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.
36
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.
4
5 Accordingly, please accept this letter as notice of
our intent to refer the following disputes to
7 adjudication under the ORSA Adjudication Rules
8
9 "1. Reinstatement of the agreed sum for
10 acceleration circa £72K.
11
12 2. Removal of negative variations for work not
13 within the scope of our subcontract circa £60K.
14
15 "3. Removal of contra charges not relevant to our
16 activities circa £80K.
17
18 4. Release of half retention monies circa £45K.
19
20 "We will present detailed figures to the adjudicator
21 and they may differ from the above.”
22
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:
23
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."
29
30 Similarly in respect of the third issue he said:
31
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."
37
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
43
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.
36
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.
6
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.
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