Jersey Unreported Judgments

Mareva injunction - costs judgment.

[2013]JRC119A

Royal Court

(Samedi)

19 June 2013

Before     :

J. A. Clyde-Smith, Esq., Commissioner, sitting alone.

 

Advocate D. S. Steenson for the Plaintiff.

Advocate J. Harvey-Hills for the Defendant.

judgment

the commissioner:

1.        The defendant seeks its costs from the plaintiff on the indemnity basis following the withdrawal of the plaintiff's Order of Justice.  The plaintiff concedes that the defendant should have its costs but on the standard basis only. 

2.        The defendant ("Gécamines") is a mining company incorporated in the Democratic Republic of Congo ("the DRC").  It is a société à responsabilité limitée or "SARL" which is similar to a private limited company under Jersey law.  It is 100% owned by the DRC. 

3.        The plaintiff ("Marange") is an SPV incorporated in Botswana and which forms part of the CI Funds Group which specialises in the recovery of distressed and sovereign debt claims. 

4.        By its Order of Justice dated 8^th October, 2010, (which I will refer to as "the 2010 Proceedings") the plaintiff obtained ex parte a Mareva injunction against Gécamines up to the value of £14.5 m (later converted to US$ 22.8M) in support of proceedings that it had brought against Gécamines in South Africa, in relation to monies that it claimed were owed under a certain settlement agreement.  It was brought to prevent dissipation of the Gécamines assets in Jersey pending determination of the South African proceedings. 

5.        The Order of Justice made reference to and was supported by an affidavit of Michael Shone, an English solicitor and director of Marange.  As explained in that affidavit Marange took an assignment of the claim that forms the subject of the South African proceedings from a Mr Franz Rootman ("Mr Rootman").  In his affidavit Mr Shone presented the case in the following manner (as summarised in the defendant's skeleton argument):-

"73a.   On 5 August 1998, the DRC entered into an agreement with a company called Moneyline Limited ("Moneyline") whereby Moneyline was mandated by the DRC to find cobalt that was being exported illegally from the DRC.

b.        During December 1998 or January 1999, the Moneyline agreement was terminated and an agreement on similar terms was concluded between Mr Rootman (who was one of the people behind Moneyline) and the DRC on similar terms (the "Cobalt Agreement").

c.        Mr Rootman complied with his obligations and identified significant amounts of cobalt that had been exported illegally from the DRC.

d.        The DRC failed to pay him and so he commenced proceedings against the DRC in the Pretoria High Court in November 2000 ...

e.        On or about 11 November 2000, Mr Rootman entered into a settlement agreement with Gécamines and the DRC (the "Settlement Agreement") whereby:

i.         Gécamines agreed undertook to pay Mr Rootman USD 10 million within 7 days, failing which Mr Rootman would be entitled to sell an aircraft that belonged to the DRC ("The Falcon"); and

ii.        The parties would jointly approach the Pretoria High Court for an order that the settlement agreement be made an order of the court.

f.         On 14 November 2000, the settlement agreement was made an order of the court ...

g.        On 3 December 2000, Gécamines and the DRC made an urgent application to the Pretoria High Court for an interdict to prevent the enforcement of the Settlement Agreement on the basis that they contested its authenticity and validity.

h.        Mr Rootman consented to this and an order was duly made...

i.         The matter was referred for oral hearing but Gécamines and the DRC  failed to produce any evidence in support.

j.         In September 2001, Mr Rootman commenced fresh proceedings against the DRC for the amount due and owing in respect of services provided under the Cobalt Agreement or, alternatively, for USD 10,000,000 due under the Settlement Agreement.

k.        He did this because it would be quicker than seeking a trial date in the existing proceedings.  He also elected to pursue the DRC rather than Gécamines because he believed that Gécamines had insufficient assets to meet the claim.

l.         On 2 September 2003, Mr Rootman obtained judgment against the DRC for USD 11,224,744.00 and ZAR 122,569.89 plus interest ...

m.       Mr Rootman then made exhaustive attempts to enforce the judgment.  He succeeded in selling the Falcon and two other small recoveries."

6.        At the time of the 2010 Proceedings, Gécamines was involved in other proceedings in Jersey brought against it by FG Hemisphere Associates LLC ("The Hemisphere Proceedings").  FG Hemisphere had taken an assignment of certain arbitration awards entered against the DRC which it sought to enforce directly against the assets of Gécamines in Jersey on the basis that Gécamines was an organ of the state of the DRC.  Under the Hemisphere Proceedings Gécamines' assets in Jersey were the subject of an arrêt entre mains and a Mareva injunction for over US$ 100M (more than the value of the assets injuncted). 

7.        The 2010 Proceedings were initially adjourned by consent.  On 27^th October, 2010, the Court in the Hemisphere Proceedings found that Gécamines was an organ of the state of the DRC.  As a consequence of this finding, Marange commenced further proceedings against Gécamines, by which it sought to enforce against Gécamines' assets certain South African judgments that it held against the DRC and this on the premise that Gécamines was an organ of the state.  The Order of Justice expressly relied upon the Court's judgment in the Hemisphere Proceedings (I will refer to these as the "2011 Proceedings"). 

8.        By letter dated 29^th June, 2011, Mourant Ozannes, acting for Gécamines, wrote at length to Walkers, acting for Marange.  The letter noted that the appeal against the decision of the Court in the Hemisphere Proceedings would be of significance in relation to the 2011 proceedings and that it was sensible for the 2010 and 2011 proceedings to be dealt with together in so far as it was possible.  The letter made it clear, however, that in the view of Mourant Ozannes, the 2010 Proceedings should be dismissed for material non-disclosure as follows (in brief summary):-

(i)        In his affidavit, Mr Shone stated that Gécamines and the DRC sought to contest the authenticity of the signature and validity of the Settlement Agreement.  However, he went on to say that thereafter, the DRC and Gécamines failed to produce any evidence in support of their allegations.  That was demonstrably false and misleading in that Gécamines had filed extensive evidence on 27^th June, 2001, with multiple sworn affidavits exhibited to it setting out in detail the nature of Gécamines' opposition to the enforcement of the Settlement Agreement, including detailed evidence in support of Gécamines' contention that the signatures of three of the signatories were forgeries.  These documents were not included in Mr Shone's affidavit sworn in support of the 2010 Proceedings but were included in his affidavit in support of the 2011 Proceedings, although the Court's attention was not drawn to them. 

(ii)       Quoting from Mourant Ozannes' letter:-

"Mr Shone failed to disclose to the Court that on 5 September 2001 Mr Rootman's attorney, Mr Mendelsohn, wrote a letter to Gécamines' attorney, W F Bouwer.  Mr Mendelsohn said expressly that 'My client has decided to accept the continued and repeated repudiated (sic) of the settlement agreement".  He confirmed that 'insofar as you act for Gécamines as an entity separate from that of the DRC, my client has no dispute with your client'.  He also confirmed that 'In the circumstances it is not necessary for you to be on record in these proceedings, and unless your client has some other interest in the matter, no further documents will be served on you."

This repudiation was expressly pleaded in subsequent proceedings brought by Mr Rootman against the DRC alone.  No claim to enforce the Settlement Agreement survived Mr Rootman's election to treat it as terminated and therefore there was no claim for Mr Rootman to cede to Marange, who in turn had no claim against Gécamines in relation to the Settlement Agreement or for its enforcement.  The claim was thus fatally flawed and bound to fail. 

9.        In its response of 22^nd July, 2011, Walkers, whilst not accepting that there had been material non-disclosure, said that these assertions invited a debate which could not sensibly be conducted in correspondence, and that the issues concerning the South African proceedings were a matter for the South African court to determine. 

10.      In the meantime, on 14^th July, 2011, the Court of Appeal dismissed Gécamines' appeal in the Hemisphere Proceedings and upheld the Court's finding that Gécamines was an organ of the state of the DRC.  Leave was given to appeal to the Privy Council. 

11.      By Act of Court dated 22^nd July, 2011, both the 2010 and 2011 Proceedings were by consent placed on the pending list and by Act of Court of 6^th August, 2011, both were stayed by consent, pending the determination of Gécamines' appeal to the Privy Council, subject only to Gécamines' entitlement to make an application to set aside or vary the orders and other relief obtained by Marange on an ex parte basis.  

12.      On 17^th July, 2012, the Privy Council allowed Gécamines' appeal, finding that it was not an organ of the state.  As a necessary consequence of this, Marange withdrew the 2011 Proceedings by consent order dated 9^th August, 2012. 

13.      On 2^nd November, 2012, Mourant Ozannes sent to Walkers a draft summons, seeking to have the 2010 Proceedings set aside or dismissed on the ground that firstly there was material non-disclosure by Marange in the course of the ex parte application and secondly, that Marange had no good arguable case for the relief that it sought or alternatively, there was no serious issue to be tried in proceedings that it had brought in South Africa. 

14.      On 9^th November, 2012, a date fix appointment took place, and 18^th January, 2013, was fixed for the hearing of the summons. 

15.      By e-mail sent on 20^th November, 2012, at 10:23, Walkers asked for confirmation of the proposed procedural directions and stated that 'it appears entirely likely that we will need to file substantial evidence to rebut the matters relied upon in support of your client's summons'.  They also said that 'summer holidays in South Africa will commence on 15 December for a month' and that 'the holidays will materially affect the plaintiff's availability and the ability to obtain expert opinion from counsel in South Africa, should that be needed, during the holiday period'. 

16.      On 12^th December, 2012, Gécamines' evidence, which comprised an affidavit of Mr Leon Kalasa and an affidavit of Mr Etienne Labuschagne, a senior counsel at the Pretoria Bar, was filed. 

17.      By e-mail dated 19^th December, Walkers said that "it will not be possible to obtain the required South African expert legal evidence before 18^th January, 2013, and/or a statement in response to the affidavit of Mr Kalasa".  They claimed that Marange would be materially prejudiced if it could not rely on its own evidence in response and sought an adjournment. 

18.      By letter dated 20^th December, 2012, Mourant Ozannes raised a number of serious concerns.  In summary, these were as follows:-

(i)        The date had been fixed by consent and there had to be good reason to adjourn a date that had been fixed by consent;

(ii)       Gécamines had an express right to challenge the injunction and it was trite law that a party that obtains an ex parte injunction must be ready to defend it at short notice;

(iii)      It was not clear why there would be any difficulty in obtaining a statement of fact from Mr Shone since:-

(a)       The factual matters with which Mr Kalasa dealt were all matters that had arisen in the South African proceedings and, in some cases, the relevant documents had been exhibited in the Jersey proceedings;

(b)       It was unclear what further evidence there was to file, particularly given that Marange had been and remained under a duty of full and frank disclosure;

(c)       If there was further evidence, it was unclear why it had not been filed at the outset.  Was Mr Shone not aware of these matters?  Why could he not deal with them?

(iv)      As regards expert evidence, the issues had been set out in some detail in Mourant Ozannes' letter of 29^th June, 2011.  Given the ongoing duty of full and frank disclosure, presumably these issues had been investigated at the time as it was incumbent on Marange to return to court in Jersey if they were material;

(v)       Marange had known about the application since 2^nd November, 2012, and had thus had ample time either to obtain an opinion or have a senior counsel ready to give an opinion.  What efforts had been made to obtain an opinion?

(vi)      Before Mourant Ozannes could consider the request further, they required answers to the questions posed and for Mr Shone of Marange to go on affidavit to answer them. 

19.      Following further exchanges by email, Marange applied on 4^th January, 2013, for an adjournment of the hearing that had been fixed for 18^th January, 2013.  The application was refused.  Quoting from my judgment given that day:-

"6.      Ordinarily Mr Steenson's submissions would, in my view, carry the day simply on the basis that a defendant on a summons should be given adequate time to respond.  But the situation is not as simple as that; there are a number of points to be made.

7.        Firstly, an injunction is a serious matter and its unjustified and continued imposition, if that is found to be the case, by definition is a matter of great prejudice to any defendant.

8.        Secondly the injunction was obtained ex parte.  Accordingly as Birt, Deputy Bailiff said in the Goldtron Limited v Most Investment Limited [2002] JLR 424 case at paragraph 14:-

"...it is fundamental and of the highest importance that a party applying for ex parte relief must be completely frank with the court and must put before the court any matters which militate against the making of the order in question."

9.        Thirdly, a party who has obtained an injunction ex parte must be ready to respond to an application to have it set aside.  Again, as Birt, Deputy Bailiff, said in the Goldtron case at paragraph 36:-

"In this case, despite having agreed a hearing date for the defendant's application to set aside the injunctions, the plaintiff applied for an adjournment on the basis that the affidavit filed on behalf of the defendant was lengthy and complex and required a response from the plaintiff's deponent, Miss Minaeva, who was on holiday.  The court refused the application to adjourn.  We wish to emphasise that, if a plaintiff takes the step of restraining a person from dealing with his assets - a drastic invasion of a person's rights - he has to anticipate that there may be a prompt application to set aside or vary the injunction.  The plaintiff must therefore be at the ready to respond to such an application.  It is not acceptable for a plaintiff, having set the court's procedure in motion, to then argue that it needs a lengthy period to justify the continuation of the ex parte relief.  Of course, the court would not be unreasonable.  It is right that a plaintiff should have the opportunity to respond to evidence produced by a defendant in support of an application to set injunctive relief aside.  However, it is also incumbent upon the plaintiff to act as a matter of urgency."

10.      Whilst the defendant's application to set aside the injunctions has not been prompt, I am satisfied that there was good reason for that delay with its energies understandably focused upon the FG Hemisphere litigation.  However, since that has been resolved, it has acted promptly.  Furthermore, it has given the plaintiff ample notice of the non-disclosure it is alleging by its letter of 29th June 2011.  Its detailed evidence was filed six weeks before the date fixed for the hearing.

11.      There was substance, in my view, in Mr Harvey-Hills' submission that the plaintiff should be able to respond with urgency to whether or not it was in breach of its duties in making full and frank disclosure when applying for the injunctions ex parte.  It has had ample, one might say in the context of an injunction obtained ex parte, generous time in which to respond.

12.      It is open to the plaintiff to argue that even if there has been non-disclosure, the injunction should be re-imposed by the court.  but that, if it were to be argued, would not constitute ground for justifying an adjournment of this application.

13.      In essence, as I see it, an injunction has been granted ex parte, the defendant has given ample notice of its claims that there has been material non-disclosure, and the plaintiff must be ready to answer those claims.  The drastic invasion of the defendant's rights represented by the injunction dictate that this should be so.

14.      Accordingly the application for an adjournment is refused."

20.      Following the giving of further directions on 10^th January, 2013, Mr Steenson emailed Mr Harvey-Hills on 11^th January, 2013, in the following terms:-

"As I explained during the court hearing yesterday, Mr Shone is presently in South Africa, using his best endeavours to obtain detailed statements of fact and expert evidence.  Unfortunately, due to the Royal Court's decision not to adjourn the case and subsequent case management directions, it appears that this evidence will not be available as required by the Court.  This is due to the absence of many witnesses of fact, who are on vacation.  In the circumstances, as Marange will be unable to file and serve its own evidence for the hearing on 18 January, I am instructed to withdraw the relief obtained by virtue of the Order of Justice dated 8 October 2010.

I would be grateful if you could acknowledge receipt of this email, which I copy to Miss Le Mottee to pass to Commissioner Clyde-Smithy so that the Court availability can be allocated accordingly.

It should be made plain that Marange's decision to consent to the lifting of the injunctions is borne from pragmatism and the difficulties it faces in filing its evidence in compliance with the Royal Court's directions.  For the avoidance of doubt, each of the allegations raised by your client in these proceedings to date, including but not limited to the evidence of Mr Kalasa and Mr Labuschagne, are strenuously denied.  Certainly, I can confirm that Marange will pursue the South African Proceedings to trial.  In this regard, all of Marange's rights are reserved and the decision to not resist Gécamines' application in Jersey should not be taken in any way to fetter or prejudice Marange's rights and/or ability to enforce against Gécamines, in whichever jurisdiction it sees fit, when judgment has been obtained in South Africa.

Finally, perhaps we might discuss the terms of the Consent Order and, in this respect, I look forward to a telephone call."

21.      By consent order dated 21^st January, 2013, the 2010 Proceedings were withdrawn save for the issue of costs which was heard before me on 28^th May, 2013. 

Submissions

22.      Mr Harvey-Hills filed a very lengthy and detailed skeleton argument, based upon the skeleton argument that had been prepared for the hearing on 18^th January, 2013.  He did so following the decision of the Court in STM Fiduciaire Limited v Bay Isles [2011] JRC 212.  In that case, STM had obtained ex parte injunctions in restraint of trade against the defendants.  The defendants applied to have those injunctions lifted on the grounds that there was no good arguable case against them.  The matter was compromised on the day of the hearing on the basis of the first defendant making a statement on oath (that he was not competing or soliciting and covering certain other matters required by the plaintiff), following which the proceedings were withdrawn, leaving over the issue of costs, which the defendant sought from the plaintiff on the indemnity basis. 

23.      In considering the conduct of the plaintiff, the Court reviewed the merits of the plaintiff's case on the basis of the affidavit evidence that had been filed both in support of the ex parte injunctions and the application to lift the same, finding that it was inherently weak, being based essentially on rumour and suspicion, such that had the proceedings not been withdrawn, the Court would have lifted the interim injunctions.  Finding also that there was nothing in the case that precluded an inter partes hearing, the Court awarded the defendants their costs on the indemnity basis. 

24.      Following STM Fiduciaire, Mr Harvey-Hills submitted that Marange had no good arguable case and the application was riddled with material non-disclosures.  Marange's conduct had been entirely unreasonable and in the circumstances, Gécamines should be awarded its costs on the indemnity basis.  

25.      Mr Steenson submitted that STM Fiduciaire was readily distinguishable from the 2010 Proceedings because STM had itself conceded, upon receiving evidence from the defendants, that its claims held no water.  By distinction, in the 2010 Proceedings, the email of 11^th January, 2013, withdrawing the proceedings specifically denied each of the allegations raised by Gécamines.  The basis for the withdrawal was explained as being born of pragmatism and the difficulties faced by Marange in providing witness evidence in accordance with the Court's timetable.  Marange had not conceded that its injunctions were groundless nor had any argument or evidence been heard by the Court, and as such, the Court could not reasonably reach a decision as to the merits of the plaintiff's case. 

26.      The ex parte injunctive relief had been obtained, he said, in an appropriate and justifiable manner and Gécamines had not sought to discharge the same for a period in excess of two years.  Reliance was placed by Gécamines upon the Hemisphere Proceedings and the need to await the Privy Council's decision, but that can have had no relevance to the 2010 Proceedings, which were neither factually nor legally connected with the Hemisphere Proceedings.  Rather Gécamines acquiesced in the imposition of the injunctive relief by failing to apply for a discharge. 

27.      Then without advance notice, Gécamines served its summons, notwithstanding notification by Marange that the month long South African holidays commencing on 15^th December, 2012, would materially prejudice Marange's ability to provide evidence in response.  By Gécamines filing its evidence on 12^th December, 2012, Marange's case was effectively hamstrung and incapable of being supported by the necessary evidence for the hearing on 18^th January, 2012.  Gécamines successfully opposed the application for an adjournment, resulting in directions which Marange simply could not meet and its failure was as a result of pragmatic as opposed to legal or substantive reasons.  Accordingly he submitted that Marange cannot be said to have acted unreasonably and the only award which would achieve a fair result between the parties is an award of costs on the standard basis. 

Decision

28.      It was agreed by the parties that the proper approach when deciding whether or not to award costs on the indemnity basis is explained by the Court of Appeal in C v P-S [2010] JLR 645, approving the Royal Court's judgment in Pell Frischmann Engineering Limited v Bow Valley [2007] JLR 479 at paragraph 7:-

"The principle, or guidelines, to be considered when deciding whether or not to award costs on an indemnity basis are not in this case the subject of dispute (save for one matter), although the parties rely on different case law: Dixon v Jefferson Seal Ltd (1), a decision of the Court of Appeal, for the wife; and Pell Frischmann Engr. Ltd. v Bow Valley Iran Ltd. (8), a more recent decision of the Royal Court, for the husband.  The Royal Court in Pell Frischmann did not purport to depart from the approach in Dixon but helpfully updated the position in light of recent case law from the English appellate courts (2007 JLR 479, at paras 25 and 27).

"25     At the risk of oversimplifying matters, the result of these English authorities may be said to be this: that the circumstances in which an award of indemnity costs may, as a matter of discretion, be ordered are less restrictive than they used to be; there must, ex hypothesi, still be something to take the case out of the ordinary, but the range of potentially relevant considerations, as described by Millett, J. (later Lord Millett) in Macmillan Inc v Bishopsgate Inv. Trust ..... is considerable and need not involve any finding of a lack of moral probity; the test, in a word, is unreasonableness; the purpose of such an award is to achieve a fairer result for the party in whose favour it is made than would be the case if he were only able to recover costs on the standard basis; in the end, it is a question of what would be fair and reasonable in all the circumstances.

27.      In this jurisdiction, the Court of Appeal in Jefferson Seal ... (in 1998) was plainly minded to follow the practice of the English courts as reflected in the cases referred to by Collins, J.A.: and, while Jersey has not adopted anything equivalent to the English Civil Procedure Rules which features strongly in the post-1998 cases, I can think of no reason why the general approach adopted in those cases should not be followed in the Royal Court and every reason why it should be."

29.      The Court of Appeal went on to consider the behaviour and conduct on the part of the husband in determining whether any fact existed which took the case out of the ordinary.  The Court in STM Fiduciaire applied the same principles and found that obtaining interim injunctions ex parte on a case which was based essentially on rumour and suspicion was unreasonable, taking the case out of the ordinary and thus justifying indemnity costs.  Mr Harvey-Hills invited me to reach the same conclusion in relation to the conduct of Marange. 

30.      I have not set out in this judgment the very detailed arguments as to the merits or lack of merits of Marange's case put forward by Mr Harvey-Hills in his skeleton argument, which extended beyond the two central allegations contained in the letter sent to Walkers on 29^th June ,2011, but suffice it to say that the arguments put forward by him were comprehensive and impressive and if the Court had been left with the original affidavit filed by Mr Shone in support of the 2010 Proceedings and the evidence filed on behalf of Gécamines, I have little doubt that the interim injunctions would have been lifted, at the very least on the two central allegations put forward. 

31.      The decision of Marange to withdraw the proceedings means that I do not know what case it would have put forward by way of a reply; as a consequence, Mr Steenson submits that I cannot have regard to the merits.  I disagree that for the purposes of awarding costs, I am precluded from doing so.  As Mr Harvey-Hills said, no plaintiff who has the benefit of interim injunctions over assets worth US$ 22.8M would give them up lightly and the fact that Marange did so leads to the inevitable inference that they were unable to meet the case put forward by Gécamines.  

32.      Where a party withdraws a case before the matter is heard before the Court, leaving the trial judge to determine the issue of costs, then it seems to me axiomatic that the judge can, in considering the conduct of the plaintiff, make his own assessment of the merits of the plaintiff's claim on the material before him.  In Noorani v Mr Richard Calver [2009] EWHC 592 (QB) the trial judge had no difficulty in reviewing the merits of a libel claim that had been abandoned part way through the hearing of evidence on the second day of the trial and this for the purpose of awarding, in that case, indemnity costs against the plaintiff.  In STM Fiduciaire the trial judge felt able to assess the merits of the plaintiff's claim upon the day of the trial with the benefit of the affidavit evidence that had been filed by both parties. 

33.      However, irrespective of the views I may take as to the merits of Marange's case, this seems to me to be a clear case where indemnity costs should be awarded. 

34.      It is true that these proceedings were initially adjourned but, as I said in my judgment of 4^th January, 2013, there was good reason for such an adjournment with Gécamine's energies understandably focused on the Hemisphere Proceedings, the interim injunctions in respect of which exceeded the value of Gécamines' injuncted assets. 

35.      However, in June 2011, Marange was placed in notice of the central allegations made by Gécamines.  Following the termination of the Hemisphere Proceedings (and the withdrawal of the 2011 Proceedings) Gécamines then issued its summons on 9^th November, 2012, some ten weeks before the date fixed for the hearing of that summons, namely 18^th January, 2013.  At that stage, Marange had been on notice for a year and a half of the central grounds upon which that application would be made.  Gécamines then filed its detailed evidence on 12^th December, 2012, some six weeks before the hearing. 

36.      It is worth bearing in mind that a plaintiff who has obtained interim injunctions ex parte is under a continuing duty whilst the proceedings remain on an ex parte basis, to return to Court if it discovers any new or altered facts or matters which, had they existed at the time of the application, should have been disclosed to the Court (see Commercial Bank of the Near East plc v A [1989] 2 Lloyds' Report 319 per Saville J at page 322-323).  Marange did not return to Court. 

37.      It also needs to be remembered that Marange was not being asked to respond to a claim being made against it, but to justify the grounds upon which it had obtained interim injunctions over the assets of Gécamines, described in the Goldtron case as "a drastic invasion of a person's rights".  Marange should have been in a position to justify the obtaining of those interim injunctions.  It had ample time to do so and it did not do so - it simply withdrew the proceedings. 

38.      In the Court of Appeal case of Dick v Dick 1990/48A, a matrimonial case, which did not appear to involve interim injunctions, Sir Godfray Le Quesne, President, said this:-

"Mr Scholefield has explained to us the circumstances which led the appellant to take this decision.  We appreciate those circumstances but it appears to us that if for reasons of his own, whether good or bad, a party who has instituted proceedings subsequently decides to drop them before they come into Court, it is fair that he should pay for that conduct the price of compensating the other party by way of indemnity costs."

39.      The award of indemnity costs must be all the more justifiable when a plaintiff withdraws proceedings which carry with them interim injunctions restraining a person from dealing with his assets. 

40.      In my view, the conduct of Marange takes it firmly into the territory where indemnity costs are justified and that is the order that I make. 

Payment on account of costs

41.      Gécamines seek an order for a payment on account of 50% of the costs it has incurred of £173,000, namely the sum of £86,500 and this following two decisions of the Court, namely Centre Trustees CI Limited and another v Van Rooyen and another [2009] JRC 133 and Café de Lecq Limited v R A Rossborough (Insurance Brokers) Limited [2012] JRC 154.  Marange resists the application on the grounds (in summary) of the inadequate billing information provided by Gécamines to date, the fact that Gécamines is a company based outside the jurisdiction (making recovery of any over-payment difficult) and the unreasonable and disproportionate level of the costs claimed.  It would be unsafe, Mr Steenson submitted, for the Court to reach a decision as to a payment on account in circumstances where its discretion should be exercised with caution.  

42.      The principle in relation to the payment of costs on account is set out in the judgment of Jacob J in Mars UK Limited v Teknowledge Ltd [1999] 2 Costs LR 44 (cited in Centre Trustees):-

"I now turn to the second issue, whether or not there should be an order for interim payment.  The first thing to do is to consider what the general rule should be, interim payment or not.  There is no guidance given in the Rules other than that the court may order a payment on account.  There is no guidance in the Practice Direction.  So I approach the matter as a question of principle. Where a party has won and has got an order for costs the only reason that he does not get the money straightaway is because of the need for a detailed assessment [taxation].  Nobody knows how much it should be.  If the detailed assessment were carried out instantly he would get the order instantly.  So the successful party is entitled to the money.  In principle he ought to get it as soon as possible.  It does not seem to me to be a good reason for keeping him out of some of his costs that you need time to work out the total amount.  A payment of some lesser amount which he will almost certainly collect is a closer approximation to justice.  So I hold that where a party is successful the court should on a rough and ready basis also normally order an amount to be paid on account, the amount being a lesser sum than the likely full amount."

43.      Lower on the same page, Jacob J said:-

"Thus I start from the proposition that there should be an interim payment in general.  However, the court has a discretion.  In exercising that discretion the court must take into account all the circumstances of the particular case."

44.      The Court should not, therefore, seek to conduct a taxation or detailed view of the successful party's costs, but adopt "a rough and ready" approach, in order to arrive at a figure which the successful party "will almost certainly collect".  

45.      Mr Steenson referred me to Mars UK Limited v Teknowledge Ltd [1999] 2 Costs LR 44 where, having referred to the above passage in Mars UK, Laddie J, distinguished between the ability of a judge to make a fair and rational assessment of costs when there has been a full trial and where, as in that case, he had heard virtually nothing; in the latter case he said the judge should exercise particular caution, a proposition which I accept. 

46.      Mr Steenson also referred me to Harrison v Black Horse Limited [2013] EWHC B5 (Costs), in which a payment of £150,000 was awarded against an untaxed bill of £1.48M.  It is fair to say that there were a number of issues in relation to the claim for an interim payment in that case under the English regime that would not apply in Jersey.  In addition, the figures claimed included a 100% success fee on the solicitor's profit costs and counsel's fees and there were, in the words of the costs judge, serious issues as to the hourly rates charged and significant issues in relation to the quantum. 

47.      There was some discussion as to whether, in an application for a payment on account of costs, the Court should work from the fees of the lawyers concerned at the rates claimed (which will no doubt differ from firm to firm) or from a summary of those fees prepared at the taxation rates. 

48.      Mr Harvey-Hills had produced to Mr Steenson and to the Court, printouts of his firm's time charges at its usual rates, which amounted to £173,000.  This comprised approximately £158,000 in respect of his firm's fees with the balance relating to the fees of English and South African counsel.  As Mr Steenson pointed out, it is not difficult to take the time of the fee earners concerned and to summarise the claim at the taxation rates (applying Factors A and B).  This Mr Harvey-Hills has subsequently done and that reduces his firm's fees to £122,353, to which must be added the fees of counsel. 

49.      I explored with counsel a number of English decisions that they had provided but we could not ascertain any particular practice followed in that jurisdiction in this respect.  That discussion took place however without my being referred to Practice Direction RC 09/02 which provides at paragraph 1.3:-

"In drawing a bill for taxation on the indemnity basis it is not necessary to specify separately Factor A and Factor B rates. Instead, the bill should specify the hourly rate claimed for each fee earner."

50.      Accordingly where costs have been awarded on the indemnity basis, then when considering a payment on account, the Court should work from the fees of the lawyers at the charge out rates claimed, in this case the sum of £158,000 (excluding counsel's fees).  The Court should be provided with a summary of the time of the fee earners and the rates claimed to enable any serious issues as to the rates or quantum to be raised.  Where costs have been awarded on the standard basis, then it seems to me that in seeking a payment on account it would be helpful to the Court to be provided with a summary of those costs at the taxation rates applying Factors A and B. 

51.      Turning to the application in this case, I accept the principle as enunciated in Mars UK and applied in Centre Trustees and Café de Lecq that the successful party ought to get the money to which it is entitled under a costs order as soon as possible and accordingly agree that a payment on account should be made.  Although the proceedings were withdrawn before the hearing on 18^th January, 2013, I have sat twice to give pre-trial directions and have the benefit of the evidence upon which the interim injunctions were originally obtained and the evidence filed by Gécamines; and so I have a reasonable indication of the work that would have been undertaken. 

52.      The issues raised by the interim injunctions, including South African law, were complex, as demonstrated by the skeleton argument filed by Mr Harvey-Hills, which ran to some 51 pages and was accompanied by eight bundles of evidence and authorities. 

53.      Mr Steenson did not raise any issues as to the rates claimed by Mourant Ozanne but he did give me some examples of where he felt the time that had been incurred by Mourant Ozannes was unreasonable, but I bear in mind that on a taxation of costs on the indemnity basis pursuant to Rule 12(5) of the Royal Court Rules 2004, any doubts which the Greffier may have as to whether the costs were reasonably incurred or were a reasonable amount shall be resolved in favour of the receiving party.  My understanding is that it is unusual for costs on the indemnity basis to be taxed down more than 10%. 

54.      In Centre Trust reference was made at paragraph 6 to the general approach of the English courts of ordering one half of the untaxed costs of the successful party by way of an interim payment.  In the case of indemnity costs that is arguably too cautious, but adopting a rough and ready but cautious approach, I have decided in the circumstances of this case to order Marange to pay Gécamines the sum of £79,000 by way of a payment on account of costs, being an amount which in my view it will almost certainly collect following taxation.  I will need to hear from Mr Steenson on the time that should be allowed for payment. 

Authorities

STM Fiduciaire Limited v Bay Isles [2011] JRC 212.

FG Hemisphere Associates [2011] JCA 141.

C v P-S [2010] JLR 645.

Pell Frischmann Engineering Limited v Bow Valley [2007] JLR 479.

Noorani v Mr Richard Calver [2009] EWHC 592.

Commercial Bank of the Near East plc v A [1989] 2 Lloyds' Report 319.

Dick v Dick 1990/48A.

Centre Trustees CI Limited and another v Van Rooyen and another [2009] JRC 133.

Café de Lecq Limited v R A Rossborough (Insurance Brokers) Limited [2012] JRC 154.

Mars UK Limited v Teknowledge Ltd [1999] 2 Costs LR 44.

Harrison v Black Horse Limited [2013] EWHC B5.

Practice Direction RC 09/02.

Royal Court Rules 2004.