SC1402

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA 110 OF 2012

BETWEEN:

PNG POWER LIMITED
Appellant

AND:

RALPH GURA, ALBERT UKURA, YARI BAIWE
and all officers and members of Arona Valley Landowners
Association Inc and all people of Agarabi, Kainantu, Obura,
Wonenara District and Yonki, Arona Valley Area, Eastern
Highlands Province
Respondents

Waigani: Salika DCJ, Gabi and Hartshorn JJ
2013: December 18th,
2014: December 5th

Appeal against judgment entered pursuant to Order 22 Rule 62 National Court Rules – exercise of discretion 

Cases cited:

Tolom Abai and Ors v. State (1998) N1762
Abai v. Independent State of Papua New Guinea (2000) SC632 
Curtain Bros (PNG) Ltd v. UPNG (2005) SC788 
State v. Sam Akoita and Ors (2009) SC977 
Isaac Lupari v. Sir Michael Somare (2010) SC1071 
Ron Napitalai v. PNG Ports Corporation Ltd and Ors (2010) SC1016 

Counsel:

Mr. J. Brooks, for the Appellant 
Mr. L. Manua, for the Respondents

5th December, 2014

1. SALIKA DCJ and HARTSHORN J: This appeal was heard on 18th December 2013 before a Supreme Court constituted by Salika DCJ, Gabi J and Hartshorn J. The Court reserved its decision. On 1st August 2014 Gabi J died. Pursuant to s. 3 (2) Supreme Court Act, after being requested to inform the Court of their position both parties agreed that the remaining judges should continue to hear the appeal. We now give the judgment of the Court.

2. This is an appeal against a National Court decision that entered judgment in the sum of K349, 218.00 against the appellant. That sum had been certified as the costs to be paid by the appellant following a taxation. The appeal is opposed by the respondents.

Background

3. The primary judge at the National Court in Madang ordered amongst others, that the contemnors were found not guilty of the charge of contempt and the costs of the hearing were awarded to the contemnors on a party party basis to be agreed if not taxed. The contemnors were Messrs Ralph Gura, Albert Ukura and Yari Baiwe.

4. Following a taxation of the costs by a taxing officer at the National Court at Waigani, the taxing officer issued a certificate of taxation in which he certified that he taxed the contemnors' costs in the sum of K 349, 218.00.

5. The contemnors/respondents applied by notice of motion for judgment and following an inter partes hearing the primary judge gave an extempore decision and entered the judgment that is now the subject of this appeal.

Grounds of appeal

6. The grounds of the appeal in essence are that the facts and circumstances of this matter indicate that the primary judge ignored relevant considerations, and even in the absence of an identifiable error by the primary judge, the resulting judgment is manifestly unjust in the circumstances such that an error can be inferred in the exercise of the primary judge's discretion.

7. The respondents contend that the appeal should not be upheld as amongst others:

a)	the appellant did not file a motion within time pursuant to Order 22 Rule 60 National Court Rules to review the decision of the taxing officer.

b)	a lawyer's negligence is not a sufficient reason to set aside taxed costs.

c)	the appellant being a body corporate has vast resources at its disposal and therefore the non-compliance with Order 22 Rule 60 National Court Rules was not excusable.

d)	the primary judge properly exercised his discretion to convert taxed costs into a judgment pursuant to Order 22 Rule 62 National Court Rules.

8. That the primary judge has a discretion under Order 22 Rule 62 National Court Rules is acknowledged by him in his extempore ruling when he notes at p148 Appeal Book that, "the court may – may on motion direct the entry of such judgment for the cost as the nature of the case requires" and then "So, maybe there is a - well, there is discretion there."

9. The respondents have not taken issue with this and have not given a notice of contention in that respect. We agree with the primary judge that the wording of Order 22 Rule 62 National Court Rules does provide a discretion to the Court. We also note that this is the view of the Supreme Court in Abai v. Independent State of Papua New Guinea (2000) SC632. The fact that the appellant did not make an application to review under Order 22 Rule 60 National Court Rules does not in our view preclude the exercise of discretion under Order 22 Rule 62 but is a matter that may be considered in the exercise of that discretion.

10. As to the approach to be taken by an appellate court in considering an appeal from a discretionary judgment, the appellant relied upon amongst others, the following passage from the Supreme Court decision of Curtain Bros (PNG) Ltd v. UPNG (2005) SC788:

"The appellant Court will not interfere with a discretionary judgment on a procedural matter within its jurisdiction, except where the exercise of that discretion is clearly wrong. A discretionary judgment may be set aside if an identifiable error occurred in the exercise of discretion. Alternatively, it may be set aside where there is no identifiable error, but the resulting judgment or order is "unreasonable or plainly unjust" and such that an error can be inferred. These principles are well established. We adopt a passage from Kitto J in the Australian High Court case of Australia Coal and Shale Employees' Union v The Commonwealth (1956) 94 C.L.R. 621 at p.627, which was adopted by Clarkson J. in Breckwoldt & Co. (N.G.) Pty Ltd v. Gnoyke [1974] PNGLR 106 at p.112 –113:

"The decision by the primary judge to stay the action was made in exercise of a judicial discretion and I accept that in those circumstances the principles on which this Court should act are as described by Kitto J. in Australian Coal and Shale Employees' Union v The Commonwealth ... the true principle limiting the manner in which appellate jurisdiction is exercised in respect of decisions involving discretionary judgements is that there is a strong presumption in favour of the correctness of the decisions appealed from, and that that decision should therefore be affirmed unless the court of appeal is satisfied that it is clearly wrong. A degree of satisfaction to overcome the strength of the presumption may exist where there has been an error which consists in acting upon a wrong principle, or giving weight to extraneous or irrelevant matters, or failing to give weight or sufficient weight to relevant considerations, or making a mistake as to the facts. Again, the nature of the error may not be discoverable, but even so it is sufficient that the result is so unreasonable or plainly unjust that the appellate court may infer that there has been a failure properly to exercise the discretion which the law reposes in the court of first instance…"

11. This passage was also cited with approval by Gabi J and Hartshorn J in their judgments in Isaac Lupari v. Sir Michael Somare (2010) SC1071 and in the Supreme Court decisions of State v. Sam Akoita and Ors (2009) SC977 and Ron Napitalai v. PNG Ports Corporation Ltd and Ors (2010) SC1016.

Exercise of discretion by the primary judge

Appellant's submissions

12. The appellant submits that the primary judge had material before him that was sufficient for him to form the view that the costs claimed in the motion for judgment were not reasonable, were not supported by material evidence and by claiming such costs the contemnors' were attempting to profit.

13. This is so submits the appellant as the material before the primary judge showed that:

a)	the contemnors' only had legal representation at the final hearing,

b)	there were not hundreds of supporters at the direction hearings or the substantive hearing,

c)	the matter only occupied approximately one hour of court time,

d)	the matter only involved three named contemnors.

e)	the bill of costs claimed more than K708, 000, approximately K690,000 being disbursements for allegedly hiring buses, hotel accommodation and meals, whereas the taxed costs amounted to K349, 000. As such, it could be inferred that approximately K330,000 of the taxed costs must have been claimed disbursements.

14. In the circumstances the disbursements could not be reasonable as the claim only involved three individuals. It is not reasonable to claim the costs of bringing hundreds of supporters in vehicles, housing them in hotels and buying them meals. Such costs cannot be reasonably claimed. Only the costs of the three contemnors themselves could be reasonably claimed, not the costs of hundreds of people.

15. Further, counsel for the appellant/plaintiff submitted to the court repeatedly and handed up written submissions to the court to the effect that at the taxation the contemnors' lawyer provided no material evidence to support the disbursements they claimed. This is reinforced by the affidavit of Mr. Yari Baiwe in which Mr. Baiwe claims he incurred these costs, but he did not provide any evidence of such costs.

16. Further, counsel for the contemnors filed affidavits and made submissions to the effect that his clients were simple grassroots people with limited financial means. If this is the case which is not disputed, it can be legitimately questioned how those persons with limited means were able to pay more than K700, 000 to bring their supporters to court and accommodate them in hotels and feed them meals.

17. The appellant submits that the facts of this matter indicate that the costs and disbursements claimed were a fabrication and in the exercise of his discretion in entering judgment, the primary judge did not properly consider the material facts and circumstances of the matter. 

18. An example of this is that in the exercise of his discretion, the primary judge could have requested the contemnors for proof of the costs and disbursements claimed.

19. Finally, as to the costs and disbursements claimed, the appellant submits:

a)	that the costs of bringing hundreds of supporters to court and putting them in hotels and feeding them are not reasonable costs and are not allowable at all, even if they were incurred (which is denied); and

b)	such costs are either allowable, or not. Such costs are not partially allowable. Either the costs claimed are reasonable and supported by evidence, or not. The fact that the taxation office awarded K349, 000 costs out of a total of K708, 000 is indicative of the taxation officer merely "plucking" an amount out of the air as submitted by counsel for the appellant before the primary judge, rather than a proper taxation based on the reasonableness of the costs claimed and a proper consideration of the evidence as to the actual costs claimed.

20. The appellant concedes that it ought to have filed an application pursuant to Order 22 Rule 60 National Court Rules to review the taxation and that it did not do so. Notwithstanding this, the judgment now appealed is plainly unreasonable and unjust and it can be inferred that there was a failure to properly exercise the discretion of the Court by the primary judge.

21. The appellant relies upon the principles referred to in Curtain Bros (PNG) Ltd (supra) and submits that they are applicable here as it is clear, it is submitted, that the primary judge did not consider all relevant matters or ignored relevant matters.

22. Alternatively, even if there has been no identifiable error, the judgment appealed is unreasonable or plainly unjust and it can be inferred that the primary judge erred in the exercise of his discretion.

Respondents' submissions

23. The respondents submit that the primary judge did not err in the exercise of his discretion and was correct in directing the judgment that he did.

Consideration

24. From a perusal of the transcript of the primary judge's reasons for his decision, the primary judge states that in the absence of authority given to him by counsel he would take into account three considerations as well as the overriding consideration of the interests of justice. The three considerations were the apparent irregularity in the manner the taxation was conducted, that the appellant had the right to apply to review the taxation officers decision but did not, and that the amount of K349, 000 taxed costs appeared on the high side. 

25. After considering those three considerations together, the primary judge determined that the predominant consideration is that the appellant had sat on the matter and had not enforced its rights and was guilty of dilatory conduct. He then takes into account that the appellant PNG Power Ltd, is a large government owned corporation, whereas the contemnors are landowners and relatively unsophisticated people and that the interests of justice lie in favour of entering judgment given all of those considerations.

26. As to the discretion in Order 22 Rule 62 National Court Rules we note that the only indication in the Rule as to how the discretion is to be exercised is by the words, "as the nature of the case requires."

27. In our view the primary judge should have given consideration to whether the amount of the taxed costs for which judgment was sought:

a)	was in accordance with what the law entitles a party to claim for costs and disbursements on a party party basis. We note Order 22 Rule 24 (2) National Court Rules which provides for costs to be allowed as 	were necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being taxed. 

b)	were reasonable in the circumstances: Tolom Abai and Ors v. State (1998) N1762,

c)	were supported by material evidence,

d)	was an attempt by the contemnors to profit.

28. The primary judge did state that he thought the amount claimed, "quite frankly…… appears on the high side" particularly given the matter occupied, "no more than one hour of the Court's time". To the extent that the primary judge did not consider the amount claimed by reference to the four matters referred to above, we of the respectful view that he erred. 

29. We mention further that as the contemnors were the parties whose costs were being taxed it was their costs that should be allowed as were necessary or proper for the attainment of justice or for enforcing or defending their rights. This in our view does not include the costs of transporting, accommodating and catering for supporters. The primary judge erred in the exercise of his discretion in our respectful view in allowing a judgment to be entered for a sum that consisted of such costs. Taxing officers should ensure that such costs should not be allowed in a taxation of costs. 

30. As to the primary judge determining that the predominant consideration after considering his initial three considerations, was that the appellant sat on the matter and did not enforce its rights, we note that Order 22 Rule 60 (1) National Court Rules which provides the right to apply for review, also uses "may" in its wording. It is arguable that a person the subject of a cost certificate may rely upon the discretion to be exercised when judgment is sought, to question the amount certified or the certification and it is not mandatory to apply for a review if he is dissatisfied. We reject the contention of the respondents' that the failure of the appellant to apply for a review affects or precludes the court from exercising its discretion under Order 22 Rule 62 National Court Rules. To the extent that the primary judge gave the weight that he did to the appellant not enforcing its rights under Order 22 Rule 60 National Court Rules, we are of the respectful view that he erred. 

31. We also mention that the primary judge appears to have taken into account that the appellant is a large government owned corporation as distinct from the contemnors being landowners and relatively unsophisticated people, as a consideration in favour of entering judgment for the amount taxed. In our view this is not a proper consideration in the context of the interests of justice. The interests of justice apply to all parties. A party whether large, or corporation or government owned should receive the same consideration as any other party.

32. For the above reasons we of the view that the appeal should be allowed.

33. If however, the primary judge did not err as we have found, we are of the view that in the absence of an identifiable error, the judgment appealed is manifestly unjust in the circumstances for the reasons submitted by the appellant, such that an error can be inferred in the exercise of the discretion by the primary judge.

34. Given the above it is not necessary to consider the application to tender fresh evidence.

Orders

35. The Orders of the Court are:

a)	this appeal is allowed.

b)	the orders by way of judgment of the National Court at Madang made on 23rd August 2012 are quashed and set aside.

c)	the appellant is granted leave pursuant to Order 22 Rule 60 (2) 	National Court Rules to file an application for review of the Certificate of Taxation in proceedings OS 393 of 2010.

d)	each party shall bear their own costs of the appeal.
____________________________________________________________
Gadens Lawyers: Lawyers for the Appellant 
Rageau Manua & Kikira: Lawyers for the Respondent