International Campaign for Real History
In the High Court of Justice


DJC Irving
- v -
Penguin Books Ltd and Deborah Lipstadt

 
Counsel Adrian Davies, a legal expert in the Chancery Division, drafts the Skeleton Argument to be submitted to the Court.
The Final Gavel: Dossier: Confidential
To open an index to the dossier in a separate window click click | [summary]

 

 

SKELETON ARGUMENT OF THE CLAIMANT

 

Background

1.    On 5th May 2000 Gray J. made an interim costs order ("the Interim Order") in favour of Penguin Books Limited ("Penguin") pursuant to CPR Rule 44.3 (8), following the dismissal of the claim herein ("the Libel Action").

 

The Order of Deputy Registrar Derrett

2. On 4th March 2002, Deputy Registrar Derrett made a Bankruptcy Order ("the Bankruptcy Order") against David John Cawdell Irving ("Mr Irving") on a petition in bankruptcy presented by Penguin, and founded upon the Interim Order. The Deputy Registrar declined to go behind the Interim Order.

3. Mr Irving appealed against the Deputy Registrar's Order of 4th March 2002, contending that the Court sitting in bankruptcy might go behind the Interim Order, and look afresh at the evidence that Penguin had been maintained throughout the Libel Action.

 

The Judgment of Peter Smith J.

Notes

1 see esp. at para. 12 of his judgment

4. On 21st May 2002 Peter Smith J. upheld the Bankruptcy Order, albeit on different grounds, for he was critical [1] of the Deputy Registrar's reasoning, and took a different view from her on the question whether the Court might go behind the Interim Order.

 

Mr Bays's Witness Statement

5. In the course of the hearing, Peter Smith J. suggested that Mr Kevin Bays, Penguin's solicitor and the partner in the firm of Davenport Lyons who had the conduct of the Libel Action, should make a witness statement dealing with the question of who paid Penguin's costs.

6. The material paragraphs of Mr Bays's witness statement read as follows:-

 
"2 I can confirm that the liability for the costs incurred by Penguin is that of Penguin, that all accounts for fees and disbursements have been rendered to Penguin, and that in the event of non-payment, I would hold Penguin liable to account for such fees.

"3. In practice, the VAT exclusive sums in relation to bills was (sic) transferred directly to my firm by Penguin's insurers, and the VAT element of such bills was paid by Penguin."

 

Maintenance and Damnification

7. Maintenance and absence of damnification are several (though often overlapping) grounds of objection.

8. On 5th May 2000, Mr Irving's case was put to Gray J. on the basis that Penguin was being maintained. As to maintenance, see per Lord Finlay L.C. in Neville v. London "Express" Newspaper [1919J A.C. 368 at 378 to 379:-

 
"Maintenance in a court of justice is defined in Hawkins' Pleas of the Crown as being 'where one officiously intermeddles in a suit depending in any such court which no way belongs to him, by assisting either party with money or otherwise, in the prosecution or defence of any such suit."'
9. Both Gray J. on 5th May 2000 and Peter Smith J. on 21st May 2002 took the view that even if maintenance were proved, that would not be a sufficient objection in point of law, since the primary liability for costs fell on Penguin, and such maintenance was moreover not necessarily objectionable, if there was a common commercial interest between the maintainor and the maintained.
Notes

2 It being conceded that it is not open to the claimant to pursue his arguments on maintenance further in a court of first instance.

10. Taking that view to be correct[2] as to the effect of maintenance, it is nevertheless submitted that the words "in practice, the VAT exclusive sums in relation to bills was (sic) transferred directly to my firm by Penguin's insurers" show that Penguin has not suffered any damnification (i.e. "loss" in the terminology of costs, which is both arcane and archaic). It would follow that Penguin ought never to have sought or obtained the Interim Order.

Notes

3 Per Bramwell B. in Harold v. Smith 5 H. & N. 381 at 385, cited with approval by Sir H. cozens-Hardy M.R. in the leading case of Gundry v. Sainsbury [1910] 1 K.B. 645.

11.   It must be borne in mind that:-

 
"Costs as between party and party are given by the law as an indemnity to the person entitled to them; they are not imposed as a punishment on the party who pays them, nor given as a bonus to the party who receives them. Therefore, if the extent of the damnification can be found out, the extent to which costs ought to be allowed is also ascertained[3]."
12. Since Penguin has suffered no damnification, it is not entitled to a penny for its costs. Its position, as a party with indemnity insurance, is analogous to the example given in McGregor on Damages, 16th ed., para. 1674 at pp. 1087 to 1088:-
 
"Where a plaintiff's medical expenses have been paid for him under a private medical insurance scheme to which he subscribes . . . the question of whether he is entitled nevertheless to claim the expenses as part of his damages is a question which does not arise because the insurances under these schemes, unlike the accident policies considered when dealing with loss of earning capacity, are regarded as indemnity insurances which entitle the insurers themselves to recover their outlays directly from the tortfeasor through the medium of subrogation. Thus the injured party has no standing to claim the medical expenses; he has been made whole by his insurers, who in their turn step into his shoes and make the claim for the moneys expended by them."
 

Notes

4 This article is exhibited at pp. 5 to 6 of Exhibit DJCI7 to Mr Irving's sixth affidavit sworn herein on 5th May 2000

13.   The admissions at paragraph 3 of Mr Bays's witness statement give the lie to the claims made by Mr Mark Bateman of Davenport Lyons in The Times of 18th April 2000 (Law, p. 11)[4]:-

 
"Despite Irving's assertions to the contrary, it was Penguin that paid the fees of the experts, leading counsel, junior counsel and my firm. In fact Penguin could have saved itself almost £2,000,000 had it accepted Irving's offer to settle for £500 payable to charity and a letter of apology. Many publishers would have taken this opportunity gleefully, but the lawyers and management at Penguin believed that there was more than money at stake."
Notes

5 It is not suggested that Miss Rogers was in any way personally at fault. No doubt she was misled by Mr Bateman's instructions, which were consistent with his statement to the Times newspaper

14.   Penguin obtained the Interim Order by falsely asserting that it was out of pocket; see for example the suggestion by its counsel, Miss Rogers [5] at page 3 of the transcript of the hearing before Gray J. on 5th May 2000 that it had paid all the costs of its legal team and its expert witnesses:-
 
"What your Lordship has [is] a bundle of invoices and a schedule, which sets out what Penguin has paid."
15. Penguin is guilty of further misleading the Court by what was once called suppressio veri et suggestio falsi, for at no point in the course of Penguin's argument at pp. 66 to 70 of the transcript was any indication whatsoever given to Gray J. that in fact Penguin's insurers had paid all its costs, except the VAT, which it is to be inferred that Penguin could recover, else it would not have paid it, but asked its insurers to pay.

 

Lodgment of Penguin's bill of costs for detailed assessment

16. Just before Christmas of 2000, Sedley LJ refused Mr Irving permission to appeal on the papers, so Mr Irving renewed his application in open court.

17. On 20th July 2001, the Court of Appeal (Pill, Mantell and Buxton LJJ.) refused Mr Irving permission to appeal against the dismissal of the Libel Action after hearing his renewed application inter partes over three days.

 

Notes

6 Transcript, paras 18 to 20

18.   In the course of the post-judgment discussion[6], leading counsel for Penguin, Mr Rampton QC, asked the Court of Appeal to grant a six month extension for the commencement of detailed assessment proceedings, which (understandably) had been left in abeyance pending the hearing of the application for permission to appeal.

19. Pill LJ evidently felt some surprise at the length of the extension sought: see para. 19 of the Transcript.

20. In the event, Penguin, having obtained the six month extension sought by consent, has still not lodged its bill for detailed assessment long after the time for lodgement (as extended by consent) has expired.

21. Mr Irving does not believe that Penguin ever seriously intended to lodge its bill, or that it sought the six month extension in good faith.

 

The relief sought by Mr Irving

22.   The Court is accordingly asked to grant the following relief, namely an order:-

 
(i) that the Interim Order be discharged;

(ii) alternatively, if it is held that there is no jurisdiction for a Court of first instance to discharge the Interim Order[7], a stay on the Interim Order, with permission to appeal against it out of time;

(iii) in either case, an unless order pursuant to CPR Rules 47.8 (1) (b) and 47.8 (2), requiring Penguin to lodge its bill for detailed assessment, or have all or some part of its costs disallowed.

Notes

7 see paras. 25 to 28 below

23.   The following additional questions of law arise. Firstly, it is submitted that the right to make the application presently before the Court is plainly not "property" which vests in the trustee in bankruptcy under section 306 of the Insolvency Act, 1986.

Notes

8

25.8 (1) Where a defendant has been ordered to make an interim payment, or has in fact made an interim payment (whether voluntarily or under an order) the court may make an order to adjust the interim payment.

25.8 (2) The court may in particular

(a) order all or part of the interim payment to be repaid;

(b) vary or discharge the order for the interim payment.

24.   It is conceded that under CPR Rule 44.3 (8) (interim orders for costs) there is no direct equivalent to CPR Rules 25.8 (1) and 25.8 (2) (a) and (b)[8] (interim orders generally).

25.   Absent an express power to discharge an interim costs order, it is submitted that the High Court has an inherent jurisdiction so to do. The Claimant derives this proposition from principle and authority.

26.   As a matter of principle free from binding authority, it is submitted that the Court must have the power to discharge an interim costs order, else there would be no difference between an interim order and a final order, which cannot be right.

27.   It is further submitted that support can be derived for this proposition from the observations of Brooke LJ in Seray-Wurlo v. Hackney L.B.C. [2002] 3 All E.R. 448 at 453, holding that:-

 
" . . . the High Court. . . possessed an inherent jurisdiction to do what it had to in order to maintain its character as a court of justice."
28. If the Claimant is wrong about the existence of an inherent jurisdiction to discharge the Interim Order, the Court has an unfettered discretion to grant a stay.

29. Factors militating in favour of a stay include firstly the matters raised at paragraphs 11 to 15 above, secondly, the inordinate delay in lodging Penguin's bill for detailed assessment, and thirdly Penguin's attempts to persuade Mr Irving's trustee in bankruptcy to allow it to prove for £2,600,000 in his bankruptcy without justifying this exorbitant figure.

30. If the Court were to take a restrictive view of its jurisdiction to discharge an interim costs order, the Claimant would seek permission to appeal against it, and the necessary extension of time for appealing.

 

ADRIAN DAVIES

3 Dr. Johnson's Buildings
Temple
London
EC4Y 7BA
tel. 020-7353-4854

 

2nd December 2002

 


To make a substantial one-time contribution to this last battle, go to this link or send an email pledging support . The total sum necessary is around £15,000 ($25,000); much has already been paid by our Fund, thanks to selfless supporters like you. Money can also be wired directly to Mr Irving's legal team in London, if preferred. [Ask how]