Plumbers and Builders v Sirunki Construction Ltd [2004] PGDC 49; DC294 (30 April 2004)

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District Courts Act Ch 40 - Power to award costs - Schedule 4 is strictly for cases where lawyers and agents are involved - Costs are to be reasonable and just in the circumstances of a case.

Practice & Procedure - Costs follow verdict - The need to provide evidence of actual costs in a contested case

Cases Cited
Leo Getsi and East New Britain Provincial Government -v - PNG Harbours Board [1993] PNGLR 408
Motor Vehicles Insurance (PNG) Trust -v- Arild [1991] PNGLR 199.

Counsel
Mr. Copland Raurela for the Complainant.
Second Defendant in Person for himself & the First Defendant

D. Wakikura: In this matter I heard submissions from both parties on the question of costs which I set aside earlier from an ex parte judgment. In my earlier ruling I granted the orders to set aside only the orders made on costs while I refused to grant the orders to set aside orders issued on the substantive issue. This was initially from an application by the complainant to set aside ex parte orders made in favour of the defendant in which the case was dismissed and costs were awarded to the defendant.

For the whole case in brief this was a claim for unpaid building materials supplied to the defendant that the complainants intended to recoup by an order from this court. The complaint was initially laid on the 22nd of April 2003 and made returnable to the 14th of May 2002 at 9.30 AM. There were a number of non-appearances from both parties or one party present and the party not available and vice versa all along the way. At one stage there was a default judgement entered on the 30th of September 2002 for the complainant which was later set aside through an application by the defendant. At another stage the matter was struck out for want of prosecution on the 15th of April 2003.

After several adjournments the matter was dismissed for want of prosecution on the 30th of September 2003 and costs were awarded to the defendant in the sum of K12, 204.00. A garnishee proceeding was instituted for non payment of costs by the complainant and it was only after that the complainants filed their application to set aside the orders of the 30th of September 2003.

In the application 1 ruled earlier that it was not fair to give the complainants a second go at a case they failed to properly prosecute in the first place. Only the costs as awarded appeared to me to be far excessive and even twice the amount claimed for in the substantive complaint so that was set aside. So for that reason I decided that I should properly hear the parties only on the issue of costs.

In this matter I will determine on what basis costs should be awarded to the defendant given the circumstances of this case. That is whether the defendants are entitle to costs and whether their claim for costs is reasonable and just in the circumstances.

The defendants in their submission stated that the court has to be reasonable and just, to objectively consider the current economic situation with the inflated costs of goods and services. The court also had to consider the attitude of the complainant in not diligently prosecuting their claim. The defendant submitted to me also section 260A of the District Courts Act (the Act hereafter) which I will highlight later with further discussions as this provision deals with costs for successful defendants in criminal proceedings.

They also submitted to me the case of Leo Getsi and East New Britain Provincial Government -v - PNG Habours Board [1993] PNGLR 408 where the question of costs was discussed in the higher court. They submitted to me that in that case Her Honor Justice Doherty allowed for airfares, meals and taxi hire and likewise in this case the defendant should be entitled to such costs. In that regard this court was invited to confirm the claim for costs of airfares by the defendant.

In his submission to me the defendant submitted and claimed for costs under the following headings as

Airline tickets from Mt. Hagen to Port Moresby and Hagen Accommodation	4,975.00
1. Food and Transportation in during court proceeding	2,325.00
2. Legal assistant costs for following Lawyers; a) Mr. Howard Maliso b) Mr. George Lau c) Mr. Ben Yaki	850.00 650.00 2,000.00
3. Miscellaneous costs	500.00
4. 8% Interest	904.00
TOT AL:	K12,204.00

The complainant responded by stating that the costs claimed by the defendant far exceeds the jurisdiction of this court. Counsel for the complainant raised whether the defendant as an unrepresented litigant was entitled to costs under schedule 4 of the District Courts Act. If not then what was the appropriate provision for the computation of costs.

Counsel submitted that schedule 4 as indicated above is for lawyers and agents with the appearance of witnesses and the defendant in this matter can not claim under that schedule. He quoted to me section 260 (1) and (2) of the District Courts Act which I will highlight and discuss later.

Counsel also referred to me the case of Motor Vehicles Insurance (PNG) Trust -v- Arild [1991] PNGLR 199 in which the higher court also addressed the issue of costs. His Honor Mr. Justice Woods reiterated in that case that unless specifically shown on the court records, the claim for costs must be supported by evidence. For our case the items 1, 2 and 3 as submitted by the defendant must be proven and the defendant has no evidence on file. Such evidence should include receipts, airline ticket butts and legal fee receipts.

Counsel submitted further to mention that that the defendant's address for service on court documents was Port Moresby and not Mt. Hagen and he had also called PNG Law Society to check on the three lawyers whose services the defendant used.

From the records they had at the Law Society Messrs. Howard Maliso and George Lau were admitted to the bar in November 2003 and Mr. Maliso is employed by the Ombudsmen Commission and Mr. Lau is employed by Paul Paraka Lawyers. The society does not have Mr. Ben Yaki on their records as a lawyer. The defendant therefore can not claim for legal fees or costs for legal services rendered by Messrs. Lau and Mapiso because at the time they were students at the law school.

The defendant in reply to that indicated that since legal aid was expensive and he provided small necessities so that they could assist him in his case. He had provided for them so that they could assist him as it is hard to get any service of this nature for free. He indicated that he had to attend to their needs so that they can assist him in the case from the capacity they were in.

These are the arguments as presented to me in this case and I also note from the depositions that the matter was registered in 2002 and the matter was disposed in September 2003. There have been a number of adjournments during the proceedings and there was an earlier ex parte order which were set aside. It seems to me there were three ex parte orders which were set aside including the application that I heard earlier. For the latter order there was a garnishee order that was obtained for the non settlement of the costs which later became the subject of this case. The number of adjournments have been for non-appearance by both parties and either one party or the other. I also say here that this matter had gone hand to hand and precisely four hands before it came to me for deliberation for the application first and now for the question of costs.

Part VIII of the District Courts Act addresses the question of costs and for the purposes of our discussion I will highlight sections 260 and 260A in their entirety and discuss their application in our case.

First we will look at section 260 of the District Courts Act and this is what the entire provision reads

(1) The power of a Court to award costs and the award of costs by a Court are subject to the following provisions:--

(a) where the Court makes a conviction or order in favour of the complainant, it may award and order that the defendant shall pay to the informant or complainant such costs as it thinks just and reasonable;

(b) subject to Section 260A, where the Court dismisses the information or complaint, or makes an order in Favour of the defendant, it may award and order that the informant or the complainant shall pay to the defendant such costs as it thinks just and reasonable;

(c) the sums allowed for costs under Paragraph (a) or (b) shall be specified in the conviction or order or order of dismissal; and

(d) a sum awarded or ordered to be paid, whether to a complainant or to a defendant, for costs, other than costs adjudged by a conviction to be paid by the defendant to the informant, is recoverable, without the direction of the Court making the order, by execution under Division IX.2; and

(e) where a case is adjourned, the Court may order that the costs of and occasioned by the adjournment be paid by a party to another party; and

(f) the costs of persons present to give evidence or produce documents, whether they have been examined or not or have or have not produced documents, unless otherwise ordered by the Court, shall be allowed to them whether or not they have been summoned, but their allowance for attendance shall not exceed the highest rate of allowance prescribed; and

(g) the amount of costs to be paid by one party to another, whether for the attendance of persons referred to in Paragraph (f) or otherwise, shall in all cases be fixed by the Court; and

(h) where the Court convicts a defendant and orders the payment of costs to the informant, the payment of costs shall be enforced in accordance with Section 168.

2. Costs awarded under this section on proceedings on a complaint shall not exceed the prescribed amounts.

Under this provision the court has the power to award costs to whichever party depending on the outcome of a case and the court when exercising this discretion it has to be reasonable and just. For the purposes of our case Sub-section (1) (b) is the appropriate provision as in this instance the court dismissed the complaint and made an order in favour of the defendant. The entire provision is clear in its application and enforcement when the court proceeds to award costs to any of the parties in a case.

The other provision worth discussing is section 260A which the entire provision reads as follows:

(1) Notwithstanding the provisions of Section 260(1) (b), the Court shall, before making an order for costs against an informant, consider all relevant circumstances and, in particular, where appropriate, shall consider--

(a) whether the prosecution acted in good faith in bringing and in continuing the proceedings; and

(b) whether at the commencement of the proceedings the prosecution had sufficient evidence to support the conviction of the defendant; and

(d) whether the prosecution conducted the investigation into the offence in a reasonable manner; and

(e) whether the evidence was sufficient to support the conviction of the defendant but the information was dismissed on a technical point; and

(f) whether the information was dismissed because the defendant established that he was not guilty; and

(3) A defendant shall not be awarded costs under Section 260(1 )(b) or under any provision in any other Act by reason only of the fact that-

(b) an information charging him with an offence has been dismissed or withdrawn.

Under this provision the court has the power and the discretion to award costs to the successful party against a losing party in a case. Subject to Section 260(1) (b) of the Act this whole provision relates to criminal matters where the court can award costs. Section 260A applies whether the information is dismissed or "struck out".

Section 260 (1) (b) states that (1) the power of a Court to award costs and the award of costs by a Court are subject to the following provisions where the Court dismisses the information or complaint, or makes an order in favour of the defendant, it may award and order that the informant or the complainant shall pay to the defendant such costs as it thinks just and reasonable. The court in awarding costs under these provisions must award costs which are just and reasonable in the circumstances after having considered all relevant state of affairs in the given particular case.

Schedule 4 of the Act has to be highlighted here as well because it provides the items for which costs can be claimed. This schedule is only for Lawyers and Agents costs in so far as a case is concerned. Schedule 5 provides for witnesses expenses and schedule 6 caters for other miscellaneous fees incurred in either prosecuting or defending a case.

This is basically what the law says in relation to the issues that have been raised in this matter. The awarding of costs is a discretionary power to be exercised reasonably and justly with due regard to the circumstances of a particular case. If a claim for costs is contested, the person claiming may have to produce receipts or support the claim with evidence on oath. In deciding what claims to allow, I should consider whether each item of costs was reasonably necessary in order to properly conduct or defend the proceedings.

The awarding of costs is the exercise of a judicial discretion and any decision must always be made after taking each case on its merits, hearing each party and taking proper account of the law. There is no absolute rule that a party who loses a case must pay the costs of the successful party. Rather, it is a general principle in Papua New Guinea, as in the United Kingdom and Australia, that "costs should follow the verdict", thus penalising the unsuccessful party and reimbursing the successful one. However, this principle is always subject to the discretion of the court in the light of the circumstances of the particular case.

Our question now is whether it would just to award costs in our case where the case was earlier dismissed and the costs awarded was ex parte and appeared excessive. On the outset the defendant was an unrepresented litigant for himself and the First Defendant except a number of times when a Howard Maliso, a final year law student at the University of Papua New Guinea in 2002 was granted leave to appear for the defendants. So in any case schedule 4 of the District Courts Act would not be applicable in this case because no lawyer or agent was involved. Even the case of Leo Getsi & East New Britain Provincial Government -v- PNG Habours Board cited above can not be applicable here because that case involved lawyers who had to get flights into Rabaul for the case and the court only awarded a certain percentage of the airfares.

That is not to rule out any expense that the defendant may have incurred as far as defending the case which the complainants failed to properly prosecute. The defence may have incurred costs but that has to be shown to the court by evidence of course as rightly ruled in the case of Motor Vehicles Insurance (PNG) Trust -v- Arild discussed above. If the defendant is claiming for airline tickets, accommodation, and for transport, then where are the ticket butts or the receipts for the actual amounts expended.

The defendant's claim in item 2 does not correspond properly with schedule 4 of the Act as the services he was given were not by lawyers in the strict sense. He may have incurred expenses which I will consider and that does not exclude item 2 completely. The miscellaneous cost in item 3 is not properly itemized if it is to be a claim under schedule 6 of the Act. The item 4 which is 8% interest is a matter I will not deliberate upon as parties have to properly address the court on that issue whether I can award interest on costs. As I alluded to earlier the defendant's claim for costs can not entirely be refused as the defence may have expended monies not properly covered for under the appropriate provisions. If it had not been for the complainants who instigated a complaint for which they failed to properly prosecute and prove then I am of the view that the defendants wasted time and expended monies so far till to date. It is not normally cheap to come to court and in the circumstances the defendants are entitled to some form of costs which can be reasonable and just. To make an order that one party should pay a sum towards the costs of the other party is a way of partially compensating the latter for having to fight the case. However, "compensation" as that term is usually used can cover a range of different sorts of loss and damage while costs are limited to the actual expenses referred to above. In all cases, I should be careful not to use costs order as a means of adding to compensation otherwise ordered or as a way of further penalising the party against whom the costs order is made.

In the circumstances I will not consider airline tickets as they are no ticket butts produced and the defendant's address for service of court documents bears a Port Moresby address. The same for accommodation as there is no evidence adduced by the defendants to show which accommodation and receipts if any. I will only consider a reasonable sum for transport to and from court at the various times to defend the claim and also for the law student.

The claim for legal expenses can not stand as the services were not provided by lawyers but it seems to Howard Maliso as a student lawyer was assisting and it may have been the responsibility of the defendant to bring the student lawyer from the university to the court house and back at the times he attended court. I note from the court records that Mr. Maliso appeared only twice in court as the student lawyer on record. A reasonable sum in that regard would be appropriate for the defendants.

I will have to consider some reasonable sum to be awarded to the defendant for typing, photocopying of court documents for the reason of this case. Although these are items not specifically provided for by statute, I have attempted to be fair to a defendant who was brought into court nearly two years now and to have a decision in his favour.

Up until today there have been about 36 adjournments in this case which include the dates for the substantive issue as well as the motions to set aside ex parte orders. The defendants caused no appearance on 11 adjournments and similarly the complainants caused no appearance on several occasions too. For the 25 adjournments the defendant has come into court I will allow K2.50 as transport costs because there is no evidence to suggest the mode of transport used by the defendant to and from court.

I will allow KI0.00 for each occasion that Howard Maliso assisted in the case and I will award K50.00 for typing or photocopy of court documents. I will now award K62.50 for the adjournments that the defendant appeared, K20.00 for assisting Howard Maliso to court and K50.00 as miscellaneous costs. If the defendant had occasioned costs above the suggested figures here, then there is no proof to the satisfaction of this court. In trying to be fair to the defendant I have tried to assess costs in the above manner.

With that the complainant is now ordered to pay costs to the defendant in the sum of K132.50 as reasonable costs of the proceedings.

Papua New Guinea District Court

Plumbers and Builders v Sirunki Construction Ltd [2004] PGDC 49; DC294 (30 April 2004)