Explora Group Plc v Hesco Bastion Ltd and Another
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE RIX,LORD JUSTICE JONATHAN PARKER,LORD JUSTICE LONGMORE,Lord Justice Rix,Lord Justice Longmore,Lord Justice Jonathan Parker |
| Judgment Date | 20 July 2005 |
| Neutral Citation | [2005] EWCA Civ 646,[2005] EWCA Civ 1137 |
| Docket Number | A2/2004/1887,Case No: A2/2004/1887 |
| Court | Court of Appeal (Civil Division) |
| Date | 20 July 2005 |
[2005] EWCA Civ 1137
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
COMMERCIAL COURT DIVISION
(MR JUSTICE SIMON)
Royal Courts of Justice
Strand
London, WC2
Lord Justice Rix
Lord Justice Jonathan Parker
Lord Justice Longmore
A2/2004/1887
MR NICHOLAS STRAUSS QC and MR MICHAEL JAMES (instructed by Walker Morris) appeared on behalf of the Appellant
MR CHARLES PURLE QC and MR McLEAN CHAPPLE (instructed by Pollards) appeared on behalf of the First Respondent
MR JAMES POTTS (instructed by CMS Cameron McKenna) appeared on behalf of the Second Respondent
The question now arises as to the instance of costs in this litigation both on appeal and at trial. The litigation was in issue terms conceptually complex and the forensic facts relating to the way in which the issues were taken, both at trial and on appeal, are also complex.
Doing the best we can and having in mind the CPR's learning that we should seek to achieve costs orders which do not raise unnecessary complexities for the costs judge, our dispositions are as follows. On appeal we would reflect the fact that the essential point on which Hesco Bastion won—the book debt point—was not formally raised until 3 February 2005 when an application to amend their notice of appeal was made. That means that Explora is the essential winner of the balance of the litigation, putting aside the book debt point, up to that point. We would reflect Explora's essential success, and the other matters to which we will refer in a moment, up to that point by making an allowance of 20 per cent in favour of Hesco up to that point. We assume for these purposes that the costs of both sides are essentially the same, and would therefore make an order of 60 per cent in favour of Explora up to 3 February 2005.
Coming to the position after 3 February 2005, and taking both appeal and cross-appeal for these purposes into account, we think that when account is taken of the very substantial issues upon which Explora succeeded on appeal—and without seeking to count up the number of issues—our view is that on the importance, meatiness and length of the issues Explora had considerable success on appeal. Also taking account of the fact that although, on the book debt point, Hesco is all but the ultimate winner of the appeal and cross-appeal, we nevertheless take account of the fact that although the book debt point means success for Hesco, as against Explora, it does not mean ultimate success in their resistance to liability under the DSCC contract.
We think the best way to reflect all these factors, but also the fact that ultimately Hesco did succeed on appeal, is to make a very substantially discounted award of costs in its favour; and the figure we have in mind is 20 per cent. So, on appeal, Explora's costs 60 per cent up to 3 February 2005 and thereafter Hesco's costs 20 per cent after that date. It is accepted that the costs of today should be Explora's costs in any event. That leaves open the question of costs of 26 May 2005 which we have not discussed as an individual item. I would propose, subject to my brethen's view, that costs of 26 May should follow our disposition of costs after 3 February.
Yes.
Yes.
Coming to the costs of trial, because of the late taking of important points on both sides (but not for these purposes, we accept, the book debts point which although not clearly highlighted was within Hesco's pleadings), the judge made an order of no order for costs up to 4 June 2004. We bear in mind that order but also Explora's ultimate—but, for reasons we have already expressed, limited—success in the overall proceedings. To deal with all these points in the best way we can, we think we should apply the same percentage of costs in favour of Hesco as it receives on appeal for the period after 3 February 2005, that is to say 20 per cent of its costs. So costs of proceedings down to end of the trial, 20 per cent in favour of Hesco.
I think that deals with everything to do with costs.
( Short discussion)
We are agreed that we will make no order for repayment today. There is liberty to apply. I have made clear—and, speaking now for the court, we make clear—that the parties should seek to agree, in outline terms, what the effect is of our costs dispositions so that if the parties can agree, if it be the case, that a sum paid on account amounts to an over-payment and should be repaid that can be dealt with consensually without concerning the court again. You may want to have it covered in some agreed order. If you cannot agree and you need to apply to the court under the liberty to apply, you have that liberty. That deals with repayment.
MR PURLE: I understand the order that your Lordship made in relation to the appeal costs is a general order relating both to appeal and cross-appeal.
Yes. It is.
MR PURLE: The first instance costs, there is no distinction in relation to costs before June 2004 and costs after.
LORD JUSTICE RIXNo. We have taken all that into account in our overall figure.
MR PURLE: Your Lordship dealt with costs down to 3 February and costs thereafter. I take the first stage, it includes 3 February.
The first stage includes 3 February, yes.
( Mr Purle QC made application for permission to appeal which was refused)
( Short discussion)
[2005] EWCA Civ 646
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
THE HONOURABLE MR JUSTICE SIMON
Lord Justice Rix
Lord Justice Jonathan Parker and
Lord Justice Longmore
Case No: A2/2004/1887
Mr Nicholas Strauss QC & Mr Michael James (instructed by Messrs Walker Morris) for the Appellant
Mr Charles Purle QC & Mr Malcolm Chapple (instructed by Messrs Pollards) for the Respondent
Mr James Potts (instructed by Messrs Cameron McKenna) for the 2 nd Defendent on 15 July 2005 only
Introduction
This appeal is principally concerned with the terms on which a marketing agent, now in liquidation, is entitled to be remunerated for its work in achieving what may be described as an entry in the United States armed forces' procurement catalogue. The principal, a manufacturer of gabions, a form of state of the art, lined, wire mesh bag or basket which when filled with local materials such as rock, clay, earth or sand can be used in fortifications or military engineering, says that nothing is due beyond the date when the agent, having gone into receivership, went out of business and assigned, or purported to assign, the relevant contracts to a phoenix company (30 April 2002). The assignee, who is the claimant in these proceedings, says that it is entitled to (the agent's 15% share of) the fruits of the procurement contract which the agent negotiated with the US government, at least down to the end of that contract's five year term (18 February 2003) and, further, that it remained and remains entitled to the fruits of that contract's extension or extensions and even renewal. The principal says that the agent was not entitled to any commission save on specific orders which the agent obtained before it ceased business; that neither the US government contract itself nor benefits under it were assignable; and that even if, contrary to its primary case, there was any accrued right to commission on future orders in place before the agent's failure and the consequential termination of the agency relationship, any such rights had been retained as "book debts" by the agent's receivers, with whom it had already achieved a total settlement of all possible outstanding liabilities.
When the US procurement contract had been made on 19 February 1998, it was anticipated that it might generate sales in its first year of some $600,000. However, the advent of war, above all in Afghanistan and Iraq, has transformed the situation, and the principal's sales of gabions to the US government has grown exponentially. A single order in December 2003 was for over $12 million. The litigation is thus of considerable importance to the parties.
At trial, Mr Justice Simon held that the US procurement contract had been entered into by the principal in trust for the agent, that the agent was entitled to its 15% share of the contract's fruits from that time, irrespective of whether any individual order had been obtained by or with the help of the agent, that those fruits had been validly assigned to the assignee (and thus not compromised by the principal's settlement with the agent's receivers) and that therefore the assignee was entitled to the agent's share from the time of the assignment (30 April 2002) down to the end of the five year contract (18 February 2003). He also held that neither the agent nor the assignee was entitled to any other commission, but he did not specifically address the US procurement contract's extension or renewal, and, indeed, may not have known about them.
On this appeal, both the principal (who is the appellant) and the assignee (the respondent)...
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