Changsha Metro Group Company Ltd v Peng Xufeng et Al

• Jurisdiction: Saint Kitts and Nevis
• Court: High Court (Saint Kitts and Nevis)
• Judge: Saunders, M
• Judgment Date: 17 July 2024
• Judgment citation (vLex): [2024] ECSC J0717-2
• Docket Number: CLAIM NO. SKBHCV2021/0086

Between:

[1] Changsha Metro Group Co. Ltd

Claimant

and

[1] Peng Xufeng

[2] Jia Siyu

Defendants

CLAIM NO. SKBHCV2021/0086

IN THE HIGH COURT OF JUSTICE

Appearances:

Ms. Jean M Dyer for the Claimant

Ms. Natasha Brooks for the Defendants

Saunders, M

1 The Claimant's (“ Changsha's”) claim is, among other things, for the return of alleged bribes paid by contractors to the 1st Defendant (“ Mr. Xufeng”) in breach of his fiduciary duties 1 to it and against the 2nd Defendant, his wife, by way of accessory liability. By an application issued 13 February 2023 the Defendants applied for orders that the Claim be struck out or stayed pending the provision of security for costs (“ the Application”). On 10 October 2023 Master Pariagsingh (as he then was) made an order, following the withdrawal of the Application, that the Defendants pay Changsha's costs which were to be summarily assessed if not agreed. By the time the Defendants withdrew the

Application, written submissions had been filed by both parties and an affidavit in opposition had been filed by Changsha

2 Changsha filed a Bill of Costs on 8 February 2024 totaling USD$15,983.29 and I ordered that the parties exchange written submissions on 8 May 2024. On 6 June 2024 I heard the parties' oral submissions, and my order is that the Defendants pay Changsha's costs assessed in the amount of EC$21,434.88 for the reasons set out below.

ASSESSED COSTS

3 The principles underpinning the Court's assessment of costs are relatively well known. The introduction of the Eastern Caribbean Supreme Court Civil Procedure Rules (revised edition) 2023 (“ the CPR”), however, brought with it the significant change that there is no longer a Part 65.11(7) (“ the Costs Cap”) which provided that, the assessed costs of a procedural application should not exceed 10% of the prescribed costs, unless special circumstances applied. Counsel for Changsha contended that the value of the claim was now not a factor to be considered when the Court assessed costs. She further submitted that the period within which Changsha could apply to set the value of the claim had not passed and it would therefore not be fair to ascribe a nominal value under Part 65.5(2)(c) to the claim. Counsel for the Defendants made the opposite submission. She contended that even if the Costs Cap was repealed, the value of the claim was a factor that the Court should consider in making its assessment and that value was the nominal sum of EC$50,000.

4 There was also some disagreement between the parties concerning whether the assessment was to be conducted pursuant to Part 65. 11 or 65.12 although it was accepted that the difference was not very material in light of the removal of the Costs Cap. Before I discuss the effect of the removal of the Costs Cap, I will very briefly summarise the assessed costs regime as it now stands under the CPR:

• a. Part 65.11 provides for the assessment of costs on the determination of all applications, procedural or not, and sets out the principles to be applied unless the application takes place at a Case Management Conference, Pre-Trial Review or Trial 2.

• b. Specific rules concerning costs apply to applications which take place at a case management conference 3, pre-trial review and a trial 4. There are also cost consequences for a successful application which ought to have been, but was not, brought at a Case Management Conference or a Pre-Trial Review 5.

• c. In quantifying the costs payable under Part 65.11, the court must consider any representations as to the time that was reasonably spent in making the application and preparing for and attending the hearing and must allow such sum as it considers fair and reasonable 6.

• d. In making a determination concerning what is fair and reasonable the Court must be guided by the factors set out at Part 65.2(3) of the CPR. The wholesale adoption of the approach to costs in the English cases is inappropriate as Parts 44–48 of the England and Wales CPR setup a distinct regime from that in the CPR. See the decision of Michel JA in Dawn Emberson Bain v Tortola Investment Trust Limited BVIHCVAP2014/0001 and Note 29.1 of The Caribbean Civil Court Practice, 3rd Edn 7.

• e. Part 65.12 does not describe a separate discretion to assess costs and applies to any matter, proceedings or part thereof, including applications, but not procedural applications, as they are specifically exempt by virtue of 65.12(1).

• f. Procedural Applications are those which do not decide the substantive issues in dispute on the claim 8. By their very nature, procedural applications cannot be governed by Part 65.12 because, upon their determination, the Court is in a position to assess costs pursuant to the principles in CPR 65.11. No separate procedure is necessary to move the Court to make an assessment as is provided by Part 65.12.

• g. Part 65.12 is entirely procedural and delineates a process for commencing an assessment where one could not take place at the hearing of the application or other proceedings in which costs were awarded 9.

• h. Parts 65.13–65.17 of the new CPR further particularise how an assessment pursuant to Part 65.12 is to be conducted, including by reference to the filing of points of dispute 10 and the making of a provisional order on the written material by the Court 11.

5 Changsha's costs consequent on the withdrawal of the Application are the costs of an application not made at a Case Management Conference. They are also costs of a procedural application as the substantive dispute was not the subject of the Application. In light of the principles set out at [4](a)-(d) above, Part 65.11 governs the costs of the Application.

THE EFFECT OF THE REMOVAL OF THE COSTS CAP

6 Although the Costs Cap has been repealed, the proportion of the assessed costs to the value of the claim is a consideration for the Court in assessing costs. See, for example, the decision of Barrow JA (as he then was) in Norgulf Holdings Limited v Michael Wilson & Partners Ltd (British Virgin Islands) Civil Appeal No. 8 of 2007 in which the Court of Appeal had to consider whether to order an interim payment of costs following the appellants having been

successful on their appeal. The appellants contended in Norgulf Holdings Limited that the costs were to be assessed pursuant to Part 65.11 of the then CPR. Barrow JA decided, among other things, regardless whether the costs of the appeal were prescribed costs, or, were assessed on a discretionary basis (such as pursuant to Part 65.11), that the value of the claim had to be considered. He stated as follows:

“A prime relevant factor is the value of the claim, and in that regard I observe that on the material that comprised the record of appeal, I am not aware of what was the value of the claim, in the court below, against these two appellants as distinct from the value of the claim against the other five defendants. As regards the value of the appeal, because the appeal was confined to the limited aspect of whether or not the judge should have continued the receivership, it seems highly arguable that the value of the appeal should be significantly different from the value of the claim. It seems to me that until the values of both the claim against these two appellants and the appeal that they brought are agreed or stipulated there can be no assessment of either discretionary or prescribed costs. Neither could there have been any reliable estimation of the minimum amount of costs likely to be awarded so as to have determined a safe amount to order as interim costs. It will therefore be appreciated that the ascertainment of values (of the claim and the appeal, respectively) that would have established the bases for interim costs would have equally established the basis for the assessment of costs, both discretionary and prescribed. With those values established it would have been a straightforward matter to assess both discretionary and prescribed costs. It is for this reason that I take the view that the appellants should have proceeded with the assessments of costs rather than apply for interim costs.” [emphasis added]

7 One may be tempted to suggest that the Court of Appeal in Norgulf Holdings Limited v Michael Wilson & Partners Ltd was influenced in its decision by the now repealed Costs Cap. The Overriding Objective, however, which the CPR says the Court is to seek to give effect when it exercises any discretion or construes any rule 12, provides that:

“The Overriding Objective

1.1 (1) The overriding objective of these rules is to enable the court to deal with cases justly.

(2) Dealing justly with the case includes –

(a) ensuring, so far as is practicable, that the parties are on an equal footing;

(b) saving expense;

(c) dealing with cases in ways which are proportionate to the –

(i) amount of money involved;

(ii) importance of the case;

(iii) complexity of the issues; and

(iv) financial position of...