Jersey Unreported Judgments

Assessment of Costs On the Papers

[2025] JRC 090

Royal Court

(Samedi)

31 March 2025

Before     :

Advocate David Michael Cadin, Master of the Royal Court

 

Advocate J. S. Dickinson for the Representor.

Advocate J. M. Sheedy for the Defendant.

judgment

the MASTER:

Introduction

1.        This judgment contains my decision as to the appropriate order for costs following the refusal of the Defendant's application for further security for costs, reported at Geneva Trust Company (GTC) SA v Tchenguiz [2025] JRC 063.  The parties' submissions on costs were heard on the papers alone.

Relevant Law

2.        The applicable principles on costs were summarised in MB and Services Limited and Golovina v United Company Rusal Plc [2020] JRC 099 at paragraphs 14 to 17 as follows - -

"14. Although it appears from the English authorities cited by the defendant that a party who has been successful overall may nevertheless be ordered to pay the costs of the other party on an issue on which the successful party has failed even where it was not unreasonable to raise that issue, that is not the position in Jersey.

15. The leading authorities on costs in Jersey are Watkins-v- Egglishaw [2002] JLR 1 in the Royal Court and Flynn-v-Reid [2012] (2) JLR 226 in the Court of Appeal. Both decisions (Watkins at para 6(d) and Flynn at para 14) specifically approved the well-known statement of principle by Nourse LJ in In Re Elgindata Limited (No 2) [1992] 1 WLR 1207 at 1213;-

"In order to show that the judge erred I must state the principles which ought to have been applied ... The principles are these. (i) Costs are in the discretion of the court. (ii) They should follow the event, except when it appears to the court that in the circumstances of the case some other order should be made. (iii) The general rule does not cease to apply simply because the successful party raises issues or makes allegations on which he falls, but where that has caused a significant increase in the length or costs of the proceedings he may be deprived of the whole or a part of his costs. (iv) Where the successful party raises issues or makes allegations improperly or unreasonably, the court may not only deprive him of his costs but may order him to pay the whole or a part of the unsuccessful party's costs.

16. This statement of principle is as applicable today as it was in 1992, but courts have become more willing than perhaps previously to make orders which have regard to success or failure on particular issues. Thus, Page, Commissioner, in Watkins approved as applicable in Jersey the observation of Lord Woolf MR in A.E.I. Rediffusion Music Limited-v- Phonographic Performance Limited [1999] 1 WLR 1507 at 1522:-

"I draw attention to the new Rules because, while they make clear that the general rule remains, that the successful party will normally be entitled to costs, they at the same time indicate the wide range of considerations which will result in the court making different orders as to costs. From 26 April 1999 the "follow the event principle" will still play a significant role, but it will be a starting point from which a court can readily depart. This is also the position prior to the new Rules coming into force. The most significant change of emphasis of the new Rules is to require courts to be more ready to make separate orders which reflect the outcome of different issues. In doing this the new Rules are reflecting a change of practice which has already started. It is now clear that too robust an application of the "follow the event principle" encourages litigants to increase the costs of litigation, since it discourages litigants from being selective as to the points they take. If you recover all your costs as long you win, you are encouraged to leave no stone unturned in your effort to do so".

17. In Flynn, the Court of Appeal made it clear that, as per (iv) of Elgindata, a successful party will only be ordered to pay the costs of an unsuccessful party on a particular issue if the successful party has raised the issue improperly or unreasonably. Thus Beloff JA at [21] of Flynn said:-

"As set out in Elgindata ..., a successful party should only be ordered to pay the costs of an unsuccessful party where the successful party has raised issues or made allegations improperly or unreasonably." As Beloff JA pointed out at [14] of his judgment, it is not (and never was) necessary to show unreasonable conduct for the court to make an order under (iii) of Elgindata, namely that the successful party be deprived of his costs on an issue which he has raised unsuccessfully.""

The Parties' Submissions

3.        GTC submits that it should have its costs of, and incidental to, the application for additional security, to be summarily assessed on the standard basis, if not agreed.  Mr Tchenguiz agrees that if the Court is minded to award GTC its costs, it should proceed by way of a summary assessment.

4.        In this case, although there were two hearings, neither individual hearing lasted for longer than a day, and nor in aggregate did they do so.  In my judgment, the Defendant's application for security for costs falls within the provisions of Practice Direction RC 17/11 and the Court has power to make an order for summary assessment.

5.        In terms of GTC's substantive claim for costs, it submits that:

(i)        it was the winner;

(ii)       the Defendant's application was made at a very late stage; and

(iii)      the Defendant's litigation conduct was inappropriate in terms of bringing the application, failing to engage with GTC, and providing the Court with inconsistent information.

6.        Mr Tchenguiz's position is that whilst he may have been unsuccessful in his application, that was in part due to GTC pulling a "rabbit from the hat" in the form of its financial statements which had, he submits, been previously requested and refused.  He submits that the application might have been avoided had GTC been more forthcoming at an earlier stage about its financial position and the Court should therefore reflect any dissatisfaction about GTC's conduct in the order for costs.

Discussion

7.        Mr Tchenguiz's application was unsuccessful and GTC prevailed.  In the usual way, costs should follow the event.

8.        There is no application for costs on the indemnity basis and complaints about Mr Tchenguiz's litigation conduct are therefore of limited relevance.

9.        The real issue is as to whether GTC's litigation conduct was such that it should be deprived of all or part of its costs on the grounds that, Mr Tchenguiz submits, it was not until the matter came before the Court that GTC finally agreed to produce some financial information, and had it done so earlier, the application would have been avoided or shortened. 

10.     As to the complaints about this information being provided late in the day, I addressed this at paragraph 36(1) of my substantive judgment where I held that:

"Having reviewed the correspondence between the parties, I do not accept the criticisms made. If anything, it was the Defendant that failed to engage with the Plaintiff and chose instead, to issue a summons."

11.     Nor do I accept that if information had been provided earlier, the application would have been avoided.  In my judgment, it would have simply provoked further, unnecessary correspondence and/or point scoring as illustrated by the fact that the unaudited financial statements were provided, by consent, on Monday 17 February 2025:

(i)        by email on Friday, 21 February 2025 at 17:15 UK time, after close of business in Geneva, Mr Tchenguiz sought additional documents from GTC in advance of the hearing listed for Monday 24 February 2025;

(ii)       having obtained the unaudited information by consent, Mr Tchenguiz sought to persuade the Court that, as noted in paragraph 3(xiii) of the Judgment:

"The information contained in the documents provided cannot be relied upon as they are unaudited; "

12.     Accordingly, I do not accept the criticisms made of GTC and nor do I accept Mr Tchenguiz's counter-factual submissions.

13.     Further, as was set out in paragraph 25 of my judgment, GTC's financial position, whether as reflected in the unaudited financial statements or in the anecdotal evidence from Mr Hiller, was not determinative of the application.  In my judgment, the most significant factor in refusing the application was the fact that Collas Crill itself held a significant amount of money on account of costs orders in favour of the Plaintiff which represented assets of the Plaintiff, subject to the control of the Court and/or the Defendant's advocates (at paragraph 35 of the Judgment).  This fact would and should have been self-evident Mr Tchenguiz and/or his lawyers and would obviously have to be taken into account when considering additional security for costs.  Yet it did not feature in Mr Tchenguiz's Skeleton Argument or in any of Ms Martin's affidavits filed in support of the application.

14.     In my judgment, there is no basis for finding that GTC acted improperly or unreasonably such that it should be deprived of all or any of its costs.

15.     Accordingly, I order that Mr Tchenguiz pay GTC's costs of and incidental to the application for additional security for costs dated 31 January 2025, to be summarily assessed on a standard basis if not agreed.

Authorities

Geneva Trust Company (GTC) SA v Tchenguiz [2025] JRC 063.

MB and Services Limited and Golovina v United Company Rusal Plc [2020] JRC 099.

Practice Direction RC 17/11