ROYAL COURT
(Samedi Division)
13 May 1999
Before: FC Hamon Esq Deputy Bailiff, sitting alone
Between:(1) Armco Inc
(2) Armco Financial Services Corporation
(3) Armco Financial Services International Limited
(4) Armco Pacific Limited
(5) Northwestern National Insurance CompanyPlaintiffs
And:(1) Roger Thomas Donohue
(2) Patrick Henry Rossi
(3) Larry Loyd Stinson
(4) David Wilmot Atkins
(5) Wingfield Limited
(6) CI Services Holdings Limited
(7) NPV LimitedDefendants
And:(1) Paul Anthony Brereton Evans
and Colin Graham Bird
(2) Rothschild Asset Management (Jersey) Limited
(3) Abacus Secretaries (Jersey) Limited
(4) Landau Limited
(5) Deutsche Morgan Grenfell (CI) Ltd
(6) Abacus Nominees LtdParties Cited
Applications, agreed without a hearing, by the Plaintiffs for an order that:
Judgment on the question of the costs of the applications.
Advocate JC Martin for the Plaintiffs
Advocate MPG Lewis for the fifth and sixth Defendants
JUDGMENT
THE DEPUTY BAILIFF: I have before me two applications for costs made by the plaintiffs. The first application concerns the use of documents and information disclosed by the third and/or sixth parties cited in respect of the fifth and sixth defendants in this action for the purpose of anti-suit proceedings commenced in the High Court by the first defendant, Roger Thomas Donohue. The anti-suit proceedings relate to the same facts as the plaintiffs substantive US proceedings, but is based primarily on the interpretation of an exclusive jurisdiction clause contained in an agreement. That agreement the plaintiff alleges to be tainted with fraud. If the agreement were found to be so tainted then it might well be that no reliance could be placed on it nor therefore on the exclusive jurisdiction clause. It might well be that following that decision an argument based on the United States being the most convenient and closely connected forum might be taken.
The summons of Mr Donohue for an anti-suit injunction was issued in England on 8 March 1999. The case is listed for hearing on 21 June 1999. As part of the summons, Mr Donohue sought and obtained ex parte leave to serve the anti-suit proceedings out of the jurisdiction on Armco Pacific Limited and Northwestern National Insurance Company, the fourth and fifth plaintiffs, who applied on 17 March 1999, to set the leave aside and that application is also listed for 21 June 1999.
Moments before I delivered judgment this afternoon, Advocate Martin drew to my attention that, whilst she was in Court this morning, her firm had received, through their English instructing solicitors, a notice of the fact that Simmons & Simmons were "writing to inform you that all of the above" (that is Mr Patrick Rossi, Mr Larry Stinson, International Trustee and Receivership Services Inc, International Run-Off Services Inc., Wingfield Services Ltd, CI Services Holdings Limited) "apply to join Mr. Roger Donohue as co-plaintiffs to these proceedings". I have no idea what a reputable firm like Simmons & Simmons is talking about in that context because Mr Donohue was always the plaintiff to the action and I presume that what they are saying is that Mr Donohue is applying to join these other parties with him as plaintiff to the action.
Advocate Martin appears to draw great strength from the fact that this came in late in the day, but at the moment I am quite unable to see the relevance of that information in the context of the judgment that I have to deliver today.
This costs application arises because once the fifth affidavit of Mr Brian Douglas Hamilton Cooper was disclosed to Advocate Lewis under cover of a letter dated 7 May 1999, the consent for release of the Abacus documents was given. Advocate Lewis argues that there be no order as to costs in that event and Advocate Martin asks for her taxed costs. Whilst Abacus - and I shall refer to them in this way - have always rested à la sagesse de la Cour" the documentation and the information in it belong to them and not to the plaintiffs, whoever the plaintiffs may be in this context.
When the request came initially on 25 March the plaintiffs said that it required "the use of the same for the English proceedings" with no better explanation. There was a one-sided correspondence but on the threat of a summons being issued, contained in a letter dated 21 April there was a reply to the effect that it was not possible to obtain instructions before the close of business on 23 April. An apparent concession was given to that by saying that the plaintiffs would wait until 12 noon on Friday, 23 April.
Sabres continued to rattle. A letter of 26 April from Bailhache Labesse asked again for an explanation as to why the information was required. A letter of 27 April from Crill Canavan was in these terms:
"I am not prepared to enter into correspondence over our clients evidence. However the Jersey information is clearly relevant on whether there was a fraud. Further the use of the Jersey information has already been argued before the Court on 30 March 1999 and leave was granted to use it in the US proceedings".
That was not understood by Bailhache Labesse who asked on 28 April for an explanation, again, as to why fraud was relevant to the anti-suit application.
On 7 May there was a further request with this sentence:
"As I have explained in earlier correspondence this is matter to which our clients may consent, but they will not be in a position to do so unless they know the reasons why the documentation is to be used".
Eventually, on 7 May, the affidavit of Mr Cooper was produced and with that affidavit was a covering letter which says in part:
"If you read the affidavit, you will see that it clarifies for what purposes my clients intend to use the information obtained from Abacus".
On 12 May a few days later, the consent was given.
I cannot agree with Advocate Martin in her contention that Advocate Lewis has behaved unreasonably. I cannot involve myself in the reasoning of Mr Donohue, but reasoning there must be because he consented to the disclosure of some documents in Hong Kong for the English anti-suit proceedings voluntarily. He only yielded up non-voluntarily disclosed Singapore information in the English anti-suit action after a ruling by the Court in that jurisdiction. Of course, had there been an earlier consent, then Mr Cooper would not have had to prepare another voluminous affidavit, but I still feel that had Crill Canavan provided - albeit in some truncated form - the essence of the reasons in a letter once the request had been made, it would have been very difficult for Bailhache Labesse to have procrastinated, or at least, if they had done so, they would have done so at their peril. In my view it was never very difficult to summarise the reasoning. Mr Cooper does it neatly in four paragraphs and for ease of reference they are 15-18 of his affidavit.
The parties could well realise that co-operation on matters such as this might well give their respective clients considerable saving in overall litigation costs. For the reasons that I have set out, I make no order as to costs.
The second summons is more contentious. Disclosure orders were made in the amended Order of Justice given on 13 August 1998. An affidavit was sworn on behalf of Wingfield Limited and CI Service Holdings Limited, the fifth and sixth defendants. An application to lift the injunction was made and judgment was delivered on 31 March. The Court ruled that the interim injunction should continue until further order of the Court or trial of the action and thereafter until final judgment. Advocate Lewis sought leave to appeal and this was refused. He intimated that he would follow his own course to appeal, but he gave no undertaking. The Court merely invited Advocate Martin to return to it if there were any question of delay. There is no doubt in my mind but that Advocate Lewis, having been refused leave, was given the clearest indication that he should proceed as quickly as may be to make his attempt to seek leave.
The appeal path has now been abandoned because consent has been given to the release of the affidavit and again we have a dispute regarding costs because while Advocate Lewis is prepared to pay taxed costs, Advocate Martin seeks indemnity costs.
The Court of Appeal has given helpful guidance to indemnity costs in this jurisdiction in the case of Dixon & Ors -v- Jefferson Seal, Ltd (13 January 1998) Jersey Unreported CofA; (1998) JLR 47. In that case the learned Court of Appeal refers to Jones -v- Jones (No. 2) (1985-1986) JLR 40 and supplemented that case with later relevant English authorities. In the Dixon case the headnote reads as follows:
"There had to be a special or unusual feature of the case for indemnity costs to be awarded. This is not confined to cases in which the losing party had been guilty of deception or had fought the action with an ulterior motive, but included cases in which it had acted oppressively, in bad faith, or in such a way as to incur costs out of all proportion to the issues at stake, although it was insufficient that the case had been strongly or even unreasonably contested".
Despite Advocate Martin being wrong in her belief that Advocate Lewis had given an undertaking to prosecute his leave to appeal there is no doubt that on 31 March there was a perfect understanding in the Court that he would attempt to obtain leave without unnecessary or undue delay. Bearing that in mind, on 7th May he could still write to Advocate Martin: "I am still endeavouring to obtain firm instructions in this regard" (meaning the appeal). In the knowledge of the understanding that was perfectly clearly set out and understood he wrote to his opponent on 5 May in these words:
"The Order of 31 March effectively releasing this affidavit has been stayed pending our clients application for leave to appeal. To my understanding there is no time limit under the Court of Appeal Rules within which an application for leave to appeal should be made. If you do not believe our clients have pursued such an application expeditiously, your recourse is to apply to the Court to review the position".
In my view that is disingenuous. It is apparent that the fifth and sixth defendants never intended to seek leave, or if they did, they show no demonstrative evidence of that fact and in my view that is playing ducks and drakes with a decision of the Court.
The costs of and incidental to this application, therefore, will be paid on an indemnity basis up to the time that the release of the affidavit was agreed. However, because no undertaking was ever given by the defendants the plaintiff must pay its own costs of writing to the Viscount on 5 May, because that letter - and I agree with Advocate Lewis - is entirely based on a misapprehension.
Authorities
Dixon & Ors -v- Jefferson Seal, Ltd. (13 January 1998) Jersey Unreported CofA.; (1998) JLR 47