Maruti Holdings Pte Ltd Claimant/Respondent v 1. Sinclair Strategies Ltd 2. Mick Cahill 3. Peter Moulton Defendant/ Applicant

• Jurisdiction: British Virgin Islands
• Judgment Date: 21 November 2013
• Neutral Citation: VG 2013 HC 29,[2013] ECSC J1121-3
• Docket Number: BVIHC (COM) 2012/130
• Court: High Court (British Virgin Islands)
• Date: 21 November 2013

[2013] ECSC J1121-3

IN THE EASTEN CARIBBEAN SUPREME COURT

HIGH COURT OF JUSTICE

COMMERCIAL DIVISION

BVIHC (COM) 2012/130

Between:

Maruti Holdings Pte Limited

Claimant/Respondent

and

1. Sinclair Strategies Limited

2. Mick Cahill

3. Peter Moulton

Defendant/ Applicant

Appearances:

Mr. Richard Brown together with Keisha Frett of Counsel for the Second Defendant

Ms. Oliver Clifton of Counsel for the First and Third Named Defendants

Mr. Brian Lacy of Counsel for the Claimant/Respondent

DECISION ON ASSESSMENT OF COSTS

Introduction

1 The applicants succeeded on an application for striking out and summary judgment following which the court ordered, that the first defendant's costs of the proceedings and its application of the 16 ^th April 2013; the second defendant's costs of the proceedings and its application by notice dated the 15 ^th April 2013; and the third defendant's costs of the proceedings and its application by notice dated the 15 ^th April 2013 all consequent on their success to be assessed if not agreed. It was further ordered that the claimant do make interim payments on account of costs due to the first defendant in the sum of US$40,000.00 and on account of costs due to the second defendant in the sum of US$40,000.00 and on account of costs due to the third defendant in the sum of US$40,000.00. These sums remain unpaid. The applicants attempts to have costs agreed was unsuccessful. The second defendant/applicant has applied by application dated the 27 ^th August 2013 to have their costs assessed and the first and third named defendants have applied by application dated the 4 ^th September 2013.

2 The respondent Maruti Holdings PTE Limited has since appealed the decision of the commercial court. Its application for the stay of the proceedings pending appeal was unsuccessful.

3 The defendants filed a consolidated bundle for the hearing of the application containing schedules of costs detailing the professional fees and disbursements incurred for the second named defendant in the total sum of US$241,879.52 and the first and third defendants have applied for combined costs of US$247,760.60. These costs now stand to be assessed.

Assessed costs — CPR 2000

4 The claim filed, although it allegs various causes of action was based primarily in intimidation alleging that the defendants had in effect bribed the claimant to secure their unjust enrichment, and had exercised intimidation in order to achieve their objective. The claim sought the return of US$21,000,000.00 which it alleged the defendants fraudulently forced the claimant to pay to them. The proceedings were summarily determined before case management conference. Had costs been determined on the basis of prescribed costs the sum payable on dismissal of the action would have been at US$21,000,000.00 x 0.5% x 55% =US$57,750.00, per defendant.

5 Order 65.12 directs the court on an application for assessment of costs and the basis of quantification is contained in Part 65.2(1) which requires that I consider all relevant circumstances and the amount deemed reasonable were the work to be carried out by reasonably competent counsel and having regard to what is fair as between the paying and receiving party. In particular I am to consider:—

• (a) any order that has already been made;

• (b) the care, speed and economy with which the case was prepared;

• (c) the conduct of the parties before as well as during the proceedings;

• (d) the degree of responsibility accepted by the legal practitioner;

• (e) the importance of the matter to the parties;

• (f) the novelty, weight and complexity of the case;

• (g) the time reasonably spent on the case; and

• (h) in the case of costs charged by a legal practitioner to his or her client —

  • (i) any agreement about what grade of legal practitioner should carry out the work;

  • (ii) any agreement that may have been made as to the basis of charging; and

  • (iii) whether the legal practitioner advised the client and took the client's instructions before taking any unusual step or one which was unusually expensive having regard to the nature of the case.

Consideration of Submissions

6 I have considered the submissions generally and under the following heads which include the grounds advanced by the defendants:—

The care speed and economy with which the case was prepared

7 The second defendants in their submissions suggested that it was with tremendous efficiency that counsel applied themselves to the proceedings. The claimant however challenges the defendants economic management of the proceedings advancing three overarching complaints that of (1) the number of Grade A fee earners who were attendant on the proceedings. In the case of the bill of costs for the second defendant there were two from the commencement of the proceedings to the 20th March 2013, and in relation to the first and third defendants there were three whose costs were in fact duplicated for the two defendants. Counsel submits that this is unjustified and unnecessary and it significantly increased the cost of the proceedings. No reasonable justification has been advanced for overuse of Grade A fee earners. (2) The hourly rates used by the second defendant is excessive and although such rate is not fixed, there must be consideration dependent on the nature of the proceedings of the level at which fee earners should be applied. The claimant urges the court to discount any overuse and where there has been excessive fire power thrown after this case. The claimant submits that it has resulted in a significant and unnecessary increase in the costs.

8 The early action of the defendants brought to swift conclusion proceedings which the trial judge referred to at paragraph [57] as being hopeless. The application challenging the jurisdiction of the proceedings was advanced in a two month period following service of the claim. It was the first and third defendant's application to strike that brought the proceedings to conclusion in the early stages if only because that application was heard first and thereafter it dispensed with the need for any further application.

The conduct of the parties before as well as during the proceedings.

9 The second defendant urges the court to consider as the starkest example of the claimant's conduct the fact that it is already in breach of the order of Justice Bannister ordering an interim costs payment to each defendant in the sum of $40,000.00, which it was required to pay on or before the 1st of August 2013. He also asks the court to consider as relevant to the issue of conduct that the claimant has issued parallel proceedings in Australia and Singapore, against the second and third defendants. This, the second defendant argues is vexatious and oppressive as these proceedings were filed only to gain leverage in the BVI proceedings. Leave was granted by the Australia court to serve out on the second defendant Mick Cahill but such application has yet to be made in Singapore. The second defendant relies on Australian Commercial Research and Development Limited v ANZ Mc Craughan Merchant Bank Limited(1989) 3 All ER and the dicta of Browne Wilkinson to support his contention. Justice Browne Wilkinson said this:—

" In my judgment where a plaintiff seeks to pursue the same defendants in two jurisdictions in the same subject matter, the proceedings verge on vexatious."

" In those circumstances it seems right that the defendant should recover fully the costs thrown away since they need never have been incurred at all but for the plaintiff's act."

The claimant's action the defendants' submit is deserving of reprimand to be reflected in the favourable consideration of the application and bill of costs of the defendants.

10 The claimant opposes these submissions clarifying that the proceedings brought in Singapore were strategically commenced to avoid the statutory limitation. In any event costs in relation to the Singapore proceedings are to be recovered under these proceedings and ought not to impact these instant proceedings. As to the submission that it continues in violation of an order of Justice Bannister to pay interim costs, the claimant states that the second defendant is being less than truthful in the submissions levied. The claimant has notified the defendants that it has placed the interim costs award in escrow pending the appeal. Although the claimant's recently filed application for a stay of proceedings was denied by the Court of Appeal, Maruti unapologetically remains in contempt, opting of its own accord to avoid the difficulties of having to recover these costs if it is ultimately successful on appeal. The claimant submits that its conduct with regard to the interim payment is neither relevant conduct nor has it resulted in an increase of the costs of the defendants.

11 Part 65.2(3) of CPR 2000 requires the court to consider the conduct of the parties before as well as during the proceedings. The Order of Justice Bannister of the 1st of August 2013, allowed the defendants' costs of the application as well as their costs of the entire proceedings. Consequently the claimant's conduct throughout the run of the proceedings, including its contemptuous conduct in relation to the interim award is relevant, which can be accounted for by an appreciation of the necessity for the energy thrown behind this case.

12 I do not find the case of Australian Commercial Research and Development Limited v ANZ Mc Craughan Merchant Bank Limited(1989) 3 All ER to be at all relevant to the issues before me and it is a case distinguishable on its facts. I do consider the institution of parallel proceedings to be relevant to the assessment of costs in so far as it resulted in the increase of costs incurred in this jurisdiction, by perhaps reference to dialogue on strategy between counsels of the various jurisdictions. In so far as the bill of costs reflects...