Trust - reasons in respect of whether the defendant is entitled to apply
for its costs.
[2018]JRC172
Royal Court
(Samedi)
18 September 2018
|
Before :
|
Advocate Matthew John Thompson Master of the
Royal Court.
|
|
Between
|
Bertrand des Pallieres
|
Plaintiff
|
|
|
And
|
RBC Trustees (CI) Limited (formally known
as Royal Bank of Canada Trustees Limited)
|
Defendant
|
|
|
|
|
|
|
Advocate A. D. Hoy the Plaintiff.
Advocate L. A. Woolrich for the Defendant.
CONTENTS
|
|
|
Paras
|
|
1.
|
Introduction
|
1
|
|
2.
|
Relevant
events
|
2-7
|
|
3.
|
The
parties’ contentions
|
8-24
|
|
4.
|
Decision
|
25-35
|
judgment
the master:
Introduction
1.
This
judgment concerns my detailed written reasons in respect of whether the
defendant is entitled to apply for its costs after an action has been dismissed
under Rule 6/25(2) of the Royal Court Rules 2004, as amended (“the
Rules”) for want of prosecution.
Relevant events
2.
On 6th
June 2018 I wrote to the parties as follows:-
“I write in response to
your letter dated 4thJune, 2018.
The matter was set down on the
hearing list on 25th May, 2016. Accordingly as two years has now elapsed,
notwithstanding the stay that expired on 31st March, 2017, notice is
given to all parties including the Plaintiff to whom a copy of this letter is
sent, pursuant to Rule 6/25(2) that I intend to consider dismissing the present
action pursuant to the powers invested in me by the Royal Court Rules.
Any party objecting to the
action being dismissed must issue a summons to show cause why the action should
not be struck out. Any such summons
must be issued, i.e. a date fix appointment must be arranged, before the
expiration of 28 days from the date of this letter with the summons being heard
before me at the earliest opportunity.
It is not sufficient to write to me requesting the action be allowed to
continue. If a summons is not
issued within the specified time period of 28 days from the date of this letter
then the action will be dismissed.
It should not be assumed that I
will agree the action is allowed to continue and I will require the applicant
to convince me that this is appropriate.
In this case, I will want to understand what has happened since the stay
expired on the 31st March, 2017.
If I do agree that the action
should continue then the summons hearing will be used as an opportunity to give
directions. Any party seeking
permission to continue should therefore set out in its summons appropriate
directions for me to consider.”
3.
This
letter was written pursuant to Rule 6/25(2) of the Rules which provides as
follows:-
“6/25 Deemed withdrawal; dismissal
(2) If
at the expiration of 2 years from the date on which an action was set down on
the hearing list, the trial of the action before the Royal Court has not been
completed, the Court may, of its own motion, after giving not less than 28
days’ notice in writing to all the parties to the action, order that it
be dismissed.”
4.
The notice
sent on 6th June, 2018 by coincidence followed on from a lengthy
letter to me dated 4th June, 2018 from Carey Olsen for the defendant
had invited me to exercise the power to dismiss proceedings. This was already under consideration as
part of the general case management powers vested in the Master of the Royal
Court.
5.
On 11th
July, 2018 having heard nothing from the parties I made an order dismissing the
action and any related counterclaim.
6.
On 16th
July, 2018 by email, Advocate Woolrich for the plaintiff arranged a date fix
appointment in relation to a summons seeking the defendant’s costs be
paid by the plaintiff on the indemnity basis.
7.
Advocate
Hoy immediately responded and stating that “the
summons should have been issued before the proceedings were dismissed and
therefore was no action existing to which a costs order could be
attached.” This is the
issue I have to determine.
The parties’ contentions
8.
Advocate
Hoy’s primary contention was that once I had made a decision to dismiss
the proceedings on 11th July, 2018, the proceedings were at an end
and I had no power to make any consequential costs order.
9.
This was
firstly by reference to the decision of Master Wheeler in Ebor S.A. v Incat
Construction (Holdings) Limited & Haden [2001] JLR 280 where he ruled
that he did not have jurisdiction to extend time to allow an action to be
reinstated.
10. Paragraphs 1 and 2 of the headnote to the
judgment stated as follows:-
“(1) The court did not have jurisdiction under
r.1/5 to hear the application. It was crucial to bear in mind the
distinction between the automatic dismissal of an action under r.6/20(2) and
the dismissal of an action as a result of a judicial act under r.6/20(1). Rule
1/5, which dealt with extensions of time, was not appropriate to overturn a
judicial act (paras. 11–13).
(2)
Nor would the court reinstate the action under its inherent jurisdiction. It
was very significant that the Rules contained no provision to allow an order
made under r.6/20(1) to be overturned, as they did in the case of judgments
entered in default, and it would be going too far for the court to resort to
its inherent jurisdiction to find such a power. In reality, the plaintiff was
asking that the court overturn the decision of June 18th, 1999 dismissing the
action. It was only in exceptional circumstances that such a power would exist
and none were present in this case. The application would therefore be
dismissed (paras. 14–15).”
11. There was no power in Rule 6/25(2) of the Rules
itself to make such a costs order once proceedings had been dismissed.
12. Even if there was such a power it could only be
exercised either before the proceedings were dismissed or as part of dismissal
of the proceedings. It could not be
exercised after the proceedings had been dismissed.
13. The fact that Rule 6/26(13) contains such a
relevant costs power did not alter this analysis. Even the power in Rule 6/26(13) also had
to be exercised either before or as part of any dismissal not after dismissal had
taken place. Rule 6/26(13) of the
Rules provides as follows:-
“6/13 Striking out
(1) The
Court may at any stage of the proceedings order to be struck out or amended any
claim or pleading, or anything in any claim or pleading, on the ground that
–
(a) it
discloses no reasonable cause of action or defence, as the case may be;
(b) it is
scandalous, frivolous or vexatious;
(c) it
may prejudice, embarrass or delay the fair trial of the action; or
(d) it is
otherwise an abuse of the process of the Court,
and may make such consequential
order as the justice of the case may require.
(2)
No evidence shall be admissible on an application under paragraph
(1)(a).”
14. The courts’ inherent jurisdiction could
not be used to make a costs order.
This was clear from Irish Nationwide Building Society v Volaw Corporate
Trustee Limited & Ors [2013 JRC 099 where the court at paragraph 17
stated as follows:-
“17. The Judicial Greffier is not a court exercising an
inherent jurisdiction; his judicial functions are limited to those which are
delegated to him by the Royal Court.
That delegation is made principally under the Royal Court Rules - see
the judgement of the Judicial Greffier in Showlag-v-Mansour 12th June
1991 unreported 91/16a.”
15. Had
the defendant asked for its costs before the expiry of the 28 day period, the plaintiff
would then have been in a position to decide how far to argue against a costs
order or indeed to decide whether or not to continue the proceedings. That option was no longer available to
the plaintiff.
16. There are practical benefits in having to apply
for costs before an action was dismissed because the parties then knew where
they stood. Otherwise costs could
be raised months if not years after the event.
17. The defendant was always in the position to
either write to ask for its costs by letter to the plaintiff and the court or
to issue a summons before expiry of the 28 day period.
18. Advocate Woolrich argued because the Royal
Court including the Master has a discretion to make a costs order, that
included making a costs order consequent upon a dismissal of proceedings under
Rule 6/25(2) of the Rules.
19. The Ebor case was not about a
consequential order but about the court being asked to set aside its own
decision which was a matter for appeal not a reconsideration.
20. The power to award costs in Rule 6/26(13) of
the Rules was not a power that on the face of the Rule could only be exercised
before dismissal.
21. It would be odd if a costs order could be made
for failure to issue a summons for directions but a costs order could not be
where there was a want of prosecution.
22. There was nothing in either Rule 6/25 or
6/26(13) or the Notice sent out by the court which stated that a party could
not ask for costs where a dismissal had occurred.
23. In relation to the question of the
courts’ inherent jurisdiction, Advocate Woolrich referred me to the
decision of Mayo Associates v Cantrade [1998] JLR 173 and the recent
decision of the Court of Appeal in Halabi v Wilson and HMRC [2018] JCA
114 applying Mayo where the court described the inherent jurisdiction at
paragraph 37 as follows:-
“The inherent jurisdiction
is, put shortly, an authority in a court to do everything to uphold, protect
and fulfil the judicial function of administering justice according to law in a
regular, orderly and effective manner, which must include all procedural power
necessary to act as a court in a meaningful sense.”
24. If there was no power to make a costs order
absent exceptional circumstances, they existed in this case because of the
ambiguities in the Rule itself and because the defendant sought its costs
immediately after the case was dismissed.
Decision
25. The conclusion I reached was that I possess the
power to make a costs order where I dismiss a case for want of prosecution
under Rule 6/25(2) having given the requisite 28 day notice for the following
reasons.
26. Firstly, I do not regard this case as identical
to Ebor. Ebor was a
case about whether the Master could set aside an order previously made under
then the equivalent of Rule 6/25(2).
I agree with Master Wheeler that the Master of the Royal Court does not
possess jurisdiction to set aside an order dismissing proceedings. If any party wishes to challenge such an
order the correct procedural route is by way of appeal to the Royal Court.
27. Secondly, I do not agree that the fact that I
cannot set aside an order dismissing proceedings does not mean I do not possess
jurisdiction to make costs orders consequential upon such a dismissal. I consider that I do possess such a
jurisdiction. The cost jurisdiction
vested in me arises from Article 2 of the Civil Proceedings (Jersey) Law
1956 which provides that in all proceedings costs are in the discretion of
the Royal Court and the Court has “full power to determine by whom and
to what extent the costs are to be paid”. The breadth of this discretion in my
judgment means that I can make a cost order consequential upon dismissal of
proceedings under Rule 6/25(2).
28. Thirdly, while I do not have a general inherent
jurisdiction as noted by Commission Clyde-Smith in the Irish Nationwide
case, the observations of the Court of Appeal Halabi, in my view apply
to the exercise of the judicial functions delegated to the Master of the Royal
Court under the Royal Court Rules.
I would not be a court in a meaningful sense if I could not make a costs
order consequential upon dismissing proceedings for want of prosecution.
29. Where I have ruled that proceedings should be
dismissed in other circumstances, such as under the court’s strike out or
summary judgment powers or for failure to comply with specific court orders,
clearly I possess the power to make costs orders as a consequence of that
decision. I am not persuaded that
the position should be different where I exercise the specific power under Rule
6/25(2). To have a different
approach creates an anomaly which I do not consider can be justified.
30. Finally, I construe Rule6/26(13) to mean that a
costs order can be sought after dismissal of proceedings under that Rule as
well as at the same time as dismissing proceedings. To construe Rule 6/26(13) to mean that a
costs order had to be sought within the 28 day period in my judgment is too
narrow an interpretation. It also
unfairly deprives a party of their opportunity to ask for costs. Having reached that conclusion it would
produce an absurd result if a party could seek costs following a dismissal of a
case under Rule 6/26(13) but could not seek costs following a dismissal under
Rule 6/25(2) notwithstanding that generally for the latter type of dismissal a
want of prosecution has occurred.
31. I accept that one answer to the problem posed
could be to either amend the Royal Court Rules to set out any time limit by
which a costs order had to be sought.
However, that is not an answer to the obligation on me to act as court
in a meaningful sense and I do not consider that the defendant in this case
should be deprived of its ability to ask for its costs simply because a
particular rule might need improvement.
32. In this case I also note that the notification
sent out to the parties (which is in standard form that has been used for many
years) does not contain any time limit by which any costs order has to be
sought. Indeed, the notification is
silent on the question of costs. It
would be wrong to penalise the defendant in this case that an express time
limit applies when there is no such time either in the Rules or in any notice
sent out pursuant to the Rules.
33. That is not to say that there is no force to
the concerns expressed by Advocate Hoy in relation to costs being sought long
after proceedings were dismissed or a potential unfairness on a plaintiff who
was debating whether or not to continue with an action not being aware of costs
consequences. Ordinarily therefore
with effect from the date this decision is made public, where notice is given
that an action is to be dismissed and a party wishes to seek costs as a
consequence of such a dismissal that party, before expiry of the relevant
notice period, should have made it clear that it wishes to seek a costs order
in its favour. This is important
because such communication may be a material factor for a party in deciding
whether or not to continue with all or part of a claim.
34. I appreciate that in some cases there will be judgments
to be made because a party may hope that proceedings are dismissed without any
further steps being taken, but these are matters for a party and their advisers
to reflect upon in deciding whether or not to seek costs. Such potential difficulties that may
arise in some cases are not a justification for preventing a party from
applying for costs.
35. If I am wrong on all the above then because in
this case costs were asked for 5 days after the proceedings were dismissed I
consider that exceptional circumstances exist to allow the defendant in this
case to make a costs application.
In future cases however a defendant who does not state that it requires
its costs within the 28 day period or thereafter may find any application for
costs being refused.
36. In light of this judgment, I adjourned the
remainder of the defendant’s costs application to allow the plaintiff to
have time to consider these written reasons and to consider whether the
plaintiff wished to file any evidence in response in relation to the
application for indemnity costs.
Authorities
Royal Court Rules 2004, as amended
Ebor
S.A. v Incat Construction (Holdings) Limited & Haden [2001] JLR 280
Irish
Nationwide Building Society v Volaw Corporate Trustee Limited & Ors
[2013] JRC 099
Mayo
Associates v Cantrade [1998] JLR 173
Halabi
v Wilson and HMRC [2018] JCA 114
Civil Proceedings (Jersey) Law 1956