Jersey Unreported Judgments

[2008]JRC191

royal court

(Samedi Division)

11th November 2008

Before     :

Commissioner J. A. Clyde-Smith, sitting alone

 

 

The Plaintiff appeared in person

Advocate D. J. Benest appeared for the Defendant

judgment

COMMISSIONER

1.        I sat on 31^st October, 2008, to hear submissions on costs in relation to this long-standing litigation which appears now to have reached a final conclusion.

2.        On 13^th December, 2007, the Court gave judgment in relation to the plaintiff's amended Order of Justice claiming breach of confidence, or misuse of private information.  The Court found in favour of the plaintiff on liability and awarded him damages for hurt feelings of £750.  Costs were reserved.

3.        The plaintiff's appeal against the level of damages awarded in his favour has not been successful.  Costs in relation to the plaintiff's appeal were awarded against him on the standard basis and have not yet been taxed.

4.        The plaintiff was the successful party in the proceedings before the Royal Court.  He sought his costs which he calculated as amounting to some £140,000, being the time that he had spent on the matter (he represented himself throughout) at £50 per hour, together with disbursements of some £14,000.  He accepted that it would be the Greffier who would tax the amount of any order made in his favour. 

5.        Mr Benest drew my attention to the principles which I should apply in exercising my discretion over costs as set out in Watkins and Connell v Egglishaw and Others [2002] JLR 1.  He submitted that this was a case in which it would be a mistake to label the plaintiff as the winner, as the circumstances of the litigation did not lend themselves to such an analysis. 

Offer to settle

6.        On 13^th June, 2007, Applebys, on behalf of the defendant, wrote to the plaintiff 'Without prejudice save as to costs' offering £2,500 in full and final settlement of the damages element of his claim, which offer remained open until close of business on Friday 22^nd June, 2007, the last working day before the scheduled trial, which, as it transpired, was delayed due to the ill health of the plaintiff.  The offer was not accepted. 

7.        Mr Benest cited the English Court of Appeal decision in Trustees of Stokes Pension Fund v Weston Power Distribution (South West) plc [2005] EWCA Civ 854 in which it was held that an offer should usually be treated as having the same effect as a payment into Court when the following conditions are satisfied:-

(i)        The offer should be expressed in clear terms, setting out those parts of the claim to which it applies, whether it takes account of any counterclaim and whether it is inclusive of interest;

(ii)       The offer should be open for acceptance for at least 21 days and otherwise accord with the substance of a Calderbank offer;

(iii)      The offer should be genuine and not a 'sham'; and

(iv)      The defendant should clearly be good for the money at the time when the offer was made.

It was further held that to the extent that any of those conditions was not satisfied, the offer should be given less weight than a payment into Court for the purposes of a decision as to the incidence of costs.  Where none was satisfied, it was likely that the Court would hold that the offer afforded the defendant no costs protection at all.  

7.  Stokes followed the introduction of the Civil Procedure Rules 1998 ("CPR") which disapplied the decision in Cutts v Head [1984] 1 AER 597 preventing the making of a Calderbank offer where a payment into Court could be made.  The CPR followed Lord Woolf's interim report on Access to Justice (June 1995) in which he proposed significant changes to the rules in relation to payments into Court and offers to settle 'in order to further the policy of encouraging settlement'.  Quoting from the report -

- 'Allowing for the fact that my proposals will enable claimants as well as defendants to make offers, it is of course important that rules of court relating to offers and to payments into court respectively should diverge as little as possible.  I therefore recommend, in respect of defendants' offers, that the making of the offer itself should be the critical step, while the backing of a payment in will be secondary and optional.  This means that Cutts v Head (1984) 1 All ER 597, (1984) Ch 290, which prevents the making of a Calderbank offer where a payment into court can be made, will no longer apply under the new rules.  When considering the exercise of its discretion as to costs at the end of a case, the court will therefore have to give primary consideration to the terms of the defendant's offer regardless of whether there was also a payment into court.  In practice, it should only be in an unusual case that the absence of a payment in should be taken to undermine the reasonableness of an offer'.

8.        The CPR provides that the Court can order that an offer is to have the same costs consequences as a payment into Court, but gives no guidance as to how the discretion to do so should be exercised.  That guidance has now been provided by the Court of Appeal in Stokes.  

9.        Cutts has been followed in Jersey.  In Sim v Thomas 2001/204 Lord Carlisle, Commissioner, cited Cutts and held that it accurately stated the law.  The issue arises as to whether this Court is bound by the decision in Sim, unless it finds it was clearly and plainly wrong.  As Mr Benest pointed out, the Court in Sim simply followed English law which, as Page, Commissioner, pointed out in Watkins (paragraph 6), has been the practice of the Royal Court in this area.

10.      Article 2 of the Civil Proceedings (Jersey) Law 1956 gives the Court the widest discretion in relation to costs.  Rule 6/33 of the Royal Court Rules 2004, dealing with payments in to Court, provides under sub-paragraph (6) that the Court, when awarding costs, may take into consideration the fact that payment into court has been made, but it goes on to provide in sub-paragraph (7) that nothing in the rule derogates from the discretion of the Court to make such order as to costs as it deems just.

11.      The Court in Watkins found there was every reason to follow English practice in relation to the appropriate approach to costs following the impact of the CPR and there is every reason why this Court should follow English practice in relation to offers.  It would be inconsistent to follow English practice in relation to costs generally but not in relation to offers.  There is no good reason to fetter the ability of the Court to take into account all relevant factors such as offers and sound policy reasons for taking offers into account namely to encourage settlements.

12.      I therefore accept Mr Benest's submission that this Court should follow Stokes and treat an offer as having the same effect as a payment into Court subject to the conditions set out, with one exception, namely the requirement for the offer to be open for acceptance for 21 days.  This very precise requirement stems from the provisions of CPR 36.5, dealing with payments into Court, which stipulate that offers must be expressed to remain open for acceptance for 21 days from the date made.  There is no such requirement under Rule 6/33 of the Royal Court Rules 2004.  Mr Benest argued and I agree that in this jurisdiction the offer should be open for a reasonable period.

13.      Applying Stokes, I agree with Mr Benest that the defendant's offer satisfies these conditions.  It was clear in its terms.  In the context of a claim for general damages, interest is of minimal consequence.  It was genuine and the defendant is clearly good for the money.  It was open for 9 days which in the circumstances was reasonable.  It was made at a time when the parties were in preparation for the main hearing, and the plaintiff would therefore have been in a position to have properly assessed it.

Costs of original Order of Justice

14.      As made clear in paragraph 2 of the Court's Judgment of 13^th December, 2007, the plaintiff's original Order of Justice brought claims under Data Protection Jersey Law 1987, the Rehabilitation of Offenders Act 1974, The European Convention on Human Rights and in Negligence, all of which were struck out by the Master, the Royal Court and the Court of Appeal, although the Court of Appeal did give leave to the plaintiff to amend his Order of Justice to formulate a claim for breach of confidence or misuse of private information.  It ordered that the costs of the proceedings that had been struck out were to be in the cause.  The defendant is therefore in a position to seek its costs in relation to those causes of action which were struck out. 

Conduct of the proceedings

15.      Mr Benest criticised two aspects of the proceedings.  Firstly, the plaintiff formally abandoned his claim for loss of earnings in the sum of £75,000 to £100,000 in the middle of the proceedings (see paragraph 34 of the Court's judgment).  This left the Court only with the claim for injury to feelings in relation to a disclosure which the Court found had been very limited and in respect of which it made an award of £750 in general damages.  Secondly, the plaintiff subpoenaed an array of witnesses, all of whom held senior posts in the Island and none of whom were able to give any evidence that was relevant to the issues before the Court.   This is dealt with at paragraph 3 of the Court's judgment which stated as follows:-

'It would be fair to say that the plaintiff saw these proceedings as an opportunity to address deficiencies he perceived in the current system in relation to spent records and his main purpose in calling these further witnesses was to explore those issues.  The Court was not prepared to allow the hearing to turn into a public enquiry and this gave rise to some considerable frustration on the part of the plaintiff, although he did in due course and with good grace accept that our task was limited to disclosure in November 2001 of which he complained.  To the extent that we fail to make reference to the evidence of these further witnesses, it is only because, through no fault on their part, it was not relevant to the issue before us'.

Decision

16.      Taking these circumstances into account, it seems to me that the defendant is in a strong position to seek its costs in relation to the three hearings dealing with the original Order of Justice and its costs in relation to the amended Order of Justice from 22^nd June, 2007, being the date the offer closed (which would include the costs of the hearing).  The plaintiff is in a strong position to seek his costs from the date of the Court of Appeal hearing on 14^th May, 2004, when he was given leave to amend his Order of Justice, to 22^nd June, 2007, being the date when the offer closed. 

17.      Mr Benest's firm have billed approximately £100,000 in respect of the amended Order of Justice which includes time spent on the recent appeals.  These sums would, of course, be reduced on taxation; I understand that the usual rule of thumb is to expect a recovery of 60%.  The defendant's costs in relation to the original order of Justice will no doubt be material bearing in mind there were three hearings.

18.      However, the defendant does not wish to enforce costs orders against the plaintiff and is anxious to draw a line under this long running litigation.  It will only use orders in its own favour to the extent necessary to set the same off against orders made against it.  The defendant submitted that the fairest order in this case would be for me to make no order for costs at all, on the basis that the defendant would not enforce the orders it has obtained from the Court of Appeal.

19.      I agree that justice between the parties is best served on the basis put forward by the defendant and I therefore make no order for costs, and this on the basis that the defendant will not enforce the recent costs orders it has obtained in the Court of Appeal.

Authorities

Watkins and Connell v Egglishaw and others [2002] JLR 1.

Trustees of Stokes Pension Fund v Weston Power Distribution (South West) plc [2005] EWCA Civ 854.

Civil Procedure Rules 1998.

Cutts v Head [1984] 1 AER 597.

Access to Justice (June 1995).

Sim v Thomas [2001] JLR N. 45.

Civil Proceedings (Jersey) Law 1956.

Royal Court Rules 2004.

Civil Proceedings (Jersey) Law 1956.

Data Protection Jersey Law 1987.

Rehabilitation of Offenders Act 1974.

The European Convention on Human Rights.