Tumu v Motor Vehicle Insurance Ltd [2015] PGNC 233; N6136 (13 August 2015)

N6136

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 898 OF 2004

BETWEEN

MARK TUMU
Plaintiff

AND:

MOTOR VEHICLE INSURANCE LIMITED
Defendant

Mt Hagen: Frank,J
2015: 6, 13 August

COSTS- Review of taxed costs- application of extension of time –principles to apply when considering extension of time

Cases Cited:
Papua New Guinea Cases

Don Pomb Pullie Polye v Jimson Sauk Papaki and Electoral Commission of Papua New Guinea [2000] PNGLR 166
Hii v Maribu (12 May 2012) SC1188
John Kombra & 10 Others v Bernard Kipit and National Capital District Commission (2009) N3756
Rundle v MVIT (No 1) [1988] PNGLR 20;
Seravo v Jack Bahafo (2001) N2078

Overseas Cases

Chapman v Chapman [1985] 1A11ER 757

Counsel:

Mr P. Kopunye, for the plaintiff
M. Mr Pokia, for the defendant

RULING ON APPLICATION

13th August, 2015

1. FRANK, J: I heard the defendant's application referred to herein, and on 13 August 2015, I granted the application with brief reasons and said I would publish my reasons later, which I do now.

2. The defendant applies for orders (amongst others):

(a) That the Certificate of Taxation filed on 26 May 2015 ("Certificate") be set aside; and

(b) For an extension of time within which to file an application for review of the taxation that resulted in the issue of the certificate.

3. The plaintiff applied by way of a Notice of Motion filed on 15 April 2015 ("Motion"). The application is supported by the affidavit of Muriso Pokia sworn on 10 April and filed on 15 April 2015. In his affidavit, Mr Pokia, on behalf of the plaintiff says, amongst others, that:

3.1 On 18 May 2012, the court issued the following orders by consent:

"THE COURT ORDERS BY CONSENT THAT:

1. Leave is granted to the plaintiff to withdraw the Notice of Motion filed on 26 May 2011.

2. The time set out in Term 2 of the Court Orders of 18 February 2011 is extended by 7 days for the defendant to file and serve its Amended Defence.

3. The costs of the application to extend time is to be paid by the Defendant on a party/party basis.

4. Time is abridged."

3.2 On 18 July 2014, the defendant's lawyers received a copy of the Bill of Costs ("Bill") under the plaintiff's lawyers letter dated 5 June 2014, and were informed that taxation of the Bill was scheduled for 28 July 2014;

3.3 On 28 July 2014,taxation of the Bill did not proceed;

3.4 The defendant's lawyers issued two letters to the plaintiff's lawyers dated 26 September 2014 and 29 October 2014, enquiring when the Bill is scheduled to be taxed;

3.5 On 24 March 2015, the defendant received by facsimile, a copy of the plaintiff's lawyers letter of that date which advised that taxation had been scheduled for 23 March 2015 but adjourned to 25 April 2015;

3.6 On 25 March 2015,the Bill was taxed. This is evident in the Certificate;

3.7 On 7 April 2015,the defendants lawyers received the plaintiff's lawyer's letters:

(a) one dated 14 March 2015 which advised that taxation would be conducted between 23 March and 27 March 2015; and

(b) the other dated 27 March 2015, which had enclosed to it a copy of the certificate.

4. The plaintiff, through the affidavit of Peter C. Kopunye sworn on 25 June 2015 and filed on 30 June 2015, says that (a) all lawyers knew well in advance of the taxation scheduled to take place between 23 March 2015 and 27 March 2015; and (b) the defendant's lawyers should have made its own enquiries commencing February 2015 to find out when taxation of the Bill is to take place; and (c) Mr. Pokia's affidavit does not point to an error in the taxation. The defendant's evidence is, otherwise, not in dispute.

5. I deal first with the application for the extension of time. This application is made pursuant to Order 22 Rule 60 (2) and Order 1 Rule 15(1) of the National Court Rules ("Rules"). Any reference herein to an Order or a Rule is, unless otherwise indicated, of the Rules.

6. Order 22 Rule 60(2) provides:

"An application for review of the taxing officer's decision shall be made within 14 days after the date of the decision objected to or within such further time as the court may allow."

7. Order 1 Rule 15(1) provides:

(1) The court may, on terms, by order extent or abridge any time fixed by the Rules or by any judgment or order.

(2) ....

8. In an application of this nature, this court has previously held that am applicant must satisfy the following:

1. That there must be a reasonable explanation why costs were taxed in the defendant or plaintiff's absence;

2. That the application for extension of time must be made promptly and within a reasonable time of the decision becoming known;

3. If there is any delay, whether the reasons for delay are justified under the circumstances;

4. Whether the application has any merits? John Kombra and 10 others v Bernard Kipit and National Capital District Commission (11 September 2009) N3756

9. There is one other factor which, in my view, is relevant to an application for extension of time under Order 22 Rule 60(2). That is the issue of prejudice.

10. In Chapman vs. Chapman [1985]1A11ER 757, the court, in a taxation review, considered this factor and said the issues is whether the paying party has been prejudiced by the receiving party's inordinate and excusable delay?

In that case, it was submitted that the prejudice suffered there were that:

(a) the paying party had apparently suffered prejudice in that the protracted delay in proceeding with the taxation of costs had caused his health to suffer; and

(b) for the other paying party, its financial position had worsened in the period between the making of the making of the orders for costs and service of bill of costs, a period of 18 months, and

(c) the knowledge and clear recollection of the other paying party of the facts of the case had diminished over the period and he was not in such a strong position as he might otherwise have been to challenge the costs being claimed.

11. With respect to the evidence, the court, at page 766, observed:

"The direct evidence of prejudice could scarcely be less impressive. Not a word further is said about how, or how far, the first defendant's health has suffered; and counsel for the defendants could add nothing, even on instructions. Not a word further is said about the extent to which the second defendant's financial position has worsened for any period. The exhibit is an unsigned and undated manuscript document recording the changes in the second defendant's employment. Probably it was written by the second defendant, though counsel could not tell me why neither the exhibit nor the affidavit said so, or why the affidavit did not verify the exhibit. The second defendant, it seems, had held the positions of chairman and managing director or director in various companies which in early 1981 fell on hard times. In July nor August 1981 the second defendant lost his jobs, his holiday pay entitlement, and his pension rights, as well as his capital in one company, and received only his statutory redundancy payment; and he had to pay up £4,500 on a personal guarantee. In the autumn of 1981 he was unemployed, in November 1981 he obtained a consultancy job with two companies, and in November or December 1982 one of these terminated. In March 1983 he became self employed, though it does not appear what the result of this was. From first to last not a single figure is mentioned, apart from the £4,500 that he had to pay on the guarantee; and there is not a word about his capital resources. Furthermore, on 13 October 1983, some six months after he became self-employed, his solicitors wrote to the plaintiff's solicitors making an increased offer to pay £8,000 to the plaintiff in order to avoid a taxation of costs. This replaced offers of £6,750 and £7,000 made respectively in January and March of that year."

12. Further on, the court continued:

"I do not think that it is normally open to the paying party to adduce either no evidence of prejudice or else miserably feeble evidence of it, and then say that from mere delay, however gross and inordinate, the court should infer prejudice, I say nothing of a case in which there are some good reasons (eg,death) why in such a case it may well be right to conclude on the facts that there was prejudice. But where there is no reason why the paying party should not establish just what prejudice from delay. Indeed, from the party's omission to demonstrate any prejudice. I would infer that there has been none."

13. Then, at page 767, it said:

" In the present case, I can see no reason why in an affidavit expressly dealing with prejudice to the defendants, a word or two might not have been said about how the first defendant's health had been affected, or how the amount of the second defendant's capital and income had changed, or how it was that the delay had affected the defendant's solicitors' recollection of the facts of a case mainly depending on documents so as to impair his ability to contest the question of costs. Something, too, might have been said to explain why any prejudice that arose was not offset by the financial advantage of being able to pay later rather than promptly, or why, instead of pressing for taxation, the defendants' solicitors from time to time had been seeking to delay it (as in their letter of 28 July 1981) or were making offers in an attempt to avoid taxation (as in their letters of 27 January, 21 March and 13 October 1983)."

14. With respect to the burden of establishing prejudice, the court, at page 766, said:

"If a paying party contends that he has been prejudiced by the receiving party's delay. I think that it is for the paying party to establish the prejudice, and not for the receiving party to establish that there has been none."

15. With respect, I would adopt this line of reasoning of Sir Robert Megarry V-C in Chapman (supra). To the test applied in Kombra (supra), I will also consider this factor to determine whether or not leave under Order 22 Rule 60(2) should be granted. This factor is also a relavant consideration in applications for extension of time in which to give notice. Rundle v MVIT (No.1) [1988] PNGLR, 20; Seravo v Jack Bahafo(2001) N2078

16. With respect to the plaintiff's assertion in paragraph 4(a) above, there is no evidence which demonstrates that the public notice which comprised Annexure "A" to Mr.Kopunye's affidavit had been circulated by letter, email or fax to all lawyers including the defendant's lawyers.

17. With respect to the position the plaintiff took in paragraph 4 (b) above, I agree that the defendant's lawyers should have made its own inquiries to find out when the taxation of the Bill is to take place. From the evidence, noted at paragraph 3.4 and 3.5 above, however, the defendant made its enquiries through the plaintiff's lawyer's who obliged. From the chronology of events, noted at paragraph 3,5,3,6 and 3.7, it was the plaintiff's lawyers who misinformed the defendant's lawyers of the taxation appointment. It did not correct this. This resulted in the defendant's lawyers not attending the taxation on 25 March 2015.

18. I make one further point in this respect. According to the Taxing Officer's endorsement of the taxation appointment of 23 March 2015, the Taxing Officer stood the appointment over to 25 March 2015 at 1.30pm and directed the plaintiff's lawyer to inform the defendant's lawyers of the new appointment and file an affidavit of service. The only letter or notification that the plaintiff's lawyers gave to the defendant's lawyers was in terms of the plaintiff's lawyers letter dated 24 March 2015, referred to at paragraph 3.5 above. The plaintiff's lawyers did not file an affidavit deposing to compliance with the Taxing Officers direction of 23 March 2015.

19. There was no evidence explaining the variance between the Taxing Officer's directions of 23 March 2015, and the plaintiff's lawyer's advice in its letter dated 24 March 2015 to the defendant's lawyers and its attendance for the taxation on 25 March 2015. If the plaintiff's lawyers had been mistaken of the date of the taxation, one would have thought that it would not have attended the taxation on 25 March 2015. Again, there was no evidence which provided any explanation for this.

20. From the evidence and matters set in paragraph 16 to 19 inclusive, I am satisfied that the defendant's lawyers have provided a reasonable explanation as to why the taxation proceeded in its absence.

21. I am also satisfied that this application was made promptly. The 14 Days within which to apply for review under Order 22 Rule 60(2) expired on 8 April 2015, one day after the defendant's lawyers received notice, on 7 April 2015, that taxation was conducted and concluded on 25 March 2015. The affidavit in support of the application was sworn on 10 April 2015. The Notice of Motion for leave was filed on 15 April 2015. I accept that the period between 10 April 2015 and 15 April 2015, would be the period it took for the defendants lawyers to send the Motion and Mr. Pokia's affidavit to the Mt Hagen National Court Registry in Mt. Hagen on 15 April 2015.

22. With respect to the grounds meriting a review, the defendant did not adduce any evidence. However, a copy of taxed Bill comprising Annexure "D" to Mr Konunye's affidavit shows the following:

(a) for an outgoing letter, the plaintiff claimed K150,which was taxed off by K70,the result of which is that the defendant is to pay,K80 for each of this item;

(b) for court appearance, the plaintiff claimed K3,000 which represented four hours of waiting time in court and appearance before the court at K750 per hour. K2, 000 was taxed off on this account leaving K1, 000 as the amount payable.

23. With regard to outgoing letters, there is no evidence of the basis of the rate applied by the Taxing Officer. Under the scale of costs for National Court Election Petition Rules 2002(as amended)("EP Rules"), the maximum allowable for an outgoing letter is K50.00. Under the Supreme Court Rules 2012, Item 8 of Schedule 4, the maximum cost that can be claimed for this item is K75.00; I have assumed that the letters for which costs were claimed are not short letters. From this comparison, I am of the view that the allowances made by Taxing Officer for each of this item was excessive.

24. with respect to the item on court appearance, on 18 May 2012,the court made orders with consent of both parties. Under item 6(i) (f) of the Rules, costs of counsel's fees for ex-parte or consent application is fixed at K50.00. Under the EP Rules, the maximum lawyer's fee for any application is K350. Under the Supreme Court Rules, the maximum allowable for waiting time is K150 per hour and not exceeding K3, 000 per day (Schedule 4,Item 15). In Hii v Maribu (2012) SC 1188, the Supreme Court allowed K200 per hour for a claim under schedule 4, Item 15. From this comparison, I find that K1, 000 allowed for this item is excessive against the amount allowable under item 6(i)(f) of table 1 of Schedule 2 of the Rules.

25. I point out two aspects only to demonstrate that there appear grounds with merit that warrant a grant of leave.

26. Next, for a party to have its costs taxed, it must file an application for taxation under order 22 Rule 45(2). In this case the records show that such an application was not filed. Only the Bill was filed. The Bill was put before the Taxing Officer without any application for the Taxing Officer to proceed to taxation. This was not a ground relied on by the defendant in its application, so I leave it at that.

27. I am satisfied that there are on the face of the records that there are grounds which appear to have merit. This favour the grant of the application.

28. The defendant also seeks orders that the Certificate and the taxation giving rise to it, be set aside pursuant to Order 12 Rule 8(3) (a), Order 12 Rule 1 and the inherent power of the court to prevent abuse of its process. The defendant did not develop each of the basis for seeking this relief to demonstrate that the Certificate was an order for purposes of Order 12 Rule 8(3)(a) or a judgment or order which fell within the scope of Order 12 Rule 1,or that the manner in which the taxation was conducted amounted to an abuse of the court's process.

29. I have found that no application for taxation was filed with the Bill. If this constitutes an irregularity, it might be arguable that the whole taxation process and the Certificate was voidable to attract the jurisdiction of this court to set aside the Certificate pursuant to Order 1 Rule 9, which provides:

"9. Application to set aside for irregularity

An application to set aside any proceeding for irregularity shall not be allowed unless it is made within a reasonable time, or if made after the party applying has taken any fresh step with notice of the irregularity."

30. On the other hand, it was held that Order 22 spells out the breadth of the jurisdiction of the National Court to award appropriate costs. Don Pomb Pullie Polye v Jimson Sauk Papaki and Electoral Commission of Papua New Guinea [2000] PNGLR 166. If this means that Order 22 is a self-contained code for the taxation of costs before the National Court, it might be arguable that those provisions in Order 12 and Order 1 Rule 9 are not applicable.

31. In the result, I am not persuaded that it is open to this court to set aside the taxation and Certificate under each of these bases.

32. With respect to the issue of prejudice, this was not addressed by either party. In so far as is relevant, the substantive proceeding is still on foot. The cost the subject of taxation is in respect of an interlocutory application. The lawyers involved for the parties have not changed; they are available to assist in the review of the taxation. The plaintiff makes no claim that it will be prejudiced should the application be granted. No evidence of prejudice has been put by the plaintiff, or is apparent on the records. This consideration therefore favours the applicant.

33. The defendant also seeks an order that all taxed costs be paid after the conclusion of the proceedings, pursuant to Order 22 Rule 5(1), which provides:

5. Time for dealing with costs. (52/5)

(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).........

34. This jurisdiction has been exercised when the court on 18 May 2012 awarded costs against the defendant, the subject of the taxation and Certificate.

35. The other relief sought by the defendant is for the costs of its application pursuant to the Motion to be paid by the plaintiff, Order 22 Rule 14 is relevant. It provides-

14. Extension of time. (52/13)

Where a party applies for an extension of time, he shall, unless the court otherwise orders, pay the costs of and occasioned by the application, or an order made on or in consequence of the application.

36. By this Rule, the defendant, being the applicant, is obliged to pay the cost of this application unless the court otherwise orders. In the circumstances giving rise to the application and my findings, I have decided to reserve the question of costs to allow parties to consider the reasons for the orders made herein and allow parties the opportunity to address this court on the issue as to whether I should make orders otherwise than for the defendant to pay the costs of and incidental to its application in accordance with Rule 14.

37. In the result, I conclude that the circumstances favour the grant of the application. I therefore grant the plaintiff an extension of time to file an application for review within 14 days of these orders.

38. The orders are:

38.1 The time within which the applicant is to file its application for review is extended to and shall expire at 12:00 noon on Thursday 27 August 2015.

38.2 The time for compliance with the requirements of Order 22 Rule 60 (3) and (4) are to be reckoned by reference to he date when an application for review is filed pursuant these orders.

38.3 The relief sought in paragraphs 2 and 3 of the motion are refused.

38. 4 Costs of the application are reserved.

_______________________________________________________________
Kopunye Lawyers: Lawyer for the Plaintiff/Respondent
Mirupasi Lawyers: Lawyers for the Defendant /Applicant