Unreported National Court Decisions
N1759
PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]
WS NO. 1053 OF 1997
BETWEEN:
YAPAO LAWYERS
PLAINTIFF
AND:
YALIMAN PAWE & OTHERS AND 
PORGERA RIVER ALLUVIAL MINERS ASSOCIATION
DEFENDANTS
Waigani
Kapi DCJ
9 September 1998
18 September 1998
CONTRACT - Remuneration for lawyers by agreement - Contingency fees allowable by the Lawyers Act, s 66 (1), (2) - Fees must be reasonable and fair Lawyers Act, s 66 (3).
Counsel
Mr W Boi for the plaintiff
No appearance by the defendants
18 September 1998
KAPI DCJ: The plaintiff, a legal firm, filed a writ of summons against the defendants for legal fees for legal work performed in connection with compensation claims against the Porgera Joint Venture Companies in relation to environmental damage done to the Porgera River system as a result of the operations of the Porgera gold mine. 
The plaintiff obtained a default judgement for costs to be assessed.
The matter has come before me for assessment of costs.
The amount claimed is in accordance with the terms of an agreement entered into between the plaintiff and each of the land owners and the defendant association. A sample agreement entered into is in the following terms:
“On the……..day of……….1995 of Lower Porgera River, Porgera, Enga Province herreby authorise Messrs Yapao Lawyers of 1st Floor, Pasuwe Ples, Kennedy Road, Gordons, P.O. Box 2552, Boroko…NCD to act for me, my relatives, my clan namely………, other landowners from Lower Porgera area having interests therrein, the Porgera River Alluvial Miners Association and all other persons qualified by the Constitution of the Association as its members to pursue our claim commencing at the Arbitration level and to Courts if not settled at Arbitration and to represent us in all other legal actions incidental to the Compensation claim against the Porgera Joint Venture Companies operating the giant Porgera Gold Mine. Our Compensation claim includes, among others, compensation claim for loss of alluvial gold, compensation for tailings and compensation for sedimentation.
I agree that, unless the legal fees for Messrs Yapao Lawyers are further negotiated they will be paid 10%, of once only compensation package, at settlement which shall be calculated from backdated payment including, the initial lump sum payments as agreed by the Porgera River Alluvial Miners Association.
 	WITNESS:	
My Signature	Name:	
 	Address:	
 	Date:”	
The total compensation package determined by the Minister for Environment & Conservation is Fifteen Million Two Hundred and Forty three Thousand Four Hundred and Fifteen Kina (K15, 243, 415.00). The plaintiff claims 10% of this amount in accordance with the agreement.
Lawyers may claim legal fees in accordance with the terms of an agreement with clients under Lawyers Act, s 66:
“66.    REMUNERATION BY AGREEMENT
(1)      A lawyer may make a written agreement with his client as to his remuneration in respect of contentious or non-contentious business done or to be done by him.
(2)      An agreement referred to in Subsection (1):
(a)      May provide for the remuneration of the lawyer by a gross sum, or by commission or percentage, or other wise, and at a greater or lesser rate than at which the he would otherwise have been entitled to be remunerated; and
(b)      may be made on the terms that the amount of the agreed remuneration either shall or shall not include all or any disbursements made by the lawyer.
(3)      If on motion by the client it appears to a Judge that the agreement is unfair or unreasonable, he may:
(a)      reduce the amount agreed to be payable under the agreement; or
(b)      direct that the costs of the business done by the lawyers be ascertained by taxation.
(4)      An agreement:
(a)      subject to Subsection (5), does not affect the amount of, or any rights or remedies for the recovery of, costs payable by the client to, or to the client by, a person other than the lawyer, and
(b)      excludes any claim by the lawyer in respect of the business to which it relates other than:
(i)       a claim for the agreed costs; or
(ii)      a claim for such costs as are expressly excepted from the agreement.
(5)      The person referred to in Subsection (4)(a) as the person by whom costs are payable to the client may, unless he has otherwise agreed, require the costs to be taxed according to the rules for the taxation of costs.
(6)      A client is not entitled to recover, from a person under an order for the payment of costs to which the agreement relates, more than the amount payable under the agreement by him to his lawyer in respect of the costs.
(7)      A provision in the agreement that the lawyer is not liable for negligence, or that he is relieved from responsibility to which he would otherwise be subject as a lawyer, is void.
(8)      The agreement may be recovered on or set aside in the like manner and on the like grounds as agreement not relating to the remuneration of a lawyer.”
It is clear from s 66 (2) (a) that it is permissible to enter into a contingency fee arrangement in an agreement. Such a fee is subject to the supervisory power of a Judge who may inquire into whether the fees are unfair or unreasonable (s 66 (3)). A client may by motion bring the matter before a Judge to determine this issue. In the present case, the defendants have not made such an application.
Is it open to this Court in assessing the costs to make the enquiry under s 66 (3) of the Act? Counsel for the plaintiff submits that the Court may enquire into the unreasonableness of the fee in assessing the costs. In Simon Norum Trading as Simon Norum & Co. Lawyers v Daniel Ikio and Komaip Trading Pty Ltd (Unreported judgement of the National Court dated 11th July 1997, N1593) Lenalia AJ applied the provisions of s 66 (3) in a case where a lawyer instituted action in the National Court to recover legal costs pursuant to a legal fee agreement.
Under s 66 (3) the Court may reduce the amount agreed to or direct that the costs of the business provided be ascertained by taxation. In order to determine whether or not the fee which has been agreed to is unfair or unreasonable, there must be some evidence of the nature of the business conducted by the lawyer and the amount of fees charged. The defendants have failed to appear in these proceedings.
The plaintiff in his affidavit sets out the nature of business conducted and the fee for the work done. These fees are not itemised in detail. These costs add up to K246, 855.03. Compared to this figure, the 10% of the total compensation package (K1.52 million) appears to me to be unreasonable. As I have pointed out previously, the costs for the work done is not itemised in detail. The proper costs of the business conducted should be accurately assessed. In the circumstances, the costs should be taxed. This will indicate the proper costs to which the plaintiff should be entitled. I direct that costs incurred by the plaintiff be taxed in accordance with s 66 (3) (b).
Lawyers for Plaintiff: Yapao 
Lawyers for the Defendants: Carter Newell