[2009]JRC096
royal court
(Samedi Division)
19th May 2009
Before : |
J. A. Clyde-Smith, Esq., Commissioner (sitting alone). |
Between |
La Petite Croatie Limited |
Plaintiff |
And |
Richard Peter Ledo |
Defendants |
And |
Angela Karen Ledo née Gale |
|
COSTS JUDGMENT
Advocate N. S. H. Benest for the Plaintiff.
Advocates R. A. Falle and S. J. Young for the Defendants.
judgment
the commissioner:
1. On 29th April, 2009, I heard submissions on costs arising out of the Court's Judgment handed down on 29th April, 2009 (JRC 090) in which the plaintiff's Order of Justice seeking a permanent injunction restraining building works being carried out by the defendants to the south of its property, which it said was in breach of a restrictive covenant in its favour, was dismissed. Also at issue were the costs of the unsuccessful application for an interim injunction which was the subject of the Court's Judgment on 13th January, 2009 (JRC 009). I now set out my decision on costs which has to be read in conjunction with the two Judgments referred to above, whose definitions I adopt. I will not set out the facts again.
2. Miss Benest for the plaintiff reminded me of the general principles to be applied in relation to costs as set out in the decision of Page, Commissioner, in Watkins v Egglishaw [2002] JLR 1 and I have had regard to those principles.
3. Mr Young, for the defendants, initially applied for all of his clients' costs to be paid on an indemnity basis but some way into his submissions abandoned the same upon instructions. Thereafter he sought his clients' costs for the whole of the proceedings on the standard basis.
4. Miss Benest, whilst acknowledging that her client's Order of Justice had been dismissed, submitted that justice was best served in this case by each party bearing its own costs. She pointed out that neither the plaintiff nor the defendants were party to the original contract in which the restrictive covenant had been imposed and the difficulties created by the drafting of that covenant were not of their making. As acknowledged by the Court, the restrictive covenant contained a latent defect that only came to light when the defendants started work on the cottage. When the plaintiff purchased it had been some 13 years from the last planning application, which had been refused, and on the face of it there was no issue. The plaintiff appeared to have the benefit of a restrictive covenant over any building to the south of Number 2.
5. The plaintiff's belief in the defendants' need for its written consent was reinforced by the defendants approaching its beneficial owners (who occupy Number 2) for consent to what they were proposing to do. The plaintiff had tried to compromise the matter in return for a cash payment and I was shown the relevant correspondence, but these negotiations foundered ultimately because the parties were too far apart financially.
6. Miss Benest argued that the defendants, by starting work without first seeking a declaration from the Court and in the face of numerous written warnings not to do so, effectively forced the plaintiff to bring proceedings seeking an injunction.
7. Furthermore, she submitted that the plaintiff had not been wholly unsuccessful in the sense that the Court did find that the restrictive covenant was enforceable over a small area of land between the cottage and Number 2 but not in respect of the works that the plaintiff was complaining of.
8. It is the case that this dispute arose out of the very poor drafting of the restrictive covenant in 1993 and is a stark illustration of the dangers of one lawyer acting for both parties in a conveyance, in particular where clauses of this kind are being drafted, clauses which need to be very carefully considered and tested from the standpoint both of the fonds dominant and the fonds servient.
9. However, neither party to this litigation was in a better position than the other to research into the background of the surrounding circumstances or matrix of facts and to interpret the restrictive covenant once the latent defect came to light, i.e. when work on the cottage started.
10. It was clear to the Court at the hearing for the interim injunction that the defendants' interpretation of the contract as a whole taken in conjunction with the then known background circumstances was correct to the point that the Court found that it was not seriously arguable that the restrictive covenant applied to the cottage. It is true that the Court did find that it was seriously arguable that part of the proposed extension to the south of the cottage was on land covered by the restrictive covenant, but notwithstanding the plaintiff continued to argue at the main hearing that the cottage as a whole was in breach.
11. I accept that the defendants might have mitigated their own risk in proceeding with the works by first seeking a declaration from the Court, but they were under no obligation to the plaintiff to do so. They were entitled to proceed with the works on the basis of what they were advised was the true interpretation of the restrictive covenant.
12. In my view, this case cannot be described as one in which the complexity or other circumstances of the litigation renders it a mistake to label the defendants as the winners. There was no discrete issue on which the plaintiff succeeded. Although the Court did find that the restrictive covenant was enforceable over a small area of land, it found that none of the works complained of were subject to it. Indeed the Order of Justice as a whole was dismissed. The defendants cannot have been said to have brought the action upon their own heads as they were entitled, as the Court found, to commence the works complained of and neither can it be said, in my view, that they have conducted themselves in an unreasonable manner in defending the Order of Justice.
13. Watkins makes it clear that where a winner is readily found, justice is achieved by making an award of costs in favour of the winner. In this case, the defendants' interpretation of the restrictive covenant, in so far as it related to the works complained of by the plaintiff, prevailed and it is readily apparent therefore that they are the winners. I therefore award the defendants their costs in relation to the proceedings as a whole on the standard basis. I would observe finally that I would not have regarded this as a case in which indemnity costs would have been appropriate.
Authorities
La Petite Croatie v Ledo [2009] JRC 090.