Taimi o Tonga - Ruling on Costs [2004] TOSC 22; C 0124 2003 (24 May 2004)

IN THE SUPREME COURT OF TONGA
CIVIL JURISDICTION
NUKU’ALOFA REGISTRY

NO. CV. 124/03
NO. CV. 219/03
NO. AC. 4/03
NO. AC. 10/04

BEFORE THE HON CHIEF JUSTICE WARD

RULING ON COSTS

Actions CV 124/03 and CV 219/03 were applications for judicial review of various decisions and actions relating to the Taimi ‘o Tonga newspaper. In both cases, the plaintiffs were successful. The defendants then unsuccessfully appealed both cases in actions AC 4 /03 and AC 10/03.

The first two actions included claims for damages which have yet to be tried but that part of the cases has now been consolidated with a further application for judicial review and damages relating to the same sequence of events.

The plaintiffs were given leave to file the bills of costs out of time for the judicial reviews at first instance and for both appeals. The defendants have contested those bills and the matter has been dealt with by written submissions.

Judgment was given in CV 124/03 on 4 April 2003 and in CV 219/03 on 26 May 2003. In CV 124/03 I ordered that the defendants should pay the plaintiffs’ cost of the hearing only with all other costs to await the determination of the remainder of the claim. In CV 219/03, leave had been given to apply to have the first defendants dismissed from the action and, for that reason, I ordered the costs of the action to that point should await the end of the damages claim as the identity of the defendants against whom the order would be made might be changed if they were successful in their application. I have overlooked the application to dismiss the first defendants and have yet to rule on it but they have been parties to the case so far and so the costs to date should apply to them. If I find they should have been dismissed from case 219/03, I shall correct my order in this case but the objections to the bill of costs in that case can still be determined whichever of the defendants eventually has to pay.

The Court of Appeal dismissed both appeals with costs to the respondents specifically noting that they were to be taxed on a party/party basis.

Counsel for the plaintiffs has submitted that the orders limiting the costs which will be payable at this stage have been overtaken by events, in particular the appeals and the consolidation of the remaining matters and so he has submitted bills for all costs incurred to date. This has not been challenged by counsel for the defendants and I consider this is a proper course to follow now.

Detailed submissions have been filed by counsel for the plaintiffs in support of his bills. Counsel for the defendants has raised objection on four aspects of the bills. A fifth was based on the mistaken premise that costs were being claimed on a solicitor/ own client basis and is not now pursued.

The first matter is the fact that the plaintiffs have claimed costs at a rate higher than that set out in Practice Direction 2/02.

The court has power to allow costs outside the levels in the PD 2/92 on special cause shown and the increase shall be of such amount as he thinks fit. One case where an increase may be allowed is where the court considers it was reasonable to have instructed counsel from abroad; see, for example, Tonga Development Bank v Niu unreported C231/92 and the, as yet, unreported, judgment of Finnigan J on costs in Polynesian Airlines v Kingdom of Tonga C126/97 delivered on 19 May 2000.

Senior counsel for the plaintiffs is a New Zealand based lawyer. The plaintiff company and the third plaintiff are both based in New Zealand and it is suggested by the plaintiffs that it was reasonable that they should have instructed senior counsel from there. It does not appear to be challenged by the defendants that these were cases in which it was proper to instruct overseas counsel as, indeed, the defendants themselves did in case 219/03 and in both appeals. I agree that the issues in this case were important and the number of lawyers here with sufficient experience is still very limited. I consider it was proper to instruct senior counsel from abroad and it, therefore, merits remuneration at rates higher than the usual scale.

Counsel are reminded that, if they wish to claim their costs following a successful outcome at other than the usual rates in Tonga, application should be made to the court to certify it is an appropriate case. Such application should normally be made before the case is heard and failure to do so may result in the costs being awarded on the normal scale for Tonga; TDB v Niu (above). In this case, no point is taken by counsel for the defendants on the need to instruct overseas counsel or that costs may be awarded above the normal rate; the challenge is to the appropriate level.

The costs have been claimed on the basis of an hourly rate. Counsel for the plaintiffs has told the court that his normal charge out rate in New Zealand is NZD$450 per hour. He suggests that it would not be appropriate to charge at that rate here and offers a rate of TOP$350. The defendants suggest the rate should be between TOP$250 and $300. The test (as counsel for the plaintiffs clearly acknowledges) is not whether the rates are comparable to the rates of other senior counsel in Auckland but whether the charges are reasonably necessary for the attainment of justice or for defending the rights of the plaintiffs in this case in Tonga.

Applying that standard, I consider TOP$350 is reasonable. I note that the scale of charges in PD 2/92 allows a daily rate for court hearings. For senior counsel that rate is $1000 per day. It is clear from the rates set out for counsel and locally qualified lawyers that the daily figure is based on a sitting day of 6 hours (although that would make the figure for senior counsel incorrect). At the rate of $350 per hour, the daily rate for six hours would be $2100 only slightly over twice the rate in PD 2/92. I consider that a very fair and reasonable charge for counsel of such seniority and I accept that as a basis for his charges.

In the Polynesian Airlines case, Finnigan J accepted the advice of counsel that, in New Zealand, as a broad rule of thumb the court would reckon, in a straightforward case with no special features, on three days preparation time to each day in court. In the complex matter the learned judge was considering in that case, he allowed 15 days preparation for each sitting day. The present cases were complex and required considerable preparation. As with many judicial review cases, however, most of the evidence was by affidavits and so the trial was brief compared to a case consisting entirely of live evidence. Even the legal submissions in court were relatively quick as a result of the care and detail with which counsel on both sides had prepared the written submissions.

Looked at as a ratio the figures, after the deductions made below, are CV124 – 5.5: 1; CV 219 – 4.9: 1; AC 4 and 10/03 6.7: 1. On that basis I cannot accept that these figures are excessive.

The second matter of concern raised by counsel for the defendants is that the order should not be made against all defendants on the basis that the costs will be paid by the second defendant, the Kingdom of Tonga, in any event. I am afraid I do not understand his concern. The normal order is that the defendants in such a case shall be jointly and severally liable for the plaintiffs’ costs expressed as costs against the defendants. That is the order I make. I have no doubt, as counsel for the defendants points out, that the Government will honour them but that does not mean the order should be modified to reflect that. The appellants differed in the two appeal cases but I accept that it is not necessary to separate the costs as the appeals were heard together and treated as involving the same issues against the appellants as a whole

More specific objection is raised, as the last two grounds, first to the inclusion of the taking of instructions and research as party/party costs and, second, to the lack of supporting vouchers for the claims for disbursements and the inclusion of the travel costs.

Order 29 rule 4 (1) allows such costs, charges and expenses as are reasonably necessary or proper for the attainment of justice or for maintaining or defending the rights of a party.

In Edwards v Kingdom of Tonga [1994] Tonga LR 62 at 69 the costs of research were only allowed in relation to aspects of the law the lawyer presenting his bill could not be reasonably expected to know. That has been confirmed more recently in Practice Direction 4/03 which disallows research unless the law is novel or of unusual complexity. I note that, prior to the present Rules, Martin CJ, when determining the proper hourly rate, similarly assumed that the practitioner "knows all the relevant law so that he cannot charge for time spent learning what the law is (except for abstruse points of law which the average practitioner would not be expected to know); O G Sanft and another v Johnson and others [1991] Tonga LR 1.

It has not been the practice in this court to allow the cost of obtaining instructions from clients as party/party costs.

The bills of costs included both research and obtaining instructions in a general figure for balance of attendances:

"being obtaining of instructions, briefing of evidence and drafting of affidavits, research and drafting of pleadings and submissions, preparation for trial, related correspondence."

With the claims was a breakdown of the timesheet of counsel. I was unable to extract the specific items to which objection was taken and so I requested counsel to provide more detail and he has done so. He has not been able to provide exact figures of the actual time on each individual aspect of, for example, an item described as "research and preparation of written submissions, general preparation for trial".

I accept his comment that, in a case of this nature, "it is difficult for me to distinguish between research and other preparation for trial – particularly in the context of a judicial review and/or appeal as the present case, where researching and preparing written submissions is, for example, something of a seamless process".

However, he has tried to provide some further apportionment on a percentage basis and I consider the information he has given is reasonable. I do not consider it necessary to take it further. In the final analysis, the court can only proceed by estimation based on such knowledge and experience as it possesses; Simpson’s Motor Sales (London) Ltd v Hendon Corporation [1964] 3 All ER 833 at 839. I have been through the breakdowns supplied and I am satisfied that the allowance for research is reasonable bearing in mind the nature of the cases. I see no reason to disallow those costs.

As far as the obtaining of instructions is concerned I do not consider those should be allowed and I deduct them as follows:

CV 124/03 2 hours

CV 219/03 8 hours

It is correct that disbursements should be properly supported by vouchers as was stated in PD 2/02 but I regard that as necessary only when they are challenged. The purpose of taxation of costs in the majority of cases is to try and settle the proper amount with the minimum need to resort to technicalities. In the present cases, counsel for the plaintiffs has not sought his costs incurred in the preparation of the bills of costs or the considerable work involved in supporting them in the face of the defendants’ opposition. If the court ordered the production of vouchers, I would direct that the preparation costs of the bills of costs should be included in the total costs order. I have no doubt it would not be possible to produce vouchers for some disbursements but the total sum involved would be relatively small and would not approach the extra costs allowed.

The disbursements are itemised in this bill but the details of, say, the documents photocopied and the actual rate at which such photocopying was charged is not stated. I suggest that, in such a case, counsel should only seek vouchers if the overall figure appears clearly excessive or incorrect. Leaving aside the airfares and other travel costs against the inclusion of which there is specific objection and to which I shall return, I fail to see any item under disbursements which could be so described and I shall accept them as submitted.

The basis of objection to the inclusion of the airfares and other travel costs of counsel and also his food and accommodation is that they are solicitor/own client costs.

Practice direction 2/92 deals with this. It directs that all reasonable sums necessarily expended by counsel in respect of travelling costs and subsistence when required to reside away from the ordinary place of residence shall be allowed. Where counsel appears who is principally resident abroad, he should not normally expect to have the costs of travel from his place of residence to Tonga allowed.

The same test applies as to the other costs; whether the disbursements are reasonably necessary for the attainment of justice or the defence of the party’s rights in this court. In unexceptional cases the need to instruct counsel from abroad cannot be considered reasonably necessary and neither, therefore, can his travel costs to Tonga. Once here, they will be treated as if based in Nuku’alofa and so any travel and subsistence necessitated by appearance in the other islands will be claimable in the usual way.

In this case, the court has accepted that it was justified to instruct counsel from abroad because of the complexity of the case and the relative expertise of counsel here and abroad. The plaintiffs in this case were faced with the financial and legal resources of the Crown Law department. From recent trends, it appeared likely that the Crown would again employ counsel from abroad. In those circumstances, the plaintiffs should also be able to do so on the principle of equality of arms. Although I accept that the availability of trained lawyers has changed since 1990, I note that in the unreported case of Uta’atu v Commodities Board, no 40/89, Martin CJ applied the same principle.

Having reached the conclusion that it was a reasonable step in this case to instruct counsel from abroad, it is proper to allow the travel costs from counsel’s ordinary place of residence as reasonably necessary for the attainment of justice. I would add that those expenses include the time taken for the journey. During the journey from New Zealand counsel is isolated from his practice because he has placed himself at the disposal of the client whose case he is travelling to attend. Counsel explains that, in CV 219, he has inadvertently omitted the time of his return journey and does not, therefore, include it. I do not consider that is a reason not to allow it and I add 3 hours for the return travelling time.

When counsel attended the Appeal Court for AC 4/03 and 10/03, he was also instructed to appear in other appeals during the same session and so he has, properly, divided the travelling and associated costs allocating half the total to his claim in each case.

Subject only to the removal of the 10 hours and the addition of 3 hours referred to, leaving a net deduction of 7 hours, the bills of costs in all these cases are allowed.

NUKU’ALOFA: 24th May, 2004

CHIEF JUSTICE