Jordan v Edwards [1979] PGLawRp 683; [1979] PNGLR 420 (5 September 1979)

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COSTS - Taxation of costs - Particular items - Counsel’s fees - Second or overseas counsel - Relevant considerations - Supreme Court Rules 1977, O. XCI, r. 81A[dxlix]¹.

(b) overseas counsel, may be allowed on taxation only if, and to the extent that, they are certified for by the trial judge, or in a matter in the Supreme Court, by the Supreme Court.

(2) In this Rule ‘overseas counsel’ means a barrister or solicitor or barrister and solicitor who is not resident in the country and normally carries on practice outside the country.”

N1>(1) When considering whether an exception should be made in terms of O. XC1, r. 81A of the Supreme Court Rules, the principal matters for consideration are:

N2>(a) the difficulty of the case (in particular whether it involves complex matters of law);

N2>(c) the expertise reasonably required for the nature of the particular action;

N2>(d) whether the smallness of the profession and of the community might cause embarrassment to the employment of resident counsel in the particular case;

where construction of the Constitution of the Independent State of Papua New Guinea is involved foreign counsel should not normally be required.

N1>(2) On an appeal in the Supreme Court, and in the circumstances, including the briefing of the same counsel as appeared before the National Court (before r. 81A was introduced), the complex nature of the case, and the fact that the plaintiff having ceased to reside in Papua New Guinea briefed available counsel and solicitors in his own State of Australia, fees for overseas counsel should be allowed.

N1>(3) In general such costs should include the costs of a return air fare to the nearest place where suitable counsel can be obtained, reasonable hotel and incidental expenses in the place of trial during trial, and other necessary expenses.

This was a matter in which the question of what counsel’s fees should be allowed on taxation was reserved for consideration of the Supreme Court under O. XCI, r. 81A of the Supreme Court Rules.

PRENTICE CJ: The question of counsel’s fees to be allowed in this case was reserved in accordance with the recently introduced r. 81A of O. 91. I think it advisable that something be said that may be of assistance to the taxing master and the profession. (It was thought that each of us should say something on the principles which will guide us on such a matter.) Traditionally the judges in Papua New Guinea have had little to do with questions involving taxation of costs. From what little we have seen recently, we are alarmed at the bills which are being brought in. In my opinion it is necessary that this be closely watched lest in a small community of practitioners it be thought that mutual agreement was being arrived at not to challenge one another’s costs.

I consider that the situation has now arrived where more and more nationals in this Independent State become involved in litigation, that the cost of importation of foreign counsel should usually be borne by the party briefing him. And it should be kept in mind that the institution of Queen’s Counsel is not recognized in our legal framework, and that fees on such a scale should not be allowed.

When considering whether an exception should be made in terms of the court’s Rule — the court, I believe, should take into account as the principal factors — the difficulty of the case (in particular whether it involves complex matters of law); the nature and extent of the rights involved; the expertise reasonably required for the nature of the particular lis; whether the smallness of the profession and of the community might cause embarrassment to the employment of resident counsel; and above all the necessity of keeping costs as low as possible and access to advice as wide and as even as possible.

One would I believe, consider that where construction of the Constitution of the Independent State of Papua New Guinea is involved, foreign assistance would not normally be required.

The instant case was a difficult one — but not outstandingly so. It did not involve an expertise which cannot fairly readily be encompassed by non-specialists. But K23,000 was involved, and both sides had engaged foreign counsel on the original hearing which took place before the enactment of the rule concerned. The same counsel were briefed on the hearing as had appeared in the National Court. Because the plaintiff had ceased to reside in Papua New Guinea at the time the action was brought on and had become a resident of Victoria, it was I believe reasonable for him to brief Victorian practitioners, to have conferences with them there and consequently to bring counsel from Australia to Papua New Guinea to conduct the appeal. I would allow fees for overseas counsel in this case. I desire to add that I agree generally in the remarks of my brethren, and in particular in my brother Kearney’s stipulation in regard to the allowance of an air fare.

RAINE DCJ: As this is the first matter of its kind I thought it might be a help to the bar to know some of my views. But I do agree with what the learned Chief Justice has said and in the orders he proposes.

For a time it will be necessary for parties to employ counsel from Australia. In most cases they are senior juniors. But we do see quite a few from the Inner Bar. In a good many cases, as we have no silks in this country, I see no reason why we should visit the losing party with party and party fees appropriate to Australian senior counsel. However, I reserve for future consideration the employment of seniors with specialist qualifications in very difficult fields such as revenue work or accountancy, or in especially hard cases. One hopes that in eight to ten years time enough national counsel will have the knowledge and experience to handle a deal of the heavy civil work. It seems wrong to me to deprive them of experience by certifying for southern counsel in cases where the latter’s attendance here is not really essential. I would also draw attention to the fact that there are several good and experienced non-nationals here who are perfectly well able to handle a high proportion of the civil work.

The amount involved is not a decisive factor. In test cases the case chosen as having the facts best suited to test the legal position might only involve very small damages. Or a plaintiff in a defamation case may be quite disinterested in damages, all he wants is to clear his good name. “Au contraire”, a huge claim in alleged breach of contract might hinge on a very simple question of fact.

Another consideration, however hard, or however easy a case, is the situation, in a small city or town, with few lawyers where embarrassment might be caused a local practitioner, whether a national or non-national, this because the practitioner is a close friend of the other party and his witnesses, or, as occurred recently in a matter before me, where the practitioner and his partner had acted professionally for people they were acting against before me. I did not see any conflict of interest in my case, in fact I am sure there was not. But I imagine it is a difficult situation.

A further matter that occurs to me is that counsel here are both barristers and solicitors. It is well established that a barrister cannot give evidence for his client whilst continuing to act. I was in a case where Royal Commissioners very reluctantly permitted it to happen. The circumstances were very special however, and it was not considered likely that there would be hostile cross-examination. A barrister and solicitor here, who, as it were, briefed himself, would be in a fix if a witness from whom he took an unsigned proof in his capacity as a solicitor, turned out to be hostile at the trial. If the proof were signed possibly no problem would arise, but even then it could. If unsigned, and the hostile witness was a critical one, then the man who could refute him, as the solicitor could, having taken the proof, has changed hats, he is then counsel, he cannot give evidence.

If the local practitioner learnt in advance that he might be in trouble with the witness it may well justify him in briefing southern counsel.

Another situation can arise, and no doubt has arisen, when a practitioner here, who was going to handle the case in court himself, is apprised that Mr. Bigwig of Queen’s Counsel will be appearing on the other side. So, he too briefs out. If he succeeds, then this is a factor to be taken into account, but surely not a decisive one. The fact that silk is briefed on one side does not mean that silk must be briefed on the other.

It rather offends my old fashioned feelings to see Mr. Monahan’s brief marked much like a solicitor’s bill of costs. But this cannot be avoided, for southern counsel have air fares, hotel expenses, etcetera. In my old State of New South Wales the prothonotary, periodically, would give an indication of what he considered was a proper party and party loading for the various circuit towns, and counsel would simply add this loading to the prothonotary’s approved party and party fee, or, if counsel was fashionable, to his own rather higher one. Counsel would pay for themselves out of the enlarged fee, for fares, hotels, etc. It is difficult to have such a system here, as counsel might have to get here earlier than might otherwise have been necessary but for flight problems, and be delayed in returning to Australia when missing a plane because a case lasted just that little bit longer than expected. Mr. Monahan was concerned about getting here on time, and set off much earlier than necessary to get the case up, but very fairly made no claim on account of this.

I might add that loadings are not only, as near as can be, an estimate of what air fares and hotels, etcetera, will amount to exactly. Something else has to be fed in to allow for inconveniences, and for loss of smaller fees one might have earned, a rush pleading or conference, a view, and so on. Of course this is something one has to make a stab at.

By and large I feel that we should work on the basis that the air fare should be assessed as if a member of the Brisbane bar had been briefed. But, for reasons I think I have made clear, this would not be just if it was reasonable, in all the circumstances, to brief some specialist from Sydney, or even Melbourne. There are special circumstances in Mr. Monahan’s case, because of the situation of his client.

I have no complaint as to Mr. Monahan’s hotel expenses. He must have either been dined out, or eaten sparingly. I do not, however, see why he should be allowed a Rent-a-Car or Avis. Solicitors should attend counsel at conferences and in court. They can provide transport. But solicitors have their problems. Thus I would allow a small daily amount for contingencies such as taxis. It simply must be remembered that we are really concerned with party and party costs only, not solicitor and client costs. The difference is as horsehair is to swansdown. The successful party must pay for the difference out of his verdict.

None of the above is to be taken as an indication of my hostility to the presence of southern counsel. Indeed, if I might say so with respect, I have had enormous assistance from them, and I am sure that the young practitioners who listen to able and experienced men from Australia must learn much. But this is not a reason for visiting huge fees and allied expenses on the losers, except in really proper cases. This is my concern, and I trust it is understood by all.

In this case it is not necessary to say anything. But in some cases it will be necessary for counsel and solicitors to keep careful diaries as to times of arrival and leaving of their southern counsel. Also, it will help us to be informed whether counsel paid his air fare and expenses, or whether the local solicitors took responsibility for this. It is important that this be done in a pretty meticulous way. Whilst we do not wish to see a successful party lose what he deserves, if we grant a certificate, we certainly do not want to see cases of double charging, due to its being forgotten, possibly months later, that counsel paid his air fare, and that the solicitor did not, or vice versa.

KEARNEY J: At the hearing the court certified without stating reasons, that the case was one in which it was proper that the fees costs and expenses of overseas counsel be allowed on taxation. In the absence of such certification, the effect of r. 81A of O. 91 of the General Rules is that these items cannot be allowed at all. The briefing of overseas counsel should in general be regarded an unusual expense, so as to require the solicitor to warn his client before doing so that the expenses involved may not be allowed on party-and-party taxation.

The court reserved for further consideration the question of the extent to which such allowance should be made. The matter is dealt with today.

A party to litigation may be represented by any practitioner admitted to practise in this jurisdiction and the fee for such services is the amount agreed with counsel. But his unsuccessful opponent can only be required to pay such expenses as were reasonably and necessarily incurred by the successful party in defending his rights.

What then in this case were those reasonable and necessary expenses, so far as counsel was concerned? The norm is measured by the fees properly allowed on taxation to resident counsel; in this appeal, the fees allowed on brief would be of the order of K350. However, in certifying for overseas counsel in this case, the court had in mind that the complexity of the issues involved was such as to be beyond the level of competence of available local counsel. That being so, it is clear that allowance must be made on taxation for the additional expenses necessarily incurred in briefing overseas counsel. That, to my mind, should in general include only the cost of a return air fare to the nearest place where suitable counsel can be obtained — that is, in general, Brisbane, Australia; his reasonable hotel and incidental expenses in Port Moresby during the trial; and, in this case, an allowance for travelling time.

That counsel’s fees on behalf of the respondent be allowed on the following basis: brief fee K350 three refreshers at K233 each hotel accommodation K180 travel in P.N.G. K40 (i.e. K10 per day) air fare economy return (Melbourne/Port Moresby) — if incurred by counsel personally.

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[dxlix]

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Papua New Guinea Law Reports

Jordan v Edwards [1979] PGLawRp 683; [1979] PNGLR 420 (5 September 1979)

Papua New Guinea Law Reports - 1979