Dr Florian Gubon Trading as Gubon Lawyers v Pacific Mobile Communications Limited (2006) N3104

• Jurisdiction: Papua New Guinea
• Judge: Kandakasi, J
• Judgment Date: 06 December 2006
• Court: National Court
• Citation: (2006) N3104
• Docket Number: WS NO 20 OF 2002
• Year: 2006
• Judgement Number: N3104

Full Title: WS NO 20 OF 2002; Dr Florian Gubon Trading as Gubon Lawyers v Pacific Mobile Communications Limited (2006) N3104

National Court: Kandakasi, J

Judgment Delivered: 6 December 2006

N3104

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS. NO. 20 OF 2002

BETWEEN

DR. FLORIAN GUBON Trading as GUBON LAWYERS

Plaintiff

AND

PACIFIC MOBILE COMMUNICATIONS LIMITED

Defendant

Waigani: Kandakasi, J.

2006: 10 April

6 December

CAUSES OF ACTION – Lawyer suing for legal and consultancy fees –Whether consultancy fees legal fees – Nature of services rendered and conduct of parties relevant considerations – Nature of services rendered and use of legal firms letterhead suggest provision of legal services using legal knowledge, skills and experience to – Lawyer suing under a fee agreement - Court has power to decide whether fee agreement is fair and reasonable – No requirement for costs in taxable form and taxation unless the court orders otherwise – Reasonable cause of action disclosed – Whether fee agreement is fair and reasonable is an issue for trial – Plaintiff required to plead the factual foundation showing fair and reasonableness of the fee agreement - Sections 62 – 69 of Lawyers Act 1986 –Rule 18 (1), (2), (4) and (5) Professional Conduct Rules 1986.

CONTRACTS – Lawyers fee agreement with client – Court has power to determine whether agreement is fair and reasonable – Tests of – Equality of bargaining power, whether client informed of his right to costs in taxable form and taxation, nature and complexity of issues involved in the business or matter lawyer instructed on are amongst other relevant factors for consideration – Sections 62 -69 Lawyers Act 1986 and Rule 18 (1), (2), (4) and (5) of the Professional Conduct Rules – Sections 4, 5 of Fairness of Transactions Act 1993.

PRACTICE & PROCEDURE – A lawyer sue on a fee agreement under s. 66 of the Lawyers Act – Lawyer required to plead amongst others the factual foundation for fairness and reasonableness of the agreement – Failure may amount to a failure to plead a case that is sustainable and form the foundation for an application to apply for dismissal for failure to disclose a reasonable cause of action – Sections 62 -69 Lawyers Act 1986 and Rule 18 (1), (2), (4) and (5) of the Professional Conduct Rules – Sections 4, 5 of Fairness of Transactions Act 1993

Cases Cited:

Papua New Guinea Cases

Marsh v. Hay [1981] PNGLR 392.

Jack Livinai Patterson trading as Patterson Lawyers v. NCDC (05/10/01) N2145.

Simon Norum Trading as Simon Norum Lawyers v. Daniel Ikio and Komap Trading Pty Ltd (11/07/97) N1593.

Philip Mamando v. Lumusa Local Level Government Council (13/9/98) N1752.

Kora Gene v. Motor Vehicles Insurance (PNG) Trust [1995] PNGLR 344.

Yapao Lawyers v. Yaliman Pawe and Others and Porgera River Alluvial Miners Assocation (18/09/98) N1759.

Tolom Abai and Others v. The State (24/09/98) N1762.

Negiso Investments Limited v. PNGBC Limited (26/06/03) N2439.

Jack Livinai Patterson trading as Patterson Lawyers v. Teachers Savings and Loans Ltd (19/02/04) N2516

Sarea Soi trading as Soi & Associates Lawyers v. Imawe Kewa Land Group Inc. (10/06/04) N2560.

Edward Manu trading as Manu & Associates Lawyers v. Honiri Timber Resources Development Ltd (23/08/04) N2597.

The Papua Club Inc v. Nusaum Holdings Ltd & Ors (No 2) (03/09/04) N2603.

Bank of Papua New Guinea v. Derick Sakatea Niso (18/10/04) N2664.

Smugglers Inn Resort Hotel Limited & Ors v. Papua New Guinea Banking Corporation and Christopher Burt (24/05/06) N3062.

Overseas Cases:

Blomley v. Ryan (1956) 99 CLR 362.

Lloyds Bank Ltd v. Bundy [1974] 3 All ER 757.

Commonwealth Bank of Australia v. Amadio (1983) 151 CLR 447.

Hart v. O’Conner [1985] All ER 880; (1985) AC 1000.

Counsel:

Mr. J. Brooks, for the Defendant/Applicant.

Mr. T. C. Waisi, for the Plaintiff/Respondent.

6 December, 2006

1. KANDAKASI J: By notice of motion filed on 10 March 2006, the defendant is seeking a dismissal of the plaintiffs claim pursuant to O. 12 r. 40 and O.12 r.1 of the National Court Rules (the Rules). The applicant relies on the affidavits of Tiffany Nonggorr sworn on 9 and filed 10 March 2006, three affidavits of Steven Ovia sworn on 16th , 21st , 27th, and filed 15th, 22nd, and 30 March 2006 and three affidavits of Chris Vihruri sworn 16th, 27th, and filed on 17th, 28th, and 5 April 2006.

Factual Background

2. In his statement of claim, the plaintiff claims that the defendant contracted his services to act as a broker in negotiating, facilitating and securing in the defendant’s favour, an international financing facility in the sum of US$12 million. That was to finance the defendant’s proposed GSM digital cellular network project in the country. The plaintiff also alleges that, it utilized its knowledge skills and experience to secure the kind of financing facility he was contracted for and secured a “Letter of Intent” from Reciprocal Trade International Limited. Further, the plaintiff claims that he forwarded the Letter of Intent to the defendant for its acceptance. However, the defendant failed to accept the Letter of Intent. This the plaintiff alleges resulted in considerable loss and damage to him. He claims K50, 000 as a debt owing for fees, a loss of 1.5 percent of the US$12 million in brokerage fees, bills for expenses and further not particularized loss and damages.

3. The defendant filed its defence to the claim against it to deny the plaintiff’s claim and pleads that there is no cause of action against it because the plaintiff has not informed it of its right to have the plaintiff’s costs taxed, the plaintiff has not put his fees in a taxable form and such costs have not been subjected to taxation pursuant to Sections 62 - 65 of the Lawyers Act 1986. Then on those bases, the defendant is seeking a dismissal of the plaintiff’s claim for failure to disclose a reasonable cause of action. In support of its application, the defendant refers to and relies upon a number of decisions of this Court including my own decision in Jack Livinai Patterson trading as Patterson Lawyers v. NCDC

xxii (05/10/01) N2145.

xxii1 and my sister Davani J.’s decisions in Sarea Soi trading as Soi & Associates Lawyers v. Imawe Kewa Land Group Inc.

xxiii (10/06/04) N2560.

xxiii2 and Edward Manu trading as Manu & Associates Lawyers v. Honiri Timber Resources Development Ltd

xxiv (23/08/04) N2597.

xxiv3 and Jack Livinai Patterson trading as Patterson Lawyers v. Teachers Savings and Loans Ltd.

xxv (19/02/04) N2516.

xxv4

4. In response, the plaintiff says he is suing on the basis of an agreement he has entered into between himself and the defendant. He argues that the provisions of s.62 to s.65 and therefore the Lawyers Act do not apply for two reasons. First, he argues that the agreement is not necessarily an agreement concerning legal costs but costs for the provision of consultancy services. This he submits regardless of the fact that he is suing as a lawyer trading as Gubon Lawyers and having used his law firm’s letterhead. Secondly, he argues in furtherance or in the alternative that the agreement he is suing upon was entered into pursuant to the provisions of s. 66 of the Act by reason of which s. 69 of the Act applies. In the premises, the plaintiff argues that it has a reasonable cause of action and as such his claim should not be dismissed. The defendant denies the alleged agreement and argues in any event that the alleged agreement is null and void and therefore unenforceable because the plaintiff failed to inform it of its rights under the Lawyers Act.

Relevant issues

5. The arguments advanced by the parties present in my view the following main issues for this Court to determine:

(a) What is the nature of the plaintiff’s contract with the defendant?

(b) What is the effect of Sections 66 and 69 on the requirements under Sections 62 to 65 of Lawyers Act? and

(b) Depending on the answer to the second issue, is there a cause of action for the plaintiff to pursue against the defendant?

First Issue – Nature of the Plaintiff’s contract

6. I will consider each of these issues in the order presented. Accordingly, I start with a consideration of the first issue first. As earlier noted, the plaintiff claims that the defendant contracted his services to act as a broker in negotiating, facilitating and securing in the defendant’s favour, an international financing facility in the sum of US$12 million. The plaintiff also claims that he utilized his knowledge, skills and experience to secure the kind of financing facility he was contracted for and secured a “Letter of Intent from the Reciprocal Trade International Limited which the defendant refused to acceptance, resulting in considerable loss and damage to him in terms of K50, 000 in debt owing for fees, a loss of 1.5 percent of the US$12 million in brokerage fees, bills for expenses and further not particularized loss and damages.

7. There is nothing in the pleadings or the evidence before me that shows that the plaintiff has qualifications, skills, knowledge and experience in a profession or capacity other than and independent of his training, qualification and experiences as a lawyer. The overall import of the plaintiff’s pleadings...