Interreligious and International Federation of World Peace v Hocking Construction and Joinery Ltd [2012] SBHC 164; HCSI-CC 170 of 2006 (3 April 2012)

IN THE HIGH COURT OF SOLOMON ISLANDS
(Chetwynd J)

Civil Claim No. 170 of 2006

BETWEEN

INTERRELIGIOUS AND INTERNATIONAL FEDERATION
OF WORLD PEACE, SOLOMON ISLANDS
Claimant

And

HOCKING CONSTRUCTION AND JOINERY Ltd
Defendant

Mr Tagini for the Claimant
Mr Afeau for the Defendant

Date of Hearing: 1st March 2012
Date of Judgment: 3rd April 2012

Ruling on application

1. The Defendant obtained a judgment on its Counter Claim, technically a summary judgment but effectively one as the result of default, on 21st April 2011. Clause 3 of the judgment reads, "The Claimants to pay the Defendant's cost of the application to be agreed if not to be taxed". This followed an earlier judgment by Goldsbrough J dating back to the 22nd February 2010. In his judgment His Lordship made an order which said, inter alia, "Costs of the action so far will be awarded to the defendants to be paid by the claimants within 28 days from today. Those costs to be agreed or taxed". In between those two judgments a further order was made (on 27th August 2010) relating to a hearing on that date. It says the Claimant should pay "the costs of today" to the Defendant.

2. It would appear from those orders and judgments the Defendant is entitled to all its costs of the action, including the application for summary judgement dealt with on 21st April 2011.

3. The parties could not agree costs and so an application was lodged on 12^th October 2011. It is headed Application For Taxation of Costs (rules 2.9 and 7.5). Those two rules relate to interlocutory applications. However, the Notice also contains an application for

"1. An order that the Claimant pays the Defendant's costs on an indemnity basis in the sum of $104,609.16.

2. An order to pay the costs of preparation and hearing of this application in the sum of $2,000. "

In other words, this was not just an application for the taxation of costs it was also an application to alter the basis on which the costs were to be taxed.

4. The "application" came before the Registrar of the High Court and he gave a written judgment on 16th December 2011. He said in so many words, and I think he was quite correct, the Defendant was too late. The order for costs had been made and that set the basis on which the costs were to be taxed.

5. One small issue to be dealt with, the "new" rules^[1] do not use the word taxation. The new rules refer to the "assessment" of costs. Be that as it may, old habits for lawyers and judges die hard and the assessment of costs is still commonly referred to as taxation. Nothing turns on this point, no one is confused or misled when taxation is referred to instead of assessment but perhaps it would be best if we all now adopted the phraseology of the new rules.

6. Costs are dealt with at Chapter 24 of the Rules. They are much simplified from our old rules and as a result, thankfully much of the judgment I gave as Registrar in a bankruptcy matter in 2003^[2] is superfluous. Rules 24.1 to 24.5 preserve the accepted or default position that costs are at the discretion of the court, that they are usually paid to the successful party, that the parties themselves can agree what costs are to be paid and to whom and that, unless the costs are referred to the Registrar for assessment, only those set out in Schedule 3 and properly incurred disbursements are recoverable. Rules 24.6 and 24.7 deal with the timing of any order for costs. The important rules for the purposes of this application are at 24.8 to 24.13.

7. Rule 24.8 sets out what standard costs are. They are all costs necessary for the proper conduct of the case and proportionate to the matters involved. What is proportionate in a simple matter is obviously different from what would be proportionate in a complex matter. Rule 24.9 describes indemnity costs as all costs reasonably incurred, including counsel's fees, with the same proviso in Rule 24.8 as to proportionality and in addition by reference to any agreement between the litigant and his legal representatives and bearing in mind the charges normally paid in such work. Indemnity costs (or more properly costs awarded on an indemnity basis) would of course be greater than standard costs (or costs awarded on a standard basis). Rule 24.10 sets out the default position with costs. Unless the court orders otherwise, they will be awarded on a standard basis. Rule 24.11 is little difficult to reconcile with the accepted position that costs are at the discretion of the court, as set out in Rule 24.1, but would seem to be aimed at giving some guidance as to the making an award on an indemnity basis. Rule 24.12 is likewise difficult to reconcile with exercise of discretion but again could be seen as giving guidance as to when a court might increase the award of costs over and above those on a standard basis.

8. The position with regard to costs would therefore seem to be the court can either order a losing party to pay costs assessed on a standard basis or on an indemnity basis. However Rule 24.13 makes it quite clear that they are not the only options available in the High Court. If the High Court does not order assessment on an indemnity basis it can fix an amount of costs which should be paid; or direct how the costs are to be calculated; or refer the assessment of costs to the Registrar and the court can also set the time by which costs are to be paid. The remainder of Rule 24.13 removes any doubt. If costs are not ordered to be assessed on an indemnity basis or on a standard basis, the amount of costs that can be ordered to be paid are not limited to those costs fixed by Schedule 3 to the Rules. Put another way, amounts greater than those set out in Schedule 3 can be ordered to be paid by the party liable to pay costs. What is also apparent from Rule 24.13 is if the court orders assessment of costs by the Registrar then the Registrar has discretion to award costs in excess of those set out in Schedule 3. Both the court and the Registrar must take into account the considerations set out in Rules 24.36, 24.37 and 24.38 but can otherwise they can exercise their discretion.

9. So far as this application is concerned, the rules referred to provide the answer. The order made by Goldsbrough J on 22^nd February 2010 and the two made by me (on 27th August 2010 and 21st April 2010) are not orders, "for costs against a party on an indemnity basis" (Rule 24.13). The Defendant is not now able to ask the Registrar to make orders in those terms. The Defendant should have either appealed the orders or gone back to the court to seek variations. It did not do so and it is now too late. This is not an issue which can be dealt with at an assessment of costs. The two substantive orders refer to taxation and whilst the rules do not now deal with costs in the terms of taxation there is no doubt both required costs to be assessed. Neither order refers to assessment or taxation on a standard basis either. The net effect is the Registrar can now assess the costs taking into account the matters referred to in Rules 24.36, 24.37 and 24.38 and without being constrained by the amounts set out in Schedule 3. This is not the same as saying the costs can be assessed on an indemnity basis. Whether the Registrar is prepared to award costs over and above those set out in Schedule 3 for any particular item of work and if so by how much are questions to be answered by the Registrar following the exercise of his discretion.

10. The case should now go back to the Registrar so that he can assess the costs. No doubt he will fix an appointment for that to take place. He will probably want to hear submissions from both parties on the day appointed. He can then, using the discretion vested in him, determine the costs payable. The costs of determining costs form part of the costs of the proceedings (Rule 24.40).

11. The costs before the court in this application shall be paid by the Defendant to the Claimant, such costs to be assessed by the Registrar if not agreed. If the Registrar is so minded he can order such costs to be deducted from the costs he assesses as being payable by the Claimant to the Defendant.

Chetwynd J

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^[1] Solomon Islands Courts (Civil Procedure) Rules 2007
^[2] In the estate of Rex Fera Civil case 172 of 2001