Nair v Prasad [2013] FJHC 89; HBC331.2010 (6 March 2013)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No: 331 of 2010.

BETWEEN:

SHALENDRA NAIR & LALITA NAIR
of Verata Nausori, Taxi Driver and Receptionist respectively.
PLAINTIFF

AND:

CHANDAN PRASAD
of 23 Malima Street, Nabua Suva, Businessman
1ST DEFENDANT

AND:

WESTPAC BANKING CORPORATION,
a registered Bank having its head Office in 73 Gordon Street, Suva.
2ND DEFENDANT

BEFORE : Justice Deepthi Amaratunga

COUNSEL : Mr. S. Kumar for the Plaintiff

Mr. V. P. Maharaj for the 1st Defendant

Mr. K. Singh for the 2nd Defendant

Date of Hearing : 5th February, 2013

Date of Ruling : 6th March, 2013

RULING

1. INTRODUCTION
   

1. The Plaintiff filed this action against the 1st and 2nd Defendants who were the purchaser of property from a mortgagee sale and the mortgagee of the said property prior to the sale, respectively. The Plaintiff prior to institution of this action, had already filed another action against the same defendants inter alia seeking an injunction. An application was made for strike out of this action for abuse of process and the Plaintiff's action against 1st and 2nd Defendants was struck off on 14th September, 2011 and indemnity cost was granted to both Defendants. The Defendants sought summary judgment in order to obtain possession in terms of the counter claim and this was allowed, and indemnity costs for that application was also granted. The Defendants appealed against the both decisions and was not successful and the decisions were affirmed. Defendants were required to file the documents supporting the assessment of indemnity costs and an opportunity was granted for the Plaintiff to oppose them.
   

2. LAW
   

2. Halsbury's Laws of England/CIVIL PROCEDURE (VOLUME 11 (2009) 5TH EDITION, PARAS 1-1108; VOLUME 12 (20TH EDIH EDITION, PARAS 1109-1836 COSTS/(2) GENERALNERAL RULES ABOUT COSTS/(ii) Assessment of Costs/1747. Basis of assess/b> states as follows
   

(ii) Assessment of Costs

1747.1747. Basis of assessment.

"Where the court1 is to assess the amount of costs2 (whether by summary3 or detailed assessment4) it will assess those costs on the standard basis or on the indemnity basis, but the court will not in either case allow costs which have been unreasonably incurred or are unreasonable in amount5. Where the amount of costs is to be assessed on the standard basis, the court will only allow costs which are proportionate to the matters in issue6 and will resolve any doubt which it may have as to whether costs were reasonably incurred or reasonable and proportionate in amount in favour of the paying party7. Where the amount of costs is to be assessed on the indemnity basis8, the court will resolve any doubt which it may have as to whether costs were reasonably incurred or were reasonable in amount in favour of the receiving party9.

Where the court makes an order about costs without indicating the basis on which the costs are to be assessed or makes an order for costs to be assessed on a basis other than the standard basis or the indemnity basis, the costs will be assessed on the standard basis10."(foot notes excluded)

Foot note 8 to the above passage deals with indemnity costs and states as follows

'8 The award for costs on the indemnity basis is often, but not always, reserved to cases where the court wishes to indicate its disapproval of the conduct of the paying party. Indemnity costs may be awarded against a party whose conduct has been unreasonable, even though the conduct could not properly be regarded as lacking moral probity or deserving moral condemnation: Reid Minty (a firm) v Taylor [2001] EWCA Civ 1723, [2002] 2 All ER 150, [2001] All ER (D) 427 (Oct); explained in Kiam v MGN Ltd (No 2) [2002] EWCA Civ 66, [2002] 2 All ER 242, [2002] All ER (D) 65 (Feb). The thrust of the CPR regime is to require the parties to behave reasonably towards each other: Baron v Lovell [2000] PIQR P20, (1999) Times, 14 September, CA (late service of expert's report). Indemnity costs are not intended to be penal but compensatory: PetrotradeInc v Texaco Ltd [2001] 4 All ER 853, [2002] 1 WLR 947, CA; McPhilemy v Times Newspapers Ltd (No 2) [2001] EWCA Civ 933, [2001] 4 All ER 861, [2002] 1 WLR 934. See also Kiam v MGN Ltd (No 2) [2002] EWCA Civ 66, [2002] 2 All ER 242, [2002] All ER (D) 65 (Feb), where it was held that the refusal of a settlement offer would rarely attract an adverse order for costs on the indemnity rather than the standard basis; MGN Ltd v Holborn [2002] EWCA Civ 88; [2002] All ER (D) 176 (Apr), where Jacob J held that the defendant had behaved unreasonably and that an award of indemnity costs was appropriate; Craig v Railtrackplc (in railway administration) [2002] EWHC 168 (QB), [2002] All ER (D) 212 (Feb) (defendants' approach in taking five years to resolve the liability issue unreasonable, considering that it was certain that at least one of the defendants would be held liable; indemnity basis for costs appropriate). Indemnity costs will not be awarded on the ground that a party has brought proceedings which have failed or have little chance of success: Shaina Investment Corpn v Standard Bank London Ltd [2002] CPLR 14. An award of costs on an indemnity basis may be made to a party in receipt of legal aid: Brawley v Marczynski (Nos 1 and 2) [2002] EWCA Civ 756, [2002] EWCA Civ 1453, [2002] 4 All ER 1060, [2003] 1 WLR 813. In deciding whether to award costs on an indemnity basis it is immaterial that the claim arises out of very serious conduct: Coca-Cola Co v Raymond Ketteridge [2003] EWHC 2488 (Ch), [2004] FSR 608. See also Jones v Associated Newspapers Ltd [2007] EWHC 1489 (QB), [2008] 1 All ER 240.' (emphasis added)

100. ASSESSMENT
     

3. 2nd Defendant filed their fist bill of costs on 20th December, 2011 which indicated a sum of $9,049.45 for the works done from 2.12.2010 to 15.12.2012, but it did not attach any actual invoices or requests to the client to pay them. Subsequent to this application another bill was filed covering the application regarding the summary judgment from 29th February, 2012 to 15th March, 2012 for $2,491.87 and again did not file actual requests or any payments of the said sum or the earlier sum.
   
4. On 5th July, 2012 the affidavit in reply to the affidavit in opposition, of Karl Jamndas attached a receipt dated 17.12. 2010 for a sum of $3,696.88 on account of three invoices relating to three cases including this action. This is understandable since the 2nd Defendant is a financial institute and they would have retained the same solicitors for all or number of their litigations, but the receipt clearly mention invoice No 7079 which only relates to the present action and that amount has not been separated from the rest for me to attribute to this action for the assessment. This could have easily done by attaching the said invoice No 7079 and request of the solicitors of the 2nd Defendant to pay the same. In any event the said payment was only for work done prior to 17.12.2010 in this action where the 2nd Defendant's solicitor acknowledged the service of writ on 7th December, 2010. This indicate how promptly the 2nd Defendant had paid for the professional services rendered by the solicitors. So, it is a myth to think that no payments were paid since then for nearly 2 years!
   
5. The solicitors for the 2nd Defendant did not want to reveal their actual disbursements due to reasons best known to them. Instead of revealing the actual invoices and disbursements the 2nd Defendant filed two bills of costs based on the purported time they spent on the case and projected a fee based on that. This is to prevent the actual invoices being presented to the court for assessment. The solicitors for the 2nd Defendant had invoiced the 2nd Defendant for this action promptly and was paid for the professional services on 17th December, 2010, when the acknowledgment of the 2nd Defendant was filed only 10 days prior to the said payment, indicating swift payment for the invoiced amount. I was not presented with the invoice and the receipt was issued for three invoices for the separate actions including the invoice for this action. In the circumstances there would have been numerous invoices and receipts relating to this action for nearly 2 years, but instead of producing them a bill of costs based on purported time allocated for this action was presented for the assessment of the indemnity costs. When a party is in possession of such evidence, but refrains from producing them to court the inference is that it is disadvantageous or adverse to them. So, I do not accept the bills of costs presented to me based on the purported time they spent on this action, and in the circumstances assess a global sum as indemnity costs and grant $4,000 as the indemnity cost for the 2nd Defendant.
   
6. The 1st Defendant had also acted similarly and instead of submitting bills or actual disbursements submitted a bill of cost based on the purported time they have spent on the action. No reasonable person would think that a solicitors firm would act for a defendant and also file acknowledgment, statement of defence and also make application by way of summons for strike out and conduct the hearing successfully and also obtain the order for strike out of the Plaintiff's action and, after that obtain summary judgment subsequently after a contested hearing without charging a fee. This contention that the 1st Defendant did not pay for more than two years, and what the solicitors could submit is only a bill based on time, cannot be accepted as probable scenario in the evaluation of the evidence before me. What I have stated earlier for the 2nd Defendant can be applied here as well with more force since the 1st Defendant is a natural person and there is no evidence to support that there were other litigations dealt by the same law firm as 2nd Defendant. In the circumstances I do not accept the two bills of costs based on the time submitted to me by the solicitors for the 1st Defendant. In the circumstances I award a sum higher than the 2nd Defendant since they have filed summons for strike out and summary judgment. Considering the circumstances of this case I ward a sum of $ 6,000 as the indemnity cost for the 1st Defendant for both awards of indemnity cost.
   

4. FINAL ORDERS
   

1. The1st Defendant is granted an indemnity cost of $6000.
2. The 2nd Defendant is granted and indemnity cost of $4000.
   

Dated at Suva this 6th day of March, 2013.

.................................................
Justice Deepthi Amaratunga
High Court, Suva