2002/9
ROYAL COURT
(Samedi Division)
14th January 2002
Before: |
M.C. St. J. Birt, Deputy Bailiff with Jurats Bullen and Georgelin |
Between |
Clive Philip Le Brun Tomes |
First Plaintiff |
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And |
Piers Ross Coke-Wallis |
First Defendant |
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And |
Coke-Wallis Jones de Polignac Trustees (Jersey) Limited |
Second Defendant |
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And |
Natalie Coke-Wallis |
Third Defendant |
Appeal against taxation decision.
Advocate R.G.S. Fielding for the Plaintiff
The First and Third Defendants in person
Mrs Coke-Wallis for the Second Defendant
judgment
the deputy bailiff:
1. On 25th January 2001 the Court ordered the defendants to pay the costs of a hearing concerning interim injunctions on the standard basis and the costs of a hearing for contempt of court on 19th January on an indemnity basis. On 28th June, the Assistant Judicial Greffier ("the taxing officer") taxed the bills of costs submitted by the plaintiff. Judgment for the sums as taxed was given by the Royal Court on 31st August 2001 but, pursuant to an order of the Master dated 28th November, execution of that judgment is stayed in the light of payment of the full sum of £8,349.54 plus interest into Court pending the hearing of this appeal. The defendants have appealed the taxation and on 19th December we allowed the appeal, remitting the matter back to the taxing officer. We concluded that the appeal disclosed procedural difficulties of general significance and, accordingly, we said that we would give written reasons for our decision. This we now do.
The Rules
2. The procedure for taxation of costs is governed by Rule 9A of the Royal Court Rules, 1992, the relevant parts of which provide as follows:-
"9A/11 - (1) Where the receiving party has begun proceedings for taxation he shall, within seven days thereof, give notice to the paying party that taxation proceedings have begun requiring the paying party within twenty-eight days from receipt of the notice to notify the Greffier and the receiving party in writing -
(a) that he wishes to respond to the bill of costs by written objections in which case he shall set these out in full within the said period whilst reserving the right to be heard at a taxation hearing; or
(b) that he has no objections to the bill of costs; or
(c) that the receiving and paying parties have agreed to a provisional taxation in accordance with Rule 9A/13.
(2) Where the paying party fails to notify the Greffier and the receiving party in accordance with paragraph (1) of this Rule, he shall be deemed to have no objections to the bill of costs.
(3) Where the paying party submits written objections pursuant to sub-paragraph (a) of paragraph (1) of this Rule then, where the receiving party wishes to file a reply or the Greffier so orders, the reply shall be filed within twenty-one days from receipt of the said written objections or order as applicable.
(4) Where at the expiration of fourteen days from the date on which either a reply is filed or the period for filing a reply has expired, whichever is the sooner, neither party has notified the Greffier in writing that -
(a) he wishes to be heard at a taxation hearing; and
(b) a provisional taxation in accordance with Rule 9A/13 has been agreed;
the Greffier shall proceed to tax the bill of costs.
Date for taxation hearing
9A/12 The date for a taxation hearing shall be fixed by the Greffier in consultation with the receiving and paying parties."
3. It is clear that, unless the paying party does not have any objections or is willing to agree to the provisional taxation route (set out in Rule 9A/13), paragraph (1) of the Rule provides that the paying party is to set out his written objections in full whilst reserving the right to seek an oral taxation hearing. His objections must be supplied to the taxing officer and the receiving party. Under paragraph (3) the receiving party then has twenty-one days within which to file a reply to the paying party's objections. If a reply is filed, the paying party then has fourteen days within which to ask either for an oral taxation hearing or for a provisional taxation. If he does not ask for either, the taxing officer can proceed to a final taxation.
4. As we shall see, difficulties arose in this case in two areas:-
(i) The original letter from the Judicial Greffe did not offer the defendants the options set out in paragraph (1) of the Rule; and
(ii) Paragraph (3) of the Rule does not make it clear who is to send the reply to the paying party (i.e. is it the receiving party or the Greffier). In this case neither did so, with the result that the paying party did not know of the reply until after the final taxation had taken place.
The procedure followed in this case
5. On 20th February, 2001 the plaintiff's advocate sent two bills of costs to the taxing officer for taxation in accordance with the relevant procedure. In accordance with the Rule, he sent a copy of the bills of costs to the defendant together with the notice required by paragraph (1). If one allows two days for receipt of the notice, the twenty-eight day period envisaged by paragraph (1) for the defendants to respond would have expired on 22nd March.
6. On 7th March, in the absence of the taxing officer on study leave, the Proceedings Officer of the Judicial Greffe wrote to the defendants in the following terms:-
"I have received two bills of costs for taxation in the above action from Jenners, copies of which you should have received.
If you wish to respond to the said bill by written objections, you should set them out in full and, in particular:
(a) identify the specific entries that you object to, why you object, and where appropriate suggest what in your opinion is a reasonable time, rate or sum;
(b) if you refer to a general number of entries, these should be identifiable from the written objection. Also, the objection should be in the form of (a) above; and
(c) if the entry in the said bill lacks sufficient information for you to properly respond, identify the entry concerned and express why that is so. For example, an entry under the form of "Preparation", "Research", or "Consideration of matter", in the content of the action and at that particular juncture in proceedings, may fail to adequately explain what work was undertaken and by whom.
If you choose not to object to the bill as drawn or any entry thereof, then by implication you are deemed to have accepted the bill or that part of the bill.
In the alternative, you may elect to be heard at an oral taxation hearing. If you choose this option, you should set out your objections on the basis of the above but limit your response to a brief summary of the entries and points in issue. This schedule will form the basis of a subsequent inter partes taxation hearing.
Please respond, as set out above, by close of business on the 28th March, 2001, otherwise I will assume that you do not wish to object to the bill."
7. The following points spring to mind in connection with that letter:-
(i) It is not a letter which is actually envisaged under the Rules. We do not know whether it is standard procedure for the Greffe to write such a letter or whether this was only done because the case involved litigants in person. We think there is much to be said for a letter from the Greffe spelling out the procedure to be followed but, if there is to be such a letter, it must be consistent with the Rule and with the information which has already been given to the paying party by the notice supplied by the receiving party.
(ii) This letter was inconsistent both with the Rule and with the notice (which reflected the requirements of the Rule). In the first place it envisages a quite different procedure to that laid down in paragraph (1) of the Rule. It requires either a detailed list of written objections or a brief summary of grounds to be followed by an oral taxation hearing. These two suggestions are specifically said to be alternatives. Yet paragraph (1) of the Rule makes it clear that the paying party does not have to make such an election at this stage. On the contrary it says that he must set out his written objections in full whilst reserving the right to be heard at an oral taxation hearing. In the second place, the period of twenty-one days given to the defendant by the letter is inconsistent with the twenty-eight day period from receipt of the notice from the receiving party and referred to in the Rule. The defendants were therefore faced with conflicting guidance as to the time in which they had to respond.
8. It is clear that the defendants were concerned about the possibility of an oral taxation hearing. In a letter to the proceedings officer dated 27th March the second defendant gave notice that it might elect for an oral taxation hearing.
9. On 11th April the defendants submitted detailed written objections to the bills of costs. It would seem that they sent these only to the Greffe and did not send them also to the receiving party's advocate as required by (1) of the Rule. In their covering letter to the Greffe, the defendants stated "in accordance with our discussion yesterday morning we wish to notify you that we would still consider a taxation hearing if this becomes necessary".
10. The proceedings officer forwarded the defendants' objections to the plaintiff's advocate on 24th April giving the plaintiff twenty-one days to put in a reply to the objections raised by the defendants. The letter went on to say: "Thereafter the Assistant Judicial Greffier will proceed to taxation". This was clearly inconsistent with the procedure envisaged by paragraph (4) of the Rule whereby the paying party has fourteen days following receipt of any reply from the receiving party to consider whether he wishes to ask for an oral taxation hearing.
11. The advocate for the receiving party filed a reply to the defendants objections by letter dated 2nd May 2001. However this was not sent to the defendants. Advocate Fielding said that he did not do so because there did not appear to be any obligation on him to do so under the Rule. We agree that this is so, nor is there any obligation on the Greffe to send the reply to the paying party.
12. The upshot in this case was that the taxing officer (who by then had returned from study leave) proceeded to tax the bill of costs and he communicated his decision to the parties by letter dated 28th June. The question of the costs of the taxation process itself was the subject of further submissions and the taxing officer made a ruling in that respect on 23rd July.
13. It is clear that the defendants were not aware of the existence of the reply from the plaintiff's advocate until the decision on the taxation was communicated to them on 28th June. That decision referred to the reply and they had to ask the Greffe for a copy. The defendants treated the decision of 28th June as a provisional taxation and made further written submissions to the taxing officer in a letter dated 12th July. However it is clear that they were informed that, at that stage, the taxing master was only looking for submissions on the question of the costs of the taxation process and the defendants responded on this limited aspect on 15th July. They did go on to say that they considered an oral taxation hearing to be appropriate; but by then it was too late, the taxing officer having reached a final taxation decision on 28th June.
Conclusions
14. It can be seen from the summary of what happened in this case that the procedure did not conform with that envisaged in Rule 9A/11. Thus:-
(i) Whilst the initial letter from Advocate Fielding to the defendants conformed with the requirements of paragraph (1) of the Rule, the letter dated 7th March from the proceedings officer did not. In particular it was wrong to suggest that the defendants were faced at that stage with a choice between detailed written objections on the one hand and summary objections followed by an oral hearing on the other. Paragraph (1) does not envisage such a choice at that stage.
(ii) The reply dated 2nd May from the plaintiff's advocate was never sent to the defendants, who were therefore not aware of its existence and could not comment on it.
(iii) Because the reply was not sent to them and because the taxing officer then proceeded direct to final taxation, the defendants never had the opportunity of electing, within fourteen days of receipt of the reply, for an oral taxation hearing, as is their right under paragraph (4) of the Rule. It is clear that this is an important provision for paying parties.
15. In the result, the defendants find that a final taxation has been made against them without their knowing that a reply had been filed and without their having had the opportunity of electing for an oral taxation hearing as is envisaged by the Rule. We appreciate that paragraph (4) states that the option for an oral hearing has to be exercised within fourteen days of the expiry of the time for filing of a reply but, we have to take note of the fact that, in this case, a reply was filed but the defendants never saw it before the final taxation was carried out.
16. In our judgment, the defendants, through no fault of their own, lost the opportunity of an oral taxation hearing which the Rule envisages. We therefore quash the taxation and remit the matter to the taxing officer for an oral taxation hearing at which the defendants may raise all the points which may properly be raised on a taxation. However we would make the following observations in that connection:-
(i) Many of the objections to the bills of costs raised by the defendants in their written submissions are wholly irrelevant. For example, they contend in section D of their letter of 11th April that the interim injunction proceedings were not in fact necessary because the plaintiff should have proceeded in another manner. That is not a matter for a taxation hearing. The Court found for the plaintiff in the interim injunction proceedings and ordered the defendants to pay the costs. It is therefore not open to the defendants to argue about the need for the proceedings. The taxation is to be conducted in the light of the Court's decision on 25th January and the sole question before the taxing officer is as to the quantum of costs to be recovered pursuant to that order. The defendants must confine themselves to relevant objections and, at the oral hearing, the taxing officer is of course free to ignore irrelevant objections and to prevent the defendants from developing them at the oral hearing.
(ii) Our decision to allow the appeal is no indication one way or the other on whether the bill of costs was taxed in the correct amount or not. We have not considered the defendants' detailed objections to the bills because of our acceptance that there were procedural irregularities. Our decision was based solely on procedural grounds.
17. As indicated at the beginning of this judgment, the plaintiff obtained judgment in the sum of the taxed costs on 31st August 2001 and execution of that judgment was stayed subject to a payment of the amount into Court. As we have quashed the taxation itself, it follows that the judgment must be set aside. Accordingly we order that the judgment of 31st August be set aside and the funds lodged in Court be returned to the defendants.
18. Finally we think that the case suggests that the procedure for taxation could perhaps be revisited by the relevant authorities. In particular:-
(i) We are not clear whether the letter dated 7th March from the proceedings officer was a standard letter sent out in all taxation hearings or whether it was only sent in this case because the paying parties were litigants in person. Either way we suggest that steps be taken to ensure that if such a letter is sent out from the Greffe, it conforms exactly with paragraph (1) of the Rule. It must also link in with any time limits which arise from the notice supplied by the receiving party under paragraph (1).
(ii) We think that paragraph (3) of the Rule needs to specify who is to send the reply to the paying party. It seems clear that neither the advocate for the receiving party nor the Greffe considered it their responsibility and, in the light of the absence of any provision in the Rule, we attribute no blame in that respect.
(iii) At least in the case of a litigant in person, we think it desirable that the time limit of fourteen days for electing an oral taxation hearing as set out in paragraph (4) should be specifically drawn to the paying party's attention by the Greffe at the relevant time. It is an important time limit and the ability to seek an oral taxation hearing is an important aspect for the paying party. We think that, if a clear warning letter is sent to the paying party, it will avoid problems and will secure more firmly the taxing officer's decision if no election has been made at the expiry of the period, and he then proceeds to a final taxation.
Authorities
Royal Court Rules 1992: Rule 9A.