Francis v Carruthers

• Jurisdiction: Bermuda
• Judgment Date: 30 April 2007
• Date: 30 April 2007
• Docket Number: Civil Jurisdiction 2004 No. 2
• Court: Supreme Court (Bermuda)

In The Supreme Court of Bermuda

Kawaley, J

Civil Jurisdiction 2004 No. 2

BETWEEN:

Wanda Francis

Plaintiff

and

Simon Carruthers

Defendant

Mr L Mills for the Plaintiff

Mr D Dwyer for the Defendant

The following cases were referred to in the judgment:

Veracchia v Metropolitan Police CommissionerWLR [2002] 1 WLR 2409

Mayor and Burgesses of London Borough of Hackney v CampbellUNK [2005] EWCA Civ 613

Liverpool City Council v Rosemary Chavasse Ltd [unreported 1999]

English v Emery Reimbold and Strick LtdUNK [2002] 3 All ER 385

Chrulew v Borm-Reid & Co (a firm)UNK [1992] 1 All ER 953

Director of Buildings and Lands v Shun Fung IronworksELR [1995] 2 AC 111

Rules of the Supreme Court, O. 62, r. 9

Costs — Expert witnesses — Calderbank offer

RULING ON COSTS of Kawaley, J

Introductory

1. On May 31, 2006, I reserved the issue of costs in giving judgment in this action in the following terms as set out in my judgment of that date:

‘51. The Plaintiff's claim for damages succeeds as regards the Defendant's liability for breach of his covenant to deliver up the premises in a tenantable condition. As far as her claim for damages is concerned, the Plaintiff's claim is allowed in part and dismissed in part and she is awarded the sum of $12,580.

52. The Defendant's counterclaim for damages for breach of the Plaintiff's covenant to keep the exterior of the building in good repair succeeds, but his claim for negligent damage to his car fails. In terms of damages, the Defendant's claim for breach of the landlord's duty to maintain the structure of the premises is allowed in part and dismissed in part, and he is awarded $1000 in this regard.’

2. Mr. Dwyer for the Defendant tendered extensive written submissions on the new costs regime and invited the Court to give guidance as to how the new Order 62 should be applied in cases such as the present where it was strongly arguable that a simple application of the usual ‘costs follow the event’ rule would be inappropriate. Accordingly, I reserved judgment after hearing argument on costs.

Provisional views on costs

3. In my May 31, 2006 Judgment, I observed as follows:

‘53. I will hear Counsel, if needs be, as to costs, but will set out my provisional views as to [the] appropriate approach in a case where the parties declined to follow the Court's encouragement before trial to reach a settlement in a case which could obviously have been compromised if common sense had prevailed. As the Defendant's main expert's report supported the Plaintiff's claim to some extent, this trial (when it effectively started) was never seriously about liability at all and substantially a controversy on quantum with modest sums involved.

54. Both parties' claims have to some extent succeeded. But the Plaintiff's award represents 91.85% and the Defendant's award 8.15% of the total sum awarded. At the beginning of the trial, the Plaintiff sought $27,522.94 and the Defendant sought $4130, or 88.95% and 13.05%, respectively, of the total amount claimed. So the Plaintiff has substantially succeeded, and applying the usual rule that costs should follow the event, should be awarded her costs of the action. However, I would only award her 90% of the total sum awarded on taxation, if not agreed, in light of the fact that the Defendant's much smaller Counterclaim also succeeded. In the ordinary case I might have simply awarded the Plaintiff all of her costs and the Defendant a proportion of his Counterclaim costs. However, it is my provisional view that it would not be just to expose the Plaintiff to any possibility having to share in the costs of the Defendant's experts.

55. Calling three expert witnesses in a ‘small money’ case, both in terms of their likely expenses and the impact on the length of the trial, was disproportionate to the sums in issue, and could only have been justified if the evidence adduced was capable of producing a complete answer to the Plaintiff's claim1. The Defendant's expert evidence was not, it emerged, capable of doing more than (a) reducing the quantum of the Plaintiff's claim and (b) supporting a counterclaim worth roughly 10% of the total sums at issue. A Defendant, albeit with a valid counterclaim, ought not to be rewarded in costs for deciding to spend more (or nearly as much) money in legal and experts' fees than would reasonably be required to settle a substantially valid claim2.’

Parties' settlement negotiations and payment into court

4. The matter was set down for trial in February 2005, but this hearing was vacated on the Defendant's application. It was then fixed for trial on January 12–13, 2006 when the Defendant applied for (a) leave to amend his Defence to add a Counterclaim, (b) leave to adduce expert evidence and (c) an adjournment of the trial. The amendment application was granted on January 12, 2006 and the other applications granted on January 13, 2006, with the costs of both days hearings awarded to the Plaintiff and ordered to be payable forthwith.

5. In adjourning the trial to enable the Defendant to advance expert evidence in support of a new counterclaim, I requested the parties to seriously consider settlement because it seemed likely that the costs of a trial would be disproportionate to the sums of money in dispute.

6. It is common ground that no settlement offer which came close to the net amount the Plaintiff has recovered ($11,580) was made by either party. On August 5, 2005, $2500 was paid into Court by the Defendant. However, pursuant to the Court's encouragement to the parties to pursue a commercially sensible settlement, on January 23, 2006 the Defendant's attorneys made the following ‘Calderbank’ offer:

‘Please be advised that our clients offer in full and final settlement … of your client's claim the total sum of $10,000 which is inclusive of the amount already paid into court of $2500. Please note that this offer is made pursuant to the provisions of Order 22 Rule 14 of the Amended Rules of the Supreme Court.

Please acknowledge safe receipt and advise within seven days if the offer is accepted, if not we shall continue to employ an expert with a view to complying with paragraph 1 of the said Order.’

7. This offer was rejected by the Plaintiff, who was seemingly looking to recover by way of settlement a sum in the region of $20,000. No counter-offer was formally made. In the event she has recovered $1580 in excess of the sum tendered by the Defendant on January 23, 2006. According to her Bill of Costs (which Mr. Dwyer indicated was not as such disputed3), the Plaintiff incurred costs in the region of $6000 after that settlement offer was made.

8. So while it is obvious that the Plaintiff should be entitled to her costs before the settlement offer was made, it is far from obvious that she should recover all of her costs after such offer was made. Is it reasonable to award the Plaintiff the entirety of costs likely to be taxed in an amount of roughly four times the amount recovered in excess of the Defendant's settlement offer, in circumstances where she has made no reasonable counter-offer, and disregarded the Court's advice that proceeding to trial would likely be wasteful in terms of the level of costs incurred?

9. My provisional view that the...