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Jersey Unreported Judgments |
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You are here: BAILII >> Databases >> Jersey Unreported Judgments >> Hotchkiss v CI Knitwear [2001] JCA 207 (22 October 2001) URL: http://www.bailii.org/je/cases/UR/2001/2001_207.html Cite as: [2001] JCA 207 |
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2001/207
COURT OF APPEAL
Judgment reserved: 24th July, 2001;
Judgment delivered: 22nd October, 2001.
Before: |
R.C. Southwell, Esq., Q.C., President; P.D. Smith, Esq., Q.C., and; de V.G. Carey, Bailiff of Guernsey. |
Between |
Channel Islands Knitwear Company, Limited |
Appellant |
|
|
|
And |
Iona Nicola MacKay Hotchkiss |
Respondent |
IN THE MATTER OF
Appeal by the appellant against so much of the Order of the Royal Court of 8th May, 2000, as entered Judgment for the Respondent in the sum of £538,577.28 (plus interest on special damages).
AND IN THE MATTER OF
The Order of the Court of 3rd May, 2001 in relation to costs, whereby the Court:
a) affirmed the order of the court below that the Defendant should pay the Plaintiff's costs of and incidental to the Royal Court action;
b) made no order in relation to the Appellant's costs of and incidental to the appeal;
c) directed that the costs of the Respondent of and incidental to the appeal be paid out of public funds on the standard basis;
d) directed that Her Majesty's Attorney General be allowed twenty-eight days from the date hereof to indicate to the Court whether he wishes to contest the payment of the Respondent's costs out of public funds;
e) directed that the interest payable on such costs is to be calculated in accordance with the provisions of Practice Direction 93/1, from the date hereof to the date of payment.
Application by the Attorney General in relation to so much of the Order of 3rd May, 2001, as directed that the costs of the Respondent of and incidental to the appeal be paid out of public funds on the standard basis.
C.E. Whelan, Esq., Crown Advocate;
Advocate C.J .Dorey for the Appellant;
Advocate N.M. Santos Costa for the Respondent.
judgment
SMITH, JA:
1. In this case Miss Hotchkiss, the Respondent, sued Channel Islands Knitwear Company Limited, the Appellant, for damages for personal injuries suffered as a result of being made to work in inappropriate conditions over a long period. At the trial before the Royal Court the Respondent's case was that the breach of the duties of care, both contractual and tortious, owed by the Appellant to her caused the injuries she suffered. Because of availability the Appellant's medical expert was called first. The gist of his evidence was that the Respondent's injuries had not been caused by the conditions under which she was made to work but that she suffered from a pre-existing medical condition which had been exacerbated by her conditions of work. The evidence of the Respondent's medical expert was that there was no such pre-existing condition and that all her injuries had been caused by her conditions of work.
2. There was no alternative plea of exacerbation in the Respondent's pleading: her case was simply one of causation. The hearing of the matter was concluded, and judgment was reserved. Some time later the presiding Commissioner informed the parties in chambers that the Court was not satisfied on the medical evidence that the Respondent's injury was caused by her work but was satisfied that her injury had been exacerbated by it. The Respondent then applied for leave to amend her pleading so as to include in the alternative a case based on exacerbation, but the Court refused to hear this application. The Court proceeded to deliver judgment in the Respondent's favour based on exacerbation but it awarded to her damages calculated on the basis of full causation and not the more limited damages appropriate to a case of exacerbation of a pre-existing medical condition.
3. The Appellant appealed to this Court and we gave judgment on the substantive issues on 3 May 2001. It appeared to this Court that:
(i) There was inadequate evidence to support the case of causation:
(ii) There was evidence, including not least the evidence of the Appellant's own medical expert that the Respondent suffered from a pre-existing medical condition which was substantially exacerbated by the working conditions in which she had been made to work;
(iii) There was sufficient material available to this Court, in the form of both oral and documentary evidence, to enable this Court, without the necessity of further evidence, to measure the damages to which the Respondent was entitled by reason of the exacerbation of her pre-existing condition, and therefore to reduce to an appropriate level the damages awarded to her by the Royal Court.
4. If the Royal Court had acted correctly, then:
(i) The alternative case on exacerbation would have been pleaded either immediately following the hearing of the medical evidence, or at the latest when the application to amend was made by the Respondent's counsel;
(ii) The Royal Court would have assessed the damages payable by the Appellant to the Respondent on the basis of exacerbation, and not of full causation.
If the Royal Court had proceeded in these ways, then an appeal to enable the damages to be reduced to the appropriate level would not have been necessary, though the Appellant might nevertheless have wished to appeal on other aspects of the Royal Court's judgment.
5. When the matter came before this Court, it rejected the grounds of appeal put forward on behalf of the Appellant except the obvious necessity to reduce the amount of damages so as to reflect the correct conclusion on the medical evidence of exacerbation. On 15 May 2001, this Court dealt with costs of the appeal. In the judgment of the Court we stated that in the absence of exceptional circumstances we would have ordered that the Respondent bear her own costs of the appeal. However, we recognised that there were exceptional circumstances - the Royal Court having fallen into serious error - and we concluded that it would not be just to visit the consequences on the Respondent by requiring her to bear her own costs of the appeal. We indicated that we were minded to make an equally exceptional order - that the Respondent's costs be taxed on the standard basis and be paid out of public funds.
6. Because of the exceptional nature of what we proposed and because it obviously touched the public interest we allowed HM Attorney General twenty eight days to indicate whether he wished to contest our proposed order. This he elected to do and the Attorney General submitted written contentions dated 15 June 2001. The Respondent furnished written contentions in reply dated 6 July 2001. On 24 July 2001 we heard oral argument, Crown Advocate C. Whelan appearing for the Attorney General and Advocate N.M.C. Santos Costa for the Respondent. Advocate C.J. Dorey appeared for the Appellant but took no part in the proceedings as she recognised that the issue was really one between the Attorney General and the Respondent. As appears below, further written submissions were furnished on behalf of HM Attorney General and the Respondent on 23 and 30 August, respectively.
7. Mr Whelan's argument on behalf of the Attorney General comprised two main planks - viz., that this Court has no jurisdiction to make the proposed order and that, even if it has, it should not do so. I examine each of these aspects of Mr. Whelan's argument in turn.
JURISDICTION
8. Mr Whelan contended, and I accept, that the Court of Appeal's jurisdiction to make the proposed order, if it exists, must be found in Article 16 of the Court of Appeal (Jersey) Law, 1961 which reads as follows:
"This Part" is Part II of the Law which deals with "Appeals in Civil Causes and Matters"
9. In my judgment, the words of Article 16 on their face confer a very wide jurisdiction. That they should be so construed receives powerful support from the House of Lords decision in Aiden Shipping Co.Ltd -v- Interbulk Limited [1986] 1 A.C. 965. That case concerned Section 51(1) of the Supreme Court Act 1981 which was ( it has since been superseded) in the following terms:
The House of Lords held that the wide discretion comprised in the subsection conferred power to order that costs be paid by a person not a party to the proceedings.
10. It will be observed that the operative words of Section 51(1) which follow the opening proviso are identical to Article 16 of the 1961 Law. In his opinion (with which the other Law Lords agreed) Lord Goff of Chieveley repeatedly stressed the width and breadth of the discretion conferred. Thus, at p.972F Lord Goff referred to "the broad words of the section"; at p.975F he stated that the jurisdiction conferred under Section 51(1) is "conferred in wide terms"; at p.979C, he said that the subsection "confers a discretionary jurisdiction on the court in very wide terms"; at p.979E Lord Goff referred to "a wide statutory jurisdiction"; at p.980C to "the broad terms of the statute" and at p.980E to "the broad jurisdiction conferred in the statute". Furthermore, Lord Goff emphatically rejected the argument that the wording of Section 51(1) should be read subject to the implied limitation that the jurisdiction to make an order for costs extended only to one against a party to the proceedings. In Gaudion -v- Weardale Limited (unreported judgment delivered on 4 February 1998) the Court of Appeal of Guernsey applied the principles expounded in the Aiden Shipping case and placed a similar interpretation on the equivalent words in Article 18(1) of the Court of Appeal (Guernsey) Law 1961.
11. Lord Goff did attach significance to the proviso comprised in the opening words of Section 51(1). At p.975F he said:
Because of the absence of the proviso an identical policy cannot be attributed to the States of Jersey. However, it does not follow from this that the words of Article 16 should not be given the very wide scope attributed by Lord Goff to the identical words in Section 51(1). Lord Goff's statement as to the role of the appellate courts is apposite to the role of this Court and I deal with the principles upon which the power under Article 16 should, in my opinion, be exercised in a case such as the instant one later in this judgment.
12. I observe that in the light of the wording of Article 16, and contrary to what we proposed, it would not be possible to order simply that the Respondent's costs be paid out of public funds. This is because Article 16 requires that the person or entity by whom the costs are to be paid must be determined by this Court in order for the power to be exercised effectively. A similar point was canvassed by Mr Whelan - he argued that an order that the Respondent's costs be paid out of public funds would be without certainty of legal meaning.
13. In my opinion both of these problems can be disposed of by making the proposed order in the Respondent's favour against the States of Jersey. The States are an entity capable of being made the object of an order under Article 16. Mr. Whelan did not seek to argue that in proceedings to which the States were a party Article 16 did not confer the appropriate jurisdiction to make an order for costs. He did, however, contend that the effect of the House of Lords' decision in Steele Ford & Newton ( a firm ) -v- Crown Prosecution Service and Related Appeals [1993] 2 All E.R. 769 was to establish that this Court has no jurisdiction to make the requisite order (and by this I mean an order for costs in the Respondent's favour against the States of Jersey). In the Steele Ford & Newton case the House of Lords held that the English Court of Appeal, Civil Division, had no jurisdiction under Section 51(1) of the Supreme Court Act 1981 to order that the costs of a successful appellant against a wasted costs order be paid out of central funds.
14. In his speech, with which the other Law Lords agreed, Lord Bridge of Harwich set out the history of the subsection tracing it back to Section 5 of the Supreme Court of Judicature Act 1890 which was in identical terms. Lord Bridge pointed out that prior to the Administration of Justice (Miscellaneous Provisions) Act 1933 an order for costs could not have been made against the Crown. Section 7 of the 1933 Act empowers the courts to make an order for costs by or against the Crown but is expressly limited in its scope to civil proceedings to which the Crown is a party. Thus, Lord Bridge concluded , neither Section 5 of the 1890 Act nor Section 51(1) of the Act could have been intended by Parliament to permit the courts to make an order for costs against the Crown in proceedings to which it is not a party.
15. It will be observed that in the Steele Ford & Newton case the House of Lords neither addressed the central reasoning in the Aiden Shipping case nor took into account the possibility that an advocate or litigator might be bankrupted by having to meet the costs at first instance or on appeal in respect of a wasted costs order which should never have been made. However, scrutiny of Lord Bridge's speech does point up two fundamental differences between the Steele Ford & Newton case and the instant case. First, the States of Jersey are not "the Crown" nor a component of the Crown. Secondly, the legislative history adumbrated by Lord Bridge has not been replicated in this Island. The key difference is the absence in Jersey of an equivalent to Section 7(1) of the 1933 Act. Without it Section 51(1) of the 1981 Act would not have applied to the Crown at all. But Mr. Whelan readily accepted that Article 16 applies to the States and that the power conferred by that Article (and by the equivalent provision applicable to the Royal Court - Article 2(1) of the Civil Proceedings (Jersey) Law 1956) has been exercised for and against the States in cases in which the States have been a party.
16. In my judgment if Article 16 alone (i.e., without an additional provision equivalent to Section 7(1) of the 1933 Act) suffices to enable this Court to make an order for costs against the States in cases to which the States are a party it must follow that Article 16 empowers this Court to make a costs order against the States in cases to which the States are not a party. In my opinion there is no basis for construing Article 16 in such a way as to exclude the States from the exercise of one aspect of the power expressly conferred. There is nothing in the wording of the Article to justify such a construction and although Lord Bridge in his speech referred to the Aiden Shipping case he did not in any way seek to repudiate Lord Goff's "wide and broad" interpretation of the words in Section 51(1) which also appear in Article 16.
17. While this analysis is, in my view, sufficient to dispose of the jurisdiction issue in the Respondent's favour I consider that I should deal nevertheless with other aspects of the submission made by Mr Whelan given the importance of this issue.
18. The Attorney General's written contentions did not dilate in any detail upon the constitutional relationships between the Royal Court, the States, and the Crown. During the course of the argument before it this Court requested that a supplemental note be filed on behalf of HM Attorney General dealing with those relationships in order to enable us to consider how far, if at all, this might reveal any obstacle to the jurisdiction the exercise of which the Court was contemplating. This note was furnished to the Court under cover of a letter of 23 August 2001 and Mr. Santos Costa responded in a letter of 30 August 2001.
19. In my judgment there is nothing in this additional material, interesting and informative as it is, which suggests that this Court is precluded from exercising the jurisdiction in question. It is true that the Judges of the Royal Court (and the Court of Appeal) are appointed by the Crown ( or in the case of Lieutenant Bailiffs and Commissioners by the Bailiff who is a Crown appointee) but this does not, in my view, affect the matter because the States, and not the Crown, are responsible for all expenditure in relation to the Courts of Jersey. The fact that in very rare cases in which neither the States nor a States' committee are a party the States may be required to pay costs arising from serious error made by a Judge appointed by the Crown or the Bailiff does not, in my judgment, raise any constitutional question as to the respective roles of the components of the state to which I have referred. In my opinion it would not materially alter the constitutional role of the States if a costs order were to be made against them as the body controlling the public finances of this Island in order to remedy the consequences of serious error made by a court at first instance.
20. There are two other portions of Lord Bridge's speech in the Steele Ford & Newton case upon which Mr. Whelan relied. Lord Bridge emphasized the importance of the requirement of clear statutory authority for public expenditure. This constitutional principle was not contested by Mr. Santos Costa. However, in my view, there is no question of an order for costs against the States in the instant case contravening this principle. If Article 16 is sufficiently clearly worded to authorise this Court to order that the costs of a party to proceedings in which the States are another party be paid out of public revenues (which it is) then it seems to me to follow inexorably that Article 16 is sufficiently clearly worded to authorise this Court to order that the costs of a party to proceedings in which the States are not a party be paid out of public revenues.
21. Lord Bridge also conducted a survey of provisions dealing with the payment of costs out of money provided by Parliament in criminal proceedings and pointed out that throughout the history of that legislation the circumstances have been precisely and specifically defined (see pp.940E - 943E). Mr Whelan referred to the similarly precise and specific wording of the Costs in Criminal Cases (Jersey) Law 1961 and argued that the contrast with civil proceedings identified by Lord Bridge applied with equal force to demonstrate that Article 16 does not apply to public funds as its terms are not precise or specific. Furthermore, Mr Whelan supported his argument by reminding us of the remarks of Lord Diplock in de Lasala -v- de Lasala [1979] 2 All ER 1146. In the course of delivering the opinion of the Privy Council in that case Lord Diplock said ( at p.1153d):
These remarks were considered by the Royal Court in State of Qatar -v- Al Thani (1999) JLR 118 and I respectfully adopt the Bailiff's statement ( at p.127) as to the application of them to this jurisdiction. However, I do not accept that the Steele Ford & Newton case, dealing as it does with the Crown and a different legislative history, is determinative of the true interpretation to be put on Article 16 of the 1961 law in relation to the States of Jersey. Furthermore, having concluded , as I have, that that Article clearly authorises this court to make an order for costs against the States in a case in which the States are not a party - such as the instant case - in my opinion this conclusion is in no way undermined by the fact that the costs in criminal proceedings legislation in this Island is similar to that pertaining in England and Wales.
SHOULD WE ORDER THAT THE RESPONDENT'S COSTS OF THIS APPEAL BE PAID BY THE STATES OF JERSEY?
22. I now turn to the arguments advanced by Mr Whelan as to why we should not make an order requiring the States of Jersey to pay the Respondent's costs of this appeal notwithstanding that, in my opinion, this Court has jurisdiction so to do.
23. It was contended that it would be unfair to make the proposed order as the Attorney General had not had an opportunity to make meaningful submissions on the merits, the proposed paying party not having been a party to the appeal. I do not accept this submission. The circumstances giving rise to the proposal that the Respondent's costs of this appeal be met out of public funds are apparent from the judgment of this Court on the substantive issues. Everything the Attorney General needs to know is comprised in it and in the judgment of the Royal Court. I accept that, usually, the non-party against whom a costs order is contemplated should be put on notice and enabled to become involved at a much earlier stage than after the judgment on the substantive issues (see Symphony Group plc -v- Hodgson [1993] 4 All E.R. 143). But in the instant case I do not accept that there is any significant risk of injustice resulting from the fact that during the hearing of the appeal the States were not represented.
24. It was contended that ordering the States to pay the Respondent's costs would tend to bring the Royal Court into disrepute and would give rise to risk of improper interference with the judiciary by the executive arm of government. I reject these contentions also. If anything is likely to bring the judiciary into disrepute it is the failure to remedy injustice inflicted on an individual by a court. Furthermore, I believe that such injustice is too high a price to pay to discourage government from expressing legitimate concern as to the performance of the courts.
25. It was contended that there was no obvious limits to the exercise of jurisdiction to order the payment of a party's costs out of the public purse - the familiar floodgates argument. In the excerpt quoted above from the speech of Lord Goff in the Aiden Shipping case His Lordship referred to the appellate courts establishing principles upon which the discretionary power may be exercised and this was done by the English Court of Appeal in relation to the facts of that case in Symphony Group plc -v- Hodgson which I have already cited. In cases such as the instant one where a court has fallen into serious error and a party's costs are sought out of public funds I consider that there are two controlling principles which, when applied, would mean that the order in question would rarely be granted.
26. The first relates to the nature of the error. Where a court has come to a conclusion of fact or law with which the Court of Appeal disagrees no question of an order for costs of the appeal out of public funds should normally arise. This is because those eventualities are within the scope of the well known ordinary risks of litigation - the kind of thing one would expect an advocate to warn his or her client about before the litigation gets under way. But an advocate should not have to warn a client in advance that a significant part of the client's damages may be forfeited because the court of trial may make the kind of mistake made in the instant case. Thus, in my judgment, the first principle should be that the possibility of a costs order against the States would only arise where a serious injustice has been perpetrated by a court lying outside even the widest interpretation of the normal risks inherent in involvement in legal proceedings.
27. The second principle relates to the financial circumstances of the party in whose favour the costs order is sought. Because neither the States nor the public have been directly responsible for the error it is, in my view, appropriate for the public purse to be fixed with the burden of a costs order only when the party in whose favour it is to be made would otherwise suffer severe financial hardship - a concept recognised in statutory legal aid schemes in the United Kingdom in the context of orders for costs against a legal aid fund in favour of successful non-legally-aided defendants.
28. I pause to emphasize that the jurisdiction to order the States to pay costs in respect of an appeal made necessary by very serious error on the part of a first instance court would fall to be exercised only in the most exceptional circumstances. In the vast majority of cases it would be entirely inappropriate for any such order to be made. While it would not be wise to attempt to define "the most exceptional circumstances" it would be right to warn litigants that applications for costs against the States in which the circumstances do not meet this very stringent test would not only not succeed but could very well result in an adverse costs order being made in respect of the application.
29. Mr. Whelan posed the rhetorical question as to why, if a costs order in favour of the Respondent was to be contemplated, we should not consider making a similar order in favour of the Appellant. The reason is that it is clear that no question of severe financial hardship arises in relation to the Appellant because the Appellant is insured in respect of this litigation. By contrast it is apparent that the Respondent has no significant assets besides the damages awarded to her by this Court. If she must meet her own costs of this appeal the money must be found from a fund awarded to her in respect of her pain, suffering, loss of amenity and financial loss flowing from her injury. In my judgment it would be quite wrong to take this fund into account in assessing hardship. If the legal system of this Island has decreed that the Respondent should enjoy that reasonable compensation for what she has and will or may suffer, it would be a travesty of justice to deprive her of any part of it because of serious error made by the court of trial. In the circumstances of this particular case I consider that it would amount to inflicting severe financial hardship to require the injured person to forfeit a substantial portion of her damages in discharge of her costs of this appeal.
30. This brings me conveniently to Mr Whelan's last, and arguably, best point: That the States having been in no way responsible for the error it would be wrong to hold them liable for costs flowing from it. I accept that when one contemplates costs orders against non-parties hypothetically, the making of an order against a person or entity which played no causal role in the expenditure of those costs may at first blush seem somewhat surprising. In the Aiden Shipping case Lord Goff said that he could not imagine any case arising in which an order for costs would be made, in the exercise of the court's discretion, against some person who had no connection with the proceedings in question (op. cit. at p.981A) But His Lordship did not limit connection to a causal connection and Article 16 lays down no such requirement. Furthermore, in the Symphony Group case although Balcombe LJ, listed in his judgment (with which the other members of the court agreed) categories of cases indicating "the sorts of connection which have so far led the courts to entertain a claim for costs against a non-party" the categories were stated to be "neither rigid nor closed" (op. cit. at p.152f) and a requirement that the person in question should have a causal connection with the litigation or its outcome was not mentioned.
31. In my judgment to limit the scope of Article 16 to persons playing a causal role in the inception of the litigation or its outcome would open the door to an injustice so gross that I cannot accept that the legislation should or can be interpreted in such a way as to admit it. Thus, if what happened in this case were to occur in one in which the damages awarded on the appeal were insufficient to meet the respondent's costs of the appeal an otherwise impecunious respondent would face bankruptcy. In his contentions H.M. Attorney General argued that this Court should not "make an assessment of the performance of the Royal Court .... because the Royal Court may be drawn into disrepute." To my mind, for this Court to permit the Respondent in the instant case to bear the consequence of the Royal Court's errors would risk bringing the whole legal system into disrepute.
32. I consider that there is sufficient connection, although not a casual connection, between the Royal Court which fell into error in the instant case and the States to justify the order contemplated. The Royal Court is the component of the constitutional structures of this Island charged with delivering public justice. In my judgment if the error committed by the Royal Court were to go unremedied a grave injustice would be perpetrated on the Respondent. There is another component of the constitutional structures of Jersey with the capacity (in terms of resources made available by the taxpayer) to negative that injustice - namely the States of Jersey. It seems to me that if one constitutional component fails in its function it is only right and proper that another should meet the costs thereby expended.
33. In reply to the Attorney General's supplemental note Mr. Santos Costa proposed that we should consider whether the Respondent would have a right of action in respect of her costs against the Commissioner personally. Insofar as this is an invitation to us to consider awarding costs against the Commissioner I reject it categorically. This is because the public interest demands that a Judge should be totally free to make his or her decisions - often very difficult and controversial decisions - without fear that an appellant may seek an order for costs against that Judge. In my view this public interest cannot be protected adequately by the application of any test no matter how stringent.
CONCLUSION
34. I would order that the States of Jersey meet the Respondent's costs of this appeal, the same to be taxed on the standard basis.
SOUTHWELL JA:
35. I have had the privilege of reading the judgments of Peter Smith QC and de Vic Carey JJA in draft.
36. I agree with paragraphs 1-21 of the judgment of Smith JA and have made some contribution to those paragraphs. In particular I agree with what he has said about the decision in Steel Ford & Newton (a firm)-v-Crown Prosecution Service and related appeals [1993] 2 All ER 769. Most of the reasoning in Lord Bridge's speech is concerned with the different legislative history in England and Wales, and is inapplicable to Jersey. Further, I respectfully find Lord Bridge's reasoning, in so far as not directed to that legislative history, unpersuasive for the reasons set out in the judgment of Smith JA.
37. On the question whether Miss Hotchkiss' costs of the appeal should be ordered to be paid by the States, there is much in the judgment of Smith JA with which I agree, in particular in paragraphs 23-28, 30 and 33, to which I have made some contribution.
38. I have the misfortune to disagree with Smith JA only on the issue whether the jurisdiction should be exercised in favour of Miss Hotchkiss. In my judgment, despite the initial view of all three members of this Court, no order should be made for payment of her costs of the appeal by the States. I reach this conclusion for the following reasons:
(i) The jurisdiction to order the costs of a party incurred as a result of an error in the Court below to be paid by the States is to be exercised only in the most exceptional cases, as Smith JA has stated in paragraphs 25-28 of his judgment. There must be, at the least, serious injustice caused by the lower court and severe financial hardship caused by that injustice to the litigant seeking the order. The test is a stringent one.
(ii) In the present case, though the errors of the Royal Court were serious, I am not satisfied that serious injustice has been caused by those errors to Miss Hotchkiss.
(iii) I am also not satisfied that severe financial hardship has been caused to her. She has recovered a substantial sum in damages and interest in accordance with the earlier judgment of this Court. That sum will be reduced by her costs of the appeal. But such costs once assessed ought not to be large in proportion to the amount of damages and interest.
(iv) In my judgment, therefore Miss Hotchkiss does not meet either of the two limbs by which the exercise of the jurisdiction is to be tested.
39. Thus despite the initial view of all three members of this Court I consider that Miss Hotchkiss should be left to bear her costs of the appeal.
40. It will be apparent from this short judgment that, though I agree with de Vic Carey JA as to the result, I do not agree with his reasoning concerning the jurisdiction of this Court in paragraphs 43-57 of his judgment. In particular, I wish to express no concluded view as to the effect of the Human Rights (Jersey) Law 2000 when that Law is brought into force in 2002, not least because this Court has not had the benefit of submissions as to the effect of that Law or as to the relevance of the decision of the English Court of Appeal, Civil Division, in In re Medicaments and Related Classes of Goods (No.4) (26th July 2001) as yet unreported, except in The Times, 7th August 2001, and online.
CAREY, JA.
41. Introduction
Smith JA in his judgment has helpfully set out the background to this application which I adopt.
42. In my judgment there are four issues that have to be considered:-
(a) Has this Court got the jurisdiction to make an order of the kind that we have proposed?
(b) If this Court has got jurisdiction to whom should an order for payment be directed?
(c) Regardless of the issue of jurisdiction, is it right for this Court to make an order in these particular circumstances?
(d) If all else fails should an order be made against the Commissioner or the Commissioner and the Jurats?
43. Issue (a): That of jurisdiction
The Court of Appeal is a creature of statute established under the Court of Appeal (Jersey) Law, 1961.
Its jurisdiction in civil matters is statutory to the extent that Article 12(1) of the Law of 1961 declares that:
44. I will digress for a moment to cover ground that at first sight may appear relevant to the consideration of Issue (b). I think it important to look at the relationship between this Court, the Royal Court and the States of Jersey, in the light of my brother judges' clear conclusions that the English authorities, on which I rely later, have no relevance in the Jersey context.
45. Over the centuries the Royal Courts of Guernsey and Jersey were allowed to develop as autonomous courts, adopting their own procedures for dealing with all causes that arose in their respective islands subject always to an ultimate right of appeal to the Sovereign in Council. As its name implies the Royal Court of Jersey is a Royal Court deriving authority directly from the Crown with its principal officers appointed by the Crown and not by the States, which as Mr. Whelan's helpful supplementary note shows, itself evolved out of the Royal Court as even by the sixteenth century it was recognised that there was need for wider consultation and representation in respect of the legislative function than was appropriate in respect of the judicial function.
46. The States has evolved like legislatures in other jurisdictions. All its members now are directly or indirectly elected by the people and, as the island's legislature, it differs little from Parliament in the United Kingdom and legislatures in other countries that follow in the Westminster tradition of parliamentary democracy. The Crown has let the States get on with its own business of legislating for and overseeing the internal administration of Jersey and has generally not sought to intervene. By convention the States are allowed to propose laws to raise taxes and regulate the government of Jersey subject always to the approval, where appropriate, of legislation by Her Majesty in Council. However the island is not a sovereign state and the Crown has retained responsibility for foreign relations and defence and the member of the Privy Council responsible for the affairs of the islands (until recently the Home Secretary but now the Lord Chancellor) claims to have a right ultimately to interfere in the interests of the good government of the island (calling in aid if necessary an Act of the Westminster Parliament).
47. I have rehearsed these points in order to emphasise the danger in the context of the issue before this Court of looking at the States of Jersey in some way as different from Parliament. Both within their areas of jurisdiction are charged with raising and disbursing public revenues. It may be tempting to equate the status of the States of Jersey to that of an English local authority and the fact that it has a corporate status separate from that of the Crown may on the face of it give support to that view. However, such a conclusion would in my judgment lead to a serious erosion of the status of the States as the autonomous legislature and overseer of the internal administration of the Island.
48. If the kind of issue that has arisen in this case had arisen sixty years ago it would have come before the Superior Number of the Royal Court. The Superior Number no doubt had occasion from time to time to reverse the Inferior Number. Whether if it felt that a party had been so badly served by the Inferior Number as this Court felt Miss Hotchkiss had been, the Superior Number would have considered it was appropriate to consider ordering "out of public funds" compensation in the form of an order for costs for the aggrieved litigant we know not. However, if there were a question of awarding this kind of compensation it seems to me that the first port of call for meeting it would have been the Crown Revenues rather than the Revenues of the States. It also seems doubtful that the Court had power to make an order for payment against the Crown, on the grounds of Crown immunity, the law restricting which was less developed than it was in England. I will leave these issues there and revert to them when considering the second question I have posed.
49. I come back to the issue of jurisdiction and the English authorities. I agree that any jurisdiction this Court has to make the order proposed must derive from Article 16 of the Law of 1961 which gives this Court "full power to determine by whom and to what extent the costs are to be paid". I also agree that in interpreting the extent of this power this Court should look to English authority for assistance. I have read the judgment of Lord Goff of Chieveley in Aiden Shipping Co. Ltd.-v-Interbulk Ltd. [1986] AC 965, but I take the ratio of that case as being no further than that expressed in the headnote:
50. It is also necessary to bear in mind that the facts of that particular case fell within a somewhat narrow remit. The case involved three party litigation in the form of two disputes, one between the owner and the charterer of a vessel and the other between the charterer and the sub-charterer. When deciding the case against the owners the Court of Appeal had refused to order that the owners pay, as well as the charterer's costs of the litigation, the sub-charterer's costs in the sub-charter proceedings.
I find support for the view that this is an exceptional jurisdiction and turning on its own facts from the speech of Lord Goff at 980 beginning at letter F and continuing on page 981:
51. A further example of where this exceptional procedure was considered appropriate is to be found in the case of Symphony Group Plc-v-Hodgson [1993] 4 All ER 143. The facts there were straightforward; the plaintiff had successfully sued a former employee for breach of contract and in particular breach of a restrictive covenant when that employee joined the plaintiff's competitors H Ltd. The evidence showed that the day the employee left the plaintiff's employment he signed a letter to the plaintiff drafted by the solicitors of H Ltd. claiming that the plaintiff had repudiated his contract of employment. The plaintiff then issued a writ against the defendant. The defendant obtained legal aid but still employed the solicitors of H Ltd. When the plaintiff was successful the former employee was not able to meet the costs and so they sought an order that H Ltd. pay the costs. The judge at first instance made an order against H Ltd. Although the Court of Appeal reversed that decision for reasons which do not concern us, it was acknowledged that it was possible to make a claim for costs against a non-party in such circumstances. In that case it was also clear that the plaintiff might well have had a separate cause of action against H Ltd. had it chosen to pursue it. At page 151 of the report Balcombe, LJ summarised the decisions that had followed on from Aiden. I do not propose to review them in detail. Balcombe, LJ went on to take up the suggestion that Lord Goff had made that guidance might well become necessary from the Court of Appeal as to the circumstances when the costs orders against non-parties would be appropriate. Again I do not consider it necessary to review in detail the nine material considerations that he considered should be taken into account (starting at the foot of page 152 of the report). Suffice to say that these show that the jurisdiction is to be exercised sparingly and there is nothing therein which lends support to the view that the present case was of the kind he had in mind.
52. At the same time that this case was being considered by the Court of Appeal the House of Lords was seized of a somewhat different point which in my view gives more important guidance as to the approach that this Court should be taking with regard to the order it is proposing to make. I refer to the case of Steele Ford & Newton and Ors-v-Crown Prosecution Service [1993] 2 WLR 934. This case involved an order of the Court of Appeal awarding payment of costs out of central funds. The circumstances were that in a number of related cases solicitors had been ordered to pay personally costs thrown away as the result of their conduct of defences of clients in the Crown Court. The solicitors appealed successfully against those orders and the Court of Appeal granted orders for the payment of their costs out of central funds. Against this order the Lord Chancellor's Department appealed. The House of Lords allowed the appeal. The decision is summarised in the headnote:
The principal speech was that of Lord Bridge. He starts at page 936 with quoting from section 51(1) of the Supreme Court Act 1981, precisely the same point from which this Court is required to start. He then refers to two recent decisions of the Court of Appeal where that Court had ordered payment of costs out of central funds and alludes to the fact that in both those cases and the decision then under appeal primary reliance was placed on the decision of the House of Lords in Aiden Shipping in support of the proposition that a power to award costs out of central funds could be implied in section 51 of the Supreme Court Act 1981. On page 938 at letter D he quotes from the judgment of Nolan, LJ in R-v-Bow Street Magistrate ex parte Mirror Group Newspapers Ltd. [1992] 1 WLR 412 in which Nolan, LJ relies on the words of Lord Goff to which I have already referred as stating that no restriction is to be implied into section 51(1). Lord Bridge concludes in his criticism of the decisions of the Court of Appeal with these words at page 938 letter F:
53. Lord Bridge then goes on to consider the issue of Crown immunity that culminated in the passing of the Administration of Justice (Miscellaneous Provisions) Act 1933 where that immunity was substantially removed. As I have said I am not aware of any similar provision in Jersey Law and it may well be that the Crown technically is still immune from suit before the Jersey Courts. Having reviewed this provision waiving immunity Lord Bridge goes on to say at the top of page 939:
54. The speech then continues to review two further contentions based on certain express provisions of English Law introducing costs payable out of monies provided by Parliament in certain instances. Likewise we have before us information as to the express provisions of Jersey Law relating to payment of costs in criminal matters out of monies furnished by the States of Jersey, but I do not find that study of the provisions in either jurisdiction necessary or of assistance for the purposes of this appeal. I move on therefore to the final conclusions of Lord Bridge on page 946 of the report:
He then gives a number of examples where costs are not recoverable finishing up with the relatively commonplace situation where a party who has been the victim of a misjudgment by an Inferior Court and has to seek judicial review cannot obtain an order against the tribunal that has fallen into error or for costs from public funds. He goes on at letter G:
The final extract from his judgment I find of assistance is at page 947 at letter D:
55. Accordingly I find nothing to distinguish this case from Steele Ford. I do not consider that this Court can impose a duty to pay on the States of Jersey any more than the House of Lords felt it could where the necessary funds had not been provided by Parliament. The States is the body vested with the responsibility for the oversight of the public purse, which is funded by money collected by way of tax, and it is not for this Court to extend the range of potential liabilities that may fall on the States. It would be for the States, if it were so minded, to make legislative provision to enable this Court wherever it finds an injustice has been suffered by a litigant to have power to award costs from public funds.
56. There may be cases where this Court might be minded to say that there had been such a serious failure in the way that the judicial organs of Jersey have operated that good government required the States to indemnify the individual who has suffered loss against that loss. Such cases in future may be subsumed into the new structure created by the Human Rights legislation where it is acknowledged that persons have a right of indemnity in respect of failures of the courts. However, in my judgment, parties in the position of Miss Hotchkiss can only be indemnified at the expense of the taxpayer by express vote of the necessary funds by the States of Jersey. I will come later to the issue as to whether this Court should be giving advice for the States of Jersey to consider this matter in such a light.
57. Before leaving this part of my judgment I would refer to a recent decision of the English Court of Appeal, in the matter of In re Medicaments and Related Classes of Goods (No. 4) Director General of Fair Trading-v-PAGB and Anor (26th July, 2001) EWCA Civ 1217.
This case followed a direction in an earlier hearing of the Court of Appeal, that an application by the Director General of Fair Trading, to which the applicants, who were trade bodies concerned with the pharmaceutical industry, objected, had to begin again. The applicants estimated that they had wasted about £1,000,000 because the proceedings had to begin again through no fault of their own.
The reason for the original decision of the Court of Appeal was that there was an appearance of bias on the part of the membership of the Restrictive Practices Court. The Court of Appeal considering the matter of costs wasted, rejected the argument that the Lord Chancellor's Department should take responsibility for the costs resulting from the perceived failures in the Restrictive Practices Court. The particular point taken by the applicants which is dealt with in the report is that their right to a fair trial under Article 6(1) of the European Convention on Human Rights had been infringed and therefore they were entitled to be compensated for the wasted costs by the Lord Chancellor who was the emanation of the State responsible for providing impartial tribunals to conduct trials of civil litigation. The Court of Appeal held that as the Appeal Court had remedied the defects in the decision at first instance, no violation of Article 6(1) occurred. This case is not directly on the point but it does in my view provide some comfort for the view that those who come before the courts are not entitled to expect fault free judicial services. It perhaps further shows that my earlier suggestion that Miss Hotchkiss would be in a stronger position if the new Law were in force may be unfounded.
58. Issue (b): If such an order should be made to whom should responsibility for payment be directed?
Although it is clear from what I have said in the first part of this judgment that I do not subscribe to the view that this court has got power to make an order for payment of costs "out of public funds" I will briefly deal with the issue of on what body responsibility for payment of costs in a case such as this should fall. It would also be relevant if, notwithstanding the lack of jurisdiction, the Court reached the stage of suggesting that the States of Jersey should be asked to vote funds to assist Miss Hotchkiss with her legal fees. I have already touched upon the relationship between the Royal Court and the States. I confess that at first sight I was somewhat anxious at the concept of imposing on the States of Jersey financial responsibility for any perceived shortcomings in the administration of justice in the Royal Court.
59. The first point I must consider is the appropriateness of making an award against the States of Jersey as such rather than some committee of the States of Jersey. As I have said the States of Jersey is a corporate body and all public assets and funds ultimately vest in the States as a whole. I am grateful to Mr. Whelan for the detailed information he has provided concerning the operation of the various committees of the States of Jersey and the careful way in which the voting of funds to committees is controlled. I cannot, however, accept the suggestion that the States is in some way compartmentalised and that as against third parties certain committees in law can claim to own certain assets to the exclusion of the rest of the States. Indeed the fact that when committees have to meet claims for tortious liability, all budgetary provisions are excluded from applying shows that at the end of the day the States acknowledge that the responsibility for third party liabilities is a collective one of the States as a whole. To use an analogy from modern Company Law the States cannot claim to be some sort of protected cell company.
60. The legal position is quite different with various committees of the States who engage in administrative and statutory activity, which gives rise to appeals or claims for judicial review on the grounds of maladministration or unreasonableness. Those actions are to be brought against the committee concerned, as it is the committee charged with such responsibility who is the perpetrator of the decision subject to review. At the end of the day, however, if a separate tortious liability arises in respect of such actions then the States funds as a whole are responsible to meet them.
61. My real concern, however, was not the issue of States and its committees and how they inter-relate but the issue that the Royal Court is not the creature of the States of Jersey. The States of Jersey has no responsibilities towards it other than to provide the funds to pay for its establishment and its manning and it could be wrong if this Court, without considering the constitutional position, imposed a duty on the States to underwrite the failures of the judicial system.
62. However, I come round to the view that this responsibility, if it were to exist in a case such as this, would be one for the States. I base this conclusion on the decision of Her Majesty's Government in 1947 evidenced by the provisions of the Jersey and Guernsey (Financial Provisions) Act 1947 which provided that so far as Jersey was concerned the Crown revenues which the Sovereign had at the beginning of each reign placed at the disposal of Parliament should no longer be paid into the Consolidated Fund but paid after expenses directly to the States of Jersey. It may be that in the case of Jersey the Crown revenues were not substantial. Be that as it may the surrender by the Crown of rights to the Crown estate in Jersey, an estate which has no doubt been enlarged over the years by the proceeds of escheats, did impose on the States of Jersey not only an obligation to meet the costs of the proper salaries of those appointed to serve the island by the Crown but also other obligations that might have otherwise fallen on the Crown estate.
63. As I have suggested in the first part of my judgment the original body to be charged with responsibility for meeting an order such as we proposed, would, in my view, have been the Crown, subject to the caveat I have already identified concerning the power of a Jersey court to make an order against the Crown - an issue which I do not feel necessary to explore further. It is therefore to the States of Jersey, as the ultimate beneficiary of the Crown estate, that an order such as that we proposed should be directed. In saying that I am not suggesting that in practice there remains any part of the Crown estate that this Court could regard as ring fenced, and so not forming part of the public revenues of Jersey, the disposal of the latter being, as I have indicated, entirely within the discretion of the States of Jersey.
64. Issue (c): In any event is it right to make an order in these particular circumstances?
Having been persuaded that there is no jurisdiction for this Court to make an order I must now consider whether I would be minded to suggest that the States of Jersey should consider the matter and vote a sum of money out of public funds on the grounds that there has been an exceptional failure by the judicial system which calls for Miss Hotchkiss to be so compensated. That may be rather a strong way of putting it and the suggestion that there be a reference to the legislature, would at first sight look rather a heavy way of proceeding in this matter. However, Jersey is a small jurisdiction and I would not baulk at the suggestion that this Court could properly in appropriate circumstances express a strong view that an injustice has occurred which the Court cannot put right and which should be the subject of consideration by the legislature to enable consideration of the issue of the payment of compensation. Ideally such a request should be confined to situations where any fair-minded member of the States could see the strength of the request that the Court was making to the extent that any debate on it was unnecessary.
65. I have concluded that this is not a situation where the injustice is so glaring that no reasonably minded States Member could fairly question payment. Further if the case did fall into that category there are potentially many other cases where similar arguments could be advanced. Litigation can never be risk free and the Respondent here is in my view joining the ranks of the many who will feel that they have suffered an injustice at the hands of the civil justice system. I do not think that this is a case for suggesting a reference to the States.
66. Issue (d): If all else fails should an order be made against the Commissioner or the Commissioner and the Jurats?
Not unnaturally I find this a somewhat delicate issue. I have had the advantage of reading in draft the judgments of Smith JA and Southwell JA. I agree with and have nothing to add to their response to the invitation of Mr. Costa that we make an order against the Commissioner.
CONCLUSION.
67. Accordingly in my judgment the order for costs that we proposed should not be made.