Chartwell Estate Agents Ltd v Fergies Properties SA Hyam Lehrer
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Globe |
| Judgment Date | 18 February 2014 |
| Neutral Citation | [2014] EWHC 438 (QB) |
| Court | Queen's Bench Division |
| Date | 18 February 2014 |
| Docket Number | Case No. HQ13X02659 |
[2014] EWHC 438 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCHDIVISION
Royal Courts of Justice
Mr. Justice Globe
Case No. HQ13X02659
Mr. M. De Gregorio (instructed by SGH Martineau LLP) appeared on behalf of the Claimant.
Mr. R. Deacon (instructed by Blake Lapthorn) appeared on behalf of the Defendants.
This is the claimant's application, dated 27th January 2014, for a variety of orders not all of which are opposed. The significant applications, which are opposed, are the claimant's application for an extension of time for the exchange of witness statements; the claimant's application for relief from sanctions for failing to serve witness statements in time, and the claimant's application for permission to amend its cost budget.
The claimant, Chartwell Estate Agents Ltd., are estate agents. The first defendant, Fergies Properties, were the owners of 19 Wilton Crescent in Knightsbridge. The second defendant, Hyam Lehrer, is the solicitor who at all material times has been acting for the first defendant.
The action relates to the claimant's claim for commission upon the sale of 19 Wilton Crescent by the first defendant to Radovan Vitek on or about 22nd April 2013 for £25million. The basis of the claim surrounds an agency agreement, completed on or about 14th May 2012, between the claimant and the first defendant, as signed by the second defendant on the first defendant's behalf. Within the agreement a commission fee of 1.5% plus VAT is referred to.
The agency agreement came into being at a time when 19 Wilton Crescent was about to be sold by the first defendant to Vitek for £27.5million. However, no contract for sale was concluded; Vitek withdrew from the sale and the property remained on the market until Vitek made a further offer to purchase the property in February 2013 for the reduced figure of £25million. That sum was accepted by the first defendant and the sale was effected on or about 22nd April 2013 for £25million.
The claimant claims commission of 1.5% plus VAT which amounts to £450,000.
The pleadings identify various differences of interpretation as to the events during 2012 and 2013 and the effectiveness of the agency agreement. The defendants deny that any commission is payable.
It is not for me to resolve those disputes at this hearing. They are trial issues. I am concerned with case management issues.
The procedural history of the claim is as follows: The claim form was issued on 8th May 2013 and it was served together with the particulars of claim. The defence is dated 20th May 2013. There is an undated reply which was served some time before 5th July 2013. On 5th July 2013 the defendants issued a Part 18 request for further information. On 24th July 2013 the claimant served its response to the Part 18 request.
On 17th October 2013 there was a case management conference before Master Leslie. It deal with various issues, including allocation, cost budgets and applying for a trial within the March to May 2014 trial window, with a time estimate of 4 days. Subsequently the case has been fixed for trial with that 4 day time estimate in the trial window commencing 29th April 2014.
The order of 17th October 2013 dealt retrospectively with the Part 18 request and response, giving the defendants liberty to serve their request by 12th July 2013 and directing a response by the claimant by 26th July 2013. As already stated, that had already happened.
Paragraph 6 of the order dealt with disclosure. Again it dealt retrospectively with what in part had already happened. It required the parties to exchange electronic document questionnaires by 6th August 2013. It added that "if the parties are unable to agree any matters regarding electronic disclosure or inspection the matter shall be referred to the court for further directions at the earliest practical date". It required each party to give standard disclosure of documents by list by 27th August 2013. It stated that the last date for service of any request to inspect or for a copy of a document was 3rd September 2013.
Paragraph 7 of the order stated as follows:
"Each party shall serve on every other party the statements of all witnesses of fact and any notices relating to evidence on whom it intends to rely.
There shall be simultaneous exchange of such statements by no later than 4p.m. on 22nd November 2013".
Paragraph 8 of the order dealt with requests for clarification or information based on any document disclosed or statement served no later than 21 days after disclosure or service with any such request to be dealt with within 14 days of the request.
No further application has been made to the court and no further court hearing has been requested or has taken place since 17th October 2013, save for this application and hearing.
The relevant correspondence between the parties from 1st July 2013 onwards is exhibited in a 101-page bundle attached to a witness statement produced for this application by the claimant's solicitors. It has been amplified by further correspondence and documents attached to a statement filed on behalf of the defendants. Pages 1 to 34 of the claimant's bundle relate to matters that preceded the case management conference on 17th October 2013. It is clear from those documents that behind the agreed disclosure orders within the order of 17thOctober 2013 lay a dispute in relation to disclosure which was simply not addressed within the context of that order.
A letter dated 15th October 2013, from the claimant's solicitors, highlighted specific disclosure issues. It contended that there had not been full disclosure by the defendants. It sought a response by 23rd October 2013 failing which the claimant's solicitors reserved the right to make an application to the court for specific discovery. The final sentence stated that until the defendants completed the disclosure exercise it would be impossible for witness statements to be drafted and finalised.
The defendants responded by email on 17th October 2013, before the case management conference, stating in the last two paragraphs of their response:
"1. You were provided with our client's list of documents on or around 29th August 2013 and inspection on 4th September 2013. You have therefore had 6 weeks to respond but have only just provided us with your comments.
2. We fail to see how the provision of the documents you have described makes it impossible for you to finalise your witness statements. You are acting for the claimant and so we expect that you can provide statements that support your client's case without requiring documents from our client".
As already stated, the disclosure issue and the possible consequential witness statement issue were not addressed at the case management conference. If there was any substance to them they should have been addressed. They were not addressed. The case management conference order was made. The case should have proceeded in accordance with its terms.
Notwithstanding the specific terms of the order, the correspondence shows a continuing unsatisfactory issue over disclosure. Put simply, the claimant's solicitors were claiming that disclosure should be made of additional documentation which it was claimed was relevant and, without sight of the documents, witness statements could not be prepared and exchanged. In a detailed letter dated 11th November 2013, a list of twelve specific items were referred to. Mr. De Gregorio supports his submissions today by stating that the majority of those items have been supplied during the past few days or weeks.
The defendants' solicitors disagreed about the relevance of the additional documentation that was being requested. They disagreed about its effect upon the preparation and exchange of witness statements. The subsequent recent disclosure of documentation has been made without prejudice to arguing its relevance.
The claimant's solicitors continued to indicate that an application would be made to the court for specific discovery if full disclosure was not made. No such application was ever made.
On 20th November 2013, the defendants' solicitors emailed the claimant's solicitors with reference to 22nd November 2013 being the date when witness statements should be exchanged, asking whether they would be in a position to exchange witness statements or were going to seek an extension of time for service. An email reply was sent on 22nd November 2013. It stated that it remained the claimant's position that full disclosure had not been provided and consideration was being given to making an application for specific discovery. Until discovery was complete it was impossible for either party to finalise their witness statements. Notwithstanding the content of that email, no application was made for specific discovery and no application was made for any extension of time to serve the witness statements.
Neither party had completed witness statements ready for service by 22nd November 2013. The claimant's position was expressly stated in their email of 22nd November 2013. It is the substance of this application. The defendants' position from the correspondence is not as clear cut as that. There is no document which states witness statements were ready to be served. No effort was made to safeguard their position, such as filing witness statements in a sealed envelope at court. Subsequent events, and the contents of an email dated 21st January 2014, satisfy me that the defendants were not ready to exchange their own...
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