PacLII Home | Databases | WorldLII | Search | Feedback

National Court of Papua New Guinea
You are here:  PacLII >> Databases >> National Court of Papua New Guinea >> 2017 >> [2017] PGNC 78

Database Search | Name Search | Recent Decisions | Noteup | LawCite | Download | Help

Tininga Ltd v Nolka Ltd [2017] PGNC 78; N6727 (13 April 2017)

N6727

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]


OS (JR) NO. 130 OF 2015


BETWEEN:
TININGA LIMITED
First Plaintiff


AND:
PUMA ENERGY LIMITED
Second Plaintiff


AND:
NOLKA LIMITED
First Defendant


AND:
RAGA KAVANA as Registrar of Titles
Second Defendant


AND:
BENNY ALLEN as MINISTER FOR LANDS AND PHYSICAL PLANNING
Third Defendant


AND:
CHAIRMAN OF THE PNG LAND BOARD
Fourth Defendant


AND:
INDEPENDENT STATE OF PAPUA NEW GUINEA
Fifth Defendant


Waigani: Nablu, J
2017: 10 March, 13 April


JUDICIAL REVIEW– Substantive judicial review settled by consent – the effect is that the plaintiff’s judicial review application was upheld – the question of costs was reserved and argued.
PRACTICE AND PROCEDURE – Costs – Solicitor-Client basis – the general rule is that costs follow the event - whether costs can be awarded on a solicitor-client basis – whether certification of overseas counsel appropriate –objection to the certification of overseas counsel’s costs upheld – conduct of the respondents was blameworthy and prolonged the proceedings – costs awarded on a solicitor – client basis.


Cases cited:


Latham v. Henry Peni (1997) PNGLR 435
Benny Balepa v. The Commissioner of Police and the Independent State of Papua New Guinea (1995) N134
Gulf Provincial Government v. Baimuru Trading Pty Ltd [1998] PNGLR 311
PeterAigilo v. The State (2001) N2102
Don PombPolye v. Jimson Sauk Papaki [2000] PNGLR 166
Bank of Hawaii (PNG) Ltd v. PNG Banking Corporation (2001) PNGNC 98
Jordan v. Edwards [1979] PNGLR 420
Mc Vie v. Woodward [1990] PNGLR 305
POSF Board v. Sailas Inmanakuan (2001) SC 677.


Counsel:


H.Leahy, for the First Plaintiff
H.Kevau, for the Second Plaintiff
W. Mininga, for the First Defendant
E.Bua, for the Second, Third, Fourth and Fifth Defendant


13th April, 2017


1. NABLU, J: Before me is the first and second plaintiff’s application for costs to be awarded on a solicitor - client basis and the first plaintiff’s application for certification of overseas counsel’s costs.


2. By way of background, the first plaintiff was granted leave on 23rd April 2015 to review the decision of the Registrar of Titles in regard to State Lease Volume 57 Folio 46, Portion 849, Dobel, Milinch Hagen, Fourmil Ramu, Western Highlands Province. The first plaintiff had purchased land from Puma Energy Ltd the registered title holder.


3. The contract of Sale of Land was concluded on or about 28th June 2013. The transfer instruments were registered on 5th November 2013.


4. Unbeknown to the first and second plaintiff, the first defendant had applied to the Secretary for Lands at that time on 14th February 2011 seeking available State Land for lease. The Department of Lands had informed the first defendant that Portion 848, Milinch Ramu, Mt Hagen, Western Highlands Province was available.


5. That land was allegedly forfeited on 19th May 2011 and then on 20th January 2012 the State purportedly granted the State Lease to the first defendant.


6. In the substantive judicial review the relief sought by the plaintiff pursuant to their notice of motion filed on 30th April 2015 was:


  1. Pursuant to Order 16 Rule 5 of the National Court Rules (leave having been granted) the plaintiff makes application for judicial review of the decisions of the defendants set forth below to be brought into the National Court and quashed or set aside:-
    1. the decision of the third defendant made on 19 May 2011 to forfeit the State Lease; and
    2. the decision of fourth defendant made on 20th January 2012 to grant a State Lease to the first defendant; and
    3. the decision of the second defendant made on 11th July 2013 to register the first defendant’s State Lease pursuant to Section 10 of Land Registration Act and then issue a certificate of title to the State Lease naming the first defendant as the registered proprietor.
  2. A mandatory order against the second defendant that the State Lease relative to Portion 849 MilinchRamuFourmil Hagen, Western Highlands Province and issued in favour of the first defendant as grantee or lessee be cancelled.
  3. Damages under Section 150 of the Land Registration Act (chapter 191).
  4. Such further or other relief as the Court deems appropriate;
  5. Costs.
  6. The matter was listed for hearing of the substantive judicial review application however on that day, the parties handed up consent orders which effectively settled the matter. The only issue for determination was the question of costs. The consent orders were endorsed by the Court. It is necessary for me to set out the terms of the consent orders:
    1. The first defendant is in possession of a defective certificate to title to the land described as Portion 849, Dobel, Milinch Hagen, Fourmil Ramu, Western Highlands Province being the whole of the land contained in State Lease volume 57 folio 46 and more particularly referred to in the affidavit of the Acting Registrar of Titles, Mr Yanjol Apin sworn 4th July 2016 and filed 5th July 2016 (the “Defective Title”).
    2. Within seven (7) days of today, the first defendant, namely Nolka Limited shall surrender the Defective Title to the Registrar of Titles, the second defendant named herein and the Registrar of Titles shall immediately after the surrender of the Defective Title copy to all the other parties or their lawyers such notice or letter of surrender showing receipt by the second defendant.
    3. Immediately upon receipt by the second defendant of the Defective Title, the second defendant shall nullify the same pursuant to Section 160(1)(a)(i) and Section 161 (1)(a) of the Land Registration Act and not less than 2 days after annulling the Defective Title he shall write and inform the first and second plaintiffs or their lawyers of the cancellation.
    4. The interim restraining orders made by the National Court and entered on 29th April 2015 shall immediately cease to have any further effect.
    5. The first defendant, its officers, servants and agents acknowledge that it has no right, title or interest in the land more particularly described as Portion 849, Dobel, Milinch Hagen, FourmilRamu, Western Highlands Province being the whole of the land contained in State Lease volume 57 folio 46.
    6. The question of the costs is reserved to a date to be set by the Court for further argument, submission and determination.
    7. The hearing of the questions of costs is listed for hearing and submissions by the parties on Friday 10th March 2017 at 9:30am.
    8. Counsels are at liberty to file their extracts of submissions before the hearing date.
    9. The time for the entry of these orders is abridged to the date of settlement by the Registrar which shall take place forthwith.

8. Parties fully argued the issue of costs. I have considered the oral and written submissions by the parties and now rule on the question of costs.


9. There are two legal issues for determination before the Court;


10. I will deal with the first issue of certification of overseas counsel costs first.


11. The first plaintiff submitted that the certification of overseas counsel is justified. The first plaintiff had engaged an overseas counsel namely, Ian Molloy to provide legal assistance in the event that the matter proceeded to a substantive hearing. The main reason for engaging counsel was that the first plaintiff did everything possible to ensure that the decision would be in its favour. The first plaintiff had expended a substantial amount of money, K4 million to be exact in purchasing the land from the second plaintiff and therefore it wanted to ensure that the first plaintiff’s interest was protected.


12. Mr Bua of counsel for the State, objected to the certification of overseas counsel costs and submitted that the test for considering whether the costs of overseas counsel should be certified was considered in the case of Bank of Hawaii (PNG) Ltd v. PNG Banking Corporation (2001) PNGNC 98. The Court set out the following considerations;


13. The law on certification of costs is provided for under Order 22 Rule 26(1)(b) of the National Court Rules. The fees, costs and expenses of overseas counsel may be allowed only if they are certified by the trial Judge.


14. The Supreme Court in the case of Jordan v. Edwards [1979] PNGLR 420 laid down the relevant principles to consider when determining the issue of certification of second or overseas counsel costs, as per Prentice CJ at page 421 stated that:


“When considering whether an exception should be made in terms of the court’s Rule- the court, I believe, should take into account as the principal factors - the difficulty of the case (in particular whether it involves complex matters of law); the nature and extent of the rights involved; the expertise reasonably required for the nature of the particular lis; whether the smallness of the profession and of the community might cause embarrassment to the employment of resident counsel; and above all the necessity of keeping costs as low as possible and access to advice as wide and as even as possible.”


15. In that case, the Supreme Court certified the costs of overseas counsel. In the case of Mc Vie v. Woodward [1990] PNGLR 305 at page 314, Amet J (as he then was) refused the certification of overseas counsel on the basis that the case was not a complex case that warranted assistance of overseas counsel. In Bank of Hawaii (PNG) Ltd v. PNGBC (supra), His Honour Justice Kandakasi, refused to certify overseas counsel costs and commented at page 15 that;


“We often speak of improving the level of advocacy and competence of Papua New Guinean lawyers and I believe that quickly resolving to the engagement of overseas counsel will not assist in that aspiration. Besides, I note that Papua New Guinean lawyers do not get a reciprocal treatment in Australia, where most of the overseas counsel come from. I believe the time has come for a critical look at the practice of certifying overseas counsel’s costs as a matter of cause.”


16. His Honour then went on to list the principles which I respectfully adopt at page 16;


“The principles laid down by the Supreme Court in Ronald Emanuel Jordan v. Glen Hamilton Edwards (supra) should be considered in every case and applied. Before there can be a certification of overseas counsel’s costs, the party applying for such certification must in my view show to the satisfaction of the Court the following;

  1. the issues presented in the case are important and complex;
  2. those issues have not been raised and considered in an earlier case in the country;
  3. there is no local experienced and capable lawyer to take on the case;
  4. the amounts involved are substantial;
  5. reciprocal and or meaningful arrangements are in place to impart skills and knowledge to a Papua New Guinean with a specified period; and
  6. if the overseas counsel concerned has appeared as counsel in a case before, he or she has in fact imparted skills and knowledge to a local lawyer or lawyers.

The above list is in no way exhaustive. A court may take other factors into account to determine whether or not to certify overseas counsel’s costs.”


17. When applying those principles to the present case, I am not persuaded that there was a need to engage an overseas counsel. I accept the State’s submissions. The issue for judicial review was not a complex issue. The issue was whether the mandatory statutory process under the Land Act was complied with? In particular did the Minister comply with Section 122 of the Land Act when forfeiting the second plaintiff’s State Lease. Such cases had been raised earlier in numerous judicial review applications over the years, in my view, there is nothing complex about this case. There were a number of issues like this, which were raised before this Court. Whether there was a substantial amount involved. The answer to that is yes, the first plaintiff had paid a substantial amount of money to purchase the land. However, whilst its an important consideration, the fact is that this review is centred around whether the Minister complied with the mandatory statutory process.


18. Mr Molloy had appeared before me on numerous occasions in other matters and he has been of great assistance, however, I have examined the Court endorsements on file for this matter and cannot confirm when Mr Molly had appeared and assisted the Court in this matter. The first plaintiff argued that he was engaged in anticipation of the substantive hearing. I am not persuaded by those submissions, the Court only has the discretion to certify the actual fees or costs of overseas counsel which have been incurred, the Rules are clear, the Court cannot certify anticipated or future costs. For that reason, I uphold the State’s objection. The plaintiff’s application for certification is refused.


19. Now turning to the issue of whether the defendants should pay the plaintiff’s costs on a solicitor – client basis.


20. Generally, costs follow the event and the awarding of costs is a discretionary matter (Order 22 Rule 4 of the National Court Rules). Order 22 provides for various types of costs which a Court has the jurisdiction to order. Party-party costs pursuant to Order 22 Rule 24, common fund basis (Order 22 Rule 32) and Trust basis (Order 22 Rule 33). The provision of the Rules that relate to solicitor–client costs or sometimes referred to as costs on an indemnity basis is provided for under Order 22 Rules 34 and 35 of the National Court Rules. Under the solicitor–client basis all costs are allowed except where it is unreasonable. However, if the costs are unreasonable they are allowed if they have been approved by the client (Order 22 Rule 35 of the National Court Rules).


21. Though discretionary, the Court should have regard to the nature of the case. In Latham v. Henry Peni (1997) PNGLR 435, Doherty J after considering that the defendant’s assault of the plaintiff on board an aircraft was unprovoked, ordered solicitor–clients costs.


22. The National Court in Benny Balepa v. The Commissioner of Police and the Independent State of Papua New Guinea (1995) N134 and Gulf Provincial Government v. Baimuru Trading Pty Ltd [1998] PNGLR 311, the Court ordered solicitor–client costs where the position taken by a party was baseless or without merit. For example filing a defence that has no merit or was not based on facts or law and it is merely a token position. Or where the proceedings were found to be vexatious, and an abuse of process; see PeterAigilo v. The State (2001) N2102.


23. The Supreme Court took a similar approach in Don PombPolye v. Jimson Sauk Papaki [2000] PNGLR 166. If an action is taken which has no merit or no basis in fact or law, the Court may exercise its discretion to order costs to be paid on a Solicitor – Client basis.


24. It is a well settled principle of law that costs is discretionary. When considering the issue of costs the general principle is that costs follow the event. The losing party should pay the winning party’s costs. Departure from the general rule is only warranted in exceptional cases.


25. In the present case, parties settled the matter on their own terms. The Court did not determine the issue of whether the statutory body, in this case the Lands Department exercised their powers within the confines of the law or complied with the mandatory statutory process under the Land Act.


26. Upon a close examination of the consent orders and the relief sought by the first plaintiff in their notice of motion. I am satisfied that the effect of the consent order is akin to or identical to the relief sought in the plaintiff’s notice of motion for substantive judicial review.


27. In other words, had the plaintiff pursued its’ application for judicial review he may have been entitled to the grant of that relief sought.


28. Therefore, I accept the plaintiff’s submission that costs follow the event and that the respondents should pay for their costs.


29. The first plaintiff and second plaintiff argued that the defendants should pay for the plaintiff’s costs of and incidental to the proceedings on a solicitor – client basis. The reason for this is because of the conduct of the defendants and its counsel. The defendants continued to defend the application, where the defence was not credible or without merit, which ultimately delayed the settlement of the matter and caused unnecessary litigation and expense upon the first plaintiff. The plaintiffs referred to the Supreme Court case of POSF Board v. Sailas Inmanakuan (2001) SC 677 to support its submissions. The first plaintiff submitted that the legal costs of the entire proceeding be paid by the defendants jointly and severally, on a full indemnity basis. The second plaintiff was joined as a party and was dragged into litigation which was unnecessary. They supported the first plaintiff’s submission.


30. Mr Leahy of counsel of the first plaintiff submitted that costs should be awarded on an indemnity basis in order to penalise the first defendant and the State for their misconduct. The plaintiff urged the Court to consider the discrepancies highlighted in the evidence filed that clearly indicated that the alleged forfeiture of Portion 849, Dobel in 2010 and 2011 or any time before 2015 did not occur.


31. The plaintiff referred this Court to the affidavits of Benjamin Samson and Yanjol Apin. At the hearing, I raised with counsel the issue about whether this Court should consider the affidavits referred to, when the matter was settled by consent and the defendants did not have the opportunity to test the evidence either by filing additional evidence or cross-examining the deponents.


32. This issue was fully argued by parties. The plaintiff argued that the affidavits were filed and that the Court can consider them. The defendants however argued that the issues between the parties were settled by way of consent therefore, the plaintiff cannot now rely on the affidavits which they did not have the opportunity to respond to.


33. I considered those submissions and weighed the different conflicting arguments and I conclude that the plaintiff can rely on those affidavits which were duly sworn and filed and would have been admissible evidence had the matter progressed to a substantive hearing.


34. It is clear that the first defendant’s conduct is highly questionable and blameworthy. Despite the fact that it had the affidavit of Benjamin Samson as earlier as 3rd December 2015, it still maintained its position which was clearly wrong at law and fact.


35. In addition to that, in the evidence before me the State counsel’s conduct is not entirely blameless. I refer to the affidavit of Angeline Sariman who annexed numerous letters to the Solicitor – General’s in an effort to settle the issues between the parties. The Solicitor-General’s office failed to respond to those letters. Those letters were sent prior to the filing of these proceedings and after the filing of the affidavit of the Registrar of Titles at the time.


36. I am of the view that these proceedings should have been concluded early had it not been for the conduct of the first defendant and the State’s counsel. Therefore, I accept the first plaintiff’s submission that this case was totally unnecessary and a waste of the Court’s time.


37. Mr Bua of counsel for the State submitted that the plaintiff should have exhausted the administrative remedies first before filing these proceedings. Counsel argued that the plaintiff could have called upon the Registrar to exercise its powers under Section 160 and 161 of the Land Registration Act for the Registrar to cure the defect in the entry on the certificate of title. I reject those submissions, there is no evidence to show that the State did respond and put those options to the plaintiff. It is not appropriate for the State to take that position now, when it had on numerous occasions had the opportunity to inform the plaintiff of this avenue, however, chose not to do so.


38. Maybe if the State had after obtaining instructions from the Registrar of Titles responded to the plaintiff and settled this matter in December of 2015 we would not be here today arguing about costs of the proceedings. I reject those submissions. The State’s counsel’s inefficiency and complacency has attributed to prolonging this case.


39. There is only one more issue which needs to be considered and that is whether the plaintiff had forewarned the defendants that they will be seeking costs on an indemnity basis. The first and second plaintiff’s counsel did not refer me to any evidence of forewarning. My review of the evidence was not successful in locating a forewarning letter from the plaintiff’s lawyers.


40. However, the evidence on the file is overwhelming to say the least, the first defendant’s conduct appear to be deliberate and support the allegations of fraud or gross impropriety and possibly perjury. The company’s action are unacceptable, deceitful and misleading.


41. The lack of action by the State’s counsel after obtaining instructions from the Registrar of Titles has attributed to this delay in settling of this case. I am persuaded that the respondents should pay for the first and second plaintiffs’ costs of the proceedings on a solicitor-client basis.


42. For the foregoing reasons and in the exercise of my discretion, I order that the first defendant shall pay fifty percent of the first and second plaintiff’s costs of and incidental to these proceedings on a solicitor – client basis. The fifth defendant shall pay fifty percent of the first and second plaintiff’s costs of these proceedings on a solicitor – client basis.


Orders accordingly.


Pacific Legal Group Lawyers: Lawyers for the First Plaintiff
Rageau Kikira Manua Lawyers: Lawyers for the Second Plaintiff
Young & Williams Lawyers: Lawyers for the First Defendant
Office of the Solicitor General: Lawyers for the Second, Third, Fourth and Fifth Defendants:

PacLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback
URL: http://www.paclii.org/pg/cases/PGNC/2017/78.html