Jersey Unreported Judgments

Trust - reasons in respect of whether the defendant is entitled to apply for its costs.

[2018]JRC172

Royal Court

(Samedi)

18 September 2018

Before     :		Advocate Matthew John Thompson Master of the Royal Court.
Between	Bertrand des Pallieres		Plaintiff
And	RBC Trustees (CI) Limited (formally known as Royal Bank of Canada Trustees Limited)		Defendant

Advocate A. D. Hoy the Plaintiff.

Advocate L. A. Woolrich for the Defendant.

 

CONTENTS

		Paras
1.	Introduction	1
2.	Relevant events	2-7
3.	The parties' contentions	8-24
4.	Decision	25-35

judgment

the master:

Introduction

1.        This judgment concerns my detailed written reasons in respect of whether the defendant is entitled to apply for its costs after an action has been dismissed under Rule 6/25(2) of the Royal Court Rules 2004, as amended ("the Rules") for want of prosecution.

Relevant events

2.        On 6^th June 2018 I wrote to the parties as follows:-

"I write in response to your letter dated 4^thJune, 2018.

The matter was set down on the hearing list on 25^th May, 2016.  Accordingly as two years has now elapsed, notwithstanding the stay that expired on 31^st March, 2017, notice is given to all parties including the Plaintiff to whom a copy of this letter is sent, pursuant to Rule 6/25(2) that I intend to consider dismissing the present action pursuant to the powers invested in me by the Royal Court Rules.

Any party objecting to the action being dismissed must issue a summons to show cause why the action should not be struck out.  Any such summons must be issued, i.e. a date fix appointment must be arranged, before the expiration of 28 days from the date of this letter with the summons being heard before me at the earliest opportunity.  It is not sufficient to write to me requesting the action be allowed to continue.  If a summons is not issued within the specified time period of 28 days from the date of this letter then the action will be dismissed.

It should not be assumed that I will agree the action is allowed to continue and I will require the applicant to convince me that this is appropriate.  In this case, I will want to understand what has happened since the stay expired on the 31^st March, 2017.

If I do agree that the action should continue then the summons hearing will be used as an opportunity to give directions.  Any party seeking permission to continue should therefore set out in its summons appropriate directions for me to consider."

3.        This letter was written pursuant to Rule 6/25(2) of the Rules which provides as follows:-

"6/25   Deemed withdrawal; dismissal

(2)       If at the expiration of 2 years from the date on which an action was set down on the hearing list, the trial of the action before the Royal Court has not been completed, the Court may, of its own motion, after giving not less than 28 days' notice in writing to all the parties to the action, order that it be dismissed."

4.        The notice sent on 6^th June, 2018 by coincidence followed on from a lengthy letter to me dated 4^th June, 2018 from Carey Olsen for the defendant had invited me to exercise the power to dismiss proceedings.  This was already under consideration as part of the general case management powers vested in the Master of the Royal Court. 

5.        On 11^th July, 2018 having heard nothing from the parties I made an order dismissing the action and any related counterclaim. 

6.        On 16^th July, 2018 by email, Advocate Woolrich for the plaintiff arranged a date fix appointment in relation to a summons seeking the defendant's costs be paid by the plaintiff on the indemnity basis. 

7.        Advocate Hoy immediately responded and stating that "the summons should have been issued before the proceedings were dismissed and therefore was no action existing to which a costs order could be attached."  This is the issue I have to determine. 

The parties' contentions

8.        Advocate Hoy's primary contention was that once I had made a decision to dismiss the proceedings on 11^th July, 2018, the proceedings were at an end and I had no power to make any consequential costs order. 

9.        This was firstly by reference to the decision of Master Wheeler in Ebor S.A. v Incat Construction (Holdings) Limited & Haden [2001] JLR 280 where he ruled that he did not have jurisdiction to extend time to allow an action to be reinstated.

10.      Paragraphs 1 and 2 of the headnote to the judgment stated as follows:-

"(1)     The court did not have jurisdiction under r.1/5 to hear the applica­tion. It was crucial to bear in mind the distinction between the automatic dismissal of an action under r.6/20(2) and the dismissal of an action as a result of a judicial act under r.6/20(1). Rule 1/5, which dealt with extensions of time, was not appropriate to overturn a judicial act (paras. 11-13).

(2)       Nor would the court reinstate the action under its inherent jurisdiction. It was very significant that the Rules contained no provision to allow an order made under r.6/20(1) to be overturned, as they did in the case of judgments entered in default, and it would be going too far for the court to resort to its inherent jurisdiction to find such a power. In reality, the plaintiff was asking that the court overturn the decision of June 18th, 1999 dismissing the action. It was only in exceptional circumstances that such a power would exist and none were present in this case. The application would therefore be dismissed (paras. 14-15)."

11.      There was no power in Rule 6/25(2) of the Rules itself to make such a costs order once proceedings had been dismissed. 

12.      Even if there was such a power it could only be exercised either before the proceedings were dismissed or as part of dismissal of the proceedings.  It could not be exercised after the proceedings had been dismissed. 

13.      The fact that Rule 6/26(13) contains such a relevant costs power did not alter this analysis.  Even the power in Rule 6/26(13) also had to be exercised either before or as part of any dismissal not after dismissal had taken place.  Rule 6/26(13) of the Rules provides as follows:-

"6/13   Striking out

(1)       The Court may at any stage of the proceedings order to be struck out or amended any claim or pleading, or anything in any claim or pleading, on the ground that -

(a)        it discloses no reasonable cause of action or defence, as the case may be;

(b)        it is scandalous, frivolous or vexatious;

(c)        it may prejudice, embarrass or delay the fair trial of the action; or

(d)        it is otherwise an abuse of the process of the Court,

and may make such consequential order as the justice of the case may require.

(2)       No evidence shall be admissible on an application under paragraph (1)(a)."

14.      The courts' inherent jurisdiction could not be used to make a costs order.  This was clear from Irish Nationwide Building Society v Volaw Corporate Trustee Limited & Ors [2013 JRC 099 where the court at paragraph 17 stated as follows:-

"17.    The Judicial Greffier is not a court exercising an inherent jurisdiction; his judicial functions are limited to those which are delegated to him by the Royal Court.  That delegation is made principally under the Royal Court Rules - see the judgement of the Judicial Greffier in Showlag-v-Mansour 12th June 1991 unreported 91/16a."

15.       Had the defendant asked for its costs before the expiry of the 28 day period, the plaintiff would then have been in a position to decide how far to argue against a costs order or indeed to decide whether or not to continue the proceedings.  That option was no longer available to the plaintiff. 

16.      There are practical benefits in having to apply for costs before an action was dismissed because the parties then knew where they stood.  Otherwise costs could be raised months if not years after the event. 

17.      The defendant was always in the position to either write to ask for its costs by letter to the plaintiff and the court or to issue a summons before expiry of the 28 day period. 

18.      Advocate Woolrich argued because the Royal Court including the Master has a discretion to make a costs order, that included making a costs order consequent upon a dismissal of proceedings under Rule 6/25(2) of the Rules.

19.      The Ebor case was not about a consequential order but about the court being asked to set aside its own decision which was a matter for appeal not a reconsideration. 

20.      The power to award costs in Rule 6/26(13) of the Rules was not a power that on the face of the Rule could only be exercised before dismissal. 

21.      It would be odd if a costs order could be made for failure to issue a summons for directions but a costs order could not be where there was a want of prosecution. 

22.      There was nothing in either Rule 6/25 or 6/26(13) or the Notice sent out by the court which stated that a party could not ask for costs where a dismissal had occurred. 

23.      In relation to the question of the courts' inherent jurisdiction, Advocate Woolrich referred me to the decision of Mayo Associates v Cantrade [1998] JLR 173 and the recent decision of the Court of Appeal in Halabi v Wilson and HMRC [2018] JCA 114 applying Mayo where the court described the inherent jurisdiction at paragraph 37 as follows:-

"The inherent jurisdiction is, put shortly, an authority in a court to do everything to uphold, protect and fulfil the judicial function of administering justice according to law in a regular, orderly and effective manner, which must include all procedural power necessary to act as a court in a meaningful sense."

24.      If there was no power to make a costs order absent exceptional circumstances, they existed in this case because of the ambiguities in the Rule itself and because the defendant sought its costs immediately after the case was dismissed. 

Decision

25.      The conclusion I reached was that I possess the power to make a costs order where I dismiss a case for want of prosecution under Rule 6/25(2) having given the requisite 28 day notice for the following reasons. 

26.      Firstly, I do not regard this case as identical to Ebor.  Ebor was a case about whether the Master could set aside an order previously made under then the equivalent of Rule 6/25(2).  I agree with Master Wheeler that the Master of the Royal Court does not possess jurisdiction to set aside an order dismissing proceedings.  If any party wishes to challenge such an order the correct procedural route is by way of appeal to the Royal Court. 

27.      Secondly, I do not agree that the fact that I cannot set aside an order dismissing proceedings does not mean I do not possess jurisdiction to make costs orders consequential upon such a dismissal.  I consider that I do possess such a jurisdiction.  The cost jurisdiction vested in me arises from Article 2 of the Civil Proceedings (Jersey) Law 1956 which provides that in all proceedings costs are in the discretion of the Royal Court and the Court has "full power to determine by whom and to what extent the costs are to be paid".  The breadth of this discretion in my judgment means that I can make a cost order consequential upon dismissal of proceedings under Rule 6/25(2).

28.      Thirdly, while I do not have a general inherent jurisdiction as noted by Commission Clyde-Smith in the Irish Nationwide case, the observations of the Court of Appeal Halabi, in my view apply to the exercise of the judicial functions delegated to the Master of the Royal Court under the Royal Court Rules.  I would not be a court in a meaningful sense if I could not make a costs order consequential upon dismissing proceedings for want of prosecution. 

29.      Where I have ruled that proceedings should be dismissed in other circumstances, such as under the court's strike out or summary judgment powers or for failure to comply with specific court orders, clearly I possess the power to make costs orders as a consequence of that decision.  I am not persuaded that the position should be different where I exercise the specific power under Rule 6/25(2).  To have a different approach creates an anomaly which I do not consider can be justified. 

30.      Finally, I construe Rule6/26(13) to mean that a costs order can be sought after dismissal of proceedings under that Rule as well as at the same time as dismissing proceedings.  To construe Rule 6/26(13) to mean that a costs order had to be sought within the 28 day period in my judgment is too narrow an interpretation.  It also unfairly deprives a party of their opportunity to ask for costs.  Having reached that conclusion it would produce an absurd result if a party could seek costs following a dismissal of a case under Rule 6/26(13) but could not seek costs following a dismissal under Rule 6/25(2) notwithstanding that generally for the latter type of dismissal a want of prosecution has occurred. 

31.      I accept that one answer to the problem posed could be to either amend the Royal Court Rules to set out any time limit by which a costs order had to be sought.  However, that is not an answer to the obligation on me to act as court in a meaningful sense and I do not consider that the defendant in this case should be deprived of its ability to ask for its costs simply because a particular rule might need improvement. 

32.      In this case I also note that the notification sent out to the parties (which is in standard form that has been used for many years) does not contain any time limit by which any costs order has to be sought.  Indeed, the notification is silent on the question of costs.  It would be wrong to penalise the defendant in this case that an express time limit applies when there is no such time either in the Rules or in any notice sent out pursuant to the Rules. 

33.      That is not to say that there is no force to the concerns expressed by Advocate Hoy in relation to costs being sought long after proceedings were dismissed or a potential unfairness on a plaintiff who was debating whether or not to continue with an action not being aware of costs consequences.  Ordinarily therefore with effect from the date this decision is made public, where notice is given that an action is to be dismissed and a party wishes to seek costs as a consequence of such a dismissal that party, before expiry of the relevant notice period, should have made it clear that it wishes to seek a costs order in its favour.  This is important because such communication may be a material factor for a party in deciding whether or not to continue with all or part of a claim. 

34.      I appreciate that in some cases there will be judgments to be made because a party may hope that proceedings are dismissed without any further steps being taken, but these are matters for a party and their advisers to reflect upon in deciding whether or not to seek costs.  Such potential difficulties that may arise in some cases are not a justification for preventing a party from applying for costs. 

35.      If I am wrong on all the above then because in this case costs were asked for 5 days after the proceedings were dismissed I consider that exceptional circumstances exist to allow the defendant in this case to make a costs application.  In future cases however a defendant who does not state that it requires its costs within the 28 day period or thereafter may find any application for costs being refused. 

36.      In light of this judgment, I adjourned the remainder of the defendant's costs application to allow the plaintiff to have time to consider these written reasons and to consider whether the plaintiff wished to file any evidence in response in relation to the application for indemnity costs. 

Authorities

Royal Court Rules 2004, as amended

Ebor S.A. v Incat Construction (Holdings) Limited & Haden [2001] JLR 280

Irish Nationwide Building Society v Volaw Corporate Trustee Limited & Ors [2013] JRC 099

Mayo Associates v Cantrade [1998] JLR 173

Halabi v Wilson and HMRC [2018] JCA 114

Civil Proceedings (Jersey) Law 1956