Jersey Unreported Judgments

Costs - reasons for granting leave to appeal costs judgment dated 23 December 2022.

[2023]JRC113

Royal Court

(Family)

3 July 2023

Before     :

M. J. Thompson., Commissioner sitting alone

 

Advocate H. B. Mistry for the Petitioner/Defendant.

Advocate P. C. Sinel for the Respondent/Plaintiff.

judgment

the commissioner:

Introduction

1.        This judgment contains my reasons for granting ("S") leave to appeal Commissioner Clyde-Smith's costs judgment dated 23 December 2022 ("the Costs Judgment") [unpublished] which was provided to the parties only.

Background

2.        The Costs Judgment related to a substantive judgment dated 16 December 2022 reported at S v T (Matrimonial) [2022] JRC 287, (the Setting Aside Judgment") and a judgment concerning amending the terms of certain freezing injunctions granted pursuant to an Order of Justice dated 17 August 2021.  The latter was also a judgment for the parties only.

3.        On the same date, Commissioner Clyde-Smith also handed down a judgment finding S in contempt of court for failing to comply with the terms of the Order of Justice reported at T v S (Matrimonial) [2022] JRC 286 ("the Contempt Judgment"). 

4.        Unusually in this case, both the Setting Aside judgment and the Contempt Judgment have been the subject of substantive appeals to the Court of Appeal.  The Court of Appeal handed down its judgment on 26 May 2023 reported at [2023] JCA 065.  The Court of Appeal upheld the Setting Aside judgment but overturned the Contempt Judgment in respect of three findings of contempt, set aside the fine imposed which was substituted for a reprimand, and varied the costs order made by the Royal Court. 

5.        In the contempt proceedings the Royal Court had ordered S to pay the costs of the contempt proceedings on the indemnity basis.  The Court of Appeal replaced that order with no order as to costs in respect of the contempt proceedings before the Royal Court and in relation to the costs of S's appeal in relation to the Contempt Judgment ordered that T paid S's costs on the standard basis.  In its judgment on costs reported at [2023] JCA 102 in relation to the contempt proceedings, the Court of Appeal said this:

"In the light of [S's] successful appeal, it is now evident that the Royal Court ought to have dismissed all of [T's] allegations of contempt, with the sole exception of the two minor contempts which we found made out."

6.        The general background to the present proceedings is otherwise complex and is summarised extensively in the Court of Appeal judgment which I have considered for the purposes of the application before me.

The test on appeal

7.        There was no dispute between the parties on the relevant test applicable on an application for leave to appeal which was summarised in BNP v Crociani [2016] JCA 231 at paragraphs 17 and 18 as follows:

"17. The test for determining whether leave to appeal should be granted is well established. In Crociani v Crociani [2014] (1) JLR 426, Beloff JA held (at para 40) that in order to obtain permission to appeal, an appellant must show that:-

(i)        the appeal has a real prospect of success;

(ii) a question of general principle falls to be decided for the first time; or

(iii) there is an important question of law upon which further argument and a decision of the Court of Appeal would be to the public advantage.

18.      In relation to appeals against an exercise of discretion by the Royal Court, the Court of Appeal will only interfere if the Royal Court:-

(i)        has misdirected itself as to the principles governing the exercise of its discretion;

(ii)       has taken into account matters which it ought not to have done or failed to take into account matters which it ought to have done; or

(iii)      reached a decision which is plainly wrong."

8.        This is the test I have applied. 

The Costs Judgment

9.        In his Costs Judgment, Commissioner Clyde-Smith firstly summarised that it related to the set aside proceedings and the application to amend injunctions contained in the Order of Justice which he regarded as ancillary to the set aside judgment.

10.      At paragraph 4 of the Costs Judgment, Commissioner Clyde-Smith summarised the legal principles to be applied as set out in the well-known case of Watkins v Egglishaw and Others [2002] JRC 2 at paragraph 8.  It is right to add in that regard that Commissioner Clyde-Smith sat as a Commissioner of the Royal Court for many years and became an extremely experienced and highly regarded judge of the Royal Court.  I have no doubt therefore that he was extremely familiar with the applicable principles when exercising a costs discretion. 

11.      At paragraph 5, Commissioner Clyde-Smith stated the following:

"5.      The judgment in Watkins and Egglishaw goes on at paragraph 10 to say that it may be appropriate for the Court to have regard to the fact (if such be the case) that a defendant has to a greater or lesser extent, brought the action against him on his own head.  Indeed, that was a factor which in that case led to no order for costs being made."

12.      His decision was recorded at paragraphs 10 to 12 as follows:

"10.    The starting point is that the Substantive Summons has been dismissed and therefore, on the face of it, [S] is the winning party who would normally be entitled to her costs.  However, there are a number of features of the conduct of [S] in these proceedings which, in my view, are significant:

(i)        The finding of the Court at paragraph 52 of the Substantive Judgment that the assertions by [S] on oath in the ancillary relief proceedings that she could not give details of the sale of the Intuit shares because Smith & Williamson had retained all of her documentation was untrue.

(ii)       The production by [S] in these proceedings of statements of four accounts she had at Investec in 2018, which had not been disclosed in the ancillary relief proceedings (paragraphs 72 and 73 of the Substantive Judgment).

(iii)      The findings of contempt on the part of [S] made by the Court on 16th December 2022 as set out in a separate judgment of that date in respect of certain aspects of her conduct during these proceedings.

11.      These features of the conduct of [S] are, in my view, sufficient to make it unjust for [T] to be ordered to pay her costs.  At the same time, it was not incumbent on [T] to bring these proceedings, as implied by Advocate Sinel, and indeed, the Court found there was no sufficient evidence to set aside the judgment of the 15th January 2019. It would be unjust, therefore, for [S] to pay [T's] costs.

12.      It might be said that in the light of her conduct as documented in the judgment of the 15th January 2019, [S] had brought these proceedings upon herself, but I discount this as a factor to be taken into account in relations to costs because there has been no appeal by [T] against that judgment."

The Court of Appeal (Jersey) Law 1961

13.      I next set out the relevant parts of Article 13 of the Court of Appeal (Jersey) Law 1961 (as Amended) because it is Article 13 that imposes the requirement to obtain leave from the presiding judge of the Royal Court where a party wishes to appeal a costs order only.  Article 13(1) states:

"(1)     No appeal shall lie under this part -

.....

(c)        without the leave of the Court making the order, from any order - ...

           (ii)        as to costs only which by law are left to its discretion;"

14.      Under the Court of Appeal (Civil) Rules 1964, the time limit for appealing to the Court of Appeal is by serving a Notice of Appeal is twenty-eight days (see Rule 3).  It therefore follows that where leave is required, in order for an appellant to serve a Notice of Appeal within twenty-eight days, the party wishing to appeal must make the application for leave within twenty-eight days of the original decision of the Royal Court on costs where leave to appeal is sought.  Otherwise an appeal will be out of time.

15.      The practical difficulty this gives rise to is where a party appeals a substantive decision, (whether with leave where leave is required or without leave where there is an appeal as of right), if that appeal fails, the unsuccessful appellant cannot challenge the costs order made below.  Likewise a successful respondent to an appeal also cannot challenge any costs order below on any appeal without leave and without filing its own appeal against a costs order.  If on the other hand an appeal is successful then the Court of Appeal has power to interfere with the costs order made below consequent upon any setting aside or variation of the original decision made by the Royal Court.  This was the approach taken by the Court of Appeal in the present case in relation to the contempt proceedings (see paragraph 210 of the Court of Appeal's substantive judgment and paragraph 22 of the Court of Appeal's costs judgment).  The effect of Article 13 of the Court of Appeal law however meant that the Court of Appeal could not vary the costs order of the Royal Court as noted at paragraph 11 of the Court of Appeal's substantive judgment and confirmed by paragraph 7 of its costs judgment.

16.      In relation to why S did not seek leave within twenty-eight days from Commissioner Clyde-Smith, Advocate Sinel, in his written and oral submissions, drew to my attention that at the hearing on 16 December 2022, when the Setting Aside judgment was handed down that it was made clear to S that to appeal any costs order made against her she needed permission from Commissioner Clyde-Smith to do so if he made such an order.  That costs order was made a week later.

17.      I have not received any explanation from S as to why she did not seek leave from Commissioner Clyde-Smith.  What she did do however, within the twenty-eight day period, was file a Notice of Appeal which did seek leave to appeal Commissioner Clyde-Smith's costs order.  Advocate Mistry also explained, by the time S re-instructed him, that he did not appreciate that leave was required until he saw Advocate Sinel's contentions raising the point on 8 March 2023.  At that stage, the hearing before the Court of Appeal was scheduled to commence and did commence on 21 March 2022.  The application for leave was therefore left over until determination of the appeal. 

18.      That position is one I understand because if T's substantive challenge to the set aside judgment had been successful then the Court of Appeal could have made a different costs order.  Where Advocate Mistry fell into error however was to consider that the Court of Appeal could make any costs order even where an appeal was dismissed.  He did however concede that point at the opening of the appeal itself. 

19.      It is also right to note that the application before me for leave is unusual in that I and the parties have the benefit of the Court of Appeal's substantive judgment and its costs judgment.  Advocate Mistry for S contended I should take these judgments into account in particular the findings of the Court of Appeal in relation to the Royal Court's Contempt Judgment.  He contends that because Commissioner Clyde-Smith took into account at paragraph 10(iii) the findings in his Contempt Judgment, the conclusions of the Court of Appeal judgment mean that Commissioner Clyde-Smith has taken into account an irrelevant consideration and therefore the test in Crociani is met.  Advocate Sinel's view was that the contempt findings made no difference because there were plenty of other matters referred to in the Setting Aside Judgment which were more than sufficient to justify no order as to costs.

20.      In relation to these arguments, I reviewed carefully the Setting Aside Judgment and the Contempt Judgment.  It was clear to me that Commissioner Clyde-Smith, in making the costs order he did, gave weight to the Contempt Judgment.  What I cannot discern from both judgments is how much weight was given to the findings of contempt where three of those findings were subsequently set aside by the Court of Appeal and where the two remaining findings were described as minor.  I was therefore satisfied and accepted Advocate Mistry's submission that there was a risk that irrelevant material was taken into account by Commissioner Clyde-Smith when he made his costs order and therefore that leave to appeal ought to be given.

21.      In light of this conclusion and that S did file a Notice of Appeal within the twenty-eight day period and given that the costs, the subject matter of this application, are substantial, I was also prepared to exercise the discretion in me to extend time to allow an appeal on costs to be brought out of time. 

Other points

22.      In relation to S's argument that Commissioner Clyde-Smith misapplied the relevant legal test, I was not persuaded by this argument.  The relevant test was clearly set out in the judgment and as noted above Commissioner Clyde-Smith is an extremely experienced judge, well used to making costs decisions and applying the relevant principles.

23.      I also do not agree that the costs order he made was because S had brought these proceedings upon herself.  In my judgment, Commissioner Clyde-Smith at paragraph 12 reached the opposite conclusion.  Rather what he did at paragraph 10, as Watkins v Egglishaw permitted him to do, was to take into account other factors.  I regard this as him having regard to "any and all considerations that may have any bearing on the overriding objective of doing justice". 

24.      In relation to S's health, while I am sympathetic to the undoubted difficulties she has faced, I did not regard these as a relevant consideration in reaching my decision. 

25.      I also did not regard Commissioner Clyde-Smith's decision as one that might be said to be perverse.  Leave to appeal has therefore been given only on the basis that irrelevant material appears to have been taken into account namely the Contempt Judgment, for which I was prepared on the unusual facts of this case to give leave to appeal. Otherwise I would have refused leave.

Directions

26.      As a result of the decision I reached I set a timetable for the filing of contentions following handing down of these detailed reasons.  Subject to the views of the Court of Appeal, I also directed that the appeal be heard before the same Court of Appeal that handed down judgment against the Setting Aside Judgment and the Contempt Judgment, if possible, and sitting remotely with a time estimate of half a day.  I took this approach because I regarded it as the most pragmatic way for the appeal to be determined rather than a differently constituted Court of Appeal having to approach matters afresh.  This is obviously subject to any different orders the Court of Appeal might make and availability of the individual judges.  

Costs

27.      Finally, I made no order as to costs.  While S was successful in her application, the application only had to be brought because she failed to do so, notwithstanding the clear guidance given by Commissioner Clyde-Smith.  The price therefore for being given leave is that she must bear her own costs of the application for leave.  T should not recover his costs because he was unsuccessful in resisting the application for leave.  The costs of the appeal itself are of course a matter for the Court of Appeal. 

Authorities

Costs judgment dated 23 December 2022 [unpublished].

S v T (Matrimonial) [2022] JRC 287. 

T v S (Matrimonial) [2022] JRC 286. 

[2023] JCA 065 (Not yet published).

[2023] JCA 102 (Not yet published).

BNP v Crociani [2016] JCA 231.

Watkins v Egglishaw and Others [2002] JRC 2.

Court of Appeal (Jersey) Law 1961.

Court of Appeal (Civil) Rules 1964.