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Jersey Unreported Judgments |
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You are here: BAILII >> Databases >> Jersey Unreported Judgments >> Edoardo Crociani, Paul Foortse, BNP Paribas Jersey Trust Corporation Ltd and Appleby Trust (Mauritius) Ltd -v- Cristiana Crociani, A and B [2014] JCA 095 (17 April 2014) URL: http://www.bailii.org/je/cases/UR/2014/2014_095.html Cite as: [2014] JCA 095, [2014] JCA 95 |
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Trust - determination of an application for an interim costs order by the Respondents.
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Before : |
The Hon. Michael Beloff, Q.C., President; |
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Between |
(1) Edoarda Crociani |
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(2) Paul Foortse |
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(3) BNP Paribas Jersey Trust Corporation Limited |
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(4) Appleby Trust (Mauritius) Limited |
Appellants |
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And |
(1) Cristiana Crociani |
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(2) A (by her Guardian ad Litem, Nicolas Delrieu) |
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(3) B (by her Guardian ad Litem, Nicolas Delrieu |
Respondents |
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Determination of an application for an interim costs order by the Respondents.
Advocate R. J. MacRae for the Appellants.
Advocate A. D. Robinson for the Respondents.
JUDGMENT
the president:
1. At the hearing on 7th April, 2014, pursuant to its dismissal of the Appellants' appeal against the decision of the Royal Court dated 2nd October, 2013 in which they had sought a stay of proceedings before that Court on the ground of forum non conveniens, ("the Forum Decision"), this Court ordered the Appellants to pay the Respondents' costs of and incidental to the Forum Decision Appeal on the standard basis. These estimated costs are set out in the Respondents' costs schedule dated 4th April, 2014 and amount to £184,662.95. The Respondents further seek a payment on account of one half of these costs amounting to £92,331.48 (payable in 28 days).
2. This is apparently the first occasion on which an order for interim costs has been sought in this Bailiwick before the Court of Appeal. For that reason we invited written submissions from both parties for which we are duly grateful.
3. The Appellants submits that:-
(i) The Court of Appeal has no power to make an order for an interim payment on account of a costs liability and that the position in Jersey differs materially from that which pertains in England where Rule 44.3(8) of the Civil Procedure Rules ("CPR") specifically empowers the court with a broad discretion to order a payment on account. (See further para15 below).
(ii) Unless and until there is such an express provision in Jersey, the interests of the costs judgment creditor are protected by the accrual of interest only.
(iii) To reach the contrary conclusion, however otherwise desirable, would be to apply lex ferenda, not lex lata.
4. I accept that there is no direct equivalent to CPR Rule 44.3(8) in Jersey: but it does not of course follow that the Jersey Courts may not enjoy the same power under their own rules.
5. Under Article 16 of Court of Appeal (Jersey) Law 1961 ("the 1961 Law") "the costs of and incidental to proceedings in the Court of Appeal under this Part shall be in the discretion of the Court, and the Court shall have full power to determine by whom and to what extent the costs are to be paid."
6. The wide discretion which the Court enjoys under the first clause of this provision on its face could include a power to make an order for interim costs, and is not, in my view, confined, on either a literal or a purposive construction, by the specific powers in the second clause which merely emphasises and supplements the width of the first.
7. The Appellants submit that, be that as it may, the apparently wide powers in the 1961 Law are limited by Rule 18(1) of the Court of Appeal (Civil) Rules 1964, which states:-
and that the wording "shall be entitled to recover is the amount allowed after taxation....." precludes the Court of Appeal from ordering that any payment of costs should be made until taxation of costs has taken place.
8. On its face Rule 18(1) is not directed to the issue whether there can be costs payments on account as well as costs payments at the conclusion of a particular stage of proceedings, but rather to the basis upon which any costs are to be assessed i.e. standard as against indemnity. (See by analogy the RSC in England and Wales (the precursor of the CPR) Rule 62(3) and (4)).
9. In any event, unless and until the Court exercises its discretion under Article 16 to make a costs order, there can be no entitlement in the ordinary sense of the word to costs on either basis. The party's 'entitlement' is the product of the exercise of the Court's discretion; it is not free standing of it. That exercise is a necessary precondition of such 'entitlement'.
10. I do, however construe the reference to an entitlement post taxation as making taxation an additional sine qua non of any costs payment . Obviously, if there is no interim payment order, taxation will take place, absent agreement, in the ordinary way. But, even if an interim payment order is made, there will still need to be a taxation (absent agreement) to determine whether the payee is entitled in the sense used in Rule 18(1) (if an interim payment has been made), to additional costs or (if the interim order has been over generous) is obliged to repay the excess. It is at that stage, absent agreement, that the final (but only the final) entitlement in the sense used in Rule 18(1) to recover a particular amount of costs is fixed. In short the exercise of a discretion to order interim costs is not only a necessary but also a sufficient precondition of 'entitlement', in the ordinary sense of the word, to such costs. That 'entitlement' is I emphasise, provisional only Rule 18(1) entitlement does indeed require taxation, absent agreement, but has nothing at all to do with whether an interim costs order can be made.
11. Pursuant to Article 12(3) of the 1961 Law, the Court of Appeal has "all the power, authority and jurisdiction of the Royal Court" for the purposes of and incidental to the hearing and determination of any appeal. Under the Civil Proceedings (Jersey) Law 1956 (''the 1956 Law'') Article 2(1) Royal Court has the same power, mutatis mutandis, to order costs, subject (i) to the provisions of that part of the 1956 Law entitled "Costs in Civil Proceedings" which do not bear on the issue under consideration (ii) to rules of court, which differentiate between standard costs (Rule 12/4) and indemnity costs (Rule 12/5) in each instance to be awarded "on a taxation of costs". This neither adds to nor subtracts from my analysis in paras. 6, 9 and 10 above, save that there is no need in this context to consider the implications, if any, of the word "entitlement". I consider that the Royal Court also enjoys power to make an interim order for payment of costs by reason of the elastic language of the opening clause of Article 2(1).
12. The Royal Court and the Court of Appeal have an inherent jurisdiction to regulate their own practice and procedure concurrent with rules of court, but not inconsistent with them C Le Masurier Ltd v Alker [1992] JLR 123 (''Le Masurier'') (at pp. 62-63); Finance & Economics Committee v Bastion Offshore Trust Co Ltd [1994] JLR 370 (''FEC'') (at pp. 66-78), and Mayo Associates SA v Cantrade Private Bank Switzerland [1998] JLR 173 (''Mayo'') (at pp. 90-92).
13. I would not, however, deploy the concept of inherent jurisdiction of the Court to justify my conclusion that the power to order an interim costs payment exists in Jersey. In Connelly v DPP 1964 AC 1254 Lord Devlin said classically "The judges of the High Court have in their inherent jurisdiction both in civil and in criminal matters power (subject of course to any statutory rules) to make and enforce rules of practice in order to ensure that the Courts process is used fairly and conveniently by both sides" (p. 1347). Whereas I have found, the statutory rules themselves provide the relevant power, resort to the inherent jurisdiction is not required, even if available. Moreover it can never be the source of orders which could not otherwise be made. In Mayo the Court said "the conclusion that it is fair and just to order that a thing be done does not determine whether there is inherent jurisdiction to order it" (p. 189). The utilisation of an inherent jurisdiction is better reserved within its appropriate but not well defined limits (ditto p. 187) for circumstances not embraced by legislation primary or secondary.
14. In my view, notwithstanding my conclusion, it would be preferable nonetheless for the Court of Appeal (Civil) Rules 1964 and the Royal Court Rules 2004 to be amended so as to make specific reference to an order for interim payment and to forestall further debate about when, in what circumstances and on what basis it should be ordered. This would also give an opportunity for those vested with the rule making power to consider whether such rule should track the modern incarnation of the CPR. I understand that a Royal Court Rules Review Group under the chairmanship of the Deputy Bailiff was recently set up by the Bailiff "to examine what changes might be made to improve access to justice and reduce the costs and risks of litigation". Interim costs orders might be a useful topic for its agenda.
15. In the new CPR 44.2(8) introduced in 2013, in England and Wales "where the Court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so". (In its pre 2013 incarnation it provided "where the Court has ordered a party to pay costs, it may order an amount to be paid on account before the costs are assessed".) As to whether on the premise, which I have found established, that there is power to make an interim costs order in Jersey there is allied to it a presumption in favour of making the same, must, absent a specific equivalent provision in Jersey, be considered as a matter of principle.
16. In my view the achievement of justice, to which all exercises of discretion under procedural rules aspire, would usually require that a party, who is, pursuant to a court order, entitled to its costs, should be paid on account a percentage of the amount he is likely to recover on taxation calculated on a conservative basis to avoid any real risk of over payment.
17. This conclusion is consistent with and supported by the jurisprudence in England and Wales at a time before the CPR contained its present presumption.
18. In Mars UK Limited v Teknowledge Limited (Costs) [1999] 2 Costs LR 44 (''Mars'') - the first relevant decision - Jacob J identified the principle in this way [at pp. 3-4]:-
His analysis is in effect adopted in the contemporary version of the CPR.
19. A similar practice has been accepted as appropriate in Jersey with the court exercising its discretion to order such payments: Centre Trustees (C.I.) Limited and Langtry Trust Company (C.I.) Ltd-v-J. Van Rooyen, N. Van Rooyen and Pabst (''Centre Trustees''); [2009] JRC 133) [p. 11, at paras. 5, 6 9] Café de Lecq Limited-v-R.A Rossborough (Insurance Brokers) Limited [2012] (2) JLR 155 (Café de Lecq) [at p. 24, paras. 27 -28] (Commissioner Page); Dalemont Limited-v-Senatorov and Others [2013] JRC 209 (''Dalemont'') [at p. 50, para. 27] (Bailhache QC, Deputy Bailiff); Marange (Investments) Proprietary Ltd-v-La Generale des Carrieres et des Mines S.A.R.L and Others [2013] JRC 119A (''Marange'') [at p. 43, para. 51 and 54] (Commissioner Clyde-Smith); Crociani and Others-v-Crociani, Foortse, BNP Paribas Jersey Trust Corporation Ltd, Appleby Trust (Mauritius) Ltd [2013] JRC 250 (''Crociani'') [at p. 55, paras. 24-27] (Commissioner Clyde-Smith). Indeed the statement of the underlying principle by Jacob J has been cited with approval - e.g. Centre Trustees at para. 6 Marange at p. 43, para. 51].
20. I accept that:-
(i) the fons et origo of those authorities is Centre Trustees;
(ii) that decision, however, proceeded on the assumption that the Royal Court had an inherent jurisdiction to make such an order: the Commissioner stated at para. 3 that "all three counsel accepted that the Court had an inherent jurisdiction" and so the point was not argued;
(iii) none of these authorities is binding on this Court.
Nonetheless I note that three experienced first instance judges found nothing anomalous in determining both that the Court enjoyed the power to order an interim costs payment and that normally it should do so, and, in any event, for reasons already articulated I would endorse their approach.
21. I can envisage circumstances where such a payment on account may be inappropriate. If, for example, the obligation to make it could be shown to stifle an Appellant's chances of pursuing a further appeal to the Privy Council; or if there was reason to believe that if the appeal were successful a Respondent might be unable, if ordered to do so by the Privy Council, to repay the costs ordered on an interim basis. These examples are, of course, not intended to be exhaustive of where the normal course should not be followed. In every case this Court in exercise of its discretion will axiomatically consider all material circumstances which bear on the justice of making or refusing an interim order and indeed in what amount, the issue to which I now turn.
22. In Marange, the Royal Court provided guidance as to the overall approach and correct procedure for making an application for a payment on account [at pp. 40 - 43, paras. 41 51].
23. Pursuant to such guidance the Court should not seek to conduct a taxation or carry out a detailed review of the successful party's costs, but should adopt, as per Mars, a "rough and ready" approach in order to arrive at a figure which the successful party will "almost certainly collect" [at p. 41, para. 44]. In terms of the correct procedure [at p. 43, para. 50]:-
24. In Crociani, the Plaintiffs successfully applied for a payment on account (using a costs schedule in an identical format to that which is currently before us [paras. 24-25]). This utilized standard Factor A rates (and a 50% Factor B 'uplift' to the time of the fee earners), and also listed the disbursements. I agree with this approach.
25. By way of a postscript to the judgment in Crociani [paras. 25-28], the Royal Court also noted this was "in the interests of proportionality" and approved this approach by ordering a payment on account of one half of the standard costs as set out in the costs schedule filed with the Court. The Court specifically considered and rejected the Defendants' submission that the costs summary provided did not allow any useful response to be made by the paying party [paras. 26 - 27], as indeed it had done in Dalemont [para. 30].
26. The Appellants contend that even if, contrary to the foregoing, there is power to make an order for payment on account of costs, and indeed a presumption in favour of making such an order, no such order should be made in the present case for the following reasons which I seek to summarise:-
(i) No such order has previously been made in the Court of Appeal. It engages therefore an unusual jurisdiction or power which should be exercised sparingly.
(ii) The Appellants have successfully obtained leave to appeal to the Privy Council. There is, therefore an extant appeal against the decision in respect of which costs have been awarded in an area where the Court of Appeal observed that it was "sailing in uncharted waters". They note that in what are said to be similar circumstances in Volaw Trust and Corporate Services Ltd and anor-v-The Office of the Comptroller of Taxes [2013] JRC 148C ("Volaw"), the Royal Court (see the judgment of Commissioner Page) refused to make an order for a payment on account on the basis that "in view of the fact that the Appellants' appeal from the Court's decision of 18th May, 2012 is due to be heard in the relatively near future and involves important issues in a field which, prior to the current proceedings, had not been the subject of judicial scrutiny, I do not think it right to accede to Mr. Kelleher's request for an interim payment (of costs) order in favour of the Comptroller. That application will therefore stand adjourned until after the result of the appeal is known."(para. 26)
(iii) The Respondents have demonstrated no particular need or urgency for circumventing the usual approach of requiring a taxation of costs and compensating the costs judgment creditor by the award of interest.
(iv) Indeed, in this case Cristiana (R1) herself has made clear that there is no urgency or great need. She gave evidence in the Miami proceedings in the following terms:-
"Q. After trial, is it your understanding that a judgment would be entered?
A. Yes.
Q. And then that judgment could be appealed, just like the forum judgment is currently being appealed?
A. Yes. I would think the whole process might take two years. I have time. I can wait. I am not in a rush. I just want my assets back." [Emphasis added.]
(v) Beyond this, there is a real risk that, if the Appellants' appeal to the Privy Council succeeds, none of the costs paid on account will ever be recovered by them. Cristiana's evidence is that she resides in the Dominican Republic where enforcement of any order is likely to be difficult, if not impossible. If the appeal to the Privy Council succeeds there will be no incentive for Cristiana to repay the costs paid to her on account. Similarly, if the Respondents' costs are taxed down to a figure below any sum which might be awarded as a payment on account, there is a real risk that the Appellants will never recover any over-payment given the difficulties for enforcement in the Dominican Republic.
(vi) It is difficult to form a view as to the accuracy of the allowances made given the very limited information about the Respondents' costs which they have provided to the Appellants or to the Court of Appeal. It is submitted that in Jersey proceedings any litigant seeking an order for a payment on account ought as a sine qua non of obtaining an interim order to comply with Practice Direction 09/03 "Taxation of Costs in Civil Proceedings by Summary Assessment in Interlocutory Proceedings" and the formalities therein because, without that information, the court is in no position to view the costs critically or make much meaningful comment on the sums claimed. It is further submitted in this context that in Crociani (after the decision the subject of the appeal before us), when ordering there to be a payment on account - despite the paucity of information provided by the Respondents - Commissioner Clyde-Smith was simply wrong to state (para. 27) that "There is no suggestion, for example, that in England the courts apply the formalities involved in a "Summary Assessment" under CPR Rule 44.7."
27. I consider these objections seriatim.
As to (i), as far as this Court is aware, no such application has previously been made or (materially) dismissed. There must be a first time for everything even in the law. If principle favours such an order, the lack of precedent cannot tell against its being made.
As to (ii) the mere fact of there being a pending appeal from this Court to the Privy Council (or by parity of reasoning from the Royal Court to this Court) cannot of itself be an argument for not making an order in favour of the party which is presently successful. In Volaw it is clear that the Royal Court was influenced by the proximity of the pending appeal, a feature absent in the present case. Permission was granted by this Court in the present case because the waters were unchartered, not because this Court entertained itself serious doubts that it had correctly steered through them.
As to (iii) and (iv) Justice, not need, is the touchstone. See Dalemont [at pp. 49-50, para. 27].
As to (v) I am sensible of the fact that problems might confront the Appellants in seeking to enforce a costs order in the Dominican Republic. But whether the substantive proceedings are heard in Jersey or Mauritius I am prepared to proceed on the assumption that the Court would have power to debar the First Respondent (Plaintiff) from pursuit of her claim unless she discharged any outstanding order for costs. Nor in any event would her reluctance, a fortiori refusal, to discharge such an order ensure to her advantage in so far as issues of her integrity or credibility arose in such proceedings.
As to (vi) the Practice Direction relied on has no direct relevance. Mainland procedure is flexible. The language of CPR 43(8) (see above) actually contrasts detailed assessment for a final order as to costs with payment of account which is not encumbered in that way or at all. The question is always whether the Court seized of such an application for payment of an interim costs order is adequately informed so as to be able to make an estimate of a reasonable sum. (see further [paras 22-25 above])
28. The Respondents seek a payment on account of 50% of their standard costs calculated at the taxation rate, i.e. a payment of £92,331.48.
29. The Appellants, without prejudice to their contention (see para. 26(vi) above) that they are disabled from making any meaningful comment at all, (as to which see para. 27(vi) above) make two particular points:-
(i) First, the total costs claimed - of nearly £185,000 - seems exceptionally large for a two day hearing. It should further be noted that the Respondents did not pursue any cross-appeal and did not have the burden of preparing appeal bundles.
(ii) There seems also to have been extensive use of London Leading Counsel, whose "wholly unexplained charges" are greater than those of the Respondents' own Advocate.
They therefore submit that, if, contrary to their primary position, any order should be made at all, it should be for no more than £55,000.
30. The complexity of the issues as well as the size of the sums at stake in the substantive proceedings inevitably results in high legal costs. Nor is it unexpected or unreasonable that specialist London counsel should be heavily involved. But I would for my part in the light of the factors alluded to at para. 29(i)-(ii) above take a cautious approach to the quantum claimed, and order the sum to be paid on an interim basis at 33.3% not 50% of the sum anticipated on taxation rounded down to £60,000. This does not of course, in any way affect the taxed costs, if any, that might ultimately be assessed as payable to the Respondents' favour when the relevant part of the proceedings is concluded. Moreover payment of such a sum will not, on the basis of the evidence before the Court, adversely affect the Appellant's ability to defend her claim in whatever forum it is ultimately ordered to take place.
31. For the reasons set out above, I would accede to the Respondents' application and order that the Appellants pay to the Respondents within 28 days the sum of £60,000 by way of interim payment on account of costs, to be assessed on the standard basis. I also respectfully agree with what Pleming JA has said about the costs incurred in connection with the applications for leave to appeal heard in May 2013.
Nutting JA:
32. I have had the advantage of reading both the judgment of the President and that of Pleming JA in draft and I agree with both judgments and have nothing to add.
Pleming JA:
33. I also agree with the judgment of the President, and the interim costs order proposed.
34. In addition to the application for a payment on account in respect of the Forum Decision Appeal costs, the Respondents also seek "an order for costs on the standard basis in relation to the Appellants' unsuccessful applications for leave to appeal and a stay pending appeal against para. 4 of the Act of the Royal Court dated 19th April, 2013". This is a reference to the hearing on 21st May, 2013 before me, sitting as a single judge of the Court of Appeal, and the order made on 24th May, 2013.
35. I received written submissions shortly after that hearing, but the question of costs was not finally resolved. I have reconsidered the submissions, dated 30th May, 2013 from the Respondents, and 3rd June, 2013 from the Appellants. In their June 3rd submissions the Appellants suggested "that the costs should be costs in the forum challenge". This seemed to be a sensible way forward, but on reflection it is difficult to draw a clear line between the forum challenge and what has become known as the anti-suit challenge which is the subject of a separate appeal. At the hearing on 7th April 2014 it was agreed that the costs of the anti-suit appeal should not yet be addressed. In those circumstances, at least for now, the final determination of the costs of, and incidental to, the May 2013 should be resolved in the anti-suit proceedings. This is not to suggest that there should be no determination, and if (for whatever reason) there is shown to be a real risk that these costs will fall between two stools, I would be content for there to be an application - at the close of the anti-suit proceedings - for the matter to be brought back before this Court for final resolution.
