Costs - application by the Defendant
Before : |
Sir Michael Birt, Commissioner, sitting alone |
Between |
Hard Rock Limited |
First Plaintiff |
And |
Hard Rock Café International (STP) Inc |
Second Plaintiff |
And |
HRCKY Limited |
Defendant |
Advocate J. D. Garrood for the First and Second Plaintiff.
Advocate T. V. R. Hanson for the Defendant.
judgment on costs
the COMMISSIONER:
1. This is an application for costs by the Defendant following my decision to allow an appeal by the Defendant against the decision of the Master in relation to a matter of specific discovery.
2. The Master's decision is contained in an Act dated 27th July 2016 with the reasons for his decision set out in his judgment dated 9th September 2016 (Hard Rock Ltd and Another v HRCKY Limited [2016] JRC 157). My decision is set out in an Act dated 21st November 2016, with reasons contained in a judgment dated 24th March 2017 (Hard Rock Limited v HRCKY Limited [2017] JRC 048.) As set out in those judgments, this is part of long running litigation between the Plaintiffs and the Defendant which is now proceeding on the Defendant's counterclaim alleging misrepresentation and breach of contract in relation to a franchise agreement.
3. Following mutual discovery in the ordinary way, the Defendant issued a summons for specific discovery. The summons sought discovery of a number of classes of document. The case came before the Master who allowed the summons in relation to many of the documents sought but refused it in relation to others, including those listed at paras 1.7 and 1.8 of the Defendant's summons. The Defendant appealed against the Master's refusal to order discovery of the documents listed in those two paragraphs.
4. For the reasons set out in my judgment of 24th March 2017, I allowed the Defendant's appeal and ordered the Plaintiffs to give specific discovery in relation to those two paragraphs, albeit not in exactly the terms of the summons.
5. When issuing my judgment, I did not impose any time limit for any application for costs and no costs application was made by either side until Advocate Hanson (who had taken over representation of the Defendant) raised the issue by letter dated 30th October, 2019. I subsequently gave directions for the filing of submissions in relation to the issue of costs and said that I would consider the matter on the papers. That is what has now occurred and this judgment represents my decision in relation to the Defendant's application that the Plaintiffs should be ordered to pay the costs of the hearings before the Master and the Royal Court on the standard basis.
6. The first issue to consider is that of delay. Advocate Garrood submits that the Defendant has left matters far too long and that it is now too late to seek an order for costs. Advocate Hanson responds that there are extenuating circumstances. The Defendant became unrepresented in June 2017 and, while it was able to enlist a new advocate for a brief period thereafter, it became unrepresented again for approximately a year from November 2017. Furthermore, there was then an application to strike out the counterclaim and this matter came before the Royal Court in 2018 (when the counterclaim was struck out), but there was a successful appeal to the Court of Appeal in 2019. Advocate Hanson was instructed in the latter part of 2018. Advocate Hanson submitted that a combination of the changes in (and at times lack of) legal representation coupled with the attention which had to be devoted to the strike out application meant that the Defendant lost sight of the fact that no costs order had been made in respect of my decision.
7. This was not a case where, as it often does, the Court imposed a time limit for any costs application to be made. The Act of Court dated 21st November stated simply that the costs of the appeal were reserved pending the handing down of written reasons.
8. I am not to be taken as encouraging such delay and there may well be circumstances in which the Court would refuse to hear an application for costs following an unreasonable period of delay. But, given the various events described above, I think it would be unfair to refuse to consider a costs application at this stage and accordingly I do not decide this matter on the ground of delay.
9. As to the merits, Advocate Hanson submits that the appeal was wholly successful and the Defendant should be awarded its costs on the standard basis. Advocate Garrood, on the other hand, submits that, although costs generally follow the event, this is not necessarily the case in interlocutory matters. He further submits that the discovery which was ordered has not turned out to be helpful because it will emerge at trial that the documents ordered to be disclosed are in fact irrelevant. He therefore submits that there should either be no order for costs or alternatively costs should be reserved to the trial judge who can determine whether the documents ordered to be disclosed were of any value. As a last resort, he suggested costs in the cause.
10. As to the second submission, I do not agree that the outcome of this costs application should depend upon whether the documents in fact turn out to be useful at the trial or not. The fact is that the rules impose obligations on the parties in relation to discovery and the Court on this occasion held that specific discovery should be granted. The question of costs must be considered in relation to the success or failure of the application rather than the eventual effect at trial. I therefore decline to leave the matter for decision by the trial judge.
11. I do not think that no order for costs or costs in the cause would be appropriate. This was an appeal against the Master's decision which was opposed by the Plaintiffs, but which was successful. I see no reason why costs should not follow the event and accordingly I order the Plaintiffs jointly and severally to pay the Defendant's costs of the appeal on the standard basis.
12. Advocate Hanson also seeks an order that the Plaintiffs should pay the costs in relation to the summons before the Master. The Defendant was substantially successful before the Master save in relation to paras 1.7 and 1.8 of its summons. Having succeeded on those two paragraphs before me on appeal, the overall effect is that the Defendant has been successful in relation to the vast majority of its summons for specific discovery. I consider that costs should follow the event and accordingly I order the Plaintiffs jointly and severally to pay the Defendant's costs in connection with the summons before the Master on the standard basis.
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