State (on the Application of ADMARC) v Ombudsman (Judicial Review Case 21 of 2019) [2021] MWHC 398 (14 September 2021)

REPUBLIC OF MALAWI IN THE HIGH COURT OF MALAWI PRINCIPAL REGISTRY JUDICIAL REVIEW CASE NO. 21 OF 2019 BETWEEN: THE STATE (ON THE APPLICATION OF ADMARC), 0. EEE EEE EEE EEE EEE EE DEE cere Ebest ne ere CLAIMANT AND THE OMBUDSMAN... ccc cere e etre reper n eb n eae a been ea teen earned pena eb enon en en es DEFENDANT CORAM: WYSON CHAMDIMBA NKHATA (AR) Mr. Chipembere- of Counsel for the Claimant Ms. Chandilanga-of Counsel for the Defendant Ms. Hawa Chatepa-of Counsel for the Defendant Ms. Chida- Court Clerk and Official Interpreter ORDER ON TAXATION OF COSTS INTRODUCTION On 9" April 2019, the claimant applied for permission to apply for a judicial review of the defendant’s decision dated 12" February, 2019 awarding compensation to an ex-employee of the claimant. The permission was granted and the defendant’s decision was stayed. A scheduling conference took place on 14'" October, 2020 followed by a hearing on 30" March, 2021. On the 23" of June, 2021, the Court delivered a judgment in favour of the claimant to the effect that the defendant did not correctly assume jurisdiction in the matter ard that the awards by the defendant were excessive and unreasonable. The court further awarded party and party costs to the claimant. It is on this regard that the matter was referred to this court for assessment of costs which | must now consider. The State ex parte ADMARC v Ombudsman, Review Case No, 21 of 2019 Pagel The claimants (hereinafter referred to as the receiving party) through Counsel filed a notice of appointment to assess costs and a bill of costs which representing the receiving party adopted in court. In the said bill of costs, the receiving party is claiming K12,384,620.00 as costs of this action. The Defendants (hereinafter referred to as the paying party) filed and adopted their objections to the claimants’ Party and Party Bill of Costs and proceeded to augment the same with an oral submission in opposition to the bill. I shall refer to the submissions as and when necessary. LAW AND PRINCIPLES ON ASSESSMENT ON COSTS Basically, the principle upon which costs should be taxed is that the successful party should be allowed costs reasonably incurred in prosecuting or defending the action. The taxing master must hold a balance: On one hand, the successful litigant, who has been awarded the costs so that he is made whole by being able to recover costs necessarily incurred and on another the unsuccessful party so that he does not pay an excessive amount of money. Jn the case of Harold Smith [1860] 5H & N 381, Bramwell B stated that Costs as between party and party are given by the law as an indemnity to the person entitled to them; they are not imposed as a punishment on the party who pays them, or given as a bonus to the party who receives them. In the case of Smith vy Buller [1875] LR 19 Eq 473, Sir Richard Malins V. C. stated that: It is of great importance to litigants who are unsuccessful that they should not be oppressed into having to pay an excessive amount of costs ... the costs chargeable under a taxation as between party and party are all that are necessary to enable the adverse party to conduct litigation and no more. Any charges merely for conducting mitigation more conveniently may be called luxuries and must be paid by the party incurring them. Order 31(5)(3) of the Courts (High Court) (Civil Procedure} Rules 2017 hereinafter CPR 2017 provides that in awarding costs the Court shall also have regard among others things the amount or value of any money or property involved; the importance of the matter to all the parties; the particular complexity of the matter or the difficulty or novelty of the questions raised; the skill, effort, specialized knowledge and responsibility involved and the time spent on the case. Order 31 rule 5 of the CPR provides that the court should have regard to whether the costs were proportionate and reasonable in amount. It is clear that the law regulating assessment of costs abhors costs disproportionate to the amount recovered that was the subject matter of the proceedings. I believe the proportionality of costs The State ex parte ADMARC v Ombudsman, Review Case No, 21 of 2019 Page 2 to the value of the result is central to the just and efficient conduct of civil proceedings. The test of what is a proportionate amount of costs to incur therefore involves considerations of the amount recovered. Order 31(4)(1) provides that where the Court is to assess the amount of costs, whether by summary or detailed assessment, those costs shall be assessed on the standard basis or the indemnity basis, but the Court will not in either case allow costs which have been unreasonably incurred or are unreasonable in amount. Order 31(4)(2) provides that where the amount of costs is to be assessed on the standard basis, the Court shall (a) only allow costs which are proportionate to the matters in issue and (b) resolve any doubt which it may have as to whether costs were reasonably incurred or reasonable and proportionate in amount in favour of the paying party. EXAGGERATION Legal costs must be fair, reasonable and proportionate, having regard to matters such as the complexity and urgency of the matter, quality of the work, instructions given and the experience of the lawyers involved. Legal practitioners have a professional duty to keep expenses of prosecuting a client’s instructions within fair and reasonable limits. It is not only a professional or ethical duty to minimise costs of litigation but also a matter of legal obligation on parties. Order 1 rule 5(1) CPR 2017 provides that the overriding objective of the rules of procedure is to deal with cases justly, which includes saving expenses and dealing with a proceeding in ways which are proportionate to the circumstances. In this case, submits that the time allegedly spent on the various tasks itemized are grossly exaggerated. They further argue that some work is deliberately duplicated while some work is fabricated to inflate the of costs. This was a detailed assessment, the court undertakes to ensure that in its assessment costs are not more than fair and reasonable in all the circumstances’ and that, in particular, are ‘proportionately and reasonably incurred’ and ‘proportionate and reasonable in amount’. THE BASIS FOR THE ASSESSMENT Order 31(4)(4) of the CPR provides that where the Court makes an order about costs without indicating the basis on which the costs are to be assessed or the Court makes an order for costs to be assessed on a basis other than the standard basis or the indemnity basis, the costs will be assessed on the standard basis. In this case, the order on costs as stipulated in the judgment does not indicate the basis upon which the costs ought to be assessed. {t follows therefore that this court ought to assess the costs on standard basis which according to Order 3 IAQ of the CPR the court ought to allow only those costs which are © proportionate tc to the matters in The State ex parte ADMARC v 7 Ombudsman, Review Case No. 24 of 2019 Page 3 issue and resolve any doubt which it may have as to whether costs were reasonably incurred or reasonable and proportionate in amount in favour of the paying party. THE HOURLY RATE The receiving party intimates that the items on the bill be taxed at K40,000.00 per hour considering that the matter was handled by Counsel Fred Chipembere of over 14 years standing at the bar. They submit that 40,000.00 is the minimum hourly rate recommended for the legal practitioner of his standing at the bar. The paying party does not object. Considering that the matter was commenced after the promulgation of the Legal Practitioners (Hourly Expense Rate for Purposes of Taxing Party and Party Costs) Rules, 2018 which provide for (40,000.00 for Counsel of more than 10 years standing, the court is compelled to adopt the same. CONSIDERATION OF THE ITEMS OF THE BILL A. RECETVING INSTRUCTIONS The receiving party is proposing 16 hours for attending upon the Claimants to receive instructions and for meetings with the defendant on 10° March, 2019, 20 March, 2019, 24" March, 2019 and 24" June, 2021 after delivery of judgment. He further mentions obtaining documentary evidence with the claimant in preparation for the application for permission to apply for judicial review and for hearing of the judicial review. The paying submits that the meetings with the defendant did not take place. Observably, the contention was not controverted when Counsel representing the receiving party took his turn to respond to the issues. The court shall therefore proceed on the assumption that the work actually done under this part was taking instractions from the client which on its own cannot take 16 hours for a case like the one herein. I will allow the 4 hours proposed by the paying party. B. DOCUMENTS PERUSED The receiving party prays for 45 hours for perusal of documents accessed and those served on them. The paying party was generally of the view that the time proposed by the receiving party was grossly exaggerated. They contend that Counsel did not attach the same to bill for the court to appreciate their length. They point out that the Determination in question was only 6 pages long and could not take 2 hours for Counsel of over 14 years standing at the bar, They submit that the Terms and Conditions of Service which Counsel claims to have read were not relevant in this matter and even if they were, Counsel was only looking for a particular section and not reading the whole document. The State ex parte ADMARC v Ombudsman, Review Case No. 21 of 2019 Page 4 It is true that the bill is not accompanied by most of the documents that the receiving party wishes to rely on and these include the copies the said Terms and Conditions of Service and the employee’s file. Order 31, Rule 12(3) of the CPR provides that a bill of costs shall be accompanied by an assessment bundle which shall contain all documents, excluding those on the Court's file, that a party shall rely on at the assessmer.t hearing. In the case of Madanitsa vs New Building Society (1992) 15 MLR 205, the Court stated as follows: lt is the duty of the party claiming costs to present before the court all information and data to enable the taxing master to come up with a reasonable and fair award. If failure ts reprimanded by disallowance or reduction of the award. It is clear, therefore that the purpose of attaching documents that are not on the record is simply to accord the court an opportunity to appreciate the length and complexity of the document in question in order to make an informed assessment of the time being proposed. The omission herein has created doubt that must be exercised in favour of the paying party by considerable reductions. Having considered the submissions by the parties on the nature of the documents and having appreciated the length and complexity of the documents listed documents, this court summed up this part as follows: DOCUMENTS TIME PROPOSED BY | TIME PROPOSED BY | TIME ALLOWED THE RECETVING PARTY | THE PAYING PARTY | BY THE COURT Employee’s file {Ohrs 2hrs 2hrs Defendant’s determination 2hrs lhr ihr dated 12" February, 2019 Claimant’s Terms and Shrs thr 2hrs Conditions of Service Defendant’s sworn statement Shrs 2hrs 2hrs in opposition Defendant’s skeleton Shrs thr 2 4 hrs arguments Defendant’s checklist 2hrs 30mins 30mins TOTAL 10hrs C. DOCUMENTS PREPARED ‘The receiving party prays for 50 hours 30 minutes for preparation of documents in this matter. The paying party was generally of the view that the time proposed by the receiving party was grossly exaggerated. Counsel The State ex parte ADMARC v Ombudsman, Review Case No. 21 of 2019 Page5 argues that some of the documents like notices are drafted by secretaries. Having considered the submissions by the parties on the nature of the documents, this court summed up this part as follows: DOCUMENTS PREPARED TIME PROPOSED BY | TIME = PROPOSED | TIME THE RECEIVING |BY THE PAYING , ALLOWED BY PARTY PARTY THE COURT Ex parte application for permission 20hrs Shrs Shrs to apply for judicial review Claimant’s skeleton arguments in 10hrs 3hrs 3hrs support of ex parte application for permission to apply for judicial review Order granting permission to apply Thr 30mins 30mins for judicial review and giving directions Nitification of Judge’s decision on lhr 30mins thr application for permission to apply for judicial review Notice of scheduling conference 30mins 30mins 30mins Claimant’s checklist Ihr lr Lhr Notice of adjournment 30mins 30mins 30mins Notice of hearing dated 20" 30mins 30mins 30mins October, 2020 Order for directions 30mins 30mins 30mins Claimant’s skeleton arguments on Shrs 30mins 2hrs hearing of judicial review Notice of adjournment dated 19" 30mins 30mins 30mins February, 2021 Paginated trial bundle 10hrs 3hrs 4hrs TOTAL 19hrs The State ex parte ADMARC v Ombudsman, Review Case No, Page 6 D. STATUTES READ The receiving party has listed 4 statutes on this part as having been perused in the conduct of this matter and they claim 8 hours in total. The paying party contends that Counsel did not read the whole statutes but was looking for specific sections and that cannot require more time. They point out that in the Constitution, Counsel looked at three sections being 120, 123 and 126, in the Ombudsman Act, they point out that Counsel looked at sections 5 and 8 and in Employment Act, they point out that looked at section 63. Counsel representing the receiving party counter-argues that one still needs to go through the document in order to isolate what is applicable in a case being dealt with. He further argues that even for Counsel of over 18 years at the bar, he still needs to refresh by revisiting the statutes. With these assertions, the court will proceed, advisedly, taking into account the experience of counsel and the relevance of the likely information sought in the statutes purported to have been read. | summarise this part as follows: STATUTE TIME PROPOSED BY | TIME PROPOSED BY | TIME ALLOWED THE RECEIVING PARTY | THE PAYING PARTY | BY THE COURT Courts (High Court) (Civil 2hrs ihr 2hrs Procedure) Rules, 2017 The Constitution 2hrs thr lhrs The Ombudsman Act 2hrs 30mins lhr The Employment 2hrs 30mins Ihr TOTAL Shrs E. CASE AUTHORITIES PERUSED The receiving party has listed 15 cases on this part and they claim a total of 15 hours. Counsel representing the paying party questions the time proposed for reading each of the cases. They further point out that the copies of the said cases were not attached for the court to appreciate the length. Apart from that, they point out that out of the 15 cases listed 5 cases were never used nor applied by Counsel in any of its documents. Counsel representing the receiving party concedes that the same were not referred to in the submissions but were referred to in their opinion, He concedes that they be taken out. He however proposed 30 minutes each for local cases cited on the understanding that they deal with the quantum on damages and it was highly likely that Counsel had had recourse to them. The State ex parte ADMARC v Ombudsman, Review Case No. 21 of 2019 Page 7 As earlier mentioned, the court bemoans the omission to attach the copies of the documents the receiving party sought to rely on and on this part, the cases listed. Clearly, the doubt thereof must be exercised in favour of the paying party by trimming the cases. I shall allow 10 cases with an average of 45 mins each. F, GENERAL CARE AND CONDUCT The receiving party proposes 80% of Part A as General Care and Conduct. Counsel points out that he exercised great care and skill in handling this case to the satisfaction of his client. The paying party is of the view that Care and Conduct is not applicable to some of the issues included therein such as perusing the documents filed by the defendant. They also argue that the CPR 2017 does not provide for General care and Conduct. I do not think it is correct to say the Rules do not provide for general care and conduct. The fact that it is not provided for in black and white does not mean it is not provided for. General care and conduct concerns the general care, conduct and skill applied by a solicitor in a proceeding as a whole, for which no direct time can be substantiated and includes the general supervision of, and indirect responsibility for, the conduct of the proceeding. I believe this is what is provided for under 0.31 1.5(3){e) of the CPR 2017 which provides that the Court shall also have regard to the skill, effort, specialized knowledge and responsibility involved. | shall allow the same. In this case, it is argued that the matter was of great importance considering that other employees could have taken advantage of the defendant’s determination to make the claimant make undue payments, There is, however, no mention as to whether the matter raised novel or complex questions for determination. | am of the opinion that 65% of Part A is reasonable. G., TRAVELLING AND WAITING The receiving party is proposing | hour for travelling to the High Court on divers dates to file and process various documents. The paying party argues that filing and processing documents at the court is the duty of the process server and that if counsel did this then it was out of his own will and is not supposed to bill that aspect using his hourly rate. I wish to agree with the paying party on this contention. Costs ought to be reasonably incurred and it is a professional duty by Counsel to keep expenses of prosecuting a client’s instructions within fair and reasonable limits. Embarking on a process server’s duty is nothing other than Counsel on a frolic of his own. I will disallow this part. Apart from that, the receiving party is claiming | hour 30 minutes for waiting upon the convening of the Court for scheduling conference, hearing of the matter and delivery of judgment. The paying party is of the view that 1 hour is reasonable as everything was done via zoom and the Judge was almost always on time. | agree that 1 hour is more realistic in the circumstances. | wil! allow the 1 hour as counter-proposed by the paying party. The State ex parte ADMARC v Qmbudsman, Review Case No. 21 of 2019 Page 8 H. DISBURSEMENTS A successful party should, so far as is reasonable, be indemnified from the expense he is put to in an action to attain justice or enforce of defend his rights. He is not however entitled to be indemnified against such costs of expenses, which had been incurred or increased through over caution, negligence or mistake, or by any other unusual expenses. In Dunne v. O’ Neill [1974] LR. 180 in deciding whether to allow such disbursements, Gannon J. further stated that the amounts of the disbursements should be assessed on the basis of what a practising solicitor who is reasonably careful and reasonably prudent would consider a proper and reasonable fee to offer to counsel. In this case, the receiving party claims K1,401,000.00 for disbursements. In this case, the paying party has no issues with the K21,000.00 claimed for filing fees. However, they challenge the K 20,000.00 for fuel arguing that all hearings were done virtually and that Counsel had already claimed for fuel under travelling and waiting. It is not in contention that most if not all hearings were done virtually however there was travelling that was done for instance for filing of documents which the paying party does not raise issues with. Contrary to the paying party’s contention that this claim amounts to double dipping, it is worth noting that there is time expended while travelling and there is fuel as an expense in travelling. I hold the view that the K20,000.00 claimed under this part is fair. Other than that, the receiving party claims K1,126,000.00 for Secretarial, messengerial, photocopying, internet and stationery. The paying party contends that the same is excessive and unreasonable. They point out that the court file is not so bulky as such stationery used was not that much, not so many documents were photocopied by counsel and there was no much secretarial and messengerial work done herein that would warrant counsel to claim such an exaggerated amount. They counter propose MK200,000.00 for this part. | had serious problems with this part. It is not itemized and not even clear how Counsel airived at the figure. Other than that, I agree with the paying party that volume of the file in question does not speak to the expenses claimed. I shall alow & 400,000.00. In total, the court allows 1°441,000.00 for disbursements, IL TAXATION The receiving party proposes 14 hours for preparation of the bill of costs after going through the file and attending proceedings inclusive travelling and waiting. They further claim 60% of this part as Care and Conduct. The paying party proposes 7 hours for preparation of the bill and argue that the care and conduct is not applicable. J had occasion to go through the bill that was presented before this court and I hold the view that the 7 hours counter proposed the paying party is even generous. The issue whether the care and conduct is applicable has already been dealt with above, I shatl allow 50% of this item as Care and Conduct. All in all, this part 18 taxed at 7 hours plus 50% care and conduct which gives K420, 0,000. 00, The State e eX x parte ADMARC v Ombudsman, Review Case No. 21 of 2019 Page 9 SUMMARY | therefore tax the bill as follows: ITEM COSTS PART A: Attendances upon client K 460,000.00 Documents perused K 400,000.00 Documents prepared 760,000.00 Statutes read K200,000.00 Case authorities perused K300,000.00 Tota] for Part A K1,820,000,00 PART B: General Care and Conduct 65% of Part A K1,183,000.00 Travelling and waiting K 40,000.00 Taxation K420,000.00 Total Professional Fees K3,463,000.00 VAT 16.5% K 616,440.00 Disbursements K44],000.00 TOTAL K4,520,440.00 The costs are taxed at K4,520,440.00. MADE IN CHAMBERS THIS 14™ OF SEPTEMBER, 2021 WYSON CH NKHATA ASSISTANT REGISTRAR