Jersey Unreported Judgments

Costs

[2021]JRC050

Royal Court

(Samedi)

23 February 2021

Before     :

J. A. Clyde-Smith O.B.E., Commissioner, sitting alone

 

Advocate J. S. Dickinson for the Plaintiff.

judgment ON COSTS

the commissioner:

1.        The Plaintiff applies by way of summons for the stay on the taxation of costs imposed on 30^th August, 2019, to be lifted and for an order that the First Defendant be ordered to pay all remaining costs of these proceedings which have not already been provided for by way of existing costs orders on the indemnity basis.

Background

2.        The Plaintiff acted for the late Kilian Hennessy, who died domiciled in Switzerland on 1^st October 2010, and his son Gilles Hennessy.  Before his death, Kilian Hennessy had sought advice from the Plaintiff in respect to proceedings that it was anticipated would be brought after his death by the First Defendant, who is his daughter. 

3.        On 26^th May 2016, the executors of Kilian Hennessy's estate (the Fourth and Fifth Defendants) through their special attorney (the Sixth Defendant) brought proceedings in Jersey against the Plaintiff for information and documents held by him when acting for Kilian Hennessy.

4.        In May 2015, the First Defendant was sent a package by an anonymous person under cover of a Jersey postcard with written on it the text "Again, I think you deserve the truth".  The package contained documents copied it would seem from the files of the Plaintiff ("the Improperly Obtained Documents") which, as the Court of Appeal said in its judgment of 24^th May 2018 (Sinel v Hennessy [2018] JCA 095) at paragraph 4, on their face plainly attracted legal professional privilege by virtue of the lawyer/client relationship between the Plaintiff and Gilles Hennessy.

5.        The First Defendant passed these documents on to her Jersey lawyer, Advocate Damian James (the Second Defendant) in June 2015.  Eighteen months later, on 23^rd December 2016, Advocate James was instructed by her to send the Improperly Obtained Documents on to the executors' Jersey lawyer, Advocate Adam Clarke (the Third Defendant), who, concerned at possible breaches of the Code of Conduct of the Law Society of Jersey, returned them.

6.        Advocate James then sought guidance from the Chief Executive Officer of the Law Society of Jersey who, on 25^th January 2019, said this:

"In considering this matter in detail, subject to the caveats below, I make the following observations:

§  The nature and content of the documents received by your client means that they were not intended for, or meant to be seen by, your client.

§  The nature of the receipt of the documents, as an anonymous package, indicates that disclosure is not inadvertent, but a deliberate act on the part of another person.

§  The accompanying note, disguised handwriting and nature of the contents gives rise to an indication of being improperly obtained by or through the sender (who is not the client).  There is no suggestion that your client has had any involvement in obtaining the documentation received.

§  The circumstances under which the documentation came into your client's possession (i.e. anonymously) was arguably improper on any construction."

7.        At the suggestion of the Law Society, Advocate James issued a representation seeking guidance from the Court, to which Advocate Sinel was convened and by which he first became aware of the Improperly Obtained Documents having been obtained by the First Defendant.  In those proceedings, it became clear that the Improperly Obtained Documents had been sent by the First Defendant directly to the executors, who had in turn filed them with the Swiss court with jurisdiction over the estate of Kilian Hennessy.

8.        On 22^nd March 2017, the Court said this in its judgment (James v Law Society and Others [2017] JRC047B):

"48.    ...it is on the face of it difficult to identify a valid reason why [the First Defendant] should have been sent documents which do not belong to her; on the face of it they must have been obtained improperly, and it would be unsurprising if a court were to determine that in those circumstances they ought not to be used.

           .....

52.      In our judgment, when a Jersey advocate or solicitor - in either case an officer of this Court - receives documentation from any source other than his or her client which, on its face, he or she ought not to have because either it has been received by mistake or clearly belongs to someone else or is privileged, it is his or her duty not to read it, not to deploy it in any litigation on behalf of the client and to return it to the person entitled to it ... in the present case, there is no adequate basis upon which it could be said, on the evidence currently available - and that position may theoretically change - that [the First Defendant] is entitled to assert ownership of the Anonymous Package.  That being so, Advocate James should not transmit the documents to Advocate Clarke even though he has been instructed to do so.  To permit him to do so would circumvent the obligations which on the facts of this case the Court, having regard to the apparent ownership of the documents, privilege, the Code of Conduct and the guidance imposes on him."

9.        In the meantime, on 1^st March 2017, the Plaintiff had issued these proceedings by way of Order of Justice.  The relief claimed in the Order of Justice is injunctive only, to preserve confidentiality.  The Order of Justice seeks to restrain, in some way, the giving of publicity to the Improperly Obtained Documents and their contents (that is, the information set out in the Improperly Obtained Documents) the delivery up or destruction of the Improperly Obtained Documents and any copies and the giving of assistance to the Plaintiff to enable him to see that confidentiality and privilege continues to be maintained.

10.      The progress of the Order of Justice as it directly concerns the First Defendant is set out in the Act of Court of 30^th August 2019 by which the Court granted the Plaintiff judgment against her in default, and is as follows:

(i)        The First Defendant was served with the Order of Justice outside the jurisdiction at her home address in Belgium in accordance with an order of the Court dated 15^th March 2017.

(ii)       On 18^th August 2017, the First Defendant placed the proceedings on the pending list.

(iii)      On 6^th September 2017, the First Defendant issued an application to challenge the jurisdiction of the Court in relation to the proceedings ("the Jurisdiction Challenge") and thereby sought to set aside the order for service upon her.

(iv)      On 12^th January 2018, the Court granted the First Defendant's Jurisdiction Challenge and set aside the order for service, and this for the reasons set out in its judgment Sinels v Hennessy & Others [2018] JRC 007.

(v)       On 24^th May 2018, the Court of Appeal overturned the Royal Court's decision and confirmed the Royal Court's jurisdiction in relation to the proceedings, ordering the First Defendant to pay the Plaintiff's costs of the Jurisdiction Challenge and the appeal ("the Jurisdiction Challenge Costs"), such costs to be taxed on the standard basis.

(vi)      On 22^nd August 2018, the Master of the Royal Court granted the Plaintiff leave to amend the Order of Justice and ordered the First Defendant to pay the Plaintiff's costs of the application to amend, such costs to be summarily assessed on the standard basis ("the Amendment Costs").

(vii)     On 21^st September 2018, the First Defendant served her answer to the amended Order of Justice.

(viii)    On 25^th September 2018, the Amendment Costs were summarily assessed by the Master of the Royal Court in the amount of £5,507.09, for which the Plaintiff formally demanded payment.

(ix)      On 5^th November 2018, the Royal Court gave directions for the preparation of the trial of the proceedings.

(x)       On 1^st March 2019, the Jurisdiction Challenge Costs were taxed by an assistant Judicial Greffier of the Royal Court as being in the amount of £100,679.67.  The Plaintiff formally demanded payment of the Jurisdiction Challenge Costs from the First Defendant on 5^th March 2019.

(xi)      On 18^th March 2019, the First Defendant issued an appeal from the Royal Court's taxation of the Jurisdiction Challenge Costs but she failed to take the necessary steps to arrange for a date to be fixed for that appeal to be heard, and it was deemed to have been abandoned by the First Defendant, pursuant to Rule 20/2(4) of the Royal Court Rules 2004 as amended.

(xii)     The First Defendant did not comply with the directions relating to the discharge by her of her discovery obligations, and the Plaintiff was required to issue an application for further Court orders which were made on 17^th April 2019.  The First Defendant was ordered to pay the Plaintiff's costs of that application, such costs to be summarily assessed on the indemnity basis.

(xiii)    On 26^th April 2019, the First Defendant provided her affidavit of discovery, a list of documents, her advocate's endorsement in relation thereto and copies of the documents in her list of documents.

(xiv)    On 1^st May 2019, the Plaintiff requested inspection of the original package of the Improperly Obtained Documents (together with the accompanying envelope and postcard) as received by the First Defendant.  The First Defendant failed to provide those documents for inspection.

(xv)     The First Defendant did not pay the Amendment Costs or the Jurisdiction Challenge Costs requiring further orders and on 15^th May 2019, the Court ordered that:

"1.       the First Defendant shall be debarred from participating in the proceedings and her answer shall be struck out unless the First Defendant by 5.00 p.m. Friday, 24^th May 2019 settles in full her liabilities to the Plaintiff pursuant to costs orders dated 25^th September 2018 and 1^st March 2019; which liabilities amount to £106,851.93 including accrued interest for the period ending 15^th May 2019, with interest accruing at a daily rate of £8 until payment; and

2.        the costs of this summons shall be paid by the First Defendant on the indemnity basis, such costs to be summarily assessed if not agreed." (the "Debarring Order").

(xvi)    On 17^th May 2019, the First Defendant served her witness evidence for trial.

(xvii)   On 24^th May 2019 the First Defendant served an expert report from Antoine Eigenmann.

(xviii)  On 24^th May 2019, the First Defendant's answer was struck out because she had not settled her liabilities to the Plaintiff, and she has been debarred from participating in the proceedings since then.  The First Defendant is out of time to appeal the Debarring Order.

(xix)   On 30^th August 2019, the Royal Court granted the Plaintiff the injunctive relief sought in the Order of Justice against the First Defendant in default, pursuant to Rule 6/6/6(b) of the Royal Court Rules 2004.  The Court also made these orders in relation to costs:

"10.     that the Plaintiff's costs of the First Defendant's defence of the proceedings be paid by the First Defendant on the indemnity basis, such costs to be taxed if not agreed, such taxation to be stayed until further order of the Court; and

11.      that the question of whether the First Defendant shall have any other liability in respect of the remaining costs of the proceedings be reserved for determination until either (a) after the Royal Court has handed down its judgment in relation to the trial of these proceedings or (b) further order."

11.      The proceedings against the other defendants can be summarised as follows:

(i)        The Second and Third Defendants entered into consent orders agreeing to be bound by the Court's ultimate determination of the proceedings.

(ii)       Midway through the trial as between the Plaintiff and the Fourth to Sixth Defendants, they entered into a consent order in which, in essence, the Fourth to Sixth Defendants agreed to destroy their copies of the Improperly Obtained Documents and not to make use of them in any jurisdiction for any purpose (save as set out in the consent order).

(iii)      The First Defendant's French lawyer Amaury d'Everlange ("the seventh Defendant") failed to appear before the Court on the return date, and the Plaintiff was granted into injunctive relief against him by default on 30^th June 2017.  As far as the Plaintiff is aware, he has not taken any steps to comply with the terms of the Court orders and has apparently now retired from practice.

(iv)      The Eighth Defendant has not played an active role in the proceedings.

Service upon the First Defendant

12.      Advocate Morley-Kirk of Viberts, the legal firm on record as representing the First Defendant, wrote to the Court on 30^th August 2019, shortly before the hearing at which the Plaintiff was seeking judgment in default, saying that her firm no longer acted for the First Defendant, and they had not been able to contact her to inform her of the hearing.  She no longer had a lawyer in Jersey and her address in Belgium was provided.  Advocate Morley-Kirk has written subsequently in the same terms. 

13.      However, pursuant to Rule 20/4 of the Royal Court Rules 2004, Viberts are still considered as the lawyers representing the First Defendant in this jurisdiction and accordingly the Plaintiff has served the default judgment order upon the First Defendant in the following ways:

(i)        By way of service upon Viberts by the Viscount, including with a French translation.

(ii)       By service upon the First Defendant at her home in Belgium by the huissier de justice (a Belgian bailiff authorised to serve proceedings and other documents in Belgium).

14.      The letter giving notice of the date fix appointment and the draft Summons, together with French translations thereof, were served by the Plaintiff upon the First Defendant (a) by way of service by the Viscount upon Viberts and (b) by way of service by a huissier de justice upon the First Defendant at her home in Belgium; in addition, these documents were delivered by a courier to the First Defendant at her home in Belgium.  The issued Summons and a covering letter, together with French translations thereof, were served by the Plaintiff upon the First Defendant by way of service by the Viscount upon Viberts; the same documents were delivered by a courier to the First Defendant's home in Belgium.  In addition, a copy of the issued Summons and a French translation thereof were served at the First Defendant's home in Belgium by a huissier de justice.  The bundles prepared for the hearing, together with related covering letters and French translations of such covering letters, were served upon the First Defendant (a) by way of service by the Viscount upon Viberts on 11^th January 2021 and (b) by way of service by the huissier de justice on the First Defendant at her home in Belgium on 13 January 2021, together with French translations of the Plaintiff's Seventh Affidavit, the exhibit thereto and Advocate Dickinson's written submissions.  Attempts to deliver the bundles and the French translations of the documents to which reference has just been made by courier to the First Defendant at her home in Belgium met with difficulty.  The courier's attempts to deliver these documents on 12^th and 21^st January 2021 were unsuccessful.  The courier finally delivered these documents to the First Defendant's home on 22^nd January 2021; this is, however, of no consequence as these documents were served on the First Defendant on 13^th January 2021 by a huissier de justice, as noted above.

15.      Viberts have written complaining about continued service upon them, but the Court is fully satisfied that the First Defendant has had proper and ample notice of the hearing of this summons and has received French translations of all appropriate documents before the Court.  She has not responded and did not appear. 

The stay

16.      Having set out the background, the issue before the Court under the first part of the summons is whether to lift the stay on the taxation of the indemnity costs order made for the benefit of the Plaintiff on 30^th August 2019.  The stay was imposed at the instance of the Plaintiff and not the Court.  Advocate Dickinson informed us that the trial of the proceedings involving the Fourth to Sixth Defendants was due to start on 9^th September 2019 and the stay was thought to be pragmatic in the sense that it left open the question of assessment of those costs and the question of whether the First Defendant would have any wider liability until after the trial had taken place and judgment handed down.

17.      As it transpires, the proceedings as between the Plaintiff and the Fourth to Sixth Defendants were compromised by way of a consent order and no judgment has been forthcoming.  The First Defendant ceased participating in the proceedings some time ago, and as a consequence, the Plaintiff has not been able to reach any agreement with her in respect of the costs liability she owes him under paragraph 10 of the consent order, and having made that order in his favour, there is now no reason to stay its taxation.  I therefore lift the stay on the taxation of costs payable by the First Defendant under paragraph 10 of the Court's order dated 30^th August 2019.

Application for residual costs

18.      The Plaintiff seeks a further order for costs against the First Defendant on the indemnity basis in respect of the residual pool of costs incurred in the proceedings which have not been provided for by existing costs orders.

19.      Advocate Sinel already has the benefit of the indemnity costs order made on 30^th August 2019 and he also has the benefit of a number of interlocutory costs orders, which it is not necessary to list.

20.      In so far as the Second Defendant is concerned, the Plaintiff obtained an order that he would pay his own costs of the proceedings, so the Plaintiff has unrecovered costs in his dealings with the Second Defendant.

21.      In so far as the Third Defendant is concerned, the Plaintiff agreed that he should be released from the proceedings on the basis of there being no order as to costs and therefore the Plaintiff does not seek to recover any unrecovered costs of dealing with the Third Defendant.

22.      In so far as the Fourth to Sixth Defendants are concerned, the Plaintiff reached agreement with them that they would pay his costs of the proceedings on the standard basis to be taxed if not agreed for the period from 14^th August 2019 to 12^th September 2019.  He therefore has unrecovered costs of dealing with the Fourth to Sixth Defendants in respect of the period prior to 14^th August 2019. 

23.      In so far as the Seventh Defendant is concerned, the Plaintiff has a default judgment against him, but the issue of costs was reserved.  He therefore has unrecovered costs of dealing with the Seventh Defendant.

24.      Finally, in so far as the Eighth Defendant is concerned, the Plaintiff obtained an order that each should bear his own costs of the proceedings, and so the Plaintiff has unrecovered costs of his dealings with the Eighth Defendant.

25.      As Advocate Dickinson submits, with justification, the First Defendant is the root cause of and the main protagonist in these proceedings.  Legal professional privilege is fundamental to the administration of justice, namely the principle that a man or woman must be able to consult his or her lawyer in confidence (see R v Derby Magistrates' Court, Ex parte B. Same v Same, Ex parte Same [1996] AC 487 at pages 507-508), and it is a serious matter that documents which on their face were between the Plaintiff and his client Gilles Hennessy have found their way to the First Defendant.  They were not intended for the First Defendant and must have been improperly obtained.  As the Court said in the judgment on the application by the Second Defendant (James v Law Society and Others [2017] JRC 047B) at paragraph 48, it was understandable that the Plaintiff issued proceedings for their destruction and/or return.  As the Court of Appeal intimated at paragraph 14 of its judgment (Sinel v Hennessy [2018] JCA 095) when the First Defendant received the Improperly Obtained Documents, she must have appreciated that they were confidential.  She was responsible for their dissemination.

26.      Having failed in her challenge to the jurisdiction of the Court, she then continued to participate in the proceedings, putting beyond doubt her acceptance of the Court's jurisdiction.  Her overall approach, as noted by the Master of the Royal Court at paragraph 22 of his judgment of 30^th May 2019 (Sinel v Hennessy and Others [2019] JRC 096) giving reasons for the Debarring Order, was to proceed at her own pace and not to comply with orders unless compelled to do so.  He then said this at paragraph 23:

"Rather it is the difficulties with service, challenges to service which were later abandoned, the unnecessary delay in consenting to amendments to the order of justice, delays in discovery and not pursuing appeals against taxation of costs by the Assistance Judicial Greffier which in combination lead me to conclude that, without appropriate sanction, the first defendant will proceed as she has in the past and will not pay the costs orders which have been assessed."

27.      She had refused to pay the two costs orders made against her which led the Master to order that she be debarred from participating in the proceedings and her answer would be struck out unless by 5.00 p.m. on Friday 24^th May 2019 she had settled her liabilities in respect of the two costs orders, including interest.  She failed to do so and as a consequence, her answer was struck out and she was debarred from participating in the proceedings.

28.      I have been referred to the general principles to be applied in the award of costs as set out in Watkins and Another v Egglishaw and Others [2002] JLR 1, and in particular, the overriding objective of doing justice between the parties.  There is something in the analogy drawn by Advocate Dickinson between the conduct of the First Defendant here and a plaintiff who withdraws proceedings.  A plaintiff in that position would ordinarily be ordered to pay the costs of the parties on the indemnity basis (see, for example, Dick v Dick (née Naranjo) [1990] JLR  Note 2c and Syvret v Benest and Benest [2012] (1) Note 5).

29.      According to the information before me, the First Defendant is a person of very substantial means and there is no reason, therefore, why she did not pay these two costs orders.  The reality is that she made a conscious decision to abandon her defence of these proceedings.  She is, of course, one of eight defendants, but she is at the root of these proceedings and in my view, justice dictates that she should pay the residual pool of costs suffered by the Plaintiff. 

30.      As to whether those costs should be paid on the standard or indemnity basis, I was referred to this passage of the judgment in Leeds United Football Club Limited v Weston and Levi [2012] JCA 088 at paragraphs 6 and 7:

"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)."

31.      In my view, the conduct of the First Defendant has been unreasonable, and it would be fair and reasonable in all the circumstances for her to pay all the remaining costs of the proceedings (that is to say all costs which have not already been provided for by existing costs orders), including the costs of this summons on the indemnity basis, such costs to be taxed if not agreed.

Conclusion

32.      In conclusion I lift the stay imposed on 30^th August 2019 and order that the First Defendant pay all the remaining costs of the proceedings (that is to say all costs which have not already been provided for by existing costs orders), including the costs of this summons on the indemnity basis, such costs to be taxed if not agreed.

Authorities

Sinel v Hennessy [2018] JCA 095. 

James v Law Society and Others [2017] JRC047B. 

Sinels v Hennessy & Others [2018] JRC 007. 

Royal Court Rules 2004. 

R v Derby Magistrates' Court, Ex parte B. Same v Same, Ex parte Same [1996] AC 487. 

Sinel v Hennessy [2018] JCA 095. 

Sinel v Hennessy and Others [2019] JRC 096. 

Watkins and Another v Egglishaw and Others [2002] JLR 1. 

Dick v Dick (née Naranjo) [1990] JLR  Note 2c. 

Syvret v Benest and Benest [2012] (1) Note 5).

Leeds United Football Club Limited v Weston and Levi [2012] JCA 088.