2000/82A
5 pages
ROYAL COURT
(Samedi Division)
12th May, 2000
Before: Sir Philip Bailhache, Bailiff
Between 1900 Trustee Company Limited Plaintiff
And Nürnberg Company Limited as Trustee Defendant
of the Nürnberg Trust
1. Application to the Court by the Defendant to set aside the Order of the Greffier Substitute of 6th January, 1999, disallowing disbursements set out in the Appellant's bill of costs, submitted pursuant to the Act of the Court of 28th May, 1998; and
2. Application to the Court by the Defendant to set aside the Order of the Master of the Royal Court of 23rd February, 2000, refusing leave to file an Amended Answer and Counterclaim.
Advocate J Martin for the Plaintiff
Mr S. Schepers, a director for and on behalf of the Defendant.
JUDGMENT
THE BAILIFF:
1. This is an appeal by Nürnberg Company Limited, the defendant in this cause, against an order of the Assistant Judicial Greffier, taxing the costs of the company following an Order of the Court of 28th May, 1998. By that order the Court discharged interim injunctions obtained by the plaintiff and condemned the plaintiff to pay the taxed costs of the application.
2. By an undated letter Messrs Olsen, Backhurst & Dorey, who were then acting for the defendant, submitted a bill of costs in the sum of £25,081.86. The bill included substantial disbursements. There followed correspondence between the parties and the Assistant Judicial Greffier, and on the 6th January, 1999, the bill was allowed in the reduced sum of £6,189.85, and 84.10.DM.
3. The defendant now appeals against certain aspects of that adjudication. The plaintiff, through its Counsel, Miss Martin, objected that the defendant was estopped from pursuing an appeal because Messrs Olsen, Backhurst & Dorey, had written to the Assistant Judicial Greffier on 11th December, 1998, confirming that they raised no objection to the provisional taxation.
4. While this would ordinarily have been a strong argument, it is doubtful that by that stage Messrs Olsen, Backhurst & Dorey, were any longer acting as Advocates for the defendant. On 28th November, 1998, the defendant, through its director Mr Stefan Schepers had written to the Assistant Judicial Greffier stating:
"We would like you to inform that from now on, the undersigning director has taken over the representation in the above case for our Company"
5. It is true that the Assistant Judicial Greffier continued to correspond with Messrs Olsen, Backhurst & Dorey, and indeed his adjudication of 6th January, 1999 was addressed to Advocate Lakeman of that firm. However the notification sent by Mr Schepers seems to the Court to conform to the requirements of Rule 15(4) of the Royal Court Rules 1992, and it follows that Advocate Lakeman was no longer the Advocate on the record. The submission that the defendant is estopped from pursuing an appeal is therefore rejected.
6. Turning to the substance of the appeal, the Assistant Judicial Greffier in his statement of case to the Court has set out his approach to the adjudication in the following terms:
"The basis on which the appellants costs were to be taxed is set out in Furzer -v- IDC (1990) JLR 179. At p183/20, the learned Greffier set out the test on taxation. Accordingly I find that the correct test for me apply in relation to taxed costs is that of taxation on the party and party basis as set out in Order 62, Rule 28(2) that is to say, 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. I take the words necessary or proper to mean more than simply necessary, but less than the test of taxation on the common fund basis of there shall be allowed a reasonable amount in respect of all costs reasonably incurred. Although the authorities lead me to this conclusion, as they do not give clear guidance as to precisely where the line is between those two positions, I can only apply the test of necessary or proper as seems right. In relation to the costs of a lawyer outside the jurisdiction, this is now provided for under paragraph 10(22) of the Legal Practice Committee Report November, 1993. The amount allowed must be reasonable in all the circumstances."
7. This approach seems to the Court to be appropriate and reasonable. Mr Schepers, who presented the case for the defendant clearly and concisely, submitted that the application of the law to the facts was faulty in five respects.
8. First he submitted that the notarial account of Mr Neiwöhner, a Luxembourg Notary, should have been allowed in full. The Assistant Judicial Greffier had taxed off 50% of the account in the sum of DM 84.10, because the notarial fee appeared to have been duplicated. Mr Schepers told us that as a matter of German law, it was necessary to notarise two copies of an affidavit. While I am prepared to accept that submission, although no evidence of German law was placed before me, the fact remains that only one copy of an affidavit is required for the purposes of an application in this jurisdiction. I cannot agree that the Assistant Judicial Greffier wrongly exercised his discretion in taxing off DM 84.10.
9. Secondly it was submitted that the Assistant Judicial Greffier had been wrong in disallowing 50% of the account of Mr Gerry Osch, a Luxembourg lawyer retained by the defendant. Mr Schepers claimed that the Royal Court had relied to an extent upon the evidence of Mr Osch in lifting the injunction. The Assistant Judicial Greffier decided that a reasonable amount of time to be allowed for taking the advice of the Luxembourg lawyer in relation to the application before the Court was a total of 6 ½ hours. The Court cannot fault the exercise of his discretion.
10. Thirdly, it was submitted that the costs incurred by Schepers Consulting SARL for the work of Mr Solanine Pong in the sum of £4,350 should have been allowed. The argument was that Mr Pong was in effect a consultant to whom the defendant was contractually liable in respect of this fee. The difficulty for the defendant is that the disbursement was not submitted for taxation on that basis. It was presented by Olsen, Backhurst & Dorey on the basis that Mr Schepers was a director of the defendant, Mr Pong was his assistant, and the defendant was entitled to claim for their time. That was the basis upon which the taxation was approached. Mr Schepers accepted at this hearing that he could not contest the disallowance of his own fees, but he maintained that the costs of Mr Pong should be allowed. In my judgment the conclusion of the Assistant Greffier was correct.
11. Fourthly, Mr Schepers submitted that VAT on the accounts of foreign advisers should have been allowed. He asserted that in German Law an adviser was required to charge VAT, which could, in certain circumstances, be recovered from the fiscal authority. Generally speaking, VAT is not chargeable, as the Court understands the position, on services rendered to a person outside the jurisdiction of the country in question. As the defendant is a Jersey company, prima facie. VAT should not have been chargeable. The position may be open to doubt, but in my judgement the Assistant Judicial Greffier was correct to resolve that doubt in favour of the paying party.
12. Fifthly, it was submitted that the costs of the British Virgin Islands lawyer, Mr Christopher MacKenzie, should have been allowed in full. The conclusion of the Assistant Judicial Greffier was that part of the advice of the B.V.I lawyer related to the principal action rather than to the application to discharge the injunctions. The Court sees no reason to set aside that exercise of discretion.
13. Mr Schepers began his submission by contending that the Assistant Judicial Greffier took no proper account of the contents of a lengthy letter of 28th November 1998, to which the Court has already referred, in arriving at his adjudication. In the Court's judgment, the papers before us do not support that contention. In his adjudication, the Assistant Judicial Greffier referred expressly to the letter of 28th November, 1998, and proceeded to deal specifically with a number of the points which had been made. Taken in the round, the Court is entirely satisfied that the Assistant Judicial Greffier approached his task with considerable care, and correctly applied the relevant law to the facts of the case. The appeal is therefore dismissed.
[The Court heard submissions relating to the costs of the applications, the defendant having withdrawn his second appeal.]
14. I make it clear that my adjudication in relation to these applications is confined to the question of costs, and does not bear in any way upon the merits of the action between the plaintiff and the defendant, which is a matter for another day. So far as the costs appeal is concerned, costs should follow the event. I see no reason, on the other hand, why this should be regarded as an exceptional case, and why costs should be awarded on an indemnity basis. I therefore award costs to the plaintiff against the defendant in relation to the costs appeal on a standard basis.
15. So far as the appeal against the decision of the Master, which was abandoned, different considerations apply. This was, and always was, a hopeless appeal, having regard to the concession which was made by the defendant that it had no intention of seeking to implement a successful appeal by relying upon the pleading which had been disallowed by the Master. The pursuit of the appeal was therefore in my judgment disproportionate to the issue in question and has placed excessive and unreasonable costs upon the plaintiff. In relation to that appeal I therefore award costs to the plaintiff on an indemnity basis.