SC1301

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO 152 OF 2013

BETWEEN

BARAVA LIMITED
Appellant

AND

AUGUSTINE MAMALAU, JOSEPH BUIDAL, ROBERT RARAP & JOSEPH RAITE
Respondents

AND

SCA NO 153 OF 2013

BETWEEN

MARCELLO VAGAIA, TIOP BALSASAR, LINUS TIRAVA, BERNARD TURADAVAI, FRANCIS TAPUKU & FRANCIS ENTINI
First Appellant

AND

BARAVA LIMITED
Second Appellant

AND

JOSEPH BUIDAL, HENRY PIDI, ROBERT RARAP & AUGUSTINE MAMALAU
Respondents

Waigani: Makail, J
2013: 04th & 05th December

SUPREME COURT – PRACTICE & PROCEDURE – Application for Stay – Appeal against refusal to set aside ex parte taxed costs – Whether right to a rehearing of an ex parte taxed costs available – Whether important point of law and procedure raised – Jurisdiction of National Court to review taxing officer's assessment of taxed costs – Supreme Court Act – ss. 14(3)(b) & 19 – National Court Rules – O 22, rr 60 & 61.

SUPREME COURT – PRACTICE & PROCEDURE – Application for Stay – Form of application – Application made by notice of motion – Application should be made using Form 4 – Application incompetent for want of form – Notice of motion struck out – Supreme Court Act – s. 19 – Supreme Court Rules – Form 4.

Facts

The National Court refused the appellants' applications to review the decisions of the Assistant Registrar of Kokopo National Court in her capacity as Taxing Officer in certifying costs in two National Court proceedings in the sum of K74,173.40 in WS No. 850 of 2010 and K10,228.30 in OS No. 287 of 2007. The costs were taxed at an ex parte taxation hearing. The appellants filed these appeals and in the interim, sought a stay of the decision pursuant to s. 19 of the Supreme Court Act. They submitted inter alia, that as the costs were taxed ex parte, and the Rules on Costs under O 22 of the National Court Rules do not provide for setting aside of ex parte taxed costs and rehearing before the Taxing Officer, the Court had discretion under s. 155(4) of the Constitution to issue those orders.

Held:

1.	As the application for stay was made by notice of motion, it was flawed and incompetent as it was not in accordance with Form 4 of the Supreme Court Rules. The notice of motion was struck out: Kawaso Limited -v- Oil Search (PNG) Limited (2010) SC1082 followed.

2.	The National Court Rules do not provide for a rehearing of ex parte taxed costs by the Taxing Officer. The only right available to a party aggrieved by the decision of the Taxing Officer in relation to taxed costs was to seek a review by way of a motion to a Judge under O 22, r 60 of the National Court Rules. 

3.	The appellants' submission that the Court has discretion to set aside the ex parte taxed costs and order a rehearing did not raise an arguable case nor did it raise an important point of law. Further, there was no apparent error of law or procedure in the decision of the primary judge. 

4.	These cases had a long history. They were about a land dispute and the respondents had to defend them since the first case was commenced in 2007. As a result, they had incurred substantial costs. To stay the judgment would deny them their costs.

5.	The application for stay was refused with costs.

Cases cited:

Gary McHardy -v-Prosec Security Limited [2000] PNGLR 279
Kawaso Limited -v- Oil Search (PNG) Limited (2010) SC1082

Counsel:

Mr E Paisat, for Appellants 
Mr N Saroa, for Respondents

RULING ON APPLICATION FOR STAY

05th December, 2013

1.	MAKAIL, J: On 14th October 2013, the National Court presided by Oli, AJ refused the appellants' applications to review the decisions of the Assistant Registrar of Kokopo National Court in her capacity as Taxing Officer in certifying costs in two National Court proceedings in the sum of K74,173.40 in WS No. 850 of 2010 and K10,228.30 in OS No. 287 of 2007. On 24th October 2013, the appellants filed these appeals and in the interim, seek a stay of the decision pursuant to s. 19 of the Supreme Court Act.

Relevant Principles on Stay

2.	The principles relevant to stay are set out in Gary McHardy -v-Prosec Security Limited [2000] PNGLR 279. These are:

•	Whether leave to appeal is required and whether it has been obtained?
•	Whether there has been any delay in making the application?
•	Possible hardship, inconvenience or prejudice to either party;
•	The nature of the judgment sought to be stayed;
•	The financial ability of the applicant;
•	Preliminary assessment about whether the applicant has an arguable case on the proposed appeal;
•	Whether on the face of the record of the judgment, there may be indicated an apparent error of law or procedure;
•	The overall interest of justice;
•	Balance of convenience;
•	Whether damages would be a sufficient remedy?

Grounds of Appeal

3.	According to the notices of appeal, each appeal is against the decision of the primary judge refusing to set aside the certificate of taxation. It is a final decision and leave is not required under s. 14(3)(b) of the Supreme Court Act. In both cases, the certificate of taxation was issued ex parte because the appellants did not attend the taxation hearing. In each case though, the grounds of appeal are identical. There are three grounds but they raise the same issue. The issue is whether the Court has discretion to set aside ex parte taxed costs and order its rehearing before the Taxing Officer. There are no other grounds alleging where and how his Honour erred in his exercise of discretion in assessing the costs.

Parties' Submissions

4.	The decision was made on 14th October 2013. The appeal and the application for stay in each case were filed on 24th October 2013. Mr Paisat of counsel for the appellants submitted that there is no delay as only a ten day period had lapsed since the date of decision and the date of filing the application for stay. The respondents have not shown how they have been prejudiced by the delay.

5.	Mr Saroa of counsel for the respondents submitted that the time to compute the delay should be from 14th October 2013 to the date of hearing, this being 04th December 2013 and if that were the case, the appellants are late by almost two months. Both counsel have not cited any decided case on point to support their competing submissions. I consider it not necessary to consider this issue because in my view, the delay is not inordinate if one were to complete time from the date of decision to date of filing the application or from the date of decision to the date of hearing of the application.

6.	It is the possibility of causing inconvenience or even prejudice to the respondents if a stay were granted that is in my view, the important consideration here. Mr Paisat submitted that that either way, both parties will be prejudiced by the stay. If a stay order is not granted, the appellants will be obliged to pay the taxed costs without having their appeals heard and determined first. If they were to pay the costs and if the appeals were successful, it would render their appeals nugatory. 

7.	Mr Saroa submitted that the respondents have secured taxed costs in the two National Court proceedings and subsequently a judgement in their favour and are entitled to the fruits of the judgment. These cases have a long history. They are about a land dispute and the respondents had to defend them since the first case was commenced in 2007. As a result, they have incurred substantial costs. To stay the judgment would deny them their costs. 

8.	It is arguable either way but I tend to lean towards Mr Saroa's submission. The respondents are entitled to the fruits of the judgments. Any delay would deny them the right to have their costs paid. This consideration must not be considered in isolation. It must be considered together with the other factors set out in the case of Gary McHardy (supra). The appellants must also demonstrate that there is an arguable case for the discretion to be exercised in their favour. They also must show that on the face of the record of the judgment, there is an apparent error of law or procedure. 

9.	For that, Mr Paisat conceded that there is no express provision in O 22 of the National Court Rules for a rehearing of taxed costs by the Taxing Officer where it is made ex parte or after an ex parte hearing. But in support of the grounds of appeal and in demonstrating that the appellants have an arguable case and that on the face of the record of the judgment, there is an apparent error of law or procedure, he strongly submitted that as the appellants were not present at the taxation hearing before the Taxing Officer and the hearing proceeded ex parte, the primary judge had discretion to set aside the ex parte taxed costs and remit it for rehearing before the Taxing Officer. He submitted that the Court had that discretion because the appellants were not heard on the assessment of costs. They were denied the right to be heard and it is only fair and appropriate that the costs be remitted to the Taxing Officer so that they can raise appropriate objections.

10.	In his conclusion, he urged the Court and submitted that given that there is no express provision on this issue in the National Court Rules, the Court has an unfettered discretion in its inherent powers under s. 155(4) of the Constitution, and can set aside the ex parte taxed costs and order its rehearing before the Taxing Officer. It is also in the interests of justice that an order in those terms be made to preserve the right of the appellants' appeal.

11.	In his response, Mr Saroa submitted that the Form in which the appellants have used to make the application for stay in each appeal is flawed and therefore, incompetent because it is not in accordance with Form 4 of the Supreme Court Rules. He relied on the case of Kawaso Limited -v- Oil Search (PNG) Limited (2010) SC1082 where it was held that an application for stay be made by using Form 4 of the Supreme Court Rules and that a notice of motion seeking an order for stay would be incompetent and may be struck down. On this ground alone, the application for stay should be dismissed.

12.	As to the merits of the application, supporting the Court's sentiments expressed at the hearing, counsel submitted that given that there is no express provision in O 22 for a rehearing of ex parte taxed costs by the Taxing Officer, it meant that there is no such right available to the appellants. He further submitted that the only right available to the appellants is under O 22, rr 60 and 61 and that is, they have a right to review the Taxing Officer's assessment of costs. This may be done by applying by motion to a Judge to review it. In a review, it is open to them and the Court has discretion to allow them to call further evidence and raise any ground of objection not stated in the statement of objection that was delivered to the Taxing Officer. 

13.	In relation to the appellants' submission that the Court has discretion under s. 155(4) of the Constitution to set aside ex parte taxed costs and order its rehearing, Mr Saroa's response is that it is inapplicable as there is a clear right of review available to the appellants under O22, rr 60 and 61. 

Competency of Application

14.	With regards to the respondents' submission that the application is incompetent for want of form, Mr Paisat did not make any submission in response. I have found no reasons to hold a contrary view to the views expressed by Sawong, J in Kawaso Limited (supra), and on that authority, I accept Mr Saroa's submission that the application is incompetent because it is not in accordance with Form 4 of the Supreme Court Rules. It is by notice of motion and does not set out the grounds of the application. For these reasons, the notice of motion is struck out.

Merits of Application

15.	However, if the merits of the application were considered, a careful consideration of the primary judge's decision reveals that while his Honour cited the terms of the appellants' motion and O 22, r 60 at page 6 of his judgment, he did not specifically address the issue raised in this appeal. He seemed to have accepted that the Court has discretion to set aside ex parte taxed costs and order its rehearing. 

16.	This can be deduced from his Honour's discussions at pages 7 to 11 of the judgment of the events leading up to and reasons for the non-attendance of the appellants or their lawyers at the taxation hearing on 21st June 2013. He seemed to say that the reasons for the non-attendance were unsatisfactory. For that reason, there was no reason to set aside the ex parte taxed costs. At pages 12 to 15 of the judgment, his Honour then proceeded to assess the taxed costs and essentially found that the appellants' objections were vague and unsatisfactory. For those reasons, he found that the appellants had not shown why the ex parte taxed costs should be set aside.

17.	The only time his Honour seemed to have addressed the issue is at page 15 of the judgment where after stating that a party objecting to a bill of costs must set out every material particular of the objection in the statement of objection, he further stated that if this was done, it would have warranted the Court's intervention either by review under O 22, r 60 or remittance to the Taxing Officer for taxing. His Honour then goes on to note the appellants' alternative submission seeking the Court to invoke s. 155(4) of the Constitution to direct the taxed costs to be re-taxed by the Taxing Officer and found that it was not appropriate to invoke it. 

18.	Taking the parties through his Honour's reasons is important because as noted, the issue raised in the three grounds of appeal is whether the Court has discretion to set aside the ex parte taxed costs and order a rehearing. With respect, I reject the appellants' submission that the Court has that discretion and that his Honour fell into error when he refused those orders. This submission runs counter to the clear and express intention to the Rules on Costs as set out in O 22. Order 22, Rule 60 states: 

"60.	Application for review of taxation. (U.K. 62/33)

(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."

19. If the Rules intended that there be a rehearing of ex parte taxed costs, no doubt, it would have so stated. But there is none and I accept Mr Saroa's submission that the only right available to a party aggrieved by the decision of the Taxing Officer in relation to taxed costs is to seek a review by way of a motion to a Judge under O 22, r 60. A review is the avenue by which the appellants may seek redress of their grievance. Order 22, Rule 60 gives the National Court jurisdiction to review the Taxing Officer's assessment of costs.

20.	Order 22, Rule 61 sets out the procedure for review. It states:

"61.	Review. (U.K. 62/35)

(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."

21.	Under r 61, the Court has wide discretion to allow further evidence to be received and objections to be made to the taxed costs. Given the wording of this Rule, particularly sub-Rule (2), it may be successfully argued that a review here is a hearing de novo. Hence, given that the appellants were absent at the taxation hearing, it was open to them to bring further evidence and raise objections at the review. They did file a review but as they did not raise the issue as to how and where the primary judge erred in his assessment of costs in the grounds of appeal, it will not be considered. 

22.	The appellants' right to object to the ex parte taxed costs is intact and available by way of a review. They were not denied the right to be heard. There would then be no need to invoke the inherent powers of the Court under s. 155(4) of the Constitution to set aside the taxed costs and order a rehearing. That was what his Honour was alluding to at page 15 of his judgment when he said that he did not find the application of s. 155(4) of the Constitution appropriate. Thus, to that extend, his Honour did turn his mind to the issue of jurisdiction.

23.	It follows that the appellants' submission that the Court has discretion to set aside the ex parte taxed costs and order a rehearing does not raise an arguable case nor do I find an important point of law in this submission. I am also not satisfied that there is an apparent error of law or procedure in the decision of the primary judge. 

24.	With this and returning to my earlier inclination that a grant of stay may cause inconvenience or even prejudice to the respondents, I am not satisfied that the balance of convenience favours the grant of stay. I accept Mr Saroa's submission that the respondents have secured taxed costs in the two National Court proceedings and subsequently a judgement in their favour and are entitled to the fruits of the judgment. These cases have a long history. They are about a land dispute and the respondents had to defend them since the first case was commenced in 2007. As a result, they have incurred substantial costs. In my view to stay the judgment would deny them their costs. 
 
25.	For these reasons, I refuse the application for stay and order the appellants to pay the costs of the application to be taxed, if not agreed.

Ruling and orders accordingly.
_______________________________________________________
Jackson Gah & Associates: Lawyers for Appellants
Nelson Lawyers: Lawyers for Respondents