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PNG Power Ltd v Gura [2018] PGNC 24; N7101 (9 February 2018)

N7101

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO 393 OF 2010

PNG POWER LIMITED
Plaintiff

V

RAPHAEL GURA, ALBERT UKURA, YARI BAIWE
& ALL OFFICERS & MEMBERS OF ARONA VALLEY LANDOWNERS ASSOCIATION INC & ALL PEOPLE OF AGARABI, KAINANTU DISTRICT, GADSUP, OBURA WONENARA DISTRICT & YONKI, ARONA VALLEY AREA, EASTERN HIGHLANDS PROVINCE
Defendant

Madang: Cannings J
2016: 5 December,
2018: 9 February

COSTS – application by dissatisfied party for review of decision of taxing officer to certify costs – National Court Rules, Order 22, Rule 60 (application for review of taxation); Order 22, Rule 61 (review).

The plaintiff was dissatisfied with the decision of the taxing officer to certify costs in the sum of K349,218.00, comprising: preparation of documents, K218.00 + counsel’s fees, K1,400.00 + allowances for witnesses, K340,000.00 + preparation for trial, K7,600.00. The plaintiff applied by motion for review of the decision, the primary grounds of objection being that (a) the defendants’ bill of costs was not taxed on an item-by-item basis; (b) the amount of K340,000.00 allowed for witness expenses was unsupported by evidence of disbursements and was excessive and unreasonable; (c) the amount of K7,600.00 allowed as preparation for trial was not supported by evidence such as time-card records and was excessive and unreasonable. The defendants opposed the application, arguing that the decision of the taxing officer was reasonable in light of the fact that there were approximately 300 defendants who had been charged by the plaintiff with contempt of court and they had to make a return road trip of 12 hours (six hours each way) on four separate occasions to attend Court in preparation for and on the date of trial, thereby incurring significant expenses for vehicle hire, accommodation and sustenance.

Held:

(1) In determining an application for review of taxed costs, the Court may exercise all the powers and discretions as are vested in the taxing officer and has the discretion to “for good reason” allow further evidence (other than what was before the taxing officer) to be received and allow the applicant to raise grounds of objection other than those set out in the notice of objection.

(2) The application for review was granted and the decision of the taxing officer was quashed and the Court decided that a certificate of taxed costs shall be deemed to be made under Order 22, Rule 59 of the National Court Rules in the sum of K44,318.00, comprising: preparation of documents, K218.00 + counsel’s fees, K350.00 + allowances for witnesses, K40,000.00 + preparation for trial, K3,750.00. The parties were ordered to bear their own costs of the application,

Cases cited

The following cases are cited in the judgment:

Bank of South Pacific Ltd v Thomas Serowa (2014) SC1373
Barava Ltd v Augustine Mamalau (2013) SC1301
Hii Luke v Richard Maribu (2012) SC1188
Napoleon Canonizado v Kapu Rageau (2011) N4382
PNG Power Ltd v Ralph Gura (2014) SC1402

REVIEW OF DECISION OF TAXING OFFICER

This was an application for review of a decision of the taxing officer to make a certificate of taxed costs.

Counsel

Y Wadau, for the Plaintiff
B W Meten, for the Defendants

9^th February, 2018

1. CANNINGS J: The plaintiff, PNG Power Ltd, applies for review of a decision of the taxing officer, Mr M Ole, who certified legal costs in favour of the defendants, Raphael Gura and others, in the sum of K349,218.00.

2. The certification of taxed costs arose out of my order at Madang on 24 September 2010 under which the defendants, who had faced trial on a charge of contempt of court, were found not guilty of contempt and the plaintiff was ordered to pay the defendants’ costs of the proceedings on a party-party basis, which were, if not agreed, to be taxed. The parties did not agree on costs and the following events occurred.

3. On 11 November 2011 the defendants filed a bill of costs, claiming K708,376.00. On 7 December 2011 the bill of costs was taxed by the taxing officer who decided to certify taxed costs in the sum of K349,218.00, comprising:

preparation of documents, K218.00 +
counsel’s fees, K1,400.00 +
allowances for witnesses, K340,000.00 +
preparation for trial, K7,600.00
= K349,218.00.

4. On 23 August 2012 I upheld a motion by the defendants under Order 22, Rule 62 (judgment) of the National Court Rules and entered judgment in their favour in the sum of K349,218.00.

5. The plaintiff appealed to the Supreme Court against my order of 23 August 2012. The appeal was heard on 18 December 2013 and judgment was delivered on 5 December 2014 (PNG Power Ltd v Ralph Gura (2014) SC1402). The appeal was allowed, the order of 23 August 2012 was quashed and the plaintiff was granted leave to file an application for review of the taxing officer’s decision.

6. On 29 July 2016 the plaintiff filed such an application by notice of motion for review under Order 22, Rule 60 (application for review of taxation) of the National Court Rules, which states:

(1) Any party to any taxation proceedings who is dissatisfied with the allowance or disallowance in whole or in part of any item by the taxing officer, or with the amount allowed by the taxing officer in respect of any item, may apply on motion to a Judge to review the decision in respect of that item.

(2) An application for review of the taxing officer's decision shall be made within 14 days after the date of the decision objected to or within such further time as the Court may allow.

(3) Every applicant for review under this Rule must at the time of making his application deliver to the taxing officer objections in writing specifying the list of items to which the applicant objects and must state concisely the nature and grounds of each objection.

(4) An applicant for review under this Rule shall serve a copy of the objections on each other party (if any) who attended the taxation of those items and any other person whom the taxing officer directs shall be served.

7. On 9 September 2016 the plaintiff filed an amended notice of motion. On 5 December 2016 I heard the amended notice of motion, which is supported by four affidavits and a list of objections, the primary grounds being that:

(a) the defendants’ bill of costs was not taxed on an item-by-item basis;

(b) the amount of K340,000.00 allowed for witness expenses was unsupported by evidence of disbursements and was excessive and unreasonable;

(c) the amount of K7,600.00 allowed as preparation for trial was not supported by evidence such as time-card records and was excessive and unreasonable.

8. The defendants oppose the application, and rely on two affidavits. They argue that the decision of the taxing officer was reasonable in light of the fact that there were approximately 300 defendants who had been charged by the plaintiff with contempt of court and they had to make a return road trip of 12 hours (six hours each way) on four separate occasions to attend Court in preparation for and on the date of trial, thereby incurring significant expenses for vehicle hire, accommodation and sustenance.

POWER OF COURT ON REVIEW

9. In determining these sorts of applications the Court enjoys the powers of the taxing officer under Order 22, Rule 61 (review) of the National Court Rules, which provides:

(1) On the review, unless the Court for good reason otherwise directs

(a) no further evidence shall be received; and

(b) a party shall not raise any ground of objection not stated in the statement of objections delivered to the taxing officer.

(2) Subject to Sub-rule (1), on the review the Court may exercise all such powers and discretions as are vested in the taxing officer in relation to the subject matter of the application.

10. The Court has the discretion to “for good reason” allow further evidence (other than what was before the taxing officer) to be received and allow the applicant to raise grounds of objection other than those set out in the notice of objection. An application for review under Order 22, Rule 60 can properly be described as a hearing de novo, ie a fresh hearing of the question of what costs should be certified. It is not an appeal against the taxing officer’s decision. This is the approach that has been taken under the equivalent provision, Order 12, Rule 37 of the Supreme Court Rules 2012, in relation to review of decisions of the taxing officer on certified costs in Supreme Court proceedings, which I respectfully adopt (eg Hii Luke v Richard Maribu (2012) SC1188 (Injia CJ), Barava Ltd v Augustine Mamalau (2013) SC1301 (Makail J), Bank of South Pacific Ltd v Thomas Serowa (2014) SC1373 (Makail J)).

11. As this is a review of taxation of costs on a party-party basis, the key provision of the Rules, as pointed out by Thompson AJ in Napoleon Canonizado v Kapu Rageau (2011) N4382, is Order 22, Rule 24(2) (party and party basis), which states:

On a taxation on a party and party basis, there shall be allowed all such costs as were necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being taxed.

DETERMINATION

12. With those considerations in mind and having had regard to the submissions of Mr Wadau, for the plaintiff, and Mr Meten, for the defendants, I set out in the following table the four categories of taxed costs that were certified by the taxing officer (in columns 2 and 3), the amounts submitted by the plaintiff to be appropriate (in column 4) and the amounts that I have decided to allow (in column 5).

CATEGORIES OF TAXED COSTS

13. I provide the following reasons for my determination.

(a) Preparation of documents

The amount claimed is modest and in accordance with the scale of costs in Schedule 2, Table 1 of the National Court Rules.

(b) Counsel’s fees

There was only one day, 24 September 2010, on which counsel for the defendants was required to appear and argue the case. I allow K350.00 in accordance with Item 6(1) of the scale of costs.

(c) Allowances for witnesses

This is the most contentious part of the taxing officer’s certificate. He allowed K340,000.00 after accepting the defendants’ contention that there were 300 defendants who had been charged by the plaintiff with contempt of court and they had to make a return road trip of 12 hours (six hours each way between their homes in Kainantu District, Eastern Highlands Province, and Madang) on four separate occasions to attend Court in preparation for and on the date of trial, thereby incurring significant expenses for vehicle hire, accommodation and sustenance.

14. The plaintiff argued that that approach was absurd as there were only three defendants and they were only required to attend court on one occasion for their trial and though some other people might have travelled with them to Madang for the trial they were only supporters and there were not 300 of them. The plaintiff presented evidence from the lawyer who prosecuted the case for the plaintiff, Mr Aiawa, that on the day of the trial he observed no more than 40 persons in the precincts of the court who appeared to be supporters of the defendants and one 25-seater bus. Furthermore the defendants presented no receipts of disbursements for any expenses incurred.

15. The defendants maintain that there were at least 300 defendants and they travelled to Madang on four occasions and inevitably incurred considerable costs.

16. I note that in the two affidavits formally relied on by the defendants at the hearing of the application (the affidavits of Albert Ukura and Yari Baiwe, filed 1 September 2016) there is no mention of the figure of 300 defendants. The deponents simply state that the defendants were described in very broad terms on the originating summons and that “a lot of people” came to Madang to “witness” the case. However I take into account an affidavit of Yari Baiwe, filed on 30 November 2011, in support of the application for taxation of the defendants’ bill of costs, in which he deposes that there were 300 contemnors who made four trips to Madang for the case.

17. I reject the plaintiff’s contention that there were only three defendants, Raphael Gura, Albert Ukura and Yari Baiwe. I uphold the defendants’ submission that the actual number of defendants, though not precisely defined, was much more than three. The originating summons named the defendants, in very broad terms, as:

Raphael Gura, Albert Ukura, Yari Baiwe & all officers & members of Arona Valley Landowners Association Inc & all people of Agarabi, Kainantu District, Gadsup, Obura Wonenara District & Yonki, Arona Valley Area, Eastern Highlands Province.

18. The statement of charge described the defendants – the contemnors – in the same terms. It is a moot point how many officers and members the Arona Valley Landowners Association had in 2010. That evidence is not before the court. Nor is there evidence of the population of the Agarabi, Gadsup and Arona Valley areas of Eastern Highlands Province in 2010. Mr Meten hazarded a guess by suggesting that it might have been 20,000. I suppose it might have been. It might not have been. I don’t want to speculate. But when the very broad terms in which the defendants are described, is considered, I have formed the view that the figure of 300 defendants that Mr Meten referred to in his submission is not unreasonable. It is a conservative estimate, I suggest. I find that there were at least 300 defendants.

19. The next questions to address are:

• How many came to Madang for the case?
• On how many occasions did they come?
• On how many occasions did they have to come to court?
• What transport, accommodation and sustenance costs were reasonably incurred for each person?

20. I take into account that there is conflicting evidence. The plaintiff’s case is that there were only the three primary defendants and a few supporters who attended court. The defendants say that there were 300 defendants and that they all attended court, not just for the trial but on three pre-trial occasions.

21. I find as a fact that there was a big group who travelled from the defendants’ areas to Madang, at least for the trial, and that these people were actually defendants. I estimate the number as 100 persons. Itemisation of all expenses and receipts and other written records is desirable, but not necessary. I take into account the guiding principle of Order 22, Rule 24(2): there shall be allowed all such costs as were necessary or proper for the attainment of justice or for defending the rights of the defendants.

22. I have decided to allow witness expenses based on the following parameters:

• 100 defendants making two trips from Eastern Highlands to Madang for the case (one return trip for the pre-trial status conference on 10 September 2010, at which the defendants were represented by Mr Meten, and one return trip for the trial, at which they were represented by Mr Meten, on 24 September 2010);
  
• the total cost per trip per person (encompassing transport, accommodation and sustenance expenses) is estimated to be K200.00.
  

Thus 100 defendants x 2 trips x K200.00 per defendant per trip = K40,000.00.

(d) Preparation for trial

I uphold the plaintiff’s submission that the proper amount is K3,750.00.

ORDER

1. The application for review is granted.
   
2. The decision of the taxing officer and the certificate issued pursuant to that decision are quashed.
   
3. A certificate of taxed costs is deemed to be made under Order 22, Rule 59 of the National Court Rules in the sum of K44,318.00, comprising the amounts set out in the schedule.
   
4. The parties will bear their own costs of the application for review.
   

SCHEDULE

Judgment accordingly.
_______________________________________________________________
Gadens Lawyers: Lawyers for the Plaintiffs
Meten Lawyers: Lawyers for the Defendants