Trafalgar Developments Ltd v Mazepin

• Jurisdiction: Ireland
• Judge: Mr. Justice David Barniville
• Judgment Date: 17 January 2020
• Neutral Citation: [2020] IEHC 13
• Docket Number: [2016 No. 9981 P.]
• Court: High Court
• Date: 17 January 2020

BETWEEN

TRAFALGAR DEVELOPMENTS LIMITED, INSTANTANIA HOLDINGS LIMITED, KAMARA LIMITED

AND

BAIRIKI INCORPORATED

PLAINTIFFS

AND

DMITRY MAZEPIN, OJSC UNITED CHEMICAL COMPANY URALCHEM, URALCHEM HOLDING PLC, EUROTOAZ LIMITED, ANDREY GENNADYEVICH BABICHEV, YULIA BOLOTNIKOVA, BELPORT INVESTMENTS LIMITED, MILKO EMILOV MINKOVSKI, ANDROULA CHARILAOU, DMITRY KONYAEV

AND

YEVGENIY YAKOVLEVICH SEDYKIN

DEFENDANTS

(COSTS ISSUE BETWEEN PLAINTIFFS AND NINTH DEFENDANT)

[2020] IEHC 13

David Barniville J.

[2016 No. 9981 P.]

THE HIGH COURT COMMERCIAL

Costs – Motion for judgment in default of appearance – Solicitor and client basis – Plaintiffs seeking an order for the costs of the motion for judgment in default of appearance against the defendant – Whether the costs of the motion should be awarded on the solicitor and client basis

Facts: The plaintiffs, Trafalgar Developments Limited, Instantania Holdings Limited, Kamara Limited and Bairiki Incorporated, brought a motion for judgment in default of appearance against the ninth defendant, Ms Charilaou. Before the hearing date of the motion, Ms Charilaou entered an unconditional appearance which was accepted by the plaintiffs. The motion was struck out and Ms Charilaou agreed to pay the costs of the motion. Although Ms Charilaou conceded that she must pay the costs of the motion for judgment in default of appearance on the party and party basis (with a stay on execution pending the determination of the proceedings), the plaintiffs did not accept that concession and wanted more. They contended that the High Court should make an order for costs against Ms Charilaou on the solicitor and client basis on the grounds that Ms Charilaou took a deliberate decision to hold off entering an appearance to the proceedings until the last minute, as part of a deliberate strategy on her part, which caused delay in the conduct of the proceedings and considerable expense to the plaintiffs in having, unnecessarily, they say, to have documents translated into Greek for service on Ms Charilaou in Cyprus.

Held by Barniville J that he had not been persuaded by the plaintiffs that he should make an order for the costs of the motion for judgment in default of appearance against Ms Charilaou on the solicitor and client basis. Barniville J concluded that the costs of the motion should be awarded on the party and party basis.

Barniville J held that it was appropriate that he expressly record in this judgment that the plaintiffs should recover the costs of serving certain documents, including the motion for judgment in default of appearance and the numerous affidavits sworn in connection with that motion, on Ms Charilaou in Cyprus together with the costs of having those documents translated into Greek.

Costs awarded on a party and party basis. Plaintiff received some of its costs.

JUDGMENT of Mr. Justice David Barniville delivered on the 17th day of January, 2020

Introduction

1 This is my judgment on a costs issue which has arisen in the context of these ongoing commercial proceedings. On the face of it, the issue appears to be very simple and straightforward. The plaintiffs brought a motion for judgment in default of appearance against the ninth defendant, Androula Charilaou (“Ms. Charilaou”). Before the hearing date of the motion, Ms. Charilaou entered an unconditional appearance which was accepted by the plaintiffs. The motion was struck out and Ms. Charilaou has agreed to pay the costs of the motion.

2 However, notwithstanding its apparent simplicity, the costs issue arising between the plaintiffs and Ms. Charilaou is somewhat more complicated and, dare I say, more interesting than many costs issues encountered by the courts. Why is that so? Although Ms. Charilaou has conceded that she must pay the costs of the motion for judgment in default of appearance on the party and party basis (with a stay on execution pending the determination of the proceedings), the plaintiffs have not accepted that concession and want more. They contend that the court should make an order for costs against Ms. Charilaou on the solicitor and client basis on the grounds that Ms. Charilaou took a deliberate decision to hold off entering an appearance to the proceedings until the last minute, as part of a deliberate strategy on her part, which caused delay in the conduct of the proceedings and considerable expense to the plaintiffs in having, unnecessarily, they say, to have documents translated into Greek for service on Ms. Charilaou in Cyprus.

3 For reasons which I set out in this judgment, I have not been persuaded by the plaintiffs that I should make an order for the costs of the motion for judgment in default of appearance against Ms. Charilaou on the solicitor and client basis. I have concluded that the costs of the motion should be awarded on the party and party basis. However, I have also concluded that it is appropriate that I expressly record in this judgment that the plaintiffs should recover the costs of serving certain documents, including the motion for judgment in default of appearance and the numerous affidavits sworn in connection with that motion, on Ms. Charilaou in Cyprus together with the costs of having those documents translated into Greek.

Background

4 These proceedings were commenced in November 2016. The central claim by the plaintiffs in the proceedings is that the defendants (including Ms. Charilaou) are co-conspirators in an alleged scheme (the “scheme”) which is intended wrongfully to deprive the plaintiffs of their shares in a Russian Company, OJSC Togliattiazot (“ToAZ”), for the ultimate benefit of the first defendant, Mr. Dmitry Mazepin. It is alleged by the plaintiffs that Ms. Charilaou has links to Mr. Mazepin and is an active participant in the alleged scheme. Ms. Charilaou denies this.

5 The circumstances which have led to the plaintiffs seeking the costs of the motion for judgment in default of an appearance on the solicitor and client basis are set out in an affidavit sworn by Ms. Karyn Harty, of McCann Fitzgerald, the plaintiffs' solicitors, on 15th October, 2018. In short, it is alleged that Ms. Charilaou was served In Cyprus with notice of the plenary summons commencing the proceedings in February 2017 but did not enter an appearance within five weeks of service, as required by O. 12, r.2(3)(a) RSC. The plaintiffs issued a motion for judgment in default of appearance against ( inter alia) Ms. Charilaou on 6th June, 2018. That motion was listed for hearing on 27th July, 2018. Two days before the hearing, on 25th July, 2018, an unconditional appearance was filed on behalf of Ms. Charilaou by AMOSS, solicitors. Consequently, the motion for judgment in default of appearance did not proceed against Ms. Charilaou (but did proceed against a number of other defendants). The motion against Ms. Charilaou was struck out on the basis that a timetable for the exchange of further pleadings would be agreed and that the issue of costs would be dealt with at a later stage.

6 Ms. Harty's affidavit sets out the basis on which the plaintiffs claim to be entitled to costs on the solicitor and client basis. A replying affidavit was sworn on behalf of Ms. Charilaou by Mr. Jerry Burke of AMOSS, on 22nd October, 2018. In his affidavit, Mr. Burke concedes that Ms. Charilaou must pay the costs of the motion for judgment in default of appearance on the usual party and party basis and seeks a stay on execution on foot of such order for costs pending the determination of the proceedings. Mr. Burke's affidavit disputes the plaintiffs' entitlement to an order for costs on the solicitor and client basis.

Commencement and service of proceedings on Ms. Charilaou

7 The proceedings were commenced by a plenary summons which was issued on 9 ^th November, 2016, following an application for leave to issue and serve the proceedings on a number of the other defendants who are domiciled outside the EU. Ms. Charilaou is domiciled in Cyprus. The plaintiffs commenced the process of arranging service of the proceedings (in the form of the notice of concurrent plenary summons and the original statement of claim in the proceedings) on 22nd November, 2016 by a request made to the Irish transmitting agency (at the Dublin Circuit Civil Court Office), which request was forwarded by that agency to the Cypriot transmitting agency. Ms. Charilaou was then served through the Cypriot transmitting agency with notice of the concurrent plenary summons and the original statement of claim, on 24th February, 2017, in accordance with Regulation (EC) no. 1393/2007 of the Parliament and of the Council (the “Service Regulation”). There is no dispute about the service of the proceedings on Ms. Charilaou in this manner and on that date. It is also not in dispute that, in accordance with O. 12, r,2(3)(a), Ms. Charilaou had a period of five weeks after service of the proceedings to enter an appearance and that she did not do so.

8 The documents served on Ms. Charilaou on 24th February, 2017 were in English. A notice was also served on Ms. Charilaou in Greek in the form specified in Annex 2 to the Service Regulation (the “Annex 2 notice”). The Annex 2 notice advised Ms. Charilaou that she had the right to refuse to accept the documents if they were not written in a language which she understood and were not written in, or accompanied by a translation into, an official language of Cyprus (Greek or Turkish). Ms. Charilaou did not refuse to accept service of the documents on 24th February, 2017.

9 No further steps were taken in relation to the plaintiffs' proceedings against Ms. Charilaou until early 2018. At that stage the plaintiffs decided to seek to amend their statement of claim. It was necessary for the plaintiffs to bring a motion seeking leave to amend the statement of claim. That motion was issued on 22nd January, 2018. Since no appearance had been entered to the proceedings on behalf of Ms....