Pell Frischmann v Bow Valley and Ors

• Jurisdiction: Jersey
• Court: Royal Court
• Judge: H. W. B. Page.
• Judgment Date: 26 July 2007
• Neutral Citation: [2007] JRC 143
• Date: 26 July 2007

[2007] JRC 143

ROYAL COURT

(Samedi Division)

Before:

H. W. B. Page. Esq., Commissioner, sitting alone.

Between

Pell Frischmann Engineering Limited

Plaintiff

and

Bow Valley Iran Limited (Formerly known as Balal Development Company Limited)

First Defendant

Bow Valley Energy Limited

Second Defendant

P T Bakrie Interinvestindo

Third Defendant

Bow Valley International (Jersey) Limited

Fourth Defendant

Advocate J. P. Speck for the Plaintiff.

Advocate N. M. Santos Costa for the First Second and Fourth Defendant.

Third Defendant was not represented.

Authorities

Watkins v Egglishaw [2002] JLR 1 .

In re Elgindata (No. 2) .

Civil Proceedings (Jersey) Law 1956

A.E.I. Rediffusion Music Ltd v. Phonographic Performance Ltd [1999] 1 W.L.R. 1507 [1999] 1 All E.R. 299 .

Bank of Credit & Commerce International. v Ali (No.4) .

Civil Procedure Rules.

United Wire Ltd. v. Screen Repair Services (Scotland) Ltd.

Lilian Day v. Philip Day [2006] EWCA Civ 415 .

Straker v. Tudor Rose [2007] EWCA Civ 368 .

Painting v. University of Oxford [2005] EWCA Civ 161 .

Johnsey Estates v. Secretary of State for the Environment [2001] EWCA Civ 535 at para 32.

Luce v. Manning [2004] JLR 64 .

Dixon, Richardson & Reeb Investments Limited v. Jefferson Seal Limited [1998] JLR 47 .

Preston v. Preston [1982] Fam. 17 .

Cepheus Shipping Corp. v. Guardian Royal Exchange Assur. PLC [1995] Lloyd's Rep. 647 .

( Disney v. Plummer 16 November 1987, Unreported).

Marie Claire S.A. v. Harlstone Hosiery Ltd. [1993] F.S.R. 692 .

Dixon v Jefferson Seal Ltd [1998] JLR N11a Court of Appeal .

Munkenbeck & Marshall v. McAlpine (1995), 40 Con. L.R. 30 .

Petrotrade Inc. v. Texaco Ltd [2002] 1 WLR 947 .

John v Price Waterhouse [2002] 1 WLR 953 .

Reid Minty v. Taylor [2001] EWCA Civ 1723 , [2002] 1 WLR 2800.

Three Rivers District Council v. Bank of England [2006] EWHC 816 .

Costs Judgment

THE COMMISSIONER:

1 This judgment is concerned with the matter of costs following decisions of the full Court (Page, Commissioner with Jurats Le Breton and Morgan)

• (i) that Pell Frischmann succeeds on its claims for breach of confidence against the Second Defendant, Bow Valley Energy Limited, and is entitled to recover damages of £500,000 (five hundred thousand pounds sterling) together with interest;

• (ii) that all other claims by Pell Frischmann fail;

• (iii) that Pell Frischmann is, likewise, entitled to judgment in the sum of £500,000 and interest against the First Defendant, Bow Valley Iran Limited and against the Fourth Defendant, Bow Valley International (Jersey) Limited and against the Third Defendant, PT Bakrie Interinvestindo; and

• (iv) that Pell Frischmann is entitled to recover interest on the award of £500,000 at the rate of Base Rate plus 1% from 1 ^st July 1997 in the case of the Second Defendant and the Third Defendant and from dates as yet to be agreed (or, in the absence of agreement, determined) in the case of the First and Fourth Defendants.

2 The parties' respective submissions on costs, by Advocate Speck on behalf of Pell Frischmann and by Advocate Santos Costa, were made in part in writing and in part orally at a hearing on Wednesday 11 ^th July.

3 In the case of Watkins v Egglishaw [2002] JLR 1, I endeavoured to summarise what I understood to be the guiding principles applicable in the Royal Court in the matter of costs as follows:-

• "(a) The Court's overriding objective in considering costs is, as in everything else, to do justice between the parties.

• (b) In many cases, that objective will be fulfilled by making an award of costs in favour of the "winning" party, where a "winner" is readily apparent. In any event, the "follow the event" rule can still be a useful starting point.

• (c) It is a mistake, however, to strain overmuch to try to label one party as the "winner" and one the "loser" when the complexity or other circumstances of the litigation do not readily lend themselves to analysis in these terms.

• (d) The discretion as laid down in art. 2 of the Civil Proceedings (Jersey) Law 1956 is a wide one and ought not to be treated as fettered by any particular supposed rule or practice, other than that the discretion should be exercised judicially and broadly in accordance with the guiding principles referred to in In re Elgindata (No.2) and A.E.I. v. Phonographic Performance.

• (e) It is, accordingly, open to the court to have regard to any and all considerations that may have any bearing on the overriding objective of doing justice. Its task is to take an overview of the case as a whole ( Bank of Credit & Commerce International. v. Ali (No. 4), per Lightman J.). The new Civil Procedure Rules governing litigation in the English courts provide that the court " must have regard to all the circumstances" and then go on to spell out certain matters that such circumstances include, the " conduct of all the parties" being one and " whether a party has succeeded on part of his case, even if he has not been wholly successful" [on] another ( Civil Procedure Rules, para. 44.3(4)). To a large extent, however, the particular matters mentioned do no more than state the obvious and it is unnecessary to import them verbatim, in any formal way, into the practice of the Royal Court.

• (f) It is implicit in this that, even though a party would otherwise be regarded as having been "successful", justice may require that costs should not automatically follow the event."

4 The basis for point (c) in this summary was the observations of Lord Woolf, M.R. in A.E.I (Lord Woolf M.R. and Mummery and Mantell L.JJ.) concerning the third of the principles enunciated by Nourse L.J. in In re Elgindata (No. 2), that is, that the general rule that costs should follow the event

"does not cease to apply simply because the successful party raises issues or makes allegations on which he fails, 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" .

Commenting on the effect of the new Civil Procedure Rules and this passage in particular, Lord Woolf said

"From April 26th, 1999 the "follow the event principle" will still play a significant role, but 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 form being selective as to the points they take. If you recover all your costs as long as you win, you are encouraged to leave no stone unturned in your efforts to do so..................

The "well established practice" on which Nourse L.J. based his third principle is, as I have already indicated, less generally followed than it has been in the past and it is no longer necessary for a party to have acted unreasonably to be deprived of his costs of a particular issue on which he has failed. ......... ..

The chairman's approach [in A.E.I. ] places far too great a significance, in a case where there are a number of issues, in trying to find a party who can be described as the overall winner and then attaching importance to that label."

5 Mummery L.J. agreed:

"The chairman of the tribunal took the wrong approach. He proceeded on the basis of a self-imposed fetter on the discretion. He was influenced by the perceived need to find a winner and a loser in a case where the final determination of the tribunal was somewhere between the respective positions adopted by the parties."

6 So far as taking an "overview" is concerned, I also noted ( Watkins v. Egglishaw, at paragraph 15) the observations of Robert Walker J. (as he then was, now Lord Walker of Gestingthorpe) in United Wire Ltd. v. Screen Repair Services (Scotland) Ltd. as to the desirability of adopting a reasonably robust approach and of avoiding, if possible, complicated costs orders that may result in complex and expensive taxation.

7 Since Watkins v. Egglishaw, the applicable guidelines in matter of costs have been the subject of a number of further decisions of the Court of Appeal in England, including two to which my particular attention was drawn. The first, Lilian Day v. Philip Day [2006] EWCA Civ 415, is a decision of a court consisting of Ward L.J. and Sir Martin Nourse in the course of which Ward L.J., with whom Sir Martin Nourse agreed, said (at paragraphs 16 and 17):

"We must ask ourselves whether the primary rule applies in this case - the general rule, that is, that the unsuccessful party will ordinarily be ordered to pay the costs of the successful party unless the court thinks otherwise. The question is, which if any, of these parties did enjoy success in this litigation? We were referred to a judgment of Lightman J in Bank of Credit and Commerce International SA v. Ali (No. 3) [1999] NLJ 1734 Vol. 149 where he said: "For the purposes of the CPR, success is not a technical term but a result in real life, and the question as to who has succeeded is a matter for the exercise of common sense .

I would go further and say that in a case like this, the question of who is the unsuccessful party can easily be determined by deciding who has to write the cheque at the end of the case:......" .

8 In the second, and most recent, case, Straker v. Tudor Rose [2007] EWCA Civ 368, Waller L.J., giving the leading judgment (with which Tuckey and Jacob L.JJ. agreed), said (at paragraph 12)

"Having regard to the general rule, the first task...