IN THE COURT OF APPEAL
TURKS AND CAICOS ISLANDS
CIVIL APPEAL NO 4 OF 2018
BETWEEN
BIG BLUE UN LIMITED
APPELLANT
AND
KATHLEEN DE BRUYNE
RESPONDENT
BEFORE:
The Honourable Mr Justice Mottley President
The Honourable Mr. Justice Stollmeyer Justice of Appeal
The Honourable Mr Justice Hamel-Smith Justice of Appeal (Ag)
APPEARANCES:
Mr Stephen Wilson QC for the Applicant
Ms Monique Allan for the Respondent
19 & 21 November 2018; 22 March 2019
JUDGMENT
Stollmeyer, J.A.
[1] On 21 November 2018 we allowed this appeal and ordered the Appellant (Big Blue) to pay to the Respondent (Mrs de Bruyne) her full costs of the proceedings in the Supreme Court up to and including 14 July 2016, less the costs of the days 26 and 27 April 2016. We also ordered that there be no costs of the appeal. This is the written judgment.
[2] The appeal is from the decision of Mr. Justice Schuster of 23 January 2018, on the assessment of damages when he awarded:
(1) $17,961.62 in special damages;
(2) interest on the total award of damages (both general and special) of $35,757.62 at 6 percent from 14 August 2017; and
(3) the Respondent 75% of her costs at first instance up to 15 April 2016 and her full costs thereafter, less the costs of 26 and 27 April 2016.
[3] There is no cross-appeal nor any Respondent's Notice in relation to any finding or conclusion of the Judge hearing the assessment..
[4] At the outset of the appeal, and on the invitation of the Court, the parties settled those awards in relation to the award of special damages and interest on the award of damages, the latter being the interest payable after judgment. They have not, however, put those agreed terms before the Court, nor have they filed any document reflecting them. We therefore treat those terms as having been endorsed on Counsels' brief. No issue was raised on the appeal as to interest payable pre-judgment. This, therefore, left only the appeal in relation to costs for our determination
Background
[5] Mrs de Bruyne brought proceedings in the Supreme Court claiming damages in negligence for injuries suffered in March 2009 while a passenger on Big Blue's boat. Big Blue was found liable and the costs of the trial on liability were reserved. Big Blue appealed the decision on liability and the matter did not proceed to assessment.
[6] On 08 May 2014 the Court of Appeal held that Big Blue was liable, but that Mrs de Bruyne was contributorily negligent to the extent of 25%. It ordered Big Blue to pay 75% of the costs of the appeal, and Mrs de Bruyne 25%. No order was made as to the costs of the proceedings below.
[7] On 18 September 2015 the Court of Appeal's written judgement was handed down. At paragraph 30, it ordered, among other matters, that Big Blue was to pay 75% of the costs below.
[8] It would appear that this was an inadvertence given the terms of its oral order on 07 May 2014 and that the signed order entered subsequently on 13 May 2014 reflected the orders made on 07 May 2014.
[9] The matter was then remitted to the Supreme Court for the assessment of damages. That assessment began on 26 April. On that day and the following day, 27 April, the Judge heard submissions on Mrs. de Bruyne's applications relating to the admission of evidence and amending her statement of claim. He dismissed both and this doubtlessly led to that part of his costs order that the costs he awarded to Mrs. de Bruyne did not include the costs of those two days.
[10] Hearing of evidence commenced on 28 April and continued on 13, 14 and 15 July, and thereafter on 14 and 15 November 2016.
[11] Prior to the commencement of the assessment, however, Big Blue made an offer to settle Mrs de Bruyne's claim in the form of what is known as a Calderbank Offer on 15 April 2016, pursuant to the provisions of Order 22 rule 14 of the Civil Rules 2000. Mrs. de Bruyne's Attorneys requested detailed information on the same day so as to enable her to come to a properly informed decision on the offer, and the great majority, but not all, of this information was delivered on 24 April. On 25 April the offer was rejected.
[12] That offer was for a total of $250,000.00 of which $125,000.00 was apparently allocated to general damages. In the event, Mrs. de Bruyne was ultimately awarded general damages of US$17,769.00, being the equivalent of GDP $19,500.00 after reflecting the Court of Appeal's Order apportioning liability. She was also awarded special damages of US$23,949.82, again reduced to US$17,961.62 after apportionment of liability. These awards are in the aggregate undeniably well below the offer made, and perhaps minimal when regard is had to the submissions made on her behalf as to what she should be awarded.
[13] What emerged during the course of the assessment, however, was that Big Blue had made certain video recordings of Mrs. de Bruyne which had not been disclosed. Some of these recordings had been made prior to the Calderbank Offer being made, and there were then further recordings made after the offer was rejected.
[14] Those video recordings were only made available at various times starting on 28 April 2016. There is some evidence that all the videos then in existence were made available by 27 May 2016, but there were then even further video recordings made which Mrs. de Bruyne was unable to view and assess until 14 July 2016.
Analysis
[15] There is no contention that Mrs. de Bruyne should not be entitled to her full costs of the trial on liability, so it is clear that in exercising his discretion Schuster J fell into an error of law. This may well have been the consequence of being misled by what the Court of Appeal had said at paragraph 30 of its written judgment of 18 September 2015. It is equally clear, however, from both the oral decision of the Court of Appeal on 08 May 2014, and the Order entered on 13 May 2014, that the Order made by the Court of Appeal on 08 May 2014 was that Big Blue pay 75% of Mrs. de Bruynes's costs of the appeal, and not 75% of her costs at first instance as is indicated at paragraph 30 of the subsequent written judgment of 18 September 2015 to which I have referred. Obviously, the Order as entered prevails.
[16] The Judge below having fallen into error, as was conceded on the hearing of the appeal, the issue of the costs payable in the proceedings below falls to be decided by this Court.
[17] The issue for determination is whether Mrs. de Bruyne should be awarded any of her costs after rejection of the Calderbank Offer on 25 April.
[18] The general rule is that a successful party is to have its costs of a trial subject, of course, to any other decision of the trial judge which he or she may come to in his or her discretion. In an instance where an offer of settlement is made by way of a Calderbank Offer, it is open to the Court to decide whether any of the costs incurred subsequent to such an offer being rejected are to be paid to the successful plaintiff.
[19] The rationale and the law relating to the circumstances in which there might be a departure from the general position under the above principle as well as the law, was explained usefully by Mummery LJ in Butcher v Wolfe and Wolfe:1
"The law.
The relevant law can be summarised in the following nine short propositions:
(1) The general principle is that a successful party is entitled to his costs. Order 62, r 3(3) of the Rules of the Supreme Court provides:
'If the Court in the exercise of its discretion sees fit to make any order as to the costs of any proceedings, the Court shall order the costs to follow the event, except when it appears to the Court that in the circumstances of the case some other order should be made as to the whole or any part of the costs.'
1 [1999] 1 FLR 334 at 339-340
(2) A party may at any time make a written offer to any other party which is expressed to be 'without prejudice save as to costs' and which relates to any issue in the proceedings: Ord 22, r 14(1). That rule was introduced following the decision of the Court of Appeal in Cutts v Head and Another [1984] 1 Ch 290, in an effort to promote the policy of encouraging settlements in all kind of disputes, and not just matrimonial and financial disputes of the kind considered in Calderbank v Calderbank [1976] Fam 93, (1975) FLR Rep 113.
(3) A Calderbank offer is not an open offer. Its existence must not be disclosed to the court until the issue of costs falls to be determined: Ord 22, r 14(2).
(4) As with a payment into court, a Calderbank offer is a matter which the court must take into account in the exercise of its discretion as to costs: Order 62, r 9(l)(d).
(5) It is appropriate to adopt the Calderbank procedure where, as here, the defendants could not protect their position by a payment into court. Compare Singh v Parkfield Group plc [1996] PIQR Q110, where the defendant could have protected himself by a payment into court, in which case a Calderbank offer was not appropriate.
(6) The court has an overall broad judicial discretion on costs. As Ormrod LJ said in McDonnell v McDonnell [1977] 1 WLR 34, 38:
'A Calderbank offer should influence but not govern the exercise of the discretion
A Calderbank offer is made for the same reason as a payment into court is made; to encourage a settlement and, failing a settlement, to protect the position on costs of the person making the payment in or the Calderbank offer. But a Calderbank offer is not to be treated as, or to be regarded as a substitute for, or to be equated for all purposes with, a payment into court. As a Calderbank offer is appropriate in a case other than a claim for debt or damages, it requires a greater degree of flexibility. The proper approach to a Calderbank offer, when it is taken into account on a later argument on costs, is to ask whether the party to whom the offer was mode 'ought reasonably to have accepted the proposal in the letter' Or, to put it another way, account must be taken of the reasonableness or otherwise of the refusal to accept the offer - see Cutts v H ad and Another [1984] Ch 290, 302 per Oliver J, and Chrulew and Others v Borm- Reid & Co [1992] 1 WLR 176, 182A. This approach is to be compared with the payment into court where, in the absence of a special reason for depriving the offering party of his post-offer costs, the simple question is whether the payment in is equal to or is beaten by the defendants at trial.
(8) A Calderbank offer must be made in clear terms so that the party against whom it may be used on the issue on costs knows what he is offered - see C & H Engineering v F Klucznic & Sons Ltd [1992] FSR 667, 671. It may well be reasonable for a party to whom an offer is made to refuse an offer made in ambiguous terms.
(9) The Court of Appeal will not interfere with the trial judge's discretion on costs, unless he erred by disregard of legal principle or he reached a conclusion which is plainly wrong; for example, as a result of a misunderstanding of relevant facts."
[20] There are certain observations which need to be made. First, the Civil Rules 2000 mirror the provisions of the English Rules referred to by Mummery LJ. Second, we are told there does not exist in this jurisdiction any practicable method of a party paying money into court under the provisions of Order 22 and it then being paid out, thus making the use of Calderbank Offers all the more necessary. Third, no issue arises as to whether the offer contained in the letter of 15 April 2016 was a valid and effective offer - it is accepted that it was.
[21] The question of a party reasonably accepting the proposal contained in the letter of offer requires that the recipient of the offer be put into the position of being able to make a properly informed decision about his or her prospects and the sensible conduct of his or her case.2 That is only reasonable.
[22] In the normal course of events, a Court might well have justifiably taken the view that Mrs. de Bruyne should receive none of her costs following the rejection of the offer. What happened, however, was that certain video recordings of her had been made and were not disclosed prior to the offer being made and rejected. Had that been done, and Mrs. de Bruyne given the opportunity to assess the evidence against her which Big Blue was proposing to introduce at the hearing of the assessment of damages, her response could indeed and should, in our view, have been remarkably different.
2 See for example Ford v GKR Construction Ltd and Others [2000] 1 All ER 802 at 802j, although this was decided on the basis of the English CPR 1998
[23] None of those video recordings were made available prior to, or contemporaneous with, the Calderbank Offer. Mrs. de Bruyne was therefore unable to make a properly informed decision as to whether she should accept the offer made on 15 April 2016. Nor were the recordings made after the offer made available until 14 July 2016. Nor was she fully aware of the full extent of what evidence against her that she faced until 14 July 2016.
[24] On the other hand, it must have been obvious to Mrs. de Bruyne by 14 July what she faced. The assessment proceeded, however, and these very same video recordings were relied upon by her to some extent in support of her claims for pain and suffering and loss of amenities. Equally obvious, given the quantum of the award in general damages, is that the Judge below was not particularly impressed either by the support she claimed from those video recordings or the other evidence in support of her claim. It may very well be that the Judge's assessment of the video recordings and other evidence explain the absence of a cross-appeal or Respondent's Notice in relation to both general and special damages.
[25] Consequently, Mrs. de Bruyne was and is entitled to her full costs up to 14 July 2016. The failure to disclose the existence of and make available copies of all of the video recordings militated against her making a full and properly informed decision in relation to the offer which had been received. There is consequently no good reason to deprive her of her full costs up to the date of the offer. Further, the delay in making available all of the video recordings, including those made after the Offer was rejected, until 14 July also weighs in her favour and in our view she should be awarded her costs up to that date. On the other hand, no fault can be found with the order of Schuster J that she should not have her costs of 26 and 27 April 2016.
[26] Conversely, knowing what at least some of the recordings showed by 14 July 2016 and becoming fully aware of what she faced, but proceeding nevertheless with the assessment after that date, weighs against her. In those circumstances, she cannot be entitled to her costs after 14 July 2016.
Disposition
[27] In the round, and having considered all the circumstances including all the relevant aspects of the litigation, we concluded that the Appellant must pay to the Respondent her full costs of the proceedings at first instance up to and including 14 July 2016, but no costs after that date, less the costs of the days 26 and 27 April 2016. We so ordered. Those costs are to be taxed in default of agreement. The Respondent is to pay to the Appellant the agreed amount of the special damages and the agreed interest on the judgment debt as endorsed on Counsels's brief.
[28] We considered Mr. Wilson's submission that there should be a set-off of the costs awarded against the damages awarded but do not regard doing so as appropriate in this case, given that no order was made that any payment be made to Big Blue.
[29] We also heard the parties on the issue of the costs of the appeal. Having considered their submissions we came to the view that in all the circumstances, and particularly that two of the three issues had been settled, there should be no order as to the costs of the appeal and so ordered.
H. Stollmeyer
Justice of Appeal
I agree
E. Mottley
President
I agree
R. Hamel-Smith
Justice of Appeal
