Jersey Unreported Judgments

Debt - application to adjourn proceedings and for security for costs.

[2014]JRC082A

Royal Court

(Samedi)

27 March 2014

Advocate S. M. Chiddicks for the Second Plaintiff.

Advocate W. A. F. Redgrave for the Defendant.

judgment

the bailiff:

1.        This is an application which arises out of proceedings brought by the second plaintiff ("Leeds"), in August 2013 seeking an order that Mr Weston should personally pay costs incurred in connection with the long running litigation between Leeds and Admatch.  The hearing of this case is fixed for 2 days, 24^th-25^th April. 

2.        Mr Weston now applies for two matters to be dealt with.  First, he seeks an adjournment of the proceedings from the 24^th April; secondly he seeks an order for security for costs. 

3.        The background to the Admatch proceedings has been described in a number of judgments.  In essence Leeds, as assignee, sued for £190,400 which it said was owed to its predecessor, the assignor, by Admatch.  Admatch admitted that it had received this sum and prima facie had to pass it on to Leeds, but contended that it was entitled to set off the sum against a much larger liability which it said was owed by an associated company of Leeds to an associated company of Admatch; and the set off was said to arise because of the terms of an agreement reached between Admatch and the predecessor Leeds company, the assignor.  That case proceeded for a long time with many interlocutory hearings and I fully accept that the total costs in connection with the action will be substantial.  Eventually they ended in Leeds' favour, in that Leeds obtained judgment for the sum of £190,400, because Admatch had failed to comply with an unless order.  There was never a trial on the merits.  More recently Leeds has instituted an action in England against Mr Weston, personally, and others, seeking amongst other relief, the £190,400.  That action was due to be tried on the 28^th July of this year. 

4.        As I say, Leeds issued its summons seeking an order for costs personally against Mr Weston in August 2013, albeit that the judgment against Admatch was given as long ago as May 2011.  Having originally fixed the hearing of this application for 2 days in January 2014, Mr Weston applied in December 2013 for an adjournment.  He did so on two grounds:-

(i)        He submitted that the matter should not be heard until the outcome of the English proceedings as those included a claim for the Jersey costs.

(ii)       He said that Advocate Redgrave was not available to represent him.

I heard that summons and gave a short judgment on 24^th December.  I granted the adjournment but I did so on the basis of the lack of availability of Advocate Redgrave, I rejected the adjournment on the basis that the proceedings should await the outcome of the English proceedings.  It was following that adjournment that the hearing was then fixed for 24^th-25^th April. 

5.        I also gave directions to bring the matter to a conclusion and, as a result of that, skeleton arguments have been filed.  Leeds filed a 31 page skeleton on 17^th January, Mr Weston replied with a 17 page skeleton on 21^st February and Leeds has filed a 24 page reply skeleton on 7^th March. 

6.        Mr Weston was originally going to rely on two main grounds for the adjournment which he now seeks.  Firstly he said that it was impossible for him to do the necessary work to assist Advocate Redgrave to get the case ready for 24^th April because he, Mr Weston, had to do an enormous amount of work in relation to the English proceedings; in particular orders had been made for discovery by early May and for the production of witness evidence by early June.  He said it was simply not possible to do them all at once.  This is linked with his second ground, which was his and his wife's health problems.  There is nothing new about his health problems.  On a number of occasions the Court has been informed that he has been advised medically he should not work for more than 4 hours a day, and that remains the position.  However, the position of Mrs Weston has changed in that she has had an operation recently and I have been shown a medical report from her consultant, dated 14^th March, confirming that Mrs Weston is not fit physically or mentally to prepare work in relation to the litigation over the next month.

7.        However there has been a dramatic change of circumstances since the summons was filed.  This relates to the English proceedings.  In those proceedings, following concerns expressed by the defendants, including Mr Weston, about Leeds' financial position, the defendants applied for security for costs.  On 28^th February, 2014, an order for security for costs was made, providing that Leeds had to provide security of £240,000 by 21^st March.  The order went on to say that the claim would be struck out and judgment for the defendants given, together with costs, should the security not be provided and that this would be done without further order.  I have been informed today that that payment has not been made.  It is therefore agreed by both parties before me that as at this moment the English proceedings are struck out.  It presumably follows that there is therefore an order for costs, payable by Leeds to Mr Weston and the other defendants, although that has not yet been quantified.  I was informed by Advocate Redgrave that the defendants' costs are in the region of £800,000, but there is no evidence to support that and clearly any amount would be subject to taxation; but what I am willing to accept is that, whatever the figure, it will be reasonably substantial because the English proceedings, like the Jersey ones, are complex and I have no doubt that many, many hours have been spent.  So, whilst I do not accept in any way the figure of £800,000, I am prepared to accept that there will be, certainly a six-figure sum due on taxation, by Leeds to Mr Weston and the other defendants.  Of course, as everyone conceded before me, one cannot be certain that the English proceedings have irrevocably come to an end.  If it were possible to provide security within a short delay, application could be made for it to be reinstated but that would be in the discretion of the Court and there is no evidence before me at present that that is what is going to occur.  So I proceed on the basis, at present, that the English proceedings are not going to take place.

8.        In one sense that development cuts the ground from under Mr Weston's feet in relation to his first ground, because he no longer has to comply with the orders for discovery and preparation of witness statements.  He is therefore free now to concentrate exclusively on the hearing on 24^th April in the period that lies between now and then.  In the light of that change of circumstance, the grounds relied upon by Advocate Redgrave remain twofold.

9.        Firstly, although there will now be no distraction of the English proceedings, it is said that there is still a lot of work to be done by Mr Weston personally in order to be ready to hear this case on the 24^th April.  It is further said that he needs his wife's assistance because she is the one who has always been in charge of the documents and he relies entirely on her assistance. It is said that the skeleton of Leeds is very wide-ranging and includes allegations of dishonesty on the part of Mr Weston which he is entitled to answer.  In particular it would seem, says Advocate Redgrave, that Leeds will be inviting the Court to make findings of fact against Mr Weston and these will influence whether an order for costs should be made against him personally.  It is said that Mr Weston feels that he needs 3 months in order to research this matter properly so as to counter the allegations made.

10.      The second aspect is linked, and relates again to health.  Mr Weston, as I say, medically can only work 4 hours a day and his wife is now not able to work at all for 1 month.  Accordingly it is said that this supports the contention that it is not possible for Mr Weston to do the case justice in the month or so between now and the hearing.

11.      I do not accept that Mr Weston needs to spend anything like the amount of time which he says.  This is an application for costs.  It is true that it is against a non-party but it will not involve the trial of the action or witnesses of fact, it will entail only looking at any documents that either party wishes to refer me to and, of course, I can be invited to draw inferences.  But this is, essentially, a matter for submission.  Mr Weston is now represented, very competently, by Advocate Redgrave.  It will be for Advocate Redgrave to do the lion's share of the work in getting the case ready and drawing my attention to such documents as are necessary to rebut any points properly made by the other side.  I should emphasise that, in my judgment, it is not for the Court on a hearing for costs, to go in enormous detail into the facts and certainly not to receive any new evidence.  I remain surprised that 2 days have been fixed for this and I certainly would be hopeful that it would be completed in less than that, although of course I am, to a degree, dependent on the way counsel choose to run their case.

12.      This matter has been going on for far too long.  The summons was issued as long ago as August 2013 I agreed to an adjournment, at Mr Weston's request, in January.  Now I am faced with yet another application for an adjournment.  I do not think it is necessary I think this matter can be properly prepared by the current hearing date, Leeds is entitled to get its summons heard within a reasonable period and I therefore refuse the adjournment.

13.      That brings me to the question of security for costs.  On this aspect I have been referred to the accounts for June 2012 which appear to show that, in the absence of selling players, Leeds was even then running at a substantial loss.  I have also been referred to a number of newspaper cuttings.  They are of course a dubious source of evidence but nevertheless they do quote a number of comments by people entitled to speak for Leeds and to that extent it seems to me I can properly take note of them.  From this it is clear that Leeds is in financial difficulty.  The current owners, it would appear, either cannot fund the continuing expenditure or are not willing to put in the money to do so.  It appears that the club was to be acquired by a Mr Cellino and he did loan substantial sums in order to pay ongoing bills.  One of the reports puts that sum at £6 million but of course I have no way of knowing whether that is accurate.  However, his bid to become the owner has been rejected by the Football League and accordingly that cannot proceed, although I see there is reference to his wanting to appeal that decision.  There must, therefore, be real concern that, if he is not able to proceed, he certainly will not put in more money and he may even seek to call in any loans he has made.  Support for the fact that Leeds is in financial difficulty is derived from the fact that they have failed to put in the £240,000 by way of security for costs in the English proceedings.  One would think that for a football club that would be a comparatively modest sum, but it is clear that they either will not or cannot put that sum in by way of security. 

14.      On the basis of the evidence before me I am satisfied that there are real grounds for thinking that if successful Mr Weston would not recover the costs of the application made against him.  Furthermore I must consider that against the background.  First, that as of now Leeds clearly owes a substantial sum to Mr Weston in respect of the costs of the English action, albeit it that that has not yet been quantified.  Secondly, Leeds did begin an action against Mr Weston personally, and Mr Levi, in Jersey and costs were incurred in connection with that action until it was stayed following a forum non conveniens application.  The costs of that hearing were reserved on the basis, no doubt, that they would probably follow the outcome of the English proceedings where the matter would be tried on its merits.  If it is the case that the English proceedings have come to an end and that Leeds have been ordered to pay the costs of that action there, there is clearly a substantial possibility that the matter can be brought back here and Leeds ordered to pay Mr Weston's and Mr Levi's costs in respect of that litigation (other than in respect of the forum application where costs have been dealt with).  Thus there is a situation where, if Mr Weston were to be successful in this hearing, not only would he be owed the costs of these proceedings, assuming costs were made against Leeds for failure, but he would also be owed the costs of the English action and such costs as might be taxed of the second Jersey action. 

15.      Against that background and in all the circumstances I consider that the interests of the justice point to ordering security for costs if Leeds wish to continue with this application. 

16.      The question then arises as to the sum.  In the original application I think Mr Weston suggested £150,000, which is clearly way over the top.  Advocate Redgrave now suggests £50,000, but no draft bill has been produced or anything to substantiate that.  Advocate Chiddicks suggested that the maximum figure would be some £10,640.  He calculated this by taking the Factor A rates for a 2 day hearing and allowing 2 days preparation.  He also allowed, he told me, for Advocate Redgrave and one assistant.  I think that is an underestimate.  First of all, it gives no uplift over Factor A, whereas in most cases there is some uplift although the percentage varies.  Secondly, it takes no account of the costs incurred to date.  Skeletons have been filed and clearly a fair degree of costs have already been incurred.  Thirdly, it makes no allowance for additional preparation between now and the hearing, I do accept that although 2 days may be required to get the case up finally, Advocate Redgrave will have to do further work between now and then in order to liaise with Mr Weston in making sure that the case is properly presented.

17.      I must hold a balance between the ability of Leeds to pursue a claim and the ability of Mr Weston to recover costs and not be left out of pocket should he be successful.  Doing the best I can to hold that balance, I think the right sum to order is one of £30,000 and that must be paid to the Judicial Greffe.  It must be paid by 5pm on Monday 7^th April.  If it is not paid, then Leeds' application against Mr Weston for personal costs will be struck out without further order and the claim against Mr Weston will therefore be dismissed and it would follow then that costs would also be ordered against Leeds on the standard basis.

Application for leave to appeal to the Court of Appeal sought by Advocate Redgrave.

18.      I reject that application Mr Redgrave.  This is an interlocutory case management matter and therefore it seems to me this is primarily a matter for the trial judge in respect of which a Court of Appeal will be very slow to intervene.  I am comforted, in the sense that of course this does not prevent you going before a single judge as a matter of urgency to see if he or she takes a different view.  So I think you must pursue any remedy before a single judge of the Court of Appeal on that score, but I refuse leave to appeal.

Application for costs made by Advocate Chiddicks.

19.      No order for costs of today's hearing.

No Authorities