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High Court of Fiji |
IN THE HIGH COURT OF FIJI
WESTERN DIVISION AT LAUTOKA
CIVIL ACTION No. 319 OF 1999
BETWEEN:
SAFARI LODGE FIJI LIMITED
a duly incorporated Company having its registered Office at Suva, Fiji and
WARREN FRANCIS of Sydney, Australia
PLAINTIFFS/APPLICANTS
AND:
ROSEDALE LIMITED a limited liability Company
having its registered Office at Suva, Fiji and
DROMAMA LIMITED a limited liability Company
having its registered Office at Suva, Fiji
DEFENDANTS/RESPONDENTS
Mr Haroon Ali Shah for the Plaintiffs
Mr Shailend Krishna for the Second Defendant
Date of Hearing: 21 January 2008
Date of Judgment: 5 February 2008
JUDGMENT
1. Introduction
By the Summons issued on 23 October 2007 initiating the instant proceeding the Plaintiffs/Applicants seek, in summary, the following orders:
1.1 The Plaintiffs/Applicants rely upon an Affidavit of Warren Francis, the Second Plaintiff, sworn and filed 20 October 2007.
1.2 The Notice of Appeal and Grounds of Appeal dated 3 July 2007 seeking that the costs order be rescinded and/or set aside are set out in Annexure ‘B’ to that Affidavit:
AND UPON such further and other Grounds as the Appellants/Plaintiffs may be advised upon the receipt of the record.
1.3 In reply the Second Respondent/Defendant has filed an Affidavit dated 25 November 2007 sworn by Michael James Harvey, Director of the Second Defendant/Respondent. The Second Defendant:[1]
1.4 Counsel for the parties provided written submissions and copies of authorities upon which they relied. These have been helpful to the Court.
2. Background/History
The Court file shows this matter has a long history. On 27 August 1999 a Writ of Summons was issued in the Court seeking, amongst other matters, specific performance of a contract or agreement said to require transfer of land constituting Lots 1 and 2 as stipulated, and damages plus interest in lieu. The file then shows a Summons and Application for an injunction was filed by the Plaintiffs/Applicants against the Defendants/Respondents, seeking to restrain them from selling those Lots. In summary,[2] the matter proceeded as follows.
2.1 The Summons and Application for an injunction came before the High Court at Lautoka (‘the Court’) on Friday 4 August 2000. Upon hearing Counsel for the Plaintiffs/Applicants and Defendants/Respondents the Court ordered, in summary:
2.3 On 4 August 2000, the Defendants/Respondents filed a Statement of Defence and on 24 August 2000 an Affidavit in Opposition was filed by the Plaintiffs/Applicants.[3] On 27 September 2000, the Court heard Counsel for the Plaintiffs/Applicants and in the absence of an appearance by the Defendants/Respondents the interim order of 4 August 2000 was continued until further order. The Defendants/Respondents were ordered to file a reply to the Plaintiffs/Applicants’ submission within 14 days, the Plaintiffs/Applicants to reply within seven days, judgment to be delivered on notice. The orders were sealed on 12 July 2001.
2.4 The Plaintiffs/Applicants filed submissions on 25 September 2000. The Court file then shows an hiatus, with no apparent activity until the Defendants/Respondents filed submissions on 8 May 2001. It appears from the file that next, on 21 August 2001 the Plaintiffs/Applicants filed a Summons for Directions, returnable on 5 September 2001:
2.5 The file indicates another apparent hiatus,[4] the record showing 27 April 2005 as the next date upon which the matter was before the Court. Counsel for the Defendants/Respondents stated he had no further instructions and sought leave to withdraw. Dates of 27 and 28 March 2006 or 13 and 14 June 2006 are noted on the file for a two day trial with a Notice of Adjourned Hearing (NOAH) to be issued to the Defendants/Respondents in person. A note on the file indicates that their former lawyers ‘may have an address’
2.6 On 27 March 2006 there was an appearance for the Plaintiffs/Applicants and none for the Defendants/Respondents. Evidence was heard going to substantive issues in the matter, as well as notice of the hearing date to the Defendants/Respondents. The matter was then adjourned to 2 June 2006 for mention: Court Record, 27 March 2006
2.7 On 7 April 2006 the Court’s ruling commenced with the observation that the matter had ‘an appalling history, it having been commenced by writ of summons and statement of claim filed on the 27th August 1999’ coming ‘on for hearing before the Court on the 27th March 2006 being the date allocated to it on the 27th April 2005’: paras [1][2][5]
2.8 The ruling of 7 April 2006 further indicates that there was no evidence in the Court file of a Notice of Adjourned Hearing (NOAH) ever having been issued and none that any lawyer entered an appearance for the Defendants/Respondents after 27 April 2005: para [4] The Court concluded a fresh hearing date must be set for it was ‘not satisfied that the defendants or either of them were aware of the hearing date ... and consider[ed] it not to be in the interest of justice to make any determination with respect to the writ of summons, that is to grant the order sought for specific performance of the contract at this time’: para [12]
2.9 The Court determined the Defendants/Respondents had to be properly put on notice with a fresh hearing date set. Should the Defendants/Respondents then fail to appear ‘then of course the matter can proceed’ in their absence: para [13]
2.10 The Writ of Summons was adjourned for mention on 12 May 2006. Plaintiffs/Applicants or Counsel were directed to serve on the Defendants/Respondents ‘Notice of Adjourned Hearing [NOAH] requiring the attendance of a representative of the defendants to appear before the Court on that day ... [s]ervice ... to be effected on or before the 21st April 2006’.
2.11 On 12 May 2006, there were appearances for both Plaintiffs/Applicants and Defendants/Respondents. Counsel for the Defendants/Respondents having advised the Court that the letter being Notice of Adjourned Hearing (NOAH) was received by him ‘yesterday’ only, the matter was adjourned to 23 June 2006. Further on that day (12 May 2006) a Notice of Change of Solicitors for the Plaintiffs/Applicants was filed.
2.12 On 23 June 2006, the matter was adjourned to 14 July 2006, a note on the file indicating ‘to clarify instructions’.[5] On 14 July 2006 upon appearances for both parties, Counsel advised he appeared for the Second Defendant/Respondent only as the First Defendant ‘has been wound up’.[6] He advised the hearing would be five days. The matter was adjourned to 21 July 2006 to fix a hearing date.
2.13 On 21 July 2006 the five day estimate by Counsel for the Second Defendant was repeated and an adjournment sought for two weeks to amend the pleadings. The matter was adjourned to 20 October 2006 with orders that the First Plaintiff have leave to file an amended Statement of Claim within 21 days, and the Second Defendant to file an amended Defence within 28 days.
2.14 On 20 October 2006 Counsel appeared with the matter being adjourned, 9-11 January 2007 set aside for hearing (as ‘A’ dates), or 12-14 March 2007 (as ‘B’ dates). On 24 November 2006 Counsel for the Second Defendant advised that Counsel was not available for the ‘A’ dates and confirmed the five day estimate. The Court vacated the ‘A’ dates, confirmed the ‘B’ dates and made up the five days by setting aside 12-16 March 2007. The Court file notes ‘Priority – o’seas counsel’.
2.15 On 9 February 2007 Counsel for the Second Defendant alone appeared, the matter being adjourned to 13 February 2007. On 13 February 2007 Counsel for the Plaintiffs/Applicants and Second Defendant appeared, with the hearing dates vacated due to the absence of the Judge and the matter adjourned to 21-25 May 2007, the file listing ‘Priority’.
2.16 On 8 May 2007 Counsel for the Second Defendant said he had filed a Notice of Motion ‘yesterday’ (7 May 2007) and sought leave to file an Affidavit. The Notice of Motion sought, in summary:
2.17 The Plaintiffs/Applicants were ordered to file and serve an Affidavit in Reply by 4pm on 11 May 2007. The matter was adjourned to 14 May 2007.
2.18 The Court file then contains a Summons dated 11 May for return date of 14 May 2007, filed by the Plaintiffs/Applicants for, in summary, orders:
2.19 The Affidavit accompanying the Summons says the Second Defendant had ‘now been wound up’.
2.20 The Court record for 21 May 2007 shows Counsel appearing for both parties. Following submissions the Court vacated the trial dates and set a timetable. It was on this date costs were sought by the Second Defendant on an indemnity basis in the amount of $15,000,[7] with costs awarded against the Plaintiffs/Applicants, for the Second Defendant, in the amount of $10,000 to be paid before 14 June 2007.[8]
2.21 On 8 June 2007 both parties were represented, with the matter adjourned to 4 July 2007. The Judge has noted on the file that if the costs ordered ‘are not paid in accordance with that order the matter will not proceed’.
2.22 On 4 July 2007 Counsel for the Plaintiff sought to add parties. Counsel for the Second Defendant advised the Court that the costs order was not paid. Counsel for the Plaintiff/Applicant affirmed costs had not been paid, stating an appeal had been lodged.[9] Submissions were made on the Notice of Motion for striking out or request for further particulars and the Court adjourned to 17 July 2007 for a ruling.
2.23 Under the ruling of 17 July 2007 specific performance was struck out by consent. Acknowledging striking out as a significant step, the Court considered in the circumstances it was ‘inappropriate to strike out the alleged offending paragraphs in the statement of claim’, saying it was ‘more appropriate that the alternate relief be ordered, that is that the particulars be provided’. The Court ordered provision of further and better particulars and costs in the amount of $500.
3. Immediate History of Costs Appeal
The Order for Costs was made on 21 May 2007. The Order for Costs was sealed on 3 July 2007. The sealed order was amended on 15 August 2007: reference to ‘Defendants’ was amended to the Second Defendant alone. On 2 July 2007 Counsel for the Plaintiffs/Applicants orally advised the Defendants/Respondents before the Court of an appeal against the costs order. On 5 July 2007 the Plaintiff filed a Notice of Appeal and Grounds of Appeal. A Summons for security for costs issued on 12 July 2007. On 26 July 2007 Counsel for the Plaintiff/Applicants (the Appellants) did not appear. The summons was struck out. $100 costs were awarded to the Defendant/Respondent.
3.1 Next, Notice of Appeal and grounds were filed on 24 August 2007. On 13 September 2007 a Summons for security for costs was adjourned sine die until the $100.00 costs earlier awarded was paid. $100 was paid on that day and on 20 September 2007 another Summons for security for costs issued. The matter was then stuck out on the basis that to appeal it was necessary first to seek and obtain leave from the High Court. $500 costs were made payable to the Second Defendant.
3.2 On 23 October 2007 the Summons and Affidavit as to costs were filed in the High Court at Lautoka. The matter has proceeded from there, until heard principally by way of written submissions on 21 January 2008.
4. Leave to Appeal out of Time/Extension of Time
As to reasons for delay, the Second Plaintiff/Applicant says in the supporting Affidavit simply that the original Appeal was struck out for non-appearance of Counsel at the Security for costs hearing, and that the subsequent appeal was struck out at the security for costs hearing ‘as there was no leave granted to appeal the costs Order’: paras 4, 5 He goes on to say that the costs order ‘is excessive and oppressive and ... has the effect of stifling the progress of my action against the Defendants, as I am not allowed to take any further steps unless the same is paid. This however is not reflected in the sealed Order’.
4.1 On extension of time, the Second Defendant refers to Rule 27 of the Court of Appeal Rules relating to extension of time in which to appeal. That rule says:
Without prejudice to the power of the Court of Appeal, under the Supreme Court Rules as applied to the Court of Appeal, to enlarge the time prescribed by any provision of these Rules, the period for filing and serving notice of appeal under rule 16 may be extended by the Court below upon application made before the expiration of the period.
4.2 The Second Defendant says that the Plaintiffs are therefore out of time to appeal.
4.3 The first question is whether time should be extended for the Plaintiffs/Applicants to seek leave to appeal.
4.4 Extension of time generally lies within the discretion of the Court. Guidance can be taken from matters including
4.5 The ultimate question is always whether, in all the circumstances and considering the above matters, the justice of the case requires an extension of time.
4.6 In the present case, the principal basis upon which an extension of time could be granted are, it seems to me, the merits of the application, whether granting or denying the extension will unduly prejudice one or other of the parties, and the justice of the case.
4.7 As a starting point, however, it is important to bear in mind that time limits and time lines exist in the justice system for good reason: so that justice may be dispensed expeditiously, so that parties have a timely opportunity to know where they stand vis-à-vis litigation, and in the recognition that ‘justice delayed is justice denied’ – this from the perspective of all parties. As the High Court acknowledged in Rajendra Prasad Brothers Ltd v. FAI Insurances (Fiji) Ltd [2002] FJHC 220, at 8; and Bank of Hawaii v. Reynolds [1998] FJHC 82, at 6, adopting the principle from Ratnam v. Cumaraswamy and Anor [1964] 3 All ER 933:
The rules of court must, prima facie, be obeyed, and, in order to justify a court in extending the time during which some step in procedure requires to be taken, there must be some material on which the court can exercise its discretion. If the law were otherwise, the party in breach would have an unqualified right to an extension of time which would defeat the purpose of the rules which is to provide a time table for the conduct of litigation: at 935
4.8 As to the failure of Counsel to appear on 26 July 2007, that circumstance is akin to Counsel being engaged elsewhere, or being away, or being distracted by work-overload, etc and is not considered to be a good reason for delay: Commissioner of Inland Revenue and James Michael Ah Koy Civ. App. No. 197 of 1973 FCA, at 2; R. v. Roberge [1995] 2 SCR 469, 2005 SC
4.9 The second reason advanced by the Plaintiffs/Applicants is a misapprehension as to the costs order being a final order rather than interlocutory:
The Plaintiff regarded the 1st Order of Costs as being a final Order hence no leave was sought from the High Court: para 2, Plaintiffs’ Submission of 21 January 2008
Further Counsel reasonably believed that Leave was not required: para 5, Plaintiffs’ Submission of 21 January 2008
4.10 This was the defect by reason of which the second attempt at an appeal was ruled out of order – namely that leave to appeal should have been sought. This defect existed at the time the original appeal was lodged. Had it been a final determination, no leave to appeal would have been necessary.
4.11 The Second Defendant contests the Plaintiffs/Applicants’ misapprehension and Counsel’s reasonable belief as stated, saying the determination was clearly not final, but interlocutory. In any event, it is said, such an error on the part of the Plaintiffs/Applicants and Counsel should not operate to justify an extension of time.
4.12 The Plaintiffs/Applicants themselves acknowledge a problem in their cause, by reference to Court of Appeal Rules, section 12 of the Court of Appeal Act Cap. 12, which says:
(2) No appeal shall lie –
...
(e) without the leave of the Court of judge making the order, from an order of the Supreme Court or any judge thereof made with the consent of the parties or as to costs only; ...
4.13 The order itself referred only to costs. At the same time, as the Affidavit of the Second Plaintiff indicates, although it is not reflected in the sealed Order, the Court has said no further steps in the action are allowed to be taken by the Plaintiffs/Applicants unless the costs are paid. As the recitation of the background set out earlier indicates, the Court file shows that on 8 June 2007 the Judge noted on the file that if the costs ordered ‘are not paid in accordance with [the] order the matter will not proceed’. Arguably, it may then be said that the Order was (effectively) more than a costs order; alternatively, the order operates as more than a costs order.
4.14 The Plaintiffs/Applicants have cited in their favour New India Assurance Company Ltd v. Footwear Manufacturers Ltd [1999] FJCA 36 (4 June 1999), where the Court of Appeal canvassed extensively the issue of interlocutory judgments, leave to appeal, and appeal as of right. Justice Pathik noted the difficulty courts have experienced in deciding whether a decision is ‘final’ or ‘interlocutory’. He cited, in this regard, Salter Rex & Co v. Ghosh [1971] 2 QB 597 where Lord Denning MR said:
This question of ‘final’ or ‘interlocutory’ is so uncertain that the only thing for practitioners to do is to look up the practice books and see what has been decided on the point. Most orders have now been the subject of decision. If a new case should arise, we must do the best we can with it. There is no other way: at 601
4.15 Having referred to differences between courts as to how the matter of ‘interlocutory’ or ‘final’ should be determined, Justice Pathik held that the Appellant in New India Assurance Company Ltd should not be penalised by this difficulty:
In considering whether to grant leave or not I have carefully analysed the facts of this case and the bona fide belief of the appellant, although mistaken, that leave is not required. I have also taken into account certain difficulties in determining the distinction as to whether a decision is final or interlocutory as acknowledged by Sir John Donaldson MR when he said in White v. Brunton ... at 608 ... ‘I do not underestimate the difficulties. Meanwhile the plaintiff needs to know whether he has to obtain leave to appeal.’
4.16 Justice Pathik concluded that leave to appeal was required from an interlocutory decision and it applied in the case before him. However:
In the light of the facts of this case and the circumstances in which the decision was given in favour of the respondent and in view of my remarks here-above regarding the difficulty in finding a clear demarcation line in the distinction between ‘final’ and ‘interlocutory’ the appellant cannot be punished for adopting and maintaining the view that it was final judgment and hence there as no need to obtain leave to appeal. For this reason it should not be precluded from pursuing its appeal: at 9
4.17 That case can be distinguished from the present as (a) costs orders are specifically referred to in Cap. 12 as the Plaintiffs/Applicants observe; (b) a costs order would not generally be seen as a ‘final’ order in terms of concluding substantive litigation. Hence, the submissions of the Second Defendant against the extension of time (and grant of leave) have some force, at least insofar as this being put forward as reason for delay.
4.18 Further, the Second Defendant contends that the costs order, as well as being interlocutory, is one of ‘practice and procedure’ calling for even greater vigilance in granting leave (or extension of time). The Second Defendant relies on Rajendra Prasad Brothers Limited & FAI Insurance (Fiji) Ltd, citing in turn Adam P. Brown Male Fashions Pty v. Phillip Morris Inc. & Anor [1981] HCA 39; 1981] 148 CLR 170 to the effect that ‘particular caution’ must be exercised in ‘reviewing decisions pertaining to practice and procedure ... Not only must there be error of principle, but the decision appealed from must work a substantial injustice to one of the parties ... ‘: at 177
4.19 As the Second Defendant says, the order ‘does not determine the substantive rights of the parties [for] the Plaintiff’s claim in their Statement of Claim is not determined or decided by the Order dated 21 May 2007’: Second Defendant’s Written Submissions of 15 January 2008
4.20 On the other hand, the dilemma of the Plaintiffs/Applicants in this case may have some force also. The costs order – although not being a pronouncement upon the matters in issue - did, in one sense, effectively end the litigation so far as the substantive matter was concerned. The Plaintiffs/Applicants were precluded by the Court from continuing with it until the costs were paid. If they were unable to pay the costs, the matter was at an end, the substantive issues thereby finalised.
4.21 When parties commence litigation, they must do so in a full awareness that litigation has costs. They must be prepared to pay the costs of the litigation they commence. Even if they are confident that their litigation will succeed, no party can ever be confident that her/his litigation costs will be wholly recoverable from the unsuccessful party. Indemnity costs are not generally awarded and even if they are they rarely if ever cover the whole of the real costs of litigation. The Plaintiffs/Applicants must be taken as having budgeted to cover their own costs and to cover the contingency that in the event of their losing the case, they would have to pay costs of the other side. They must also be taken as having been aware that at intervals along the way costs order/s may be made and could be made against them. Generally, therefore, a costs order could not be put forward as ending a party’s substantive claim.
4.22 Militating against this is, however, the fact that the amount of $10,000 is large. So far as I have been able to ascertain by reference to various cost matters, looking both at cost awards generally in Fiji at least to that time, and all other costs awarded in the matter itself, it is a substantial sum. This means it is a not insignificant hurdle for the pursuit by the Plaintiffs/Applicants of their action.[10]
4.23 I consider it is not inappropriate in this case to treat the costs order as ‘more than’ a costs order taking into account that the Court said the matter could not proceed without the costs being paid. In those circumstances, albeit this does not have an identical strength with the difficulties set out in the cases to which Justice Pathick refers in New India Assurance Company Ltd, the contention by the Plaintiffs/Applicants as to the lack of awareness as to the need to seek leave is not entirely without merit.
4.24 More substantially, however, I have looked at prejudice to the parties or any one of them, the merits, and the justice of the case. As these matters are relevant to whether or not leave to appeal should be granted, I turn to that aspect.
5. Leave to Appeal
The Second Defendant put forward a number of reasons for refusing leave to appeal. On the matter of prejudice, the affidavit of Michael James Harvey sworn 25 November 2007 says:
The Defendants will suffer prejudice if the Plaintiffs are granted leave to appeal the Order of 14 May 2007 [sic] as the Defendants have registered the Order in the Supreme Court of Brisbane in order to execute the Order as a judgment. The Defendants have incurred substantial costs in this process: para 14
5.1 The Affidavit also invokes the doctrine of res judicata on the basis that the Plaintiffs/Applicants ‘have already had two (2) attempts to appeal the Costs Order (which it consented to on 14 May 2007 [sic]) ... the Plaintiffs should not be given a third opportunity to further waste the resources of the Court and cause further prejudice to the Defendants.
5.2 The res judicata point is rightly not pursued by Counsel for the Second Defendant, for the issues in the costs order have not been agitated whether as to leave to appeal, extension of time, or the question of costs themselves. Res judicata means a final judgment, conclusive of the matters in issue, has been delivered by a competent court having jurisdiction. This is not so here.
5.3 Nor is the notion pursued that the Plaintiffs/Applicants ‘consented’ to the costs order taken any further. Albeit the Court file shows the matter was stood down on 21 May 2007 and the parties returned to the Court after engaging in discussions, it is clear from the record that costs order is not a consent order. There is nothing on the record to indicate that there was any agreement as to costs.
5.4 For the Plaintiffs/Applicants, the prejudice is stated effectively in the Affidavit of the Second Plaintiff/Applicant, Warren Francis, sworn 20 October 2007, wherein he said:
That the Costs order is excessive and oppressive and it has the effect of stifling the progress of my action against the Defendants, as I am not allowed to take any further steps unless the same is paid ...:: para 6
5.5 The prejudice is not located simply in a costs order in and of itself: this would not be a valid basis for ‘prejudice’ in the sense required. But prejudice does lie in the Plaintiffs/Applicants’ position in the second aspect – namely that it stands in the way of the substantive action and the substantial amount (contested as ‘manifestly harsh and excessive’) that is the inhibiting factor. If leave is not granted, and it cannot be appealed against, the Plaintiffs/Applicants will not be able to ‘have their day in court’; they will (they say – through their contention as to the ‘manifest harshness and excess’) be precluded from pursuing the substantive action.
5.6 I am mindful of the time and resources, including financial, expended by the Defendants in registering the Order in the Queensland Supreme Court to execute it as a judgment is taken into account and the prejudice to the Second Defendant thereby if an extension of time and leave are granted. However, the prejudice suffered by the Plaintiffs/Applicants in not being able to pursue the substantive action outweighs that of the Defendants.
5.7 In looking at the merits and the justice of the case, I have had regard to a number of High Court authorities on the question of costs. I have also perused Order 62 of the High Court Rules and matters to which the Taxing Officer is to have regard in taxing costs. Guidance is provided in each of these (Order 62 and for the Taxing Officer, Order 1, Rule 9 (3)(b)). Particularly, Order 1, Rule 9(3)(b) directs the Taxing Officer, in exercising his discretion ‘to have regard to all relevant circumstances and in particularly to –
(i) the complexity of the item of the cause or matter which it arises and the difficulty or novelty of the questions involved;
(ii) the skill, specialised knowledge and responsibility required of, and the time and labour expended by the solicitor;
(iii) the number and importance of the documents (however brief) prepared or perused;
(iv) the place and circumstances in winch the business involved is transacted and whether the solicitor concerned was in the circumstances obliged to act through his agent in Suva, Lautoka or Labasa, as the case may be;
(v) the importance of the cause or matter to the client;
(vi) where money or property is involved, its amount or value;
(vii) any other fees and allowances payable to the solicitor in respect of other items in the case, cause or matter, but only where work done in relation to those items has reduced the work which would otherwise have been necessary in relation to the item in question.
5.8 That is, fixing costs is not a matter of setting a global figure but of addressing work done referrable to indicators giving guidance as to how that work may be assessed insofar as a fair and proper $-cost or $-value be set on it. Even if there is a global figure, this should be referrable to tangibles – for example, the matters (i)-(vii) as set out above.
5.9 Order 62, Rule 26(1) of the High Court Rules permits the Court to make an award of costs. In a thorough review of the principles and application of Order 62, looking at indemnity costs, award of a gross sum in lieu of taxed costs, costs on special order of a judge and so on., in Frank R. Eggers Junior v. Blue Shield (Pacific) Insurance Ltd Civil Action HBC0094 of 1997L, 11 March 2004 the Court said:
[C]osts on an indemnity basis ... would be made only in exceptional circumstances: Bartlett v. Barclays Bank Trust Co Ltd (No 2) [1980] 1 Ch 515, at 547 where Brightman LJ was forthright enough to admit he did not know the reason why a successful party could not be indemnified for the inevitable costs of litigation. Indemnity awards are made where a party ahs conducted the litigation unreasonably, or ‘persi8sted in that suspicion to a wholly unreasonable, and quite exceptionally unreasonable extent ...’ Bowen-Jones v. Bowen-Jones [1986] 3 All ER 163 at 166 where a trustee had honestly, but quite unreasonably, kept insisting a beneficiary was not the genuine beneficiary ...: at 1-2
5.10 In Frank R. Eggers Junior Justice Gates, as he then was, goes on to set out other circumstances where the award of indemnity costs is appropriate, then observing that the court has ‘an absolute and unfettered discretion to award or not to award costs’, citing Donald Campbell & Co v. Pollak [1927] AC 732. Per Viscount Cave LJ, at 811, that discretion is, however, to be exercised ‘with reason and justice’ in accordance with Aiden Shipping v. Interbulk Ltd [1986] AC 965, at 981.
5.11 Costs awarded in Frank R. Eggers Junior were set by reference to bills presented by the Plaintiff, and an estimate by the Court as to whether the whole of each bill or any part thereof and then which parts or how much was fair and appropriate.
5.12 A factor which appears to have operated in the award and setting of the costs figure in the present case is the briefing of overseas Counsel.
5.13 In State v. Rasmesh Patel Cr Action HAC016/988, 6 February 2003, High Court Suva (Judgment on Taxation of Costs) the Court amongst other matters approved of costs for overseas Counsel (and Queen’s Counsel) by reference to Kylie-Jane Anderson v. Iowane Salaitoga [1999] 45 Fiji LR 241, at 244F; and Graham Southwick v. The State (unreported) Court of Appeal, Fiji Cr App No. AAU0061 of 1999S, 1 March 2002.
5.14 The Court observed that in Kylie-Jane Anderson Justice Byrne considered a motor vehicle accident claim in Fiji ‘was very similar to such a claim in Australia and since the facts and law in that case were not complex it did not require a QC from overseas to handle it’. Hence, costs were calculated on the basis of local rather than overseas Counsel: at [42]
5.15 In State v. Ramesh Patel the Court observed that in Southwick it was said:
The amount claimed, $582,000 was enormous by Fiji standards. Costs have to be assessed for their reasonableness, not by the standards of the country where counsel practices but by Fiji standards. A fee for counsel on a per diem basis would be usual in Fiji. Whilst a party is entitled to counsel of his/her choice and to seek to obtain the best possible defence at his/her expense, an award of costs in Fiji would have to reflect not the expenditure incurred but a sum commensurate with the fees paid to counsel in a developing economy such as Fiji: at [43]
5.16 In State v. Ramesh Patel the Court observed:
In Southwick the court found the sum claimed was excessive, at least by Fiji standards. However it was not suggested that the engagement of a Queen’s Counsel was in itself inappropriate or unreasonable. There are no longer any Queen’s Counsel in Fiji holding their patent from the Queen of Fiji, nor has any President appointed a member of the Fiji Bar to the rank of State Counsel. The engagement of a Queen’s Counsel, if reasonable, would inevitably have to be from overseas: para [44]
5.17 The Court went on to estimate what, in all the circumstances, was an appropriate figure. In such a case, ‘reasonableness ... may have to be based upon what would be considered reasonable fees for a Queen’s Counsel if such were based in Fiji, or on the cost of bringing a Queen’s Counsel from overseas’. On that basis, the Court considered it reasonable to allow between $FJ 2,000-4,000 per day: para [45]
5.18 ‘Reasonableness’ was also considered by the Court in State v. Ramesh Patel by reference to other matters, including:
5.19 In the present case, it was overseas counsel rather than Queen’s Counsel from overseas. The accommodation of some factors by the Court is illustrated by the cutting down of the sum asked by the Defendants - $FJ 15,000 to $FJ 10,000. It may be that the Court was mindful of differing costs and fees in Fiji and overseas. However, this can be a matter of speculation only, for there is no indication in the file that there was a toting up of figures applicable to stipulated costs or that the total amount was arrived at by reference to stipulated costs, fees, matters or principles. There is no indication that the Defendants presented to the Court any material upon which such a toting up could be done.
5.20 The considerations as to reasonableness such as touched upon by Justice Gates in State v. Ramesh Patel (as applicable to the present case) do not appear to have been addressed by the Court. At least, there is no explicit referencing for the Plaintiffs/Applicants or the Second Defendant to satisfy themselves as to how the costs figure was arrived at, and by reference to what (apart from the global $15,000 figure set by the Defendants in their oral application for costs). So far as I can see, there is no material in the file by which the Court could have done this.
5.21 The sum total of all this is that in awarding costs the Court is, as noted, required to fix the figure by way of reasonableness, in accordance with some referrable standard. Whether this is upon presentation of a breakdown of fees, expenses, costs and/or charges, etc by the party seeking costs, whether through or by reference to bills or accounts or estimates which albeit not necessarily detailed give some approximation to which the Court can reasonably address itself in fixing the ultimate award, or some other discernable method or measuring point.
5.22 This is not what occurred in the present case. Rather, a global figure of $15,000 as indemnity costs was requested and a global figure of $10,000 (as it appears indemnity costs) was awarded.
5.23 On 22 January 2008, the Court of Appeal granted leave to appeal against an indemnity costs ruling made in Attorney-General of Fiji v. Tupou Takaiwai Senirewa Draunidalo, Misc. No. 0053/07 Leave was granted on the basis that on its face, the award of costs of the trial Judge was excessive. The present case is as between private litigants in a civil claim where the substantive matter is different from that in Attorney-General v. Draunidalo. But principles as to costs must be consistent across litigation. In the present case, it is appropriate to bear in mind similarly the issues of principle in the setting of, or estimation of, a costs order and the matters arising in relation thereto.
6. Conclusion
As noted at the outset, the Grounds of Appeal set out by the Plaintiffs/Applicants are:
6.1 The Second Defendant says that Grounds 1 and 3 ‘are the same’. As to Ground 2, the Second Defendant says that it is ‘bad and wrong at law ... confusing and not related and is a non-issue to’ the costs order in issue. The Second Defendant adds that there is no evidence in the Affidavit of Warren Francis addressing Ground 2.
6.2 This is, however, not a case where ‘the intended appeal is patently unmeritorious or there are clearly no arguable points requiring decision’: Public Service Commission v. Manuvavalagi Dalituicama Korovulavula, Civil Appeal No. 11, 1989, at 5 (per Sir Moti Tikaram, President, Court of Appeal).
6.3 In my view there are reasonable prospects of success in the appeal against the Order for Costs made 21 May 2007. Ground 2 may be a reference effectively to the course (some may say tortuous course) the proceedings have taken in coming from the date of original filing – 27 August 1999 – to 21 May 2007, the date of the costs order. It is highly likely that awarding costs and setting the amount at $10,000, the Court was mindful of the history of the matter. Even bearing that in mind, however, there is no indication on the file that that is the reason for the amount and even then costs need to be set by reference to actual costs rather than as a punishment for a party’s dilatoriness or conduct. If it were intended to be a punishment, then it should have been framed explicitly as such, providing the Plaintiffs/Applicants with an opportunity to address that basis for costs directly.
6.4 Litigation can be and generally is an expensive process. Assessing costs and how this is done, the principles by which it is done and the grant of costs in combination raise an important issue. In my opinion it would advance the cause of justice and advantage litigants generally for the principles to be set down and reaffirmed so that courts, litigants and counsel generally have a clear reference point. That leave has been granted in Attorney-General of Fiji v. Tupou Takaiwai Senirewa Draunidalo in itself affirms this need.
6.5 In coming to my determination in the present proceeding as to the merits, prejudice and justice in the case (and all the other factors set out earlier) I have had regard to all the matters set out in the parties Affidavits, written submissions and authorities; additional authorities referred to herein; the whole of the file in the present proceeding; the amount of costs awarded and to any indications as to the way in which it was arrived at; the delay on the part of the Plaintiffs/Applicants in seeking leave to appeal; the need for an extension of time; the principles for granting leave; all the matters referred to herein; and the whole of the matter generally insofar as it is relevant to the present application. Taking all those issues into account, I consider that an extension of time to apply for leave to appeal should be granted to the Plaintiffs/Applicants, and leave to appeal should be granted. It follows that leave to appeal out of time should be granted also.
6.6 As to costs in the present application, the Plaintiffs/Applicants have asked that costs be in the cause. The Second Defendant has by submission sought costs to be summarily assessed by the Court. I have determined, as set out in the Orders below, that costs in the application should be determined at the hearing of the appeal or otherwise as directed by the Court of Appeal. At this stage, my own estimate taking into account the scale and nature of the work necessarily undertaken in such an application, costs would be in the range of $500 or perhaps $500-$750. It appears to me, however, that the question of costs in this application is better dealt with at the conclusion of the appeal itself and the determination in the appeal. Should the Court of Appeal have a different view then of course it will say so.
6.7 In the event the Court of Appeal determines the question of costs in the application and appeal, then to enable it to do so in an orderly manner and consistent with the principles as to costs orders referred to, at that time (unless the Court of Appeal is of another view) the parties should have ready for presentation to the Court a list of costs or a schedule setting out the costs sought, how calculated and of what they consist. This is the most efficient and least expensive way of determining upon costs, as it can eliminate a need for a further hearing on costs and going to taxation. It means that the Court will be in a position to address the question of costs in the appeal, focussing on the actual costs so that a determination can be made consistent with reasonableness and principle.
Orders
Justice Jocelynne A. Scutt
Lautoka
5 February 2008
[1] In written submissions of 15 January 2008, p. 2.
[2] Note: Not all documents filed with the Court are referred to in this summary. For example, written submissions were filed in the
course of the matter and are not referred to here.
[3] Note: Some caution needs to be exercised in setting down the history of the matter, for chronological order is not assured in traversing
the file. Documents do not appear on the file necessarily at the date upon which they were filed. A Reply (which is in the nature
of submissions) bearing the date 6 August 2001, appears on the file at this point; it bears a Court stamp and handwritten date ‘7
October 2001’. It is difficult to determine chronologically some of the events occurring in relation to the matter.
[4] I refer to footnote 3 as to the file.
[5] It is not clear from the note on file whether the need ‘to clarify instructions’ was on the part of the Plaintiffs/Applicants,
the Defendants/Respondents, or both.
[6] The record has Counsel listed as appearing for the Second Defendant but indicates it is the Second Defendant which has ‘been
wound up’. The record for 21 July 2006 indicates again that Counsel was appearing for the Second Defendant. The Notice of Appointment
of Solicitors field 20 July 2006 shows the Second Defendant as represented by them.
[7] How that amount was arrived at/estimate is unclear – there is no itemising or listing of costs making up the final total of
$15,000. Note: material now before the Court for the Defendants/Respondents sets the date of the costs order as 14 May 2007, however
the Court record and sealed Orders indicate the costs order was made on 21 May 2007.
[8] There is no itemising or listing of the costs making up the final total of $10,000 awarded.
[9] Note: As at this date, therefore, the Defendants/Respondents at least had oral notice of an appeal or intention to appeal against
costs.
[10] True it is that there were two further appearances going to procedural matters including amendments and further Affidavits, etc however
it was in the course of the first of these that the Court confirmed that the substantive litigation could not go on until the costs
order was paid. Hence, that these hearings/appearances occurred cannot stand as ‘evidence’ that the Plaintiffs/Applicants
had no misapprehension as to the costs order in that sense of being ‘final’ or a stumbling block to continuing their
litigation..
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