Jersey Unreported Judgments

2002/102A

royal court

(Samedi Division)

 

22^nd May, 2002

 

 

 

 

 

Claim by the plaintiff for indemnity costs, arising out of a summons seeking to strike part of the defendant's answer, and summary judgment on liability in the action

 

Advocate J. C. Martin for the Plaintiff.

Advocate P. de C. Mourant for the Defendant.

 

 

judgment.

 

the MASTER:

1.        By summons dated 20th February, 2002, the plaintiff sought to strike out paragraphs 6 and 7 of the defendant's Answer pursuant to Rule 6/13(1) of the Royal Court Rules 1992 and also sought summary judgment on liability in the action.  Indemnity costs were also claimed.  The summons was scheduled to be heard before me on 10th April, 2002.

2.        The substantive issues in this summons have now been resolved between the parties with the defendant consenting to the relief sought.  The parties came before me, therefore, on 10th April, 2002, solely to argue the question of costs.  Skeleton arguments were filed in advance and a number of affidavits were also filed on behalf of the plaintiff.  Detailed oral submissions were also made by Advocate Martin on behalf of the plaintiff and by Advocate Mourant on behalf of the defendant.  I am grateful to both parties for the work involved in this regard.  Following the hearing I adjourned my decision until today.

3.        The main action is very straightforward.  In February, 2001, the plaintiff (a carpenter) was working on a site where employees of the defendant (a roofing contactor) were also working.  The plaintiff was injured when he was hit by a roll of roofing felt kicked by an employee of the defendant.  The plaintiff, in his Order of Justice, claims that the defendant is vicariously liable for its employee's negligence and claims damages for personal injuries.  The Order of Justice was issued in September 2001.  In its Answer of 10th October the defendant denies that its employee was negligent and alternatively claims that the accident resulted from the contributory negligence of the plaintiff.  In a Reply filed on 17th October, 2001, and amended on the 23rd October, 2001,  the plaintiff pleaded, inter alia, that liability had been admitted on a number of occasions by the insurers representing the defendant.

4.        The plaintiff has sought interim payments and two interlocutory summonses have been issued in this regard.  The first was issued on 24th September, 2001, seeking an interim payment of £10,000 and the second on 1st March, 2002 seeking a subsequent payment of £15,000.  Part VIIA of the Royal Court Rules 1992 deals with the question of interim payments.  Rule 7A/2 - (1) states:-

                       "If, on the hearing of an application under Rule 7A/1 in an action for damages the Court is satisfied -

           (a)        that the defendant against whom the order is sought (in this paragraph referred to as "the respondent") has admitted liability for the plaintiff's damages: or

           (b)        that the plaintiff has obtained interlocutory judgment against the respondent for damages to be assessed; or

           (c)        that if the action proceeded to trial, the plaintiff would obtain judgment for substantial damages against the respondent or, where there are two or more defendants, against any of them;

           the Court may, if it thinks fit, and subject to paragraph (2) of this Rule, order the respondent to make an interim payment of such amount as it thinks just, not exceeding a reasonable proportion of the damages which in the opinion of the Court are likely to be recovered by the plaintiff after taking into account any relevant contributory negligence and any set-off, cross-claim or counterclaim on which the respondent may be entitled to rely."

For the purposes of these proceedings the important provision is sub-paragraph (c) because the defendant denies that liability has been admitted and no interlocutory judgment has been obtained.  The plaintiff says that he was forced to issue proceedings in order to make his claim for interim payments because of the stance taken by the defendants.

5.        The plaintiff's position can be simply stated.  He contends through Advocate Martin that the defendant admitted liability through his insurers in correspondence in August, 2001, and subsequently through a legal assistant employed by Mourant du Feu & Jeune in September of that year.  The plaintiff submits that these admissions were unequivocal.

6.        In support of the contentions of the plaintiff were put before me three affidavits.  One was sworn by Advocate Dionne Gilbert on 19th October, 2001.  A second affidavit was sworn by a legal assistant, Mr. Carl Ashcroft, on the same date and a third affidavit was sworn by another legal assistant, Mr. Mark Edward Harris, on 5th March, 2002.  All three affidavits deposed to the fact that liability was unequivocally admitted in conversations with a legal assistant at Mourant du Feu & Jeune.  No affidavit was put before me on behalf of the defendant but in the correspondence which was produced there are statements on behalf of Mourant du Feu & Jeune denying that liability was formally admitted in the manner suggested in the affidavits.

7.        There was also put before me correspondence which had been exchanged from August, 2001, to date.  Part of the correspondence was between the plaintiff's legal advisers and the insurers.  The plaintiff contends that this correspondence shows clearly an unequivocal admission of liability on the part of the insurers who were acting for the defendant.  Advocate Mourant argued to the contrary and said that I must look at all the correspondence and that clearly showed that liability had been admitted for the purposes of negotiation only rather than at large.

8.        The bulk of the remaining correspondence produced to me turns around the discussions/conversations which allegedly took place in September, 2001, where the plaintiff contends that liability was admitted by the defendant's legal advisers.  There is also subsequent correspondence in which the whole issue of liability is raised between the respective law firms.  I have considered very carefully all the correspondence and the evidence by way of affidavit which was put before me and I set out below my conclusions.  The exchange of correspondence appeared to lead nowhere because on 20th February, 2002, the plaintiff issued the summons which is now before me on the matter of costs.  It was only after the issue of the summons that the defendant through its lawyers admitted liability unequivocally.  The only issue for me to adjudicate on is the question of costs and the plaintiff urges that this is an appropriate case for the award of costs on an indemnity basis.

9.        The law relating to the question of indemnity costs was considered by the Court of Appeal in the case of Dixon-v-Jefferson Seal Limited (1998) JLR 47 CofA.  In paragraph (2) of its decision set out in the headnote on pages 48 and 49 the Court of Appeal found as follows:-

           "There had to be a special or unusual feature of the case for indemnity costs to be awarded.  This was 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 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."

    A detailed analysis of the principles applicable to awards for indemnity costs is set out in the judgment of Collins JA. (see page 58 line 36 to page 61 line 14 of the judgment).

10.      Before stating my findings there are two observations of a general nature to which I would wish to make:-

(i)        On 31st July, 2000 at the instance of the Court of Appeal there was circulated to practitioners an extract from the judgment of the Court of Appeal in in re Esteem Settlement (27^th July, 2000) Jersey Unreported; [2000/150] dealing with the views of the Court on the management of Royal Court proceedings generally.

(ii)       In the case of Eves -v- Hambros Bank (1995) JLR 344, the Privy Council said that it considered notwithstanding the terms of Rule 6/7(1) of the Royal Court Rules 1992 that any Court must have an inherent power to protect other litigants from the abuse of its processes.  That encompasses the ability of the Royal Court to refuse an application to place an action on the pending list on the grounds that to do so was an abuse of the process of the Court.

I merely draw the attention of the parties to these matters and invite them to consider what has been said by the Court of Appeal and the Privy Council.

11.      Having reviewed all the material put before me and taking into account the detailed and helpful submissions made I have come to the following conclusions:-

(i)        on balance, I am satisfied that liability was conceded by the defendant's insurers in correspondence before proceedings were issued;

(ii)           (b) In any event, on the basis of the three affidavits put before me (including one sworn by Advocate Gilbert who is, of course, an officer of the Court) I am satisfied that liability was unequivocally admitted by a representative of the defendant's legal advisers.  I note that no evidence was put before me to contradict those affidavits although I have observed that in correspondence it was not accepted that on admission of liability was made.

On the material put before me I find that there was, on the facts, an admission of liability on behalf of the defendant by September 2001 at the very latest.

12.      The issue for me to decide is whether the costs of the summons of 20th February, 2002 should be awarded on an indemnity basis.  The law, as previously stated, is clearly set out by the Court of Appeal in the case of Dixon-v-Jefferson Seal Limited cited above.  In order to justify an award of indemnity costs there must be special or unusual circumstances.  The principles set out in the Jefferson Seal case were accepted by both parties before me and the question for me is merely to apply those principles.

13.      In coming to my conclusions I have considered very carefully all the material put before me including particularly the correspondence which passed between the parties over the last six months or so.  I have found, as a matter of fact, that liability was conceded by the defendants back in August or September last year.  The correspondence shows, however, prevarication on the part of the defendant's legal advisers who have seemed unwilling or unable to address directly or confront this issue.  The correspondence from the defendant's lawyers in this regard is, I consider, evasive and refuses to answer the questions directly put to them on a number of occasions by the plaintiff's lawyer.  In those circumstances, I think that the plaintiff had no choice but to issue the summons on 20th February, 2002 seeking to resolve matters once and for all.

14.      I am asked merely to adjudicate on whether an award for indemnity costs is appropriate in the circumstances of the case.  Nothing further is required of me.  I consider that the particular facts which have occurred in the present case and which I have briefly outlined are such as to constitute "special or unusual circumstances" required to justify an award of indemnity costs.  I therefore order that the defendant pay the costs of the plaintiff in the relation to the summons of 20th February on an indemnity basis.

 

Authority.

Dixon -v- Jefferson Seal Limited (1998) JLR 47 CofA.

in re Esteem Settlement (27^th July, 2000) Jersey Unreported; [2000/150].

Eves -v- Hambros Bank (1995) JLR 344.

Royal Court Rules 1992: 6/13; 7A/2.