Eurocom Ltd v Siemens Plc
| Jurisdiction | England & Wales |
| Judge | Sir Vivian Ramsey |
| Judgment Date | 12 February 2015 |
| Neutral Citation | [2015] EWHC 685 (TCC) |
| Date | 12 February 2015 |
| Docket Number | Case No: HT-14250 |
| Court | Queen's Bench Division (Technology and Construction Court) |
[2015] EWHC 685 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Sir Vivian Ramsey
Case No: HT-14250
Ms Serena Cheng (instructed by Wheelers LLP) for the Claimant
Ms Fionnuala McCredie QC & Mr Paul Bury (instructed by Mr Suber Akther, Siemens PLC Legal Department) for the Defendant
Approved Judgment
Introduction
In these proceedings, I handed down judgment on 7 November 2014, in the absence of the parties. The parties have been unable to agree the cost consequences following that judgment and this judgment is concerned with three cost issues. The first issue is whether the Defendant ("Siemens") should have its costs against the Claimant ("Eurocom") on an indemnity basis; the second issue is whether there should be a proportionate costs order to reflect the issue of breach of natural justice on which Siemens did not succeed and the third issue is what sum should be allowed by way of summary assessment of those costs.
The basis of assessment
I turn first to the question of whether the costs should be assessed on the indemnity basis. Miss Fionnuala McCredie QC, who appears with Mr Paul Bury on behalf of Siemens, submits in summary that the conduct of Eurocom, including the conduct of Knowles acting on their behalf, was so unreasonable as to justify an order for indemnity costs. She relies on the conduct of Mr Giles in completing the RICS nomination form for the nomination of an adjudicator, which in my previous judgment at paragraph 65 I held raised a very strong prima facie case of fraudulent misrepresentation. She also relies on the conduct of Knowles and the solicitors subsequently instructed in failing to deal with the enquiries made about the RICS nomination form and the basis upon which it was said that there was a conflict.
Ms Serena Cheng, who appears on behalf of Eurocom, submits that the grounds put forward by Miss McCredie are not sufficient to justify an order for indemnity costs. She submits that the conduct of Mr Giles forms no part of the conduct of Eurocom in these proceedings. She also submits that there has been no finding of fraud and that there is nothing in Eurocom's conduct of these enforcement proceedings that takes this application out of the norm so as to justify an order for indemnity costs.
I now turn to consider those arguments.
The principles on which indemnity costs are to be awarded are sufficiently well-established. They have recently been referred to in this court by Akenhead J in Savoye & Savoye Limited v Spicers [2015] EWHC 33 TCC.
I summarised those principles in BSkyB v HP Enterprises [2010] EWHC 862 TCC at [35] and I consider that, in the light of the further authorities cited, those principles still hold good. There I stated:
"Whilst it is not necessary for there to be a moral lack of probity or conduct deserving moral condemnation to justify indemnity costs, there must be something in the circumstances to take the case out of the norm. That may be either because of the nature of the allegations in the case or because of other conduct of the relevant party: see Reid v Minty [2002] 1 WLR 2800; Kiam v MGN Ltd [2002] 2 All ER 242; Excelsior v Salisbury Ham Johnson [2002] EWCA Civ 879."
Whilst in Simms v The Law Society [2006] 2 Costs LR 245 at [16], Carnwarth LJ (as he then was) explained that the court will principally be concerned with the losing party's conduct of the case rather than the substantive merits of the party's position, as stated in BSkyB v HP Enterprises at paragraphs [37] to [40], in cases where fraud is alleged and established, the court may take that conduct into account.
In this case Eurocom pursued an application for summary judgment to enforce an adjudicator's decision where there was, as I found, a strong prima facie case that the adjudicator's appointment was a nullity because of a fraudulent misrepresentation made in the RICS nomination form by those acting on behalf of Eurocom. The position is, therefore, that this is a case where, for the purpose of summary judgment based on an adjudicator's decision, a party has to assess the merits of the application. I consider that, in the context of summary judgment, a strong prima facie case of fraud is a matter which takes a case such as this out of the norm. There are not many, if any, cases of adjudication enforcement which raise that sort of contention.
But that on its own may not be enough for, as I held in BSkyB v HP Enterprises at [45] the underlying fraudulent conduct of an employee may not justify indemnity costs. In this case, however, the conduct which gave rise to the strong prima facie case of fraud arose in the conduct of the adjudication not the underlying merits of the claim. In addition, despite the statement in the nomination form being drawn to the attention of Knowles first in January 2014 and then again in February 2014, there was no response by them to the proper enquiries as to the basis of the conflicts of interest relied on in the nomination form. I consider that this strongly indicates that, internally, the fact that wrong information had been put in the RICS nomination form was realised by those acting on behalf of Eurocom. That was something which, in my judgment, called for an answer but it was not given an answer because there was no proper answer or explanation that could be given.
When solicitors, Wheelers, were instructed by Eurocom in May 2014, the same point was put to them but again it was not responded to. What is more, in the witness statement by the solicitor supporting the summary judgment application, there was no mention of the nomination point which had been drawn to his attention as had the earlier correspondence.
It was only after the court, on its own initiative, in the order of 28 July 2014, required Eurocom to state what the alleged conflict was, that Mr Giles produced his first witness statement from...
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