N8143

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 14 of 2014 (COMM)

BETWEEN:
PASTOR STEVEN BAGARI & four others
First Plaintiffs

AND:
GEDI DABU – President of Kiwai Local Level Government
Second Plaintiff

AND:
BENZES KUDI ALUSI – President of Oriomu Bituri Local Level Government
Third Plaintiff

AND:
HON. JAMES MARAPE, Minister for Finance
First Defendant

AND:
SCHADRACH HIMATA, Secretary for Mining
Second Defendant

AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Defendant

AND:
OK TEDI MINING LIMITED
Fourth Defendant

AND:
PNG SUSTAINABLE DEVELOPMENT LIMITED
Fifth Defendant

AND:
OK TEDI DEVELOPMENT FOUNDATION LIMITED
Sixth Defendant

AND:
BANK SOUTH PACIFIC
Seventh Defendant

AND:
ANZ BANK LIMITED
Eighth Defendant

Waigani: Hartshorn J
2019: 23rd October

COSTS - Application for costs of proceeding upon discontinuance – grounds for discontinuance discussed - where a party discontinues without leave, irrespective of whether leave is required under Order 8 Rule 61, that party shall pay the costs of the party against whom the discontinued claim is made, unless the court otherwise orders - in considering the question of costs the courts order that costs follow the event -  in this case a party has consented to the discontinuance but not as to any right it may have as to costs – plaintiffs have not shown any change of circumstances or any form of unreasonable conduct on the part of  the fourth defendant which in all the circumstances or at all provides a good reason for departing from an order that costs follow the event - plaintiffs’ shall pay the costs of the fourth defendant of and incidental to this proceeding on a party to party basis to be taxed if not agreed - 8 Rule 61, Order 22, Rule 11 & 17  National Court Rules

Cases Cited:
Papua New Guinea Cases

Motor Vehicles Insurance Ltd v. Sossie Joe (2007) SC 863
Waralo Business Group Inc. v. Mokono (2017) N7034

Overseas Cases

Brookes v. HSBC Bank plc [2011] EWCA Civ 354

Counsel

Ms. L. Painap, for the Plaintiffs
Mr. M. Tumul, for the Fourth Defendant

23rd October, 2019

1. HARTSHORN J: This is a decision on the application of the fourth defendant Ok Tedi Mining Ltd (OTML) for its costs of this proceeding to be paid by the plaintiffs.

Background
2.   The plaintiffs’ claimed substantively, declaratory relief to the effect amongst others, that certain Community Mine Continuation Agreements are unenforceable, null and void and are of no effect, that the continuous dumping of mine waste and tailings into the Ok Tedi and Fly River systems is in breach of the Mining and Environment Acts and is unlawful, that certain trust deeds and trust bank accounts are null and void and that certain trust funds are payable to the plaintiffs and others. In addition, orders were sought that certain compensation funds be paid to the plaintiffs and that a permanent injunction be issued against OTML from operating the Ok Tedi mine until a proper waste dump or tailings dam is constructed and built to contain its waste and tailings.
3. The plaintiffs’ were given leave to discontinue this proceeding by consent. OTML is the only defendant that seeks its costs. 

Submissions as to costs
4. The plaintiffs submit that the OTML should not be awarded its costs as:
a)	the plaintiffs were granted leave to discontinue and so they are not obliged to pay OTML’s costs. Reliance was placed upon Waralo Business Group Inc. v. Mokono (2017) N7034 at [8];
b)	OTML did not file a defence and took three years to file its notice of intention to defend which by then was out of time;
c)	allegations against the lawyers for OTML contained in the affidavit of the former lawyer for the first defendant precluded a costs order being made.
5. OTML submits that it should be awarded its costs of the proceeding as:
a)	a party discontinuing should normally pay the opposing party’s costs;
b)	the plaintiffs’ have made numerous applications and appeals all of which have been dismissed or withdrawn;
c)	the plaintiffs’ did not have a serious case that was likely to succeed;
d)	OTML was required to defend itself in a claim that had little merit;
e)	previous costs orders have been made in favour of OTML in the proceeding;
f)	OTML has not waived its rights to its costs;
g)	OTML is entitled to its costs irrespective of when it filed its notice of intention to defend.	

Consideration
6. Order 8 Rule 61 National Court Rules is as follows:
“61.	Discontinuance. (21/2)
(1)	A party making a claim for relief may discontinue proceedings so far as concerns the whole or any part of any claim for relief by him-
(a) where the pleading is not closed-without leave or consent; and
(b) where a judgement has not been entered- with the consent of  all other parties; and 
(c) at any time- with the leave of the Court.”
7. Order 22 Rule 17 National Court Rules is as follows: 
“17.	Discontinuance. (52/16)
   (2) Where, under Order 8 Rule 61, a party to any proceedings discontinues the proceedings without leave as to the whole or any part of the relief claimed by him against any other party, the discontinuing party shall, unless the Court otherwise orders, pay the costs of the party against whom the discontinued claim is made, occasioned by the discontinued claim and incurred before service of notice of the discontinuance.”

8. Order 22 Rule 11National Court Rules is as follows:
“11.Following the event. (52/11)
If the Court makes any order as to costs, the Court shall, subject to this Order, order that the costs follow the event, except where it appears to the court that some other order should be made to the whole or any part of the costs.”
9. From a perusal of Order 22 Rule 17, where a party discontinues without leave, irrespective of whether leave is required under Order 8 Rule 61, that party shall pay the costs of the party against whom the discontinued claim is made, unless the court otherwise orders.
10. Here, leave has been obtained to discontinue. The plaintiffs’ submit that if a party obtains leave to discontinue, it does not have to pay the opposing party’s costs. Reference is made to [8] of my decision in Waralo v. Mokono (supra). In that case, the argument was raised but was not considered as it was determined that leave in that case had not been granted.
11. To my mind, that leave has been granted to discontinue in circumstances where a party has consented to the discontinuance but not as to any right it may have as to costs, as occurred in this instance, does not preclude the party obtaining such leave from having a costs order for the proceeding being made against it.
12. The starting point in considering the question of costs is Order 22 Rule 11 National Court Rules. Pursuant to Order 22 Rule 11, if the court makes any order as to costs, the court shall, subject to Order 22, order that costs follow the event, except where it appears to the court that some other order should be made to the whole or any part of the costs.
13. In this instance, there is no other Rule in Order 22 which requires the court in this instance not to order that costs follow the event. Order 22 Rule 17 only applies to a scenario where leave to discontinue has not been obtained.
14. In applying, “costs follow the event” where a plaintiff has discontinued, it should be considered that the, “event” is the decision or result on the issue, matter or proceeding. To follow the event is to follow the decision or result of the issue, matter or proceeding. When a plaintiff has discontinued, that plaintiff has not obtained the decision or result which it sought. The defendant on the other hand, has obtained the decision or result that it sought: that result or decision being that the plaintiff has not obtained the decision that it sought against the defendant. Consequently on a discontinuance, “costs follow the event” should be interpreted to mean that the defendant should be awarded its costs.
15. That upon a discontinuance the starting position is that a defendant should recover its costs was referred to by Moore-Bick LJ in the English and Wales Court of Appeal decision of Brookes v. HSBC Bank plc [2011] EWCA Civ 354 when he stated at [10]:
“10. It is clear, therefore, from the terms of the rule itself and from the authorities that a claimant who seeks to persuade the court to depart from the normal position must provide cogent reasons for doing so and is unlikely to satisfy that requirement save in unusual circumstances. The reason was well expressed by Proudman  J. in Maini v. Maini: a claimant who commences proceedings takes upon himself the risks of the litigation. If he succeeds he can expect to recover his costs, but if he fails or abandons the claim at whatever stage in the process, it is normally unjust to make the defendant bear the costs of proceedings which were forced upon him and which the claimant is unable or unwilling to carry through to judgment. That principle also underlies the decision of this court in Messih v. MacMillan Williams.”
16. The next consideration is whether the plaintiffs have satisfactorily made out that some other order should be made.
17. In determining whether some other order should be made, I have had recourse to the following principles summarised in Brookes v. HSBC Bank (supra) at [6] as follows:
“(1)	when a claimant discontinues the proceedings, there is a presumption by reason of CPR 38.6 that the defendant should recover his costs; the burden is on the claimant to show a good reason for departing from that position;
(2)	the fact that the claimant would or might well have succeeded at trial is not itself a sufficient reason for doing so;
(3)	however, if it is plain that the claim would have failed, that is an additional factor in favour of applying the presumption;
(4)	the mere fact that the claimant’s decision to discontinue may have been motivated by practical, pragmatic or financial reasons as opposed to a lack of confidence in the merits of the case will not suffice to displace the presumption;
(5)	if the claimant is to succeed in displacing the presumption he will usually need to show a change of circumstances to which he has not himself contributed;
(6)	however, no change in circumstances is likely to suffice unless it has been brought about by some form of unreasonable conduct on the part of the defendant which in all the circumstances provides a good reason for departing from the rule.”
18. The presumption referred to above, is the same as the presumption contained in Order 12 Rule 11 National Court Rules. That is that costs follow the event, as considered and explained above, except where it appears to the court otherwise.
19. Given this and that decisions from the English and Wales Court of Appeal are persuasive in this jurisdiction, I am not aware of any reason why these principles should not apply in this instance.
20. In regard to the plaintiffs’ submissions, as to OTML filing its notice of intention to defend out of time, Order 7 Rule 6(2) National Court Rules provides that the defendant may give notice of intention to defend at any time without leave: Motor Vehicles Insurance Ltd v. Sossie Joe (2007) SC 863. Further, this court has permitted OTML to be represented throughout the duration of the proceeding. As to OTML not filing a defence, this is not a reason for denying a costs order on a discontinuance. The plaintiffs’ were at liberty to seek appropriate orders concerning the non-filing of a defence. In terms of any costs order made, clearly OTML would not be able to seek costs for a defence which it has not prepared and filed.
21. In regard to allegations made by the former lawyer for the first defendant against the lawyers for OTML, these allegations concern the representation by those lawyers of OTML and are not concerned with whether OTML should be paid its costs by the plaintiffs’or as to any action or inaction by OTML which would have a bearing on a costs order.
22. Consequently, I am not satisfied that the plaintiffs’have shown any change of circumstances or any form of unreasonable conduct on the part of OTML which in all the circumstances or at all provides a good reason for departing from an order that costs follow the event. Given this, it is not necessary to consider the other submissions of counsel.

Orders
23.  The Court orders that:
a)	The plaintiffs’ shall pay the costs of the fourth defendant of and incidental to this proceeding on a party to party basis to be taxed if not agreed otherwise;
b)	Time is abridged.
__________________________________________________________________
Young & Williams:  Lawyers for the Plaintiffs             
Allens:  Lawyers for the Fourth Defendant