Courtwell Properties Ltd v Greencore PF (UK) Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Akenhead |
| Judgment Date | 04 February 2014 |
| Neutral Citation | [2014] EWHC 184 (TCC) |
| Docket Number | Case No: HT–12–375 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 04 February 2014 |
[2014] EWHC 184 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Akenhead
Case No: HT–12–375
Stephanie Barwise QC (instructed by Shulmans LLP) for the Claimant
Joanne Wicks QC (instructed by WH Lawrence) for the Defendant
Hearing date: 24 January 2014
It might have been hoped that the parties to this relatively uncomplicated leasehold dilapidations dispute, who had settled the case by acceptance of a Part 36 Offer, could have resolved the outstanding issue of costs without recourse to the Court. Instead, a one day hearing was called for to address an application by the Claimant for indemnity costs. The summary costs bills for this exercise total nearly £100,000 inclusive of VAT; both parties have deployed Leading Counsel. 12 witness statements have been lodged comprising some 120 pages of text and over 550 pages of exhibited evidence. There has been unavoidably more than 5 hours of judicial reading time. Whilst the Claimant is entitled in this case to come to Court and seek indemnity costs, what it can not be allowed to do is to act in a disproportionate way when it comes to present its application. It is noteworthy that the near £100,000 expended on this application would probably more than account for the difference between the Claimant's indemnity and standard costs.
The Background
Courtwell Properties Ltd ("Courtwell") is the sub-lessee of long (125 year) leases on three blocks of industrial premises, Nos. 3, 4 and 6–8 Missouri Avenue, Salford. In effect, Greencore PF (UK) Ltd ("Greencore") was the sub-sub-lessee to Courtwell in respect of each such demise. Greencore, having occupied the premises itself for some time, in turn had sub-let to Paramount Foods ("Paramount") who used the premises as a bakery. Greencore's sub-sub-leases expired on 1 October 2010 (Unit 4), 12 December 2010 (Unit 3) and 31 March 2011 (Units 6–8). In April 2010, Courtwell's then surveyors prepared three schedules of dilapidations relating to alleged breaches of repairing and maintenance governments; the total remedial work cost was said to be £1,774,000.
Mr Guy, a building surveyor and Associate Director of CBRE, retained by Greencore, visited the site in September 2010 on two occasions and wrote to Beaumont Lord on 28 October 2010 saying:
"…From these visits, it is clear that the current tenants have no intention vacating the units and indeed there is more evidence to suggest that they are staying in these units indefinitely. In this regard, if the tenant has no intention of vacating the premises and the terms under which they are now occupying the premises prove a commitment to the site, then your client will have incurred no loss of the units and there would be no claim.
As such, we require the following information from you before we can conclude our initial responses. Can you please confirm:
• Your client's intentions for the units…
Also, can you please confirm whether you have instructed the Landlord to carry out a Section 18 Valuation of the properties…"
There being no response for over three months, Mr Guy wrote again on 10 February 2011 in similar terms. Again there was no response except that Courtwell's solicitors wrote on 2 March 2011 to him saying that they would respond in due course. Greencore's solicitors wrote on 12 April 2011 to Courtwell's solicitors saying that:
"…we consider that the statutory cap on damages put in place by Section 18 (1) of the Landlord and Tenant Act 1927 will play a significant part in any claim that your client might seek to pursue.
If it is your client's intention to pursue a claim, it would be helpful (and appropriate) to set out now your client's and Paramount Foods Limited's intentions for the premises generally. We look forward to hearing from you in that respect, but, in any event, please provide copies of any correspondence (either before or after the lease expiry) date between your client and Paramount concerning Paramount's continued occupation…"
It seems to be the case that from about this time the lines, probably unnecessarily, began to be drawn between the parties because Courtwell's solicitors replied:
"…it is not entirely clear to us whether Mr Guy is retained as a valuation expert or as an expert witness in the field of building surveying.
Mr Guy has previously stated in correspondence, in his expert opinion, Section 18 (1) will apply and that goes further to state that his opinion is that there will be no loss whatsoever.
We would anticipate that your client's expert witness would not be so bold as to make such a statement without having given the matter full and proper consideration and therefore, it would appear that there is a fundamental difference of opinion between the parties…"
They did not respond to the query about their client's intentions relating to the property until 4 May 2011 saying that they were not aware of there "in fact being any correspondence between our client and Paramount regarding their future intentions for the property". As appeared later, there was relevant correspondence including offers and counter-offers. They were told that Mr Guy was a building surveyor and that a valuation expert would be instructed later if necessary (see letter dated 17 May 2011 from Greencore's solicitors).
For reasons which are not clear, in May 2011 Courtwell retained a new surveyor, Mr Firn, who prepared new schedules of dilapidations for each property, costed by a quantity surveyor. A Mr Clarke prepared a capital diminution valuation pursuant to Section 18.
Mr Firn and Mr Guy made contact in September 2011 and it is fair to say that the relationship between them was not good. I can not determine on the papers whose fault that was. I am certainly not in a position to determine whether Mr Guy or indeed Mr Firn were guilty of some form of professional misconduct. Part of the almost festering sore was whether or not Mr Guy had given advice about valuation in circumstances which, being a building surveyor and not a valuer, he was not in a position to give. Greencore's solicitors tried to clear this up by letter dated 25 November 2011 to Courtwell's solicitors from which time it must have been reasonably clear to all concerned that Mr Guy was not a valuer, that rightly or wrongly the assertion that there was no loss related to whether or not Paramount remained in occupation and that Greencore was not asserting as a matter of fact that there was no actual loss but that would be for the court to decide.
With no warning, Courtwell's replacement solicitors sent a letter of claim purportedly pursuant to the Dilapidations Pre-Action Protocol on 26 June 2012 which contained the revised dilapidations schedules, a quantified demand and valuation reports for each unit. The quantum claimed, now based on capital diminution rather than the cost of remedial works, had come down to some £700,000. On 23 August 2012, they sent Greencore's solicitors a reminder and asked to be told what Greencore's position was.
Greencore's solicitors responded in early September 2012 saying that, because the diminution measure was less than the cost of the works, it would be sensible for the valuers to meet to narrow issues and to "gauge whether the claim can be settled without the need for litigation". They asked for access for their valuer to inspect premises. Perhaps unsurprisingly, given the new schedules, the fact that they related to three properties and the impending August holiday period, Greencore and its professional team were unable to respond within the 56 day period mentioned in the Protocol.
Courtwell's solicitors responded on 24 September 2012 repeating their apparent belief that Mr Guy had opined two years before that there was no loss and that there would therefore be little to be achieved by the valuers meeting going on:
"In the absence of any response to the Schedules of Dilapidations and quantified demands within the timescale set out by the CPR protocol and our instructions are to press forward with the matter."
They did not offer access to Greencore's valuers to inspect the premises.
Greencore's solicitors response dated 3 October 2012 doubtless ratcheted up what was becoming a poor relationship between solicitors by suggesting that Courtwell's solicitors' letter was "disingenuous, ignoring much of what we have told you previously"; they repeated what they had said earlier and confirmed that they had other individuals at CBRE as valuers. There was a detailed reply the following day to which there was a reply on 19 October 2012 which made it clear that there would be a response to the dilapidations schedules within the next two weeks. The two weeks estimate was not achieved.
Courtwell issued its proceedings in the TCC on 15 November 2012. Ms Barwise QC for Courtwell, who has only recently become involved, together with counsel for Greencore, Miss Wicks QC, have jointly prepared a helpful chronology and list of those involved which I adopt in an adapted form below:
A. People involved
B. Chronology
| Role | Claimant | Defendant |
| Solicitors | (1) Mace & Jones (2) Shulmans: Michael Watson, | (1): Squire Sanders: W Lawrence (2) WH Lawrence: William Lawrence |
| Counsel up to trial | K Reynolds QC, | (1) T Harry (2) J Davey and J Wicks QC |
| Expert Building Surveyor | (1) Mr Lord, Beaumont Lord (2) Keith Firn, Datum Building Surveyor | (1) Chris Guy, CBRE (from Sep 2010-July 2013) (2) Oliver Thomas, CBRE (from July 2013) |
| Expert Quantity Surveyor | Andy Reynolds, Rider Levett Bucknall | Guy Higginbottom, Faithful & Gould |
| Expert Valuer Surveyor | Ian Clarke, Jones Lang LaSalle | Garry Hicks, CBRE Sarah Gardner, CBRE |
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