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You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Celtic Bioenergy Ltd v Knowles Ltd [2022] EWHC 1223 (QB) (20 May 2022) URL: http://www.bailii.org/ew/cases/EWHC/QB/2022/1223.html Cite as: [2022] EWHC 1223 (QB), [2022] Costs LR 837 |
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Claim No: HT-2016-000314 SCCO Ref: SC-2019-BTP-000509 |
QUEEN'S BENCH DIVISION
FROM THE SENIOR COURT COSTS OFFICE
Strand, London, WC2A 2LL |
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B e f o r e :
Sitting with:
MASTER MARK WHALAN
As an Assessor
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CELTIC BIOENERGY LIMITED |
Claimant |
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- and – |
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KNOWLES LIMITED |
Defendant |
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Dr Mark Friston (instructed by Isca Legal LLP) for the Defendant
Hearing date: 11 November 2021
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Crown Copyright ©
MRS JUSTICE FOSTER DBE:
INTRODUCTION
Background
"The Client receives from the Opposing Party the sum of or a sum in excess of £250,000 in payment in aggregate of the costs incurred or to be incurred by the Client."
"As previously envisioned and advised, reinforced now by advice from counsel, we will require a little more time to serve Full Points of Disputes.
In the interests of saving the time and costs of making a protective application we would prefer if this could be dealt with by agreement between ourselves.
We anticipate we will require a further 21 days and we shall be grateful if this can now be agreed."
The Master's Decision
"10. I consider [counsel for the receiving party] was correct in doing so. The view I take about points of dispute two is that they simply supplement the "holding" points of dispute. It is true in one sense that the level of detail is not insufficient. I have read out the practice direction that points should be short and succinct. However, it seems to me that points of dispute two are compliant with the Practice Direction. Given also the date on which they are served back in September 2019, there are no questions of any ambushes arising. I am satisfied here that those points should be admitted, and I accept the application for variation to the "holding" points so that the paying party is entitled to rely on them.
"11. The issue in relation to the recently served supplemental point [sic] served on 4 January 2019 is much more controversial. Mr Kemp, the partner at DAC Beachcroft handling the case on behalf of the claimant, made a witness statement in support of an application to Jefford J for indemnity costs to be paid. He sets out in terms paragraph 68 [et seq.] the nature of the funding agreement between his firm and the claimant, and states clearly that the work was undertaken subject to CFA, and sets out various details in relation to it. Therefore, in my view it can be [sic] as clear as it can be that in January 2019 the paying defendants, (although they were not paying defendants then but now are), knew of the nature of the funding arrangements between their opponents and their solicitors.
"12. The bill, as I have said, served in July 2019, and at page 3 it states clearly that the work was undertaken in compliance with the conditional fee agreement, which allows for recovery of hourly rates and that there was no breach of the indemnity principle. It seems to me therefore that the paying party was on notice of the CFA at an early time and it was open to it then to take points on the indemnity principle.
"13. Mr Lyons says simply this is all too late. The supplementary point of dispute could have been served at the outset, but delivering the document now puts his clients in considerable difficulties. It may be that they would wish to make a witness statement addressing the points raised. That would inevitably require an adjournment of the hearing today which they are anxious to proceed with. The objections he says are wide-ranging and not focused. Mr Lyons also points to the general conduct of the defendants in these proceedings, which have been the subject of observation and a finding of fraud by Jefford J in her judgement. See for example paragraphs 98 and 99.
"14. However, Mr[sic]Friston who appears for the paying party, submits that that is conduct arising in the arbitration proceedings. It is not conduct in the detailed assessment. He continues that it would indeed be a very rare event if the application was refused. He accepts that there was a finding of fraud against his client, but the perpetrator of that fraud has lost his job as a result. These are complex proceedings and the reason for the extension of time requested in September last year serving the points of dispute was that the Costs Lawyer had to draft them had come into the case "new", as he put it, and he was concerned that there were possibly costs not within the ambit of the judge's order that had found their way into the bill. All of these needed careful consideration. Subsequently, Mr Friston was asked to give advice on the nature of the retainer and he accepts fully the amended points of dispute was raised based upon his advice. He submits that the information about the CFA in Mr Kemp's witness statement was "tucked away" as he expressed it, and although it would have been open to the paying party to raise specifically the indemnity challenge earlier, points to be admitted were served more than a month ago, in any event they have already served a reply.
"15. The points which weigh with me are that as long ago as January 2019 the defendant was put on enquiry as to the nature of the funding arrangement between the receiving party and its solicitors, but it took a whole year for that to gravitate into a supplemental point of dispute. There was then a second bite of the cherry when that point could have been taken which was when the bill was served, which states plainly in terms that there was a conditional fee agreement.
"16. Mr Friston has informed the court that the Costs Lawyer needed extra time to prepare the points of dispute. However, this was not in the context of a large bill involving several years work requiring divisions into parts. On the contrary, one of the objections made by the paying party is that only five months work has been involved. In these circumstances, it seems to me Costs Lawyer was on notice and ought to have been alert to the fact that there may have been an indemnity issue points to take, yet this was only served in January 2020.
"17. The overriding objective is clear that the court must deal with cases justly and at proportionate cost, and has a duty under rule 1.1 to ensure that the case, here the detailed assessment, proceeds promptly and fairly. If I allow the supplementary point to stand, then inevitably there will be an adjournment of the detailed assessment today, has been listed for months, and they do not consider that it is a just or reasonable outcome so far as the receiving party is concerned. For those reasons I agree with Mr Lyons it is simply too late. The point was there for the taking months ago. To raise it within a few weeks or less than a month of the hearing, with no application being made before today when it was clear that the claimant was objecting, and giving, in my view, the receiving party inadequate notice of it, inevitably will require today's hearing to be adjourned. That is not in my view a just outcome. Therefore for those reasons the application fails."
The Paying Party's Arguments
"The background information included in the bill of costs should set out … a brief explanation of any agreement or arrangement between the receiving party and his legal representatives, which affects the costs claimed in the bill."
Receiving Party's Argument
(a) The decision was wrong;
(b) The decision was unjust because of a serious procedural irregularity,
and the Appellant had to show that the decision of the Master had exceeded the generous ambit within which a reasonable disagreement is possible and referred to the well-known authority of Tanfern Ltd v Cameron MacDonald [2001] 1 WLR 1311. To the extent that the reasons were considered to be sparse, attention was also drawn to what Lord Hoffman said regarding ex tempore judgments in Piglowska v Piglowski [1999] 1 WLR 1360 at 1372 (HL):
"The exigencies of daily court room life are such that reasons for judgment will always be capable of having been better expressed. This is particularly true of an unreserved judgment such as the judge gave in this case but also of a reserved judgment based upon notes, such as was given by the District Judge.
These reasons should be read on the assumption that, unless he has demonstrated the contrary, the judge knew how he should perform his functions and which matters he should take into account."
Consideration
"But that is the point, that you could have asked. I mean if the Bill had been silent as to the way the matter had been financed, then it would be a point, but it states in terms work was undertaken in compliance with a conditional fee agreement, so when the costs lawyer was reading papers and working out the case in September 2019, surely a bell should have rung if he was concerned about it."
"The sole question was whether this court should interfere with her decision not to allow Mr Edinburgh to amend his points of dispute in terms of the supplemental points provided just before the start of the hearing on 2 December 2019. As to that, Mr Blackburn drew attention to the provisions of CPR 46PD, para 6.15:
"If a party wishes to vary that party's breakdown of costs, points of dispute or reply, an amended or supplementary document must be filed with the court and copies of it must be served on all other relevant parties. Permission is not required to vary a breakdown of costs, points costs caused or wasted by the variation."
And at paragraph 18:
" … the default position under that paragraph is that parties may vary points of dispute if they so wish. That default position is, however, subject to a general discretion to disallow the variation or to allow it upon conditions. This is an important discretion, without which it would be possible for parties to ambush their opponents by waiting to the last minute to file supplemental points of dispute raising points not previously heralded. This would be productive of unfairness. Paragraph 6.15 does not prescribe how the discretion to disallow supplemental points of dispute should be exercised, but the overriding objective (enabling the court to deal with disputes of this kind) "justly and at proportionate cost" should be borne in mind …"
"I've read the overriding objective and it says at para 1.12 that dealing with a case justly and at proportionate cost etc etc appropriate share of courts resources. It seems to me if I had given permission to widen its PODS yet again this would not have been dealing with the case expeditiously and fairly. Had the paying party complied with rules in first place there would have been no point. The indemnity principle was there for the taking from the beginning." (Agreed Note of Application for Permission to Appeal Before DMC on Day 3 of Assessment.)