Oil Search (PNG) Ltd v Upeke [2018] PGNC 532; N7658 (29 March 2018)

N7658

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

O.S. NO. 107 OF 2016

OIL SEARCH (PNG) LIMITED
Plaintiff

V

LEWIS UPEKE and WILFRED UPEKE and members of Imawe Bogasi Clan; their agents, servants, associates, relatives and supporters
First Defendant

WOLOTOU LAND GROUP INCORPORATED
Second Defendant

IPIPOME HONGIRI, WAINOKOLU and KAPISAPI SUBCLANS of IMAWE BOGASI CLANS
Third Defendant

Waigani: Kariko, J
2018: 20^th & 29^th March

COSTS – application for review – bill prepared by non-lawyer – disbursements – meaning of – accommodation & transport costs of a party – whether necessary - must be reasonable – supported by evidence

Cases Cited

Pius Sankin v Papua New Guinea Electricity Commission (2002) N2257
PNG Power v Ralph Gura (2014) SC1402
Tolom Abai and Ors v The State (1998) N1762

Legislation

National Court Rules

Counsel

Mrs E Noki, for the Plaintiff
Mr W Upeke, lead First Defendant

RULING

29^th March, 2018

1. KARIKO J: This is an application for a review of the taxed costs of the first defendant pursuant to Order.22 Rule.60 (1) National Court Rules.

Background

2. In the substantive proceeding Oil Search (PNG) Limited (OSL) sought as its principle relief, a permanent injunction against the defendants from unlawfully interrupting and interfering with the operations of OSL as the Manager of the Erave-Samberigi Road Project in the Southern Highlands Province.

3. On 16^th March, 2016 I heard an urgent ex parte application by the plaintiff for interim injunctive orders against the first defendant, then the only defendant (Imawe Bogasi Clan) and granted the orders which were extended in November, 2016 after the inter partes hearing of the application.

4. The substantive case was subsequently tried by affidavit evidence and on 3^rd March, 2017 I dismissed the application for a permanent injunction and ordered the plaintiff pay the defendants’ costs of the proceeding.

5. The costs of the first defendant were taxed on 28^th November, 2017. Aggrieved by the decision of the taxing officer, OSL filed this application for review.

The law

6. Pursuant to Order 22 Rule 60(1) a party aggrieved by the taxation of costs may apply to the Court to have the taxation reviewed.

7. On a review, the Court shall consider whether the amount of the taxed costs:

(1) was in accordance with what the law entitles a party to claim for costs and disbursements on a party/party basis,
(2) were reasonable in the circumstances: Tolom Abai and Ors v The State (1998) N1762,
(3) were supported by material evidence,
(4) was an attempt by the party who prepared the bill to profit.

(See PNG Power v Ralph Gura (2014) SC1402)

8. Order 22 Rule 24 provides that on a taxation of costs on a party-party basis, there shall be allowed all such costs as were necessary or proper for the attainment of justice or for enforcing the rights of the party.

9. A claim for such costs should be properly supported by evidence. The party entitled to costs should not profit from the order for costs. The order is for the party to recover what it may have been forced to incur on account of the litigation: Pius Sankin v Papua New Guinea Electricity Commission (2002) N2257.

Review application

10. The applicable scale of costs is set out in Table 1 of Schedule 2 of the National Court Rules.

11. The plaintiff challenges the amounts allowed by the taxing officer in relation to the first defendant’s claims under Part 3 (Counsel’s fees), Part 7 (Preparation for trial) and Part 9 (Taxation of costs). A total of K696,200.00 was claimed under those Parts and K86,315.00 was allowed. The details are:

	Claimed (K)	Allowed (K)
Part 3 (Counsel’s fees)	2700.00	1200.00
Part 7 (Preparation for trial)	692,600.00	84,000.00
Part 9 (Taxation of costs)	400.00	400.00
Disbursements	500.00	500.00
Total	696,200.00	86,315.00

12. The taxing officer did not publish a decision regarding the taxation but his “work sheet” (the bill of costs containing handwritten figures of amounts allowed) is in the court file. The parties agreed that the list of objections filed by the plaintiff accurately records the items allowed at taxation. I have compared that list with the “work sheet” and they correspond.

Submissions

13. OSL’s main arguments on this review are that the taxing officer erred in awarding the costs objected to because:

(1) those costs ordered were party-party costs and not on a solicitor-client basis.
(2) the costs claimed are not included in Schedule 2 Table 1 National Court Rules which lists the costs that may be claimed on a part-party basis.
(3) accommodation and transport costs are not proper claims.
(4) the claims for accommodation and transport costs were not supported by evidence.
(5) the claims amount to unjust enrichment.

14. In response, the first defendant submitted that the costs were necessary to defend the case against them by OSL, meaning that the six members of the Imawe Bogasi Clan were compelled under the circumstances to live in Port Moresby until the case was finally determined.

Part 3 (Counsel’s fees)

15. It is noted that the first defendant had a lawyer on record, Axis Pacific Lawyers. Mr Kevin Kepo of that firm represented the first defendant during the proceeding, although he failed to appear when the substantive matter was tried.

16. Under Part 3 the taxing officer allowed K150 for each of the eight occasions the lead defendant of Imawe Bogasi Clan, Wilfred Upeke, appeared in court as representative of the Clan in the absence of their lawyer. Costs under this Part may only be claimed by a lawyer for attendance or appearing in court. The fees cannot be allowed to a party who appears because of the unavailability of his counsel.

17. The taxing officer therefore erred in allowing the first defendant K1,200.00 under this Part.

Part 7 (Preparation for trial)

18. Under Part 7, the first defendant sought to claim Mr Kepo’s costs of preparing for the trial including taking instructions, drafting documents and legal research, but that claim was properly declined by the taxing officer.

19. Under this Part, the first defendant also claimed as “disbursements”, accommodation travel and transport costs for six clan members of the Imawe Bogasi Clan, including Wifred Upeke. There are several points to note about this particular claim:

(1) Such costs cannot be claimed under Part 7.
(2) The “disbursements” are not those of the first defendant’s lawyers.
(3) The “disbursements” do not even qualify as witnesses’ expenses that are allowable under Part 6 (Allowances to witnesses), because witnesses were not required for any of the court attendances including the trial.
(4) No evidence was produced to the taxing officer to verify the “disbursements”.

20. In response to this application for review, Wilfred Upeke filed an affidavit on 5^th December, 2017 that attaches receipts of payment from:

(1) Pejay Trans & Logistics Services who allegedly provided accommodation; and
(2) Rainbow Marvelous Inn who allegedly provided a hire car,

to the six members of the Imawe Bogasi Clan for 12 consecutive months, being the period from when they travelled to Port Moresby to defend the case (April 2016) to when the proceeding was finally determined (March 2017).

21. The amounts claimed as “disbursements” for accommodation and transport hire were:

Month	Claimed (K)	Allowed (K)
3-30 April 2016	53,500.00	7,000.00
May 2016	62,000.00	7,000.00
June 2016	60,000.00	7,000.00
July 2016	62,000.00	7,000.00
August 2016	62,000.00	7,000.00
September 2016	60,000.00	7,000.00
October 2016	62,000.00	7,000.00
November 2016	60,000.00	7,000.00
December 2016	62,000.00	7,000.00
January 2017	62,000.00	7,000.00
February 2017	56,000.00	7,000.00
1-3 March 2016	6,000.00	7,000.00
Total	667,500.00	84,000.00

22. The receipts referred to in paragraph 20 were not produced at taxation because as Wilfred Upeke explained, he was not asked for them. I gather from submissions that the taxing officer simply decided to allow K7,000 per month without any proper basis – a figure he seemingly plucked from the air. It is interesting to note that K7,000 was allowed for March 2017 when the first defendant only claimed K6,000 for just three days of that month. Accordingly, I find the taxing officer erred in taxing the “disbursements”.

23. There is an argument that monies spent on accommodation and vehicle hire may be costs that were necessary for defending the action (Order 22 Rule 24) but the costs must be justified and reasonable and supported by proper evidence.

24. The costs for six members of the Imawe Bogasi Clan living in hotel/guest-house accommodation and using a hire car for 12 continuous months to defend an application for a permanent injunction is not justified and reasonable. This case did not require six members of the Imawe Bogasi Clan to travel to Port Moresby and stay here for 12 months. The evidence relied on by the Clan at the trial comprised affidavits by Wilfred Upeke alone. Instructions to their lawyer could have been relayed by phone or email. Documents filed by Mr Upeke shows he has access to both modes of communication.

25. In any case, the evidence now produced in support of the “disbursements” does not appear credible. The relevant receipts suggest that Mr Upeke and his group paid K667,500.00 in cash for accommodation and transport over 12 consecutive months away from home and family to await the outcome of an application for permanent injunction against them. The total amount is ridiculously high. It is clear to me that in this instance, the first defendant has attempted to profit from the bill of costs.

26. I consider one return air travel by Mr Upeke from Mendi to Port Moresby with perhaps 5 days stay at the Rainbow Marvelous Inn to provide and finalise instructions to the lawyers may have been all that was needed. Car hire would not be necessary. In the circumstances, I would allow the first defendant a nominal amount that I think would adequately cover the suggested expenses and that sum is K5,000.00.

Part 9 (Taxation of costs)

27. Costs awarded under Part 9 are discretionary and relate to the taxation process. The sum of K400.00 claimed and allowed is in my view, acceptable.

Disbursements

28. Pursuant to Order 22 Rule 49(1)(b), disbursements shall be included in a bill of costs. The disbursements by their lawyer cannot be claimed by the Imawe Bogasi Clan. Disbursements made by Mr Upeke for the Clan in relation to preparing for taxation are covered by the costs claimed and allowed under Part 9.

29. The taxing officer therefore erred in allowing K500.00 for disbursements made by the first defendant.

Conclusion

30. The costs I allow on this review compared to the taxed costs are:

	On taxation (K)	On review (K)
Part 1 (Preparation of documents)	215.00	215.00 (Not objected to)
Part 3 (Counsel’s fees)	1200.00	Nil
Part 7 (Preparation for trial)	84,000.00	5,000.00
Part 9 (Taxation of costs)	400.00	400.00
Disbursements	500.00	Nil
Total	86,315.00	5,615.00

Order

31. Accordingly, I order that:

(1) Upon review, the taxed costs of K86,315.00 of the first defendant’s bill of costs is reduced to K5,615.00.
(2) Each party shall bear its own costs of this review.

_____________________________________________________
Bradshaw Lawyers: Lawyer for the Plaintiff