NEST INVESTMENTS HOLDING LEBANON v DELOITTE & TOUCHE [2020] DIFC TCD 003 — Costs assessment following appeal (20 May 2020)

This order addresses the final quantification of costs in a complex multi-party dispute, specifically determining the impact of late-introduced foreign law evidence on the indemnity basis of recovery.

What was the specific dispute between Nest Investments Holding Lebanon and Deloitte & Touche that necessitated this costs order in TCD 003/2020?

The litigation involved a multi-party claim brought by Nest Investments Holding Lebanon S.A.L. and ten other claimants against Deloitte & Touche (M.E.) and Joseph El Fadl. The underlying dispute centered on professional services, which escalated into a series of procedural battles, including a Case Management Conference (CMC) where preliminary issues were ordered, and a subsequent appeal regarding the admissibility of evidence. The current order follows the Court’s earlier determination on the merits of the appeal, focusing exclusively on the financial fallout of the litigation.

The core of the costs dispute arose from the Claimants' attempt to introduce Lebanese law evidence for the first time during the appeal stage. The Court found this tactical decision to be procedurally flawed and substantively irrelevant to the issues at hand. As noted in the judgment:

I take the view that the conduct which led to the advancing of this Lebanese law evidence at the appeal stage only, and in the form which it took, was sufficiently out of the norm to attract indemnity costs.

The stakes involved significant legal expenditure, with the Court ultimately awarding the Defendants USD 245,000 in costs, reflecting both standard and indemnity-based assessments. Further context on the procedural history can be found in the NEST INVESTMENTS HOLDING LEBANON v DELOITTE & TOUCHE [2020] DIFC TCD 003 — Consent order regarding partial discontinuance of multi-party claims (21 April 2020) and the NEST INVESTMENTS HOLDING LEBANON v DELOITTE & TOUCHE [2020] DIFC TCD 003 — Appeal against preliminary issues order (23 April 2020).

Which judge presided over the costs assessment in TCD 003/2020 and in which division of the DIFC Courts was this matter heard?

Justice Sir Jeremy Cooke presided over this matter within the Technology and Construction Division (TCD) of the DIFC Courts. The order was issued on 20 May 2020, following the parties' submission of written costs arguments on 7 May 2020 and 14 May 2020, pursuant to the Court's earlier request for further submissions made on 23 April 2020.

What were the specific arguments advanced by the Claimants and Defendants regarding the recoverability of costs in TCD 003/2020?

The parties were in agreement that the Court should perform an immediate assessment of costs and that the standard basis was appropriate for the majority of the claim. However, the Defendants sought indemnity costs specifically regarding the Lebanese law evidence, arguing that the Claimants’ failure to introduce this evidence at the lower court level was unreasonable. The Claimants, conversely, challenged the quantum of the Defendants' costs, specifically criticizing the fees claimed for attendance on others, work performed on the statement of costs, and general document review.

Regarding the costs of the application for permission to appeal, the Defendants acknowledged they were not entitled to recover costs for resisting the application, as they had been unsuccessful in that specific procedural step. As the Court observed:

I consider that the Defendants, in those circumstances, are not entitled to an order for their costs of resisting the application for permission and the Defendants rightly do not claim their costs, because they lost on the appeal.

What was the precise legal question Justice Sir Jeremy Cooke had to resolve regarding the application of the Ladd v Marshall test to the Lebanese law evidence?

The Court had to determine whether the Claimants' late introduction of Lebanese law evidence met the criteria for the admission of fresh evidence on appeal, as established in Ladd v Marshall. The doctrinal issue was whether the evidence could have been adduced at the trial level and, if not, whether it was of sufficient significance to influence the outcome. Justice Sir Jeremy Cooke concluded that the test was not met, as there was no valid reason for the failure to present the evidence earlier, and the evidence itself failed to address the substantive points of the dispute.

How did Justice Sir Jeremy Cooke apply the indemnity costs doctrine to the Claimants' conduct in TCD 003/2020?

Justice Sir Jeremy Cooke utilized a "broad-brush" approach to assess the reasonableness of the costs claimed. He distinguished between the standard costs for the general appeal and the indemnity costs for the Lebanese law evidence. He found that the Claimants' strategy was "unreasonable to a high degree," justifying a departure from the standard basis.

Regarding the quantum of the award, the judge scrutinized the itemized claims, particularly the excessive nature of the submissions filed by the parties. He noted:

Taking a broad- brush approach but allowing Counsels’ fees in full, that figure represents nearly 70% of the profit costs. The criticisms made by the Claimants in relation to attendance on others, to work carried out in relation to the statement of costs and work done on documents are partially justified, but I consider that taking everything into account I would not be ungenerous in awarding $150,000.

Which specific authorities and statutes did the Court rely upon to reach its decision on costs in TCD 003/2020?

The Court relied on the Ladd v Marshall test to evaluate the admissibility of the late-introduced foreign law evidence. Additionally, the Court referenced the general principles of the Rules of the DIFC Courts (RDC) regarding the assessment of costs, specifically the distinction between standard and indemnity bases. The Court also considered the procedural history of the case, including the lack of reasons provided by the Judicial Officer during the initial permission to appeal application, which influenced the Court's decision to make no order for costs regarding that specific application.

How did the Court utilize the precedent of Ladd v Marshall in the context of the Lebanese law evidence?

The Court used Ladd v Marshall as the benchmark for determining whether the Claimants had a legitimate basis for introducing new evidence at the appellate stage. Because the Claimants failed to show that the evidence was unavailable during the initial proceedings or that it would have materially altered the outcome, the Court deemed the attempt to introduce it as an unreasonable procedural maneuver. This failure to meet the Ladd v Marshall threshold was the primary driver for the Court’s decision to award indemnity costs against the Claimants for that portion of the litigation.

What was the final disposition and the total monetary relief ordered by the Court in TCD 003/2020?

The Court ordered the Claimants to pay the Defendants a total of USD 245,000 in costs. The Court also addressed the issue of interest, ruling that interest at a rate of 9% would apply to the total sum, but only from the date of the order, as there was insufficient evidence to justify interest for any earlier period.

The total of the sums I award by way of costs is therefore $245,000 with interest at 9% to run from the date of the issue of this order.

The Court also noted that the Claimants' submissions on costs were excessive, specifically criticizing the volume of documentation filed:

There remains a further figure of $29,259 claimed for the costs of the submissions on costs. I regard this as excessive. 23 pages of Submissions with annexed Schedules and 6 pages in reply is over- egging the pudding.

What are the wider implications of this ruling for practitioners regarding the introduction of foreign law evidence and the recovery of costs?

This order serves as a stern warning to practitioners regarding the late introduction of foreign law evidence. It reinforces that the DIFC Courts will apply the Ladd v Marshall test strictly and will not hesitate to award indemnity costs when a party attempts to introduce evidence at the appeal stage that could and should have been presented at the first instance. Furthermore, the ruling highlights the Court's preference for concise submissions, noting that "over-egging the pudding" with excessive documentation will be viewed unfavorably during costs assessments. Practitioners must ensure that all foreign law evidence is fully prepared and presented at the earliest possible stage to avoid the risk of indemnity costs.

Where can I read the full judgment in NEST INVESTMENTS HOLDING LEBANON v DELOITTE & TOUCHE [2020] DIFC TCD 003?

The full order with reasons can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/technology-and-construction-division/tcd-003-2020-1-nest-investments-holding-lebanon-sl-2-jordanian-expatriates-investment-holding-company-3-qatar-general-insurance-2 or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/technology-and-construction-division/DIFC_TCD-003-2020_20200520.txt

Cases referred to in this judgment:

Legislation referenced:

• Rules of the DIFC Courts (RDC) — General provisions on costs assessment.