Jersey Unreported Judgments

Costs

[2022]JRC110

Royal Court

(Samedi)

20 May 2022

Advocate W. A. F. Redgrave and C. F. D. Sorensen for the Plaintiff.

Advocate M. C.  Seddon for the Defendant.

CONTENTS

judgment

the MASTER:

Introduction

1.        This judgment contains my decision on costs and applications for payments on account of costs following my judgment in this matter dated 6^th April 2022 reported at Sheyko v Consolidated Minerals Limited [2022] JRC 082 and the Act of Court dated 16^th March 2022.  Pursuant to paragraph 5 of the Act of Court I ordered the defendant to make a payment on account of the costs of and incidental to the hearing on 16^th March 2022 in an amount to be determined.  I further reserved the question of the costs of and incidental to the hearing on 21^st December 2021 pending further written submissions which I have since received.  This decision is made on the papers by reference to those written submissions.

Submissions

2.        In relation to the costs of the December 2021 hearing, the plaintiff contended that I needed to determine what my decision would have been.  This was because one week before the December 2021 hearing the defendant, on a without prejudice save as to costs basis, was prepared to consent to payment being ordered in favour of the plaintiff of all sums held in court provided that payment was stayed until determination of the defendant's renewed application for leave to appeal and, if successful, any resulting appeal.

3.        The plaintiff therefore contended that I had to determine whether the plaintiff would have achieved a better outcome than that contained in the offer.  If I reached such a conclusion then the offer could be ignored, and the plaintiff should be awarded his costs on the indemnity basis.

4.        In the alternative the plaintiff contended that if I would have made the same order proposed by the offer, or one less beneficial to the plaintiff, then I should make no order as to costs because firstly the majority of work for the December 2021 hearing was relevant to the March 2022 hearing (where the plaintiff prevailed and was awarded indemnity costs) and also because the plaintiff had a contractual entitlement to recover all costs incurred.  A fair balance was therefore to make no order as to costs.

5.        In respect of the payment on account, if costs were awarded in favour of the plaintiff, for the costs of the December 2021 hearing the plaintiff sought the sum of £9,500 being 50% of the costs actually incurred.  For the March 2022 hearing the plaintiff sought the sum of £16,500 being just less than 50% of the costs incurred from 3^rd February 2022 to 23^rd March 2022.

6.        The defendant's position was that the December 2021 hearing was avoidable.  The defendant firstly criticised the plaintiff for bringing its application before the defendant's application for leave to appeal had still to be determined.  Secondly, the costs were avoidable had the plaintiff accepted the defendant's "reasonable and prudent" offer.  The defendant also contended that the terms of the offer made were exactly what later transpired and therefore the plaintiff had failed to beat the defendant's offer.

7.        The defendant further contended that just because the plaintiff was successful at the hearing on 16^th March 2022, the plaintiff could not be classed as the winner for the December 2021 hearing.  This therefore led to the defendant seeking its costs of and incidental to the December 2021 hearing on the indemnity basis.

8.        As an alternative if I was minded to award the plaintiff the costs of the December 2021 hearing, this should be on the standard basis only, because while the plaintiff had a contractual entitlement to indemnity costs, the court in the exercise of its discretion possessed the power to deprive a party of its contractual right to costs (see Tygres Investments Limited v Jersey Home Loans Limited & Ors [2016] JCA 173).

9.        In respect of the application for payment on account no submissions were made by the defendant.

Decision

10.      In relation to the power to award costs, the defendant in its skeleton reminded me of the general principles for the award of costs by reference to Article 2 of the Civil Proceedings (Jersey) Law 1956 and Watkins v Egglishaw [2002] JLR 1.  While I am extremely familiar with these principles, I have reminded myself of the same for the purposes of this judgment.

11.      I have also reminded myself of the relevant principles for the award of indemnity costs referred to in Pell Frischmann v Bow Valley Iran Limited & Ors [2007] JLR 479 and MacFirbhisigh & Anor v C.I . Trustees and Executors Limited & Ors [2016] 1 JLR Note 1.

12.      In relation to the defendant's offer what the defendant was prepared to agree was a consent order providing for payment of the sums held in court to the plaintiff subject to a stay "pending the determination of CML's [the defendant's] application for leave to appeal and if successful any resulting appeal".  What was therefore offered by the defendant was agreement to payment of monies held in court to the plaintiff provided a stay was agreed until any resulting appeal was determined.  If leave to appeal had been granted this therefore involved agreeing to a stay until determination of any full appeal before the Court of Appeal, any application for leave to appeal to the Court of Appeal if the full appeal turned out to be unsuccessful, any application for leave to appeal to the Privy Council and if leave was granted, a stay until determination of any appeal by the Privy Council. 

13.      I therefore agree with Advocate Redgrave that I have to seek to evaluate what decision I would have made but for the Court of Appeal refusing leave to appeal.  This is not a straightforward task because since leave to appeal was refused, I have of course granted the plaintiff the order it was seeking and refused any stay pending a petition in doléance.

14.      In relation to my judgment, the section dealing with the effect of an appeal based on doléance was not before me in December 2021.  Nor is the judgment between paragraphs 47 and 54 relevant because that part of the judgment dealt with the proposed grounds of appeal to the Privy Council on the basis that a petition based on doléance could be brought.

15.      What is however helpful is the consideration set out at paragraph 55 onwards about whether any appeal would be rendered nugatory.  At paragraph 55 I quoted the Assetco. Plc v Grant Thornton UK LLP [2019] EWHC 592 (Comm), 2019 WL 01172949 including the following: -

"(4) Ultimately, the proper approach is to make the order which best accords with the interests of justice."

16.      In my judgment, while there was an application for leave to appeal pending, as such applications are normally determined on the papers and do not take significant periods of time, the balance of advantage would have come down in favour of the defendant and leaving monies in court until the application for leave to appeal had been determined.

17.      What would have happened after that date if leave to appeal had been granted is however impossible for me to reach any conclusion on because the basis upon which leave to appeal would have been granted would have been significant in evaluating both whether the grounds relied upon for an appeal were strong and how any discretion to grant a stay might then have been exercised.

18.      I have set this out because the defendant's offer was seeking a stay until determination of any appeals as set out above.  However, I have concluded that I would have not gone that far and instead would have only ordered a stay until determination of any application for leave with the question of any further stay then being revisited based on whatever the circumstances would have been at that time.  To that extent the plaintiff has bettered the defendant's offer because I would have ordered a more limited stay.

19.      However, the plaintiff could have responded by agreeing to a stay until determination of any application for leave to appeal but did not do so.  In that sense the costs of the December 2021 hearing were avoidable.

20.      I have therefore concluded that I do not regard a costs order in either party's favour as doing justice between the parties.  There are criticisms applicable to both sides.  In the plaintiff's case it could have proposed a stay until the application for leave to appeal was determined; in the defendant's case the offer it made has been beaten by the plaintiff because I would have not granted the stay contained in the offer as set out above.  I do not therefore consider that there is any "clear winner" in this case in respect of the December 2021 hearing.  In my judgment in respect of the December 2021 hearing the just order is therefore that each party should bear their own costs. The question of indemnity costs does not therefore arise.

21.      In relation to the requests for payment on account, in relation to the December 2021 hearing this also falls away as no costs order is made in the plaintiff's favour.

22.      In respect of the March 2022 hearing, given that I ordered costs on an indemnity basis, while there may be some duplication between the fee earners involved, a payment on account of close to 50% of the costs claimed reflects the cautious approach that is required to be taken when a payment on account is sought and accordingly is justified.  I therefore order that a payment on account of the costs of and incidental to the 16^th March 2022 hearing in the sum of £16,500, to be paid by the defendant to the plaintiff within 14 days.

23.      In respect of the costs of this costs hearing, I have also concluded that no order as to costs should be made because the main issue for determination was the costs of the December 2021 hearing not the payment on account of costs.

Authorities

Sheyko v Consolidated Minerals Limited [2022] JRC 082. 

Tygres Investments Limited v Jersey Home Loans Limited & Ors [2016] JCA 173. 

Civil Proceedings (Jersey) Law 1956

Watkins v Egglishaw [2002] JLR 1. 

Pell Frischmann v Bow Valley Iran Limited & Ors [2007] JLR 479

MacFirbhisigh & Anor v C.I . Trustees and Executors Limited & Ors [2016] (1) JLR Note 1

Assetco. Plc v Grant Thornton UK LLP [2019] EWHC 592 (Comm), 2019 WL 01172949.