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National Court of Papua New Guinea |
PAPUA NEW GUINEA
IN THE NATIONAL COURT OF JUSTICE
OS NO 281 OF 2007
JOSHUA GIRU
Plaintiff
V
WILLIE EDO
First Defendant
CLEMENT NAKMAI
Second Defendant
Kimbe: Cannings J
2007: 6, 13, 25 July
COSTS – "wasted costs orders" – whether a party's lawyers should be directed to repay to their client costs that their client has been ordered to pay to another party – National Court Rules, Order 22, Rule 65 (personal liability of solicitor for costs).
The National Court dismissed a case because of abuse of process by the plaintiff, ordered the plaintiff to pay the defendants' costs and gave the plaintiff's lawyers an opportunity to be heard on whether they should be directed to repay those costs to the plaintiff. Order 22, Rule 65(1)(b) of the National Court Rules allows the court to give such a direction, commonly known as a 'wasted costs order', where, eg, costs are incurred improperly or without reasonable cause or are wasted. This is a ruling on whether the plaintiff's lawyers should be subject to a wasted costs order.
Held:
(1) When deciding whether to make a wasted costs order against a lawyer or law firm, four questions should be considered:
- (a) Have costs been incurred improperly or without reasonable cause or wasted etc?
- (b) Are the lawyers responsible?
- (c) Is it a clear case of the lawyers acting improperly, unreasonably or negligently?
- (d) Would it be just to direct the lawyers to repay their client's costs?
(2) A finding of abuse of process against a party who is represented by a lawyer will usually mean that costs have been incurred improperly or without reasonable cause. The reasonable inference to draw in the absence of evidence to the contrary is that ultimate responsibility for the incurring or wasting of costs rests with the lawyer.
(3) In the present case:
- (a) costs were incurred without reasonable cause;
- (b) the plaintiff's lawyers were responsible;
- (c) it was not a clear case;
- (d) it would not be just to make a wasted costs order, given the peculiar and unique history of the case and the public interest that was served in resolving confusion surrounding the position of Provincial Administrator of West New Britain.
(4) Accordingly, the plaintiff's lawyers were not ordered to repay their client's costs.
Cases cited
The following cases are cited in the judgment:
Don Pomb Pullie Polye v Jimson Sauk Papaki and Electoral Commission (2000) SC651
Jacob Sarapel v Fred Kulumbu (2003) N2405)
Peter Aigilo v The State (2001) N2102
Tribal Plumbers v Tropical Habitat Ltd (2001) N2067
RULING
This is a ruling on whether lawyers should be directed to repay their client's costs.
Counsel
R G Maguire, by written submission, for the plaintiff's lawyers
P Kingal, for the defendants
25th July, 2007
1. CANNINGS J: This is a ruling on whether a law firm, Amet Lawyers, should be directed to pay the legal costs that their client – the plaintiff, Joshua Giru – has been ordered to pay to the defendants, Willie Edo and Clement Nakmai, in a case commenced by Mr Giru. The case was about Mr Giru's appointment as Provincial Administrator of West New Britain. Last year, in a separate case, Mr Edo successfully challenged Mr Giru's appointment. The National Court quashed Mr Giru's appointment and ordered that Mr Edo be acting Provincial Administrator. Mr Giru appealed against that decision to the Supreme Court but his appeal was dismissed for want of prosecution. He then commenced fresh proceedings in the National Court, seeking a declaration that he was the lawfully appointed Provincial Administrator.
2. I heard the case on 15 June 2007 and handed down judgment on 6 July 2007, refusing all of Mr Giru's claims for relief and dismissing the proceedings. I held that there was an abuse of process as Mr Giru was engaging in a multiplicity of proceedings. He was having a 'second bite at the cherry' after his appeal against the National Court decision to quash his appointment was dismissed. I concluded that the defendants had been brought back into court needlessly and the proceedings were frivolous in the sense that Mr Giru abused the processes of the court and started a case that had little or no chance of success. A number of important and interesting issues had been raised but in the wrong forum and at the wrong time. All of Mr Giru's grievances should have been prosecuted before the Supreme Court. I stated that it was his fault, or more correctly, it appears, that of his lawyers, that things have not worked out differently. I ordered costs against Mr Giru then indicated that I was considering directing Mr Giru's lawyers to repay those costs to him, under Order 22, Rule 65(1)(b) of the National Court Rules, which allows the court to give such a direction where, eg, costs are incurred improperly or without reasonable cause or are wasted. I said that I would give Mr Giru's lawyers a reasonable opportunity to be heard on that issue and set down a hearing for that purpose seven days after handing down the judgment.
THE HEARING OF 13 JULY 2007
3. Mr Kingal, who represented the defendants in the trial, made an appearance and submitted that a direction should be made against Amet Lawyers. Mr Giru was present but had little to say other than to confirm that his lawyers were unable to attend. There was no appearance by Amet Lawyers, which was not unexpected as Mr Maguire, of Amet Lawyers, who represented Mr Giru at the trial, informed the court immediately after the judgment was delivered that he would be unavailable. Amet Lawyers did, however, file a written submission, arguing against any direction.
ISSUES
4. Mr Kingal raised two issues in addition to the central issue of whether I should make a direction against Amet Lawyers. Consequently there are three issues to determine:
1 SHOULD THE COURT CONSIDER THE WRITTEN SUBMISSION FILED BY AMET LAWYERS?
5. Mr Kingal submitted that I should not look at their written submissions as no lawyer has appeared to present them. Amet Lawyers were being discourteous and presumptuous by not attending a hearing that was specially convened for their benefit, he suggested.
6. It is true that the hearing was specially convened as after I handed down the judgment on the morning of Friday 6 July 2007 I suggested that Amet Lawyers be heard that afternoon. It was only when Mr Maguire requested more time for them to consider their position and research the law that I set down the following Friday for the hearing. However, I do not agree that Amet Lawyers have been discourteous or presumptuous, at least not to the extent that I should refuse to consider their submission. Mr Maguire informed the court on 6 July that he would not be available on 13 July and might face some difficulty in getting someone to stand in for him. I suggested that perhaps he could get a local lawyer to appear on behalf of his firm, and it was left at that. It would have been preferable for Amet Lawyers to have arranged for someone to represent them, if only to formally tender their submission. That would have been a more professionally courteous procedure; and I suggest that that should be done in future if a similar situation arises. But it is Amet Lawyers' right to be heard and if they choose to exercise their right by only filing a written submission, I will not hold it against them. I have therefore considered their submission.
2 SHOULD COSTS OF 13 JULY BE ADDED TO THE COSTS AWARDED ON 6 JULY?
7. Mr Kingal argued strongly that the costs of the hearing of 13 July should be awarded against Mr Giru or Amet Lawyers, in addition to the costs of the trial, which have already been awarded against Mr Giru; and the costs should be added irrespective of the outcome. This was because the 13 July hearing was part and parcel of the trial proper and only became necessary as Mr Maguire said he was not ready to proceed on the afternoon of 6 July. He should have been ready, Mr Kingal submitted, as he had carriage of the matter and a good lawyer would plan for these sorts of contingencies.
8. I suppose a good lawyer is always prepared for just about everything. But the failure of a lawyer to prepare himself to defend a costs order against his firm does not mean that he is not a good lawyer. I granted Mr Maguire's application for an adjournment of the costs hearing. As it has turned out I did so for good reasons as Mr Maguire has filed a well researched written submission, which raises a number of points I have had to consider when deciding whether to make a direction against his firm. So I reject this part of Mr Kingal's submission. Costs for the 13 July hearing will depend on the outcome of the hearing.
3 SHOULD AMET LAWYERS BE DIRECTED TO REPAY MR GIRU'S COSTS?
9. This is the central issue and it can only be resolved by dissecting Order 22, Rule 65(1)(b) of the National Court Rules into its elements and considering the leading case, Don Pomb Pullie Polye v Jimson Sauk Papaki and the Electoral Commission (2000) SC651. Order 22, Rule 65(1)(b) states:
Where costs are incurred improperly or without reasonable cause, or are wasted by undue delay or by any other misconduct or default, and it appears to the Court that a solicitor is responsible (whether personally or through a servant or agent), the Court may, after giving the solicitor a reasonable opportunity to be heard ... direct the solicitor to repay to his client costs which the client has been ordered to pay to any other party.
10. The rule says that it is appropriate to direct lawyers to repay their client's costs where two preconditions are met:
(A) costs are:
(B) it appears to the Court that a lawyer is responsible (whether personally or through a servant or agent) for the costs being incurred improperly or without reasonable cause etc.
11. In Polye's case the Supreme Court made the following remarks about directions under Order 22, Rule 65(1), which were labelled 'wasted costs orders':
12. To those principles I would add two highlighted by Mr Maguire in his submission:
The present case
13. In light of the above principles I am going to pose four questions:
(1) Have costs been incurred improperly or without reasonable cause or wasted etc?
(2) Are Amet Lawyers responsible?
(3) Is this a clear case of Amet Lawyers acting improperly, unreasonably or negligently?
(4) Would it be just to direct Amet Lawyers to repay their client's costs?
14. As to (1), I consider that costs were incurred without reasonable cause as the proceedings were an abuse of process, the defendants were brought back into a court needlessly and the case was frivolous as it had little or no chance of success. A finding of abuse of process against a party who is represented by a lawyer will usually (but agreeing with Mr Maguire's submission – not necessarily) mean that costs have been incurred improperly or without reasonable cause.
15. As to (2), I hold Amet Lawyers responsible. The reasonable inference to draw in the absence of evidence to the contrary is that ultimate responsibility for incurring costs without reasonable cause rests with the lawyer. Clients in the position of Mr Giru rely on their lawyers for competent, well researched and considered legal advice. I infer, given that Amet Lawyers also represented Mr Giru in the Supreme Court appeal, that Mr Giru commenced the new case in the National Court on the advice of his lawyers.
16. As to (3), though the conduct of Amet Lawyers comes close to the borderline, this is not, for the reasons I set out in (4), a clear case of improper, unreasonable or negligent conduct by a law firm.
17. As to (4) – the crucial issue of whether it would be just to make Amet Lawyers repay their client's costs – I have been persuaded by Mr Maguire's submission that the sort of abuse of process that occurred, even though the lawyers were responsible for it, did not fall within the category that has so far in PNG attracted a wasted costs order. No one has suggested that Amet Lawyers engaged in dishonest or unethical conduct. This appears to be a case of lawyers searching for a novel, unprecedented, albeit misconceived, way of reviving proceedings rather than flagrantly wasting the court's time and their client's costs. Another point raised by Mr Maguire has been telling. There has been considerable uncertainty in West New Britain over the position of the Provincial Administrator since Mr Giru's appointment in June last year. As a result of the court proceedings commenced by Mr Edo, the position changed hands three times. Mr Edo commenced his proceedings in Waigani, which, as I remarked at the start of the present case, was regrettable as it meant that the People of the Province were not fully informed of what was happening in the courts. When the Supreme Court dismissed Mr Giru's appeal in May this year, no written judgment was handed down and this fuelled the confusion generated by the previous court proceedings. I see merit in Mr Maguire's submission that despite the abuse of process there was a public interest served by the present case in that the People of the Province now have a clear understanding of what has happened. There is now by dint of the judgment I handed down on 6 July 2007 a reasoned explanation of how and why Mr Edo is the Acting Provincial Administrator. The whole saga is perhaps unique. In these circumstances, I am satisfied that it would not be just to direct Amet Lawyers to repay their client's costs. Having given them an opportunity to be heard, I will not order Amet Lawyers to repay Mr Giru's costs.
ORDER
18. The order of the court will be:
(1) The order for costs made on 6 July 2007 will remain in force, and no direction is given to the plaintiff's lawyers to repay the plaintiff's costs.
(2) The parties and their lawyers will bear their own costs of the hearing of 13 July 2007.
_____________________________________________________
Amet Lawyers: Lawyers for the plaintiff
Williams Attorneys: Lawyers for the first Defendant
Pius Kingal & Associates: Lawyers for the Second Defendant
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