Jersey Unreported Judgments

Debt - application by the defendants for an order that the plaintiff pays costs.

[2014]JRC166

Royal Court

(Samedi)

5 September 2014

Advocate S. M. J. Chiddicks for the Plaintiff.

Advocate W. A. F. R. Redgrave for the Defendants.

judgment

the bailiff:

1.        This is an application by the defendants ("Mr Weston" and "Mr Levi" respectively) for an order that the plaintiff ("Leeds") pay the costs of the entirety of these proceedings insofar as they have not already been dealt with. 

2.        At the conclusion of the hearing on 21^st July, I granted the application and ordered Leeds to pay the costs on the standard basis.  I now give my reasons. 

History of the litigation

3.        The background, so far as relevant, is as follows.  In 2005 Leeds United Association Football Club Limited ("the original plaintiff") instituted proceedings ("the 2005 proceedings") against a Jersey company called the Phone-in Trading Post Limited (trading as "Admatch") seeking payment of £190,400 which Admatch had received as agent for the original plaintiff in connection with the sale of tickets by credit card.  Admatch admitted having received this sum but claimed to be able to set off the amount against a larger debt due by an associated company of the original plaintiff to an associated company of Admatch pursuant to a set off clause in the agreement between the original plaintiff and Admatch.  Admatch has at all material times been owned by Mr Weston as sole beneficial owner and he was for most of the time the only director. 

4.        The original plaintiff subsequently went into administration and the claim against Admatch, amongst other assets, was assigned to Leeds, which was subsequently joined to the 2005 proceedings and became the effective plaintiff. 

5.        The 2005 proceedings were very protracted and there were numerous interlocutory skirmishes.  The background can be found in a number of judgments which have been published.  For present purposes, I can move straight to 19^th January, 2011, when the Court made two unless orders against Admatch.  The first was to the effect that, unless Admatch filed a re-amended answer and a revised affidavit of discovery by 23^rd February, 2011, its answer would be struck out without further order and Leeds would be entitled to judgment.  The second was that unless Admatch paid an outstanding costs order in the sum of £63,529.79 by 23^rd February, 2011, its answer would also be struck out without further order and Leeds would be entitled to judgment. 

6.        Admatch did not comply with the two orders.  It sought leave to appeal from the Court of Appeal.  That application was dismissed on 22^nd March, 2011, with reasons being given on 19^th April.  Subsequently, on 19^th May, 2011, this Court, granted judgment in favour of Leeds against Admatch in the sum of £190,400 together with interest. 

These proceedings

7.        While the 2005 proceedings were still in existence, Leeds issued the present proceedings on 17^th December, 2010.  The Order of Justice alleged personal claims against Mr Weston and Mr Levi in respect of the £190,400.  The matter came before the Court for the first time on 28^th January, 2011, when both defendants appeared personally.  At that hearing, Mr Levi indicated that he wished to challenge the jurisdiction of this Court. 

8.        On 17^th February, which was one day before the time for filing an answer expired, Messrs Baker and Partners ("Bakers") wrote to Messrs Sinels (acting for Leeds) stating that they had very recently been instructed and seeking an extension of four weeks for service of an answer.  Sinels replied the same day raising the point that Mr Levi had attempted to challenge the Court's jurisdiction on 28^th January and seeking confirmation that this was no longer the case and that both defendants accepted this Court's jurisdiction.  An extension of three weeks for filing an answer was offered. 

9.        Bakers replied the next day (18^th February) accepting the extension of three weeks and stating as to jurisdiction:-

"As for jurisdiction, there are in our view strong arguments that both this matter and the first claim against Admatch should have been litigated in England.  However in the circumstances we do not seek on behalf of the defendants to challenge the jurisdiction of the Royal Court on this matter."

10.      The defendants filed an answer on 11^th March, 2011, which said this at paragraph 4:-

"4. The second assignment appears to have been entered into in contemplation of this action and requires the Court to determine matters of English law.  Consequently the proper venue for the trial of the action is in England.  The defendants do not challenge the jurisdiction, because it is convenient for this matter to be determined by the Court determining the plaintiff's claim against Admatch and the defendants anticipate that the plaintiff would not be prepared to consent to the removal of both actions to the place of the proper law of the contract."

As can be seen, the answer was filed after Admatch's answer had been struck out but before its appeal to the Court of Appeal had been heard and before judgment in default was given against it. 

11.      On 4^th April Leeds filed a reply to the answer and gave notice of a draft summons in respect of a request for further and better particulars of the answer and seeking directions generally.  On 15^th April, Bakers wrote, commenting in some detail on Leeds' request for further particulars and enclosing a request by the defendants for further and better particulars of the Order of Justice. 

12.      As previously mentioned, judgment in default was given against Admatch on 19^th May.  A few days later on 26^th May, 2011, Bakers wrote to Sinels to the following effect:-

"Following the conclusion of the Leeds v Admatch proceedings we are of the clear view that the most appropriate forum for the current proceedings is now England and Wales.  We invite your clients to agree to a transfer of the action to that jurisdiction."

The letter confirmed that Mr Weston would submit to the jurisdiction of the English court and gave notice that, if agreement was not forthcoming, a summons seeking a change of forum would be issued.  The letter also invited Leeds to consent to a minor amendment to the answer and provided certain further particulars of the answer as had previously been requested.  The minor amendments to the answer were agreed by Sinels the next day. 

13.      A summons on the grounds of forum non conveniens was issued by Bakers shortly afterwards.  On 28^th September, 2011, this Court stayed the proceedings on the grounds that England was the more appropriate forum.  A subsequent appeal by Leeds against that decision was dismissed by the Court of Appeal. 

14.      Leeds duly issued proceedings against Mr Weston and Mr Levi in England but these came to a halt on 27^th March, 2014, when Leeds failed to comply with an unless order requiring Leeds to provide security for costs.  Accordingly the English proceedings brought by Leeds were dismissed and Leeds was ordered to pay the costs of Mr Weston and Mr Levi on the standard basis. 

15.      The costs of the forum hearing in these proceedings were awarded in favour of the defendants.  What therefore remains to be dealt with are the costs in connection with the conduct of these proceedings save in relation to the forum hearing.  It is in these circumstances that the defendants now apply for an order that such costs should be awarded against Leeds. 

Submissions

16.      The case put by Advocate Redgrave was simple.  These were proceedings seeking an order that Mr Weston and Mr Levi personally pay the £190,400 which Leeds claimed against Admatch.  The proceedings were transferred to England following the forum decision and they ended there in defeat for Leeds, the claim having been dismissed on 27^th March, 2014.  Costs should follow the event.  The proceedings were unsuccessful and were in any event brought in the wrong forum. 

17.      Advocate Chiddicks argued that the position was not as straight forward as Advocate Redgrave suggested.  He submitted that the defendants had allowed Leeds to incur unnecessary costs in Jersey and they should therefore pay the costs of the proceedings in Jersey or, at the very least, there should be no order as to costs.  In elaboration of this submission, he pointed out that the defendants chose not to raise the forum point initially (see the letter from Bakers dated 18^th February) despite Mr Levi's indication that it might be raised.  On 11^th March, 2011, they filed a lengthy (58 paragraphs) answer in response to the Order of Justice at a time when Admatch had already failed to comply with the unless orders in the 2005 proceedings.  Mr Weston must have known that Admatch had not complied and was not going to comply with the unless orders.  Paragraph 4 of the answer (quoted above) had made it clear that it was only because of the existence of the 2005 proceedings that the defendants were not challenging the jurisdiction.  Knowing that the 2005 proceedings were shortly to have come to an end, they allowed Leeds to incur unnecessary costs in considering the answer, filing a reply and generally proceeding with the matter until the forum application was filed.  For those reasons, the defendants should pay the costs or there should at the very least be no order for costs.  

18.      In reply, Advocate Redgrave submitted that it was only following the decision of the Court to grant judgment against Admatch on 19^th May, 2011, that it was known for certain that the 2005 proceedings had come to an end.  It was therefore only at that stage that an application could be made that the appropriate forum for the present proceedings was now England because of the lack of existence of the 2005 proceedings.  Had any application to transfer the forum of the present proceedings been brought at an earlier stage, it would have been regarded as premature because the 2005 proceedings were still in existence, even if on their last legs.  Furthermore, he submitted that the work done by Leeds in filing a reply and asking for further and better particulars etc. was not wasted because it was work which would otherwise have had to be done in the course of the English proceedings following transfer to the English courts.  Given that the English proceedings were on essentially identical grounds to the proceedings brought in Jersey against Mr Weston and Mr Levi, work done on the pleadings in Jersey would essentially result in a matching saving of time in the English proceedings, so that only one set of costs would ultimately be incurred.  

Decision

19.      In my judgment, Leeds should pay the costs of the proceedings, essentially for the reasons put forward by Advocate Redgrave.  The underlying substance of the claim has been decided against them by reason of the dismissal of the English proceedings, and therefore the starting point is that Leeds should pay the defendants' costs in connection with the litigation.  It is true that the defendants did not formally raise the issue of forum until after the dismissal of the 2005 proceedings but they had made it clear in the answer that it was only because of the existence of the 2005 proceedings that they were content for the claim against Mr Weston and Mr Levi also to be dealt with in Jersey.  Leeds were therefore on notice of a possible contention that the proceedings should be transferred to England should the 2005 proceedings come to an end.  In my judgment, it was not unreasonable for the defendants to wait until the 2005 proceedings were actually dismissed before issuing a summons seeking a transfer of the forum of the present proceedings.  Any earlier summons would have risked being held to be premature given that the 2005 proceedings had not formally come to an end.  Furthermore, I agree that much of the work done in the present proceedings will have been very useful in the English proceedings and will therefore have led to some reduction in the costs which would otherwise have been incurred in those proceedings. 

20.      All in all, I see no reason why costs should not follow the event and Leeds should therefore pay the costs of the defendants.  I see no grounds for an award of indemnity costs and accordingly the costs are on the standard basis. 

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