N3507

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

APP NO 32 OF 2001

BETWEEN

RUEBEN KAIULO, MBE,
ELECTORAL COMMISIONER
First Appellant

AND

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Second Appellant

AND

JOHN YALUMA
Respondent

Mount Hagen: Makail, AJ
2008: 13 June
: 27 October

PRACTICE & PROCEDURE - Application for entry of judgment on certified costs - Jurisdiction of National Court - National Court Rules - Order 22, rule 62 -Certificate of taxation conclusive evidence of liability - Affidavit evidence of non payment of taxed costs conclusive evidence of default - Thirwall -v- Eng Chin Ah & Ors [1988-89] PNGLR 34 followed.

PRACTICE & PROCEDURE - Application for review of certified costs by taxing officer - Application for review maybe filed in or within same proceeding by Notice of Motion supported by Affidavit - Time to file application for review - 14 days or such further time as the Court may allow - 14 days is mandatory - Application filed outside 14 days is time barred - National Court Rules - Order 22, rule 60(2) - Application for leave to file application for review out of time - Discretionary - Proper principles for application discussed - Reasonable explanation for delay - Arguable grounds of review - Grounds must be in writing, contain a list and must be concise - Notice of Objection - Prejudice to other party - National Court Rules - Order 22, rules 60 & 61 - Application for entry of judgment refused - Application for leave to review granted.

Cases cited:
Thirwall -v- Eng Chin Ah & Ors [1988-89] PNGLR 34
Tolom Abai & 766 Ors -v- The Commander of PNG Defence Force & The State (1998) N1762
Pius Sankin & Ors -v- Papua New Guinea Electricity Commission (2002) N2257
Jack Livinai Patterson trading as Pattersons Lawyers -v- Teachers Savings and Loans Limited (2004) N2516
William Moses -v- Otto Benal Magiten (2006) SC875

Counsel:
Mr T Kuma, for the First Appellant
No appearance for Second Appellant
Respondent in person

INTERLOCUTORY RULING

27 October, 2008

1. MAKAIL AJ: In this appeal, the Papua New Guinea Electoral Commission (the "Electoral Commission") and the State appealed a decision of the Mt Hagen District Court of 4 December 2000 in the matter DC No 115 of 1999 between the Electoral Commission and the Respondent whereby the District Court dismissed the Electoral Commission’s application to set aside an earlier ex parte Order of 4 November 1999 ordering it to pay K10,000.00 to the Respondent with costs.

BRIEF FACTS

2. From the Affidavit of John Yaluma sworn and filed on 5 June 2008, Affidavit in Response of John Yaluma sworn and filed on 13 June 2008 and the Affidavit of the Electoral Commission’s lawyer, Tumun Kuma sworn on 28 May 2008 and filed on 5 June 2008, most of the facts are not in dispute. 

3. The facts are; the Electoral Commission fell out of time to appeal the decision of the District Court. It filed an application by way of an Originating Summons to seek leave to extend time to appeal in OS No 149 of 2001. On 22 October 2001, the National Court granted the application and following the grant of leave, it filed this appeal. After that, it failed to prosecute this appeal and on 20 February 2004, the National Court dismissed the appeal for want of prosecution and ordered the Electoral Commission to pay costs of the appeal to the Respondent.

4. Pursuant to the National Court’s decision dismissing the appeal with costs, the Respondent prepared an Itemized Bill of Costs and submitted it for taxation on 17 January 2005. In the Itemized Bill of Costs, the Respondent claimed a sum of K183,345.00 but at the taxation hearing on 26 January 2005, the Taxing Officer allowed a sum of K151,610.00 as the certified costs of the Respondent. 

5. The Electoral Commission did not pay the sum of K151,610.00 and it has been outstanding since it was certified by the Taxing Officer on 26 January 2005. As a result, on 5 May 2008, the Respondent filed a Notice of Motion to enter judgment on the certified costs against the Electoral Commission. The Respondent’s Notice of Motion is in the following terms:

"1.	An Order that the National Court Order of No 32 of 2001 dated 20 February 2004 be enforced (sic). 

2.	An Order that K151,610.00 Total cost of the Respondent had taxed on the 26 January 2005 be in force (sic). 

3.	Order for costs and 8% interest. 

4.	An Order that settlement to take effect within 21 days. 

5.	Any other Orders this Court deems fit". 

6. The Electoral Commission also filed a Cross Notice of Motion on 5 June 2008 to seek leave to review the decision of the Taxing Officer to certify costs of K151,610.00 to the Respondent. The Electoral Commission’s Cross Notice of Motion is in the following terms:

"1.	The First Appellant be given further time to review the decision of the Taxing Officer of 26 January 2005 pursuant to Order 22 Rule (60) (2) of the National Court Rules. 

2.	Alternatively, the First Appellant be given further time to review the decision of the Taxing Officer of 26 January 2005 pursuant to Section 155(4) of the Constitution. 

3.	The court reviews the allowance of the Items 2-74 in whole and in part by the Taxing Officer on 26 January 2005 pursuant to Order 22 Rule (60)(1) of the National Court Rules.

4.	Costs to be paid by the Respondent, to be taxed if not agreed. 

5.	Any other orders as the court deems fit".

7. But, from the Affidavit evidence, the Electoral Commission disputes the service of the notice of the taxation hearing of 26 January 2005 and says that it was not notified of the taxation hearing of 26 January 2005, hence it did not attend to oppose the assessment of costs. It also disputes the propriety of the assessment of the Itemized Bill of Costs of the Respondent by the Taxing Officer.

APPLICATION FOR ENTRY OF JUDGMENT ON CERTIFIED COSTS

Jurisdiction of Court to enter Judgment on certified costs

8. The National Court’s power to enter judgment on certified costs is found under Order 22, rule 62 of the National Court Rules which states as follows:

"62.	Judgment. (52/63)

Where the amount of any costs has been certified under this Division the Court may, on motion by a party, direct the entry of such judgment for the costs as the nature of the case requires".

9. There is no dispute that the certified costs of K151,610.00 has been outstanding since the Taxing Officer taxed the Itemized Bill of Costs and certified it on 26 January 2005. There is a copy of the certificate of taxation to that effect also before me.

10. It is the law that a certificate of taxation is conclusive evidence of liability. In Thirwall -v- Eng Chin Ah & Ors [1988-89]PNGLR 34, His Honour Woods J, (as he then was) held that a certificate of taxation is conclusive evidence of liability. I adopt and follow that decision of Thirwall’s case (supra) in this case and find that as there is a certificate of taxation of K151,610.00 against the Electoral Commission, I have no difficulty in finding that the Electoral Commission is liable to pay the certified costs of K151,610.00. 

11. But, I go one step further and add that, in order to prove that the certified costs is outstanding, there must be Affidavit evidence showing the outstanding certified costs. Further, there must be evidence of attempts made by the successful party to get the other party or parties to pay the certified costs. In this regard, based on the Affidavits of the Respondent, I have no difficulty in finding that the Electoral Commission defaulted or failed to pay the certified costs of K151,610.00.

12. In the Supreme Court Judgment of William Moses -v- Otto Benal Magiten (2006) SC875, the Supreme Court was asked to enter judgment on the certified costs of the appeal by the appellant who was awarded costs of a successful appeal and the respondent failed to pay it. This is what the Supreme Court said in relation to the powers of the Supreme Court to enter judgment on the certified costs after the Supreme Court noted that the Supreme Court Act and Supreme Court Rules make no provisions for application for entry of judgment on certified costs:

"16. The present case – SCA No 15 of 1999 - does not involve the Supreme Court in the exercise of its review jurisdiction. It is an appeal against a decision of the National Court. It is clear therefore that the Supreme Court has the power to award costs and to enforce its orders for costs under Sections 6(2) and 8(1)(e) of the Supreme Court Act and Order 22 of the National Court Rules. 

17. Order 22, Rule 62 (judgment) of the National Court Rules allows the National Court to direct the entry of judgment for costs, after certification by the Registrar. It states:

‘Where the amount of any costs has been certified under this Division the Court may, on motion by a party, direct the entry of such judgment for the costs as the nature of the case requires’. 

18. The Supreme Court has equivalent power in equivalent circumstances. In the present case, certificates for costs have been issued and a party to the appeal – the respondent, Otto Benal Magiten - has made an application for entry of judgment for the certified costs. Therefore we will enter judgment for those costs". 

13. The point of making reference to that Supreme Court appeal case is that, both the National and Supreme Court have powers to enter judgment on certified costs where there is default or failure by the unsuccessful party or parties to pay the certified costs. Thus, it is clear to me that the National Court has jurisdiction to enter judgment on certified costs under Order 22, rule 62 of the National Court Rules. Thus, the question is, should I enter judgment on the certified costs? I could right now but then there is the cross application by the Electoral Commission to seek leave to review the decision of the Taxing Officer to certify costs of K151,610.00 to the Respondent which must also be determined. Thus, I turn to that application now.

Can the Electoral Commission apply for leave to review the decision of Taxing Officer out of time in this appeal?

14. There is no doubt in my mind that the National Court has jurisdiction to review the decision of the Taxing Officer to certify costs to a party under Order 22, rules 60 & 61 of the National Court Rules. But the application for review must be made within 14 days after the date of the decision or "within such time as the Court may allow" in order for the Court to exercise that jurisdiction. First, 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". (Emphasis is mine).

15. And Order 22, rule 61 of the National Court Rules 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".

16. In the present case, the Electoral Commission concedes that it is outside of the 14 days to file an application for review of the decision of the Taxing Officer. But it seeks leave to review that decision out of time. I accept that the power of the National Court to grant leave to a party to review the decision of Taxing Officer to certify costs out of time is found under Order 22, rules 60(2) of the National Court Rules. (supra).

17. But the question I poised above is important to determine the question of leave to review the decision of the Taxing Officer. If I find that the Electoral Commission is not entitled to seek leave to review the decision in this appeal, then, that is the end of the matter but it shall be at liberty to file fresh or new proceeding to seek leave to review the decision of the Taxing Officer. But if I find that it is perfectly proper for the Electoral Commission to seek leave to review that decision in this appeal, then the next question is, what considerations should the Court take into account to decide the question of leave for review?

18. I am unable to find any local case authorities directly on point but the nearest I found is the case of Tolom Abai & 766 Ors -v- The Commander of PNG Defence Force & The State (1998) N1762. In that case, the Plaintiffs, 767 in total were former members of the PNG Defence Force who were retrenched from the Defence Force after the Defence underwent a downsizing of manpower in early 1990s. They sued the PNG Defence Force and the State for unpaid retrenchment monies and about half of them were successful with their claims after the National Court entered judgment in their favour with costs on solicitor/client basis.

19. Their lawyers submitted an Itemised Bill of Cost for taxation after the State lawyers disagreed with an offer for settlement out of court. The Taxing Officer taxed the Bill of Costs and reduced it by 70%. Being aggrieved by the decision of the Taxing Officer, the Plaintiffs’ lawyers applied for review of that decision.

20. From my perusal of the judgment of the National Court, it appears to me that the Plaintiffs’ lawyers applied for review of the Taxing Officer’s decision using the same proceeding or within the same proceeding. 

21. The second and also the last case is Pius Sankin & Ors -v- Papua New Guinea Electricity Commission (2002) N2257. In that case, Elcom applied for review of the Taxing Officer’s decision under Order 22 Rule 60 of the National Court Rules after the Taxing Officer awarded certified costs based on the Plaintiffs’ bill of costs on a solicitor client basis. It claimed that, the taxing officer erred in allowing 150 hours at K250.00 totalling K37,500.00 for taking instructions and attending on conferences with the Plaintiffs. 

22. The Plaintiffs argued that, it was within the discretion of the taxing officer to allow the 150 hours out of a total claimed of 300 hours. This they said was reasonable having regard to the size and or the volume of the documents filed in court and the time it took the parties to resolve a number of interlocutory matters before getting to the substantive matter. They also point to the fact that, since the date of the issue of the proceedings on the 22 October 1999, it took almost two years to arrive at the final decision. In the end, the Court upheld the objection to allow K37,500.00 as costs for attendance and conference and ordered in its stead a sum of K10,000.00.

23. From these two cases, it appears to me that a review of the Taxing Officer’s decision may be filed in the same or within the same proceeding where the initial order for costs was made. It need not be filed in a fresh or new proceeding. Thus, I have reached the conclusion that a party seeking to review the decision of a Taxing Officer in respect of costs need not issue fresh or new proceedings to seek review. It is sufficient to file an application for review in the same or within the same proceedings. 

That being the law, I am satisfied the Electoral Commission is entitled to file an application for review in this appeal. But that is not what the Electoral Commission is seeking here. Rather it is seeking leave of the Court to review the decision of the Taxing Officer out of time in this appeal. I think that the issue I raised on whether the Electoral Commission may file an application for leave for review of the Taxing Officer’s decision in this present appeal, was not raised before, even in the case of Jack Livinai Patterson trading as Pattersons Lawyers -v- Teachers Savings and Loans Limited (2004) N2516. That is why His Honour Sevua J, said that:

"The respondent has therefore made this application, somewhat belatedly, to review the decision of the Taxing Officer on 11th April 2003 and have it set aside. The application is made under Order 22 Rule 60(2) of the National Court Rules, which provides for an application for review of the taxation to be made within 14 days after the decision or within such time the Court may allow. I have allowed this application to be made this late because of the merits of the case".

24. As noted His Honour allowed the application for review to be made that late because of the merits of the case but I consider that he did not dwell or consider the principles by which the Court may take into account when deciding a late application for review of the Taxing Officer’s decision. Further and more importantly, I consider that His Honour treated the late application for review in or within the same proceeding in that case.

25. Be that as it may, I find that an aggrieved party or parties like in this case, the Electoral Commission may apply for leave for review of the Taxing Officer’s decision in or within the same proceeding like in this appeal. This is because first, if an aggrieved party or parties can apply for review of the decision of the Taxing Officer in or within the same proceeding, then it would also mean that an aggrieved party or parties having being out of time may seek leave of the Court to review the decision of the Taxing Officer out of time in or within the same proceeding.

26. Secondly, if it was intended that separate or fresh proceedings should be issued by an aggrieved party or parties to seek leave to review the decision of the Taxing Officer, I am sure there would be a provision under Order 22 of the National Court Rules expressly providing for one. As there is none, I find that it was not meant to be the case. Thus, I find that it is perfectly proper for the Electoral Commission to apply for leave to review the decision of the Taxing Officer out of time in this appeal.

27. Thirdly, I am of the view that it is implicit in Order 22, rule 60(2) of the National Court Rules that, an aggrieved party or parties may apply for leave to review in or within the same proceeding because of the phrase "within such further time as the Court may allow". That is why in order to bring an application for leave to review the decision of the Taxing Officer, I consider that it must be made by Notice of Motion and supported by an Affidavit or Affidavits. See Order 4, rules 38 - 44 of National Court Rules.

28. Accordingly, I am satisfied that the Electoral Commission has properly come before the Court and further, this Court has jurisdiction to hear its application for leave for review out of time. I now turn to the next issue.

What considerations or principles should the Court take into account in applications for leave to review decisions of the Taxing Officer out of time?

29. I consider that under the second leg of Order 22, rule 60(2) of the National Court Rules, the National Court has the discretion to extend time or grant leave to an aggrieved party or parties to review the decision of the Taxing Officer out of time. It is a discretionary power of the Court to be exercised on proper principles.

1. Reasonable explanation for the delay.

30. I consider that the first consideration is whether an aggrieved party or parties have provided a reasonable explanation for the delay. In other words, they must provide reasonable reasons for allowing the default to occur. This means that, to satisfy this consideration or principle, there must be Affidavit evidence placed before the Court to show why an aggrieved party or parties failed to file the application for review within 14 days. I also consider that what constitutes a reasonable explanation is determined from the facts of a particular case.

31. Bearing in mind this consideration or principle, the question is, did the Electoral Commission provide a reasonable explanation for the delay. Here, I have read the Affidavit of Mr Kuma. The first matter to note is that the decision of the Taxing Officer was made on 26 January 2005. Between 26 January 2005 and the filing of the Cross Application on 5 June 2008 seeking leave to review that decision is a total of 3 years and 5 months. To my mind, this is a long delay.

32. In his Affidavit, Mr Kuma says that the Electoral Commission was not given notice of the taxation hearing by the Taxing Officer, hence it did not attend the taxation hearing before the Taxing Officer on 26 January 2005. He says that although the appeal was registered in Mt Hagen National Court and it was expecting the taxation hearing to take place at Mt Hagen National Court, the taxation hearing took place at Waigani National Court without the Electoral Commission’s knowledge. 

33. He says that the Itemized Bill of Costs was filed by Jerry Tonge on 17 January 2005 but it was believed that Mr Tonge did not have a lawyers practicing certificate to practice law at that time. After the taxation hearing, he says that the Electoral Commission’s lawyers wrote to Mr Jerry Tonge who was believed to be working with Simon Norum Lawyers on 4 March 2005 to enquire as to the status of the taxation hearing. Mr Kuma further says that they put Mr Tonge on notice that they would be filing a review of the decision of the Taxing Officer on behalf of the Electoral Commission shortly. In that letter, they also enclosed a copy of the Statement of Objection for Mr Tonge’s notice. See Annexure "D" for a copy of the Objection to the Affidavit of Mr Kuma. 

34. Mr Tonge replied in a letter dated 6 April 2005 saying that he did not have any idea as to how his name appeared on the Itemized Bill of Costs and who drew up that Bill. After that, the Court file went missing and the lawyers for the Electoral Commission were unable to file the Notice of Motion and supporting Affidavits for the review within the 14 days even though they did send the documents to Mt Hagen National Court Registry for registration and allocation of a hearing date for the review.

35. From the explanation given, I am satisfied that the Electoral Commission has given a reasonable explanation for the delay. It did take action through its lawyers as soon as it learnt that the Respondent’s Itemized Bill of Costs was taxed in their absence on 26 January 2005. It took action by indicating to the lawyer purporting to represent the Respondent that it would seek a review of the decision of the Taxing Officer. But then the Court file went missing and it was able to have the court documents for the application registered and given a hearing date up until the filing of the Cross Motion on 5 June 2008. 

36. I accept the explanation given by the Electoral Commission because I note the Court file that is before me does not have original documents. It only contains photocopies of documents and more importantly a photocopy of the Respondent’s Itemized Bill of Costs. What is significant here is that, it supports the Electoral Commission’s argument that the Court file went missing soon after the taxation hearing on 26 January 2005. That is why a replacement Court file was created. I believe it is the one before me. 

37. In the end, notwithstanding the delay of 3 years and 5 months, I am satisfied that the Electoral Commission has satisfactory explained the delay in filing the application for review of the decision of the Taxing Officer.

2. Arguable grounds of review

38. I consider that the second consideration or principle is whether or not an aggrieved party or parties have shown or demonstrated that there are arguable grounds of review to justify the exercise of discretion in their favour. Again, I consider that there must be evidence of grounds of review. The grounds of review must be in writing and must contain a list of objection to the decision of Taxing Officer. This is where the Notice of Objection becomes relevant. It must state concisely the nature and grounds of objection.

39. I say this because it is a requirement under Order 22, rule 60(3)&(4) of the National Court Rules to serve a copy of the objections on the Taxing Officer and any other party or parties to the proceeding including any other interested parties that the Taxing Officer may direct. Further, the objections shall be in writing and must state the list of items the applicant is objecting and must state concisely the grounds of each objection. 

40. In this case, did the Electoral Commission demonstrate that there are arguable grounds of review in its Notice of Objection? For this issue, there is no dispute that there is Notice of Objection prepared by the Electoral Commission but it was not registered and given a hearing date along with the Notice of Motion because the Court file went missing. But, what is in dispute and which makes the application for review arguable is that the Electoral Commission says that the sum of K151,610.00 was not properly assessed by the Taxing Officer.

41. That is why the Electoral Commission says that the certified cost is excessive especially where this appeal was dismissed for want of prosecution and not after the substantive appeal was heard and determined. If it was the latter case, it would be expected that more work, time and costs would have been expanded, to argue the substantive appeal, hence a higher award of costs.

42. I have perused the Statement of Objection and I must say that it is very detailed but also concise. It clearly shows the grounds of objection. The objections are listed from Items 2 to 74 are in response to the work done and costs claimed in each of the items of the Itemized Bill of Costs. I also agree that the certified costs of K151,610.00 is substantial when compared to the work and charged out costs in the Itemized Bill of Costs.

43. Therefore, I am satisfied that the grounds of review are arguable, more so where the certified costs is K151,610.00 for an appeal that was dismissed for want of prosecution and not on merits.

3. Prejudice to the other party

44. Finally, I consider that the prejudice to the other party is a relevant consideration and the Court must take it into account when determining whether or not to grant leave to an aggrieved party or parties to review the decision of the Taxing Officer out of time. 

45. In this case, I consider that the Respondent’s only concern here is that there will be further delay for him to receive the money from the certified costs of the unsuccessful appeal of the Electoral Commission. Whilst I accept that to be so, I am of the view that the prejudice is minimal.

CONCLUSION

46. In conclusion, I am satisfied that this Court has jurisdiction to hear applications for leave for review of the Taxing Officer’s decision out of time. I am also satisfied that the application is properly before the Court and that the application for leave for review has been sufficiently made out.

47. For the foregoing reasons, I refuse the Respondent’s application for entry of judgment on the certified costs of K151,610.00 and conversely uphold the application of the Electoral Commission for leave to review the Taxing Officer’s decision.

ORDERS

Accordingly, I make the following formal Orders of the Court:

1.	The Respondent’s application for entry of judgment on the certified costs of K151,610.00 is refused.

2.	Leave is granted to the Electoral Commission to file an application for review of the decision of the Taxing Officer of 26 January 2005 to certify costs of K151,610.00 to the Respondent within 21 days from the date of this Order.

3.	Each party bear their own costs of both applications.

4.	Time for entry of these Orders be abridged to the date of settlement by the Registrar which shall take place forthwith.

________________________________

Parua Lawyers: Lawyers for the First Appellant 
Acting Solicitor General: Lawyers for the Second Appellant
The Respondent in Person