Jersey Unreported Judgments

Debt - costs judgment.

[2012]JCA088

Court of Appeal

3 May 2012

	Before     :		Dame Heather Steel, D.B.E., President; Michael Jones, Q.C., and; James McNeill, Q.C..
Between		Leeds United Football Club Limited		Appellant
And		Robert Lawrence Weston		First Respondent
And		Melvyn Stuart Levi		Second Respondent

Costs decision.

Advocate P. Sinel for the Appellant

Advocate S. M. Baker for the Respondents.

JUDGMENT

JONES JA:

Introduction

1.        On 23 April 2012, we refused the plaintiff's application for leave to appeal a decision of the Bailiff to stay these proceedings, on the ground of forum non conveniens. We ordered that the plaintiff should be liable for the defendants' costs from the date of the determination by the single judge of the plaintiff's application to him for leave to appeal, on the indemnity basis. We now give our reasons for making the costs order in these terms.

2.        Under cover of an email, dated 5 April 2012, the Acting Assistant Judicial Greffier sent to parties a draft of our judgment on the application for leave. Written submissions in relation to costs were invited, and were duly filed on behalf of both parties. When the court convened on 23 April, parties declined our invitation to make further oral submissions.

3.        The plaintiff's position was that there should be no order for costs. The defendants contended that the plaintiff should pay indemnity costs.

Grounds for an award of indemnity costs

4.        The circumstances in which it may be appropriate to award costs on the indemnity basis have been considered on a number of occasions by this court. In Dixon v. Jefferson Seal Ltd. [1998] JLR 47, Collins J.A., with whom Harman and Southwell JJ.A. agreed, concluded that there had to be "some special or unusual feature in the case" to justify such an award. (Page 59) In Marett v. Marett [2008] JLR 384, Pleming J.A., Sumption and Nutting JJ.A. concurring, said this:-

"A court may make an indemnity costs order only where there has been some culpability, some abuse of process such as deceit, underhanded or unreasonable behaviour, abuse of court procedures, or the submission of voluminous and unnecessary evidence. There are many examples in decided cases of the application of these broad principles (see Dixon v. Jefferson Steel Ltd. (6) (1998 JLR at 52-53); Maçon v. Quérée (née Colligny) (20); and Jones (née Ludlow) v Jones (No.2) (11), noting the reference to "some special or unusual feature" to justify the award of indemnity costs). There are also examples of cases where the court has made an indemnity order, even in the absence of culpability or abuse ... ... relying on the court's general discretion, in England and Wales, under the CPR, r.44.3." (Paragraph 73)

5.        In Leeds United Association Football Club Limited and Another v. The Phone-In Trading Post Limited t/a Admatch [2011] JCA 110, at paragraph 11, this court pointed out that the limitation placed on the exercise of the court's discretion by the use of the word "only" in the first sentence of the foregoing passage must be regarded as an error.

6.        In C v. P-S [2010] JLR 645, the court rejected a submission that an indemnity costs order should only be considered where the actions of the paying party are malicious or vexatious. Beloff J.A., who delivered the judgment of the court, said this:-

"We do not accept that it is appropriate to impose such a restrictive approach on the discretion of the court to make an award of costs on the indemnity basis. The question will always be-is there something in the conduct of the action by one of the parties or the circumstances of the case which takes the case out of the norm in a way which justifies an order for indemnity costs, recognizing that there will usually be some degree of unreasonableness? We do not consider that there is a need for the claiming party to show a lack of moral probity or conduct deserving of moral condemnation, or malicious or vexatious conduct". (Paragraph 11)

7.        In making an award of indemnity costs on the ground of unreasonableness, the court is seeking "to achieve a fairer result for the party in whose favour it is made than would be the case if he were only able to recover costs on the standard basis; in the end, it is a question of what would be fair and reasonable in all the circumstances." (Pell Frischmann Engineering Limited v. Bow Valley Iran Limited and Others [2007] JLR 479, paragraph 25, cited with approval in C v. P-S at paragraph 7).

Defendants' submissions on indemnity costs

8.        In advancing their costs application, the defendants submitted that the plaintiff had acted unreasonably in a number of respects, which we summarise:-

(i)        Having been refused leave to appeal by the Bailiff, the plaintiff pursued an application for leave to a single judge of this court, where it was plain that the Bailiff had exercised his discretion well within the spectrum of reasonableness and that the appellate court would not interfere. It was therefore unreasonable for the plaintiff to continue pursuing an application for leave to appeal in such circumstances.

(ii)       When McNeill J.A. heard the application for leave to appeal, he applied the test set out in Glazebrook v Housing Committee [2002] JLR Note 43 to each of the grounds of appeal and found that they did not meet the test. The single judge having found that the test for leave to appeal had not been met on any ground, it was unreasonable for the plaintiff to pursue its application to the plenary court.

(iii)      In the hearing before the full court, the plaintiff sought to raise arguments which were not presented in the court below or advanced before the single judge. It was unreasonable of the plaintiff to raise such arguments when it must have been obvious that the court would not entertain them.

(iv)      Before the full court, the plaintiff unreasonably sought to repeat all its points from the court below rather than properly appealing specific points upon which there may have been real grounds of appeal.

(v)       It was unreasonable of the plaintiff to conduct an appeal in which the bulk of the points raised were not genuine appeal points but simply another attempt at arguing the whole forum issue before a different court. Having to respond to this was time-consuming and costly for the defendants.

(vi)      At the conclusion of the hearing before this court on 24 January 2012, the plaintiff's advocate raised the issue of limitation as being of concern to the plaintiff. The court requested written submissions from both parties on the subject. Submissions were filed and there followed correspondence between the parties and the court.

(vii)     At the same time as this court requested further written submissions on limitation, it also invited submissions on the issue of whether there were any witnesses who had indicated an unwillingness to attend trial in Jersey. In responding to this, the plaintiff introduced a substantial amount of new material and raised new arguments which were not before the Royal Court or this court.

(viii)    On 22 December 2011 the defendants' solicitors repeated an assurance already given that they would not seek to benefit from different limitation periods applicable in England, and drew the plaintiff's attention to "the costs of correspondence on this matter [which] are now becoming disproportionately high".

(ix)      On 22 February 2012, the defendants discovered that the plaintiff had issued a protective writ in England on 28 October 2011. The protective proceedings were not mentioned by the plaintiff in its written submissions on limitation, or in correspondence.

(x)       In its written contentions filed in support of its application to the plenary court for leave to appeal, the plaintiff raised factors of cost and delay. The earlier filing of the protective writ meant that the time and money needed to bring the proceedings in England had already been spent and this was relevant to the consideration by this court of those factors, but the court was not informed of that development. The defendants only became aware of the proceedings in England because the claim form and particulars of claim were served on the defendants' English solicitors on 27 February 2012, being the last date for service in compliance with CPR Rule 7.5.

(xi)      The plaintiff's conduct of the litigation against Admatch had been "of a vindictive and vexatious nature".

Discussion

9.        We reject the defendants' contention that it was unreasonable for the plaintiff to apply to the single judge for leave to appeal (paragraph 8 8(i) and 8(ii)). During the hearing before him, the Bailiff had indicated that he had "toyed with", but then discarded, the idea of giving leave to appeal with a view to resolving the apparent conflict between Jaiswal v Jaiswal [2007] JLR 305 and Durant International Corporation v Federal Republic of Brazil [2012] JCA 214 on the one hand and Gheewala v Compendium Trust Company Limited and others [2003] JLR 627 on the other, and suggested that the matter was one on which the plaintiff could "easily get leave from the single judge". When the matter came before him, the single judge referred the application to the full court for determination. In our view, therefore, the plaintiff's decision to renew its application before the full court cannot, in principle, be characterised as unreasonable.

10.      We also reject the argument that the plaintiff's conduct of the litigation against Admatch has been such as to justify an award of indemnity costs in this case (paragraph 8 8(xi)). What is relevant to our decision is the conduct of the plaintiff in this action, not its conduct in a separate action.

11.      Before us, the plaintiff argued that the Bailiff had misdirected himself on two points of law, and had erred in his evaluation of the material which was before him, by taking into account irrelevant matters and leaving out of account relevant matters. Whilst we regarded the plaintiff's arguments on the points of law as having no merit, we do not regard the plaintiff as having acted unreasonably in advancing them.

12.      The evaluation question, however, involved a challenge to the exercise of the Bailiff's discretion. We were invited to hold that his decision was "outside the spectrum of reasonableness". That required a consideration of the factual material and the arguments on which the Bailiff determined the forum issue. In the circumstances of this case, the question for us ought to have been whether, on that material and on those arguments, the Bailiff was entitled to determine the matter as he did, in the exercise of his discretion. Instead, as the defendants have submitted, the plaintiff advanced arguments that were not before the Royal Court (23 April judgment, paragraph 30); invited us, in effect, to re-try the issues which had been determined in the Royal Court (paragraph 26); and, in asserting that the Bailiff had left out of account relevant matters, simply restated arguments that had been deployed in the court below (paragraph 34).

13.      On the matter of whether any witnesses had indicated an unwillingness to travel to Jersey to give evidence (paragraph 8(vii) above), the question asked by the court was simple - it was whether the transcript of the hearing before the Bailiff contained any reference to any requirement for the compulsion of witnesses to attend court in Jersey. The answer to that question is that it did not. In its "Supplemental Submissions of the Appellant in respect of issues before the Court of Appeal on 24 January 2012", which are dated 6 February 2012, however, the plaintiff went far beyond what was required to answer the question, by seeking to advance a number of further arguments, and by lodging further documents, extending to 63 pages, concerning matters of procedure in Jersey and in England.

14.      As the defendants record (paragraph 8(vi)), towards the end of the hearing on 24 January, Advocate Sinel mentioned that he had in mind that there may be some complex limitation questions if the dispute had to be litigated in England, and expressed the hope that there would not be a delay in the issuing of our judgment. In the course of the discussion which ensued, Advocate Redgrave repeated an undertaking which, we were told, had been offered in correspondence, to the effect that the defendants would not take advantage of the passage of time caused by the appeal process, if proceedings were raised in England. Conscious of a possibility that the expiry of a time limit might extinguish the relevant right, rather than simply provide a defence, we wished to be assured that that would not happen in the circumstances of this case, and that limitation could, indeed, be waived by the defendants in England. Consequently, we asked parties to lodge written submissions on the point.

15.      By email, dated 26 January 2012, the defendants answered the question that we had asked in these words - "The answer is no. Limitation is a plea in defence, which must be pleaded in order to be relied on." Reference was made to a single page in Halsbury's Statutes. By contrast, the submissions for the plaintiff on this matter ran to ten pages, quoted from correspondence between the parties, sought to compare limitation periods in Jersey with those in England, and analysed the causes of action in the Jersey proceedings. The paperwork which was filed in support of these submissions runs to 77 pages in 17 separate documents, including Regulation (EC) No. 864/2007 of The European Parliament and of The Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II).

16.      The possibility that there might be limitation problems in England was not advanced by the plaintiff in the hearing before the Bailiff as a reason not to grant a stay. Such problems were, however, prayed in aid by the plaintiff in its Notice of Appeal, as a relevant matter left out of account in the Royal Court. These were described at paragraph 9(i) of the Notice in these terms:- "The incidence of complex arguments in respect of limitation in proceedings in England and the risk of the Appellant's claims being time-barred". The Notice of Appeal was signed on 20 October 2011. That was eight days before the protective writ was issued, and we do not, therefore, make any criticism of the plaintiff for making no mention of the writ in the Notice. The plaintiff's written contentions, however, which are dated 22 December, contain a paragraph in the same terms as paragraph 9(i) of the Notice of Appeal in support of the complaint that relevant matters had been left out of account in the determination of the forum issue. No mention is made of the protective writ in the written contentions, nor is any mention made of it in the plaintiff's Supplemental Submissions on limitation.

17.      Moreover, at paragraph 55.2.5 of its written contentions, the plaintiff cites the following as a further relevant factor which the Bailiff had failed to take into account:-

"The duplication and waste of costs in re-pleading. The learned Bailiff does not appear to acknowledge that there will be significant wasted costs in the duplication necessitated by producing new pleadings in England with different lawyers;"

18.      By 22 December, when the written contentions were signed off, different lawyers had produced new pleadings in England, but no mention was made of that fact.

19.      There is nothing in the circumstances of this case to cause us to depart from the general rule that costs follow success. Further, in our opinion, the plaintiff's conduct, as described in paragraphs 12 to 18 of this judgment and looked at as a whole, was such as should properly be regarded as unreasonable. The respondents were unnecessarily put to expense in considering and responding to arguments which should not have been advanced. An award of costs on the standard basis would be unlikely fully to reimburse the defendants for the work that was occasioned by having to consider and address these arguments. Whilst, as we have said, we are of the view that the plaintiff did not act unreasonably in seeking leave from the full court to appeal on the two points of law which we have identified, the plaintiff's written contentions on these points occupied less than three pages out of 28. We regard it as fair and reasonable that the plaintiff be found liable to the defendants for their costs from the date of the decision of McNeill J.A., sitting as a single judge on 22^nd November 2011, on the indemnity basis. 

Authorities

Dixon v. Jefferson Seal Ltd. [1998] JLR 47.

Marett v. Marett [2008] JLR 384.

Leeds United Association Football Club Limited and Another v. The Phone-In Trading Post Limited t/a Admatch [2011] JCA 110.

C v. P-S [2010] JLR 645.

Pell Frischmann Engineering Limited v. Bow Valley Iran Limited and Others [2007] JLR 479.

Glazebrook v Housing Committee [2002] JLR Note 43.

Jaiswal v Jaiswal [2007] JLR 305.

Durant International Corporation v Federal Republic of Brazil [2010] JCA 214.

Gheewala v Compendium Trust Company Limited and others [2003] JLR 627.