Natixis S.A. v Marex Financial Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Bryan |
| Judgment Date | 08 November 2019 |
| Neutral Citation | [2019] EWHC 3163 (Comm) |
| Date | 08 November 2019 |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2017-000325 |
and
[2019] EWHC 3163 (Comm)
The Honourable Mr Justice Bryan
Case No: CL-2017-000325
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
COMMERCIAL COURT (QBD)
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Susannah Jones (instructed by Stephenson Harwood LLP) for the Claimant
Robert Weekes (instructed by Memery Crystal LLP) for the First Defendant
Robert Thomas QC (instructed by Hill Dickinson) for the Second Defendant/Part 20 Defendant
Hearing date 8 th November 2019
APPROVED JUDGMENT
INTRODUCTION
The parties appear before me today on the ancillaries hearing following my judgment handed down on 2 October 2019 in Natixis SA v Marex Financial [2019] EWHC 2549 (Comm).
ACCESS WORLD'S COSTS OF NATIXIS' CLAIM AGAINST ACCESS WORLD
It is convenient to address the issues between Natixis and Marex first, followed by those between Marex and Access World, although in fact as I was coming into Court, a number of the issues have resolved as between Natixis and Marex. One issue however remains and that relates to Access World's costs of Natixis' claim against Access World, which failed.
Ms Jones, who appears for Natixis, submits that Natixis acted reasonably in making claims against both Marex and Access World, that Natixis claimed against Access World at Marex's request, with Marex's express sanction, and that it brought claims which were “parasitical” on Marex's own claim, which share a nexus with Natixis' claim against Marex.
It is submitted that the paradigm case for a co-defendant order is a case like this in which the defendants blame one another. I am referred to the case of King v Zurich Insurance Co [2002] EWCA Civ 598 at [33]:
“Where a plaintiff had behaved reasonably in suing both defendants, he should not normally end up paying costs to either party even though he succeeded only against one of the defendants.”
In this regard, it is noted that it is, or at least was at some point, common ground between Marex and Natixis that some sort of co-defendant order would be appropriate and there were different proposals.
Natixis asked the Court to exercise its discretion under CPR44.2 to order Marex to make a direct payment for costs to Access World on Sanderson principles, alternatively to make Marex and Natixis jointly and severally liable for Access World's costs of Natixis's claims against Access World. Marex is neutral as to what order should be made as, ultimately, Marex will be picking up the bill in any event.
Ms Jones refers me to the applicable principles under CPR44.2, it being established that there is jurisdiction to make an order of the sort that she is seeking.
She also draws to my attention the case of Moon v Garrett [2007] 1 Costs L.R. 41, at [38] where Waller LJ said:
“It seems to me that the above citation demonstrates that there are no hard and fast rules as to when it is appropriate to make a Bullock or Sanderson order. The court takes into account the fact that if a claimant has behaved reasonably in suing two defendants, it will be harsh if he ends up paying the costs for the defendant against whom he has not succeeded. Equally, if it was not reasonable to join one defendant because the cause of action was practically unsustainable, it would be unjust to make a co-defendant pay those defendant's costs. Those costs should be paid by a claimant and it will always be a factor whether one defendant has sought to blame another.”
He continued at [39]: “The fact that cases are in the alternative, so far as they are made against two defendants, will be material, but the fact the claims were not truly alternative does not mean that the court does not have the power to order one defendant to pay the costs of another. The question of who should pay whose costs is peculiarly one for the discretion of the trial judge.”
Essentially two submissions are made as to why the order that is sought by Natixis should be made. The first is that it would be disproportionate to order them to pay the costs because there would be a need to separate matters out on the assessment, which will lead to additional costs and may cause delay. Secondly, it is said there is no costs risk to Access World because the evidence — although I am not sure it is formally in evidence but certainly the material in the trial bundle — suggests that Marex is good for the money. In addition, Marex has paid orders in relation to the principal to Natixis and it is submitted there is no reason why a similar approach to compliance will not be made by Marex in due course.
Therefore, it is suggested that the risk to Access World of a failure to pay by Marex is limited and is not an overwhelming factor in that regard.
Mr Weekes, who appears for Marex, points out that the reality is that on a detailed assessment all the factors will have to be gone into looking at individual costs as to whether they were reasonably incurred and are reasonable amount, and that applies both to Marex and to Natixis.
Mr Thomas, who appears for Access World, says that he is the successful party, that the claim of Natixis failed, and that costs should follow the event in the normal way, and that he should have a costs order in his favour from Natixis. He says, however, and recognises, that in fact, because of the reality that ultimately Marex will be picking up the bill and, no doubt because such an order would also benefit him, he is content that with an order of joint and several liability of Natixis and Marex, but he resists any order whereby the paying party is simply Marex. He says it would be inappropriate for such an order to be made because Access World would then have a costs exposure if Marex did not pay.
He also supports the point made by Mr Weekes, that in reality, if there is a detailed assessment, then individual costs will have to be considered and broken out in any event, and therefore the suggestion that this will all be disproportionate or result in substantial additional costs or cause delay is overplayed.
Ultimately, as is recognised both in CPR44.2 and indeed in the passage from Moon v Garrett to which I have referred, the matter is one for the exercise of judicial discretion in relation to costs.
I consider that the one scenario that should not arise is one where Access World faces a credit risk in circumstances where there would not be a credit risk in relation to Marex, if a standard order following the event was made.
In circumstances where Natixis essentially sued Access World at the instigation of Marex, Natixis' claim is parasitical on Marex's claim and Marex is the ultimate paying party, I consider that the just and appropriate Order to make is that Marex and Natixis are jointly and severally liable for Access World's costs, and I so order.
SUMS DUE TO MAREX BY WAY OF DAMAGES
The next issue that arises between Marex and Access World is in relation to the sums due to Marex by way of damages.
I found Access World liable in negligence to Marex in respect of the 14 PC4 and PC5 warehouse receipts. I also found that Access World's duty was limited by reference to the limitation of liability provision in the terms and conditions, limiting liability to €100,000 per event or series of events, and I held that the damages recoverable by Marex from Access World fell to be reduced by 25% by reason of Marex's contributory negligence.
An issue has arisen as to the order in which one considers such matters. Mr Thomas accepts, as he must, that the €100,000 limit applies to each authenticated warehouse receipt. However, he says — and I will come on to what I said in my judgment — that the Court found that this provision had the effect of qualifying the extent to which Access World assumed responsibility to Marex. He refers to paragraphs 504 to 505 of the judgment. He says the effect of this finding is that Access World only ever owed a duty to Marex up to €100,000 per warehouse receipt.
It is then submitted that, in accordance with the Court's findings, that Marex's recoverable loss arising from breach of that qualified duty falls to be reduced by 25% by reason of Marex's contributory negligence.
The conclusion he then urges upon me, therefore, is that the sum payable by Access World in damages, there being 14 relevant receipts, is no more than €1,050,000 and not €1,400,000 as contended for by Marex.
Mr Weekes, who appears for Marex, says that such an approach is wrong in principle in relation to the operation of section 1(1) of the 1945 Act. Before turning to his submissions, I will quote what I said in my judgment. At [505], I said as follows:
“In the present case, and as already noted, emails sent by Access World to Marex (including the 22 December and 9 January emails but extending to many before that) referred to the application of the Terms and Conditions to “…all offers made by…, all agreements concluded… and any other work carried out” (emphasis added). A reasonable person in the position of Marex would have understood that the Terms and Conditions applied to “any other work carried out” including work gratuitously performed such as the authentication of the warehouse receipts the subject matter of PC4 and PC5, and I so find. In such circumstances, Access World's assumption of responsibility was on the basis that any statements made by it were subject to its Terms and Conditions including the limitation clause therein. It is neither necessary nor appropriate to construe the Terms and Conditions like a contract.”
The first point therefore is that the finding I made, and intended to make, was that there was an assumption of...
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