Pacific Trade International Ltd v Waisime [2020] PGSC 137; SC2053 (2 November 2020)

SC2053

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCREV 46 AND 49 OF 2019

REVIEW PURSUANT TO s. 155 (2)(b) CONSTITUTION

BETWEEN:
PACIFIC TRADE INTERNATIONAL LIMITED
Plaintiff

AND:
JAMES WAISIME
First Respondent

AND:
MARYANNE WAISIME
Second Respondent

AND:
AUSOKA ENTERPRISES LIMITED
Third Respondent

AND:
JUSTIN SEO trading as CITI ENGINEERING
(PNG) LIMITED
Fourth Respondent

Waigani: Hartshorn J,
2020: 22^nd October, 2^nd November

COSTS - Application concerning current lawyers’ entitlement to tax previous lawyers’ bill of costs

Cases Cited:

Rex Paki v. Motor Vehicle Insurance Ltd (2010) SC1015
Wamu Abari v. Willie Gumaim (2020) SC1925

Counsel:

Ms. D. Doiwa, for the Applicants
Mr. D. Kipa, for the First and Second Respondents

2^nd November, 2020

1. HARTSHORN J: This is a decision on contested applications in two related proceedings which seek orders that certain parties current lawyers are not entitled to tax and claim the costs of those parties under a bill of costs filed by those parties previous lawyers.

Background

2. The applicants were unsuccessful in two review proceedings before the Supreme Court. Costs were awarded to the first and second respondents, James and Maryanne Waisime (Waisimes) in both proceedings. A bill of costs was filed for taxation on behalf of the Waisimes by their lawyers at that time, Twivey Lawyers. The Waisimes then engaged new lawyers, Wang Dee Lawyers. Objection was made by the applicants at the taxation of the bill of costs, to Wang Dee Lawyers appearing for the taxation of a bill of costs which was prepared and filed by Twivey Lawyers. The taxing officer adjourned the taxation and directed that the objection be raised and argued before this court.

The applications

3. The applicants apply pursuant to Order 2 Rule 1(h) Supreme Court Rules and Order 12 Rule 1 National Court Rules. The Waisimes take issue with the competency and merits of the applications.

Consideration

Jurisdictional basis

4. Order 2 Rule 1(h) Supreme Court Rules, is as follows:

"Application of National Court Rules

1. The following Rules of the National Court shall apply as if they were, with necessary modifications, Rules of the Supreme Court with regard to—

........

(h) Any other matter where there is a relevant provision in the National Court Rules, no provision in these Rules and no order has been made as to the procedure to be followed."
5. As was stated in Wamu Abari v. Willie Gumaim (2020) SC1925 (Salika CJ, Hartshorn J, Dingake J) at [10], for Order 2 Rule 1(h) Supreme Court Rules to be enlivened, there must be a matter where there is a relevant provision in the National Court Rules and no provision in the Supreme Court Rules and no order has been made as to the procedure to be followed. All three prerequisites must be satisfied.

6. The matter in this instance, being what the applicants are seeking to achieve, is for the lawyers which prepared and filed the bill of costs, to tax that bill of costs and claim the costs for their former clients, the Waisimes, and not for the current lawyers for the Waisimes to tax the bill of costs and claim those costs. It was not brought to the attention of this court that there is a provision in the Supreme Court Rules that provides for the relief which the applicants seek and I am not aware of such a provision. Further, there is no evidence of any order having been made as to the procedure to be followed to obtain such relief.

7. As to whether there is a relevant provision in the National Court Rules, the applicants rely upon Order 12 Rule 1 National Court Rules. Order 12 Rule 1 however, under the heading of “General relief”, is a general provision. It does not contain a concise reference or any reference to the relief sought by the applicants and so cannot, in my view, be considered to be a relevant provision. Consequently, the applicants have not satisfied the court as to the three prerequisites which require satisfaction to enable Order 2 Rule 1(h) Supreme Court Rules to be enlivened. Given this, the applications of the applicants should be dismissed.

8. Notwithstanding this, I give consideration to the merits of the relief sought.

9. The first ground of the applicants is that there was no evidence before the taxing officer that Wang Dee Lawyers had standing to tax the bill of costs filed by Twivey Lawyers. The applicants do not take issue with the fact that Twivey Lawyers have filed a notice of ceasing to act for the Waisimes and that Wang Dee Lawyers have filed a notice of change of lawyers to the effect that they now represent the Waisimes in this proceeding.

10. The applicants submit that Wang Dee Lawyers are bound to ensure that they are authorised to tax and claim costs for professional work performed by Twivey Lawyers. That is as may be, but that is the concern of Wang Dee Lawyers, the Waisimes and Twivey Lawyers. It is not the concern of the applicants. The concern of the applicants and their lawyers is that they are dealing with the lawyers for the Waisimes, of whom they have had proper notice.

11. The second and third grounds are that it is unethical and constitutes unjust enrichment by Wang Dee Lawyers to tax and claim the costs of the Waisimes incurred by Twivey Lawyers when there is no evidence that Twivey Lawyers have been paid or that they have settled or waived their fees.

12. No provision, including from the Professional Conduct Rules, was relied upon by the applicants for this ground. Again, it is not the concern of the applicants whether Wang Dee Lawyers are being unethical or are being unjustly enriched in their representation of the Waisimes and in their dealings with Twivey Lawyers. I refer to my comments concerning the first ground in this regard. I note also the evidence that the applicants lawyers copied their correspondence to Wang Dee Lawyers to Twivey Lawyers. There is no evidence that Twivey Lawyers have responded or taken a position, adverse or otherwise to the concerns of the applicants and their lawyers.

13. Given the above, the application of the applicants must fail. The remaining consideration concerns costs. The Waisimes seek costs on a solicitor client basis against the lawyers for the applicants.

14. Counsel for the applicants submits that these applications were brought on the instructions of the applicants in good faith and upon the directions of the taxing master.

15. Counsel for the Waisimes submits that there was no merit to the applications and that the lawyers for the applicants have been notified of this on numerous occasions. Further, the lawyers for the applicants were placed on notice that costs on an indemnity basis against the lawyers for the applicants would be sought if the applications failed or were dismissed.

16. That the taxing officer referred the objection of the applicants to this court, does not detract from there being no merit in these applications. The lawyers for the applicants do not take issue with Wang Dee Lawyers having instructions to represent the Waisimes in these proceedings. When a client instructs a lawyer to make an application that simply has no merit, the lawyer should advise against the application being made. If the client persists with the instructions, the lawyer should cease representing the client unless the said instructions are withdrawn. Here, the applications have no merit. Further, there is no evidence that the copying of correspondence by the lawyers for the applicants to Twivey Lawyers has elicited their support for these applications or indeed, any response, adverse or otherwise to the concerns of the lawyers for the applicants. The lawyers for the applicants were put on notice of the lack of merit of the applications and that an adverse costs order would be sought if the applications were brought and failed. Notwithstanding this, the applicants and their lawyers persisted with these applications.

17. I am satisfied that the necessary requirements for an order of solicitor client costs against a lawyer have been made out. I refer in this regard to the Supreme Court decision of Rex Paki v. Motor Vehicle Insurance Ltd (2010) SC1015. I am of the view that Wang Dee Lawyers in their letter to the lawyers for the applicants appropriately put them on notice that all lawyers owe a duty to explain to a client the ‘legal logic’ or otherwise of a client’s instructions. This necessarily includes the consequences of persisting with instructions that have no merit and which are most likely to fail. The instructions which the applicants gave to their lawyers had no merit and should not have been persisted with. That they have been is evidence that the applicants were not advised appropriately by their lawyers. To my mind, this is conduct which is unreasonable and sufficiently blameworthy such that solicitor client costs against the lawyers for the applicants should be ordered.

Orders

18. The Court orders that:

a) These applications are dismissed;

b) Makap Lawyers shall pay the first and second respondents’ costs of and incidental to the said applications on a solicitor client basis.
__________________________________________________________________
Makap Lawyers: Lawyers for the Applicants
Wang Dee Lawyers: Lawyers for the First and Second Respondents