Jersey Unreported Judgments

2000/238

9 pages

ROYAL COURT

Samedi Division

 

1st December 2000

 

 

Before:  Sir Philip Bailhache, Bailiff

and Jurats Tibbo and Allo.

 

 

Between                         Mrs. Hannah Morahie Drake née Neville

                                           in her capacity as executrix of the late

                                                          Derek Cyril Drake                                            Appellant

 

And                                           Arlindo Reis Freitas Gouveia                                Respondent

 

And                                          Lemprière, Whittaker Renouf

                                                                     a firm                                             Party Convened

 

Appeal by the Appellant from the order of the Master of 10^th August, 2000, relating to the costs of and incidental to a strike out application and the main action and seeking an order that:

a)     the said order of the Master be set aside; and

b)     the Party Convened pay the costs of the Appellant and the Respondent of and incidental to the strike out application and the main action.

 

 

 

                                         Advocate P.S.Landick for the Appellant

                                       Advocate J.C. Martin for the Respondent

                            Advocate Mrs. M.E. Whittaker for the Party Convened

 

 

JUDGMENT.

 

THE BAILIFF:

 

Introduction

 

1.   This is a summons by which Mrs. Hannah Morahie Drake ("the appellant"), executrix of her husband the late Derek Cyril Drake ("the deceased") is appealing against an order of the Greffier Substitute (to whom we shall refer as "the Master") relating to the costs of the deceased's action against Arlindo Reis Freitas Gouveia ("the respondent").  This action was struck out by the Master on 10th August 2000 on the application of the respondent on the ground of inordinate and inexcusable delay.  The Master ordered the appellant to pay the respondent's costs. The appellant now seeks orders that the firm of Lemprière Whittaker Renouf ("LWR"), the deceased's former legal advisers, should pay the respondent's costs of the action and her own costs incurred since 16th March 2000.  From the appellant's perspective, this is a sorry tale.

 

Background

 

2.         The history may be adumbrated as follows.  On 18th March 1994, there was a minor road traffic accident in which a car driven by the respondent emerged on to a major road, La Vallée de St. Pierre, and collided with a car driven by the deceased.  On 31st October 1994, an Order of Justice was issued claiming damages from the respondent for negligence.  On 25th November, 1994, the action was placed on the pending list and there, so far as the court file is concerned, it rested quiescent until March 2000.

 

3.         In fact, there was activity in the background which was mainly directed towards establishing which insurance company would take responsibility for the respondent's actions.  In January 1995, the Motor Insurers' Bureau was approached and a question arose as to whether fresh proceedings should be served on the Bureau.  The Bureau at first instructed Guardian Insurance.  In August 1996 Guardian was replaced by Eagle Star. After much procedural wrangling, Eagle Star informed LWR in March 1997 that they were able to deal with the deceased's claim.  In April 1997, LWR sent details of the claim to Eagle Star.  On 18th July 1997, Eagle Star responded, apologizing for the delay and asking for confirmation whether proceedings had been served and if so, upon whom.  Thereafter, in so far as the action was concerned, nothing happened until March 2000.  Meanwhile, on 9th May 1999, the deceased had died.

 

4.         It is claimed by the appellant, and not denied,  that between 18th July 1997 and 12th November 1998 she and her husband had written to LWR on at least seven occasions, asking for news of progress and urging that the claim be pursued.  They received only one response by letter of 18th March 1998, which promised to inform them of developments.  On 15th June 1999, after the death of her husband, the appellant wrote to the Bâtonnier asking for help in getting a response from LWR.   She wrote again on 29th September 1999 and 2nd December 1999.  By letter of 7th March 2000, the Bâtonnier wrote to the Acting Bâtonnier stating that he had written to LWR five times asking that the matter be dealt with, but had received no reply.  On 16th March 2000, the firm of Ogier & Le Masurier was instructed by the Acting Bâtonnier to deal with the appellant's affairs.

 

5.         That was the history which led up to the respondent's application to the Master on 1st August 2000 to strike out the action.  The action was struck out, as we have stated, and no appeal has been brought against that decision.  The respondent, naturally, applied for costs.  Mr. Landick, for the appellant, asked that LWR be ordered to pay the respondent's costs or that the matter be adjourned so that LWR could be convened.  The Master's judgment of 10th August 2000 did not recite any of the arguments on these submissions but merely recorded his decision that the costs of the action be paid by the appellant on the standard basis.  After the lodging of the appeal, he elaborated his reasons.  He had declined to make any order against LWR on the grounds that:-

 

"(i)       that firm was no longer acting for the plaintiff and obviously was not a party to the strike out application or the proceedings generally;

(ii)        I was not prepared to make any finding as to whether there had been professional negligence on the part of that firm which had caused such inordinate and inexcusable delay in the prosecution of the action as led to it being struck out;

(iii)       [LWR] were not present or represented at the hearing on 10th August and thus could not be heard on the application and I did not consider it appropriate to adjourn matters so as to allow them to be convened and I also had some doubt as to whether they could, in fact, be convened in any event."

 

The convening of LWR

 

6.         Prior to the hearing which took place before the Master on 1st August, Ogier & Le Masurier had given notice to LWR of their intention, should the strike-out application succeed, to apply for an order that LWR should pay the costs.  That notice was given by fax of 27th July.  Ogier & Le Masurier stated:-

 

            "Insofar as you may object that I am giving you only two clear days' notice of this possible costs application, which turns on whether the strikeout application is successful, I must point out that your firm has only today, for the first time, made any substantive response to my repeated requests for help and that response has provided no explanation for the inactivity since, at the latest, 25th July 1997 which will be the only or most likely reason for the strikeout application to succeed.

 

            It would be iniquitous for Mrs. Drake to bear any costs order. ...

 

            If you wish to be heard on this application for costs, Mrs. Drake will not object to any application by you to be joined in the proceedings for that purpose.

 

            I shall, of course, continue to resist the strikeout application and I maintain my request that you assist me in any way you can.

            I also reserve Mrs. Drake's right to ask for an order that you pay this firm's costs of acting for her".

 

7.         There was no response to that fax. After judgment was reserved by the Master on 1st August, Ogier & Le Masurier wrote again on 7th August, repeating that if the strike-out application were successful, an application would be made for the costs to be paid by LWR.  Ogier & Le Masurier reiterated that no objection would be taken to LWR's seeking to be joined in the proceedings in order to be heard.  There was no reply to that fax.  On 8th August, Ogier & Le Masurier wrote again to advise that judgment would be given by the Master on 10th August, and reiterating the notice given in the previous message.  Again, there was no reply to that fax.  On 11th August, Ogier & Le Masurier wrote to LWR advising that the action had been struck out, giving notice of a possible appeal and asking whether LWR would agree to pay the costs of the action.  There was no reply to that fax.  On 4th September, Ogier & Le Masurier wrote again to LWR advising that the costs appeal would be heard on 29th September and reiterating that the Court would be asked to order that LWR should pay all the costs of the proceedings.  LWR was invited to discuss the content of the letter or any other aspect of the matter.  There was no reply to that fax.

 

 

8.         On 25th September, Ogier & Le Masurier wrote again to LWR confirming the date of the hearing, inviting discussion and attaching a copy of the appellant's draft skeleton argument.  On 29th September, the hearing of the appeal took place.  LWR did not apply to be joined in the proceedings, and indeed was not represented.  Counsel for the appellant urged the Court to deal with the matter without convening and hearing LWR, because LWR had been kept fully informed about the appeal and had chosen not to seek to intervene.  After hearing argument from counsel for the appellant and for the respondent, we reserved our judgment.

 

9.         On the afternoon of 29th September, the Bailiff's Secretary received a fax from counsel for the appellant enclosing a copy of a fax from LWR which had been sent to Ogier & Le Masurier that morning, but which had not been drawn to the attention of counsel before the hearing.  LWR asked to be heard if the Court were to find that it had jurisdiction to make an order for costs against them.  The Court, without hearing counsel further, directed that LWR be convened for 27th October in order to make any submissions which they might wish to make.  Mrs. Whittaker appeared on that day for LWR and addressed us, and we again reserved judgment.

 

The law

 

10.       Mr. Landick contended that the Master was wrong in refusing to convene LWR and in declining to consider whether he should invoke a jurisdiction to order them to pay the respondent's costs.  He referred first of all to Skinner-v-Myles (1990) JLR 268 at 269 where the head-note summarizes the material part of the decision as follows:-

 

           "The court had jurisdiction to order that an award of costs against the plaintiff be paid by the plaintiff's advocate as an aspect of its power to discipline its own officers for behaviour which tends to defeat the course of justice.  Such an order would not be made against an advocate who had made a mere mistake or error of judgment, but it could be made against an advocate in respect of professional negligence causing such inordinate and inexcusable delay in the prosecution of an action that, as here, the action was struck out for want of prosecution"

 

11.       Counsel submitted that this was clear authority for the proposition that the Court could order LWR to pay the respondent's costs.  He conceded, however, that there was doubt whether this jurisdiction could be exercised by the Master on the basis that quasi-disciplinary orders should be made by the Royal Court itself.

 

12.       Mr. Landick submitted, however, that there was another statutory jurisdiction which could have been invoked by the Master.  Article 2(1) of the Civil Proceedings (Jersey) Law, 1956 provides:-

 

                       "Subject to the provisions of this Part of this Law and to rules of court made under the Royal Court (Jersey) Law, 1948, the costs of and incidental to all proceedings in the Royal Court shall be in the discretion of the Court, and the Court shall have full power to determine by whom and to what extent the costs are paid."

 

13.       This provision does not appear to have been construed by the Court before.  It is, however, very similar to section 51(1) of the Supreme Court Act 1981, which, so far  is material, provides:-

 

                       "Subject to the provisions of this or any other Act and to rules of court, the costs of and incidental to all proceedings in the civil division of the Court of Appeal and in the High Court ....... shall be in the discretion of the court, and the court shall have full power to determine by whom and to what extent the costs are to be paid."

 

14.       Mr. Landick referred us to Aiden Shipping Co. Ltd v. Interbulk Ltd., The Vimeira [1986] 2 All ER 409 where the High Court held that that provision was wide enough to empower the court to order any non-party to the action to pay the costs.  Lord Goff made it clear however that the exercise of this jurisdiction should be limited in accordance with the requirements of reason and justice.  He stated, at 413:-

 

                       "...it is not surprising to find the jurisdiction conferred under s 51(1), like its predecessors, to be expressed in wide terms.  The subsection simply provides that "the court shall have full power to determine by whom ... the costs are to be paid". Such a provision is consistent with a policy under which jurisdiction to exercise the relevant discretionary power is expressed in wide terms, thus ensuring that the court has, so far as possible, freedom of action, leaving it to the rule-making authority to control the exercise of discretion (if it thinks it right to do so) by the making of rules of court, and to the appellate courts to establish principles upon which the discretionary power may, within the framework of the statute and the applicable rules of court, be exercised." (Lord Goff's emphasis)

 

15.       And later, at 416-417:-

 

                       "In the vast majority of cases, it would no doubt be unjust to make an award of costs against a person who is not a party to the relevant proceedings ... I do not, for my part, foresee any injustice flowing from the abandonment of that implied limitation.  Courts of first instance are, I believe, well capable of exercising their discretion under the statute in accordance with reason and justice.  I cannot imagine any case arising in which some order for costs is made, in the exercise of the court's discretion, against some person who has no connection with the proceedings in question.  If any problem arises, the Court of Appeal can lay down principles for the guidance of judges of first instance;  or the Supreme Court Rules Committee can propose amendments to the Rules of the Supreme Court for the purpose of controlling the exercise of the statutory power vested in judges subject to rules of court."

 

16.       He also cited Gupta v. Comer [1991] 1 All ER 289 where the English Court of Appeal approached the power of the court to order a solicitor to pay costs as an example of the exercise of the jurisdiction under s.51 of the 1981 Act.

 

17.       Mrs. Whittaker submitted that there was no equivalent provision in the Royal Court Rules 1992 to Order 62 of the Rules of the Supreme Court which was the subordinate statutory provision under which Gupta v. Comer was decided.  This is true, but the absence of a rule of court cannot affect the construction of an article of a primary law.  The absence of any equivalent provision in the Royal Court Rules means only that the discretion conferred by the Civil Procedure (Jersey) Law, 1956 has not been fettered.

 

Conclusion

 

18.       In our judgment, the principles laid down in Aiden Shipping and Gupta are equally applicable in Jersey.  The words "by whom" in Article 2(1) of the Civil Procedure (Jersey) Law 1956 are wide enough to embrace any non-party whom the Court, in the exercise of its discretion, considers ought justly to be ordered to pay the costs.  No doubt this is a jurisdiction which ought to be exercised sparingly and with caution.  Nonetheless, particularly in these days when the costs of litigation threaten to make the courts inaccessible in practice to sections of the community, it is a power which the court should use in appropriate circumstances in order to ensure that litigants are not unfairly treated.

 

19.       We think, therefore, that the Master was wrong not to adjourn the hearing on costs so as to allow LWR to be convened and to be heard.  It was unnecessary for any express finding to be made as to whether LWR had been professionally negligent in causing such inordinate and inexcusable delay in the presentation of the action as to lead to its being struck out.  It was only necessary for him to consider, in all the circumstances of the case, "by whom and to what extent the costs are to be paid."   Clearly, the cause of the inordinate and inexcusable delay would be a very material factor in making that determination.  But the issue for determination was the question by whom the costs should, in accordance with reason and justice, be paid.

 

20.       We therefore allow the appeal and quash the order for costs made by the Master.  We considered whether we ought to remit the matter to the Master for a re-hearing.  Generally speaking, the judge by whom the substantive action or application has been heard is the appropriate person to determine the question of costs.  Counsel for the appellant urged us however to deal with the matter ourselves on the basis that we were now as well informed on the background to the case as was the Master.

 

21.       Mr. Landick urged us to order LWR to pay the costs of the action on the basis that the appellant and her deceased husband were blameless in relation to the delay which had led to the striking out.  Both the deceased and, after his death, the appellant, had repeatedly pressed LWR to make progress and had been ignored.  Eventually, the appellant had been driven to seek the assistance of the Bâtonnier in obtaining alternative legal representation.  Counsel submitted that it would be iniquitous if the appellant were to be made to pay the wasted costs of her husband's abortive action.  Miss Martin, for the respondent, submitted that her client's costs should be paid by someone, but as to whether it was the appellant or LWR she effectively submitted to the wisdom of the Court.

 

22.       Mrs. Whittaker was at first unwilling to make any submissions on the issue of whether LWR should be ordered to pay the costs.  Eventually, she told the Court that she was unable to comment on the question of delay.  She submitted that that issue should be considered in the context of the action as a whole and that it would be prejudicial to the position of LWR in any subsequent action if she were to develop her argument.  She also submitted that an order for costs would be prejudicial to LWR in any subsequent action brought against the firm by the appellant for professional negligence, and should not therefore be made.

 

23.             We have to record that we did not find these submissions from Mrs. Whittaker very helpful.  In our judgment, the question of who should pay the wasted costs is a different issue from the question of whether or not LWR was professionally negligent.  We cannot see that any unfair prejudice will be caused to LWR by resolving that first question now.  Despite being given every opportunity to address fully the issue of whether the wasted costs of the action should be paid by LWR, Mrs. Whittaker declined to do so.  No explanation has therefore been given for the inactivity by LWR between 18th July 1997 and March 2000 which led to the action being struck out on the ground of inordinate and inexcusable delay.

 

24.             It is, of course, true that an action in negligence might lie against LWR and that the appellant could add the costs incurred in the abortive action against the respondent to her claim in such an action.  However, no such action has yet been instituted and we cannot assume that it will be instituted.  As we indicated at the beginning of this judgment, this has been, from her perspective, a sorry tale. Nearly seven years after a minor road traffic accident, and after much painfully slow grinding of legal wheels, the appellant is no closer to a resolution of the issues than her husband was at the beginning.   The action begun by the deceased over six years ago has ground to a halt and has been struck out.  We accept the submission of Mr. Landick that the appellant is blameless for this state of affairs.  She now finds herself facing a bill for many thousands of pounds in legal costs.  Why should she be required to face the uncertain prospect of beginning fresh litigation to recover these costs?  Her husband, who would have been the principal witness on his own behalf in the original action, has died.  Nearly seven years have passed and the recollection of other witnesses has no doubt dimmed and may be unreliable.  Documentary evidence may have been lost or destroyed.   Responsibility for this unhappy state of affairs rests fairly and squarely with LWR and in my judgment, it is just that they should pay the wasted costs of the action.  I therefore order that the costs of the respondent up to 10th August 2000 and the costs of the appellant between 16th March and 10th August 2000 be paid by LWR on the standard basis.  I am prepared to hear counsel in relation to the costs of this appeal.

[Counsel addressed the Court with regard to the costs.]

 

JUDGMENT ON COSTS.

 

THE BAILIFF:

 

1.            My decision is that LWR will pay the costs of the appellant and of the respondent between 10^th August and 29^th September, 2000, on the standard basis.

 

2.            I am asked to order that the costs of the parties between 29^th September and today should be paid by LWR on an indemnity basis.  The underlying reason for that submission by counsel for both the appellant and the respondent is that LWR failed repeatedly to respond to correspondence and other invitations to participate in the hearing which took place on 29^th September and that if they had responded the subsequent hearing in October would have been unnecessary.

 

3.            Counsel for LWR has made two points in response.  The first is that the appeal raised a novel point of law.  The second point is that the appellant was on legal aid and that there ought therefore to be a distinction made because indemnity costs are intended to indemnify a client against costs which he would otherwise pay.  The assumption is that a client on legal aid will not be paying costs and therefore should not receive an order for indemnity costs.

 

4.            So far as the first point is concerned, I accept that the question of how the Civil Proceedings (Jersey) Law, 1956 should be interpreted did raise a point of law which had not previously been considered by the Court.  That does not, however, answer the argument that LWR were on notice some time before 20^th September that the issue would be argued at that time.

 

5.            So far as the question of indemnity costs against a legally aided client is concerned, it seems to me that there is no legal justification for this Court distinguishing between different litigants.  Whether a litigant is funded in one way or another is, in my judgment, immaterial to the exercise of discretion as to whether indemnity costs should be awarded.  Neither of these points meets the argument put forward by counsel for the appellant and for the respondent as to why indemnity costs should be ordered.

 

6.            My decision, therefore, is that, so far as the costs incurred between 11^th September and today are concerned, LWR will pay the costs of the appellant and the respondent on an indemnity basis.

 

Authorities.

 

Skinner-v-Myles & Public Health Committee (1990) JLR 88.

 

Skinner-v-Myles & Public Health Committee (1990) JLR 98.

 

Civil Proceedings (Jersey) Law, 1956: Article 2(1).

 

Supreme Court Act 1981: s.51(1).

 

Aiden Shipping Co. Ltd v. Interbulk Ltd., The Vimeira [1986] 2 All ER 409.

 

Gupta v. Comer [1991] 1 All ER 289.

 

Myers-v-Elman [1939] 4 All ER 484.

 

Symphony Group plc-v-Hodgson [1993] 4 All ER 143.

 

Representation of the Bâtonnier re Sinel (27^th January, 2000) Jersey Unreported.

 

Boyd-v-Pickersgill & Le Cornu (14^th September, 2000) Jersey Unreported.

 

Drake-v-Gouveia (10^th August, 200) Jersey Unreported.