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PNG Lands Ltd v Tano Dawahi Ltd [2016] PGNC 81; N6307 (14 April 2016)

N6307

PAPUA NEW GUINEA

IN THE NATIONAL COURT OF JUSTICE

OS NO. 628 OF 2014

BETWEEN:

PNG LANDS LIMITED
First Plaintiff

AND:
ISLAND TRADING & CONSTRUCTION
LIMITED
Second Plaintiff

AND:
TASMAN SILCOCK
Third Plaintiff

AND:
TANO DAWAHI LIMITED
Defendant

Waigani: Hartshorn J.
2016: April 4^th, 14^th

Costs

Cases cited:

Michael Pundia v. Jerry Kiwai (2011) N4427
Pius Sankin v. Papua New Guinea Electricity Commission [2002] PNGLR 432
Rex Paki v. Motor Vehicles Insurance (PNG) Ltd (2010) SC1015
Timothy Patrick v. Pepi Kimas (2010) N3913

Counsel:

Ms. G. Salika, for the Plaintiffs
Mr. M. Kipa, for the Defendant

14^th April, 2016:

1. HARTSHORN J. This is a decision on the defendant’s application for its costs of the proceeding to be paid on a solicitor client basis. The parties have agreed that the proceeding be discontinued and leave has been given for this to occur pursuant to Order 8 Rule 61 (2) National Court Rules.
   

Background

2. The three plaintiffs sought a declaration that agreements that they had entered into with the defendant concerning a proposed subdivision of land in Milne Bay Province, are enforceable against the defendant. Injunctive relief was also sought. An application seeking interim injunctive relief was refused on 13^th December 2014.

Costs application

3. The defendant seeks its costs of the proceeding on a solicitor client basis as:

1. the plaintiffs’ or their lawyers have caused it to unnecessarily incur legal expenses by delaying properly discontinuing the proceeding;
   
2. the plaintiffs’ lawyers were put on notice that solicitor client costs would be sought if the proceeding was not withdrawn by a certain date.
   

4. The plaintiffs’ contend that the defendant is not entitled to its costs of the proceeding on a solicitor client basis as:

1. it was agreed that the proceeding would be discontinued in December 2014;
   
2. the defendant has not given evidence as to how it has been prejudiced or that it has suffered damages, and no copies of bills of costs are in evidence.
   

Consideration

5. The plaintiffs’ rely on the cases of Pius Sankin v. Papua New Guinea Electricity Commission [2002] PNGLR 432 and Michael Pundia v. Jerry Kiwai (2011) N4427. Sankin (supra) was a judicial review of a taxing master’s decision concerning the taxation of costs after the court had ordered that costs be paid on a solicitor client basis, and so is not on point.

6. In Pundia (supra), Makail J is reported as stating that an applicant for costs on a solicitor client basis under Order 22 Rule 65 National Court Rules must establish that costs were incurred, improperly or without reasonable cause, were wasted by undue delay, or by other misconduct or default. This is in essence what Order 22 Rule 65 (1) requires. Order 22 Rule 65 however is concerned with whether a solicitor (lawyer) should be personally liable for costs and not, as in this instance, whether costs should be ordered to be paid on a solicitor client basis. The relief that a court under Order 22 Rule 65 is able to grant, reflects this. The comments of Makail J, relied upon by the plaintiffs’, are therefore not on point.

7. In Timothy Patrick v. Pepi Kimas (2010) N3913, Gavara Nanu J said as to costs being awarded on a solicitor client basis:

“...the applicant must demonstrate that there are grounds upon which such award may be made; for instance, the applicant having to defend proceedings which are frivolous and vexatious and are an abuse of process. See, Gulf Provincial Government -v- Baimuril Trading Pty Ltd [1998] PNGLR 311; or that the applicant is being dragged into the Court and is made to suffer and incur unnecessary costs. See, Concord Pacific Ltd -v- Thomas Nen [2000] PNGLR 47.”

8. In Rex Paki v. Motor Vehicles Insurance (PNG) Ltd (2010) SC1015, the Supreme Court stated that:

&##160; &##8220;The awar award of c of costs on an indemnity basis is discretionary. An order for costs on an indemnity basis may be made where the conduct of a lawyer or a party to the proceedings is so improper, unreasonable or blameworthy that he should be so punished by such an order. The question is whether the conduct of the appellant in this matter is such that it caused the respondent to incur unnecessary costs.”

9. In this instance, it is the case that although the second and third plaintiffs were to discontinue in December 2014, before the application for interim relief was argued, the first plaintiff had not agreed to discontinue. In the letter of the lawyers for the plaintiffs’ dated 8^th March 2016 in evidence, it is stated that “our client”, (presumably the first plaintiff as the second and third plaintiffs had already agreed to discontinue), is happy to discontinue because the defendant confirmed that the agreement the subject of the proceeding was terminated on 15^th July 2013. As the first plaintiff was happy to discontinue because of that confirmation, the proceeding could have been discontinued after the receipt of the letter from the defendant’s lawyers dated 25^th May 2015 which contained the confirmation. It would appear then that the costs incurred by the defendant since about a week after the date of that letter, have been incurred unnecessarily and are a result of the action or non action of the plaintiffs and/or its lawyers.

10. Consequently, I am satisfied that the defendant is entitled to its costs of the proceeding by virtue of the discontinuance by the plaintiffs’ and that those costs to be on a solicitor client basis for those costs incurred from 1^st June 2015 onwards.

Orders

11. It is ordered that:

1. The plaintiffs’ shall pay the defendant’s costs of and incidental to this proceeding, to be taxed if not agreed, as follows:
   

i) until 1^st June 2015 on a party party basis;
ii) from 1^st June 2015 on a solicitor client basis.

2. Time is abridged.
   

___________________________________________________
Young & Williams Lawyers: Lawyers for the Plaintiffs
Fairfax Legal: Lawyers for the Defendant