July 26, 2021 court of first instance - Orders
Claim No. CFI 041/2021
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
(2) LATIF (a firm)
(3) LATIF LLP
ORDER WITH REASONS OF JUSTICE SIR JEREMY COOKE
UPON the Third Defendant having requested permission in an Application Notice dated 19 May 2021 to amend its Acknowledgement of Service to indicate an intention to defend the claim (the “AoS Application”)
AND UPON the Third Defendant’s application made by way of the same Application Notice dated 19 May 2021 seeking directions for the service of its Defence (and any Counterclaim) and the Claimants’ Reply (and any Counterclaim) (the “Directions Application”)
AND UPON the Claimants’ application made by way of an Application Notice dated 25 May 2021 for a stay of the claim against the Third Defendant (the “Stay Application”)
AND UPON the Claimants’ consenting to the AoS Application
AND UPON the Third Defendant withdrawing its Directions Application and consenting to the Stay Application
AND UPON the Registrar Nour Hineidi making an Order in relation to the above applications on 1 July 2021 (the “Order”)
AND UPON the Claimants’ application made by way of an Application Notice dated 06 July 2021 for a de novo review of the Order pursuant to paragraph 2 of the DIFC Courts Practice Direction No. 3 of 2015 and for the reasons set out in the Fourth Witness Statement of Ian Hammond dated 06 July 2021 (the “De Novo Application”)
IT IS HEREBY ORDERED THAT:
1. Permission is given to the Claimant to bring the de novo Application out of time on 7 July 2021.
2. By consent, the AoS Application is granted and the Third Defendant has permission to file and serve an amended Acknowledgement of Service indicating its intention to defend the claim within 7 days of the date of this Order.
3. By consent, the Claimants’ claim against the Third Defendant is stayed pending determination of the First Defendant’s jurisdiction challenge made by way of an Application Notice dated 19 May 2021.
4. The Third Defendant shall pay within 14 days the Claimants’ costs of the Stay Application, summarily assessed in the sum of US$20,000.
5. The Third Defendant shall pay within 14 days the Claimants’ costs of the de novo Application, summarily assessed in the sum of US$5,000.
6. The parties have liberty to apply.
Date of issue: 26 July 2021
SCHEDULE OF REASONS
1. This is an application for a de novo consideration of an order made by the Registrar on 1 July 2021. It is common ground between the parties that the Registrar omitted to put into effect the consent order agreed by the Parties that the Acknowledgement of Service filed by the Third Defendant should be amended to delete the challenge to the Court’s jurisdiction. That is readily corrected and could have been done under the Slip Rule with minimal costs incurred by either party. So could the provision for liberty to apply which the parties had agreed to be general, rather than limited to 7 days, as ordered by the Registrar.
2. The real issue between the parties now is as to the costs order which the Registrar made which was that each party should bear its own costs of the two applications of 19 May 2021 and 25 May 2021 and as to the costs of this de novo review.
3. The Third Defendant had to come to the Court to seek to amend its Acknowledgment of Service to withdraw the challenge to the Court’s jurisdiction, as it did in its application of 19 May 2021. As part of that withdrawal application, it sought directions for service of pleadings, which would naturally follow. Any costs of that application, in total, should, as a matter of logic, because it was an order made by way of indulgence to the Third Defendant, have been ordered by the Court to be paid by the Third Defendant in any event.
4. The Claimant on 25 May 2021 however applied for a stay against the Third Defendant pending the outcome of the First Defendant’s application to contest the jurisdiction of the Court. The Third Defendant consented to that application, initially seeking to impose conditions for such consent. Ultimately, on 7 June 2021, the Third Defendant agreed to the stay, without its prior preconditions, which of necessity meant that the further directions sought by the Third Defendant for service of pleadings was superseded, but on the basis that the costs of both applications be costs in the case. That reservation as to costs was ambitious, as it had sought to impose conditions to the stay as a condition of agreeing to it.
5. There was then dispute about the issues of costs, the parties being in agreement on the orders to be made for the future conduct of the action, as between Claimant and the Third Defendants. The Claimant, agreed to an order for costs in the case in respect of the application to amend the Acknowledgment of Service alone but claimed costs for the balance of the applications on the basis that it had been successful on both the stay application and what it referred to as the Directions Application, by which it meant the Third Defendant’s consequential application for orders for pleadings following on from its acceptance of the Court’s jurisdiction.
6. The reality of the matter is that there could have been little costs incurred by the Claimant in relation to the Application to amend the Acknowledgment of Service and the Application for consequent directions which was superseded by the agreed stay. The real costs must have been incurred in putting together the application for the stay and in seeking agreement on the terms of the orders to be made.
7. The Third Defendants, even more ambitiously, when agreement did not result on the issue of costs, then sought to recover its costs in relation to the application for a stay.
8. The Third Defendant takes the point that the application for a de novo review was out of time when made on 7 July 2021 as it should have been made on 6 July 2021. In practice the parties had to come before the Court to correct the Order made in the agreed respects. I give leave for the application for the de novo review to be brought out of time.
9. This is a proverbial storm in a teacup and the parties lawyers are not to be commended for incurring additional unnecessary costs which result from adopting an unreasonable stance. The Third Defendant should have agreed to pay its own costs of its application to amend its Acknowledgment of Service and for further directions. The Claimant should have enquired of the Third Defendant if it was willing to agree to a stay before making the application but the attitude of the Third Defendant in seeking to impose conditions for such agreement means that an application would have become necessary in any event. The Third Defendant should therefore pay the Claimant’s costs of the application for the stay. I cannot see how there could be any separate costs incurred by the Claimant in relation to the directions sought by the Third Defendant over and above the application for a stay since such directions would obviously disappear with the stay.
10. Agreement should have been reached before the Registrar on the basis that the costs of the stay application of 25 May 2021 should be borne by the Third Defendants and that each side bear their own costs of the Acknowledgement of Service and Directions Application of 19 May 2021.
11. On the de novo review that is the order that I make and as the Claimant has succeeded in part, the Third Defendant should pay a limited sum to the Claimant in respect of the de novo Application.
12. As to assessment of costs, on a summary basis, I order the Third Defendant to pay US $20,000 in respect of the Stay Application and I order the Third Defendant to pay the sum of US $5000 in respect of the de novo Application. All other costs on these applications are to lie where they fall.
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