The test on appeals from a taxation of costs

The test on appeals from a taxation of costs

 The Royal Court has revised the test to be applied in relation to an appeal from a taxation of costs in the recent case of Incat Equatorial Guinea Limited and others v Luba Freeport Limited [2010] JRC165.The judgment also raises two general points of interest as to the principles to be applied by the Assistant Judicial Greffier (“the Greffier”) when conducting a taxation.

Following its successful defence of claims worth in excess of US$9.1 million together with interest, Luba Freeport Limited (“Luba”) was awarded costs on the standard basis. After the bills of costs had been taxed by the Greffier, the plaintiffs appealed against the Greffier’s decision in relation to the costs incurred by Luba’s English solicitors, DLA Piper, who had been instructed to assist in relation to Luba’s defence. The appellants were represented by Advocate Michael Goulborn while Advocate James Gleeson appeared on behalf of the respondent.

Test on appeal

 The appellants submitted that the test to be applied was the longstanding one established in Murphy v Collins (2000) JLR 276, namely that the Court should exercise its own discretion but give such weight as it thought fit to the decision of the Greffier. The respondent by contrast submitted that the Court should adopt the test laid down in Downes v Marshall [2010] JRC 155B for appeals to the Royal Court from the Registrar of the Family Division. That test was summarised as follows: “An appeal from the Family Registrar should only be allowed if there has been a procedural irregularity or if, in exercising his discretion, he has taken into account irrelevant matters, or ignored relevant matters, or otherwise arrived at a conclusion which the Court believes to be wrong.”

The Court referred to two previous cases of appeals against taxation. In Alhamrani v Russa Management Limited (2006) JLR 176, the Court noted that the parties were agreed that the test to be applied was that laid down in Murphy. In Reg’s Skips Limited v Yates [2009] JRC 156, the Court did not specifically refer to the relevant test but made it clear that it was not the function of the judge on appeal from taxation to engage in the same line by line exercise as that conducted by the Greffier. Instead, the appellant should confine himself to points of principle as to how the Greffier had misdirected himself or wrongly exercised his discretion.

The Court held that it should apply the test in Downes on appeals against taxation and summarised its reasons for so holding as follows:

3. One of the reasons for the decision in Murphy was that the jurisdiction was given to the court (or judge) and had simply initially been delegated to the Greffier. However, under Rule 12/3 of the Royal Court Rules 2004 (“the Rules”), the power to tax costs is conferred on the Greffier, not the Court. There is no question of any delegation. In these circumstances, the Court concluded that greater latitude should be given to the decision of the Greffier than is perhaps given in other cases where there has been a delegation.
4. The Greffier has considerable expertise and familiarity with the process of taxation, a facility which is not acquired by the court. This was an additional reason for the court to recognise the discretion conferred upon the Greffier.
5. The test in Downes strikes the right balance in matters of It prevents the parties simply seeking a fresh bit of the cherry, but allows the court to intervene if it thinks that intervention is required in the interests of justice and fairness.