Ascension Asset Management Ltd v Goriola Olusina Daniel
| Jurisdiction | England & Wales |
| Judge | Brown |
| Judgment Date | 17 April 2023 |
| Neutral Citation | [2023] EWHC 875 (KB) |
| Docket Number | Case No: SC-2021-APP-001272 |
| Court | King's Bench Division |
| Year | 2023 |
and
[2023] EWHC 875 (KB)
Judge Brown sitting as a Master of the KB
Case No: SC-2021-APP-001272
IN THE HIGH COURT OF JUSTICE
SENIOR COURT COSTS OFFICE
Transferred to the KING'S BENCH DIVISION for hearing only
Mr. Richard Wilcock (instructed by Clarion Solicitors) for the Claimant
Mr. Imran Benson instructed by and for the Defendant
Hearing dates:13–15 February 2023
Further written submissions: 22 March 2023
Draft circulated: 27 March 2023
Hand down delayed due to limited counsel availability
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
COSTS JUDGE Brown
I am required to decide whether, in principle, fees are now payable to the Defendant solicitors by the Claimants, their former client, pursuant to two discounted conditional fee agreements (DCFA/s) following success in the claims to which they relate. It has arisen in an assessment sought by the Claimants of a statutory or statute bill delivered on or about 9 September 2021 for fees and disbursements of £201,480.48 (the fees amount to some £144,000 plus VAT). There are also issues arising on a claim by the Defendant for damages (which is pursued in the alternative to the claims made on the bill) 1 and an issue as to whether the fees now sought are subject to a cap.
(Although no issues of privilege arise between the parties some of the relevant matters occurred in the course of a mediation and are likely to be caught by privilege of a third party, see para. 6 below. I have, accordingly, omitted certain passages — marked by square brackets-from this judgement in public, albeit they are set out in the decision in private.)
The facts in broad overview
The First Claimant is a limited company involved in the business of purchasing and management of commercial and residential property. The Second Claimant, Mr Daniel, was a director and shareholder of the company.
The First Claimant instructed the Defendant to act on its behalf in February 2020 in respect a claim for rent arrears and forfeiture (‘the Rent claim’). It did so on the basis of a DCFA (‘the Rent DFCA’) which provides that a payment was be made if the claim was lost (‘losing fee’) but at a much reduced amount from that might otherwise be payable (hence ‘discounted’). The amount of the losing fee was capped at £10,000, in addition to any disbursements.
The First Claimant issued proceedings against various parties (‘the 'Opponents’) on 25 February 2020 in the Rent claim. The Opponents counterclaimed asserting ownership over a number of properties held by the Second Claimant, Mr Daniel. Further, on 7 May 2020 the Opponents issued proceedings against the first Claimant and Mr. Daniel, asserting a beneficial ownership of the First Claimant (‘the Chancery Proceedings’).
The separate cases were consolidated on 16 June 2020. Following consolidation, the Defendant and the Claimants agreed a further DFCA (‘the Chancery DFCA’) in respect of the Chancery proceedings. The losing fee for this DFCA was in agreed in the sum of £8,000 (inclusive of VAT) in addition to any disbursements.
A mediation took place by videolink on 3 March 2021 before a trial listed for 12 – 16 April 2021. Counsel was instructed on the Claimants' behalf. In the course of the mediation and after an initial exchange of offers, there were discussions, in particular, between Mr. Daniel and Counsel, following which it was proposed that an offer be made to the Opponents to resolve the disputes on the basis of a number of different proposals
(which it is not necessary for me to recite) but which included the proposal that each party bear their own costs. Following this proposal, and whilst there is a dispute as to what was said at this point, it is common ground that Mr. Ijieze, who is a fee earner of the Defendant with conduct of the claims, raised the issue of his firms' fees. On the Claimants' case, as appears in Mr. Daniel's witness statement, Mr Ijieze said that his firm's costs were “ in the region of £30–£50,000” and that Mr. Daniel “presumed” this included disbursements. Mr. Ijieze, in his witness statement, says that he said that “ up to that stage” his firm's costs were “ not less than £50,000 plus VAT”. That factual dispute, as it was initially presented, concerning what was said about costs might be understood to have widened in the course of evidence (and I deal with this below). It appears however to be further common ground (and in any event I so find), that […]. It appears also to be clear, and I so find, that he did so in circumstances where he conveyed to Mr. Ijieze that the rent arrears (and other such recoveries) would be used to cover the Claimants' liability to the Defendant in costsIn the early hours of 4 March 2021, a broad understanding of the way forward appears to have been reached. The deal anticipated was a complex one involving the transfer of property. The Defendant says that at this point the agreement was subject to contract and thus not binding. It was not entirely clear to me whether this was challenged by the Claimant at the hearing. In any event the Opponents in their correspondence after the mediation referred to the agreement reached at mediation as being ‘ subject to contact’. Indeed Mr. Daniel refers in an email of 8 April 2021 to the agreement at mediation as “ provisional”. In any event it appears clear from the documentation and the way the parties appear to have proceeded, indeed the course of further negotiation after the mediation, that neither party considered that the mediation had created a binding agreement. It seems to me clear that there was indeed no such agreement at the mediation.
[….] It also appears that Mr. Daniel had concerns about proceeding with the proposed deal and counsel provided further advice on the merits of the claims. Significantly for these purposes, it was anticipated by the agreement that had been reached at mediation that the parties would bear their own costs.
On 22 March 2021, the day before a PTR (rescheduled it would appear because of the continuing negotiations), a deed of settlement was concluded in the substantive action. The deed recognised (inter alia) the First Claimant's interest in a number of properties and provided that a substantial sum be payable by way of rent (and, possibly other matters) in the sum of £170,379. It also provided that the parties were to bear their own costs.
A substantial amount of work, it seems to me, had been undertaken after the mediation and before a binding deal could be reached. Indeed, there was clearly some prospect that the matter might go to trial, and some work continued on the claim and in preparation for the trial. In this period there were further communications between the Claimants and the Defendant as to costs, in particular an email from the Defendant 15 March 2021 stating that their fees were now “ circa £75,000 plus VAT”.
The issues
After the deed was finalised, in an email of 8 April 2021, Mr. Daniel appears to have argued that the DFCA “[excluded] the event of a mediation settlement” (which he nevertheless described as “ the probable and preferred outcome”) and contended that in such circumstances the Claimants were required to pay a “ capped fee” only and I understand that to be a reference to a losing fee. That argument is not now pursued.
It is clear that the Rent Claim was successful and it was also accepted by Mr. Wilcock for the Claimants at the hearing that I should proceed on the basis that the Chancery claim was also successful 2, no point had been taken about this in the Statements of Case. There is also no dispute that disbursements are payable and that sums were payable in respect of orders for costs made in the course of proceedings (‘interim orders’). My understanding is that a sum, which the Defendant has put at £31,559.70, has effectively been paid in respect of disbursements and fees.
It is however now said by the Claimants that by the terms of the DFCAs any liability to pay charges was limited to basic charges recovered from the Opponents and since the deed did not give rise to any enforceable order as to costs (and in fact had the effect of waiving previous interim orders for costs in the Claimants' favour which had not yet been assessed or paid) no further fees are payable. Further, and in the alternative, if further fees are payable then by reason of representations made in the course of the mediation, those fees should be capped at £50,000.
The Defendant denies both contentions saying that the Claimants' first case is based on a misconstruction of the DFCAs and that no such objection can properly be made at this stage to the payment of basic fees (even if the Defendant were wrong in its interpretation as to the proper meaning of the retainers). Although there were representations made in the mediation as to costs, they were not such as could justify any cap. Only if the DCFAs are to be construed as the Claimants contend is a claim is made for compensation by the Defendant (the basis of such a claim being that the Claimants were in breach of the terms of the DFCAs).
At an earlier hearing, directions were given for the setting out the parties' respective cases in Statements of Case. I address the issues arising in the manner in which the disputes were set out in the Statements of Case, and as subsequently refined or clarified at the outset of the hearing. They are as follows:
(1) Whether on the correct interpretation of the DCFAs, or by virtue of an implied term, the Defendant should be paid its basic charges for the work done. If not, whether the Claimants...
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