Semaan v Westpac Banking Corporation [2011] FJHC 673; HPP Action 26.2011 (27 October 2011)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

HPP Action No. 26 of 2011

BETWEEN:

ROBERT SEMAAN and MICHAEL FAIRFAX both of Suva, Company Directors.
PLAINTIFFS

AND:

WESTPAC BANKING CORPORATION incorporated in Australia and registered in New South Wales under the Companies Act 2001 and having its registered office at 1 Thompson Street, Suva.
DEFENDANT

BEFORE: Master Deepthi Amaratunga

COUNSEL: Mr. Mc Donal P. of Cromptons for the Plaintiffs
Mr. Udit J.J. and Mr. Prasad V. of Howards Lawyers for the Defendant

Date of Hearing: 12th September, 2011
Date of Ruling: 27th October, 2011

RULING

1. INTRODUCTION
   

1. The Plaintiff filed this summons for extension of time for removal of caveat on 12th August, 2011. The Plaintiff filed an affidavit in support where the certificate of title with the memorials, but the memorials submitted to the court does not indicate the correct status of the caveat, as an application for removal of it was lodged on 29th June, 2011 and it was subsequently removed by the registrar on 17th August, 2011 even before the first hearing of this summons which was on 23rd August, 2011 and in the absence of any materials showing the removal of the caveat or an application for removal, the caveat was extended for 21 days, where in fact there was no caveat on the title to be extended. Once this was brought to my notice by the Defendants, the said order extending the removal of caveat was rescinded and the caveat was dissolved with immediate effect after inter parties hearing. The Defendants sought indemnity cost and that order was reserved for today. The suppression of material fact of lodgment of application by the Defendant for removal of caveat resulted the order 'extending' a caveat that already removed by the Registrar of Land. So, the grant of indemnity cost is justified as the Defendants were brought to court in this application unnecessarily by the Plaintiff suppressing material facts.
   

2. PRINCIPLES GOVERNING COSTS
   

2. The defendant seeks to recover costs from the plaintiffs it incurred in defending this action. The Defendant filed an affidavit in opposition and also made oral submission. It is clear that Defendant has also carried out a search in the registry in order to show the correct status of this caveat and the 'caveat was extended' when actually there was no caveat on property on 23rd August, 2011, which would have made the issue of this matter much complicated to the Defendant as he was brought to the court unnecessarily. In the circumstances it is justified in ordering indemnity cost for the Defendant.
   
3. The award of costs is discretionary. The court has the jurisdiction to award such costs as may be appropriate to the circumstances of the case.
   
4. In this case there was no caveat on place of the title when this summons was heard on the first day. The Plaintiff has even failed to mention the vital material of Defendant's application for removal of caveat which was filed on 29th June, 2011. Even the copy of the title which contained the memorials which was file on 12th August, 2011 do not contain the said entry which would have alerted the status of the caveat on the date of first hearing of this matter. This clearly shows that the copy of the memorial that was filed in this case was obtained long before 12th August, 2011 and the Plaintiff deliberately tried to conceal this fact from the court.
   
5. It is clear that the Plaintiff was negligent in filing this summons for extension of the caveat, knowing that there was an application filed on 29th June, 2011 for removal of such caveat. The Plaintiff should have known this and if a proper search was done on the title this would have been revealed.
   
6. The caveat filed by the Defendant in relation to this property was removed on 17th August, 2011 and that entry could not have been revealed in the memorial, since this summons and the affidavit in support of that summons was filed on 12th August, 2011, but clearly the application for removal which was registered on 29th June, 2011 would have been depicted and that was not done and that resulted an order of 'extension' and unnecessary cost being incurred to the Defendant.
   
7. The Plaintiff knowing that there was an application filed by the Defendant for removal of the caveat before the land registrar filed this action without even informing that fact in the affidavit in opposition and the annexed title and the memorials does not depict any such removal application made by the Defendant which resulted the Defendant to come before the court seeking 'removal' of the caveat.
   
8. The Defendants filed the memorials which not only indicate the filing of the removal of the caveat of the Defendant on 29th June, 2011, but also the actual removal of the caveat by the registrar on 17th August, 2011. So, it is clear that there was no caveat to be extended on 23rd August, 2011 when I first heard the summons for extension of the caveat. These facts were not intimated to me and the caveat was 'extended' for a period of 21 days from 23rd August, 2011, which was obtained by suppression of material facts to the court.
   
9. The court has an absolute and unfettered discretion to award or not to award costs Donald Campbell & Co. v Pollak [1927] AC 732, per Viscount Cave LC (at p. 811). That discretion is to be exercised with reason for justice: Aiden Shipping v Interbulk Ltd [1986] AC 965 (at 981). Factors that will justify an award of increased costs include the urgency and complexity of the matter and the conduct of the unsuccessful party.
   
10. Although discretionary, it is necessarily awarded on principle. Judicial discretion is regulated by the principle of doing justice to the parties in each particular case, the court having regard to the particular circumstances including the evidence adduced, the parties conduct and the ultimate result.
    
11. The defendant is seeking costs on an indemnity basis. Order 62 rule 26(1) replaced by Order 62 rule 15(1) and (2) of the High Court (Amendment) Rules 1988 permits the Court to award indemnity costs. Such awards would be made only in exceptional circumstances. The circumstances of this case shows the exceptional nature of this proceedings where non existent caveat was made to extend by suppressing the material facts to the court. So, the appearance of the Defendant was unnecessary and it was only because of the deceitful conduct of the Plaintiff who did not reveal the material facts to the court and the copy of the memorials of the title filed in support of this application did not depict the correct status of the caveat on the date of the filing of this application. In Police Service Commission v Beniamino Naiveli, Civil Appeal No. ABU 0052/95 the Fiji Court of Appeal confirmed that indemnity costs may be awarded under Order 62 r 26(1) in appropriate cases. The meaning of "indemnity costs" and its applicability and availability has been discussed by the Fiji Court of Appeal in Police Service Commission v Beniamino Naiveli, Civil Appeal No. ABU 0052/95 The Court held:
    

"the first question relates to the meaning of indemnity costs" a term commonly used in the past in England to indicate a more generous award then the usual party and party costs provided for in the English equivalent of 0.62, 5. 25 of the Fiji High Court Rules, the latter being defined therein as those costs "necessary or proper" for the attainment of justice or for enforcing or defending the party's rights.

Until it was recognized in the amendment to the English Order 62 in 1986, a separate category of "indemnity costs" was not mentioned in either the former English rules or the present Fiji rules based on them. In EMI Records v. Wallace [1982] 2 ALL ER 980 Sir Robert Megarry V-C undertook a detailed review of the use of that expression and conclude that it was equivalent to award of "solicitor and own client costs" in 0.62, r. 29 (described in its Fiji equivalent 0.62, r. 26 as "costs payable to a barrister and solicitor by his own client"), but excluding paras (2) and (3) thereof. It would result in all costs being allowed "except insofar as they are of an unreasonable amount or have been unreasonably incurred: (r. 26 (1). Sir Robert's judgment is with respect persuasive,....An award of costs on an indemnity basis is to be understood in Fiji as an award in terms of 062, r. 26(1)."

12. The Court of Appeal further observed at p.6:
    

".....neither considerations of hardship to the successful party nor the over optimism of an unsuccessful opponent would by themselves justify an award beyond party and party costs. But additional costs may be called for if there has been reprehensible conduct by the party liable – see the examples discussed in Thomson v. Swan Hunter and Wigham Richardson Ltd (1954) 2 ALL ER 859 and Bowen-Jones v. Bowen-Jones (1986) 3 ALL ER 163."

13. In Taylor v. Santos & Ors [1999] SASC 430 the Supreme Court of South Australia considered the relevant principles applicable to the exercises of the discretion to award indemnity costs. At paragraph 9 the Court stated:
    

"Solicitor and client costs may be awarded where a party should have known it had no chance of success [Fountain Selected Meat (Sales) Pty Ltd v. International Produce Merchants Pty Ltd (2988) 81 ALR 397]. Such costs have also been awarded in cases where the trial judge indicated that –

[i] The case was misconceived;

[ii] The plaintiff had lost on virtually every issue;

[iii] The relief claimed in the summons was defective;

[iv] The difficulties in the Plaintiff's claim had been pointed out prior to trial;

[v] The party's case was falsely and deliberately concocted;

[vi] The party prevaricated in the witness box to prolong litigation;

[vii] Fragmentary and unconvincing evidence was adduced by a party with a lack of substance in its case and like grounds;

[viii] There was re-litigation of issues already determined."

14. In Petrotade Incorporated v Texaco Ltd [2002] 1 WLR 947 Lord Wolf in distinguishing indemnity costs from standard costs said (at p. 949):
    

"An order for indemnity costs does not enable a claimant to receive more costs than he has incurred. Its practical effect is to avoid his costs being assessed at a lesser figure. When assessing costs on the standard basis the court will only allow costs "which are proportionate to the matters in issue" and resolve any doubt which it may have as to whether costs were reasonable incurred or reasonable and proportionate in amount in favour of the paying party." On the other hand, where the costs are assessed on an indemnity basis, the issue of proportionality does not have to be considered. The court only considers whether the costs were unreasonably incurred or for an unreasonable amount. The court will then resolve any doubt in favour of the receiving party. Even on an indemnity basis, however, the receiving party is restricted to recovering only the amount of costs which have been incurred".

15. In Town Planning Board v Society For Protection of the Harbour Limited, Court of Final appeal of Hong Kong, FACV NO 14 of 2003 (2 April 2004) the Chief Justice said:
    

"16. The courts have rejected the proposition that an award of indemnity costs will only be made where a case has been brought with an ulterior motive or for an improper purpose or where there is some deception or underhand conduct on the part of the losing party. (Macmillan v Bishopsgate Investment Trust Ltd, unreported, judgment delivered 10 December 1993 (Millet J); Disney v Plummer, unreported judgment delivered 16 November 1987 (English Court of Appeal). These decisions and the reasoning on which they were based have been endorsed by the Hong Kong Court of Appeal (Sung Foo Kee Ltd v. Pak Lik Co (A Firm) at 575E-576F, per Godfrey JA; see also Choy Yee Chun v Bond Star Development [1997] HKLRD 1327 at 1334G-1334G, per Stock J.).

16. Order 62 rule 7 (4) of the High Court (Amendment) Rules, 1988 allows a Court to award a gross sum in lieu of taxed costs: South Pacific Recording v Yates, FCA, 39 of 1996 (14 November 1997). The main purpose behind the power to award a gross sum instead of taxed costs is to avoid further expense, delay and aggravation involved in protracted litigation arising out of taxation. This was supported by Leary v Leary [1987] 1 WLR 72 at 76 per Purchas LJ and Dymocks Franhise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd [1999] 3 NZLR 239 at 245 per Hammond J expressing the concern that taxation is "an arduous and expensive matter, which causes almost as much difficulty as the litigation itself."
    
17. In Frank R Eggers Junior v Blue Shield (Pacific) Insurance Ltd, Suva High Court Civil Action No. HBC 0094 of 1997L his Lordship Justice Gates (as he then was) discussed several cases where the Court made an award of a gross sum in lieu of taxed costs.
    
18. That the fixing of a gross sum is just and appropriate in this case to avoid any continued litigation between the parties on the issue of costs as the case has already concluded, except for the issue of cost.
    
19. In ascertaining what are reasonable costs some guidance can be derived from Order 62, rule 13 of the High Court (Amendment) Rules 1988 which reads:
    
    1. "13 – In determining the scale of standard costs to be awarded as provided by Order 1 r 9(a). The Taxing Officer shall have regard to [the] complexity of the proceedings in respect of which costs are taxed and in particular to:
       

The complexity of the item or of the cause or matter in which it arises and the difficulty or novelty of the questions involved;

The skill, specialized knowledge and responsibility required of, and the time and labour expended by, the solicitor;

The number and importance of the documents (however brief) prepared or perused;

The place and circumstances in which the business involved is transacted;

The importance of the cause or matter to the client;

Where money or property is involved, its amount or value;

Any other fees and allowances payable to the solicitor in respect of other items in the same cause or matter, but only where work done in relation to those reduced the work which would other wise have been necessary in relation to the item in question."

100. CONCLUSION
     

20. In the circumstances it is clear that this is an exceptional case where the Plaintiff deliberately and or negligently suppressed the material facts and obtained an order for 'extension' of a caveat which was already removed by the registar. This resulted the Defendant engaging solicitors and incurring unnecessary cost to defend this case. The award of indemnity cost is amply justified in the circumstances as the Plaintiff's conduct has resulted these proceedings where the Defendant had to file affidavit in opposition to an order that was obtained by suppression of material facts. Considering the complexity of such an order being implemented by the registrar of land and the resultant effect of such an order on the Defendant it is clear that they have sought legal advice and a search was also effected on the title and an affidavit in opposition was also filed with annexed copy of the memorial on the title of the land, with oral hearing on this on the same day. The Defendant has sought an indemnity cost of $10,000 but has failed to annex any invoices justifying that amount. Considering the unnecessary hardships in obtaining legal services and the lengthy and detailed submissions made by the counsel for Defendant, the amount of the indemnity cost has to be determined and an indemnity cost of $3,000. Is granted for the Defendant to be paid by the Plaintiff within 21 days.
    

4. FINAL ORDERS
   

21. The Defendant is granted indemnity cost of $3,000.00 to be paid by the Plaintiff within 21 days.
    

Dated at Suva this 27th day of October, 2011.

Mr. Deepthi Amaratunga
Master of the High Court
Suva