DailyGobble Inc v Amin Jain & Ors

Where an English court assists a foreign court by ordering examination of a witness, the usual starting point is that the party obtaining the order bears the examiner’s fees and expenses. The court retains a complete discretion to reallocate those costs, principally by reference to the parties’ conduct and any associated legal issues. A certificate of non-attendance under CPR 34.10 does not oblige the party seeking the deposition to apply for a coercive order. Indemnity costs require conduct or other circumstances taking the case outside the norm. Conduct that is criticised but arises from rapidly developing circumstances will not necessarily meet that threshold.

The Applicant sought evidence in England for civil proceedings pending in California. A Letter of Request led to an order requiring the Respondent, a third-party witness, to disclose documents and attend examination. The order was varied by consent, but the examination did not proceed after the US trial was vacated and issues arose concerning the Applicant’s corporate standing and possible limitation arguments.

The Respondent applied for a stay. The Applicant applied under CPR 34.10(2) for an order compelling attendance and sought the costs of the failed examination. Before the hearing, the parties agreed the substantive timetable. The court therefore determined the costs of both applications and the wasted examination expenses.

1. Costs of examination. The usual position under CPR 34.14(3) is that the party obtaining the examination order pays the examiner’s fees and expenses. CPR 34.14(6) preserves the court’s complete discretion over the ultimate incidence of those costs. The discretion is informed principally by conduct and, where relevant, success or failure on associated legal issues under CPR 44.2.
2. Enforcement under CPR 34.10. An examination order is an order of the court which should ordinarily be obeyed. If a witness fails to attend, the examiner must file a certificate under CPR 34.10(1). That certificate permits an application under CPR 34.10(2), but such an application is not mandatory. The circumstances did not show that the Respondent was refusing to attend or produce documents; the real dispute concerned timing and costs. The CPR 34.10 application was therefore unnecessary in the circumstances.
3. Conduct. The Applicant’s failure to pay sums required in Delaware caused it to become a void corporation when the Letter of Request and the English order were issued. That directly contributed to the adjournment of the US trial and made the Respondent’s request for postponement reasonable. The Applicant should have recognised that the planned examination could not effectively proceed and should not have pressed ahead with the associated arrangements.
4. Indemnity basis. Applying Excelsior Commercial and Industrial Holdings Ltd [2002] EWCA Civ 879; [2002] C.P. Rep. 67, indemnity costs require conduct or other circumstances taking the case outside the norm. Although the Applicant’s conduct was open to criticism, the rapidly developing circumstances did not satisfy that threshold.
5. The Applicant was ordered to pay the Respondent’s costs of both applications on the standard basis and to bear the wasted examiner, videographer and stenographer costs.

This was a first-instance determination of costs arising from applications concerning a Letter of Request. The substantive timetable for disclosure and examination had been agreed before judgment.