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Palma v Electoral Commission of Papua New Guinea [2017] PGNC 298; N6975 (24 October 2017)

N6975

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

EP NO. 93 OF 2012

BETWEEN
BARI PALMA
Petitioner

AND
ELECTORAL COMMISSION OF PAPUA NEW GUINEA
First Respondent

AND
CAMILUS DAGIMA BONGORO
Second Respondent

Waigani: Makail, J

2017: 18^th & 24^th October 2017

COSTS – Review of taxed costs – Grounds of – Costs unreasonably and unnecessarily incurred – Excessiveness of costs – National Court Rules – Order 22, rules 44 & 45 – National Court Election Petition Rules, 2002 (as amended) – Rule 19 (4) – Schedule 2

Cases cited:
Bank of South Pacific Ltd v. Thomas Serowa (2014) SC1373
Canisius Karingu v. PNG Law Society (2001) SC674
Napoleon Canonizado v. Kapu Rageau (2011) N4387

Counsel:
Mr. W. Otto, for Petitioner
No appearance, for First Respondent
No appearance, for Second Respondent

RULING ON REVIEW OF TAXED COSTS

24^th October, 2017

1. MAKAIL, J: This is an application for review of costs taxed and certified by the Taxing Officer in the sum of K275, 119.00 dated 26^th January 2016. This sum was awarded to the Second Respondent following an original claim of K653, 100.43 in the Second Respondent’s bill of costs filed by Kombri & Associates Lawyers on 8^th April 2015. It was costs allegedly incurred to defend the election petition filed by the Petitioner against the election of the Second Respondent as Member for Kerowagi Open electorate in the 2012 General Election.

2. The application is supported by an objection filed on 10^th October 2016. The objection sets out the grounds of objection to the Taxing Officer’s assessment and allowance of costs in his decision of 26^th January 2016.

3. There is no dispute that the Petitioner did not attend the taxation hearing even though he was given notice.

4. This case appears to be the first of its kind where an application is being made to review the Taxing Officer’s decision to tax and certify costs arising from an election petition. As opposed to civil proceedings where costs is claimed under Order 22, rules 44 and 45 of the National Court Rules (“NCR”), costs for election petitions are claimed under Rule 19 and Schedule 2 of the National Court Election Petition Rules, 2002 (as amended) (“EP Rules”).
5. But the Petitioner does not contest the principles applicable in a review under Order 22 of the NCR as applying to review of taxed cost in an election petition under the EP Rules. These principles are costs must be necessarily and reasonably incurred or must not be excessive: Canisius Karingu v. PNG Law Society (2001) SC674; Napoleon Canonizado v. Kapu Rageau (2011) N4387 and Bank of South Pacific Ltd v. Thomas Serowa (2014) SC1373.

6. Based on these principles, the ground that the taxation hearing was conducted without representation from the Petitioner is misconceived and dismissed.

7. Secondly, it must be accepted that the assessment and allowance made by the Taxing Officer is reasonable unless the Petitioner as the applicant and aggrieved party establishes that the costs allowed in each item or activity was unnecessarily or unreasonably incurred or excessive. The costs claimed and sum allowed in each review case must be considered on its own merits taking account, amongst other things, the complexity of the issues involved and experience of lawyers. The onus is on the applicant to establish them.

8. This is an election petition case. The Petitioner’s counsel did not identify the issues involved, and if they are not complex, and did not require more time to prepare to defend the petition. All he submitted was that the First Respondent played a passive role while the First Respondent was the main player in defending the petition. No reasons were given for this proposition.

9. As a result, it has been difficult to work out if the costs allowed in each item or activity and subject of this review were unnecessarily or unreasonably incurred or excessive. But it is erroneous to suggest that a party such as the Second Respondent would not have incurred costs in defending the petition. The true question is; how much is he entitled to, as costs?

10. And it is not a ground nor a justification for an applicant like the Petitioner to allege that the Taxing Officer “by oversight or by mere laziness, omitted to even slice or in fact remove most of the items as being unnecessary and unjustified.” (see para. 7 at page 2 of Petitioner’s written submission filed 12^th October 2016).

11. The scale of costs set out in Schedule 2 of the EP Rules give the Taxing Officer a wide discretion to apply different rates for each item or work performed by the lawyer so long as the costs are necessarily or reasonably incurred in connection to the legal proceedings.

12. Running through the grounds of objections and the written submissions of the Petitioner, the following is noted and concluded:

Part 1

Pre-trial fees.

“Schedule 2 of the Election Petition Rules sets the maximum amount of these (sic) part of litigating Election Petition. It states “an allowance of up to K450.00. Premised on that aspect we maintain that the taxing officer’s accepting of the second respondent’s consistent fee of K450.00 on every item is absurd, unjustified and without factual basis.

We say that the second respondent’s bills of K214,050.00 is staggering and that the taxing officers conclusion of K76,400.00 is also excessive. We submit that it would be much less in that aspect of fees.”

13. The objection is on the applicable rate for this item or activity and not the work performed by the lawyers for the Second Respondent such as perusing, preparing and filing of affidavits. In addition, a mere assertion that the applicable rate for each item is absurd, unjustified and without factual basis and further, the total sum is staggering and excessive is uncalled for when counsel has not been diligent in identifying which costs for which item or activity should be reduced or disallowed. And it is not for the Court to work that out or ascertain them for the Petitioner.

14. The bill of costs sets out in detail those matters which have not been denied by the Petitioner. Accepting that to be the case and making concession for the Petitioner’s claim of excessiveness, a sum of K46,400.00 is taxed off from K76,400.00, leaving a balance of K30,000.00. This sum is allowed.

Conference

“We further submit that the taxing officer’s acceptance of K450.00 as the fixed amount in every conference is unreasonable. There is no mention of who attended the conference and what transpired and warranting the maximum hourly rate of K450.00 at every conference. What was the complex issues discussed that can attract the maximum amount? The taxed amount of K3,750.00 be replaced with amount below K500.00.”

15. The objection is in relation to the applicable rate for this item or activity and the lack of particulars of the conferences provided by the Second Respondent. Other than this, it is presumed that lack of particulars in relation to the conferences would have been clarified at the taxation hearing. If the Petitioner did not attend, he is disentitled to complain about it now. In any case, the sum awarded is reasonable. The objection is dismissed and sum of K3,750.00 is upheld.

Preparation for trial

“The rate of K2,500.00 submitted by the second respondent which the taxing officer taxed but not disclosed is very excessive. The taxing officer does not specify each of them as to his taxation of the items. We submit that it should be K550.00 at the most.”

16. Same grounds of objection as above in relation to items listed 28 to 50 of the bill of costs. Apart from this, the Petitioner does not contest the item or work performed by the lawyer to prepare for the trial which includes perusing affidavits, drafting and settling affidavits, considering submissions, researching and drafting and settling submissions.

17. Taking into account these matters and the vagueness in the Second Respondent’s objection, concession is made by taxing off a sum of K10,000.00 from the sum allowed of K39,250.00, leaving a balance of K29,250.00. This sum is allowed.

Letters and Phone calls.

“That part of the items as considered by the taxing officer should be further reviewed as being excessive and that a sum of K500.00 be allowed as reasonable in that aspect.”

18. There is no contest that costs were incurred for letters in and out and phone calls in and out and rightly so because any litigation will attract such costs. In the bill of costs, the Second Respondent claimed a total sum of K400.00. This sum is reasonable and upheld.

Part 2

Lawyer’s Fees.

“Although those items from 59 to 75 of the second respondents’ bill we disagree with flat maximum amount of K450.00 across the board. The taxing officer allowed everything and arrived at a total of K11,450.00 as submitted by the second respondent. It is very unreasonable and we say it would be reduced by three (3) quarters.”

19. Same grounds of objection as above. Apart from this, the Petitioner did not identify which court appearance(s) called for a different rate(s) to the ones applied by the Taxing Officer.

20. On the other hand, the Taxing Officer referred to the different applicable rates under this part for appearances at directions hearing, interlocutory applications, trial and taking a deferred judgment. He had the benefit of the file endorsement notes to verify the dates of appearances by counsel and nature of the hearing or matter with the bill of costs and arrived at the sum awarded.

21. The work performed by the First Respondent’s lawyers under this item was necessary and reasonable for the defence of the petition. The objection is dismissed.

22. Same reasons given for Item – Preparation for Trial. The objection is dismissed and Taxing Officer’s award in the sum of K11,450.00 is upheld.

Part 3

Lawyer’s travelling expenses.

“This aspect needs to be properly assessed as to the timing of the travels and as to the documents the ticket butts etc. Whether they relate to the hearing of the petition or tickets produced for other trips. The taxing officer allowed in full amount submitted by the second respondent a sum of K12,535.06 The entire items or costs need to be verified to reflect the true aspect of travel and expenses.”

23. The ground of objection is vague and the Petitioner cannot expect the Court to work out or ascertain where the error (s) is in the assessment by the Taxing Officer. The onus is on the Petitioner to identify which travel is not connected to the petition or unnecessary such that costs incurred should not be paid by him. He has not done that except to make a general assertion that costs are unsupported by evidence.

24. According to the Taxing Officer, the costs of travel were supported by relevant evidence. There is no merit in this objection. It is dismissed and the sum of K12,535.06 is upheld.

Part 4

Allowances to witnesses.

“The second respondent submitted a total of K360.00 for witnesses’ as being for K50 for four witnesses and another K40 for transport to give evidence and the taxing officer allowed in full at K360.00. We say it should be K180.00 as being reasonable.”

25. Rules 1 and 5 of Part 4 provide for K50.00 for witnesses per day and K40.00 for witnesses’ transport costs. These were the rates applied by the Taxing Officer. There is no merit in this objection and it is dismissed. The sum of K360.00 is upheld.

Part 5

Allowance to parties.

“That is the most unreasonable and unjust enrichment so to say. The amount submitted by the second respondent in that aspect is a massive K331, 995.00. In that Hire Cars alone took up K275, 000.00. That aspect of costs need to be verified as to the intend and purposes of those hire cars. The receipts provided by the hires as well as other hotels need to be verified. The taxing officer’s actions to conduct taxation exparte in considering this aspect need to be tested. The hire car aspect is a total lie and that it would be zero. That is unjustified and it should be reduced to reflect faithfulness of activities. We say it should be to K2000.00 – K3000.00 the most as trial in Kundiawa was only for four days.”

26. It is erroneous to say that costs for parties’ attendances at Court hearings and trial are restricted to the actual trial as submitted by the Petitioner. Rule 1 of Part 5 includes costs of attendances at every hearing. This means for example, directions hearing, pre-trial conference, interlocutory application hearings and status conference at Waigani National Court where these hearings took place.

27. Further, the Petitioner does not specify which hire of motor vehicle was or were not connected to the petition or costs were unnecessarily or unreasonably incurred. And it is not for the Court to work out or ascertain them for him.

28. Finally, the Taxing Officer had before him relevant evidence in the form of invoices and receipts to satisfy him-self that the claim was justified.

Travel expenses – Air.

“K20,877.00 was allowed in full. We say it is totally unreasonable on the part of the second respondent and the taxing officer did not exercise due care in allowing it in full. The taxing officer grossly erred in allowing the full amount based on ticket buts etc. When those documents are subject to further confirmation and verification with the airline consent. Since it is a misleading costs item, it would have declined that aspect.”

29. The same reasons are given as above. The objection is dismissed and sum of K20,877.00 is upheld.

Accommodation expenses.

“As to the other aspects of the part of the cost the second respondent submitted a bill of K18,347.00 would be reduced as well as the party has a liking of staying in very expensive five star hotel. The taxing officer allowed full amount based on the receipts from hotels. Those aspects need to be verified as receipts can be created or manufactured.”

30. The same reasons are given as above. The objection is dismissed and sum of K18,347.00 is upheld.

Reasonable meal expenses.

“Following on from being accommodated in those extravagant hotel and parties liking for having full meals three times a day costs them K17,271.00 is unreasonable. The taxing officer taxed it to K10,000.00 is also grossly unjustified. We say it would be well below K1,000.00.”

31. The same reasons are given as above. The objection is dismissed and sum of K10,000.00 is upheld.

Reasonable travel expenses.

“We say this is the core of the expenses incurred by the second respondent when he submitted a bill of K275,000.00. The taxing officer allowed K120,000.00 in that aspect which we say it is unnecessary unjustified. The second respondent has a number of vehicle and the receipts and the real vehicles need to be verified with the Motor Vehicle insurance limited and the companies whether they existed. The taxing officer erred in not considering those evidences. We said that, that aspect is untrue and the second respondent is entitled to nothing. That is a clear case of unjust enrichment.”

32. The same reasons are given as above. The only difference here is that, as the Taxing Officer has conceded that the evidence was insufficient because the receipts of payments did not indicate the length of hire and dates of hire, he awarded a global sum of K120,000.00. Taking this concession made by him into account and vagueness of the objection, a global sum is just. A sum of K90,000.00 is taxed off, leaving a balance of K30,000.00 to be paid by the Petitioner.

Disbursements

“K5, 000.00 as taxed by the taxing officer from K21, 228.00 submitted by the second respondent is grossly excessive and need to be reviewed. We say, the amount of K1, 000.00 is applicable.”

33. There is no contest that costs were incurred for disbursements and rightly so because any litigation will attract such costs. The Petitioner objected to awarded sum of K5, 000.00 but does not specify which disbursement should be disallowed.

34. According to the Taxing Officer, this was a global figure after having considered the amount of papers used in the litigation per the Court file. This sum is a significant reduction from the original sum of K21,228.00. The objection is dismissed, the Taxing Officer’s award of K5,000.00 is upheld.

Part 6

Taxation costs.

“The taxation is done ex parte so there is nothing to charge the petitioner. The second respondent is entitled to nothing in that regard.

In light of the matter submitted, we say on behalf of the petitioner that all aspects of costs as submitted to the taxing officer for taxation and same being taxed are unreasonable and excessive in the circumstances. The manner in which the second respondent and Martin Kombri of counsel pushed through their taxable costs through the taxing officer who heard same ex parte needs proper assessment by the review court.

We submit that the taxed costs of the taxing officer David Gonol be reviewed in its entirety by this court. The taxed costs of totalling a staggering K275,119.00 is an amount that by first sign needs to be relooked at. It clearly manifests unjust enrichment.”

35. According to Rule 19 (9), where on taxation of any costs, one-sixth or more of the amount of the bill of costs is taxed off, the costs of preparing the bill and attending the taxation will not be allowed.

36. One-sixth of K653,100.43 is K108,850.07. More than one-sixth of the bill of costs has been taxed off. The Taxing Officer was correct not to award costs of taxation. The objection is misconceived and dismissed. No sum is awarded.

37. Finally, as costs of taxation were not awarded, it follows that the objection by the Second Respondent to the award of K150.00 as costs for failure to attend the taxation hearing should be upheld and this sum is disallowed.

38. The total sum allowed as costs for the Second Respondent is K171, 969.06.

39. Each party shall pay its own costs of the application.
Ruling and orders accordingly.
________________________________________________________________
Win & Win Attorneys at Law: Lawyers for Petitioner
Kombri & Associates Lawyers: Lawyers for Second Respondent