Sagicor v Crawford Adjusters

• Jurisdiction: Cayman Islands
• Judge: (Henderson, J.)
• Judgment Date: 09 December 2011
• Court: Grand Court (Cayman Islands)
• Date: 09 December 2011

Grand Court, Civil Division

(Henderson, J.)

SAGICOR GENERAL INSURANCE (CAYMAN) LIMITED and PROPRIETORS OF STRATA PLAN NO. 151

and

CRAWFORD ADJUSTERS (CAYMAN) LIMITED and SIX OTHERS

HURLSTONE LIMITED, HURLSTON GENERAL CONTRACTORS LIMITED, J. HURLSTON and R. HURLSTONE

and

PROPRIETORS OF STRATA PLAN NO. 151

M. Roberts for the first and second plaintiffs;

G. Hampson for the first to third defendants;

T. Lowe, Q.C. for the fourth to seventh defendants.

Cases cited:

(1) Elgindata Ltd. (No. 2), In re, [1992] 1 W.L.R. 1207; [1993] 1 All E.R. 232; [1993] BCLC 119, followed.

(2) Knight v. Clifton, [1971] 1 Ch. 700; [1971] 2 W.L.R. 564; [1971] 2 All E.R. 378, followed.

(3) Ottway v. Jones, [1955] 1 W.L.R. 706; [1955] 2 All E.R. 585, followed.

(4) Seepersad v. PersadUNK(2004), 64 W.I.R. 378; [2004] UKPC 19, followed.

Legislation construed:

Grand Court Rules 1995, O.62, r.4(11): The relevant terms of this sub-rule are set out at para. 24.

Civil Procedure-consolidation of actions-apportionment of costs-where costs follow event and successful damages inquiry consolidated with unsuccessful new claim/counterclaim forming separate proceedings, costs to be apportioned according to time spent on each action-may take into account relevance to successful action of evidence adduced in unsuccessful action

Civil Procedure-costs-indemnity basis-indemnity costs only if improper, unreasonable, or negligent conduct by paying party, e.g. causing significant increase in length or cost of trial-pursuing novel claim or one unlikely to succeed not sufficient for indemnity costs

Following the dismissal of two consolidated actions, the parties claimed indemnity costs against each other in the Grand Court.

Sagicor General Insurance Ltd. and the proprietors of Strata Plan No. 151 commenced an action for fraud and conspiracy against the Hurlstone and Crawford parties (‘the original action’) and Sagicor obtained a Mareva injunction against the Hurlston parties. An application for a similar injunction against the Crawford parties failed. The action was abandoned at the outset of the trial and the Grand Court (Henderson, J.) dismissed it, awarding indemnity costs to the defendants and ordering that there be an inquiry for the purpose of assessing damages arising from the Mareva injunction (in proceedings reported at 2008 CILR 482). Before the start of the damages inquiry, the Hurlstone parties commenced a new action against Sagicor for abuse of process and malicious prosecution of a civil case. Meanwhile, the Crawford parties amended their existing counterclaim to advance claims for abuse of process and defamation against Sagicor. The new claim and counterclaim were heard at a consolidated hearing with the damages inquiry. Much of the material adduced by the Hurlstone and Crawford parties was relevant to both their claims and the assessment of damages in the original action. The Grand Court (Henderson, J.) dismissed the consolidated actions but awarded general and aggravated damages in the original action to the Hurlstone parties for losses caused by the Mareva injunction (in proceedings reported at 2011 (1) CILR 130). The court then conducted the present costs hearing at which the parties claimed indemnity costs from each other.

The Hurlstone parties submitted that (a) their claim had been a continuation of the original proceedings in which they had succeeded, being one case in form and substance, such that Sagicor should pay their costs for the hearing; and (b) costs should be awarded on an indemnity basis because the claim had resulted from improper, unreasonable, or negligent conduct of Sagicor for the purposes of GCR, O.62, r.4(11).

The Crawford parties submitted that (a) their counterclaim had been a continuation of the original proceedings in which they had succeeded, being one case in form and substance, such that Sagicor should pay their costs for the hearing; (b) alternatively, the court should award costs against Sagicor, despite their victory in the counterclaim, because the action had been necessary to restore the Crawford parties” reputations and they had succeeded on several factual matters; and (c) that costs should be awarded on the indemnity basis because the claim had resulted from improper, unreasonable, or negligent conduct of Sagicor for the purposes of GCR, O.62, r.4(11).

Sagicor submitted in reply that (a) neither the claim nor the counterclaim had been continuations of the original action, that had already been dismissed, but distinct actions on which it had succeeded; (b) an action had not been necessary to restore the Crawford parties” reputation, which had been restored by the dismissal of the original action and, whilst accepting liability for costs in relation to the damages inquiry, it should therefore be entitled to the extra costs of defending the claim and

counterclaim, from the Hurlstone and Crawford parties; and (c) those costs should be awarded on the indemnity basis, as the claim and counterclaim had been both improper, unreasonable, or negligent for the purposes of GCR, O.62, r.4(11) and unlikely to succeed.

Held, apportioning costs between Sagicor and the Hurlstone and Crawford parties:

(1) The Hurlstone parties would be awarded a proportion of their costs. Despite the considerable evidential overlap between the new action and the damages inquiry, the former remained a distinct claim rather than a continuation of the original proceedings and they were not one in form and substance. Costs liability for the hearing would, therefore, be apportioned according to the time spent on the damages inquiry for the original action and the significant time spent only on the new claim. The proper apportionment, in the circumstances, was for Sagicor to pay 85% of the Hurlstone parties” costs and for the latter to pay 15% of Sagicor”s costs (paras. 17–24).

(2) Further, the Crawford parties would be awarded a proportion of their costs. The trial of the counterclaim had occurred after the dismissal of the original action and could only be viewed as a separate event. Although the court had the jurisdiction to award costs against a successful party, it would do so only in exceptional circumstances where justice demanded it, none of which existed in the present case. The counterclaim had not been necessary, as the dismissal of the original action had publicly restored the Crawford parties” reputations by finding no evidence of fraud or conspiracy on their part. Although the Crawford parties had succeeded on several factual matters, Sagicor would, as the successful party to the counterclaim, be entitled to its costs, subject to a proper apportionment according to the time spent on the damages inquiry and the time spent only on the counterclaim. As the Crawford parties had adduced evidence relevant to both the damages inquiry and the new action/counterclaim, the proper apportionment was for Sagicor to pay 85% of the Crawford parties” costs and for the latter to pay 15% of Sagicor”s costs (paras. 29–43).

(3) Moreover, no party would be ordered to pay costs on an indemnity basis. The Hurlstone and Crawford parties had not caused any significant increase in the length or cost of the new action or the counterclaim and Sagicor had not caused any significant increase in the length or cost of the new action or the damages inquiry. No party had conducted proceedings improperly, unreasonably, or negligently for the purposes of GCR, O.62, r.4(11) and the mere fact...