N2152

PAPUA NEW GUINEA

[In the National Court of Justice]

OS 471 OF 2000

BETWEEN:

AINEA SENGERO
-Plaintiff-

AND:

LUTHER WENGE –
GOVERNOR MOROBE PROVINCIAL GOVERNMENT
1st Defendant-

AND:

SOIAT WILLIAMS –
SECRETARY DEPARTMENT OF PERSONNEL MANAGEMENT
-2nd Defendant-

LAE: INJIA, J.
2001: JULY 13, AUGUST 6

Civil – Costs – Discontinuance of proceedings by plaintiff, by leave – Whether Successful defendant should pay unsuccessful plaintiff’s costs – Principles discussed – National Court Rules, Order 22 rule 11.

Cases cited:
Ritter v. Godfrey [1920] 1 K.B. 47
Papua New Guinea Coffee Industry Board v. Panga Coffee Factory Ltd [1990] PNGLR 363

Counsel:
B. Ovia for the Plaintiff
P. Ousi for the defendants

6 August 2001

INJIA, J.: The plaintiff is the former Administrator of the Morobe Provincial Government. On 5/09/00, he filed an Originating Summons seeking orders inter alia, a declaration that his suspension or purported suspension by the First Defendant, ("Governor") is illegal and invalid.

On 13/7/01, I had before me two motions. The first motion was the plaintiff’s motion seeking leave to discontinue the proceedings and seeking orders for costs. The second motion was from the defendants seeking orders dismissing the proceedings and costs. I dealt with the plaintiff motion first because it was filed first in time. I granted leave to the plaintiff to discontinue the proceedings. The reason for the discontinuance was that the relief sought in the Originating Summons was no longer available because the plaintiff’s employment was terminated by the National Executive Council ("NEC") ON 06/04/01. This in turn extinguished the defendant’s motion. But the plaintiff applied for his costs to be paid by the defendant and the defendants moved for their costs to be paid by their plaintiff.

Order 8 rule 61(2) allows a plaintiff to discontinue proceedings commenced by originating summons, by leave of the Court. Orders 8 r 63 provides that the "Court may give leave under Rule 61… on terms". The phrase "on terms" includes terms as to costs. This rule can be read subject to Order 22 r11 which provides for award of costs. Order 22 r11 states:

"If the Court makes an 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." (my emphasis)

The general rule that "costs follow the event" stated above means that an unsuccessful party should pay the successful party’s costs. What then is the position of a plaintiff who discontinues his action? Pursuant to Order 22 r17(1) a plaintiff who discontinues his action without leave of the court is an unsuccessful party and he must pay the successful defendant’s costs "unless the Court orders otherwise". It follows that an unsuccessful plaintiff who discontinues costs, "unless the Court otherwise orders". In the present case, because the proceedings were discontinued with leave of the Court, the unsuccessful plaintiff must pay the successful defendant’s costs unless the plaintiff qualifies under the exception.

But the precise ambit of the discretion conferred by the exception to the general rule is not specified under Order 22. In my research, I am unable to locate any local cases in which an unsuccessful plaintiff is required to pay a successful defendant’s costs. I find Lord Atkin’s statement in Ritter v. Godfrey [1920] K.B. 47 in relation to Order 62 r3(3) of the United Kingdom Supreme Court Rules which is similar to our Order 22 r11, to be on point and persuasive. Lord Atkin states the general principles governing the exercise of discretion on the exception to the general rule as follows:

"It is not easy to deduce from these authorities what the precise principles are that are to guide a judge in exercising his discretion over costs. And yet as the discretion is only to be exercised where there are materials upon which to exercise it, it seems important to ascertain the principles upon which a judge is to discern whether the necessary materials exist. In the case of a wholly successful defendant, in my opinion the judge must give the defendant his costs unless there is evidence that the defendant (1.) brought about the litigation, or (2.) has done something connected with the institution or the conduct of the suit calculated to occasion unnecessary litigation and expense, or (3.) has done some wrongful act in the course of the transaction of which the plaintiff complains. These principles require further expansion.

By (1.) is meant-has so conducted himself as to lead the plaintiff reasonably to believe that they had a good cause of action against the defendant, and so induce him to bring the action. The authority for this proposition is Bostock v. Ramsey. (1.). It is wide, for in terms it is not limited to unreasonable or improper conduct, or to conduct other than that which constitutes the alleged cause of action. Inasmuch as the bringing of many actions of contract and most actions of tort is due to the effect upon the plaintiff’s mind of defendant’s conduct, and the effect is at any rate to induce a belief that the plaintiff has a good cause of action, it would appear to follow that provided the belief was reasonable the judge in all such cases has grounds for depriving a successful defendant of costs. I presume e converso there would be grounds for dealing with a successful plaintiff'’ costs when his conduct has induced the defendant reasonably to believe that he has a good defence.

I am inclined to think therefore that the propositions in Bostock v. Ramsy (1) should be read subject to the first, if not also the second, of the limitations suggested above---i.e., subject to the conduct being unreasonable or improper, and being conduct other than that which constituted the alleged cause of action. For the purposes of this case, however, I shall assume that they are to be read without the qualification suggested. (2.) and (3.) may possibly overlap. (2.), I think, would include improper conduct in or connected with the litigation calculated to defeat or delay justice. Such conduct would also be included in (3.), which, I think, further extends to cases where the facts complained of, though they do not give the plaintiff a cause of action, disclose a wrong to the public: King v. Gillard (2), by which I understand some criminal or quasi criminal misconduct, e.g., a fraud or crime or preparation for a fraud or crime, or possibly some act of serious oppression. Such conduct must, however, be in the course of the transaction complained of. If there is evidence of facts falling within the three classes above mentioned, then an appellate Court will not interfere with the discretion of the trial judge, even though they might not have come to the same finding of fact or exercised their discretion in the same way."

Counsel for the plaintiff’s submissions are these. The First Defendant ("the Governor") brought about the proceedings by his conduct in not complying with the procedural requirements for issuing and serving notice of suspension under clause 17 of the Standard Terms and Conditions For the Employment of Provincial Administrators in the National Public Service 1995 ("Standard Terms and Conditions") adopted under clause 1 of the Contract of Employment For the Administrator Morobe Provincial Government Mr. Ainea Sengero, dated 24/7/97 ("Contract of Employment"). The allegations of misconduct used by the Governor which support the suspension and his recommendation to dismiss the plaintiff were unfounded and politically motivated. This is confirmed by the NEC when on 6/4/01, the NEC decided to terminate the plaintiff’s service under the "best interest of Papua New Guinea" in clause 17.1(c) and not for cause under clause 17.1(d) based on the allegations of misconduct levelled against him by the Governor. It would not be fair that the plaintiff either pay his own costs and/or the defendant’s costs because he was not pursuing purely private interest, but rather fighting against unfounded political interference in the office of the Administrator of the Province and that it is only fair that the defendants should pay the plaintiff’s costs as well as their own costs from the "public purse."

Counsel for the defendants submits that the general principle that costs should follow the event should apply and that the unsuccessful plaintiff should pay the successful defendant’s costs. The plaintiff pre-maturely instituted incompetent proceedings without allowing disciplinary procedure under the Standard Terms and Conditions to take its normal course, and this caused the defendants to incur unnecessary expenses in defending the claim, and now that the disciplinary proceedings have taken their normal course, the plaintiff should pay the defendant’s costs.

Applying the principles canvassed by Lord Atkin in Ritter v. Godfrey, to the present case, it is my view that this is a case in which both parties, the plaintiff and the first defendant in particular, have both employed an unco-operative attitude in the conduct of the business of their respective public offices. There appears to have been bitter personal differences between the two men in the management of the affairs of this province and this clouded their conscience which in turn led them not to see each other eye-eye in their own offices. Ironically their offices are situated next to each other in the same office complex. Attempts by the Governor’s office to serve the notice of suspension together with the allegations of misconduct on the plaintiff were frustrated by the plaintiff’s refusal to accept service of these documents. If the plaintiff had co-operated and allowed himself to be served these documents, then the suspension would have taken effect and he would then have had 7 days to submit his reply to the NEC and then simply awaited the decision of the NEC as to his fate. It was not until on 11/9/00 when I ordered that the Notice of Suspension be served on the plaintiff, that the Notice was so served on the same day within hours of the order and the plaintiff effectively became suspended thereupon pending the decision of the NEC on his fate. And so if the plaintiff allowed himself to be served the notice of suspension, based on whatever allegations of misconduct the Governor saw fit to make against him, then all this litigation was unnecessary. Therefore, I accept Mr. Ousi’s submission that the plaintiff is entirely blameworthy in instituting these proceedings pre-maturely.

On the other hand, it is clear from the minutes of the NEC decision in evidence that up to this day, the merits of the allegations levelled against him by the Governor have not been determined by the NEC and they never formed the basis of the NEC’s decision to terminate the plaintiff. Instead the NEC based its decision under the "best interest of Papua New Guinea" clause.

This decision perhaps lends support to the plaintiff’s claim that the conduct of the "Governor" in levelling unfounded allegations or misconduct of the plaintiff led the plaintiff to believe that he had a good cause of action against the defendants in Court and instituted these proceedings.

In all the circumstances, I consider that this is a case in which both parties share the blame for the events which brought about these proceedings: see Papua New Guinea Coffee Industry Board v. Panga Coffee Factory Ltd [1990] PNGLR 363. Therefore, it would not be fair to order the unsuccessful plaintiff to pay the successful defendant’s costs or vise versa. I consider that each party should bear their own costs. The question as to the source where the respective parties will turn to, to fund their own costs in not for me to postulate and determine. I order that each party bear their own costs of the proceedings.
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Lawyer for the plaintiff	:	Gamoga & Co.
Lawyer for the defendants	:	Warner Shand