Ministry of Education v Ralulu [2010] FJHC 11; HBC291.2009 (22 January 2010)

IN THE HIGH COURT of FIJI
AT LABASA
CIVIL JURISDICTION

Civil Action No: HBC 291/09

BETWEEN:

MINISTRY OF EDUCATION
of Marela House, Thurston Street, SUVA
1st PLAINTIFF

AND:

THE ATTORNEY GENERAL OF FIJI
of Suvavou House, Victoria
Parade, SUVA
2nd PLAINTIFF

AND:

VILIAME RALULU, Rev. SAMUELA QOLIKORO, Rev. ISEI.
NAGATA, Rev PAULIASI MATAKIBAU, IVA BATIKI, TEMA MILLER
and MALELI RAKULA, board members of the Savusavu Secondary School, Naqere Savusavu.
DEFENDANTS

Before: Master Robinson. H.
Counsel: Mr. J. Mainavolau for the Plaintiff
Ms. B. Malimali for the Defendant.

Date of Decision: 22 January 2010.

RULING

INTRODUCTION

[1] This is an application for costs by the Defendants Counsel after the Plaintiff’s Counsel withdrew the action. It should be noted, though, that this is one of those actions in which interlocutory orders were sufficient to achieve the intended result thereby making it unnecessary, in a practical sense, to proceed any further.

[2] Before we proceed to the exercise of the Courts discretion in making orders for Costs, it is necessary to have an understanding of the background from which the action arose. This is necessary to enable the Court to determine whether either or both parties had done some wrongful act in the course of the transaction complained of such as to unnecessarily prolong the matter or bring it into a category attracting costs. Upon determination of these facts a proper use of judicial discretion could then be exercised. The substantive matter complained of is the prevention of the Acting School Principal from resuming his duties at the School thereby disrupting the start of the School for third term.

BACKGROUND

[3]. This matter arose as a result of the Nasavusavu School Board’s decision to close the Secondary School’s gate and preventing the Acting School Principal from attending to his duties at the beginning of the school term on the 8 September 2009. The decision was taken because they were not satisfied with the Ministry of Education not addressing their concerns about the behaviour of the Acting School Principal.

[4]. The behaviour complained about relates to the Acting School Principal’s participation and encouragement of the consumption of alcohol, yaqona and other "immoral" behaviour within the School compound during the week-ends, in which some students are said to have been involved. More particularly there was an allegation of a fund raising type party commonly known as "gunu sede" which was held at the School Workshop in which members of the public were invited, this was of special concern to the Board.

[5]. The Nasavusavu Secondary School is a co-educational boarding school and the girls dormitory, accommodating young girls, is within the school compound. The School gates are normally locked in the evenings and letting the members of the public into the school compound is limited during these times.

[6]. The School Board’s concern about the moral and social responsibility, encouragement of substance abuse, abuse of authority and the like, prompted them to raise these concerns with the Ministry of Education. Correspondence initially started with a letter to the School Staff copied to the Ministry of Education on 17 June 2009 and follow up letters to the Ministry right up to the 7 September, the day before the start of the School.

[7]. Indeed the School Board’s actions and concern up to this point should be commended and encouraged. It appears that these concerns were not taken seriously by the Education Ministry which opted instead to raise concerns about the Board’s financial management of the school.

[8]. It was a difficult impasse and in frustration the School Board took the option of closing the school gate preventing the Acting School Principal from entering the school compound at the start of the third term. The option to close the school gate and to prevent the Acting School Principal from attending school was not a wise decision, this much the Defendants agree.

[9]. This matter is the response to the actions of the School Board. The Plaintiff issued an Originating Summons which was filed in the High Court in Suva accompanied by an Ex-Parte Motion seeking injunctive relief. The Order was granted by the Honourable Mr. Justice Pathik on the 8 September 2009. The relevant Order was in the following term:-

1. The Defendants be restrained by themselves or their management, directors, servants, officers, contractors and agents or any of them or otherwise howsoever from closing the Savusavu Secondary School, its school gates, classrooms and offices and from locking out the Acting Principal of Savusavu Secondary School, Savusavu from entering the school until the determination of this matter.

Other orders granted on that day were procedural and entailed the transfer of the matter to be put before the Master at the Labasa High Court.

EVENTS AFTER THE ORDER

[10]. What the Plaintiff did in enforcing the Order became a contentious issue with the Defendants and they are of the view that this should be taken into account in any considerations of costs. On the grant of the order the following are some of the events which followed:-

a). On 9th September the Acting Principal used the order to terminate 9 members of the support staff;

b). The 1st Defendant, the School Manager was arrested when he entered the School and taken to the Savusavu Police Station;

c). Correspondence was entered into between the Solicitor for the Defendants and the Office of the Attorney Generals regarding the re-instatement of the terminated members of the support staff and the misinterpretation of the Order of 8 September.

d). A meeting of all School Staff was called by the Acting School Principal on the 9 September attended by an officer from the Ministry of Education Savusavu and a Police Officer in which the staff were informed that no meeting shall take place between them and the School Management or there will be consequences.

e). On the 16 September the Acting Principal announced at the School that:-

(i). the Management of the School is now handled by Ministry of Education along with the Sole Trustee of the School;

(ii). that they have frozen the school accounts;

(iii). that there will be an AGM to be held in October.

[11]. It is clear from a general glance of the events which occurred before and after the Order of 8 September that something was indeed amiss in the relationship between the School Management Board, the Acting Principal of the School and perhaps the Ministry of Education. This was probably due to lack of communication than anything else.

[12.] The matter was finally resolved after an afternoon of mediation on the 2 October 2009 and thereafter consent orders were made. One of the term of the consent order required that an annual general meeting and an election of the office bearers of the school board be held on 6 November. The matter was then adjourned to 11 November for mention and further directions if necessary.

[13]. When the matter was called on the 11 November, a new school board had been elected and none of the defendants were re-elected. The Counsel for the Defendants is concerned, and rightly so, that she had not been able to receive costs as a result of certain actions taken by the Plaintiffs. This action was the freezing of the School Board’s account without the knowledge of the old School Board and the opening of another account in the School Board’s name without the proper signatories. There was a genuine concern of the Counsel for the defendants when the new School Board refused to pay the defendants costs.

[14]. Were these post order actions necessary and if not how did that contribute to prolonging the matter and therefore incurring unnecessary costs? At this juncture it should be pointed out that the costs to which the Master’s Court has jurisdiction relates to party/party costs although indemnity costs or solicitor/client costs can also be granted in special circumstances.

PARTY/PARTY and SOLICITOR/CLIENT COSTS

[15] Party/party costs are often said to be "those certain or specific costs awarded by judgment or order to be payable by one party to another. The order is in the nature of a qualified indemnity against the expense incurred and subject to the terms of the order includes all such costs as are proper and necessary for the attainment of justice or for enforcing or defending the rights of the party whose costs are being taxed. Party/party costs are entirely within the Court’s jurisdiction, as part of its judicial functions in exercising justice between the parties"; J.A. Ahern and K Siebel (eds.) Legal Costs (New South Wales) Butterworths (looseleaf).

[16]. Solicitor/ client costs on the other hand has been described as "the costs of all services rendered by the Solicitor on instructions from a client ...These category of costs includes, not only all costs necessary and properly incurred by the solicitor, but also unusual costs and even costs which might have been incurred unnecessarily, provided that the services were rendered by the direction of a client who has been properly warned that such costs might not otherwise be allowed..."(ibid).

(17). Hence whilst the solicitor/client costs are subject to or determined by a contract party/party costs on the other hand are by virtue of an order of the Court. It has been suggested that as a rule of thumb the Court’s jurisdiction effectively begins with the filing of the process and ends with the granting of judgment and that within this rough time frame lurks party/party costs.

SUBMISSIONS

[18]. It appears that the Plaintiff objected to any award of costs on two grounds. The first ground is that ‘The Plaintiffs have now withdrawn the action seeing that the Old Board (made up of Defendants) are no longer in existence’. That is, that the substantive matter has been resolved and that the case was discontinued by reason that the Defendants are no longer in existence as a unit. It appears to the Court that there is close co-relation in the Plaintiff’s view, of the persons within the School Management Board and the substance of its complaint such that the solution of the School Managements’ concern, valid though that may be, lay in its dissolution.

[19]. A further component of the first ground of objection to costs by the Plaintiff is seen in its attempt to protect an award of costs against the "new" School Management Board, that is, the Defendant. I say, the Defendant, because the change of ‘guards’ does not change the colour of the proceedings sufficient for the Plaintiff to now stand on both sides, even if its motive from the beginning was to remove the old School Management Board. No evidence is before the Court sufficient for it to draw any conclusions regarding the above observations except as to say that it is a superfluous proposition to distinguish the new School Management Board from the old School Management Board in relation to any award of costs in favour of the Plaintiff. The Defendants are sued in their capacity as members of the School Management Board not as individuals. Hence the defendant in these proceedings remains the School Management Board, old or new. Therefore if any award of costs were to be made in favour of the Plaintiff it would now be paid by the new School Management Board.

[20]. The second ground is that the Defendants are not entitled to costs when the matter was settled by consent. There is merit on this ground of objection although clouded somewhat by the fact that by the time mediation had taken place the real object of the action had already been achieved. Mediation should have occurred long before the matter came to the attention of the Court and both parties are at fault in not canvassing this option earlier and neither should benefit in terms of costs from it but should be commended for the way it was concluded.

[21]. Further the Plaintiff claims costs from the Defendants as the ‘old’ Management and not the ‘new’ management it help put in place. An application for costs moulded in this fashion ought not to be entertained as it did not take into account the point put forward by the Defendant in its submission in respect of decisions made by de-facto officers.

[22]. The Defendant’s application for indemnity costs is somewhat difficult, from the submission to clearly ascertain, as it echo’s an appeal to its own client to pay its fees. Nevertheless the submission generally is based on two main propositions. The first is that the Plaintiff is at fault in not taking the Defendants concern about the behaviour of the acting school principal seriously enough.

[23]. They are, therefore of the view that had the Plaintiff been serious about their concerns, a more constructive dialogue may have ensued and the matter would not have come to Court. True this proposition may be, but the Defendants are also in agreement that the action they took was not wise in the circumstances and indeed it was for this reason alone that the matter came to the Courts attention.

[24]. The second proposition is that the Plaintiff’s actions after the grant of the Order of 8 September were less than honourable, that they deliberately misinterpreted the Order to obtain the removal of the School Management Board and that they had no intention of resolving the issues or concerns of the Board. The result of the non-action by the Plaintiffs prolonged the matter and incurred unnecessary costs for the Defendants. These actions, in the Defendants view were reprehensible enough sufficient for it to attract the Court’s discretion to award costs to the defendant. The amount of costs proposed was $3,000:00 together with $800:00 in travelling expenses.

APPLICATION FOR COSTS

[25]. Order 62, rule 3 of the High Court Rules provides the authority upon which the Court can award costs. Rule 3 (1) states:-

"Subject to the following provisions of this order, no party shall be entitled to recover any costs of or incidental to any proceedings from any other party to the proceedings except under an order of the Court."

Rule 3(2):"If the Court in the exercise of its discretion sees fit to make any order as to costs of or incidental to any proceedings, the Court shall, subject to this order, order costs to follow the event, except when it appears to the Court that in the circumstances of the case some other order should be made as to the whole or any part of the costs".

[26]. The award of costs is at the discretion of the court, a discretion exercised judiciously. For the Court to exercise its discretion it must do so "on fixed principles that is according to rules of reason and justice not according to private opinion" ( Sharpe v. Wakefield [1891] UKLawRpAC 8; (1891) A.C. 173) or even benevolence (Kierson v. Joseph L. Thompson & Sons LTD., (1913) 1.K.B. 587), or Sympathy (Bevington v. Perks (1925). The exercise of the judicial discretion must be justifiable (Ritter v. Godfrey. (1920) 2 KB 47); for example in the successful enforcement of a legal right without misconducting himself/herself he/she is entitled to costs as of right (Cooper v. Whittingham [1880] UKLawRpCh 159; (1880), 15 Ch.D. 501).

[27]. The settled practice is that in the absence of special circumstances a successful litigant is entitled to costs and it is therefore necessary, to show some ground for exercising discretion refusing an order for cost. Although the award of costs often follow the event in civil matters, this is not necessarily so.

[28]. The legal principle underlying the award of costs is said to have been derived from an old English Statute which enacts that "forasmuch as people be compelled to come before the King’s Council, or in the Chancery by writs grounded upon untrue suggestions, that the Chancellor for the time being, presently after that such suggestions be duly found and proved untrue, shall have power to ordain and award damages according to his discretion, to him which is so troubled unduly as afore is said" (Andrews –v. Barnes ( [1888] UKLawRpCh 112; 39 Ch. D 133 at 139). The word ‘damages’ in the above principle is now commonly perceived as costs.

[29]. It is clear from the authorities that a successful defendant, in the absence of special circumstances, has a reasonable expectation of obtaining an order for costs to be paid by the Plaintiff but this expectation is not a right to costs unless the Court awards them. The Court has an absolute and unfettered discretion to award or not to award costs, a discretion which ought to be exercised judicially.

[30]. In this instance, if we were to use the principle that costs follow the event, then is the Plaintiff entitled to costs? The short answer is no. The finality of the matter was reached after mediation and by consent orders. The object of the exercise was achieved after the order of 8 September was granted. The matter need not have come to the attention of the Court had the parties convened a meeting before the 8 September. Both parties, in my view should therefore bear their own costs being partly responsible for the matter reaching the state it did.

[31]. The next point to be determined is whether the actions of the Plaintiff after the order of 8 September sufficient to attract the Court discretion and award costs on an indemnity basis to the Defendant. The Australian and the English Courts have long accepted that solicitor and client costs can be awarded in appropriate cases where "there is some special or unusual feature in the case to justify the court exercising its discretion in that way";(Preston –v.- Preston (1982) 1 All ER 41 at 58). In Andrew –v.- Barnes [1888] UKLawRpCh 112; (1888) 39 Ch.D 133. it was argued that there are only three classes of cases in which an award of costs can be made and they are; where charges of fraud was made and not sustained, where a public officer was sued in his official capacity and where the suit was by a beneficiary against the trustee.

[32]. The Australian cases have expanded the circumstances or categories to include the following classes:-

(i.) "evidence of misconduct that causes loss of time to the Court and to other parties;

(ii.) "the fact that the proceedings were commenced or continued for some ulterior motive or in wilful disregard of known facts or clearly established law"

(iii.) "the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions"

(iv.) "an imprudent refusal of an offer of compromise "; and

(v.) "an award of costs on an indemnity basis against a contemnor.

[33]. The award of costs on an indemnity basis is therefore a departure from the ordinary practice and the best way to deal with the matter is to look at the circumstances of each case in the search of ‘ the presence or absence of factors which would be capable, if they existed, of warranting a departure from the usual rule" Brandon LJ. In Preston –v- Preston (1982) 1 All ER at 58. In the search of these "factors" it is therefore possible in future litigations that more categories or different features about cases which when found may attract an award of costs on an indemnity basis.

[34]. Any analysis of the facts must address the question of "whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on a party and party basis", Sheppard J in Colgate-Palmolive Company and Colgate- Palmolive Pty Ltd.-v- Cussons Pty Ltd (1993) 46 FCR225.

[35]. Looking at the particular facts of this case the Court must now decide if the wrong done by the Plaintiff, as seen by the Defendant, was directly connected with the Plaintiff’s case or collateral to it. That is, if it was not directly connected to the substantive matter then it is no ground on which to exercise the discretion to award costs. This is the position in the Australian case determined in the English Court of Appeal; King & Co –v.-Gillard & Co (1905) 2Ch.D.7.

[36]. Were the actions of the Plaintiff after the Order of 8 September directly connected to the substantive matter or were they collateral to it. The sacking of nine members of the support staff by the Acting School Principal and his taking or interpreting the Order of 8 September incorrectly were not the actions of the Plaintiffs but rather that of a misinformed individual. The arrest of the School Manager was also not an act of the Plaintiff and had no direct bearing on the substantive matter. The School Manager’s remedy lay elsewhere, unfortunate though, the incident may be. The post order behaviours complained of did not appear to be that of the Plaintiff’s and even if it were, it would be in my view, collateral to the substantive matter to be determined.

[37]. As no further proceedings arose from the said behaviour which prolonged the matter there was no need to order indemnity costs on this basis. Were the post order behaviours complained of reprehensible and if so would indemnity costs follow?

[38]. This question was determined in our jurisdiction in the matter of Singh v.- Commander Naupoto & Ors HCA No: 193/08. In this case it was argued that the test is reprehensible conduct and drew its authority from Dewa –v.- University of South Pacific (1996) FJHC 125 and Police Service Commission –v.- Naiveli (1995) HBJ 029. A conduct is considered to be reprehensible if it is oppressive or vexatious.

[39]. In the Singh –v.- Commander Naupoto the actions of the Defendant in placing the Plaintiff’s name on the "watch list" and stopping him from leaving the country was not considered by Justice Hickey to be reprehensible enough to attract indemnity costs. What is relevant is that litigation can often be conducted in a way which is unreasonable but an award for costs can only be granted where "the conduct could properly be regarded as lacking moral probity or deserving moral condemnation"; May LJ in Reid Minty v.-Taylor (2002) 1WLR 2800 at 2807.

[40]. The above position was further expanded by Brown LJ in Kiam –v.- MGN Ltd (No.2) [2002] EWCA Civ 66; (2002) 1 WLR 2810 when he said that "such conduct would need to be unreasonable to a high degree; unreasonable in this context certainly does not mean merely wrong or misguided in hindsight. An indemnity costs order ...does, I think, carry at least some stigma. It is of its nature penal rather than exhortatory" This is not the position in our matter and in my view the behaviour complained of by the Defendant after the Order of 8 September fell short of the standard required sufficient for the Court to award costs on an indemnity basis.

For the above reasons, the formal Orders of the Court are:-

1. No order for costs on a party/party basis against either party;

2. No order for costs against the Plaintiff on an indemnity basis in favour of the Defendant; and

3. A direction that the "new" School Management Board pay the Solicitors fees incurred by the "old" School Management Board.

H A ROBINSON
MASTER

22 JANUARY 2010