Afiniti, Ltd v Muhammad Ziaullah Khan Chishti

• Jurisdiction: Bermuda
• Judge: Kawaley JA,Sir Anthony Smellie JA,Sir Christopher Clarke, P
• Judgment Date: 05 December 2024
• Neutral Citation: BM 2024 CA 16,[2024] CA Bda 22 Civ
• Docket Number: Civil Appeal No. 2 of 2024
• Court: Court of Appeal (Bermuda)

Between:

Afiniti, Ltd.

Appellant

and

Muhammad Ziaullah Khan Chishti

Respondent

Neutral Citation Number: [2024] CA (Bda) 22 Civ

Before:

THE PRESIDENT, THE RT HON Sir Christopher Clarke

JUSTICE OF APPEAL, THE HON Sir Anthony Smellie

and

JUSTICE OF APPEAL, THE HON Ian Kawaley

Civil Appeal No. 2 of 2024

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE SUPREME COURT OF BERMUDA SITTING IN ITS

ORIGINAL CIVIL JURISDICTION (COMMERCIAL COURT)

BEFORE THE HON. JUSTICE SHADE SUBAIR WILLIAMS

CASE NUMBER 2023: No. 162

Date: 05/12/2024

INDEX

Costs of appeal reference Indemnification Deed-appropriate award-;whether Respondent entitled to award on a contractual basis in an event

Appearances:

Mr Conor Doyle of Conyers Dill & Pearman Limited, Counsel for the Appellant

Mr. Alex Potts KC and Mr Richard Horseman of Wakefield Quin Limited, Counsel on behalf of the Respondent

COSTS RULING

Kawaley JA

Introductory

1 On 16 September 2024, we disposed of the appeal delivering a Judgment (the “Judgment”) which sets out the relevant background and summarised the result as follows:

“77…

• (a) Ground 1 is allowed in part. The IC Determination was admissible as evidence of what occurred in the first stage of the contractually agreed process for determining whether the Trade Secrets Proceedings are indemnifiable. To the extent that the Appellant contended that it had binding effect (its primary argument), Ground 1 is dismissed;

• (b) Ground 2 is allowed. The Judge ought to have ruled that the Award was admissible in evidence pursuant to sections 40 and 41 of the BICA and that it was arguably an abuse of process to relitigate the issues determined against the Respondent by the Award. However, the Court declines to make abuse of process findings which will have to be determined by the Supreme Court in future proceedings;

• (c) Ground 3 is refused. The Judge correctly rejected the argument that the Award gave rise to an issue estoppel.

78. The Respondent's Cross-Appeal is dismissed. The Judge rightly declined to strike-out Logan 2 [a relevant affidavit] and no grounds have been made out for this Court to order the Appellant to make an interim payment on account of the Respondent's advance of expenses claim.”

2 Each party claimed victory and an entitlement to costs of the appeal and in the Court below. However, the Respondent's primary position was that under the Deed of Indemnity (the “Deed”) he was entitled contractually to his costs in any event. Accordingly, the application turns on the adjudication of two main issues which can conveniently be dealt with in the following order:

• (a) whether the Respondent is entitled to contractual costs in any event; or

• (b) (if not) how should the usual discretion in relation to costs be exercised.

Contractual costs

3 The disposition of the appeal and cross-appeal results in the Supreme Court proceeding to adjudicate the merits of the Respondent's substantive application for indemnification under the Deed. In my judgment any application for contractual costs on the basis of a claimed entitlement under the Deed should in the first instance be made in the Supreme Court. The issue is not straightforward and is not in any event suitable for determination on the papers in the context of an application which was intended to deal with the incidence of costs applying the standard principles.

The incidence of costs

4 It is sometimes a strong indication of a contest with no decisive winner when each side has the temerity to claim overall victory. However, it is also often the case that while it is clear that one party has ‘won’, they were unsuccessful on time consuming issues so that their costs should be reduced by a proportionate amount. The present case is illustrative of the latter situation. In First Atlantic Commerce v Bank of Bermuda Ltd [2009] Bda LR 18 at [66], this Court found that the award of costs to a successful party may be modified by the principle in In re Elgindata Ltd (No 2) [1992] 1 WLR 1207, so that “ the successful party's...