Jersey Unreported Judgments

[2008]JCA138A

COURT OF APPEAL

15^th August 2008

Advocate T. V. R. Hanson for the Respondents.

Johan Hendrick Laurentius Bartholomeus Wijsmuller as a litigant in person.

JUDGMENT

vos ja:

1.        Mr Bartolemeus Wijsmuller ("Mr Wijsmuller"), the first Defendant in these proceedings, is seeking to appeal part of an order made by Commissioner Howard Page on 20^th May 2008 out of time.  The part of the order in question rejected Mr Wijsmuller's application for costs against non-parties to the action, namely Messrs Dermot Boylan and Adrian Rabet (the "Liquidators"), the joint liquidators of SGI Trust Jersey Limited, the first Plaintiff.

2.        On 20^th May 2008, Commissioner Page made an order allowing the Plaintiffs to discontinue the proceedings, and a series of ancillary orders as to costs including the following:

"6. ordered that the First Defendant [Mr Wisjmuller] shall pay the costs of the liquidators of the First Plaintiff in opposing the First Defendant's application for costs orders against the said liquidators personally, to be taxed if not agreed; ...

11. reserved judgment in respect of the First Defendant's application for leave to appeal against the Commissioner's orders refusing the First Defendant's application for a costs order against the Intervenors [Liquidators] personally".

3.        On 21^st May 2008, Commissioner Page delivered a reserved judgment refusing Mr. Wijsmuller leave to appeal from his refusal to order that the Liquidators pay the costs of the proceedings personally.  His reasons dealt with Advocate Begg's argument (on Mr Wijsmuller's behalf) that the law as to when costs should be granted against non-parties in situations similar to this case had "moved on", because of a decision of the English Court of Appeal handed down on 18^th April 2008 in Dolphin Quays Developments Ltd. v. Mills and Others [2008] EWCA Civ 385, so that the earlier English Court of Appeal decision of Metalloy Supplies Ltd. v. M.A. (U.K.) Ltd. [1997] 1 WLR 1613 could no longer be relied upon

4.        On 8^th July 2008, Mr Wijsmuller, acting in person, served a notice of appeal out of time after his application for legal aid had been finally rejected at the end of June 2008.  He raised numerous points about the conduct of the liquidators, which he maintains constitute exceptional conduct on the basis of which the Commissioner ought to have ordered the Liquidators to pay Mr Wijsmuller's costs.

5.        Thereafter, two summonses were issued or served on 24^th July 2008, expressed as being required to be dealt with by a single Judge of the Court of Appeal as follows:-

6.        Mr Wijsmuller applied for the Liquidators to appear to show cause why (a) he should not have leave to appeal notwithstanding the Commissioner's refusal of leave, (b) there should not be a retrospective enlargement of time, and (c) a stay pending appeal.

7.        The Liquidators applied for Mr Wijsmuller to show cause why (a) the applications for leave to appeal should not be struck out as an abuse of process and on the grounds that they are prohibited by Article 13(c)(ii) of the Court of Appeal (Jersey) Law 1961, and (b) whether there should be an order that the costs in issue and/or a further sum of £5,000 be paid as security for the Respondents' costs of the appeal. 

8.        These matters may be decided by a single Judge because they are incidental to a pending appeal, and do not involve "the decision of the appeal" within Article 18(1) of the 1961 Law.

9.        The Court has received an affidavit from Mr Wijsmuller dealing with both summonses, and including submissions as well as evidence, accompanied by a lengthy exhibit.  In addition, Advocate Hanson has made submissions in two letters to the Court dated 7^th and 8^th August 2008.

10.      Advocate Hanson argues for the Liquidators, in essence, that Article 13(c)(ii) bars Mr Wijsmuller's appeal.  Articles 13(c) and (d) provide as follows: "No appeal shall lie under this Part - (c) without the leave of the court making the order, from any order - (ii) as to costs only which by law are left to its discretion; (d) without the leave of the court whose decision is sought to be appealed from, or of the Court of Appeal, except - (i) where the value of the matter in dispute is more than £3,000, or (ii) on a question of law;".

11.      The Court of Appeal considered a similar situation in Ernest Farley & Son Limited v. Takilla Limited [1984] J.J. 123.  Le Quesne J.A recited Rule 4 of the Court of Appeal (Civil) (Jersey) Rules 1964 and continued: "It appears to us that the language of sub-rule (3) is mandatory and if an application is presented in accordance with sub-rule (2), then it must be filed and the appeal must be set down.  If there is some defect in the procedure, such as the absence of leave required by law, then that is a point which can be taken when the matter comes before the Court and if the point appears to be well-founded the appeal will be dismissed on that ground at that stage".

12.      The Liquidators have effectively now taken the point as to whether the appeal is competent, and brought that issue before me, as envisaged by the Court of Appeal in Ernest Farley.

13.      Mr Hanson has also helpfully cited Marshall v. Levine [1985] 2 All ER 177.  That case is recent authority for the proposition that, in England at least, the equivalent of Article 13(c)(ii) can be circumvented where the Judge at first instance has wholly failed to exercise any judicial discretion in making the costs order it did (see the citation from Lindley MR in Bew v Bew [1899] 2 Ch 467 at page 471 citing James LJ in The City of Manchester (1880) 5 PD 221 at 221).  Marshall v. Levine and Scherer v. Counting Instruments (Note) [1986] 1 WLR 615 were approved by the House of Lords in Bankamerica Finance Limited v. Nock [1988] A.C. 1002 at pages 1007-1010 per Lord Brandon.

14.      Mr Hanson also argues that the Marshall decision has never been directly applied in Jersey, and fails anyway properly to apply the clear statutory language, so should not be followed here in Jersey.  In any event, he says that the exception does not apply, because the Commissioner undoubtedly did exercise a real discretion as to the costs in issue.

15.      I should say at once that I can see no reason why the Jersey Court should wish to depart from the line of compelling English authority to which I have referred, and I see no force in the submission that the language of the Jersey statute compels a different result from that in England.  Article 13(c)(ii) is intended to prevent appeals from a judges' discretionary decision as to costs alone, without his own permission being given.  It is not intended to prevent appeals as to the legal basis on which the judge's discretion is to be exercised, or as to which grounds for the exercise of a discretion are relevant and which are not, even when that decision is as to costs alone.  This was made clear by Lord Brandon in approving formulations (9) and (10) from Scherer at page 1010 in Bankamerica as follows:

"(9) If a judge, having relevant grounds upon which to do so, has upon those grounds, or some of them, made an order as to costs in the exercise of his discretion, his decision is final unless he gives leave to a dissatisfied party to appeal. (10) If, however, he has made his order having no relevant grounds available or having in fact acted on extraneous grounds, this court can entertain an appeal without leave and can make what order it thinks fit".

16.      At first sight, it might appear that the essential issue in Mr Wijsmuller's appeal is not the way in which the Commissioner's discretion was exercised, but is the legal basis on which costs should, or should not, be awarded against non-parties in cases of this kind.  The primary submission that Advocate Begg made to the Commissioner was that he had exercised his discretion on the wrong legal basis, namely on the basis of principles derived from the decision in Metalloy Supplies Ltd. v. M.A. (U.K.) Ltd., rather than those derived from the more recent decision in Dolphin Quays Developments Ltd. v. Mills and Others [2008] EWCA Civ 385.

17.      But, properly understood, the Commissioner did in fact exercise his discretion, first on the basis of Metalloy (in paragraph 75 of his lengthy judgment of 20^th May 2008), and then (in paragraph 5 of his judgment of 21^st May 2008) when Dolphin Quays was cited to him as setting out the correct legal basis for the exercise of discretion, on the assumption that that case set out the correct test for the award of costs against a non-party in a case such as this, even though he had doubts as to whether it in fact did so.  Thus, even if the Court of Appeal were to find that Dolphin Quays rather than Metalloy governed (as to which I express no view), there would be no basis for interfering with the Commissioner's discretion, and the appeal would anyway be bound to fail.

18.      Mr Wijsmuller's affidavit sets out two more legal bases for his appeal: First whether a liquidator can properly assign causes of action for fraud to an interested party without reference to the Attorney General or the Court, and secondly, whether Article 13(d)(i) can allow an appeal without leave (because the sum in issue exceeds £3,000), even if Article 13(c)(ii) is also applicable.

19.      In my judgment, neither of these arguments can help Mr Wijsmuller:-

(i)        The question of the consents needed by a liquidator before exercising a right to assign does not affect the discretion as to costs which underlies the appeal.  Even if such consents should have been obtained, that would not make it dishonest to have failed to obtain them.  Put simply, the point would not in my view affect the way in which the discretion was exercised, as explained by the Commissioner in the paragraphs I have mentioned.

(ii)       The second point is simply wrong.  Article 13(d)(i) does not override Article 13(c)(ii), and nothing in the language used suggests that it could.  Simply because an appeal may generally be brought without leave if the amount in dispute is over £3,000, it does not mean that Article 13(c)(ii), prohibiting any appeal as to discretionary costs without leave of the first instance court, ceases to apply.

20.      In these circumstances, it seems to me that Mr Wijsmuller's appeal is barred by Article 13(c)(ii) of the 1961 Law, and cannot be permitted to proceed.  The appeal must, therefore, be dismissed in accordance with the decision in Ernest Farley.

21.      My decision on this primary issue makes it unnecessary to reach any conclusion on the other issues raised by the parties' summonses. 

22.      Unless either party makes any further submissions to me in writing within 7 days of the date of this decision, I will also order that Mr Wijsmuller pays the Liquidators' costs of these summonses and of the appeal on the standard basis.

Authorities

Dolphin Quays Developments Ltd. v. Mills and Others [2008] EWCA Civ 385.

Metalloy Supplies Ltd. v. M.A. (U.K.) Ltd. [1997] 1 WLR 1613.

Court of Appeal (Jersey) Law 1961.

Ernest Farley & Son Limited v Takilla Limited [1984] J.J. 123. 

Marshall v. Levine [1985] 2 All ER 177. 

Bew v Bew [1899] 2 Ch 467.

The City of Manchester (1880) 5 PD 221.

Marshall v. Levine and Scherer v. Counting Instruments (Note) [1986] 1 WLR 615

Bankamerica Finance Limited v. Nock [1988] A.C. 1002.

Dolphin Quays Developments Ltd. v. Mills and Others [2008] EWCA Civ 385.