Before : |
Sir Michael Birt, Commissioner, sitting alone. |
Between |
(1) M B & Services Limited |
Plaintiffs |
|
(2) Tatiana Golovina |
|
And |
United Company Rusal International Public Joint-Stock Company (formerly United Company Rusal PLC) |
Defendant |
Advocate W. A. F. Redgrave for the Plaintiffs.
Advocate D. Evans for the Defendant.
judgment on costs
the commissioner:
1. On 23rd March 2021, I gave judgment in relation to the Defendant's application to strike out the Plaintiffs' claims (or some of them) in the Order of Justice pursuant to Rule 6/13. I struck out that part of the Order of Justice which pleaded infringement of a specified Russian patent and a specified Ukrainian patent but otherwise declined to strike out any part of the Order of Justice.
2. However, I agreed that much of the Order of Justice fell within Rule 6/13(c) in that it did not plead the case in sufficient detail. I therefore directed that an Amended Order of Justice be filed remedying the matters specified at paragraph 127 of the judgment.
3. I must now consider the question of costs, upon which I have received written submissions from the parties.
4. The Plaintiffs submit that this was an application to strike out which, save for one minor respect, failed. The Defendant should therefore be ordered to pay the Plaintiffs' costs. The Plaintiffs accept that they have been ordered to file an Amended Order of Justice remedying defects but submit that the application should have been brought under Rule 6/15 seeking further information. If that had been done, the matter could probably have been resolved by agreement and the hearing would have been unnecessary.
5. The Defendant, on the other hand, submits that that is to ignore the realities of the situation. Although the summons was brought as a strike out application under Rule 6/13, it is well-established, as the Court said at paragraph 30 of the judgment, that if a pleading is defective but can be remedied by amendment, the Court will not strike out the pleading but will order amendment. The Defendant further submitted that it was clear from the summons and from its Skeleton Argument that, to the extent that the Court concluded that the defects were capable of being remedied by amendment, the Defendant was seeking an order that the Plaintiffs be directed to file an amended pleading.
6. The principles governing the award of costs are well-established; see Watkins v Egglishaw [2002] JLR 1 at para 7 and Flynn v Reid [2012] (2) JLR 226 at paras 12 - 14. Both of these cases approved the approach in the case of in Re Elgindata Limited (No 2) [1992] 1 WLR 1207 where the following principles were laid down:
(i) Costs are in the discretion of the Court.
(ii) They should follow the event, except when it appears to the Court that in the circumstances of the case some other order should be made.
(iii) The general rule does not cease to apply simply because the successful party raises issues or makes allegations on which he fails, but where that has caused a significant increase in the length or cost of the proceedings he may be deprived of the whole or a part of his costs.
(iv) Where the successful party raises issues or makes allegations improperly or unreasonably, the Court may not only deprive him of his costs but may order him to pay the whole or a part of the unsuccessful party's costs.
7. I consider that, looking at the realities of the situation, the Defendant was the successful party in this case. The Court essentially accepted its submissions that the Order of Justice was defective in a substantial number of respects. Thus, the Plaintiffs were ordered to plead matters of foreign law in relation to both causes of action relied upon (breach of confidence and conspiracy; to specify exactly what was said to comprise the confidential information, and what in general terms was the period for which the information was said to be confidential; and to specify how the Defendant was under an obligation of confidence. They were also ordered to plead particulars of the misuse of confidential information and better details of the alleged acts of infringement of the patents together with certain other matters.
8. Advocate Redgrave submits that the application could equally have been brought under Rule 6/15. For the most part, that is true. But, subject to what is said below, I do not believe that it altered who is to be regarded as the successful party. Advocate Redgrave contended that, if the summons had been issued under Rule 6/15, the matter could probably have been sorted out before the hearing. I do not accept that submission. There was nothing to stop the Plaintiffs agreeing to amend the Order of Justice at any time between the issue of the summons and the hearing but no such attempt was made. On the contrary, at the beginning of the hearing before me, the essential stance of the Plaintiffs was that little or nothing was wrong with the pleading.
9. In principle therefore, I consider that, as the successful party, the Defendant should be awarded its costs on the standard basis.
10. However, the Defendant elected to proceed under Rule 6/13 rather than under Rule 6/15 as it could have done (see para 126 of the judgment). I consider that certain costs were incurred unnecessarily as a result.
11. Thus, part of the Plaintiffs' Skeleton argument was, quite naturally, devoted to the principles which the Court should apply on a strike out application. Equally, although accepting in many cases that an order for amendment might be the appropriate remedy, the Defendant maintained its application for a strike out in certain respects which were rejected by the Court. Thus, at para 63 of the judgment, the Court recorded that the Defendant had asserted that the whole Order of Justice should be struck out because of the failure to plead foreign law. The Court categorised this as 'a hopeless submission'. Similarly, at para 89 of the judgment, the Court recorded that the Defendant maintained that certain passages should be struck out in relation to the claim for breach of confidence after publication of the patents but the Court rejected this.
12. Putting all these matters together, I consider that (iii) of paragraph 6 above is applicable. The matters upon which the Defendant was unsuccessful and the work unnecessarily caused by the decision to proceed under Rule 6/13 rather than Rule 6/15 are sufficient in terms of the length and cost of the summons to justify a deduction to reflect those matters upon which the Defendant was unsuccessful.
13. Taking a broad view, and having regard to my assessment of the time and effort devoted to these aspects, I consider that a deduction of 15% would be appropriate.
14. I therefore award the Defendant 85% of its costs of and incidental to the summons against the Plaintiffs jointly and severally, such costs to be on the standard basis and to be taxed if not agreed.
Authorities
Watkins v Egglishaw [2002] JLR 1
Flynn v Reid [2012] (2) JLR 226
Re Elgindata Limited (No 2) [1992] 1 WLR 1207