Pua v Magiten [2005] PGNC 65; N2892 (7 October 2005)

N2892

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS NO 264 OF 2000

EGGA PUA
Applicant

V

OTTO BENAL MAGITEN
Respondent

KIMBE: CANNINGS J
8 SEPTEMBER, 7 OCTOBER 2005

RULING ON APPLICATION

PRACTICE AND PROCEDURE – costs – order for costs, to be taxed if not agreed – whether a party in whose favour an order for costs is made has to submit to taxation – whether order for specific sum of costs can be made – National Court Rules, Order 22 – slip rule – Constitution, Section 155(4).

The respondent succeeded several years ago in obtaining an order from the National Court dismissing an application by the applicant for an extension of time to appeal against a decision of the District Court. The National Court order did not expressly state which party was awarded costs and stated that ‘costs to be taxed if the parties don’t agree’. The respondent filed a bill of costs but the applicant failed to satisfy the bill. The respondent recently sought to file an application, seeking an order for a specific amount of costs. The Registry refused to accept the application, telling the respondent that he had to get his bill of costs taxed. This court agreed to hear the respondent’s application.

Held:

(1) The court has the power under the slip rule to correct errors or clarify a previous order and this was an appropriate case in which to exercise that power.

(2) The National Court has the power to make an order for a specific sum of costs. The court does not have to order that costs be taxed, if not agreed.

(3) The Court made an order for costs of K400.00.

Cases cited:
The following cases are cited in the judgment:

Charles Maino v Moi Avei (2000) SC648
Dick Mune v Paul Poto (No 2) [1997] PNGLR 356
Isidore Kaseng v Michael Debege (2004) N2735
Orogen Minerals Ltd v Internal Revenue Commission (2003) N2464
Re Election of Governor-General (No 3) (2004) SC752
Richard Dennis Wallbank and Jeanette Minife v The State [1994] PNGLR 78
The State v Barclay Bros (PNG) Ltd (2004) N2507

Counsel:
No representation for the applicant
O Magiten, the respondent, in person

CANNINGS J:

INTRODUCTION

This is an application for an order for payment of a specific amount of legal costs. The application is made by the person who is the respondent to the substantive proceedings, which is an application for an extension of time to appeal against a decision of the District Court. This is a judgment on the respondent’s application.

BACKGROUND

In or about 1999 the respondent, Otto Benal Magiten, and the applicant, Egga Pua, came to an agreement for the sale of a trade store at Sarakolok, near Kimbe. The respondent obtained a bank loan to finance the purchase of the trade store. The applicant then changed his mind and the sale did not go ahead. The respondent was aggrieved and took the matter to the District Court at Kimbe, and won. On 18 January 2000 the District Court ordered the applicant to pay the respondent K5,766.40, within three months.

The applicant had the right to appeal to the National Court. But the time allowed for filing an appeal expired. He had not paid the money he had been ordered by the District Court to pay. Then on 12 May 2000 he commenced the substantive proceedings, OS No 264 of 2000. He sought an extension of 21 days to file an appeal and an order staying the operation of the District Court’s order of 18 January 2000.

On 5 October 2000 the respondent took the matter back to the District Court, which issued a warrant for the arrest of the applicant. It is not clear whether that warrant was executed.

For some reason there was a delay in dealing with the substantive proceedings. It seems that the National Court never made a ruling on the question of extension of time or staying the District Court order. The next thing that happened was on 29 August 2001 when the respondent filed a motion seeking dismissal of the substantive proceedings on the ground of want of prosecution. On 2 September 2001 the respondent served a copy of the motion and supporting affidavit on the applicant.

On 21 September 2001 the respondent’s motion came before Lenalia J. His Honour granted the orders sought in terms of the notice of motion filed by the respondent on 29 August 2001.

On 27 November 2001 those orders were entered in the following terms:

1. The appeal No 264 of 2000 is dismissed for want of prosecution.
   
2. That the District Court order dated 18 January 1999 and 5 October 2000 is confirmed.
   
3. That costs to be taxed if parties don’t agree.
   

It will be observed that the order does not expressly state which party is awarded costs. However, there is an endorsement on the National Court file stating that orders were being granted in terms of the notice of motion; and in the notice of motion the respondent had sought costs. So it is reasonably to be inferred that Lenalia J had awarded costs to the respondent.

On the same day that the order of 21 September 2001 was entered, ie 27 November 2001, the respondent filed a bill of costs for K400.00. That is the last document on the National Court file before the matter returned to court on 8 September 2005.

The respondent appeared in person and filed an application, seeking an order for payment of costs of K400.00. His application was expressed to be supported by an affidavit dated 29 August 2001. There was no appearance by the applicant.

I quizzed the respondent on the background of the matter. He said that he had been trying for several years to get the applicant to cooperate but the applicant kept saying that he would not pay the costs unless he was ordered to do so by the court. The respondent also said that he had faced difficulty getting his current application before the court as staff at the Kimbe Registry had refused to accept it and informed him that he had to have his bill of costs taxed by the Registrar.

RELEVANT LAW

In the normal course of events if a party obtains an order from the National Court in their favour, that party will be entitled to have its legal costs paid by the opposing party or parties. The amount of costs is worked out according to a scale of costs. If the parties cannot agree on what the amount should be the question of costs is submitted to "taxation" and the taxing officer is the Registrar. This is rather confusing terminology as taxation usually refers to the process of compulsory contribution to government revenue or something similar. Taxation of costs is something completely different. It is legal terminology which means examination and assessment of the amount of costs of court proceedings.

The National Court’s power to award costs is regulated by Order 22 of the National Court Rules. There are a few basic principles that must be considered:

• First and foremost, an award of costs is at the discretion of the court. The party which wins has no right to be paid costs. The court can award costs to the losing party, order the parties to pay their own costs, order that costs be in the cause or make no order for costs.
  
• Secondly, the court’s power to make orders about costs can be exercised at any stage of the court proceedings and even after the end of the proceedings.
  
• Thirdly, the court has a discretion to either award a specific sum of costs or make the amount of costs subject to taxation.
  
• Fourthly, a party has no entitlement to costs unless there is an order for costs from the court.
  

These principles are set out in the following rules in Order 22 (costs) of the National Court Rules.

Rule 4 (powers of the court generally):

(1) The powers and discretions of the Court in relation to costs shall be exercised subject to and in accordance with this Order.

(2) Subject to Sub-rule (1), this Order has effect subject to these Rules and subject to any Act.

Rule 5 (time for dealing with costs):

(1) The Court may, in any proceedings, exercise its powers and discretions as to costs at any stage of the proceedings or after the conclusion of the proceedings.

(2) Where the Court makes an order in any proceedings for the payment of costs, the Court may require that the costs be paid immediately, notwithstanding that proceedings are not concluded.

Rule 6 (taxed costs and other provisions):

(1) Subject to this Order, where, by or under these Rules or any order of the Court, costs are to be paid to any person, that person shall be entitled to his taxed costs.

(2) Where the Court orders that costs be paid to any person, the Court may further order that, as to the whole or any part (specified in the order) of the costs, instead of taxed costs, that person shall be entitled to—

(a) a proportion specified in the order of the taxed costs; or

(b) the taxed costs from or up to a stage of the proceedings specified in the order; or

(c) a gross sum specified in the order instead of the taxed costs; or

(d) a sum in respect of costs to be ascertained in such manner as the Court may direct.

Rule 8 (order for payment):

Subject to this Order, a party to proceedings in the Court shall not be entitled to recover any costs of or incidental to the proceedings from any other party to the proceedings except under an order of the Court.

In addition to the above rules relating specifically to costs, it is a general rule of practice and procedure that the National Court has the power to correct simple arithmetical or clerical errors or ‘slips’ or to make minor corrections to its orders that do not alter the substantive character of the order that has been made. This is known generally as the ‘slip rule’. This is part of the inherent powers of the National Court. An example of the circumstances in which the rule applies is provided by Order 8, Rule 59(1) of the National Court Rules (minute of judgment or order), which states:

Where there is a clerical mistake in a minute of a judgement or order, or an error in a minute of a judgement or order arising from an accidental slip or omission, the Court, on application by a party or of its own motion, may, at any time, correct the mistake or error.

(See generally Richard Dennis Wallbank and Jeanette Minife v The State [1994] PNGLR 78, Supreme Court, Los J, Brown J, Salika J; Dick Mune v Paul Poto (No 2) [1997] PNGLR 356, Supreme Court, Kapi DCJ, Los J, Salika J; Charles Maino v Moi Avei (2000) SC648, Supreme Court, Los J, Sheehan J, Injia J; Re Election of Governor-General (No 3) (2004) SC752, Supreme Court, Kapi CJ, Injia DCJ, Hinchliffe J, Salika J, Sakora J; Orogen Minerals Ltd v Internal Revenue Commission (2003) N2464, National Court, Sakora J; The State v Barclay Bros (PNG) Ltd (2004) N2507, National Court, Kapi CJ; Isidore Kaseng v Michael Debege (2004) N2735, National Court, Kandakasi J.)

Whenever there is cause to consider the nature and extent of the powers of the National Court to make orders, Section 155(4) of the Constitution must be considered.

Section 155(4) (the national judicial system) states:

Both the Supreme Court and the National Court have an inherent power to make, in such circumstances as seem to them proper, orders in the nature of prerogative writs and such other orders as are necessary to do justice in the circumstances of a particular case.

THE PRESENT CASE

All of the above laws are relevant to the present case. The respondent, Otto Benal Magiten, succeeded four years ago in obtaining an order from the National Court, dismissing proceedings by the applicant, Egga Pua, that were aimed at securing an extension of time to appeal against an order of the District Court. The respondent obtained a loosely drafted order for costs, which talked about the costs being taxed if there was no agreement about costs. He has been trying for four years to enforce the order for costs without success. He submits that he wants to simplify the process. He does not want to go though the rigmarole of applying for taxation and waiting for the Registrar of the National Court to come to Kimbe to conduct a taxation hearing. He submits that he is only asking for a modest sum – K400.00 – and it would make things straightforward for everybody if the court made an order for payment of costs of that amount.

What the applicant is saying makes sense. He won his case in the District Court. He then won in the National Court, in that he defeated the application for an extension of time to appeal. He obtained an order for costs. He has waited a long time. I accept his submission that the justice of the case requires that there be an order in his favour for a specific sum. I am satisfied that this court has the power to amend the order made by Lenalia J on 21 September 2001 and entered on 27 November 2001. I can amend that order under the slip rule, as the order was loosely drafted.

I can then make an order for the specific sum sought by the respondent, K400.00. I agree that that is a modest and reasonable sum. It is clear from Order 22, Rule 6(2)(c) of the National Court Rules that an award of costs can be for a specific sum. It is not mandatory for all awards of costs to be taxed. I agree with the respondent that this will make things simple and straightforward.

ORDER

For the reasons set out above the court will order that paragraph 3 of the order entered on 27 November 2001 be set aside and replaced as follows:

• The applicant, Egga Pua, must pay the sum of K400.00 costs to the respondent, Otto Benal Magiten, within one month after the date of service of this order.
  

Ordered accordingly.
_________________________________________________________

Lawyers for the applicant : Self-represented
Lawyers for the respondent : No representation