IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

TECHNOLOGY AND CONSTRUCTION COURT

No HT –99 – 289

St Dunstan's House,

133-137 Fetter Lane,

London EC4A 1HD

Friday, 4th February 2009

HIS HONOUR JUDGE HUMPHREY LLOYD, QC

________________________________

FW COOK LIMITED

SHIMIZU (UK) LIMITED

________________________________

MR MICHAEL BOWSHER appeared on behalf of the Claimant.

MR DAVID THOMAS appeared on behalf of the Defendant.

(Transcribed from the official tape recording by

Harry Counsell & Company,

Cliffords Inn, Fetter Lane, London, EC4A 1LD

Telephone: 0171 242 9346

Facsimile: 0171 831 2526)

________________________________

JUDGMENT

(AS revised and approved by the Judge)

1 JUDGE LLOYD QC: This is an application by the claimant,

2 Cook, to enforce by way of summary judgment under Part 24 of

3 the CPR an adjudicator's decision made on 15th December 1999

4 by Mr Julian Critchlow, who had been appointed by the

5 Technology and Construction Solicitors Association, as

6 provided in the subcontract between Cook and the defendant,

7 Shimizu. The application is resisted by Shimizu. It paid

8 the sum that it considered to be due pursuant to the

9 decision, namely £22,246.26. The amount of the decision was,

10 in gross terms, some £222,659 in favour of Cook. By amendment

11 the application is thus for summary judgment for £197,827.

12 (All figures are inclusive of VAT.)

13 In my view the issue primarily turns on the meaning to be

14 given to the notice by which the disputes were referred to

15 the adjudicator(ie what were the disputes referred to the

16 adjudicator) and what is the meaning to be given to the

17 decision. Enforcement is also resisted on the grounds that

18 if the decision were to mean what Cook says it means, then

19 the adjudicator has exceeded his jurisdiction because he has

20 decided that the sum of money which Cook seeks to be paid was

21 an amount which he had to decide was payable by Shimizu to

22 Cook. It is of course well established that decisions of

23 people such as adjudicators may be challenged and may be

24 unenforceable . I f the decision of the adjudicator was not one

25 which he was authorised to reach; in other words the

26 adjudicator has exceeded his jurisdiction: Jones v Sherwood

27 Computer Services ulc [1992) 1 WLR 277 which was referred to

28 and applied in Bouyques (UK) Ltd v Dahl - Jensen (UK) Ltd

29 [2000] RLR 49 to which Mr Bowsher for Cook referred in his

30 skeleton argument. I do not of course refer to a decision

31 was not authorised because it was merely mistaken, because,

32 although an adjudicator might be regarded as exceeding his

33 jurisdiction in the sense that he was riot authorised to make

34 a mistake, that is not the sense in which the term is used

35 (unless of course the mistake in the application of the law

36 or principles .which the adjudicator was authorised to apply),

37 such as where the adjudicator gave a decision which was riot

38 within the contract. The purpose of an adjudication is to

39 resolve, at least temporarily, an existing dispute and not to

1 create a new and different dispute.

2 The subcontract was for mechanical works at the Telehouse

3 2000 building in the London Docklands. It was made in 1998

4 and although no formal subcontract was executed it is

5 accepted that it incorporated DOM/2. Evidently in the summer

6 of 1999 practical completion was achieved, either in June or

7 July. For technical reasons, retention, which at one stage

8 was referred to the adjudicator, was not released because

9 Shimizu had not achieved the requisite degree of completion

10 which might have entitled Cook to be paid its retention.

11 Before the dispute was referred to adjudication payments on

12 account had been made so the disputes essentially arose out

13 of discussions about Cook's final account. That is clear

14 from the letter of reference of 15th October 1999 which gave

15 notice of intention to seek adjudication. The letter was

16 written by the managing director of Cook, Mr Anstead, (and on

17 its face did not emanate from any legal or other adviser). I

18 intend to read this letter in the sense in which I am sure it

19 was received by Shimizu it is not right to read letters of

20 this kind minutely, to pore over individual. words, to milk a

21 particular noun or verb arid to try and give it a legalistic

22 effect. One must put oneself in the position of the parties

23 at the time and adopt, so far as one can, a commonsense

24 approach. It said:

25 "The writer visited Mr Stannard [to whom the latter

26 was being sent] at your offices on 22 September

27 1999. `We observed that our provisional. final

28 account figure was circa £2.4 million compared with

29 your valuation of circa £1.8 million, and that such

30 significant differences of opinion existed between.

31 our respective colleagues as to the value of

32 variations, acceleration, delay, disruption and

33 contra charges that it was unlikely that we could

34 agree the final account without involving third

35 parties.

37 "We emphasised that we preferred to negotiate with

38 yourselves in a professional way, but that unless

39 you felt able to make movements towards us on

1 certain key issues we would use adjudication. To

2 date we have had no meaningful response from

3 yourselves.

5 Accordingly, please accept this letter as notice of

our intent to refer the following disputes to

7 adjudication under the ORSA Adjudication Rules

9 "1. Reinstatement of the agreed sum for

10 acceleration circa £72K.

12 2. Removal of negative variations for work not

13 within the scope of our subcontract circa £60K.

15 "3. Removal of contra charges not relevant to our

16 activities circa £80K.

18 4. Release of half retention monies circa £45K.

20 "We will present detailed figures to the adjudicator

21 and they may differ from the above.”

23 The letter concluded by saying "Further substantial sums.

24 were claimed by us for [various matters) .... and we would

25 welcome an opportunity for further discussion." That

26 letter was also then sent to the Appointments officer of

27 TecSA and Mr Critchlow was appointed. He conducted the

29 procedure in accordance with the Tecate Rules, version

29 1.2. Rule 11 provides: "The scope of the adjudication

30 shall be the matters identified in the notice requiring.

31 adjudication". I was also referred to Rules 3, 14, and

32 28, although I do not consider that anything turns on

33 them. Mr Critchlow received submissions from the

34 parties. The time for making his decision was extended

35 by agreement. He duly gave his decision in which he

36 concluded, that he had four issues to deal with arising

37 from the letter of referral. I am concerned only with

38 the first three issues.

39 He recorded in his letter of decision the nature of

1 the case of each party, using language which wag

2 comparable to but not identical to the terminology used

3 by Cook. Some of the figures which are recorded in the

4 decision clearly differ from those contemplated by Cook,

5 both as regards its own claims and as regards Shimizu's

6 claims.

7 Although the acceleration agreement is clearly a

8 claim in the usual positive sense, the other two claims

9 were ones which were made in order to recover or to get a

10 decision about amounts which Shimizu had considered were

11 either effectively due to it or were valuations made by

12 it. They therefore covered "negative variations" which

13 was a term used to describe a wide variety of items other

14 than pure Contra charges ox set-off items such as

15 omissions and over-valuations. In the summary of the

16 decision the figures thus naturally changed.

17 The adjudicator decided that a binding acceleration is

18 agreement had been entered into and that Gook was

19 entitled to be paid £73,461 plus VAT in respect of it.

20 That was issue 1.

27 Issue 2 concerned the negative variations. Having

22 considered each of the items Mr Critchlow said:

24 I find and hold that the respondent ryas entitled to

25 deduct £29.146.24 plus VAT but has wrongfully

26 deducted a further (61,000.90 plus VAT, and the

27 referring party is entitled to recover the said sum

28 of £61,000.90 plus VAT from the respondent."

30 Similarly in respect of the third issue he said:

32 I find and hold that the respondent is entitled to

33 items of set-off amounting to £67,068.70 plus VAT,

34 but has wrongfully deducted a further (55,035_65

35 plus VAT, and the referring party is entitled to

36 recover the same from the respondent."

38 So on both issues 2 and 3 whilst he accepted much of

39 Cook's case he thought that Shimizu had also been right. He

40 did not total up those figures in any way and, having dealt

41 with retention, interest and costs he concluded his decision

42 by saying only

44 "I direct that all sums payable pursuant to this

45 decision shall be paid by the respondent to the

46 referring party within seven days of the date

1 hereof, save that my fee shall be paid to me within

2 seven days of the date of the invoice.”

4 Cook read that decision as entitling it to a payment of

5 over £200,000. it treated the last words which said the

6 sums that had been mentioned in the decision were

7 "payable" as meaning that they werec then to be paid in

8 full. Shimizu, however, read the decision as

7 indicating that the adjudicator had decided

9 that some, of the items

10 which were being disputed were to be treated in a

11 particular way 9 in the overall final account then under

12 negotiation between the parties. Accordingly, within

13 seven days, on 22nd December 1999, Shimizu duly issued a

14 payment notice and set out, in explanatory schedules and

15 other forms, how the amount should be treated. In its

16 payment advice notice no. 11 it summarised the position.

17 It shows that it regarded the effect of the decision as

18 resulting in a further payment to Cook of £22,24626. It

19 arrived at that amount by starting with the previous sum

20 of £1,826,474.06 for measured work, then (1) adding to it

21 the amount awarded in respect of acceleration, (£73,461);

22 (2) Creating the negative variations in the sum of

23 f29,146.2a as a deduction; (3) treating the contra

24 charges as f67,068 again as a deduction, and thus so as

25 to arrive at a net balance (before amounts paid on

26 account) of fZ,803,720.12 it then deducted the amount

27 paid on account of £l,781,474.06 to produce £22,246.26,

28 which it then paid.

29 Cook immediately issued proceedings and made the

30 usual application for abridgement of time. The parties

31 sensibly anticipated the uaual practice of this court and

32 agreed a consent order so that Shimizu'5 evidence was

33 available by 18 January (taking into account the

34 Christmas and New Year holidays) and thus the application

35 could be heard as soon as possible thereafter.

36 Shimizu therefore opposes enfoxcemenc on the grounds

37 that its interpretation of the decision was correct I

38 have already said that this is primarily a question both

39 of the meaning to be given to the decision itself but

40 also of the letter of referral and the points which were

1 being referred to the adjudicator for decision 'the

2 adjudicator did not express the consequences of his

3 findings in the form of a total or net figure payable to

Cook as he might have done if Cooks view of the decision

5 were right. Shimizu says that this is indicative of the

6 true construction to be given to the decision and of

7 their view of the referring letter. Since it is to

8 assumed that the adjudicator intended to decide only that

9 which he had been asked to decide it is convenient first

10 to consider the effect of the letter of referral.

11 I have come .to the conclusion that Shimizu is right

12 in its view of the referring letter. The referring

13 letter expresses the view on the part of Cook that, out

14 of the many items in dispute on the final account, it

15 wished to have decisions on certain of them in the hope

16 that, other items might well be resolved once the

17 adjudicator's decisions were given. 1 refer to the

18 opening paragraph of the letter which sets the scene

19 What Cook was faced with was the unlikelihood of agreeing

20 ',the final account without involving third parties".

21 Hence it had recourse t0 adjudication to advance that

22 process of agreement. It made therefore a selection of

23 items and questions relating to key points on the

24 negative variations and on the contra charges. The

25 letter expressly said that the detailed igures would be

26 put forward later. (obviously the amount for

27 acceleration was in a separate category.) Thus the

2s letter mentioned only rounded sums in relation to what

29 later became issues 2 and 3. It did not refer to or ask

30 for a revision of what had been paid so far.

31 Furthermore, as Mr Thomas for Shimizu rightly emphasised,

32 the letter spoke of "reinstatement" and "removal' which

33 are naturally appropriate where there are "significant

34 differences of opinion°, about the contents or ingredients

35 of a "provisional final account". The use of word

36 "deduct" by the adjudicator signifies not that he had

37 decided that a sum or sums should then be paid but

38 expresses the view that the amount ought not to have

39 removed by Shimizu from its version of the final account

1 and ought to be reinstated.

2 The adjudicator's decision indicates to me that

3 Shimizu so understood Cooks position, since in relation

4 to both the negative variations and the contra charges Mr 5 Critchlow recorded Shimizu's case so that it matched the

6 case being put forward by Cook in the sense both that it

7 dealt with Cook's case and it also wished to bring into

8 account what it considered to be the overall position on

9 some of the negative variations and, in particular, on

10 the contra charges.

11 I have said that the notice requiring adjudication,

12 did not claim that any particular sum of money was then

13 immediately due. I do not think that, strictly I dan

14 look at the payment notice which preceded it for the

15 purposes of deciding what the referring letter means but

16 only because Mr Dowsher says that it is not accepted that

17 the payment notice of 5th October 2999 had reached the

18 claimant by the time the letter of 15th October 1999 was

19 written. Y have seen the payment notice (it has been

20 exhibited to Shimizu's witness statement in opposition?

21 and the figure for measured work is comparable to the

22 figure referred to in the referring letter. But for what

23 Mr sowsher said, one might have assumed, that a letter of

24 Sth October 1999 would almost certainly have reached Cook

25 by the date of the referring letter of 15th October 1999

26 Any document such the letter of 5 October which operates

27 to define jurisdiction has to be placed in its context so

28 normally a party such ass Shimizu would be entitled on an

29 application of this kind to adduce evidence that would be

30 admissible for that purpose.

31 It is in any event not necessary in this case to

32 read the letter of referral with that disputed background

33 in mind since the relevant background is,to be found in

34 the text of the letter itself. its force, is, as it were,

35 negative. ~It is not written by reference to a particular

36 net state:of accounts between the parties If it had

37 been then one would have expected a subcontractor such as

38 Cook effectively to have challenged the relevant payment

39 notice or interim valuation on the grounds that it failed

1 to give proper effect to the matters in dispute and that

2 it ought, therefore, to have resulted in a higher payment

3 (or payments) than the amount which had been paid or had

not in fact been paid. The letter would then have

5 referred specifically to the payment notice that was

6 disputed.

7 so these factors point to the conclusion which I

8 think is the only conclusion to be reached. Looking at

9 this letter and notice it is plain that Cook wished to

10 obtain a decision an what might not correctly be called

1l points of principle, but which were a number of items or

12 elements or ingredients in an overall final account and

13 valuation, as opposed to obtaining a decision as to how

14 much the next interim payment should be

15 cook's case is, of course, that that approach is not

16 entirely consistent with the text of the decision letter

17 itself.Surely, it is said, the decision should be read

18 as it stands. It ends up by a direction, but it is a

19 direction that °all sums payable pursuant to this

20 decision shall be paid "However in view of the fact

21 that, as I have indicated, the adjudicator did not

22 produced a combined quantification of the result of his

23 earlier decisions on the various issues, i consider that

24 the adjudicator was well aware of at least the

25 background, namely that it was a dispute about the final

26 valuation and that it was not a dispute about a

27 particular interim payment notice or the amount that

28 ought to be due on it or the next one. I was told that

29. the material before the adjudicator contained or referred

30 to Shimizu's last payment notice but, although I would in

31 any event have expected an adjudicator such as Mr

32 Critchlow to have informed himself about such matters, I

33 do not consider that I can take such a factor into

34 account in interpreting a decision which is otherwise

35 admirably clear.

37 I also do not consider that he adjudicator decided to

38 leave the parties to tot up the total as the true amount to

39 be paid within seven days. The tenor of the decision does

1 not suggest that. the adjudicator shirked such a simple task.

2 Rather it suggests that the adjudicator decided that he did

3 have the material to expre8s the result in terms of an

4 immediate payment, given that he was examining only parts of

5 the final account that were in dispute in October 1999. The

6 words "I direct that all sums payable " do not of

7 themselves mean that the sums payable in the decision are

8 necessarily immediately payable. They are payable pursuant

9 not just to the decision but. quite obviously, pursuant to

10 the sub-contract. Therefore, the words "the sums payable

11 pursuant to the decision " must necessarily mean sums that

12 are otherwise payable pursuant to the subcontract, ie if

13 payable pursuant to the subcontract. That interpretation

14 does not pervert or bend the words of the decision It gives

15 effect to the decision in the manner in which a decision of

16 this kind should be read, ie one which is intended to

17 implement the subcontract between the parties (and not to

18 conflict with it). Cook's view would result in no account

19 being taken of what amounts had or had not already been paid

20 on account of some of the items in dispute, as the case may

21 be. The adjudicator was not required to take that aspect

22 into account at all Obviously, if Cook is right then it

23 would be entitled to all these sums in the final account, but

24 it would not now be entitled to these amounts, if indeed the

25 amount already paid to Cook is, as Shimizu contends, quite

26 sufficient to meet the decisions of the adjudicator. '

27 For these primary reasons, I am bound to give effect

28 to the contentions of Shimizu on this applications,

29 whether seen either as an application for summary

30 judgment or indeed, as conditionally suggested by Mr

31 Bowsher, for the interpretation of the decision and the

32 referring letter There is, for the purposes of summary

33 judgment, at least a realistic prospect of success on

34 Shimizu's part in establishing that the decision and the

35 referring wetter have the meanings which ishimizu puts

36 forward. :It equally follows that, if I were to accede to

37 Mr Bowsher's argument that I should look at this almost

38 as a preliminary point, then a fortiori z would decide

39 that point against his contentions and in favour of the .

1 defendant.

2 I raised in argument a possible alternative route

3 which was that the decision might be ambiguous, in which

4 case I might then be permitted to look at the payment

5 notice. If I were wrong, which I do not think that I am,

6 then certainly the last part of the decision was

7 ambiguous. This is not a criticism of the adjudicator

8 since in my view the adjudicator expressed himself in

9 clear terms. If one were only to ask what is really

10 meant by the last paragraph of the decision and to look

11 at that alone (but in its context) then in my view quite

12 clearly there are two possible meanings - "payable now"

13 or "payable if otherwise payable". That dilemma could be

14 resolved by looking at the circumstances surrounding the

15 decision including for this purpose the fact that the

16 payment notice was part of shimizu's submissions to the

17 adjudicator. once that is known any ambiguity that there

18 might be has immediately to be resolved in favour of

19 Shimizu, because an adjudicator (and certainly one of Mr

20 Critchlow's calibre) must be taken to have borne in mind

21 that only those specific elements of that payment notice

22 which were in dispute remained effectively to be decided

23 by him Therefore Shimizu was right so to interpret the

24 decision as it did. On this basis the decision is

25 tantamount to a direction to the parties as to certain

26 ingredients of the next valuation and that Shimizu has to

27 give effect to them.

28 Lastly, if my view of the decision is wrong, but if,

29 put another way, my view of the referring letter is as 1

30 have described it then the adjudicator did not give

31 effect to it. To that extent he has not done what he was

32 authorised to do under Rule 11 of the TeCSA Rules (which

33 here do no more than reflect sections 108(l) and (2) of

34 the Act) namely to decide the dispute de',scribed in or the

35 subject of, the notice requiring adjudication which relate

36 to the ingredients or elements in the final valuation.

37 If, therefore, the interpretation to be given to the

38 decision letter is that contended for by Cook, then I

39 would similarly, for the same reasons, but regretfully,

1 reach the conclusion that the adjudicator had nodded and

2 had done something which he was not authorised to do,

3 namely,to decide in favour of the claimant that it was

4 entitled to sums of money which the referring letter had

5 not asked him to do.

For the reasons I have already indicated x acquit the

8 adjudicator of any such inadvertence. In my judgment he

9 rightly had in mind the intention of providing the parties

10 with the third party assistance (as contemplated by cook's

11 notice? as to what should go into the final account and, to

12 that extent, Shimizu has correctly interpreted the award in

13 theway it has done. Accordingly, the application will be

14 dismissed.

15 [End of approved transcript)

16 ......

17 MR THOMAS:Your Lordship having put the matter in the way

18 that you have, then T would actually ask for the

19 dismissal of the action.

20 MR BOWSHER:My Lord, I would resist that application, at

21 least in part for one of the reasons z have already

22 indicated, that having rejected our interpretation arid

23 put forward another, we would say that the way in which

24 you have applied the figures is not the correct

25 application back to the payment notice.

26 JUDGE LLOYD: I think technically, Mr Thomas, for you to make

27 that application you would have had to have issued a

28 counter-application asking for the dismissal of the

29 amended application. Since you have net done that, I do

30 not think I have jurisdiction to dismiss the action.

31 Therefore, the action will have to continue subject to,

32 as I have already indicated, the desire of either party

33 to refer the substantive dispute to arbitration- So it

34 remains therefore to decide what we are going to do with

35 the action,. I am against you, Mr Thomas,! 3n asking for a

36 dismissal, so it is back to mr Sowsher to decide what he

37 wants to do with the action. so on those applications I

38 treat this as a CMC, do I not'

39 MR THOMAS: Salve for the point that I perhaps! should take

1 instructions as to whether or not we wish to arbitrate so

2 that I would not wish to take any further step.

3 JUDGE LLOYD: I do not want to make life too complicated for

4 you, but that is how it would be. Equally, z have to say

5 that it is still open and I might well be disposed to

6 take a step which would preserve Mr Thomas's right to

7 make the application which he wishes to make, which he

8 could make even though you might wish to go to

9 arbitration because, effectively, if I dismiss the action

10 on the basis which I have done, then that would be you

11 have to watch out for this res judicata, but since

12 adjudication is a provisional, decision, it really does

13 not matter. 1 am not deciding anything which would tie

14 the arbitrator or the court in say final result, am I?

15 MR THOMAS: No, my Lord. I think what we would propose is

16 that the CMC should be adjourned now

17 JUDGE LLOYD: I am quite happy to do now. I am not

18 particularly interested in giving directions that you

19 might have to comply with about putting in a non-existent

20 defence, or something like that. I have to do something,

21 have I not?

22 MR BOWSHER: Yes. I think the CMC has to be adjourned so

23 that the parties can then decide what ,step next to reeks

24 and in what form

25 JUDGE LLOYD: What I would probably do is give you some time

26 in which you decide what you are going to do with this

27 action. I think the defendant needs to know what is

28 going to happen in other words you will go away and

29 decide what is going to happen. So if I simply say the

30 claimants to either issue an application notice for CMC

31 by 4.30 on 11th February, or otherwise to notify the

32 defendant and the court of its intentions with regard to

33 this action by the same time. Alright? Then if they do

34 not do that you will be back saying they are in default

35 of the order and apply to dismiss the action as abuse of

36 the process of the court or whatever you: are up to- I

37 will leave it like that

38 MR BOWSHER: Yes. My Lord, I would ask for permission to

39 appeal.

1 JUDGE LLOYD: On what grounds

2 MR HOWSHER: This is, as far as i am aware, the first time

3 that a decision has been taken considering the

4 appropriate approach to interpreting a decision,

5 particularly where there is a relationship between the

6 notice of adjudication and the decision. All the

7 decisions before have really turned on jurisdiction

8 points.

9 JUDGE LLOYD: I see I do not know, they have been pouring to

10 out.

11 MR BOWSHER: Subject to not having read Northern

12 Devolopments v J & J Nichol2 yet.

13 JUDGE LLOYD: No one referred to any case before me so r

14 assumed that there was not anything relevant

15 MR BOWSHER: I do not believe that any of them actually deal

16 with questions of construction, they have hitherto dealt

17 with

18 JUDGE LLOYD: What is wrong with my construction? It is not

19 just a teasing exercise, but if permission to appeal is

20 granted it must be on the basis of some prospects of

21 success or some arguable point. Therefore, I need to

22 know what it is. I should not trouble the Court of

23 Appeal with things that they should not be troubled with.

24 MR BOWSHER: Indeed. In our submission, our argument that

25 one should construe the decision within the four points

26 of the decision first and look at that, and that that

27 should really be as it were the principal tool, is a

28 proposition which the Court of Appeal should consider.

29 Obviously, there is no particular point that turns on

30 construction of the notice of adjudication in this case,

31 that would be a simple factual. matter, but in our

32 submission it is a general point as to whether or not,

33 when considering what the interpretation of the decision

34 is, the decision necessarily has to be read in light of

35 the letter,' or notice and is a point of general

36 importance.

37 JUDGE LLOYD: Do you wish to say anything on the subject, Mr

38 Thomas

39 MR THOMAS: I would simply say that the claimant has no

1 reasonable prospect of success, your Lordship having

2 given a very clear decision on the meaning of the letter.

3 Furthermore, the interpretation of letter such as this

4 is a matter falling directly within the expertise of a

5 judge of the TCC, and that is a factor which militates

6 against permission to appeal. being given.

7 JUDGE LLOYD: Mr gowsher, I do not consider that my decision

8 required me to consider or establish arty new point of

9 interpretation or principle, nor do I consider that I

10 have done so in a way which is anything other than the

11 way in which documents of this kind are ordinarily

12 considered, nor, as necessarily follows, do r consider

13 that I have reached the wrong decision and in respect of

14 which you have any reasonable prospect o£ success So I

15 am afraid permission will be refused.

16 MR THOMAS: My Lord, I ask for the costs of the application

17 to be assessed in the sum of £8,196.60 in accordance with

18 the schedule that is here provided. I hope your Lordship

19 has that and I hope my learned friend has it as well.

20 JUDGE LLOYD: I have it.

21 MR THOMAS: Each side provided cost schedules to each other

22 and it is right to say, I think, that one point that z

23 would rake as to the reasonableness of our £8,100 is that

24 the cost schedule coming forth from the claimant was in

25 the sum of £18.000 odd.

26 JUDGE LLOYD: So that a great deal more was put in. Where do

27 the differences lie? There is a degree of difference

28 between counsels fees

29 MR BOWSHER: There was a significant error in counsels fees

30 in our schedule.

31 JUDGE LLOYD: Does everything move to the right?

32 MR BOWSHER: No, there was a duplication of an item when the

33 calculation was originally done.

34 JUDGE LLOYD:What should it be, just so that Mr Thomas

35 removes that from the basis of invidious comparison? You

36 need not mention it, you can just indicate the factor by

37 which I should divide it?

38 JUDGE BOWSHER: Approximately two-thirds

39 JUDGE LLOYD: I reduce it to one third of the,figure?

1 JUDGE BOWSHER: To two thirds of the figure approximately.

2 JUDGE LLOYD: It is still more All Mr Thomas is doing is .

3 saying how reasonable his figures are compared with your

4 equally reasonable figures

5 MR BOWSHER: We have no specific comment to make on their

6 figures.

7 JUDGE LLOYD: What does that mean?

a MR BOWS HER: We have no specific criticism of the make-up of

9 the figures put forward by them.

10 JUDGE LLOYD: Are you suggesting I should follow any course

11 other than to award them costs in the sum of £8,196?

12 MR BOWSHER: We say that the normal course is to assess a

13 percentage of the costs claimed, and in those

14 circumstances there would only

15 JUDGE LLOYD: It is not, actually. Not here it is not.

16 MR BOWSHER: It is a course

17 JUDGE LLOYD: You certify that the sum is no more than the

is defendant is liable to pay, and it is one of the points

19 that, as far as I know, no one has yet grappled with.

20 How do x tax this down to a standard basis, if that is

21 really what you mean, when the object of the exercise, as

22 I understood the practice Direction, was that a party

23 should be paid its coats, which would effectively mean on

24 an indemnity basis, upon which I think many of us have

25 actually been acting without opposition, I should add.

26 MR BOWSHER: In my submission there is nothing in the

27 Practice Direction to indicate that the basxa of the

2e summary assessment should be on what is effectively an

29 indemnity basis.

30 JUDGE LLOYD: There was a new Practice Direction last month

31 telling me that we have got to remove anything which we

32 consider to be exorbitant, but you are not at the moment

33 suggesting that there is anything here that is

34 exorbitant. I would normally need to be told in

3S specxalist,work if there were something which is so out

36 of line that it would be regarded as exorbitant, because

37 specialist work does throw up both hours and rates which

38 are higher than one might find elsewhere.

39 MR BOWSHER: In our submission there is nothing in the

1 Practice Direction or Part 44 of the Rules to indicate

2 that on summary assessment one should necessarily recover

3 any more than either one would recover on detailed

4 assessment, or would previously have recovered on

5 taxation, and that therefore in making a summary

6 assessment an attempt should be made to reflect what

7 would be recoverable on detailed assessment, and that

8 therefore a reduction is appropriate on that basis. The

9 only way on summary assessment to make that reduction is

10 to make some across the board allocation, but all that

11 the certificate in the statement of costs says is that

12 the costs do not exceed those which the defendant is

13 liable to pay, not that this is what we would expect to

14 get on detailed assessment. We would say at least then,

is oar that basis, that there should be a reduction on, say,

16 rule of thumb of to or 15 per cent from the sum claimed.

17 MR THOMAS: we would say that there are no good grounds put

18 forward for that on the basis of the schedule.

19 JUDGE LLOYD: r think probably the simplest ground is to say

20 that these are statements based upon estimates.

23. Sometimes, certainly in respect of hearings, for example,

22 an estimate might be a generous one. They are also based

23 upon time actually.rscorded which, on analysis, might

24 turn out to be fractionally over the mark if one were to

25 assess it and, therefore, in order to avoid the

26 possibility that people are being paid for work that was

27 not productively being done there is this rule of thumb

28 reduction, in other words if there are any errors they

29 are unlikely to be in favour of the paying party. So if

30 I were to. I would be thinking in the figure of £7,500

31 which is not 15 per cent or even 10 per cent. 1 think in

32 order to ensure that some effect is given to that, that

33 is the figure which I will assess the costs in, £7,500

34 Z will have to reconstruct the reasons for refusing

35 permission$~to appeal, and you krill get that in the usual

36 form If,"they do come back other than the way r gave it,

37 that was not intentional.

38 MR THOMAS; Although it is not, in my submission and in your

39 view, a case for appeal, I wonder whether your Lordship

1 would permit the case to be reported because it does

2 occur to those behind me

3 JUDGE LLOYD: I would be delighted to do so, but the only

4 question is who is going to pay for the cost of

5 transcription? I think the answer is this: if, Mr

6 Bowsher, you decide not to appeal, I will have a

7 transcript made because I do not think it right that I

8 should ask either party to have to pay for costs of the

9 transcript, but if either of you were going to appeal

10 then I do not think it right to relieve the parties of a

11 cost which they would have .to incur and relieve the

12 possibility of. having to pay that cost if the appeal were

13 successful, that being a cost which falls ors the Court

14 Service. Can you let us know within seven days whether

15 you want it transcribed, please? I am sure you are going

16 to makc up your mind whether or not to appeal within

17 seven days are you not?

18 JUDGE BOWSHER : Probably, yes.

19 JUDGE LLOYD: Because for that purpose you will then seek a

ZO copy of the transcript, but will you let us know? r will

21 be happy to of course, but is will be revised because ex

22 zemporo judgments do require to be revised Thank you

23 both very much.

25 _______________