Fourie v Le Roux and Others (No 2)

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This is an appeal by the appellants from the decision of the Costs Judge, Master Wright, from a decision he gave on 27 June 2005. He carried out a detailed assessment of the respondents' costs which were payable by the appellants pursuant to an order of the Court of Appeal in proceedings which I will describe briefly in a moment, the Court of Appeal's order being made on 14 March 2005. The background is helpfully set out in the skeleton argument of the appellants and as it is only a page or two long I will read it for incorporation into this judgement.

"The appellants were originally the sole provisional liquidator of two South African companies, Herlan Edmunds Investments Holdings Limited and its wholly owned subsidiary Herlan Edmonds Engineering Proprietary Limited (called HEE). Since proceedings were commenced two other persons have been appointed provisional liquidators with the appellant. On 9 July 2004 at a without notice hearing before Mr Justice Park in the Chancery Division, the appellants applied for and obtained a freezing injunction against the respondents, the first injunction. This application was made on the basis of the first and second respondents who had been involved in a scheme secretly to remove assets belonging to HEE and to transfer such assets to, in particular, the third respondent a company incorporated in England.

On the return day you will notice that the application for the first injunction on 23 July 2004 the hearing was adjourned to 26 July 2004. On that date, His Honour Judge Norris QC, sitting as deputy judge of this division, continued the first injunction until 1 December 2004 or further ordered. He ordered the respondents to pay the appellants' costs at that hearing. Subsequent to that decision the order was not, apparently, drawn up. On 28 July 2004, the respondents issued an application to discharge the first injunction. They also applied to expedite the hearing of that application so that it would be heard on 5 August 2004 but the appellant opposed that. On 30 July 2004, Mr Justice Lloyd refused the application to expedite the hearing of the application to discharge the first injunction and again a costs order was made in favour of the appellant. The hearing of the respondents' application to discharge the first injunction took place before Mr John Jarvis QC, sitting as a deputy judge of this division, on 28, 29 and 30 September 2004. Evidence had been filed in support of that application by the respondent, which had been responded to by the appellant. I understand that there were a number of files, which had been prepared at significant cost.

On 30 September 2004 Mr Jarvis discharged the first injunction on the grounds that Mr Justice Park had lacked jurisdiction but later on that day the appellant applied for and obtained a second injunction from him against the first and third respondents and this was on the basis of an undertaking by the appellant to issue a claim form in the High Court. Notwithstanding the obtaining of the first injunction and its extension by His Honour Judge Norris, no proceedings have actually been issued. Notwithstanding the fact that the appellant had succeeded in obtaining the second injunction, Mr Jarvis ordered the appellant to pay not just the costs incurred by the respondents in obtaining the discharge of the first injunction, which, in the event, the evidence was irrelevant because he determined it solely on the basis of jurisdiction. He also ordered the payment of the entire costs of the proceedings on an indemnity basis. Further, he ordered the appellant to make an interim payment of £60,000 within 14 days, which was done.

The appellant appealed to the Court of Appeal against Mr Jarvis's decision to discharge the first injunction. The second injunction itself was discharged by Mr Justice Blackburne on 25 November 2004 when he granted a third freezing injunction against the first respondent and the third respondent in favour of HEE which had by then been added as another claimant in the proceedings. He ordered that the respondent should pay 70 per cent of the appellants' costs and ordered an interim payment of £60,000, which has not been paid because that was stayed pending the outcome of the respondents' appeal against the third injunction. The appellants' appeal against the decision by Mr Jarvis to discharge the first injunction and the respondents' appeal against the third injunction were heard together by the Court of Appeal on 1 to 3 February 2005 and judgement was handed down on 7 March 2005.

In circumstances to which I will come, when referring to the judgement of the Vice-Chancellor in the Court of Appeal, I record at the moment the order the Court of Appeal made in relation to costs. On the detailed assessment of costs ordered to be paid by the appellant to the respondent pursuant to paragraph 2 of Mr Jarvis's order, and it was effective to the entire costs of the proceedings to the date of the hearing before Mr Jarvis, it is directed that the costs judge shall apportion those costs between (1) the application for and discharge of Mr Justice Park's order and (2) the further application for a freezing order made to Mr Jarvis QC on the afternoon of 30 September 2004."

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The Court of Appeal dismissed the respondents' application against the third injunction. The matter, as I say, came before the costs judge on a detailed assessment pursuant to that order. To understand why that cost order was made I should refer to two passages in the judgement of the Vice-Chancellor. Under the heading "Duplication" paragraphs 46 and 47, the Vice-Chancellor dealt with the submission made on behalf of the appellants before the Court of Appeal that they should not have to pay the costs of the entire proceedings given that they had been successful in obtaining a freezing injunction and that the appeal against the third order had been dismissed. I quote from the judgement:

"The point here is that the deputy judge ordered Mr Fourie to pay all the costs of the proceedings, not just the costs of the application to discharge, notwithstanding that...