Channel Islands Knitwear Company Ltd v Hotchkiss

• Jurisdiction: Jersey
• Court: Court of Appeal
• Judge: Southwell, Smith and Carey, JJ.A.
• Judgment Date: 22 October 2001
• Neutral Citation: [2001] J.Unrep 207
• Date: 22 October 2001

COURT OF APPEAL

Southwell, Smith and Carey, JJ.A.

C.E. Whelan, Crown Advocate, for the Attorney General;

Miss C.J. Dorey for the appellant;

N.M.C. Santos-Costa for the respondent.

Cases cited:

(1) Aiden Shipping Co. Ltd. v. Interbulk Ltd., [1986] A.C. 965; [1986] 2 All E.R. 409; [1986] 2 Lloyd's Rep. 117; (1986), 130 Sol. Jo. 429, followed.

(2) de Lasala v. de Lasala, [1980] A.C. 546 ([1979] UKPC 10); [1979] 2 All E.R. 1146; (1979), 123 Sol. Jo. 301, considered.

(3) Gaudion v. Weardale Ltd., Guernsey Court of Appeal, February 4th, 1998, unreported, considered.

(4) Medicaments and Related Classes of Goods (No. 4), In re, English Court of Appeal, The Times, August 7th, 2001, considered.

(5) R. v. Bow St. Metropolitan Stipendiary Magistrate, ex p. Mirror Group Newspapers Ltd., [1992] 1 W.L.R. 412; [1992] 2 All E.R. 638, considered.

(6) State of Qatar v. Al Thani, 1999 JLR 118, followed.

(7) Steele Ford & Newton v. Crown Prosecution Service (No. 2), [1994] 1 A.C. 22; [1993] 2 All E.R. 769, not followed.

(8) Symphony Group PLC v. Hodgson, [1994] Q.B. 179; [1993] 4 All E.R. 143, considered.

Additional cases cited by counsel:

Auckland Harbour Board v. R., [1924] A.C. 318.

Di Donato v. Italy, European Ct. of Human Rights, October 21st, 1999, App. No. 41513/98.

Donoghue, In re, 2000 JLR 67.

Sinel, In re, 2000 JLR N-19.

Legislation construed:

Court of Appeal (Jersey) Law 1961, art. 16: The relevant terms of this article are set out at para. 8.

Civil Procedure—costs—appeal costs—Court of Appeal has jurisdiction under Court of Appeal (Jersey) Law 1961, art. 16 to determine by whom and to what extent appeal costs payable—includes power to order that appeal costs paid by non-party

Civil Procedure—costs—judicial error—States may be required to pay costs of appeal if serious judicial error causes injustice and severe financial hardship—no right of action for appeal costs against judge personally

The Attorney General contested a proposed order that the respondent's appeal costs be paid out of public funds.

Before the Royal Court, the respondent claimed that the appellant was in breach of its common law duty as an employer to provide a safe system of work and that the situation in which the respondent worked had caused her medical condition. There was no alternative plea of exacerbation in the respondent's pleading. The court decided that the system of work had merely exacerbated an existing medical condition but refused to allow the respondent to amend her pleading to include such a claim. It proceeded, nevertheless, to deliver judgment in the respondent's favour on the basis of exacerbation but awarded damages on the basis of full causation, not the more limited damages appropriate to a case of exacerbation.

The Court of Appeal upheld the Royal Court's finding that the respondent suffered from a pre-existing medical condition which had been exacerbated by the conditions in which she worked but held that the Royal Court fell into serious error by (a) deciding the case on the basis of exacerbation, without allowing that basis to be pleaded; and (b) assessing damages on the basis of full causation, after deciding liability on the basis of exacerbation. It therefore reduced the damages awarded to the level appropriate for the claim based on exacerbation. The proceedings in the Court of Appeal are reported at 2001 JLR 234.

In respect of costs, the Court of Appeal indicated that, in the exceptional circumstances of the Royal Court's having fallen into serious error, it was minded to make an order that the costs of the respondent's appeal, which may not have been necessary had the Royal Court proceeded correctly, be paid out of public funds. These proceedings are reported at 2001 JLR 273.

The court allowed the Attorney General to contest the proposed order as it was exceptional and touched the public interest. It was accepted that, if the court had jurisdiction to make such a payment, it was to be found in art. 16 of the Court of Appeal (Jersey) Law 1961. The Attorney General submitted that (a) it was not possible to order that the respondent's costs be paid "out of public funds," as art. 16 required that the person or entity by whom the costs were to be paid should be determined by the court; (b) the relevant entity for the making of such an order was the States but an order should not be made as (i) it would give rise to a risk of improper interference with the judiciary by the executive, (ii) there were no obvious limits to the exercise of such a jurisdiction, and (iii) the States were not responsible for the error of the Royal Court and should not be held liable; (c) the court had no jurisdiction to make the proposed order as (i) there was House of Lords authority on the comparable English statute denying the jurisdiction, (ii) the order of costs would breach the principle that there was always clear statutory authority for public expenditure, and (iii) the payment of costs out of public funds, in particular, was always precisely and specifically defined by statute; and (d) even if the court had jurisdiction to make such an order, it should not do so as the respondent had neither suffered a serious injustice as a result of the errors of the Royal Court, nor had severe financial hardship been caused to her.

The respondent submitted that she had a right of action in respect of her costs against the judge of the Royal Court personally.

Held, declining to make the order for costs out of public funds:

(1) Article 16 of the Court of Appeal (Jersey) Law 1961 conferred jurisdiction on the court to determine in all proceedings by whom and to what extent the costs were to be paid. This discretion included a power to order that costs be paid by a person who was not a party to the proceedings. The construction placed on the relevant section of the comparable English statute by the House of Lords was not determinative of the interpretation to be put on art. 16 as (a) decisions of the House of Lords, in general, were merely persuasive in the development of Jersey law; and (b) that section had a different legislative history, and was therefore not persuasive in this case. Moreover, as it was accepted that art. 16 was sufficient statutory authority to enable the court to make an order for costs against the States in those cases to which the States were party, it was also sufficient statutory authority in respect of those cases to which the States were not party (per Smith, J.A. (Southwell, J.A., concurring), para. 9; para. 16; Carey, J.A., dissenting, paras. 55-56).

(2) The court could not make an order that the respondent's costs be paid out of "public funds" as the wording of art. 16 required that the person or entity by whom the costs were to be paid should be determined by the court. The relevant body for these purposes was the States of Jersey. There was a sufficient connection between the Royal Court and the States to justify the order contemplated as the States were responsible for providing the funds, not only for the establishment and manning of the courts, but also for any other obligations which fell on the Crown estate through the courts. Moreover, the fact that the States or a States committee might be required to pay costs arising from a serious judicial error did not raise any constitutional question as to the respective roles of the organs of government ( para. 12; para. 19; para. 62).

(3) The jurisdiction to order that the costs of a party, incurred as a result of an error in the court below, were to be paid by the States was, however, to be exercised only in the most exceptional cases, namely where serious injustice had occurred in the lower court, causing severe financial hardship to the litigant seeking the order ( paras. 26-27; para. 38; para. 64).

(4) In the present case, however, although the errors of the Royal Court were serious, the respondent had suffered neither serious injustice nor severe financial hardship, as (a) she had recovered a substantial sum in damages and interest in accordance with the earlier judgment on appeal; and (b) the assessed costs of her appeal ought not to be large in proportion to the amount of damages and interest (per Southwell, J.A. (Carey, J.A., concurring), para. 38; Smith, J.A., dissenting, para. 29; paras. 31-32).

(5) The respondent had no right of action in respect of costs against the judge of the Royal Court personally as the public interest demanded that judges should be totally free to make their decisions without fear that an appellant might seek an order for costs against them ( para. 33; para. 37; para. 66).

1 SMITH, J.A.: In this case Miss Hotchkiss, the respondent, sued Channel Islands Knitwear Co. Ltd., the appellant, for damages for personal injuries suffered as a result of being made to work in inappropriate conditions over a long period. At the trial before the Royal Court, the respondent's case was that the breach of the duties of care, both contractual and tortious, owed by the appellant to her caused the injuries she suffered. Because of availability the appellant's medical expert was called first. The gist of his evidence was that the respondent's injuries had not been caused by the conditions under which she was made to work, but that she suffered from a pre-existing medical condition which had been exacerbated by her conditions of work. The evidence of the respondent's medical expert was that there was no such pre-existing condition and that all her injuries had been caused by her conditions of work.

2 There was no alternative plea of exacerbation in the respondent's pleading: her case was simply one of causation. The hearing of the matter was concluded, and judgment was reserved. Some time later the presiding Commissioner informed the parties in chambers that the court was not satisfied on the medical evidence that the respondent's injury was caused by her work but was satisfied that her...