N4784
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS (JR) NO 8 OF 2009

JACOB SANGA KUMBU
Plaintiff

V

DR NICHOLAS MANN, CHAIRMAN, COUNCIL APPEAL COMMITTEE, UNIVERSITY OF PAPUA NEW GUINEA
First Defendant

UNIVERSITY OF PAPUA NEW GUINEA
Second Defendant

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Defendant

Cannings J

Madang: 7 September 2012
Waigani: 14 September 2012

COSTS – basis of costs order: whether costs on a solicitor-client basis justified – self-represented litigant: whether costs should be restricted to out-of-pocket expenses.

The plaintiff, after being granted an application for judicial review, applied by motion for costs on a solicitor and client basis. Two issues arose: (1) whether the awarding of costs on a solicitor and client basis was justified by the circumstances in which the application for judicial review was granted; (2) whether the fact that the plaintiff (a law student) represented himself was relevant to the basis on which the order for costs should be made.

Held:

(1)	An order for costs on a solicitor and client basis is intended to signify the court's disapproval of the conduct by a party of court proceedings and is justified where, for example, there has been a rejection of a settlement which would, if accepted, have resulted in a better outcome than that which was obtained, or where the conduct of a party, either before or during the proceedings, can be said to warrant such an order or there are special or unusual circumstances.

(2)	Here, ordering costs on a solicitor and client basis was as a matter of principle justified as the plaintiff had succeeded emphatically at the trial, exposing numerous errors of law by the defendants which he had previously drawn to their attention, the defendants had been a party to three previous judicial proceedings in which similar errors of law had been exposed, the defendants had made no serious attempt to settle the matter and the effect of prolonging the proceedings for three years after the granting of leave for judicial review was to cause unnecessary hardship to the plaintiff.

(3)	That the plaintiff was not a lawyer admitted to practise and that he represented himself in the proceedings do not make it inappropriate to order that his costs, in addition to out-of-pocket expenses, be paid to him (Canisius Karingu v Papua New Guinea Law Society (2001) SC674 followed).

(4)	The first and second defendants shall pay the plaintiff's costs on solicitor-client basis, which shall if not agreed be taxed.

Cases cited

The following cases are cited in the judgment:

Canisius Karingu v Papua New Guinea Law Society (2001) SC674
Don Pomb Polye v Jimson Sauk Papkai [2000] PNGLR 166
Hii Yii Ann v Canisius Karingu (2003) SC718
Island Helicopter Services Ltd v Wilson Sagati (2008) N3340
Jacob Sanga Kumbu v Dr Nicholas Mann, UPNG & The State (2012) N4746
John Kombra v Bernard Kipit (2009) N3756
Joshua Giru v Willie Edo OS No 281 of 2007, 25.07.07 (unreported)
Karen Mek v Mann, UPNG & The State OS (JR) No 392 of 2009, 17.01.11
Kely Kerua v Council Appeal Committee of the University of Papua New Guinea (2004) N2534
Kila Tutura v Joseph Ng (2005) N2924
Kramer Consultants Pty Ltd v The State [1985] PNGLR 200
Peter Kama v Council Appeals Committee of the University of Papua New Guinea (2010) N3829
PNG Aviation Services Pty Ltd v Geob Karri (2009) SC1002
PNG Ports Corporation Limited v Canopus No 71 Ltd (2010) N4288
PNG Waterboard v Gabriel M Kama (2005) SC82
Rex Paki v MVIL (2010) SC1015
Smith v Buller (1875) LR 19 Eq 473
Tolom Abai v The State (1995) N1402

NOTICE OF MOTION

This was an application for costs after judgment.

Counsel

J S Kumbu, the plaintiff, in person
S Phannaphen, for the third defendant

14 September, 2012 

1. CANNINGS J: The plaintiff, after being granted an application for judicial review, applied by motion for costs on a solicitor-client basis. Two issues arise: (1) whether the awarding of costs on a solicitor-client basis is justified by the circumstances in which the application for judicial review was granted; (2) whether the fact that the plaintiff (a law student) represented himself is relevant to the basis on which the order for costs should be made.

(1)	IS THIS AN APPROPRIATE CASE FOR AN AWARD OF COSTS ON A SOLICITOR-CLIENT BASIS?

2. The National Court has a wide discretion whether to make an order for costs and as to the terms of a costs order. The discretion must be exercised judicially, not arbitrarily. Costs usually 'follow the event': the successful party is awarded their costs, but this is always subject to the discretion of the Judge (PNG Ports Corporation Limited v Canopus No 71 Ltd (2010) N4288). A party has no entitlement to costs except under an order of the Court (National Court Rules, Order 22, Rule 8). The Court usually states the basis on which costs are awarded, which means that if the parties cannot agree on the amount of costs the party in whose favour an order for costs has been made is entitled to their "taxed costs". The costs to which they are entitled will be calculated and determined by an officer of the Court called a taxing officer in accordance with Divisions 22.3 and 22.4, whose decisions are subject to review under Rules 60 and 61. Costs will be taxed on the basis prescribed by the Court's order.

3. Order 22 of the National Court Rules recognises several different bases of calculating and taxing costs:

(a)	Party and party basis (Rules 23-24): the party in whose favour an order has been made "shall be allowed all such costs as were necessary or proper for the attainment of justice or for enforcing or defending the rights" of that party (Rule 24(2)). Such costs include only the bare costs necessarily incurred (Smith v Buller (1875) LR 19 Eq 473). This is the most common basis on which costs are to be calculated. Awarding costs on a party-party basis is the most common form of a costs order; and if the court does not specify on what basis costs are to be calculated, it is presumed that the order is only for party-party costs.

(b)	Common fund and trustee bases (Rules 31- 33): applicable only where costs are to be paid out of a fund or where a person is entitled to be paid costs out of a fund which he holds in the capacity of trustee. These are more generous bases for calculating costs than the party and party basis.

(c)	Solicitor-client basis (Rules 34-35): all costs actually incurred are allowed except if they are of an unreasonable amount or of an unusual nature and have been incurred without the approval of the client. This is the most generous basis on which an order for costs is made; it is intended to mark the court's disapproval of the conduct of a party in litigation (Tolom Abai v The State (1995) N1402). The practice appears to have developed of also referring to solicitor and client costs as costs on an indemnity basis; the terms have been used interchangeably in numerous cases, eg PNG Waterboard v Gabriel M Kama (2005) SC821. In PNG Aviation Services Pty Ltd v Geob Karri (2009) SC1002 the Supreme Court suggested that it may be appropriate to make award costs on a solicitor and client basis where, for example, there has been a rejection of a settlement which would, if accepted, have resulted in a better outcome than that which was obtained, or where the conduct of a party, either before or during the proceedings, can be said to warrant such an order or there are special or unusual circumstances. In PNG Ports Corporation Limited v Canopus No 71 Ltd (2010) N4288 Kandakasi J held that an unsuccessful party who has failed to make good faith efforts towards resolving a dispute out of court should be subject to an order for costs on a solicitor-client basis.

4. Order 22, Rule 65 (personal liability of solicitor for costs) also provides for a costs order to be made against a lawyer, as distinct from an order against a party, "where costs are incurred improperly or without reasonable cause or are wasted by undue delay or by any other misconduct or default". Such an order marks the court's disapproval of the conduct of a lawyer (Don Pomb Polye v Jimson Sauk Papkai [2000] PNGLR 166, Island Helicopter Services Ltd v Wilson Sagati (2008) N3340, Joshua Giru v Willie Edo OS No 281 of 2007, 25.07.07 (unreported)).

5. In the present case the plaintiff applies for an order for costs on a solicitor and client basis against the defendants (not against the defendants' lawyers). He does so pursuant to my orders of 20 July 2012, which as well as granting his application for judicial review of decisions of the Student Disciplinary Committee and the Council Appeal Committee of the University of Papua New Guinea reserved the question of costs and stated that he was at liberty to apply by notice of motion for costs (Jacob Sanga Kumbu v Dr Nicholas Mann, UPNG & The State (2012) N4746).

6. The plaintiff submits that the manner in which the defendants conducted the litigation was unreasonable and unfair and that they refused to negotiate or settle the matter and failed miserably to learn from mistakes exposed in earlier cases, the result being that he has suffered great hardship and been denied the opportunity to practise his chosen profession as a lawyer. Only the third defendant, the State, defended the motion. Mr Phannaphen of the Office of Solicitor-General, submitted that because the State had not played an active role in the proceedings and apparently been joined only as a nominal defendant no costs should be awarded against it. The first and second defendants did not appear at the hearing of the motion, despite being given seven days notice through an announcement in court in Waigani on Friday 31 August 2012 that it would be heard in Madang on 7 September 2012.

7. Let me deal first with the State. I am satisfied that it has not played an active role in the proceedings and was joined unnecessarily, so I uphold the submission that no costs should be awarded against it.

8. As for the first and second defendants, and putting aside for a moment that the plaintiff is not a lawyer admitted to practise and that he represented himself in the proceedings, I find that this is an appropriate case, as matter of principle, in which to award costs on a solicitor and client basis.

9. First, the plaintiff not only won the case but he had an emphatic victory. He was subject to disciplinary proceedings when he was a final year law student due to his alleged involvement in a riot in which university security personnel were assaulted and university property was damaged. He was found guilty by the Student Disciplinary Committee and excluded from studies for two semesters, barred from graduating and ordered to pay 10% of the total costs of assessed damage to university property and enter a good behaviour bond. He appealed to the Council Appeal Committee, which rejected his appeal and upheld the Disciplinary Committee's decision. He succeeded in the National Court in showing that he was dealt with under a non-existent law, not under the Student Discipline Statute, and that the Disciplinary Committee erred by:

•	exercising jurisdiction despite the proceedings being time-barred;
•	exercising jurisdiction despite being unlawfully constituted;
•	exercising jurisdiction despite there being four defects in the charge;
•	finding the plaintiff guilty despite a lack of evidence to sustain the actual allegations put to him; and
•	imposing a penalty that was irrational.

10. The cumulative effect of so many errors was that the Disciplinary Committee's decision was unreasonable. As for the Appeal Committee it made two serious errors of law:

•	exercising jurisdiction despite being unlawfully constituted; and
•	not determining the grounds of appeal and failing to give good, proper and sufficient reasons for its decision, thus denying natural justice to the plaintiff.

11. Its decision to reject the plaintiff's appeal was also held to be unreasonable. The decisions of the Disciplinary Committee and the Appeal Committee were quashed and declared null and void. Though other claims for relief, including that the plaintiff be allowed to graduate and excluded from enrichment courses and awarded damages, were refused, it was an emphatic victory in that it was proven that numerous errors of law had been made and the principal relief sought – that the decisions to find him guilty and to impose penalties and to reject his appeal – was granted. The outcome of the case revealed that the defendants had been 'running a defence case on a complete lack of defence', which is a circumstance in which an order for costs on a solicitor and client basis is justified (Rex Paki v MVIL (2010) SC1015).

12. Secondly, the evidence at the trial showed that the plaintiff had put to the first and second defendants before the commencement of the judicial review proceedings that there were errors in the decision making process, but he was not taken seriously.

13. Thirdly, the errors found to have been committed by the first and second defendants were a repeat of errors that had been exposed in three previous judicial review proceedings involving the University of Papua New Guinea. In both Kely Kerua v Council Appeal Committee of the University of Papua New Guinea (2004) N2534 and Peter Kama v Council Appeals Committee of the University of Papua New Guinea (2010) N3829 decisions of the Appeal Committee were found to be flawed due to a failure to address the student's grounds of appeal and to give good, proper and sufficient reasons for rejection of an appeal. In Karen Mek v Mann, UPNG & The State OS (JR) No 392 of 2009, 17.01.11, judicial review of the Appeal Committee's rejection of an appeal was granted largely due to confusion regarding which version of the Student Discipline Statute was applicable. The Court found that the University itself was not sure which version of the Statute had been applied. Exactly the same confusion arose in the present case. The disciplinary proceedings against the plaintiff miscarried at the outset as he was charged under an incorrect and non-existent law. Though the National Court decisions in Kama (made in January 2010) and Mek (January 2011) post-date the decisions that were subject to judicial review here (made in 2008) and the granting of leave for judicial review (given in April 2009) they were made well before the hearing of the present case (June 2012), so the defendants had ample time in which to take stock of and adjust their position and to consider the viability of defending the proceedings.

14. Fourthly, despite the defects in its student disciplinary procedure being exposed in the three earlier cases the defendants made no genuine attempt to settle. A party which fails to explore all available avenues of settling a matter out of court or which forces a party into court or unnecessarily prolongs litigation (whether due to malice or incompetence, it does not much matter) puts itself at risk of having costs awarded against it on a solicitor and client basis (Kila Tutura v Joseph Ng (2005) N2924, PNG Ports Corporation Ltd v Canopus No 71 Limited (2010) N4288).

15. Finally, the effect of the three-year prolongation of the proceedings after the granting of leave for judicial review has been to cause hardship to the plaintiff. He has been denied the opportunity to complete his university education and to practise his chosen profession.

16. The combined effect of the above factors is to make the present case, as a matter of principle, appropriate for an award of costs on a solicitor and client basis.

(2)	WHAT IS THE RELEVANCE OF THE PLAINTIFF REPRESENTING HIMSELF?

17. The common law position, applied for many years in PNG, was that a person who received the benefit of a costs order and represented himself was only entitled to out-of-pocket expenses. The rationale was that if no lawyer was involved, the person awarded costs could not expect to be rewarded as if he was a lawyer (Kramer Consultants Pty Ltd v The State [1985] PNGLR 200). In John Kombra v Bernard Kipit (2009) N3756 Davani J queried the appropriateness of awarding legal costs to a layman who had represented himself in court.

18. It sounds unusual to award legal costs to a person who has represented himself. However, the appropriateness of a court exercising its discretion as to costs in this way was thoroughly canvassed by Kandakasi J in Canisius Karingu v Papua New Guinea Law Society (2001) SC674 and addressed in Hii Yii Ann v Canisius Karingu (2003) SC718. Kandakasi J concluded that the common law position was inappropriate to the circumstances of PNG and developed a rule of the underlying law in the following terms:

I consider it now appropriate to the circumstances of Papua New Guinea that those principles should be varied. I do so by holding that an order for costs in a litigant in person case includes the litigant in person's costs necessarily and reasonably incurred for the attainment of justice, unless the court otherwise orders. That should be the case whether or not the litigant in person is a lawyer provided there is no dual gain. This follows on from the fact that neither the Lawyers Act nor the Rules prohibit litigants in person from conducting their own cases. Of course, the court will be in a position to appreciate the level of assistance it receives from such persons and should be in a position to determine whether a litigant in person should be entitled to his costs or not. I have therefore allowed for the qualification "unless the court otherwise orders".

19. In Karingu the successful litigant was a lawyer admitted to practise who did not have a practising certificate at the time that he appeared in court. It was easy to conclude that he should receive costs as if he were a lawyer. In the present case the plaintiff is not a lawyer. He argued that he is but I reject the argument. It is not proper for a person to be called a 'lawyer' until he or she has completed a degree in law at a recognised and reputable tertiary institution. Does that mean that the present case should be distinguished from Karingu? No, the rule of the underlying law developed in Karingu should not be confined to cases in which the self-represented litigant is a lawyer. It extends, in my view, to non-lawyers. I apply the rule here and in the exercise of my discretion award costs on a solicitor and client basis to the plaintiff.

ORDER

(1)	The application for costs is granted.

(2)	The first and second defendants shall pay the plaintiff's costs of the entire proceedings, including this motion, on a solicitor and client basis, which shall if not agreed be taxed.

(3)	Time for entry of this order is abridged to the date of settlement of the order by the Registrar which shall take place forthwith.
_______________________________________________

Niugini Legal Practice: Lawyer for the 1st & 2nd Defendants
Solicitor-General: Lawyer for the 3rd Defendant