May 09, 2024 court of first instance - Orders
Claim No: CFI 052/2023
IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
BETWEEN
ANDREW RAOF
Claimant
and
KBH LIMITED (FORMERLY KNOWN AS KAANUUN LIMITED)
Defendant
ORDER WITH REASONS OF JUSTICE RENE LE MIERE
UPON the Order with Reasons of Justice Rene Le Miere dated 15 April 2024
AND UPON the parties’ written submissions on costs dated 25 April 2024
IT IS HEREBY ORDERED THAT:
1. The Defendant shall pay the Claimant his costs of the Claimant’s application fixed in the sum of AED 2,029.75.
2. The Defendant shall pay the Claimant his costs of the Defendant’s application fixed in the sum of AED 45,525.
Issued by:
Hayley Norton
Assistant Registrar
Date of Issue: 9 May 2024
At: 8am
Summary
1. By Application No. CFI-052-2023/1 the Defendant applied for orders that the Court should not exercise its jurisdiction pursuant to RDC 12.1(2) because service was not validly effected on the Defendant in accordance with the RDC (the “Defendant’s Application”).
2. By Application No. CFI-052-2023/2 the Claimant sought permission to rely upon his supplemental second witness statement dated 13 March 2024 for the purposes of responding to the Defendant’s Application (the “Claimant’s Application”).
3. The Court heard counsel for the parties at a hearing of both applications on 20 March 2024.
4. On 15 April 2024 the Court ordered that the Claimant’s application be granted, the Defendant’s application be dismissed, and directed the parties to make submissions as to the costs of the applications.
5. For the reasons which follow it will be ordered:
1. The Defendant shall pay the Claimant his costs of the Claimant’s application fixed in the sum of AED 2,029.75.
2. The Defendant shall pay the Claimant his costs of the Defendant’s application fixed in the sum of AED 45,525.
The Judgment
6. On 15 April 2024 the Court ordered:
1. The Claimant’s Application to rely on his second witness statement dated 13 March 2024 is granted.
2. The Defendant’s Application is dismissed.
3. The period within which the Claimant may bring his claim under Part 9 of the Employment Law is extended to 25 July 2023.
4. If the claim form issued on 25 July 2023 was not served in accordance with RDC 9.2 and 9.3, the error does not invalidate service of the claim form and service of the claim form on 24 November 2023 by means of email addressed to dubai@kbh.ae is effective service of the claim form on the Defendant.
(“the Order”)
7. The facts, procedural history, issues, arguments, and findings are set out in the schedule of reasons to the Order: Raof v KBH Limited DIFC CFI-052-2023, 15 April 2024 (“the Judgment”). These reasons should be read with the Judgment.
Complainant’s proposed costs orders
8. The Complainant proposes the following costs orders;
(a) The Defendant pay the Claimant his costs of the Claimant’s application.
(b) The Defendant pay the Claimant his costs of the Defendant’s application.
Defendant’s proposed costs orders
9. The Defendant proposes the following costs orders;
(a) Each party bear their own costs of the Claimant’s application.
(b) There be no order as to the costs of the Defendant’s application. Alternatively, any award of costs should be nominal to reflect the nuanced outcome.
Complainant’s application
10. At paragraphs 127 and 128 of the Judgment I said:
“127. My provisional view is that the Claimant should have the costs of his application for permission to rely on his second witness statement - Application CFI-052-2023/2.
128. The Claimant made his second witness statement in answer to the Defendant’s argument that the Claimant's claim was time barred. The Defendant raised that argument for the first time in its evidence in answer. The Defendant objected to the Claimant relying on his second witness statement which caused the Claimant to make Application CFI-052-2023/2.”
11. The Complainant submits he should have his costs of the application in line with the Court’s provisional view, for the reasons set out at paragraph 128 of the Judgment. The Claimant sought the Defendant’s consent to the application being filed on the basis that the issue was raised for the first time in the Defendant’s second witness statement in reply. Having declined to consent, the Defendant then indicated at the hearing that it did not oppose the new statement. It might be said that a formal application was required as a further statement from the Complainant fell outside the normal rules for sequential exchange. However, had the limitation issue been properly raised by the Defendant in its initial application and first witness statement, there would have been no need for an application.
12. The Defendant submits that the witness statement was being introduced out of time and the direction of the Registry was sought whether an application should be made to introduce it late. It was the Registry which directed that the application had to be made. The Claimant's requirement to file a second witness statement was not one that was directly forced by any unreasonable action on the Defendant’s part. Thus, suggesting that the Defendant should bear the full cost seems somewhat disproportionate. The Defendant submits that a fairer approach is for each party to bear their own costs.
13. I find that the Defendant should pay the Claimant’s costs for the reasons stated at paragraph 128 of the Judgment and the reasons stated by the Claimant.
Defendant’s application
14. At paragraphs 129 - 131 of the Judgment I said:
“129. My provisional view is that the Defendant should pay the Claimant his costs of the Defendant’s application.
130. The Claimant is the successful party in that the Court will not declare that it should not exercise its jurisdiction or strike out the Claimant's claim.
131. That is so notwithstanding that the Claimant failed in his argument that he brought his Part 9 claims to the Court within the primary limitation period prescribed by Article 61(2)(a) of the Employment Law.”
15. The Complainant submits he should have his costs of the application in line with the Court’s provisional view, notwithstanding the court’s decision on limitation in relation to the Part 9 Claims for two reasons:
(a) Firstly, the Claimant was the successful party. The Defendant failed to obtain any of the relief it sought. The Claimant’s costs were incurred in having to respond to that failed application. The basis of the Defendant’s application was that service was defective. This was rejected and alternatively, the Court would exercise its discretion to remedy the defect in any event. The Defendant’s subsequent contention that the claims were brought out of time also failed. The financial claims were in time and the Court extended the relevant limitation period in respect of the Part 9 claims.
(b) Secondly, in exercising its discretion the Court is required to have regard to the conduct of the parties. The following aspects of the Defendant’s conduct are relevant:
i. The Defendant’s application relied on a technical breach of the service rules, despite having suffered no actual prejudice and despite the existence of the court’s discretion under RDC 4.51.
ii. Late in the day, in its witness statement in answer to the Claimant’s evidence, the Defendant chose to put forward a separate basis for striking out the Claimant’s claim based on limitation, then objected to the Claimant’s application to file evidence dealing with the point.
iii. The Defendant produced an excessively long skeleton argument which introduced a third basis for striking out the claim based on abuse of process, with accompanying legal argument. That argument was misconceived, and it was inappropriate to raise the point in the application.
iv. The Defendant’s skeleton and submissions dealt at length with the merits of its defence to the Claims, which has not yet been filed. It made assertions, in effect, as to what the Defendant’s evidence was in relation to its proposed defence. This was irrelevant to the application and unnecessary.
v. The Defendant’s skeleton also made repeated reference to the Claimant’s character, his performance as an employee of the Defendant and alleged lack of professionalism. This attack on the Claimant’s character was irrelevant and was a wholly inappropriate use of a skeleton argument.
16. The Defendant submits there be no order as to costs or, alternatively, any award of costs should be nominal, for the following reasons:
(a) Whilst the case was not struck out the issue of the disapplication of the limitation period is one that the Court had to decide upon so that the Claimant’s claim could continue without being time barred. The Court highlights the point at paragraph 130 of the Judgment “the Claimant failed in his argument that he brought his Part 9 claims to the court within the primary limitation period.”. Having made a finding of fact that the Claimant did not bring his Part 9 Claim within the limitation period the Part 9 claim must as a matter of logic be out of time. Accordingly, the only way that a Part 9 claim could be advanced is if an application was made by the Claimant. The point being that it was always open to the Defendant to take this point which it did do based upon a construction of the DIFC Employment Law. Such construction has been upheld by the Court and relief has been granted which is based on the Court’s discretion whilst agreeing with the Defendant upon its construction.
(b) Where the Court agreed with this construction is demonstrated at paragraphs 91 and 95 of the Judgment. It has determined that the circumstances justified disapplying 61(2)(a). Further the Court substituted the period “such other period as the Court considers reasonable” for bring the Part 9 claims. While the Court has found favourably for the Claimant in part, this success was not absolute. The Claimant has failed on his pleaded point, particularly the timeliness of the Part 9 claims under the primary limitation period which required the Court to exercise a discretion.
17. I find that the Defendant should pay the Claimant his costs of the Defendant’s application for the reasons stated at [130] and [131] of the Judgment and the reasons advanced by the Claimant.
18. The Court has a discretion to deprive a successful party of the costs of discrete issues, but the exercise of that discretion should be exercised with caution. The unsuccessful party must satisfy the Court that there are good reasons why it should not pay the other party's costs. It is often the case that a successful party will not succeed on every issue raised. To attempt, in every case, an analysis of which party was successful on which issue would add uncertainty and complexity to the outcome of litigation, derogate from the prospect of settlement, and add to the time and cost of costs arguments.
19. Whilst the Court accepted the Defendant’s construction argument in relation to the limitation period prescribed by Article 61(2)(a) of the Employment Law and the Claimant failed in his argument that he brought his Part 9 claims to the Court within the primary limitation period prescribed by Article 61(2)(a), that brought the Defendant no meaningful success because the Court exercised its discretion to extend the limitation period. Furthermore, the basis of the Defendant’s application was that service was defective. The limitation argument was raised late in the Defendant’s skeleton argument.
20. Looking at the matter as a whole, the fair and appropriate order is that the Defendant pay the Claimant’s costs of the Defendant’s application.
Length of Defendant’s skeleton argument
21. The Defendant’s skeleton argument is 36 pages long. It does not comply with Practice Direction No 2 of 2016.
22. The Defendant admits that it should have sought permission to extend the page limit but submits that any oversight was unintentional and did not significantly disadvantage the Claimant as he had the benefit of all the Defendant’s arguments comprehensively set out beforehand.
23. The skeleton argument was unnecessarily long because of the inclusion of irrelevant material that should not have been included.
24. Nevertheless, in the circumstances, which include that the Defendant must pay the Claimant’s costs, no sanction will be imposed.
Amount of Claimant’s costs
25. The Claimant has filed a statement of costs and a witness statement in which he sets out the costs he claims.
26. The Claimant claims for 98 hours and 10.5 hours he worked on the Defendant’s application and the Claimant’s application respectively. That is for attendances on counsel, attendances on opposition, attendances on the Registry, attendance at the hearing, and work done on documents.
27. The Claimant says he is a litigant in person and a qualified solicitor.
28. The Claimant claims costs on a capped hourly rate of AED 1,600, which he says is lower than the norm for someone of his post-qualification experience (almost six years), admitted in England and Wales and practising in the DIFC, which is upwards of AED 2,500 at a law firm.
29. The RDC are silent on the question of awarding costs for a litigant in person. RDC 2.10 provides:
“If no provision is made or no appropriate form is provided by the Rules or any law in force in the DIFC, the following rules of practice and procedure shall be followed and adopted:
(1) Such Rules as shall have been enacted;
(2) To the extent that no Rule or Practice Direction dealing with the matter shall have been enacted, with regard to the Court of First Instance, the Guide together with any prescribed forms with such changes as the Court considers appropriate to be applied in the circumstances;
(3) Insofar as the Guide does not deal with the matter or makes reference to the CPR, the CPR together with any prescribed forms with such changes as the Court considers appropriate to be applied in the circumstances. …”
30. In Howard Norman Leedham v Oxford Investment Managers Limited [2008] DIFC CFI 006, Justice David Williams applied the relevant CPR rule to award a solicitor litigant in person costs, on the authority of RDC 2.10.
31. RDC 2.10 provides that the Guide is to be applied. The Guide is defined as The English Admiralty and Commercial Courts Guide 2006, as updated from time to time. The current edition of the Guide is the 11th edition published in 2022.
32. The Guide does not expressly deal with costs of a litigant in person. At F.13.1 the Guide says that the rules governing the award and assessment of costs are contained in CPR Parts 44 to 48.
33. CPR 46.5 relevantly provides:
“(1) This rule applies where the court orders (whether by summary assessment or detailed assessment) that the costs of a litigant in person are to be paid by any other person.
(2) The costs allowed under this rule will not exceed, except in the case of a disbursement, two-thirds of the amount which would have been allowed if the litigant in person had been represented by a legal representative.
(3) The litigant in person shall be allowed –
(a) costs for the same categories of –
(i) work; and
(ii) disbursements,
which would have been allowed if the work had been done or the disbursements had been made by a legal representative on the litigant in person’s behalf;
(b) the payments reasonably made by the litigant in person for legal services relating to the conduct of the proceedings; and
(c) the costs of obtaining expert assistance in assessing the costs claim.
(4) The amount of costs to be allowed to the litigant in person for any item of work claimed will be –
(a) where the litigant can prove financial loss, the amount that the litigant can prove to have been lost for time reasonably spent on doing the work; or
(b) where the litigant cannot prove financial loss, an amount for the time reasonably spent on doing the work at the rate set out in Practice Direction 46.
(5) A litigant who is allowed costs for attending at court to conduct the case is not entitled to a witness allowance in respect of such attendance in addition to those costs.
(6) For the purposes of this rule, a litigant in person includes –
…
(b) any of the following who acts in person (except where any such person is represented by a firm in which that person is a partner) –
…
(ii) a solicitor;
…
34. Practice Direction 46 provides at [3.4] that the amount, which may be allowed to a selfrepresented litigant under rule 46.5(4)(b), is GBP 19 per hour.
35. CPR 46.5 provides for two different ways of calculating the amount of costs to be allowed to a litigant in person. Where the litigant can prove financial loss, the amount allowable is the amount that the litigant can prove to have been lost for time reasonably spent on doing the work: CPR 46.5(4)(a). Where the litigant cannot prove financial loss, the amount allowable is the amount for the time reasonably spent on doing the work at the rate set out in Practice Direction 46: CPR 46.5(4)(b).
36. In Patel v Karmakar [2023] 1 WLUK 134, which was referred to by the Defendant, the County Court sitting at Oxford held at [33] that the mere assertions by the defendant, who was a solicitor litigant in person, that he could have spent more of his time working on matters for clients whether during the working day or otherwise was insufficient to establish that he had suffered a financial loss let alone the extent of that loss for the purposes of CPR 46.5(4)(a). It was therefore impossible to apply the cap under CPR 46.5 (2) of two thirds of what an instructed solicitor on the record would have been able to recover. The defendant therefore recovered on the standard basis for work which had been reasonably undertaken and is reasonable in amount at the default litigant in person rate of GBP 19 per hour.
37. The Claimant has not proved financial loss. He has adduced evidence that he is employed as a lawyer practising in the DIFC and on a limited income. He says that he has had to make sacrifices and compromises and take financial risks to be able to bring these proceedings. But there is no evidence the Claimant has suffered any financial loss as a result of the time he spent working on the applications.
38. Therefore, the amount allowable is an amount for the time reasonably spent on doing the work at the rate of GBP 19 set out in Practice Direction 46.
39. The Claimant spent 98 hours doing the work on the Defendant’s application. He should be allowed an amount for 98 hours at the rate of GBP 19, that is GBP 1,862. The Claimant refers to an exchange rate varying between 4.60 and 4.66 AED to GBP. I will adopt an exchange rate of 4.65. GBP 1,862 is AED 8,658.
40. The Claimant claims a disbursement of AED 36,867 for counsel fees.
41. The Claimant’s costs of the Defendant’s application are fixed in the sum of AED 45,525.
42. The Claimant spent 10.5 hours doing the work on the Claimant’s application. He should be allowed an amount for 10.5 hours at the rate of GBP 19, with an exchange rate of 4.65. That is AED 928.
43. The Claimant will be allowed costs of the Claimant’s application of AED 928 and AED 1,101.75 for court fee, a total of AED 2,029.75.
