Thiess Bros (Pacific) Pty Ltd v Chief Collector of Taxes [1982] PNGLR 385

• Jurisdiction: Papua New Guinea
• Judge: Bredmeyer J:
• Judgment Date: 03 December 1982
• Citation: [1982] PNGLR 385
• Court: Supreme Court
• Year: 1982
• Judgement Number: SC239

Full Title: Thiess Bros (Pacific) Pty Ltd v Chief Collector of Taxes [1982] PNGLR 385

Supreme Court: Kidu CJ, Pratt J, Bredmeyer J

Judgment Delivered: 3 December 1982

PAPUA NEW GUINEA

[SUPREME COURT OF JUSTICE]

THIESS BROS. (PACIFIC) PTY. LTD.

V

CHIEF COLLECTOR OF TAXES

Waigani

Kidu CJ Pratt Bredmeyer JJ

12 September 1982

3 December 1982

INCOME TAX — Appeals — Review Tribunal — Jurisdiction — Costs — No Power to award costs — No power in National or Supreme Court to order costs — Income Tax Act 1959 — National Court Act 1975, (Ch. 37), ss. 6 (2), 8 (e) — National Court Rules, O. 91 rr. 1-4 — Supreme Court Act 1975 (Ch. 37), s. 8 — Constitution, s. 184 (1) and (2).

COSTS — Taxation Review Tribunal — Costs before — No power in Tribunal to award costs — No power in National or Supreme Courts to award costs before Tribunal.

A Review Tribunal constituted under s. 240 of the Income Tax Act 1959 has no power to award legal costs on matters heard before it.

The National Court and the Supreme Court have no power to award costs of the proceedings before the Review Tribunal.

On an appeal from the Review Tribunal to the National Court (or an appeal therefrom to the Supreme Court) those courts have power to award costs of the appeal.

Cases Cited

Birkman, In re; Ex parte Pickering (1860) 1 Q.S.C.R. 14.

Federal Commissioner of Taxation v. Mantle Traders Pty. Ltd. (1980) 49 F.L.R. 256.

Garnett v. Bradley (1878) 3 A.C. 944.

Letang v. Cooper [1965] 1 Q.B. 232.

Shell Co. of Australia Ltd. v. Federal Commissioner of Taxation [1931] A.C. 275.

Thiess Bros. (Pacific) Pty. Ltd. v. Chief Collector of Taxes [1977] P.N.G.L.R. 62.

Thiess Bros. (Pacific) Pty. Ltd. v. Chief Collector of Taxes [1978] P.N.G.L.R. 474.

Summons

This was an application by a successful appellant taxpayer for an order for costs incurred by it in proceedings before a Taxation Review Tribunal.

Counsel

J. Fuller, for the applicant (appellant taxpayer).

J. Geddes, for the respondent.

Cur. adv. vult.

3 December 1982

KIDU CJ: This is an application by Thiess Brothers (Pacific) Pty. Ltd. for costs incurred by it in proceedings before the Taxation Review Tribunal. These costs amounted to K12,400.

The appellant appealed to the National Court from a decision of the Review Tribunal. It was unsuccessful and appealed to the Supreme Court which upheld the appeal and ordered costs in its favour both for the proceedings, before it and before the National Court: (Thiess Bros. (Pacific) Pty. Ltd. v. Chief Collector of Taxes [1978] P.N.G.L.R. 474). Liberty was granted to either party to apply for costs of the proceedings before the Review Tribunal. For some unknown reason, it took four years for this application to be made.

The Income Tax Act 1959, does not empower the Review Tribunal to award costs. In fact, the practice has been one of parties (taxpayer and Chief Collector of Taxes) paying their own costs of proceedings before the Review Tribunal.

Mr. Fuller, for the appellant, submitted that the Supreme Court had the power to make orders for costs of proceedings before the Review Tribunal. He relied on s. 256 of the Income Tax Act, O. 91 of the National Court Rules and s. 8 of the Supreme Court Act 1975.

Section 256 of the Income Tax Act provides:

The National Court may, on the hearing of an appeal under this Division, make such order as it thinks fit and may by the order confirm, reduce, increase or vary the assessment.

Section 8 of the Supreme Court Act provides:

For the purpose of this Act, the Supreme Court may, if it thinks it necessary or expedient in the interest of justice to do so:

(a) ...; and

(b) ...; and

(c) ...; and

(d) ...; and

(e) exercise in relation to the proceedings of the Court any other powers that may for the time being be exercised by the National Court on appeals or applications....

Mr. Geddes, for the Chief Collector of Taxes, argued that there were two questions to be determined:

1. Whether an unsuccessful taxpayer who appeals from a decision of the Review Tribunal can ask for his costs of proceedings before the Tribunal from the National Court or the Supreme Court.

2. If the answer to Q.1 is "Yes", should the National Court or Supreme Court exercise its discretion.

The power to award costs is of statutory creation. A paper delivered at the 1975 Summer Judicial Conference in Canberra, Australia, sums up the history of how both the common law courts and courts of equity in England were vested with the power to award costs and I quote from the paper:

"Jurisdiction to award costs, and so to control them, is entirely the creation of statute. At Common Law neither the plaintiff nor the defendant was entitled to costs. The Statute of Gloucester, 6 Edw. I, C. 1, (1278) (so called because it was enacted at Gloucester) gave costs to a plaintiff who received damages in a real action, but only to a plaintiff. Subsequent statutes extended the plaintiff's right to recover costs in any action. The defendant was left without any recourse for the expenses to which a plaintiff had put him until the passing of the statutes 23 Hen. 8, C. 15 and 4 Jac. 1. C. 3. The first restricted his right to certain specific actions but the later statute extended to every case where the plaintiff would have had costs if he had succeeded. For a more detailed history reference may be made to The Law of Costs, John Gray (1853)."

Lord Blackburn in Garnett v. Bradley (1878) 3 A.C. 944 at p. 962 summarized the position:

"The result was, that, as a general rule, in every case in courts of Common Law, the party who succeeded got his costs, whether he was plaintiff or defendant, whether he succeeded by a verdict or upon demurrer.... the general rule established by all those numerous statutes... was that the successful party got his ordinary taxed costs; in other words, that the costs followed the event, and that the party who was successful had them as a matter of right."

In contrast to this rigid common law rule, the courts of equity exercised a discretion in awarding and in regulating costs, sometimes withholding, or reducing them, for good reason. These courts appear to have derived their discretionary jurisdiction from the statute 17 Ric. 2, C. 6. (In re Birkman; Ex parte Pickering (1860) 1 Q.S.C.R. 14.) See also the discussion of the foundation of this jurisdiction by Beams, Doctrine of the Courts of Equity with respect to Costs, (2nd ed., 1840) pp. 1-5. Both this Court and the National Court have the statutory power to award costs for proceedings before them. Section 184 (2) of the Constitution provides, inter alia, as follows:

(2) "Without limiting the generality of sub-section (1), the rules may make provisions for and in respect of:

...

(e) the costs of and relating to proceedings in the Supreme Court or the National Court;..."

The National Court Act does not provide for the award of costs. However, s. 14 thereof provides:

"All Rules of Court made under or continued in force by the pre-Independence law known as the Supreme Court Act 1949, as in force immediately before its repeal, or the Papua New Guinea Act 1949-1974 of Australia (other than Rules of Court in relation to the pre-Independence Full Court of the Supreme Court) are, by virtue of this section, adopted as Rules of Court of the National Court and apply, with the necessary modifications, to the extent to which they applied, or purported to apply, immediately before the repeal referred to above."

Order 91 of these Rules relates to costs. Rule 1 therefore says:

"Subject to the provisions of the Judicature Act (which does not apply in Papua New Guinea) and these Rules, the costs of and incident to all proceedings in the Court, including the administration of estates and trusts, shall be in the discretion of the Court or Judge: Provided that nothing herein contained shall deprive an executor, administrator, trustee, or mortgagee who has not unreasonably instituted carried on or resisted proceedings of any right to costs out of a particular estate or fund to which he would be entitled according to the Rules heretofore acted upon in Courts of Equity: Provided also, that, subject to the next following Rule, when any cause, matter or issue is tried with a jury, the costs shall follow the event, unless the Judge by whom such cause, matter, or issue is tried, or the court, shall for good cause otherwise order."

And rule 4 says:

"If a cause is removed from an inferior court which has jurisdiction in the cause, the costs in the Court below shall be costs in the cause." (Emphasis mine.)

There is no doubt then that the National Court has absolute power over costs, including costs in a lower court where a cause is removed therefrom to the National Court.

The present case was an appeal from the Income Tax Review Tribunal to the National Court. Rule 4 would be inapplicable. The Review Tribunal is not a court.

Rule 1 is also inapplicable. It relates to "the costs of and incident to all proceedings in the Court" — i.e. the National Court.

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