Vatu v Path [2007] VUCA 10; Civil Appeal Case 30 of 2007 (13 August 2007)

IN THE COURT OF APPEAL
OF THE REPUBLIC OF VANUATU
(Appellate Jurisdiction)

CIVIL APPEAL CASE No.30 OF 2007

BETWEEN:

KARAE VATU
JOEL PAUL
FRANK LELE
DAVID VARURU
(First Appellants)

AND:

JOHNSON BOE
CHARLIE TAVUI
CHRISTIAN MALIU
DAVID MELE
JOHN TAMATA
(Second Appellants)

AND:

JOEL PATH
First Respondent

AND:

NATU MUELE
Second Respondent

Coram: Hon. Chief Justice Vincent Lunabek
Hon. Justice Ronald Young
Hon. Justice Edwin Goldsbrough
Hon. Justice Christopher Tuohy
Hon. Justice Hamlison Bulu

Counsel: Mr. Ronald Warsal for the First Appellants
Mr. Saling Stephens for the Second Appellants
Mr. Felix Laumae for the First & Second Respondents

Date of hearing: 13 August 2007
Date of judgment: 13 August 2007

JUDGMENT

Introduction

1. This is an appeal which arises from the making of a costs Order. Although the appeal itself is framed as an appeal against enforcement proceedings, after discussion with counsel, it became clear that the real issue was a challenge to a costs order made by the Judge in the Supreme Court.

Background

2. The costs order arises from contempt proceedings in the Supreme Court. The contempt proceedings by the Appellants were unsuccessful. By judgment of 30 June 2006 the Supreme Court Judge ordered that costs either be agreed or that the Court would determine those costs. The Claimants, given the result of the substantive proceedings had to meet the costs of the Defendants.

3. There is some disagreement between the parties as to what happened next. The Respondents in these proceedings say that they prepared a schedule of costs, served that schedule on the First and Second Appellants and waited their response. Receiving no response they sought an order for costs of the amount specified in the schedule.

4. There appears to be no formal order made by the Supreme Court for costs in these proceedings. The Appellants say that the first they knew of any order for costs was an order of the Supreme Court regarding enforcement. In particular on the 24th May 2007, an order of the Supreme Court headed "Enforcement Order" advised that the Appellants in these proceedings must jointly pay the First and Second Defendants the sum of VT3,524,492 said to be the First and Second Defendants incurred costs.

5. At that stage the Appellants in these proceedings sought a stay of the Enforcement Order complaining to the Supreme Court that they had not properly participated in the setting of costs. The Application for Stay of Execution of the Enforcement Order was refused. And it was from that Order that this appeal was made. However this appeal is essentially a challenge to the costs Order originally made by the Judge. That is of the essence of this appeal.

Counsel’s Submissions

6. The Appellants’ submissions focussed on rule 14 of the Civil Procedure Rules particularly relating to enforcement. However, as we have recounted after discussion with the bench, the Appellants focussed on the obligations of the Court under rule 15 which describes the process for costs in the Supreme Court.

7. The second ground of appeal related to an aspect of the Enforcement Order which the Appellants objected to. The Enforcement Order records that the Appellants in this Court should pay the First and Second Defendants costs and observes, in parenthesis, that the bill of costs was properly incurred by the Sanma Provincial Council given the Defendants were its duly appointed Officers. The Appellants say that this was essentially an order of the Court that the Sanma Provincial Council be entitled to receive the costs payable by the Appellants. Given the Council was not a party, such an Order could not be made the Appellants submitted.

8. As to the first ground of appeal the Respondents’ submissions were essentially that the R.15 process had not been complied with, at least sufficiently.

Discussion

9. Rule 15 of the Civil Procedure Rules begins, as relevant, at Rule 15.6 which describes the process for an order in costs in the Supreme Court. Rule

15.6.1 directs the Judge that he must make an order for costs in proceedings before that Court. Rule 15.6.2 provides that the order should be made at the time of Judgment or as soon as practicable afterward. Rule 15.6.3 describes the various alternatives a Judge has in ordering costs.

10. Here the Judge made an order under Rule 15.6.3(a) that the unsuccessful Claimants should pay the other parties costs. In his original judgment of 30 June the Judge told the Claimants that they would be liable for costs.

11. Rules 15.7 and 15.8 describe respectively the process for setting of costs and the matters that the Judge must take into account in deciding the appropriate quantum.

12. It is clear to us that the Judge did not follow the process prescribed in the Civil Procedure Rules. It may be, although that is not clear, that the successful Respondent did prepare, as they were required, a statement of costs and file that in Court. There is no file copy on the Court file that can be found. However there is a copy of the statement of costs on a subsequent document. It is clear that the Respondent completed the statement of costs and sent a copy to the Claimants personally. No copy was sent to counsel for the Claimants.

13. It is also clear that no hearing as to costs was conducted by the Judge. No formal order for costs appears on the Court file other than the mention in the Enforcement Order.

14. To return to the process described by R15.7. Rule 15.7.2 requires the Judge to ask the successful party to prepare a statement of costs, to fix a time by which this was to be done and it requires the Judge to fix a date for determining costs.

15. Implicit within R15.7.2 is that a hearing will be held to determine costs. No such hearing was held in this case. Nor was there clear evidence that counsel for the Claimants were served with a copy of the schedule of costs served as is required by R15.7.4. Where parties are represented by counsel service on counsel is essential.

16. Rule 15.8, as we have said, requires the Judge to consider a series of factors in setting the quantum of costs. Implicit within that rule is an obligation on the Judge to give a reasoned decision as to costs demonstrating that he has taken into account those factors set out in R15.8.

17. We can deal briefly with the second ground of appeal which related to the position of the Sanma Provincial Council in the Enforcement Order. The Enforcement Order made no order with regard to the Council it simply referred to it in passing. It may well be that the Provincial Council did pay the costs of the successful Respondents but that was a matter entirely between them. The reference to the Council was one in passing and no more. It was not an order of the Court and there fore could not be the subject of challenge in this Court.

18. In this case the Judge failed to fix a date for determining costs, failed to undertake a hearing as to costs and failed to give a reasoned judgment as to costs. In our view, those failures are fatal to the costs order made in the Supreme Court. The appropriate course therefore is to allow the appeal, quash the decision as to costs and order a re-hearing of the quantum of costs by the Judge following the procedure set out in the rules.

19. Before ending this judgment however, we make one further comment. In our view, it would have been simpler and more straight forward and the preferable course of action, for the Appellants in this Court when they discovered that costs have been ordered to have applied to the Judge for a re-hearing of the costs award. They could have pointed out to the Judge that the civil rules required a particular procedure and that procedure had not been followed. That would have saved considerable time and expense of all parties.

Costs

20. At the completion of delivering this judgment we invited counsel to make submissions on costs. The Appellants said that they should have costs given they were the successful party acknowledging that the appeal was granted on slightly different grounds than they had argued. However, they suggested that the appropriate amount would be 50,000 VT for each Appellant.

21. The Respondents stressed that the appeal was decided on a slightly different basis than the Appellants argued and in the circumstances, the proper approach would be to order costs lie as they fall.

22. We consider that the Appellants are entitled to costs given that they have succeeded in this Court. However, what might be considered an appropriate amount should be reduced in this case by these factors.

23. Firstly we think the interests of the First and Second Appellants were essentially identical and it would not be fair for two orders of costs to be made. Secondly we take into account, as we have said, that the basis on which the appeal proceeded and was allowed was slightly different. And thirdly we take into account that we consider the proceedings could have been resolved by an application for re-hearing.

24. In those circumstances we think that the total costs in the favour of the Appellants should be VT30,000. That is fairly divided equally between the First and Second Appellant. There will be an order accordingly.

25. As to payment of costs the Respondents in this case already have an order from the Supreme Court that they are entitled to costs. The Supreme Court will after hearing resolve quantum. We think that it is fair and appropriate that these costs ultimately be offset against the costs that the Respondents will obtain in these proceedings.

DATED at Port-Vila this 13th day of August 2007

BY THE COURT

Vincent LUNABEK CJ
Ronald YOUNG J
Edwin Goldsbrough J
Christopher TUOHY J
Hamlison BULU J