Car Giant Ltd and Another v The Mayor and Burgesses of the London Borough of Hammersmith
| Jurisdiction | England & Wales |
| Judge | Mr Stephen Furst |
| Judgment Date | 10 March 2017 |
| Neutral Citation | [2017] EWHC 464 (TCC) |
| Docket Number | Case No: HT-2013-000071 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 10 March 2017 |
[2017] EWHC 464 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Stephen Furst QC
(sitting as a Deputy High Court Judge)
Case No: HT-2013-000071
Mr Neil Mendoza (instructed by IBB Solicitors) for the Claimants
Miss Tiffany Scott (instructed by Browne Jacobson) for the Defendant
Hearing dates: 2 nd March 2017
COSTS JUDGMENT
Introduction
This judgment deals with costs.
On 2 nd March 2017 I gave judgement in favour of the Claimants ("Car Giant") in the sum of £179,125 together with interest in the sum of £15,853.81. The action concerned a claim for damages for dilapidations following the expiry of the Defendant's ("LBHF") lease.
On 16 th April 2014, LBHF made a CPR Pt. 36 offer in the sum of £250,000. It is evident that Car Giant did not beat that offer and accordingly it is common ground that Car Giant should pay LBHF's costs from the 7 th May 2014 (the expiry of the "relevant period") together with interest on those costs at 1% above base rate.
In such circumstances, the usual order would be that LBHF should pay Car Giant's costs to 7 th May 2014, with all such costs being subject to a detailed assessment on the standard basis.
Applications
However, in this case, LBHF makes the following applications:
5.1. for payment of its costs incurred before 7 th May 2014;
5.2. that the basis of assessment of the costs both before and after 7 th May 2014 should be on an indemnity basis;
5.3. to amend the Costs Budget in accordance with an application issued on 20 th February 2017;
5.4. for an indication as to the reasonableness of exceeding the Costs Budget in certain respects;
5.5. for interest on costs;
5.6. for payment on account of costs.
It is convenient at this point to set out, in summary form, some of the history of this litigation, insofar as relevant to these applications.
History
LBHF's lease expired on 21 st February 2011. Before that date there were direct negotiations between the clients. LBHF contends that in about September or October 2010 LBHF made an offer of settlement of £250,000. The precise circumstances in which that offer was made and the terms attached to that offer (if any) are difficult to ascertain because whilst it is referred to in an exchange of emails, the offer itself was apparently not made in writing and I have no direct evidence from the maker of the offer. However I accept the evidence of Mr Ryan Diamond, Car Giant's solicitor, that the offer was made by Mr Hooton, Head of Property at LBHF, "to move negotiations forward but crucially all figures discussed were subject to the final authorisation/approval of the relevant Council committee at the Defendant." This account is consistent with the emails at about this time (including an email dated 5 th August 2010) and in particular with the fact that any offer was conditional on approval by the relevant committee at LBHF. No such approved offer was made.
The following year, in June 2011, an offer was made by Mr Ian Moore, a partner of Jones Lang LaSalle, then advising LBHF, of £113,000, excluding VAT to settle the claim. This offer is obviously less than the sum recovered by Car Giant.
In September and October 2012 there was contact between Mr Outterside of Vail Williams (the valuer who gave evidence on behalf of Car Giant at trial) and Jones Lang LaSalle, representing LBHF. It would seem that Mr Matthew Haines of Jones Lang LaSalle had been instructed by LBHF to prepare a s.18(1) valuation. Whether this was prepared or if it was, whether it was provided to Car Giant, is unclear. I am told that there were without prejudice discussions between valuers but I have not been given any details of those discussions.
These proceedings were issued on 24 th May 2013.
As I say above, LBHF made the CPR Pt. 36 offer by letter dated 16 th April 2014. The letter ended by stating that: "Our client had obtained valuation evidence (privilege in respect of which is not waived) and it is therefore confident this Offer will not be beaten by your client at trial." The following day Car Giant wrote to LBHF noting this statement and commenting that it was "the sort of thing that's preventing us from narrowing our differences and resolving the claim." The same email attached Car Giant's s.18 valuation.
There were then meetings between valuers but at the end of 2014 or the beginning of 2015 the question of ADR was raised. The letter of 25 th January 2015, from LBHF's solicitors suggested that "…if the issues in dispute can be sufficiently identified and narrowed then it may be that the nature of those disputed issues is such that an alternative dispute resolution procedure can be considered." Car Giant's solicitors responded to this suggestion by letter dated 2 nd April 2015. This letter argued that the cost of the repair works carried out (which by that stage were known) did not limit Car Giant's recovery since some units had been let on a limited repair basis because of their poor state of repair and other units had been let at less than market value in return for a full repairing covenant. In the event this was not an argument pursued by Car Giant's valuer as the basis of the calculation of the diminution in value of the reversion at trial. The letter went on to note that the discussions between the valuers appeared to have reached an impasse and that further discussions were unlikely to bear fruit until there was a significant shift in LBHF's position.
The offer of some form of ADR was put forward by LBHF's solicitor's letter of the 15 th May 2015. Car Giant's solicitors responded on 14 th August 2015 suggesting that ADR would be appropriate but only after the valuers had exchanged reports.
In the meantime, on 1 st April 2015, Mr Haq, an LBHF employee, wrote an internal email referring to an offer apparently put forward by Mr Perry and himself at some earlier date in the sum of £315,000 which offer, the email stated, was rejected by Car Giant. This offer is briefly referred to in Mr Timothy Rayner's (LBHF's solicitor) statement but without any further explanation. It is not referred to by Mr Ryan Diamond.
Although the question of mediation was mentioned later in 2015 and early in 2016, it once again surfaced directly in October 2016. Car Giant now agreed to mediate, that mediation took place in January 2017 but was not successful. Of course this was only shortly before the trial in February 2017 when considerable costs had no doubt been incurred by both parties.
Mr Ryan Diamond states that Car Giant's position was that negotiations or ADR were unlikely to be successful prior to disclosure and/or full explanation of the position taken by LBHF's valuer. Certainly that was the position taken by Car Giant in 2015. Mr Diamond also points out that Mr Haines was disinstructed in about August 2015 and that Mr Lenson, LBHF's valuer at the hearing, was only in a position to take matters forward from about July 2016 and it was only then that LBHF's position became clear. Mr Diamond also maintains that Mr Lenson took a different approach from that adopted by Mr Haines. Some delay was also caused in advancing meetings between valuers in the Autumn of 2016 by Mr Outterside's illness. Mr Diamond concludes: "Having finally reached a point where the Defendant's position on valuation/diminution was finally clear the Claimants now felt comfortable proceeding with mediation on the basis that both parties had now set out their respective positions."
By contrast Mr Timothy Rayner maintains that there was an unreasonable delay on the part of Car Giant in agreeing to mediate and that Car Giant fundamentally changed its case very shortly before trial. He points to the history of the matter, briefly summarised above, and the delay on the part of Car Giant in responding to his suggestion of ADR. Indeed it was not until October 2016 that Car Giant finally agreed to mediate. As mentioned above Mr Outterside had argued that the cost of the repair works carried out should not limit Car Giant's recovery but when reports were exchanged the justification for this approach was different. Now Mr Outterside argued that the cost of repairs, whether carried out or not, should form the central element of the s.18 valuation. As regards Mr Diamond's contention that Car Giant were justified in postponing the mediation until the valuers' positions were known, LBHF point to the letter of 11 th October 2014 from Car Giant's solicitor and an email dated 1 st December 2014 (a without prejudice document) from which it is argued that it is apparent that Car Giant knew perfectly well the position being taken by LBHF and in particular Mr Haines. A similar point is made by reference to two letters in April and May 2015.
The final matter of complaint concerns the preparation of the trial bundles. Put shortly Mr Rayner complains that the trial bundle index was provided late, not until 20 th January 2017, that it was missing documents (including the lease in question and correspondence), that Car Giant refused to include any post-proceedings correspondence and that subsequently Car Giant asked for further documents to be included. I take this shortly because on any view, LBHF are entitled to their costs in this period.
Costs prior to 7 th May...
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