Kirby Kearns v Lesley Kemp and Another
| Jurisdiction | England & Wales |
| Judge | Mr Justice Nicol |
| Judgment Date | 05 December 2013 |
| Neutral Citation | [2013] EWHC 4093 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No. HQ12D05081 |
| Date | 05 December 2013 |
[2013] EWHC 4093 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice,
Strand,
London, WC2A 2LL.
Mr Justice Nicol
Case No. HQ12D05081
Mr Thrower (instructed by Sahota Solicitors, 218 The Strand (3rd Floor), London WC2R 1AT) appeared on behalf of the claimant.
Mr Price and Mr Dougans (solicitor) (instructed by Bryan Cave Solicitors, 88 Wood Street, London EC2V 7AJ) appeared on behalf of the first defendant.
The second defendant did not attend and was not represented.
JUDGMENT AND PROCEEDINGS THEREAFTER ( )
By his claim form issued on 29th November 2012, the claimant sought damages for libel from the first defendant based on three tweets which the first defendant published on 10th October 2012 and two further tweets which were published by a third party in response to her tweets. The first defendant initially acted in person. A case management conference was held by Deputy Master Eyre on 15th March 2013. The first defendant did not attend. The Deputy Master directed, amongst other things, that the claimant had leave to amend the claim form and particulars of claim to seek a permanent injunction and the first defendant was to file a draft amended defence. The Deputy Master adjourned the CMC and ordered the first defendant to pay £824.20 as the summarily assessed costs of the hearing and that, in default of payment within 14 days, the first defendant's defence was to be struck out and she was to be debarred from defending the claim. On 2nd April 2013 the time for complying with payment of the costs was extended to 28 days from service of the order.
The first defendant sought to appeal the 'unless' order so far as it related to the payment of costs. She was granted a stay of this part of Deputy Master Eyre's order on 9th April 2013. As it happens, the judge who granted the stay was myself. I made the stay conditional on the first defendant filing a full and proper statement of means.
On 29th April 2013, Master Yoxall gave the claimant permission to amend the claim form and amended particulars of claim, to add the second defendant and to serve that defendant out of the jurisdiction in California, USA.
On 7th June 2013, Tugendhat J granted the first defendant permission to appeal the 'unless' part of Deputy Master Eyre's order so far as it related to payment of costs. On 16th July 2013, Tugendhat J also directed that the case should be listed before him for consideration of whether the claim disclosed a real and substantial tort or whether it was an abuse of the process of the court and for determination of the actual meaning of the words used.
The appeal hearing was listed for 24th July 2013. By a consent order made on 23rd July 2013 the appeal was discontinued, with costs reserved — I shall refer to these as the "appeal costs".
In the meantime, the claimant had served the second defendant. By an application notice issued on 16th July 2013, the second defendant challenged the jurisdiction of the court.
The claimant is an Irish national. Of greater importance, he appears to be resident in Qatar, which is not a Brussels contracting State, nor a State bound by the Legano Convention, nor a regulation State as defined in the Civil Jurisdiction and Judgments Act 1982. By an application notice dated 23rd August 2013 the first defendant sought an order that he provide security for costs.
On 18th November 2013 the claimant gave notice of discontinuance.
The claimant accepts that, in consequence of his discontinuance, he is obliged to pay the following costs of the first defendant: the costs of the claim, the first defendant's appeal costs and the first defendant's costs of the security for costs application. The default position is that these costs should be assessed on the standard basis — see CPR rule 44.9(1) — and that is the basis on which the claimant submits those costs should be assessed. However, the first defendant contends that I should order they be assessed on the indemnity basis.
The first defendant also seeks an order that the claimant make a payment on account of costs. CPR rule 44.2(8) now provides that:
"Where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs unless there is good reason not to do so."
This provision was substituted by the Civil Procedure (amendment) Rules 2013, S.I. 2013 No. 262, rule 16. The amendments came into force on 1st April 2013 and, while there are transitional provisions for certain of the changes (see rule 22), none apply to rule 16 of the Amendment Rules. In any event, the claimant does not dispute that he is obliged to make a payment on account. The amount is disputed.
The claimant accepted that he was also obliged to pay the second defendant's costs. Originally, the second defendant argued that its costs should also be assessed on the indemnity basis but, shortly before the hearing of the applications before me, the claimant and the second defendant agreed that these should be assessed on the standard basis and, in principle, the claimant would submit to an order for a payment on account. The amount of this payment was left for me to determine.
Consequently, I had to decide the following: (a) should the claimant be required to pay the first defendant's costs of the claim, the appeal and the security for costs application on a standard or an indemnity basis? (b) What amount should the claimant be required to pay the first defendant on account of costs? (c) What amount should the claimant be required to pay the second defendant on account of costs?
Indemnity or standard basis: the principles to be applied
In either case, the court will only allow costs which have been reasonably incurred and only in a reasonable amount. However, there are two differences between the two bases. First, on the standard basis any doubt is resolved in favour of the paying party. On the indemnity basis, any doubt is resolved in favour of the receiving party. Furthermore, on the standard basis the receiving party must also show the costs were proportionate — see, now, CPR rule 44.3(1) to (3).
The court has a discretion as to which basis to choose but the discretion must, of course, be exercised judicially. Since the default position is that costs are assessed on the standard basis, there has to be some good reason to depart from that position. One of the matters which the court must take into account in any costs decision is the conduct of the parties — see, now, rule 44.4(a) — and the conduct of the parties is of particular importance in deciding whether to order costs on an indemnity basis. The principles were summarised by Tomlinson J in Three Rivers District Council v. The Governor and Company of the Bank of England [2006] EWHC 816 (Comm) at [25]. I have considered all of these but I note especially that there must be some conduct or some circumstance which takes the case out of the norm. So far as the claimant's conduct is relied upon, the test is not conduct attracting moral condemnation, but unreasonableness. The court can consider whether it was reasonable for the claimant to have raised and pursued particular allegations and the manner in which the case was run. Other cases emphasize that it is not enough that the claimant has failed. That will normally be the case whenever a party is ordered to pay the other side's costs. There is a difference between a losing case and a case which was so weak that the claimant ought to pay the costs on an indemnity basis as a result. I also accept the argument of Mr Thrower for the claimant that it is not enough that the claimant has discontinued. Were it otherwise, CPR rule 44.9 would provide that the deemed costs order on discontinuance was that the claimant should pay costs on the indemnity basis, but it does not. There must, I accept, be a significant level of unreasonableness to justify an order for costs on an indemnity basis.
However, Mr Thrower also argued that a party who has acted throughout on legal advice is not guilty of conduct such as to merit an award of indemnity basis and that it is only the paying party's conduct which is relevant, rather than the conduct of his legal representatives. Mr Thrower relied on a passage in Volume 1 of the 2013 edition of the White Book 44.4.3 page 1357, which in fact says:
"A party who has acted throughout on professional advice is not guilty of conduct such as to merit an award of indemnity costs."
The authority cited in the White Book is Zissis v. Luklmski [2006] EWCA Civ 341 at [51]. It is not entirely clear from the passage in the judgment as to which professional had given advice in that case. It is certainly not clear that the Court of Appeal was intending to establish a general proposition that a litigant would generally be immune from an order to pay costs on an indemnity basis if the conduct in question was the product of advice from his or her legal representative. That would be a surprising general proposition. However, more fundamentally, if there is such a proposition it cannot help the claimant in this case. As Mr Price for the first defendant observed, there is a dearth of evidence as to whether it was the claimant or his solicitors who was responsible for the unreasonable conduct on which the first defendant relies. Mr Thrower asked me to infer that it was the solicitor. I do not consider that I have the evidence on which such an inference could be based.
The first defendant's submissions as to why the claimant had behaved unreasonably and should be required to pay costs on an indemnity...
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