Alejandra Frade and Others v Michael Radford and Another
| Jurisdiction | England & Wales |
| Judge | Lord Justice Hickinbottom |
| Judgment Date | 14 July 2017 |
| Neutral Citation | [2017] EWCA Civ 1010 |
| Docket Number | Case No: A2/2016/3038 |
| Date | 14 July 2017 |
| Court | Court of Appeal (Civil Division) |
[2017] EWCA Civ 1010
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT (QUEEN'S BENCH DIVISION)
THE HON MR JUSTICE WARBY
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Hickinbottom
Case No: A2/2016/3038
Benjamin Williams QC (instructed by Taylor Hampton Solicitors Limited) for the Appellants
Alexander Hutton QC (instructed by Simons Muirhead & Burton) for the Respondents
Hearing date: 13 July 2017
This is a renewed application for permission to appeal against the Order of Warby J dated 8 July 2016 dismissing two appeals against Orders of Master Haworth ("the Costs Judge") in proceedings for the detailed assessment of the costs of the Appellant Defendants ("the Defendants") payable by the Respondent Claimants ("the Claimants"). On 24 November 2016, Lewison LJ granted permission to appeal on some grounds. Through Benjamin Williams QC, the Defendants now renew their application for permission in respect of those grounds he did not. Alexander Hutton QC for the Claimants appeared in the application to oppose it.
For the purposes of this application, the underlying facts are uncontroversial, and are helpfully summarised in Mr Williams' skeleton argument.
The underlying dispute concerned a Spanish film called "La Mula". The First Claimant was commissioned to direct the film. The Second Claimant was the corporate vehicle through which he traded. The Defendants, with others, financed the production of the film. Shortly before filming was complete, a dispute arose, and the First Claimant left the set. Another director was hired to complete the project, and the Claimants and Defendants have been dispute since.
The film contracts were subject to an exclusive jurisdiction clause in favour of the Spanish courts. However, in July 2010, the Claimants issued proceedings against the Defendants here, advancing a wide range of complaints including defamation and unlawful means conspiracy. On 2 August 2010, Sweeney J granted the Claimants an interim injunction restraining the Defendants from distributing the film and repeating alleged defamatory statements. That injunction was continued from time-to-time, until discharged by Tugendhat J on 23 May 2012.
All the Defendants were resident outside the jurisdiction. In the early stages, they did not participate in the English litigation, at first because they did not know about the proceedings and later because they disputed service. Throughout 2011, the Claimants sought and obtained extensions of time for service.
Taylor Hampton Solicitors were instructed by the Defendants in July 2011, when the focus of the proceedings was still on the issue of service. On 4 July 2011, Taylor Hampton sent the First and Second Defendants ("the Individual Defendants") a retainer letter, accompanied by their standard terms of business. These provided for payment, win or lose, at an hourly rate of £395. The retainer letter noted the possibility of funding the case under a conditional fee agreement ("CFA"), but stated that consideration of such an agreement was premature because "… the facts are simply too complicated to form an early assessment on the merits…". The Individual Defendants countersigned the retainer letter on behalf of the Fourth and Fifth Defendants ("the Corporate Defendants"), as well as themselves. They returned the countersigned letter the same day.
Taylor Hampton instructed Augustus Ullstein QC of Counsel ("Counsel"), and he entered into a CFA with them on or about 6 July 2011. His CFA covered the whole proceedings; but it named only the Individual Defendants as his clients.
On 8 August 2011, Taylor Hampton sent the Defendants a draft CFA. Unlike Counsel's CFA, it named as clients the Corporate Defendants as well as the Individual Defendants. However, it had limited scope. The covering letter noted the exclusive jurisdiction clause nominating Spain, and explained: "Counsel and my role is to deal with the procedural position in England and not to consider your rights under the film contracts".
The Taylor Hampton CFA was based on the standard Law Society CFA terms. The agreement stated that it covered: "Your claims… to have the proceedings against you dismissed, to set aside the interim injunction, any assessment of damages under the cross undertaking, and any ancillary applications such as seeking an anti-suit order …". The reference to "your claims" reflected the fact that the standard terms were designed primarily for use by claimants. However, it has always been common ground that the phrase was to be construed in this case as referring to applications by the Defendants to have the proceedings against them dismissed at an interim stage. The CFA also covered "any appeal by your opponent".
The CFA expressly excluded:
"Any claim against you by your opponent or counterclaim by you to the claim as opposed to a claim for damages under the cross undertaking".
Again, because the agreement was based upon a standard form for use by claimants, the terminology is not ideal: but it has always been common ground that the proper construction was that the CFA excluded any requirement for Taylor Hampton to act in the substantive defence of the proceedings, as well as any counterclaim, as opposed to interim applications "… to have the proceedings against you dismissed…".
The CFA was accompanied by a risk assessment, which recorded that the Defendants' aim was "… to have the injunction lifted, to bring an end to the English proceedings and to seek damages under the cross undertaking".
The Defendants entered into the CFA with Taylor Hampton on or about 10 August 2011. The covering letter referred back to the original retainer letter, and specifically extended it to cover the claims of the Corporate Defendants.
Thereafter, Taylor Hampton and Counsel represented the Defendants in the English proceedings. In February 2012, Taylor Hampton issued an application to set aside the injunction, and for a declaration that proceedings had not been served. Eventually, the Claimants accepted that there had been no service on the Individual Defendants, and that the injunction as against them should be discharged. On 23 May 2012, Tugendhat J made a consent order to that effect. The Individual Defendants thereafter played no part in the substantive claim.
However, proceedings against the Corporate Defendants continued. There was an unsuccessful mediation in July 2013. The Defence and Counterclaim, drafted by Counsel, was served in October 2013. The Claimants were late in filing a Defence to the Counterclaim, and judgment in default was entered. This gave rise to prolonged interlocutory activity. Although the judgment was regular, it was eventually set aside by the court as a matter of discretion.
In March 2013, the Corporate Defendants applied to strike out the claim. That application was granted by Master Eyre on 7 February 2014, who concluded that the claim was "hopeless". That order was confirmed on appeal by Sir David Eady sitting as a Judge of the High Court, on 28 July 2014. Master Eyre awarded the Defendants the costs of the claim, and Sir David Eady awarded them the costs of the appeal.
In the course of the detailed assessment of those costs, the Claimants raised a number of issues. For example, they contended that the Taylor Hampton CFA only covered the application to dismiss for want of service, and not the later application by the Corporate Defendants to dismiss on other grounds.
The Claimants also submitted that the fact that Counsel's CFA did not name the Corporate Defendants as his clients meant that those clients had no liability to pay Counsel for any work done – so that, on the inter partes assessment, there should be disallowance of half of Counsel's fees before 23 May 2012 (because half of his work was said to be attributable to the Corporate Defendants), and all of his fees thereafter (because from that point the claim only continued against the Corporate Defendants).
In response to this, it was accepted by Counsel and Taylor Hampton (on behalf of the Defendants) that an oversight had occurred. Taylor Hampton's retainer had been expressly extended in August 2011 so as to cover the Corporate Defendants, but no corresponding change was made to Counsel's CFA. Hence, on 30 July 2015 (of course, after the inter partes costs orders were made), Counsel and Taylor Hampton executed a "deed of rectification" whereby his CFA was expressly extended, with retrospective effect, to cover the proceedings against the Corporate Defendants.
Insofar as costs fell outside the CFAs, in the detailed assessment,...
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