Debt - costs judgment.
[2012]JCA088
Court of Appeal
3 May 2012
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Before :
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Dame Heather Steel, D.B.E., President;
Michael Jones, Q.C., and;
James McNeill, Q.C..
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Between
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Leeds United Football Club Limited
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Appellant
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And
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Robert Lawrence Weston
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First Respondent
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And
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Melvyn Stuart Levi
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Second Respondent
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Costs decision.
Advocate P. Sinel for the Appellant
Advocate S. M. Baker for the Respondents.
JUDGMENT
JONES JA:
Introduction
1.
On 23 April 2012, we refused
the plaintiff’s application for leave to appeal a decision of the Bailiff
to stay these proceedings, on the ground of forum
non conveniens. We ordered that the plaintiff should be liable for the
defendants’ costs from the date of the determination by the single judge
of the plaintiff’s application to him for leave to appeal, on the
indemnity basis. We now give our reasons for making the costs order in these
terms.
2.
Under
cover of an email, dated 5
April 2012, the Acting Assistant Judicial Greffier sent to parties
a draft of our judgment on the application for leave. Written submissions in
relation to costs were invited, and were duly filed on behalf of both parties.
When the court convened on 23 April, parties declined our invitation to make
further oral submissions.
3.
The
plaintiff’s position was that there should be no order for costs. The
defendants contended that the plaintiff should pay indemnity costs.
Grounds for an award of indemnity costs
4.
The circumstances in which it may be
appropriate to award costs on the indemnity basis have been considered on a
number of occasions by this court. In Dixon v. Jefferson Seal Ltd.
[1998] JLR 47, Collins J.A., with whom Harman and Southwell JJ.A. agreed,
concluded that there had to be "some
special or unusual feature in the case" to justify such an award.
(Page 59) In Marett v. Marett [2008] JLR 384, Pleming J.A., Sumption and Nutting JJ.A.
concurring, said this:-
"A court may make an indemnity
costs order only where there has been some culpability, some abuse of process
such as deceit, underhanded or unreasonable behaviour, abuse of court
procedures, or the submission of voluminous and unnecessary evidence. There are
many examples in decided cases of the application of these broad principles
(see Dixon v. Jefferson Steel Ltd. (6) (1998 JLR at 52-53); Maçon
v. Quérée (née Colligny) (20); and Jones (née Ludlow) v Jones (No.2) (11), noting the
reference to "some special or unusual feature" to justify the award
of indemnity costs). There are also examples of cases where the court has made
an indemnity order, even in the absence of culpability or abuse … …
relying on the court’s general discretion, in England and Wales, under
the CPR, r.44.3." (Paragraph 73)
5.
In Leeds
United Association Football Club Limited and Another v. The Phone-In Trading
Post Limited t/a Admatch [2011] JCA 110, at paragraph 11, this court
pointed out that the limitation placed on the exercise of the court's
discretion by the use of the word "only"
in the first sentence of the foregoing passage must be regarded as an
error.
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).
Defendants’ submissions on indemnity costs
8.
In
advancing their costs application, the defendants submitted that the plaintiff
had acted unreasonably in a number of respects, which we summarise:-
(i)
Having
been refused leave to appeal by the Bailiff, the plaintiff pursued an
application for leave to a single judge of this court, where it was plain that
the Bailiff had exercised his discretion well within the spectrum of
reasonableness and that the appellate court would not interfere. It was
therefore unreasonable for the plaintiff to continue pursuing an application
for leave to appeal in such circumstances.
(ii)
When
McNeill J.A. heard the application for leave to appeal, he applied the test set
out in Glazebrook v Housing Committee [2002] JLR Note 43 to each of the grounds of appeal and found that
they did not meet the test. The single judge having found that the test for
leave to appeal had not been met on any ground, it was unreasonable for the
plaintiff to pursue its application to the plenary court.
(iii) In the hearing before the full court, the
plaintiff sought to raise arguments which were not presented in the court below
or advanced before the single judge. It was unreasonable of the plaintiff to
raise such arguments when it must have been obvious that the court would not
entertain them.
(iv) Before the full court, the plaintiff
unreasonably sought to repeat all its points from the court below rather than
properly appealing specific points upon which there may have been real grounds
of appeal.
(v) It was unreasonable of the plaintiff to conduct
an appeal in which the bulk of the points raised were not genuine appeal points
but simply another attempt at arguing the whole forum issue before a different
court. Having to respond to this was time-consuming and costly for the
defendants.
(vi)
At the
conclusion of the hearing before this court on 24 January 2012, the plaintiff’s advocate raised the
issue of limitation as being of concern to the plaintiff. The court requested
written submissions from both parties on the subject. Submissions were filed
and there followed correspondence between the parties and the court.
(vii)
At the
same time as this court requested further written submissions on limitation, it
also invited submissions on the issue of whether there were any witnesses who
had indicated an unwillingness to attend trial in Jersey. In responding to this,
the plaintiff introduced a substantial amount of new material and raised new
arguments which were not before the Royal
Court or this court.
(viii) On 22 December 2011 the defendants’ solicitors repeated
an assurance already given that they would not seek to benefit from different
limitation periods applicable in England, and drew the
plaintiff’s attention to “the
costs of correspondence on this matter [which] are now becoming
disproportionately high”.
(ix) On 22 February 2012, the defendants discovered that the
plaintiff had issued a protective writ in England on 28 October 2011. The protective proceedings
were not mentioned by the plaintiff in its written submissions on limitation,
or in correspondence.
(x) In its written contentions filed in support of
its application to the plenary court for leave to appeal, the plaintiff raised
factors of cost and delay. The earlier filing of the protective writ meant that
the time and money needed to bring the proceedings in England had already been
spent and this was relevant to the consideration by this court of those
factors, but the court was not informed of that development. The defendants
only became aware of the proceedings in England because the claim form and
particulars of claim were served on the defendants’ English solicitors on
27 February 2012,
being the last date for service in compliance with CPR Rule 7.5.
(xi)
The
plaintiff’s conduct of the litigation against Admatch had been “of a vindictive and vexatious
nature”.
Discussion
9.
We reject
the defendants’ contention that it was unreasonable for the plaintiff to
apply to the single judge for leave to appeal (paragraph 8 8(i) and 8(ii)). During the hearing before him, the Bailiff
had indicated that he had “toyed
with”, but then discarded, the idea of giving leave to appeal with
a view to resolving the apparent conflict between Jaiswal v Jaiswal
[2007] JLR 305 and Durant International Corporation v Federal Republic of
Brazil [2012] JCA 214 on the one hand and Gheewala v Compendium Trust Company Limited and others [2003] JLR 627 on the other, and suggested that the matter was one
on which the plaintiff could “easily
get leave from the single judge”. When the matter came before him,
the single judge referred the application to the full court for determination.
In our view, therefore, the plaintiff’s decision to renew its application
before the full court cannot, in principle, be characterised as unreasonable.
10. We also reject the argument that the
plaintiff’s conduct of the litigation against Admatch has been such as to
justify an award of indemnity costs in this case (paragraph 8 8(xi)). What is
relevant to our decision is the conduct of the plaintiff in this action, not
its conduct in a separate action.
11. Before us, the plaintiff argued that the
Bailiff had misdirected himself on two points of law, and had erred in his
evaluation of the material which was before him, by taking into account
irrelevant matters and leaving out of account relevant matters. Whilst we
regarded the plaintiff’s arguments on the points of law as having no
merit, we do not regard the plaintiff as having acted unreasonably in advancing
them.
12.
The evaluation
question, however, involved a challenge to the exercise of the Bailiff’s
discretion. We were invited to hold that his decision was “outside the spectrum of
reasonableness”. That required a consideration of the factual
material and the arguments on which the Bailiff determined the forum issue. In
the circumstances of this case, the question for us ought to have been whether,
on that material and on those arguments, the Bailiff was entitled to determine
the matter as he did, in the exercise of his discretion. Instead, as the
defendants have submitted, the plaintiff advanced arguments that were not
before the Royal Court (23 April judgment, paragraph 30); invited us, in
effect, to re-try the issues which had been determined in the Royal Court (paragraph
26); and, in asserting that the Bailiff had left out of account relevant
matters, simply restated arguments that had been deployed in the court below
(paragraph 34).
13. On the matter of whether any witnesses had
indicated an unwillingness to travel to Jersey to give evidence (paragraph 8(vii)
above), the question asked by the court was simple – it was whether the
transcript of the hearing before the Bailiff contained any reference to any
requirement for the compulsion of witnesses to attend court in Jersey. The
answer to that question is that it did not. In its “Supplemental Submissions of the
Appellant in respect of issues before the Court of Appeal on 24 January
2012”, which are dated 6 February 2012, however, the plaintiff
went far beyond what was required to answer the question, by seeking to advance
a number of further arguments, and by lodging further documents, extending to
63 pages, concerning matters of procedure in Jersey and in England.
14. As the defendants record (paragraph 8(vi)),
towards the end of the hearing on 24 January, Advocate Sinel mentioned that he
had in mind that there may be some complex limitation questions if the dispute
had to be litigated in England, and expressed the hope that there would not be
a delay in the issuing of our judgment. In the course of the discussion which
ensued, Advocate Redgrave repeated an undertaking which, we were told, had been
offered in correspondence, to the effect that the defendants would not take
advantage of the passage of time caused by the appeal process, if proceedings
were raised in England.
Conscious of a possibility that the expiry of a time limit might extinguish the
relevant right, rather than simply provide a defence, we wished to be assured
that that would not happen in the circumstances of this case, and that
limitation could, indeed, be waived by the defendants in England.
Consequently, we asked parties to lodge written submissions on the point.
15. By email, dated 26 January 2012, the defendants answered the
question that we had asked in these words – “The answer is no. Limitation is a plea
in defence, which must be pleaded in order to be relied on.” Reference
was made to a single page in Halsbury’s Statutes. By contrast, the
submissions for the plaintiff on this matter ran to ten pages, quoted from
correspondence between the parties, sought to compare limitation periods in Jersey with those in England, and analysed the causes of
action in the Jersey proceedings. The
paperwork which was filed in support of these submissions runs to 77 pages in
17 separate documents, including Regulation (EC) No. 864/2007 of The European
Parliament and of The Council of 11 July 2007 on the law applicable to non-contractual
obligations (Rome II).
16. The possibility that there might be limitation
problems in England
was not advanced by the plaintiff in the hearing before the Bailiff as a reason
not to grant a stay. Such problems were, however, prayed in aid by the
plaintiff in its Notice of Appeal, as a relevant matter left out of account in
the Royal Court.
These were described at paragraph 9(i) of the Notice
in these terms:- “The incidence of
complex arguments in respect of limitation in proceedings in England and the
risk of the Appellant's claims being time-barred”. The
Notice of Appeal was signed on 20
October 2011. That was eight days before the protective writ was
issued, and we do not, therefore, make any criticism of the plaintiff for
making no mention of the writ in the Notice. The plaintiff’s written
contentions, however, which are dated 22 December, contain a paragraph in the
same terms as paragraph 9(i) of the Notice of Appeal
in support of the complaint that relevant matters had been left out of account
in the determination of the forum issue. No mention is made of the protective
writ in the written contentions, nor is any mention made of it in the
plaintiff's Supplemental Submissions on limitation.
17. Moreover, at paragraph 55.2.5 of its written
contentions, the plaintiff cites the following as a further relevant factor
which the Bailiff had failed to take into account:-
“The duplication and
waste of costs in re-pleading. The learned Bailiff does not appear to
acknowledge that there will be significant wasted costs in the duplication
necessitated by producing new pleadings in England with different
lawyers;”
18.
By 22
December, when the written contentions were signed off, different lawyers had
produced new pleadings in England, but no mention was made
of that fact.
19. There is nothing in the circumstances of this
case to cause us to depart from the general rule that costs follow success.
Further, in our opinion, the plaintiff’s conduct, as described in
paragraphs 12 to 18 of this judgment and looked at as a whole, was such as
should properly be regarded as unreasonable. The respondents were unnecessarily
put to expense in considering and responding to arguments which should not have
been advanced. An award of costs on the standard basis would be unlikely fully
to reimburse the defendants for the work that was occasioned by having to
consider and address these arguments. Whilst, as we have said, we are of the
view that the plaintiff did not act unreasonably in seeking leave from the full
court to appeal on the two points of law which we have identified, the
plaintiff’s written contentions on these points occupied less than three
pages out of 28. We regard it as fair and reasonable that the plaintiff be
found liable to the defendants for their costs from the date of the decision of
McNeill J.A., sitting as a single judge on 22nd November 2011, on the
indemnity basis.
Authorities
Dixon
v. Jefferson Seal Ltd. [1998] JLR 47.
Marett v. Marett [2008] JLR
384.
Leeds
United Association Football Club Limited and Another v. The Phone-In Trading
Post Limited t/a Admatch [2011] JCA 110.
C
v. P-S [2010] JLR 645.
Pell
Frischmann Engineering Limited v. Bow Valley Iran
Limited and Others [2007] JLR 479.
Glazebrook v Housing Committee [2002] JLR Note 43.
Jaiswal
v Jaiswal [2007] JLR 305.
Durant
International Corporation v Federal Republic of Brazil [2010] JCA 214.
Gheewala v Compendium Trust Company Limited and others
[2003] JLR 627.