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O'Brien (trading as O'Brien's Lawyers) v Monogenis [2020] PGNC 164; N8387 (29 June 2020)

N8387

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

MP NO. 8 OF 2019

BETWEEN
STEVEN O’BRIEN trading as O’BRIEN’S LAWYERS
Applicant

AND
THEODOSIOS MONOGENIS
Respondent

Waigani: Thompson J
2020: 18^th March
2020: 29^th June

TAXATION - Application for review of taxed costs – solicitor/client costs - principles to be applied to review of Taxing Officer’s decisions - onus on applicant to show factual basis for objections

Counsel

Mr. A. Paru, for the Applicant
Mr. G. Geroro, for the Respondent

29^th June, 2020

1. THOMPSON J: On 11 March 2019 the Applicant filed an Application for Taxation of Costs as between a solicitor and client, pursuant to S 63 of the Lawyers Act.

2. The taxation proceeded in accordance with O22 R47-49, which allows for the taxation of costs under S 63 of the Lawyers Act.

3. On 18 June 2019 the Taxing Officer (‘the TO’) taxed the bill down from K111,568.05 to K88,792.55.

4. Order 22 Rule 59(4) says that where the TO disallows any item or part of any item, he should not make a final Certificate of Taxation until after the expiry of 14 days after the date of the decision. Notwithstanding that the TO disallowed items or parts of items on 18 June, he issued a final Certificate of Taxation on the same day, 18 June 2019.

5. Order 22 Rule 60 says that on an application for review of the TO’s decision, the applicant must at the time of the application, deliver objections in writing specifying the list of items objected to, and state concisely the nature and grounds of each objection.

6. The Respondent did not file an application for review within 14 days, and so subsequently filed an application to extend the time, which was granted on 28 February 2020. He filed a Statement of Objection on 6 March 2020.

7. The Applicant objected that the Statement was in breach of the Rules, but I find that it sufficiently complied with the requirements for an Objection. It was, however, inadequate in the sense that it did not show the amounts which had been taxed off by the TO. There was nothing in any of the material from the parties which showed the amounts taxed off. The only hint was provided by the copy of the taxed Bill annexed to the affidavit of Alu Konena, which showed some items where the time spent had been crossed out and replaced with a smaller figure. The ‘Taxed off” column was blank.

8. The requirement to state the nature and grounds of each objection, should be implemented by a concise reference to the factual basis contained in the documents. For example, an objection that the time spent in preparing a document was excessive, should be supported by a reference to the length or complexity of that document. Where the document is not on the court file, it needs to be produced in evidence, so that the basis of the objection can be tested by regard to the contents of the document.

9. In this case, none of the documents were on the court file, as the proceedings issued by the Applicant were solely for the purpose of claiming costs arising out of other proceedings in a different court. The Respondent did not produce any of the documents.

10. On this fairly limited basis, I have considered the objections.

11. The Applicant has conceded the first Objection, relating to a duplication of Items 17 and 22. This results in a reduction of K5,400.00.

12. In relation to the majority of the other charges, the Objection is that the time spent was excessive. Some of the time was spent by a person shown as “BTN”, while other time was spent by “FXG”, “MTG”, “DAL”, “DXB” and “AUK”. The Bill does not identify if these persons were lawyers or non-lawyers. The Bill does not state the hourly rate charged for the time spent by each of these persons. However, it can be deduced from the units and time shown. It appears that 1 hour represented 1 unit, and on this basis, the hourly charge-out rates appeared to be:

BTN - K900.00 , MTG – K1,750.00, FXG- K475.00,
DXB- K1,200.00, DAL – K550.00, and AUK – K600.00/K675.00.

13. The Bill does not state that these hourly rates were agreed by the Respondent, and does not refer to any fee agreement. The hours spent are almost the only costs in the Bill. Pursuant to O22 R34-36, all costs shall be allowed unless they are unreasonable or were approved by the client, and the TO has the discretion to allow amounts higher than the Scale fees prescribed in the Schedule. In the absence of a fee agreement, it is the Schedule which shows what are the rates and amounts which are prima facie reasonable, but they may be increased by the TO having regard to the complexity of the matter, the skill involved, the number and importance of the documents, the importance of the proceedings to the client, and so on.

14. Pursuant to O22 R49, a Bill is required to identify if the work was done by a non-lawyer. As none of those persons are identified as non-lawyers, and the Respondent has not alleged this, it must be assumed that all the work in the Bill was performed by lawyers.

15. Some of the work shown, is administrative work, which should have been done by a non-lawyer, such as Scanning annexures for an affidavit. The time spent should therefore have been charged at a clerical, and not a lawyer’s, rate.

16. In relation to Item 26, the Respondent says that the telephone call lasted only
2 minutes, while the Bill has charged for 12 minutes. If he agreed to be charged on the basis that all time spent would be charged by reference to a minimum time of 6 minutes, with actual lesser time spent being rounded up to 6 minutes, then this charge should be for 0.10 units and not 0.20 units.

17. In relation to Item 27, the Respondent says that it should only have taken 12 minutes to read the relevant provisions of the Acts, and not 1 hour. Where a lawyer is charging K900.00 per hour, he is not a junior lawyer, and it is reasonable to expect that he has an adequate knowledge of the type of work which he is performing. Every lawyer is required “... to have a reasonable knowledge of his work and cannot charge for learning his own business. (Tolom Abai and Ors v the State (1998) PGNC 92, and Joseph Sanga Kumbu v Mann, UPNG and ors (2018) PGNC 50)

18. It is reasonable to expect a lawyer of medium seniority performing this type of criminal work, to have some knowledge of the requirements of the Bail Act and Criminal Code, when considering an application for bail variation.On this basis, he can reasonably refresh his memory of the relevant provisions, and consider how they apply to the facts of the matter. Half an hour should be sufficient time to do this.

19. In relation to Item 28, the Respondent says that it should only have taken half an hour to draft the application for bail variation, and not 1 hour 24 minutes. He did not produce copies of the document. In the absence of any information about the length or complexity of the application, I am unable to say if the time spent was unreasonable.

20. The same principle applies to most of the Respondent’s Objections that the time spent was excessive. In the absence of copies of the documents or any information showing their length or complexity, there is no factual basis to support the Objection. For instance, the Bill charges about 4 hours for preparing an affidavit in support of the application. On the face of it, this may seem unduly long. However, the affidavit may have been lengthy and required to cover various issues, which appear to have included the Respondent’s proposed travel arrangements, which may have necessitated the time spent. I do not know if the Applicant produced the documents and information at the Taxation to prove each of the charges and time spent, but as the Respondent did not appear and object at that time, he now has the onus of justifying his Objections on a Review. The onus is on the respondent to show that the TO erred in the exercise of his discretion in a manner that was manifestly wrong or the amounts allowed were exorbitant (Hii Luke v Richard Maribu (2012) SC 1188).Where the Respondent has not produced any factual evidence to show that the amounts allowed were exorbitant or otherwise unjustified, he has failed to show that the TO erred, and failed to discharge his onus of proof.

21. In relation to Item 43, the Respondent says that it should only have taken 30 minutes to read the case authorities, and not 66 minutes. In the absence of evidence of the number of case authorities, and the complexity of the issue being researched, there is no factual basis for finding that the amount allowed was exorbitant or unjustified.

22. In relation to the charges for telephone calls in Items 47 onwards, the Respondent says that the time spent was excessive. For the calls made to or from the Respondent, he would know the time spent. For the calls made to third parties, he can only assume that the time was excessive. Some of the items are unclear. For instance, Items 54 and 58 appear to relate to requests for documents to be prepared, and it would not be reasonable to take 30 mins to make those requests. The minimum 0.10 unit should be allowed for each call.

23. In relation to Items 60-61, the Respondent says that the time spent at Court should be only 2 hours, not 5.5 hours. If this was a Bill on a party/party basis, it might not have been allowable to claim waiting time at Court. However, the Bill is as between lawyer and client, so that all costs actually incurred are recoverable, unless it can be shown that the costs were unreasonable or incurred without the client’s approval.The Respondent has not provided any factual evidence showing that the lawyer did not spend all day at Court or that he did not authorise the lawyer to spend all day at Court. Further, it appears that the TO may have reduced the charges to 2.5 hours, which is only 30 minutes longer than the Respondent considers a reasonable time.

24. In relation to Item 62, the Respondent says that it should only have taken 6 minutes to attend at the Police Station, and not 30 mins. On its face, such an attendance could not have been made in only 6 minutes, and 30 minutes appears reasonable.

25. In relation to Items 72, 83, 91 and 105, the Respondent has not produced evidence of the length or complexity of the documents which would show that 18 minutes was excessive.

26. In relation to Item 75, as the document is said to be only an additional affidavit, to annexe further documents, it may be inferred that it should not have taken nearly 2.5 hours for a lawyer to prepare it. One hour would be sufficient.

27. In relation to Item 76, again, as it is said to be just a letter to the police, it
may be inferred that it should not have taken 1.5 hours to prepare, and 30 minutes would be sufficient.

28. In relation to Item 77, on its face it is a charge for nearly 2 hours spent in going through the files to extract the documents to be copied as attachments for the letter to the police. This is work which could have been done by a clerk. However, it appears from the documents that the TO may have reduced the charge to 30 mins, which is the amount which the Respondent considers to be reasonable.

29. In relation to Items 87 and 96, the description of the work includes signing the affidavit on 2 different days. Clearly one charge is incorrect.

30. In relation to Item 98, there is nothing to show that 1 hour was excessive preparation for the hearing.

31. In relation to Item 99, there is nothing to show that the lawyer did not spend 2 hours at court. Further, the TO appears to have reduced the charge to 1 hour, which is the time which the Respondent considers reasonable.

32. In relation to Item 103, the Respondent says that the letter should only have taken 30 minutes to prepare. This appears to be the amount allowed by the TO.

33. In relation to Item 107, while the time spent perhaps need not have taken so long, there is nothing to show that the amount allowed was unjustified or exorbitant.

34. In relation to Item 112, having already spent the time charged in Items 103, 107, 109 and 110 in preparing the letter, it would be unreasonable to spend a further 1.2 hours in reviewing it, and 30 minutes would be sufficient.

35. In relation to Item116, assuming that it was considered necessary for a lawyer and not a clerk to deliver the letter, there is nothing to show that 30 minutes is excessive.

36. In relation to Items 125 and 131, the same principle applies as in Items 60-61. There is nothing to show that the lawyer did not spend those hours waiting at Court.

37. In relation to Item 129, on its face it should not have taken the lawyer nearly an hour to read his client’s affidavit, and 12 minutes would be reasonable.

38. In relation to Item 130, on its face it should not have taken 12 minutes to do a memo telling a clerk to file a document, and 6 minutes would be sufficient.

39. In relation to Items 132 and 133, the lawyer/s had already spent considerable time preparing, reviewing and updating the Affidavit, and a further 24 minutes would be sufficient.

40. In relation to Item 134, I do not consider 24 minutes to be excessive for the lawyer leaving the office and attending at the Yacht Club to witness the Respondent signing the affidavit, presumably for the convenience of the Respondent.

41. In relation to Items 136 -139, the Bill shows that the Applicant charged a total of nearly 6 hours for preparing the submission. As written submissions should be concise and not lengthy, this appears to be unduly long. However, again, in the absence of evidence of the complexity or length of the document, and in view of the importance of the document to the client, the Respondent has not shown that the TO erred in apparently making some but not all of the reduction considered reasonable by him, and has failed to discharge his onus of proof.

42. In relation to Items 140 – 142, it appears that ‘counsel’ was instructed to prepare a list of authorities, although this person was not identified. If ‘counsel’ was DAL, who is said to have actually drawn the list, he is only a junior lawyer. It is not clear why it would take BTN, the more senior lawyer, 1.5 hours to review the list and instruct the junior lawyer to compile it, or why it would take FXG, the most junior lawyer, to take another 1hour 6 minutes to compile the list after DAL. A total of nearly 3 hours is excessive to prepare the list. However, the TO appears to have reduced the time by 1 hour, and in the absence of evidence of the length or complexity of the document, the Respondent has not shown any error by the TO.

43. In relation to Item 144, it may be unreasonable to spend 18 mins drawing an affidavit of service. However, the longer time spent should be set against the lowest charge-out rate for the most junior lawyer, so that the charge is not on its face excessive. But having spent 18 minutes doing the affidavit, it was not necessary for another lawyer - AUK - to spend a further 6 minutes doing it. The charge for Item 146 is unnecessary, if the charge for Item 144 is fully allowed.

44. In relation to Item 148, the Bill has already shown charges totalling nearly 3 hours for preparing the list, so there could be no need for a further 3 hours to be spent on 15 October, and in any event, it seems that the list had already been filed on 5 October and served by 8 October. This charge appears to be an error (or was perhaps incurred in one of the other matters for which the Applicant was acting for the Respondent).

45. In relation to Items 149 – 150, and 152 and 154, the same principles apply as in the earlier charges for court attendances. There is nothing to show that the time was not spent, and in any event, it appears that the TO reduced the amounts by over 3 hours.

46. In relation to Item 151, as the lawyer had already prepared and appeared in court 1-2 weeks earlier, 2 hours of preparation appears on its face to be excessive, and 1 hour would be reasonable for the lawyer to refresh his memory.

47. In relation to Item 153, again, as the lawyer had already prepared and appeared less than a week earlier, a further 4.5 hours of preparation is excessive. The TO appears to have reduced this by 1.5 hours, but I consider that 1 hour would have been sufficient, so a further 2 hours should be deducted.

48. Items 162-165 relate to preparation of the Bill. Unlike a Bill on a party/party basis, the lawyer did not have to go through the file and identify each of the items of work by reference to the descriptions of work set out in the Schedule of Costs in the National Court Rules, and then prepare a detailed Bill listing each of the items in the sub-headings and format prescribed by the Rules, alongside the appropriate fee prescribed in the Schedule. He only had to produce a computer printout which already showed the work done and the times spent, and engross it into a Bill for filing.

49. However, the TO had taxed off more than 1/6^th of the Bill. Under O22 R56 the Applicant was therefore not entitled to recover the costs of the taxation, and so none of Items 162-165 should have been allowed.

CONCLUSION

50. When taxing costs on a solicitor/client basis, it would normally be expected that the lawyer would produce a fee agreement signed by the client, to show the basis on which the Bill was prepared. No fee agreement has been produced. In its absence, the lawyer is required to show that the costs were reasonably incurred or incurred with the client’s approval. The Respondent has not challenged the hourly rates charged by each of the persons who performed the work or produced any evidence to show that the rates were unreasonable. There is nothing to show on their face that the hourly rates were unreasonable. In the absence of any evidence to the contrary, the Respondent has accepted the reasonableness of the rates, and has only challenged the amount of time spent.

51. The Bill issued by the Applicant was for K99,045.50 plus K2380.00 for disbursements, plus K10,142.55 for GST, making a total of K111,568.05. The TO’s Certificate was for K88,792.55, presumably including disbursements and GST.

52. After deducting the amounts considered excessive, and the amounts which the TO appears to have taxed off, the Bill totals approximately K82,100.55. No challenge has been made to the further claim for K2380.00 for disbursements, so that the total is K84,480.55. If GST is added to the fees, but not to the disbursements, the final total is K92,690.60.

53. The amount certified by the TO is less than the amount set out above. I am therefore forced to conclude that the crossed-out figures on the Bill before the Certificate of Taxation, did not represent the only amounts taxed off by the TO, and so the limited basis on which I have considered whether or not the TO erred in his decisions, is not accurate. It is not known what amounts were taxed off or allowed for each Item, as they have not been identified individually. I cannot say, for instance, if the TO allowed, or merely reduced or actually disallowed the costs of the taxation. No assistance is obtained from the Respondent’s Objection, which shows what he considered should have been allowed for a number of items, leaving the balance of the items unchallenged, and does not show if they included items which had been taxed off by the TO.

54. It must follow that the Respondent has not shown, by factual evidence in support of his Objections, that the TO erred in the exercise of his discretion when taxing the Bill and reducing it from K111,568.05 to K88,792.55.

55. The only exception is that the Respondent did show, and the Applicant conceded, that the TO had erred in allowing a duplication of the charges in Items 17 and 22. The Bill must be reduced by the sum of K5,400.00

ORDERS

56. The Objection is partly upheld.

57. The Taxing Officer’s decision to certify the taxed costs in the sum of K88,792.55 is varied, and the costs payable by the Respondent to the Applicant are assessed and determined to be K83,392.55.

58. Each party is to pay its own costs of and incidental to the Objection.

59. The Applicant’s Notice of Motion filed on 30 October 2019 is to be set for hearing on the next available date.
__________________________________________________________________
O’Briens Lawyers: Lawyers for the Applicant
Geroro Lawyers: Lawyers for the Respondent