[1991] Tonga LR 1

IN THE LAND COURT OF TONGA
NUKU'ALOFA REGISTRY

BETWEEN:

O.G. SANFT & SONS & ANOR

v

JOHNSON & ORS

Land Court Nuku'alofa
Martin CJ
Land cases nos. 7/1981 and 14/1988
23 January 1991
Costs - taxation - principles applicable
Practice & procedure & taxation of costs
Taxation of casts - principles.
The defendants having been successful, both in the. Land Court and on appeal were allowed costs as taxed. On review of that taxation.
HELD:
1.	The Court must assess how much time has been reasonably and necessarily spent on a case and allow a fair hourly rate,
2.	An hourly rate is set the reflect the fact that Supreme Court litigation is highly complex, requires a wide knowledge of low and procedure, assumes a practioner knows she relevant law (except abstruse points) so cannot charge for leasing the low, and assumes a practioner will conduct a case efficiently. The lowly rate includes provision for the overheads of a lawyer's business and is set to allow the practioner a fair return for his learning and expertise.
3.	As a final check after taxation it is necessary to consider whether the total figure allowed fairly reflects the complexity of the action.
Judgment
The Defendants were successful in the Land Court and on appeal. Their costs were taxed on 28th September 1990. The Plaintiffs have applied for review of taxation. They challenge the hourly rates allowed and point to an arithmetical error. They also apply for a stay of execution to allow the costs to be paid over a period of 2 years.
The hourly rates allowed on taxation were:
1987	$40.00	
1988	$50.00, and	
thereafter	$60.00.	
The principles applied on taxation appear to be a mystery to some practitioners. It may help those practitioners and litigants in person if I set out the background and the principles applied.
The court has to assess how much time has been reasonably and necessarily spent on the case (which may be considerably less than the time actually spent) and allow a fair hourly rate for that time. An additional amount may Ix allowed lithe case is exceptionally complex, or it has been conducted with unusual efficiency.
In the past no hourly rate appears to have been fixed and it is difficult to ascertain on what basis bills used to be taxed. In an attempt to establish guidelines for the profession and consistency in taxation, hourly rates were introduced in 1987. The rate has to include provision for the overheads of a lawyer's business, and allow him a fair return for the application of his learning and expertise. When assessing the cost of running a practice allowance must be made for the fact that part of his time has to be spent on office administration, and that he is not earning money while doing this.
The amount of the hourly rate has been established by trial and error over a period. With very little information on which to base a decision, the rate for fully qualified lawyers was set at $40.00 per hour in 1987. Several bills were taxed on that basis until representations from practitioners established that the hourly rate was too low. The cost of providing premises had been underestimated. In 1988 the rate was increased to $50.00 per hour. In 1988 it was increased to $60.00 per hour to take account of rising costs, and it has remained at that rate ever since. From time to time representations have been made that it should be increased but no figures have yet been produced to show that the current rate is unfair to practitioners.
This rate applies only to cases in the Supreme Court, conducted by fully qualified lawyers. It reflects the fact that Supreme Court litigation is highly complex and requires a wide knowledge of law and procedure. It is intended to provide a fair return for that expertise. It assumes that the practitioner knows all the relevant law so that he cannot charge for time spent learning what the law is (except for abstruse points of law which the average practitioner would not be expected to know). It also assumes that he will conduct the case efficiently and not waste time on irrelevant matters. A taxing officer from his own experience in practice what work was required to be done, and how long it should have taken to do it. He will disallow any time claimed in excess of this.
Conduct of the trial itself requires intense concentration and instant decisions in often complex situations. For that reason a slightly higher rate is normally allowed for advocacy.
On review of taxation the court has to reconsider every point challenged and decide whether the decision was correct, or whether something was overlooked or wrongly decided.
Applying those considerations to this case.
1.	I find an obvious arithmetical error for 19th August 1988 where 0.5 hours has been allowed at $50.00, it should be $25.00 and the costs must be reduced by that amount.
2.	I have carefully considered the representations made with regard to hourly rates that even after deduction of all overheads they are excessive. I am not persuaded that they give the practitioner an excessive reward for his expertise, and conclude that these rates are lair and proper.
3.	There is a charge of $500.00 for each day of the trial. At the end of each day in court the advocate has to review all the evidence given and prepare for the next day in the light of that evidence. After 5 hours or more in court he faces 3 or 4 hours work in the evening. Bearing in mind the amount of time required at this stage in the case. I find the charge justified.
As a find check after taxation, it is necessary to consider whether the total figure allowed fairly reflects the complexity of the action. This action was particularly complex both on law and on the facts. The total allowed for the 2 actions in the Land Court was $7,468.90, with a further $1306.00 for the appeal. I have to say that the overall figure seems about right.
The costs will remain as taxed save for a reduction of $25.00 which I will allocate to Case No 7/81.
Application to Stay Execution
The Plaintiffs ask to be allowed to pay the costs over a period of 2 years. They point out that Mr Johnson holds a sublease of their land without paying any rent at all. That is a result of the terms of the sublease from which their company expected to benefit. It is still open to the parties to negotiate a reasonable rent. If they cannot reach agreement there are avenues open to the landlords, but I cannot concern myself with that now.
It suffices to say that I have been given no financial information which would justify a stay of execution beyond alloying rime for the Plaintiffs time to make suitable arrangements for payment.
Execution will he stayed for 3 months from today. Any application for a further stay is unlikely to succeed.