July 24, 2016 court of first instance - Orders,Orders
Claim No: CFI 015/2014
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
BEFORE JUSTICE ROGER GILES
BETWEEN
ASIF HAKIM ADIL
and
FRONTLINE DEVELOPMENT PARTNERS LIMITED
ORDER OF JUSTICE ROGER GILES
UPON the Judgment of Justice Roger Giles dated 3 April 2016
AND UPON reviewing the parties’ submissions on costs
IT IS HEREBY ORDERED THAT:
1.The Defendant pay the Claimant’s costs of the proceedings, to be assessed by the Registrar if not agreed.
2. The Defendant pay interest on costs and disbursements paid by the Claimant from the date(s) of payment.
3. The Defendant forthwith pay the Claimant AED 800,000 on account of costs pending their assessment.
Issued by:
Natasha Bakirci
Assistant Registrar
Date of issue: 24 July 2016
At: 4pm
SCHEDULE OF REASONS
1.The judgment in these proceedings was issued on 3 April 2016. Paragraph 343 of the judgment read –
“343. Although not on all heads of claim, Mr Adil has been dominantly successful in the proceedings. Subject to any further submissions, if made, my present view is that Frontline should pay Mr Adil’s costs of the proceedings (including of the without prejudice privilege application, which should be formally dismissed).”
2. Directions were given for draft orders, including in relation to any submissions on costs. Orders were made in late May 2016, reserving consideration of costs.
3. These are my reasons for the costs orders hereafter set out.
Procedural matters
4. The Claimant’s draft orders of 18 April 2016 proposed that the Defendant’s Chairman, Mr Suresh Chaturvedi, be added as a defendant for the purposes of costs, and that the Defendant and Mr Chaturvedi be jointly liable to pay “the Claimant’s costs occasioned by these proceedings”. Reasons for making Mr Chaturvedi liable for costs were outlined; understandably in the light of para 343 of the judgment, the Claimant did not expand on a costs order against the Defendant.
5. In alternative draft orders of 1 May 2016 the Defendant proposed an order that it pay 20 per cent of the Claimant’s costs occasioned by the proceedings, giving brief reasons for that order. Apparently on behalf of Mr Chaturvedi, the Defendant’s lawyers opposed the informal application for a third party costs order.
6. A telephone hearing was held on 18 May 2016 in relation to the draft orders. As earlier noted, in the orders later made consideration of costs was reserved. Directions were given for submissions on costs, which now encompassed the third party costs order.
7. The application for a third party costs order was later abandoned, and no more need be said of it.
8. The first submissions were to come from the Defendant. In submissions of 8 June 2016 it proposed an order that it pay 50 per cent of the Claimant’s costs.
9. Matters then expanded. In submissions of 16 June 2016, purportedly in reply, the Claimant maintained that he should have the entirety of his costs, but also sought (i) that the costs be on an indemnity basis; (ii) that there be an interim payment on account of costs pending assessment; and (iii) that he receive interest on costs.
10. By letter dated 23 June 2016 the Defendant objected to this expansion, but also made submissions against the additional relief and asked for time further to respond. Time was allowed, and further submissions were made by the Defendant on 7 July 2016.
The questions for consideration
11.The questions thus arising are –
(a) whether the costs order against the Defendant should be for the whole of the Claimant’s costs, or for 50 per cent (or some other percentage) of those costs; and
(b) whether the Claimant should be permitted to seek the additional relief of indemnity costs, interim payment, and interest on costs; and if so –
(i) whether the costs should be assessed on an indemnity basis;
(ii) whether there should be an interim payment on account of costs; and
(iii) whether there should be interest on costs.
Costs against the Defendant
12. The Defendant submitted that the Claimant’s costs should be reduced because he had succeeded only in a relatively small part of his claim, which had been exaggerated and had included “several unreasonable allegations”. It said that he had ultimately succeeded on only about 20 per cent of his claim, apart from the statutory penalty, because the claimed USD 1.77 million (see para 2 of the judgment) had succeeded as to only USD 359,000; that the principal case of employment until resignation on 28 November 2013 had not been accepted; and that a number of heads of claim had not been pursued (for example club membership and “Abusive Dismissal Compensation”) or had not been accepted (for example driver’s charges and out of pocket expenses, see paras 312-314 of the judgment).
13. The submissions overlook that the central issue between the parties was whether Mr Adil’s employment had been effectively terminated for cause on 30 June 2013. The factual investigation to which it gave rise governed the proceedings, and provided the basis for deciding the true occasion for the termination of the employment, which was well in contention as the hearing was conducted, and for deciding the Counterclaim. The money value of the outcome is not a sound guide to disposal of costs (and the statutory penalty cannot so lightly be ignored).
14. It is correct that in some respects the Claimant did not pursue or was not successful in his pleaded case; the Defendant also did not fully pursue his pleaded case and was egregiously unsuccessful. Costs should be determined on a realistic assessment of success or failure, to reflect the overall justice of the proceedings and without undue parsing into issues; it is commonplace that pleaded cases evolve in the conduct of the trial and that a realistic winner does not succeed on all issues.
15. Having carefully considered the Defendant’s submissions, I remain of the view that the Claimant was dominantly successful in the proceedings; such that in my opinion no reduction is warranted in the costs to be ordered in his favour.
Additional relief
16. It is unfortunate that the Claimant sought the additional relief in the manner he did. However, the consideration of costs was not limited by prior orders or directions, and there is no injustice to the Defendant when it has had the opportunity to make submissions. The Claimant should be permitted to seek the additional relief.
Indemnity costs
17. Material factors are indicated, non-exhaustively, in Practice Direction No. 5 of 2014. The Claimant submitted that there had been unreasonable conduct on the Defendant’s part in its conduct of the proceedings, and also that it had agreed in principle to a settlement but had reneged; he submitted that these matters warranted an order for indemnity costs.
18. The conduct on which the Claimant relied was the expansive pleading of the Defendant’s case and abandonment of parts of that case, as referred to in the judgment at paras 195-198 in relation to the Defence and paras 278-287 in relation to the Counterclaim; see also generally at para 288. To this he added the attempted reliance on Article 59A of the DIFC Employment Law, Law No. 4 of 2005 (see paras 200-201 of the judgment). Further, he said, Mr Chaturvedi had been found to be an unsatisfactory witness (reference was made to paras 68, 75 and 119 of the judgment), and as the Defendant’s Managing Director he must have been responsible for the pleaded case.
19. I do not think that these matters, not uncommonly encountered, so take the case out of the ordinary as to warrant indemnity costs. I do not think they reach the level of misconduct in the defence or prosecution of the proceedings.
20. The Claimant put before me, as part of his costs submissions, draft settlement agreements and some correspondence. Perhaps strangely, the Defendant did not object to the disclosure of these materials, and it may be that I should not have regard to them. However, they show that the settlement discussions were subject to formal agreement, which did not occur, and do not enable me to determine whether failure to achieve a formal agreement was due to manoeuvring or intransigence of one party rather than the other. I am not satisfied that the Defendant reneged on a settlement.
21. Neither separately nor together do these matters make out a case for indemnity costs.
Interim Costs
22. It is not uncommon to order an interim payment on account of costs, so that the party with the benefit of the costs order is less out of pocket while assessment proceeds; and in particular where the party against which the order is made is of limited worth and expenditure in assessment might produce no return.
23. From a schedule provided by the Claimant, costs and disbursements were invoiced by his current lawyers from March 2015 onwards. The schedule recorded 13 invoices to 26 May 2016, and two draft invoices, for a total sum of AED 2.675 million. There was no evidence of the costs payable or paid to his previous lawyers. There was also no evidence of payment of the invoices, but it is unlikely that the lawyers continued to act without payment and the Defendant did not suggest that the Claimant was not out of pocket; I infer that he is out of pocket in a substantial sum. At least as at 30 June 2013 the Defendant was significantly in the red (see para 68 of the judgment), and in the absence of further evidence I am prepared to proceed on the basis that its resources are limited. I consider that an order for payment on account is warranted.
24. The Defendant’s submissions did not take issue with the principle of interim payment on account. The submissions were directed to the adequacy of the evidence of costs. The Defendant submitted that two invoices had not been produced to it, and that it was apparent from invoices produced to it that some fees had “not properly been incurred in relation to the trial”. The invoices were not put before me. The Defendant submitted that inadequacy of the Claimant’s disclosure should bring refusal to order an interim payment.
25. The evidence is scant, but in my view the Defendant’s position can be accommodated in the assessment of the interim payment. The Claimant submitted that the order should be for 30 percent of the AED 2.675 million. I put aside, in the Defendant’s favour, any costs payable or paid to the Claimant’s previous lawyers. But it is difficult to see that the Claimant would recover on assessment less than 30 per cent of the AED 2.675 million, even allowing for a discount for costs as between the parties and for challenge to whether costs were incurred for the trial; and the Defendant did not support its submissions by putting the invoices before me. Rounding down, in my view the order should be for AED 800,000.
Interest on costs
26. As I have said, although there was no evidence of payment of costs and disbursements by the Claimant I infer that he is out of pocket. In any event, any order should be in terms that give interest on amounts that have been paid, from the date of payment.
27. The Defendant submitted only that interest “is more appropriately dealt with as part of the assessment process once it has been made clear when the Claimant paid [his lawyers]”. This misses the point. An order is necessary, it is not part of the assessment process, and if appropriate it should be made now.
28. For proper compensation to the Claimant, the order should be made.
Orders
29. I make the following orders –
