Tolom Abai and Others v The State

• Jurisdiction: Papua New Guinea
• Judge: Woods J
• Judgment Date: 24 September 1998
• Court: National Court
• Citation: (1998) N1762
• Year: 1998
• Judgement Number: N1762

National Court: Woods J

Judgment Delivered: 24 September 1998

N1762

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS 819 OF 1994

TOLOM ABAI & OS - Plaintiffs

V

THE STATE - Defendant

Waigani: Woods J

11 May 24 September 1998

Lawyers costs - taxation of costs – - principles of taxation – objection to disallowance of items – on solicitor and client basis are all costs to be allowed where a third party is liable – test of reasonableness - requirement to keep records of time spent - disbursements.

Cases cited :

Jordan v Edwards [1979] PNGLR 420

In Re Marsland V Marsland [1902] St R Qd 219

Re Remnant 11 Beav 603 (50 ER 949)

Text Referred to: Saddington & White: Costs, Solicitor & Client.

Ms E Dirua for plaintiffs

C Makail for the State

24 September 1998

Woods J. This matter of costs has come before the Court following an objection under Order 22 Rule 60 of the Rules of the National Court where the lawyer for the plaintiffs is dissatisfied with certain disallowances of the taxing officer. I am now reviewing the actions of the taxing officer in respect of certain disallowances.

The substantive matter here was a claim by some 766 persons against the State for certain entitlement monies owing following retrenchment from the Defence Force. Following the hearing of the claim and certain negotiations 432 of the claimants were successful and 334 persons unsuccessful. At the conclusion of the proceedings it was agreed that the State would pay the legal costs reasonably incurred by the plaintiffs on a solicitor client basis. There were two Bills of Costs raised and submitted for taxation because there had been a change in the legal practice of the lawyers involved in the proceedings. At the taxation of the Bills of Costs the Taxing officer, the Registrar of the National Court, considered a number of principles of law on the taxation of costs and taxed off certain amounts.

The Rules of the National Court in Order 22 do make a distinction between party and party costs and solicitor and client costs. (It is noted that in Papua New Guinea there are no practitioners called solicitors, the term used in the Lawyers Act is lawyer however it is accepted for the purpose of the operation of the Rules that solicitor means lawyer.) Thus Order 22 Rule 24 notes that on a taxation on a party and party basis there shall be allowed all such costs as were necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being taxed. And Rule 35 Solicitor and Client Basis:

(1) All costs shall be allowed except as mentioned in the following sub-rules.

(2) Costs shall not be allowed in so far as they are of an unreasonable amount, unless the amount has been approved by the client.

(3) Costs shall not be allowed in so far as they are unreasonably occurred, unless incurred with the approval of the client…

(4) Notwithstanding sub-rules (2) and (3) of this rule where costs are

incurred which in the circumstances of the case are of an unusual

nature and such that they would not be allowed on a taxation of costs

on a party and party basis pursuant to Rule 24 of this Order the costs

shall not be allowed unless it is shown - (a) that the costs were

reasonably incurred; or (b) that before the costs were incurred the

solicitor expressly warned the client that the costs might not be

allowed on a taxation of costs on a party and party basis.

At first glance it seems that there may be a difference between the level of costs on a party and party basis and on a solicitor client basis. However that is not necessarily so and reference is made to certain statements in the case of In Re Marsland v Marsland [1902] St R Qd 219. See Griffith CJ. ‘The rule is that for the same work there must be the same remuneration on whichever basis the taxation is had but there is much properly chargeable as between solicitor and client which ought not to be allowed as between party and party. For that additional work the client is bound to pay his solicitor as proper remuneration but for the same work there should be the same measure of remuneration’. And per Real J ‘if the taxing officer has allowed in a party-party bill for all the work necessarily and properly performed, to make any extra allowance for the same work would in reality be allowing for work which has never been performed’.

It is also noted in authorities on costs that in taxing a bill of costs between a solicitor and his client it is usual to allow the costs of such steps as, in the circumstances were reasonably necessary. On the other hand it would be wrong to allow only the expense of the steps which, in the end, prove efficacious in furthering the business of the client. It may be advisable to try two or three different methods of carrying into effect the client’s desire before it can be ascertained which is most likely to produce beneficial result; all such costs should, in ordinary circumstances, be allowed against the client, although they might not all be available against his opponent upon a party and party taxation. But then also note the principle that a solicitor is expected to have a reasonable knowledge of his work and is not allowed to charge a client for work which is useless, and he is not allowed to charge a client for work performed by the solicitor in learning his own business.

Order 22 Rule 35 by making reference to the concept of unreasonable amount is clearly giving the authority to a taxing officer and the court to consider reasonableness of amounts charged when the costs come to a taxation. Where it is submitted that the client has agreed to an unreasonable amount it must still be open to the taxing officer and an officer of the court or to the court itself to look at the agreement with the client and ascertain the reasonableness of the amount charged under ordinary taxation principles. And further where the client is not himself going to pay the amount but a third party is, for whatever reason, going to pay the amount then it must be incumbent on the court and officers of the court to consider the reasonableness of the amounts in the bill. A client cannot agree to unreasonable or unnecessary costs where the client knows that a third party is to bear those costs.

As noted under Order 22 Rule 49 any Bill of Costs must still contain particulars of the work done by the lawyer, his servants and agents, and the costs claimed for the work done. Therefore a bill must be in substantially in the same form whether for taxation between party and party or between solicitor and client. It is a misconception to think that a solicitor and client bill can be in more general terms with less detail, rule 49 applies equally to any bill of costs.

The Objection is as follows:

On the Dirua Bill of costs there are objections to the disallowance of certain amounts under

1. Item 12 Preparation for Trial Bill costed at K329,800.00

Taxed off K250,450.00

2. Payments to others Bill costed at K115,291.3

Taxed off 77,991.36

On the Howard and Dirua Bill of Costs there is an objection to:

Item 5 Preparation for Trial Bill costed at K735,548.99

Taxed off...