matters more appropriately dealt with at an appeal. I have referred to Kandakasi .J’s decision where he is clear in his reasons that he did deal with the cross-claim and was of the view that the retainer had expired and that the applicant must first obtain instructions from his client to deduct monies held in trust, and that the letter of authority is unenforceable. On my reading of those reasons, I see that His Honour, apart from granting summary judgment, also indirectly ruled on the cross-claim. It would be wrong for this court to grant a stay pending the hearing of the cross-claim, when the court has already dealt with that issue and formed a view.

I note also a recent motion filed by the applicant on 2nd December 2004, seeking orders for the cross-claim to be dismissed. That motion need not be argued because I am of the view Kandakasi .J has sufficiently dealt with the cross-claim.

In any event, Mr Nii for the applicant agrees that because the judgment debt has been satisfied, that there is nothing to stay.

Application Sub Judice

The applicant also seeks a stay because it submits the matter is "sub-judice". The respondent submits that it is not and has never been sub-judice.

It is necessary to understand the background to the sub-judice rule. It was developed as part of the law on Contempt of Court in common law. Briefly, it means that there must be a real risk of prejudice to the administration of justice before a matter can be sub judice. (see Halsburys Laws of England 4th edn.)

The law in relation to what may be published concerning current legal proceedings is sometimes referred to as the sub-judice rule. According to Halsburys Laws of England 4th Edn. Vol. 9(1) at par. 421;

"... Publication contempt, when not falling within the strict liability rule, consists of the usual two elements, actus reus and mens rea.

The actus reus of this contempt is the impedance of or interference with the administration of justice by the court. There must be a real risk of prejudice to the administration of justice. For this to be the case, proceedings must be pending or imminent at the time of publication.

The required mens rea is an intention to interfere with or impede the administration of justice; it seems that recklessness is not sufficient. The intention may be inferred.

The standard of proof which applies to contempts under this head is the criminal standard" (see pg. 256 of Halsburys (supra)).

As to when contempt is committed, it may be necessary for proceeding to be pending or imminent at the date of publication. (see Halsburys (supra) at par. 424).

In this case, there are decisions from the National and Supreme Court. The judgment debt has been satisfied. The only proceeding pending is the complaint before the Lawyers Statutory Committee. The trial judge’s orders for summary judgment confirms that there is no arguable case, that there is no meritorious defence and that there are no legal issues. After the dismissal of the applicants appeal in the Supreme Court, the National Court’s orders remained and which order has been fully satisfied. As to the cross-claim for K3,127,435.48, in outstanding legal fees due under the Agreement, I have seen that Kandakasi .J has dealt with this and formed the view that there is no merit in the matters pleaded in the cross-claim. As for the claim in WS 79 of 2000, the applicant can deal with this in its own time.

The issue is whether the proceedings of the Lawyers Statutory Committee will prejudice the hearing of existing claims. Again, if the applicant is of the view that he has claims for outstanding legal fees, then he can only file these, after the bills have been taxed. (my emphasis) That is the law. (See Jack Livinai Patterson v National Capital District Commission (2001) N2145 dated 5th October 2001; Sarea Soi trading as Soi and Associates Lawyers v Imawe Kewa Land Group Inc. (2004) N2560 dated 10th June 2004); Edward Manu trading as Manu and Associates Lawyers v Honiri Timber Resources Development Limited N2597 dated 23rd August 2004).

I reiterate again that the charges laid by the LSC are against Mr Paraka, not the firm Paraka Lawyers. This is significant because the gist of the applicants claims for outstanding legal fees are by it as Paraka Lawyers whereas, the enquiry by the LSC against Mr Paraka is against him personally.

The LSC is looking to embark upon an enquiry of "improper conduct" by Mr Paraka. The various provisions of the Lawyers Professional Conduct Rules alleged to have been breached in relation to each count are as follows;

i. Count 1: Rule 3 (a) iii

"3 DUTY OF EVERY LAWYER

(a) not to engage in conduct (whether in pursuit of his profession or otherwise) which –

...

(iii) is unprofessional; or

...

ii. Count 2: Rule 13 (i)

"13. KEEPING THE CLIENT INFORMED

(1) A lawyer shall inform his client fully of his rights and possible courses of conduct regarding issues of substantial importance and shall keep his client appraised of all significant developments and generally informed in the matter entrusted to him by that client unless he has been instructed to do otherwise."

(2) A lawyer shall –

• (a) notify his client promptly of the receipt by him of monies or securities on behalf of that client; and

..."

iii. Count 3: Rule 20 (3)

"20. PROFESSIONAL COURTESY

...

(3) A lawyer shall not communicate regarding a legal matter in which he is acting with a person whom he knows is represented in that matter by another lawyer."

iv. Count 4: Rule 3 (d)

"3. DUTY OF EVERY LAWYER

...

(d) to respond within a reasonable time and in any event within twenty one (21) days (or such extended time as the Committee may allow) to any requirement of the Committee for comments or information on a complaint and in doing so he shall furnish in writing a full and accurate account of his conduct –

• (i) in relation to the matter the subject of the complaint; or
• (ii) in relation to any other matter the subject of an investigation or enquiry by the Committee; and

..."

The charges/counts show that the LSC has to consider whether the applicant’s conduct in relation to the withholding of monies applied towards payment of legal fees is a breach of the professional conduct rules.

The issue to be decided on the applicant’s cross-claim is whether he should be paid what he claims is owing to him. The court and the LSC are considering two entirely separate issues, one being a civil claim for legal fees owing, the other being for improper conduct. A relevant issue the court should ask itself is whether a decision made by the Lawyers Statutory Committee would influence the mind of a Judge when the applicants various claims now before the court, go before it. The claims are for ‘unpaid’ legal fees. A judge always asks when claims for payment of legal fees are before it for determination, whether those fees have been taxed. If those fees have not been taxed, then the court must make an order that the claim be dismissed because there is no cause of action on foot and for the bills to be referred to the Registrar for taxation. (see Jack Livinai Patterson v National Capital District Commission (supra); Sarea Soi trading as Soi & Associates Lawyers v Imawe Kewa Land Group Inc. (supra)).

But if the bills have been taxed, then the judge will consider the claim together with Defences, if any. I do not see how the hearing of the Lawyers Statutory Committee or a decision will affect or influence the trial judge’s mind.

Furthermore, the principle of sub judice will only apply if there will be prejudice to the administration of justice. Again, I do not see how the enquiry before the Statutory Committee can prejudice the hearing of the applicant’s claims.

Again, for this court to find the existence of the required mens rea, there must be evidence of intention to interfere with or impede the administration of justice. But this principle may be applicable in a situation where a court proceeding is sought to be stayed. In this case, it is the Lawyers Statutory Committee, a quasi-judicial tribunal, which has yet to sit or make a decision.

In the Supreme Court case of the Public Prosecutor v. Nahau Rooney [1979] PNGLR 448, the court relied on the decision of Attorney General v. The Times Newspapers Ltd [1973] 3 ALL ENG LR pg. 54 where it said; "The law on this subject is and must be grounded entirely on public policy...it is there to prevent interference with the administration of justice and it should in my judgment be limited to what is reasonably necessary for that purpose." It further held that "conduct amounts to contempt where it presents a real risk as opposed to a mere possibility, of interference with the due administration of justice."

In SCR No. 3 of 1984 Ex p Callick & Koroma [1985] PNGLR 67, the court again adopted reasoning in the Attorney General v. the Times Newspaper, (supra), particularly at pg. 73 where it held:

"it is scarcely possible to imagine a case where comment would influence judges in the court of appeal or noble or learned lords in this house. And it would be wrong and contrary to the existing practice to limit proper criticism of judgments already given but under appeal".

I have canvassed in detail, the applications that are supposedly before the National Court and before the Lawyers Statutory Committee. These two tribunals are considering two entirely separate issues.

I had also referred to the law on the sub-judice which was developed as part of the law on contempt.

The court has already ordered summary judgment resulting in Mr Paraka paying monies but it is his conduct as principal of the firm that is at issue here. Therefore, I can conclude that the issues before the Lawyers Statutory Committee are not sub-judice the National Court’s proceedings because there is no real risk of an interference with the due administration of justice.

In any event, the law is that the cross-claim for payment of legal costs cannot proceed until after those costs have been taxed. So therefore, it is futile for the applicant to proceed on a cross-claim or claim for recovery of outstanding legal costs, until after all outstanding costs have been taxed, meaning Kandakasi .J’s orders must take their course.

Injunctions

I have seen that Kandakasi .J has dealt with the cross-claim by expressing certain views.

However, notwithstanding, I reiterate that the basis for this finding in light of the present position at law is that the applicant cannot seek payment of outstanding legal fees he says he is entitled to, until after those bills have been taxed. And Kandakasi .J’s orders are the commencement of that process. Secondly, the issue of the validity of the Retainer and letter of authority are separate issues which can be dealt with in separate proceedings.

But as to balance of convenience, the applicant submits that it will suffer irreparable damage to its professional career if the injunction is refused. He submits that if the Lawyers Statutory Committee continues to sit and determine the charges against its principal Paul Paraka and that if he is found guilty, he may be suspended from practice. He submits that this will definitely affect his legal practice which now has approximately 40 lawyers and in excess of 100 support staff and branch officers in six locations in this country. He further submits that in the event the National Court does hear the cross-claim and the court finds that the applicant did lawfully retain funds pursuant to a validly executed Retainer Agreement and a letter of authority then this will pose a practical threat and dilemma that can never be remedied. He submits that the Lawyers Statutory Committee’s decision can never be reversed in those circumstances and that the damage caused to the appellant is irreparable and cannot be matched by any form of compensation, monetary or otherwise.

However, he submits also that in the event the injunction is granted and the applicant does not succeed, the Lawyers Statutory Committee does not suffer any foreseeable damage at all. If it does, this can be indemnified by an award of compensation pursuant to the applicant’s undertaking as to damages.

In response, the respondent referred the court to Simon Ketan v. Lawyers Statutory Committee [2001] N2290 where the applicant was seeking to injunct the Lawyers Statutory Committee pending a review of his referral to the Lawyers Statutory Committee. In this case, the applicant only seeks to injunct the Lawyers Statutory Committee from sitting pending the hearing of the cross-claim. In Simon Ketan (supra), the court held that;

"persons concerned with such investigations have the right to defend themselves once a formal charge has been laid. If there is say an allegation of defamation of one’s character, separate proceedings could be issued for defamation. But it is no reason to prevent such lawful authorities from carrying out their lawful investigations. If the courts were to readily come into the sphere of investigations and make orders preventing such authorities from carrying out their investigations, it would interfere in the process of proper investigations and bringing those responsible for any criminal or other misconduct to the appropriate authorities to be dealt with according to law." (pg. 11).

Justice Kandakasi said again at pg. 13 of that case;

"...the society is not excluded in the exercise of its powers and functions and or duties to refer to the committee any improper conduct of a lawyer coming to its attention however that may be ... the clear statutory objectives of,,, the society which is to safeguard ... the integrity of lawyers and maintain a higher level of proper professional conduct."

The LSC’s Notice of Enquiry is directed only at the applicant’s principal, to him as an individual. Simon Ketan (supra) is authority for the principle that LSC’s functions should not be injuncted. Furthermore, an injunction is an equitable remedy. The applicant must come to court with clean hands. In this case, the applicant has not complied with the court’s orders to submit the plaintiff’s files for audit and taxation. On that basis alone, it cannot seek injunctive orders, because it has not come to court with clean hands.

I note applicant’s submissions and reiterate again that the applicant’s claim which is in relation to unpaid legal costs, cannot be instituted or pursued until after the applicant’s bills have been taxed. The applicant should, for its own benefit, enhance compliance with Kandakasi J’s orders because it is the taxing of its files, that will enable it to then proceed confidently with its claims for unpaid legal fees (if any) against the plaintiff.

Payment into court

The orders sought in paragraph 5 of the applicant’s motion is for payment into court of the sum of K3,063,265.32 being outstanding legal fees pending determination of the cross-claim. I need not consider these submissions because of the position at law in relation to taxing of bills of costs. At this time this court does not know how much exactly is properly owed by the respondent to the applicant. This will be done after the bills have been taxed. Again, I urge compliance by the applicant with Kandakasi .J’s orders, for there to then be a certified amount, to be paid into court at a later time, if and where necessary.

Conclusion

I find that not only has the applicant sought to stretch the limits of the rules within which such applications are confined to, but that it also asks the court to exercise its inherent powers to set aside a final judgment which has been fully satisfied. The law is that a court has no power to set aside or vary a final judgment which has been passed and entered (see Bailey v Marinoff [1971] HCA 49; (1971) 125 CLR 529). There are exceptions to that rule, which the applicants claim does not fall under. I have seen that the judgment by Kandakasi .J is not an irregularly entered judgment that should be set aside ex debito justitiae (see Anlaby v Praetorius [1888] UKLawRpKQB 55; (1888) 20 QBD 764). It is my view that the application before me is a complete abuse of the courts process which should not be allowed to continue.

The orders I make are to enhance compliance with Kandakasi .J’s orders. I should also point out that although I have considered the directions sought by respondents counsel in its written submissions, that the orders I made will not be in those specific terms but are made to ensure completion of this matter.

Therefore, the court orders that;

1. The Notice of Motion filed by Paraka Lawyers on 28th April, 2004 is dismissed in its entirety;
   
2. Within 28 days from the date of this order, the applicant shall deliver to the taxing officer all its files subject to the orders of Kandakasi .J of 19th December, 2002;
   
3. Subject to the terms of the same orders referred to in paragraph 2 hereof, the files shall be appropriately audited by a chartered accountant, then thereafter taxed by the taxing officer;
   
4. The applicant shall pay the respondent and the Lawyers Statutory Committee’s costs of the applications before me, to be taxed if not agreed;
   
5. Time is abridged to time of settlement to take place forthwith.

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Lawyer for the Defendants/Applicants : Harvey Nii Lawyers
Lawyer for the Plaintiffs/Respondents : Gadens Lawyers
Lawyer for the Lawyers Statutory Committee : O’Briens Lawyers