DS Venture Ltd v Tonga Cable Ltd [2020] TOSC 118; CV 68 of 2019 (22 December 2020)

IN THE SUPREME COURT OF TONGA ADMIRALTY JURISDICTION NUKU’ALOFA REGISTRY
CV 68 of 2019
BETWEEN:
DS VENTURE LIMITED - Plaintiff
-and-
TONGA CABLE LIMITED - Defendant
-and-
All persons claiming, or being entitled to claim, for any loss and/or damage arising in any way from damage to the Tongan- Fiji and Tongan domestic cables alleged to have been caused by the anchor of the DUZGIT VENTURE on its entry into the port of Nuku’alofa, Tonga on 20 January 2019.

Costs order made on 18 September 2020
Plaintiff’s application for certification of costs at higher than scale

RULING

BEFORE:	LORD CHIEF JUSTICE WHITTEN QC
Counsel:	Messrs P. David QC, M. McCarthy and W. Edwards for the Plaintiff. Messrs J. McBride and P. Bloomfield for the Defendant.
Date of ruling:	22 December 2020

The application

1. This proceeding was commenced on 20 December 2019.
2. On 18 September 2020, the Defendant was ordered to pay the Plaintiff's costs of and incidental to the Defendant's application for extensions to the interlocutory timetable and the appearance that day, to be taxed, in default of agreement.
3. By memorandum filed 30 October 2020, Mr William Edwards, on behalf of the plaintiff, applied for an order that the plaintiff’s costs be allowed at a higher rate for counsels’ fees than that provided by the applicable Practice Direction, namely, TOP$600 per hour for Mr David QC and TOP$400 per hour for Mr McCarthy.

Plaintiff’s submissions

4. Mr Edwards called in aid Order 47 rule 5(1) and (2) which provide:

0.47 Rule 5. Additional costs to be certified for

(1) Any party seeking to recover costs at a higher rate than those provided for in the relevant practice direction shall make application to a Judge to have the higher rate certified for.

(2) Application for certification under this rule may be made orally at a directions hearing or informally by letter to the Registrar.

...

and that the overriding consideration on costs to be awarded at a higher rate is to be found in rule 2(1) which provides:

0.47 Rule 2. Allowance for costs

(1) There shall be allowed all such costs, charges and expenses as are reasonably necessary or proper for the attainment of justice or for maintaining or defending the rights of any party.

5. Mr Edwards also relied on Lali Media Case – Taili o Tonga Ruling on Costs [2004] TOSC 22 at 24 in support of his submission that "the time to make such application is appropriate...".
6. He further contended that the “nature of the pleadings, together with the approach in the context of the rules and the complexity of the case is novel to the Supreme Court of Tonga and it is reasonable and necessary in the circumstances for the attainment of justice and for defending the rights of the plaintiff that very highly qualified and senior counsel from overseas were engaged to act for the plaintiff.”
7. In their memorandum filed 27 November 2020, Messrs David QC and McCarthy, submitted that:
   • (a) the court had previously noted the relative importance of the proceedings;
   • (b) that the hearing, the subject of the costs order, involved an application of a procedural nature did not mean that counsel responsible for the conduct of the case should not attend - indeed, that attendance was necessary;
   • (c) in the circumstances of an “11th hour” application by the defendant which was very quickly heard by the court so that the proceedings could advance, it would be appropriate to accept the application for higher rates as the court thinks fit notwithstanding that the application was made after the hearing; and
   • (d) as the costs of dealing with the extension of time could become disproportionate, the plaintiff was content for costs to be assessed on the basis of three hours for senior counsel and three hours for Mr McCarthy as instructing solicitor/counsel.

Defendant’s submissions

8. The defendant opposes the application. In his memorandum filed on 20 November 2020, Mr McBride submitted that:
   • (a) the plaintiff's assertion that the novelty of the nature of the pleadings and complexity of the case meant that it is "reasonable and necessary for the attainment of justice and defending the rights of the plaintiff for very highly qualified and senior counsel from overseas to be engaged" should be rejected;
   • (b) the mention on 18 September 2020 was not complex. It concerned timetabling issues which were resolved by the court by way of compromise between the competing positions;
   • (c) it is settled practice in Tonga (and New Zealand) that the complexity of proceedings, for costs purposes, is not to be altered retrospectively: JL Tindall & ors v Far North District Council, HC, Auckland, CIV 2003-488-000135, 25 May 2007; and
   • (d) for those reasons, the Court should not make any orders for additional costs under order 47, rules 2 and 5, particularly in circumstances where the defendant is not a wrongdoer in any conventional sense and has been joined to the proceedings as a defendant for the very reason that it suffered loss and damage as a result of the conduct of the plaintiff, and it had no prior knowledge of the circumstances in which the plaintiff damaged its cable.

Consideration

9. This application may be resolved primarily by reference to Mr Edwards’ submissions.
10. Further to the excerpts of order 47 rule 5 referred to by Mr Edwards, sub rule (3), provides:

(3) In the absence of exceptional circumstances, application under this rule must be made prior to the hearing in respect of which the costs are to be incurred.

11. And, in Lali Media Case – Taili o Tonga Ruling on Costs [2004] TOSC 22 at 24, Ward CJ stated, relevantly:

"... Such application should normally be made before the case is heard and failure to do so may result in the costs being awarded on a normal scale for Tonga."

12. It may well have been that, as has been considered in the Ruling on the limitation proceedings this day, including costs of the proceeding (apart from the order the subject of this application), it did not occur to the Plaintiff to apply for an uplift in counsel’s rates either at the commencement of the proceeding or before the mention, the subject of this application, because it expected to be a payer of costs in accordance with the usual approach to costs in limitation proceedings. Nonetheless, given the seniority and expertise of the practitioners engaged, it may be expected that contingencies in respect of possible costs orders in favour of the Plaintiff (especially upon the filing of the defence and Counterclaim in which the Defendant positively alleged fault and negligence against the Plaintiff) should have been considered at the appropriate, much earlier, time.
13. Further, no exceptional circumstances have been advanced to warrant departure from the rule and echoed statement of principle referred to above. Adherence to the rule is important. Any application for certification of higher counsel’s fees, if granted, is a significant consideration for any opposite party in terms of its costs exposure, which in turn may bear upon its assessment of its case and commercial considerations of the risks of steps to be taken (or not taken) in the case, including any possible settlement.

Conclusion

14. For the reasons stated, the Plaintiff’s application for increased counsel’s rates on the costs order made on 18 September 2020 is refused.
    

NUKU’ALOFA	M. H. Whitten QC
22 December 2020	LORD CHIEF JUSTICE