Sevele v Saulala [2006] TOSC 5; CV 105.2002 (6 February 2006)

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

CV 105/2002

BETWEEN:

FELETI V. SEVELE
Plaintiff

AND:

SANGSTER SAULALA
Defendant

BEFORE THE HON. MR JUSTICE FORD

Counsel: Mr Niu for the plaintiff and Mr Kaufusi in support of his own bill of costs

Date of Chambers hearing: 31 January 2005
Date of Ruling: 6 February 2005

RULING ON COSTS

The application

Mr Manamo'ui Kaufusi, as solicitor for the defendant, has filed a bill of costs for taxation totalling $4729.50. The plaintiff, with one or two minor exceptions, opposes the amount claimed in its entirety. I heard Mr Kaufusi and Mr Niu in Chambers and counsel agreed that I should proceed to carry out the taxation exercise on the basis of their respective submissions. Before proceeding, however, I need to say something, albeit briefly, about the background to the case.

The background

Mr Sevele, who is presently a Minister of the Crown, issued defamation proceedings against Mr Saulala on 13 February 2002 claiming damages totalling $500,000.00. The claim related to allegations contained in a letter to the editor of a weekly newspaper published by the defendant. The allegations, which the plaintiff described as false and defamatory, related to his involvement, in particular, in the Tonga squash industry.

The case meandered its way through the usual civil procedure processes and eventually, on 25 February 2004, it was set down to be heard before a judge and jury during the week commencing on Monday 11 April 2005. An earlier fixture had been allocated for the end of November 2003 but that fixture was vacated after counsel for the plaintiff announced in Chambers that the action had been settled and he expected to be able to file a memorandum of settlement in the near future. As it turned out, there was a dispute as to whether there had, in fact, been a settlement. No memorandum of settlement was ever filed.

I need not say any more on that aspect of the case. The relevant facts are fully set out in a subsequent judgment delivered on 29 April 2005. After a three-day hearing I upheld the defendant's contention that there never had been a settlement and I awarded costs to the defendant in connection with the settlement cause of action hearing to be agreed or taxed. The original defamation cause of action still remains in existence and awaits a hearing.

When, on 25 February 2004, the Court fixed the trial date for 11 April 2005, what was then envisaged was a trial of the defamation cause of action. At that stage Mr Niu was acting for the plaintiff and Mr Kaufusi had just taken over, from Mr William Edwards, acting for the defendant.

It appears from the Court file that the issue of the alleged settlement cause of action did not surface until 3 March 2005. On that date Mr Waalkens QC from Auckland wrote to the Court Registrar and to Mr Kaufusi pointing out that he had been instructed to take over acting for the plaintiff and he enclosed for filing an amended statement of claim containing the original defamation cause of action and six additional paragraphs setting out particulars of the alleged settlement cause of action. The plaintiff's proposal was that both causes of action would be tried together before a jury at the hearing on 11 April 2005.

The Court was concerned about the likely complexity of the issues for the jury if both the defamation case and the alleged settlement cause of action were to be tried together and on 1 April 2005 it ordered that the trial on 11 April would be confined to the alleged settlement cause of action only. The plaintiff was ordered to file an appropriate amended statement of claim, for reference to the jury, confined only to the settlement cause of action. Likewise, the defendant was ordered to file a similar amended statement of defence.

Those steps were taken. The amended statement of claim was confined to the six additional paragraphs that had already been incorporated in the amended pleading filed on 3 March 2005. The amended statement of defence filed on 4 April 2005 was a one-page document which simply denied that the case had ever been settled.

When the trial then began on the morning of Monday 11 April 2005, counsel agreed that it was more appropriate for the settlement issue to be determined by a Judge and the jury panel that had been summoned were consequently discharged. The hearing occupied three days. Mr Waalkens appeared for the plaintiff and Mr Clive Edwards and Mr Kaufusi appeared for the defendant.

After judgment was delivered in favour of the defendant, two bills of costs were filed for taxation on behalf of the defendant. Mr Edwards's invoice totalled $20,790.00 and, as already noted, Mr Kaufusi's bill totalled $4729.50. Objection was taken by the plaintiff to both bills of costs and taxation was requested before a Judge instead of the Registrar. Extensive written submissions in opposition were filed by Mr Waalkens.

A fixture was then made for taxation but the hearing had to be vacated because of the civil service strike. A further fixture was made for December 2005 but when the matter was then called Mr Kaufusi informed the Court he had just received confirmation that morning from Mr Clive Edwards that his (Mr Edwards's) bill of costs had been settled directly between the parties. That meant the taxation exercise would be confined to Mr Kaufusi's bill only and in view of this unexpected development, the taxation hearing was adjourned by consent until 31 January 2006.

Particulars of costs claimed

I turn now to the taxation exercise. Order 29 rule 4 (1) of the Supreme Court Rules 1991 provides that there shall be allowed 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. Taxation should not be seen as a "gravy train". This Court has long recognised the need upon taxation to be fair to both parties and that includes the loser. Costs incurred over and above those that are reasonably necessary or proper, in terms of the rule, ought to be regarded as luxuries which should not be payable by the other side.

Items 1 - 16:

The first 16 items in Mr Kaufusi's bill of costs relate to attendances between 17 February 2004 and 11 August 2004. Mr Niu submitted that none of these items, which totalled $1565.00, were recoverable upon taxation. He correctly noted that costs were awarded in respect of the alleged settlement cause of action only and he stressed that that issue had only arisen for the first time on 3 March 2005 when the plaintiff filed his amended statement of claim.

I uphold Mr Niu's objection. Items 1 to 16 are disallowed.

Item 17:

Under this head Mr Kaufusi claims $150 (2 hours) for receiving and perusing a letter from Mr Waalkens dated 3/3/04 and an enclosed amended statement of claim. Mr Niu submitted that only half an hour should be allowed in respect of this item. The letter comprised of three short paragraphs.

In Tupou v Saulala [2004] TOSC 50, the Court proposed, based on New Zealand practice, a practical procedural approach for fixing the reasonable costs on taxation for run-of-the-mill correspondence and telephone calls. In short, the amount to be allowed in such cases (whether sender or recipient) is 1/10th (equating to 6 minutes) of the lawyer's approved hourly rate.

Based on the current maximum allowable rates, the appropriate figures will be:

Senior Counsel (210 pa'anga) 21 pa'anga;

Counsel (140 pa'anga) 14 pa'anga;

Locally Unqualified Lawyers (105 pa'anga) 10.5 pa'anga.

As an aside, it is noted from the bill of costs in question dated 6 May 2005 that Mr Kaufusi has charged out at an hourly rate of 75 pa'anga which was the old maximum figure under Practice Direction No. 2 of 1992. The 75 pa'anga figure was increased to 105 pa'anga as from 10 August 2004 by Practice Direction No. 5 of 2004 but as Mr Kaufusi's charges have been based on 75 pa'anga, the appropriate figure to allow for run-of-the-mill correspondence and telephone calls in the instant case will be 7.50 pa'anga.

As already noted, the letter from Mr Waalkens dated 3 March 2005 comprised of three brief paragraphs. The six additional paragraphs included in the attached amended statement of claim, raising the settlement cause of action, were equally brief. Mr Niu's assessment is correct. I allowed $37.50 in respect of item 17.

Item 18:

The claim is for a figure of $52.50 in respect of a letter written to the Registrar asking for a jury trial. The letter consists of two short sentences. I allow $7.50.

Item 19:

No objection was taken to item 19 and the claim of $12.50 is allowed.

Items 20- 24:

These items all relate to attendances on Thursday 7 April 2005. I will set them out in full:

"20. 7/4/05. Receiving, studying and filing letter dated 7/4/05 from Harry (Mr Waalkens) and enclosing amended statement of claim -- two hours -- T $150.00.

21. To attending Mr Edwards conferring and seeking advice in view of allegations and requesting him to appear as senior counsel as the case is now handle (sic) by a QC -- 1 1/2 hours -- T $112.50.

22. Attending Mr Saulala conferring and advising the need to appoint a Senior Counsel because a QC is appearing for the plaintiff, obtaining consent -- 1 hour --T $75.00

23. To attending Mr Edwards with file discussing the case and briefing him -- 2 hours -- T $150.00

24. To arranging with Mr Saulala to attend Mr Edwards on the same day -- 2 hours -- T $150.00"

Mr Niu submitted that all these claims were excessive. He contended that no more than 1/2 an hour should be allowed for each of the first four items and a 1/4 of an hour for item 24.

The letter and amended statement of claim raised nothing new. The amended statement of claim was made up simply of the six paragraphs taken from the earlier statement of claim relating to the settlement cause of action. No explanation was provided by Mr Kaufusi as to why Mr Edwards was not briefed as counsel until the last moment. Mr Kaufusi had known for over a month that a QC was appearing for the plaintiff. Nor was any satisfactory explanation provided as to why so much time was apparently required to persuade Mr Saulala to accept Mr Edwards as counsel and to attend before him.

In my view, three hours would be a reasonable time period to allow for Mr Kaufusi's attendances on Thursday 7 April 2005. Items 20 - 24 (inclusive) are therefore allowed in the amount of $225.00.

Items 25 and 26:

Item 25 is a claim for $150.00 based on two hours spent "receiving studying and filing" a letter dated 8 April 2005 from Mr Waalkens and a further amended statement of claim. The letter in question simply pointed out that the amended statement of claim included a request for an apology which had been omitted from the earlier pleading. Item 26 is a charge for one hour of time spent preparing a letter to the Registrar, "informing that I will assist senior counsel who will conduct the case."

Mr Niu submitted that these two items should be disallowed in full. I am prepared to allow $22.50 in total.

Items 27 and 28:

Item 27 is a claim for $225.00 on account of three hours preparation for trial on 9/4/05. Item 28 is a claim for $300 on account of four hours interviewing witnesses on 10/4/05. Mr Niu submitted that those charges must have been duplicated because Mr Edwards as senior counsel had claimed a substantial amount for preparation for trial. I accept the substance of Mr Niu's objection. I have not been persuaded that the full amount claimed in respect of these two items is reasonable. I allow $300.00 in total.

Item 29:

This is a claim for $150.00 based on two hours spent preparing filing and serving on 11/4/05 (the day the trial commenced) an application to "debar the plaintiff from this proceeding". Mr Niu submitted that no more than half an hour should be allowed for this item.

The application in question was based on the alleged failure of the plaintiff to comply with a discovery order made on 4 August 2004. The application was misconceived and there could be no possible justification for raising the issue at such a later stage. I will allow a charge of $37.50 based on the half-hour time period Mr Niu suggested.

Item 30:

This item is the most contentious. It is a claim for $1,275.00 for 3 days appearing in Court.

Mr Niu submitted that the case for the defendant did not warrant two counsel and the decision of the defendant to have Mr Kaufusi appearing along with Mr Edwards was a luxury which the plaintiff should not have to pay for. Mr Kaufusi submitted that his appearance alongside Mr Edwards was necessary because Mr Edwards had been briefed only a few days beforehand and he (Mr Kaufusi) needed to be present to assist if issues came up that Mr Edwards was unfamiliar with.

I have already commented on the lack of explanation for the late briefing of Mr Edwards. The plaintiff should not have to bear any costs resulting from the defendant's failure to instruct senior counsel at an earlier stage.

Mr Kaufusi took no part in the trial. He did not lead or cross examine any witnesses. No application had been made to the Court prior to trial for certification that a second counsel was appropriate. In any event, I would not have so certified. The case, in my opinion, did not warrant an extra counsel. I accept Mr Niu's submissions in relation to this matter and I disallow the item in full.

Item 31:

This was a claim for $75.00 which was not disputed. Nor does Mr Niu dispute the claim for disbursements totalling $62.00.

Conclusion

In summary, the total allowed on taxation in respect of Mr Kaufusi's bill of costs is $779.50 and I certify accordingly.

NUKU'ALOFA: 6 FEBRUARY 2006

JUDGE