Maini v Maini
| Jurisdiction | England & Wales |
| Judge | MRS JUSTICE PROUDMAN |
| Judgment Date | 11 November 2009 |
| Neutral Citation | [2009] EWHC 3036 (Ch) |
| Court | Chancery Division |
| Docket Number | Claim No: HC08C02766 |
| Date | 11 November 2009 |
[2009] EWHC 3036 (Ch)
Mrs Justice Proudman
Claim No: HC08C02766
IN THE HIGH COURTS OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand
London WC2A 2LL
MR P NOBLE (instructed by G Singh & Co) appeared on behalf of the Claimant
MR S GASZTOWICZ QC (instructed Jones & Co) appeared on behalf of the Defendant
Approved Judgment
The trial of this action was due to start yesterday, 10 th November 2009, with a time estimate of about ten days. However, after representations to Chancery Listing from the Claimants' solicitors, the time estimate was reduced to half a day on the basis that the Claimants were to withdraw their action and make an application instead. No formal notice was given of that application, although as a result of communications between counsel it appeared that an application was to be made that, notwithstanding discontinuance, the Claimants should not have to pay all the costs of the action. I am told that the Defendants' counsel gave the Claimants' counsel notice yesterday of his intention to seek an order at the hearing for indemnity costs.
Mr Gasztowicz QC appeared as counsel for the Defendants and Mr Noble as counsel for the Claimants. Neither side produced a skeleton argument or a reading list in advance of the hearing nor did they inform the court of the nature of the hearing today. [I have since been told that Mr Noble's clerk faxed through a skeleton argument at 9.20 a.m. yesterday. It did not come through until much later and was in any event very late.] I inferred that there was to be some argument on costs from a letter from the Claimants' solicitors dated 6 th November, saying that the Claimants were withdrawing their claim seeking no order as to costs and there was to be a half-day hearing. That was as far as my knowledge went. Mr Gasztowicz told me that he knew last Friday that the trial was unlikely to go ahead, but his knowledge of the Claimants' stance was so limited that he felt it prudent to make some preparations over the weekend for trial. The lack of skeleton arguments or even a bare summary of what was to be argued yesterday has lengthened the hearing as the case has had to be fully opened to me. It took a full day rather than the half-day estimated. I have sympathy for Mr Gasztowicz's complaint that it was incumbent on Mr Noble to give particulars of the application he was to make, but I nevertheless am of the view that both parties could have produced some document to assist the court. However, we are where we are and I must deal with the issues that have arisen.
The general rule on discontinuance is contained in CPR 38.6.1. Unless the court orders otherwise a claimant who discontinues is liable for the defendant's costs incurred on or before the date on which notice of discontinuance was served. Such a costs order is deemed by CPR 44.12.1(d) to have been made on the standard basis. A claimant who wishes to avoid such an order may apply under CPR38.6 for the court to order otherwise. The court also has jurisdiction to entertain an application for costs to be paid on the indemnity basis. In each case the burden is on the party making the application to take the case out of the normal rule.
The Claimants and Defendants are close relatives and were in business together for some years, originally under the aegis of the Singh family's father. It is therefore particularly sad that the parties have fallen out in such a spectacularly bitter way. The Claimants allege that the Defendants deprived them of an interest in a family company by fraud and deceit. It is said that there was a deliberate dilution of the Second Claimant's shareholding vested in her as trustee for herself and her husband (the First Claimant) and that her diluted share was then taken away from her through fraud, deceit and possibly forgery. The allegations are very strongly expressed and deceit is alleged not only against the parties but also some of their witnesses.
The first intimation that the Claimants were abandoning the trial was on or about 5 th November. It seems to be common ground that one reason is that the legal insurers who were standing behind them may seek to avoid the policy. The reason for this appears to be connected to an expert handwriting report (to which I shall later refer) sent to them (apparently) by the Defendants. Another reason is that Mr Noble decided at about the same time that he was no longer willing to act on a conditional fee basis. He volunteered to the court that he took this decision after having read and considered a witness statement filed on behalf of the Defendants from a family member who, as he put it, had no axe to grind. On this slender information (and I am not sure that I have got it right) it seems that those who have provided the financial support necessary for them to bring the case to trial have rightly or wrongly taken a different view on the merits from that of the Claimants. However, Mr Noble asked me to proceed on the basis, as I do, that the Claimants themselves still firmly believe that they have a true and sustainable case as to the facts.
Mr Noble's case as to costs yesterday was largely reactive to the application by the Defendants for indemnity costs, although the withdrawal and relisting for half a day was made prior to the indication that indemnity costs would be sought.
I have not really got to the bottom of why the Claimants listed this matter for a hearing on costs. At first Mr Noble said that the listing had been made at the suggestion of the Chancery Listing Officer on his own initiative, but that cannot be right. The reason given by the Claimants' solicitors in two letters to the court was to obtain an order for dismissal with no order as to costs. Mr Noble did not, however, pursue an application before me that there should be no order as to costs. He submitted that his clients should not pay for a handwriting expert's report commissioned by the Defendants and also, more generally, that the Claimants should not pay more than a proportion of the Defendants' costs of the action. Nevertheless, he conceded that they would have to pay "most of the costs" and did not advance any reason that I could follow as to why, apart from the report I have mentioned, it would be disproportionate, as he submitted, for the usual order to be made. I infer from what he said that the purpose of the application was to attempt to secure a negotiating position on costs as the Claimants' advisers feared that the Defendants were going to apply for indemnity costs. If that is the right inference the tactic backfired in that it gave the Defendant's a forum for seeking indemnity costs without having to make their own separate application while no negotiating advantage was in the event obtained.
First, I should deal with the question of the expert's report. The trial of this matter was, as I have said, fixed to start this week on 10 th November. On 13 th October last the Claimant's solicitors faxed ten witness statement to the Defendants' solicitors as evidence in rebuttal of evidence served by the Defendants on 16 th June 2009. In connection with the hearing of the application to admit that evidence it emerged that the Claimants were relying on a calendar as evidence in support of their contention that the Second Claimant was on holiday in Wales on 29 th August 1992, and could not have attended a crucial board meeting on that date. The calendar was supplied by way of disclosure on 27 th October and the Defendants, suspicious that the entries were a later concoction, immediately submitted the calendar to a handwriting expert who signed off his report on 5 th November. The Defendants say that the report supports their case that the entries were a later addition to the calendar. The report was served on the Claimants on 6 th November. On the same day, the day that the Claimants' decided to withdraw their claims, the Defendants prepared to issue an application to admit the report in evidence.
Mr Noble submits that I should disallow the costs of that report. First, he says that it is inconceivable that the report would have been admitted in evidence. The first reason he propounds for this is that to admit it would cause the trial date to be lost. I do not agree. The Defendants cannot be criticised for dilatoriness in relation to the report. It was a reasonable response to the very late disclosure of the calendar, and although there might well have been argument about the proportionality...
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