SC1202

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SC REF NO 4 0F 2010

SPECIAL REFERENCE
PURSUANT TO CONSTITUTION, SECTION 19

IN THE MATTER OF RE-ELECTION OF THE
GOVERNOR-GENERAL, SIR PAULIAS MATANE, FOR THE SECOND TERM AND INTERPRETATION OF
SECTIONS 87(5) AND 88 OF THE CONSTITUTION

REFERENCE BY
THE MOROBE PROVINCIAL EXECUTIVE

Waigani: Sakora J, Batari J,
Cannings J, Manuhu J, Gabi J

2012: 29 October, 2 November

COSTS – whether appropriate to award costs in proceedings re Special Reference under Constitution, Section 19 – discretion as to costs – whether distinction should be drawn between referrers and interveners – relevant considerations to take into account in exercise of discretion.

After the Supreme Court handed down its opinion on questions of constitutional interpretation and application referred to it under Section 19 of the Constitution, it reserved the question of costs pending applications for costs. The referrer and three interveners subsequently applied for costs. This is the ruling on those applications.

Held:

(1)	The Supreme Court is a superior court of record and has power under the underlying law and Section 155(4) of the Constitution and the Supreme Court Rules to award costs at its discretion in any proceedings including a Section 19 Special Reference.

(2)	Though the Section 19 reference procedure is unique there is no reason that the general rule that costs should follow the event ought not apply.

(3)	In applying the rule of thumb that costs follow the event, the court should identify the party or parties primarily responsible for 'the event' and the party or parties primarily responsible for opposing it; and award costs to the former against the latter.

(4)	The court should before making a final decision on costs take into account any special considerations that would warrant a departure from the general rule, eg whether a party to the reference has made a significant contribution to the proper determination of the reference (even though its submissions may not have ultimately been upheld), whether any party has been held to have acted unconstitutionally, whether any party has abused the processes of the court.

(5)	Here, 'the event' was the determination of eight questions that formed the subject of the Reference, seven of which were decided substantially as proposed by the referrer and contrary to the propositions advanced by the second intervener (the National Parliament) and the fourth intervener (the Attorney-General).

(6)	The party primarily responsible for that event was the referrer and the parties primarily responsible for opposing it were the second and fourth interveners.

(7)	Application of the rule of thumb would result in the second and fourth interveners being ordered to pay the referrer's costs. There were no special considerations to warrant departure from the general rule. In particular: it was unnecessary in hindsight for other interveners to join the proceedings and none of them added significant value to the Court's consideration of the issues; the second intervener had acted unconstitutionally and the fourth intervener had not prevented unconstitutionality, so their conduct reinforced the application of the rule of thumb.

(8)	The second and fourth interveners were accordingly ordered to pay the referrer's costs of the entire proceedings, while the first, third and fifth interveners were ordered to bear their own costs.

Cases cited

The following cases are cited in the judgment:

Air Traffic Controllers Association v Civil Aviation Authority (2009) SC1031
Don Pomb Pullie Polye v Jimson Sauk and Electoral Commission (1999) SC651
Reference Pursuant to Section 18(1) of the Constitution by Igo Namona Oala & Oala Moi (2011) SC1128
Supreme Court Reference No 1 of 2000 Re Validity of Valued Added Tax Act (2002) SC693
Supreme Court Reference No 2 of 2010; Special Reference by the Attorney-General (2010) SC1078
Supreme Court Reference No 3 of 2006; Reference by Fly River Provincial Executive (2007) SC918
Supreme Court Reference No 4 of 2010; Special Reference by the Morobe Provincial Executive (2010) SC1085
Supreme Court Reference No 4 of 2010; Special Reference by the Morobe Provincial Executive (2010) SC1089
William Moses v Otto Benal Magiten (2006) SC875

APPLICATIONS

This was a determination by the Supreme Court of four applications for costs made following determination of a Constitution, Section 19 reference.

Counsel

J Issack, for the referrer
P Ame, for the first intervener
M Konge, for the second intervener
J Lome, for the third intervener
No appearance, for the fourth intervener
B Lomai, for the fifth intervener

2 November, 2012

1. BY THE COURT: Before the Court are four applications for costs that have been filed after determination by this Court of a Special Reference under Section 19 of the Constitution regarding the appointment of Sir Paulias Matane as Governor-General. The Reference was determined on 10 December 2010 by the Court giving its opinion on the eight questions referred to it and making declarations and orders to the effect that Sir Paulias' appointment was unconstitutional and invalid and that a meeting of the Parliament be called to nominate the next Governor-General (Supreme Court Reference No 4 of 2010; Special Reference by the Morobe Provincial Executive (2010) SC1085).

2. On 16 December 2010, one of the parties to the Reference, the second intervener, the National Parliament, filed an application under the slip rule, seeking variation of the Court's orders. On 21 December 2010, we dismissed the slip rule application for being incompetent, unmeritorious and an abuse of process and ordered the Office of the Speaker of the National Parliament to pay, in relation to the slip rule application, the costs of the referrer, the first intervener and the fifth intervener, on a solicitor-client basis. We also ordered that the question of costs in relation to the substantive Section 19 Reference remained open, pending an application for costs by any party to the Reference (Supreme Court Reference No 4 of 2010; Special Reference by the Morobe Provincial Executive (2010) SC1089). The four applications we are now dealing with were subsequently filed.

3. The parties to the reference were:

•	the referrer, Morobe Provincial Executive;

•	the first intervener, Mr Ronald Rimbao (an unsuccessful candidate for nomination);

•	the second intervener, the National Parliament;

•	the third intervener, Sir Pato Kakaraya (an unsuccessful candidate for nomination);

•	the fourth intervener, the Attorney-General;

•	the fifth intervener, Sir Makena Geno (an unsuccessful candidate for nomination).

4. The first, third and fifth interveners generally supported the propositions advanced by the referrer and those propositions were largely upheld by the Court. We decided seven of the eight questions in the manner proposed by those parties. The second and fourth interveners opposed the propositions advanced by the other parties, and the Court rejected absolutely the propositions advanced by them.

5. The applications for costs have been filed by the referrer and the first, third and fifth interveners. All but one of those parties seeks an order for costs against both the second and fourth interveners; the exception being the first intervener, who seeks costs only against the second intervener.

6. The second intervener, the National Parliament, opposed all applications arguing that it is not appropriate given the special and unique nature of a Section 19 reference to order costs against any of the parties and that it is contrary to public policy to order costs against the National Parliament. The fourth intervener, the Attorney-General, made no appearance at the hearing of the applications.

7. We consider that all the applications for costs can be determined by addressing three issues:

1	Is it appropriate to award costs in a Section 19 reference?

2	What considerations should be taken into account when deciding whether to award costs?

3	How should the discretion be exercised in this case?

1	IS IT APPROPRIATE TO AWARD COSTS IN A SECTION 19 REFERENCE?

8. The Supreme Court is a superior court of record and has power under the underlying law and Section 155(4) of the Constitution to award costs at its discretion in any proceedings before it of any nature (Don Pomb Pullie Polye v Jimson Sauk and Electoral Commission (1999) SC651, William Moses v Otto Benal Magiten (2006) SC875, Air Traffic Controllers Association v Civil Aviation Authority (2009) SC1031). This includes a Section 19 Special Reference. The 2010 amendments to the Supreme Court Rules, which introduced a new Order 12 (costs), regulate the exercise of the power to order costs, but the power to award costs as part and parcel of the exercise of the Court's judicial functions has always existed.

9. The Supreme Court has already determined the question of the appropriateness of making costs orders in Section 19 References, in at least three cases. In Supreme Court Reference No 1 of 2000 Re Validity of Value Added Tax Act (2002) SC693 the referrer, the Morobe Provincial Executive, was awarded the costs of the reference which resulted in an Act of the Parliament being declared unconstitutional. In Supreme Court Reference No 3 of 2006; Reference by Fly River Provincial Executive (2007) SC918 the court awarded costs of a successful application to strike out a Reference (on the ground of non-compliance with the Supreme Court Rules) to the intervener which had moved the application, against the referrer. Likewise in Reference by the Attorney-General and Principal Legal Adviser to the National Executive (2010) SC1078 the Court, upon upholding an objection by an intervener to the competency of a Section 19 Reference (on the ground of abuse of process) ordered that the referrer pay all of the intervener's costs of the reference on a party-party basis.

10. So it is appropriate to award costs in a Section 19 Reference or put another way there is nothing in the special and unique nature of a Section 19 Reference to make it inappropriate to award costs.

2	WHAT CONSIDERATIONS SHOULD BE TAKEN INTO ACCOUNT WHEN DECIDING WHETHER TO AWARD COSTS?

11. We endorse what was held by the Supreme Court in the Fly River case:

Though the Section 19 reference procedure is unique there is no reason that the general rule that costs should follow the event ought not apply.

12. That this is the proper approach to take is reinforced by Order 12, Rule 15 (costs reserved) of the Supreme Court Rules, which states:

Where the costs of an application or other proceeding are reserved by the Court or a Judge, the costs so reserved shall follow the event unless the Court or Judge otherwise orders.

13. In applying the rule of thumb that costs follow the event, we consider that the Court should identify the party or parties primarily responsible for 'the event' and the party or parties primarily responsible for opposing it; and then award costs to the former against the latter, subject to taking into account any special considerations that would warrant a departure from the general rule. It might be the case, for example, that a party to the reference has made a significant contribution to the proper determination of the reference (even though its submissions may not have ultimately been upheld). Or a party might have been declared by the Court to have acted unconstitutionally. Any party guilty of an abuse of process would not normally be expected to obtain the benefit of a costs order.

14. It must be emphasised that the decision of the Court whether to make an order for costs and if so to determine the terms of the order are matters for the exercise of discretion. No party is entitled to costs.

3	HOW SHOULD THE DISCRETION BE EXERCISED IN THIS CASE?

15. Here, 'the event' was the determination of eight questions that formed the subject of the Reference, seven of which were decided substantially as proposed by the referrer and contrary to the propositions advanced by the second intervener (the National Parliament) and the fourth intervener (the Attorney-General).

16. The party primarily responsible for that event was the referrer and the parties primarily responsible for opposing it were the second and fourth interveners.

17. Application of the rule of thumb as to costs would result in the second and fourth interveners being ordered to pay the referrer's costs. Are there any special considerations to warrant departure from that rule of thumb? No. We have considered the position of the first, third and fifth interveners. They were on the winning side in that they largely supported the referrer. But frankly they added little value to the quality of the jurisprudential analysis that was required to determine the Reference. They had no right of appearance. They were conferred a privilege by being granted leave to intervene. They had an interest in the outcome of the Reference as they were unsuccessful candidates. Their bona fides is not in question. With the benefit of hindsight, however, their intervention was unnecessary. We consider that there can be disadvantages in allowing interveners to join proceedings of this nature. We agree with the reservations expressed by Davani J in Reference Pursuant to Section 18(1) of the Constitution by Igo Namona Oala & Oala Moi (2011) SC1128 about the Court perhaps being overly liberal in the past in permitting interveners to join constitutional references. Her Honour doubted the utility of allowing persons to intervene when all that they would be doing would be repeating submissions of the principal party. We share her Honour's concerns, and we consider that they can be given effect in the present case by refusing the applications for costs of the first, third and fifth interveners.

18. The fact that the second intervener, the National Parliament, was found to have acted unconstitutionally in a number of respects and that the fourth intervener, the Attorney-General, had not prevented unconstitutionality, reinforces our view that it is in the interests of justice that they bear the referrer's costs.

CONCLUSION

19. Application of the rule of thumb that costs follow the event results in the conclusion that the second and fourth interveners should pay the referrer's costs. There are no special circumstances to warrant departure from that rule. Costs will be on a party-party basis.

ORDER

(1)	The referrer's application for costs is granted.

(2)	The 1st, 3rd and 5th interveners' applications for costs are refused.

(3)	The 2nd and 4th interveners shall pay the referrer's costs of the entire Reference, on a party-party basis, to be taxed, if not agreed.

(4)	The 1st, 3rd and 5th interveners shall bear their own costs.

Judgment accordingly.
_____________________

Manase Lawyers: Lawyers for the Referrer
Ame Lawyers: Lawyers for the 1st Intervener
Kelly Naru Lawyers: Lawyers for the 2nd Intervener
Greg Manda Lawyers: Lawyer for the 3rd Intervener
Lomai & Lomai Attorneys: Lawyers for the 5th Intervener