Heathfield International LLC v Axiom Stone (London) Ltd
| Jurisdiction | England & Wales |
| Judge | Simon Barker |
| Judgment Date | 04 May 2020 |
| Neutral Citation | [2020] EWHC 1075 (Ch) |
| Court | Chancery Division |
| Docket Number | Claim No F30BM013 |
| Date | 04 May 2020 |
[2020] EWHC 1075 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN BIRMINGHAM
BUSINESS LIST (ChD)
HIS HONOUR JUDGE Simon Barker QC
Claim No F30BM013
Representation
Martin Budworth instructed by The Wilkes partnership Solicitors for the Claimant
Natasha Dzameh instructed by MB Solicitors for the Second Defendant (The First Defendant was not concerned in this application)
ON PAPER JUDGMENT ~ SECOND DEFENDANTS' APPLICATION AFTER LATE FILING OF A COSTS BUDGET
I direct that pursuant to CPR 39APD6 paragraph 6.1 no tape recording shall be made of this judgment and that copies of this version shall stand as authentic and be treated as the official transcript.
HIS HONOUR JUDGE Simon Barker QC:
This action was begun on 6.8.18. The Claimant, Heathfield International LLC, (‘C’), as legal or equitable assignee of Quantum Medical Limited (‘QML’), claims against the First Defendant, Axiom Stone (London) Limited, (‘D1’) a sum in excess of £260K allegedly owing in respect of invoices for the provision of medico-legal services pursuant to a written contract between QML and D1, alternatively as a reasonable fee for services rendered, plus interest and compensation under the Late Payment of Commercial Debts (Interest) Act 1998 totalling a further £100k odd at that time. The claim against the Second Defendant, Medecall Limited, (‘D2’) is an alternative and secondary claim arising from D1's denial of the claim and assertion that D2 is the relevant contracting party. D2 filed a Defence and Counterclaim dated 15.2.19. The Defence was drafted and served by D2's solicitors who are MB Solicitors.
On 20.3.19 the court issued a Notice of Proposed Allocation to the Multi-Track as a Chancery case. Paragraph 4 of that Notice provides
“ In accordance with CPR 3.13 all parties, except litigants in person, must file and exchange budgets
…
(b) … not later than 21 days before the first case management conference”.
On 8.4. 19 D2 filed a Directions Questionnaire stating, at section I, that it intended to make a security for costs application. The draft directions filed with the Questionnaire made no reference to costs budgeting.
On 29.7.19, following a hearing at which D2 was represented by counsel, a district judge sitting in the Business and Property Court (‘BPC’) made an order on a Request for Further Information made by D2 of C.
On 7.10.19 the Court issued a Notice of Costs and Case Management Conference (‘CCMC’) listing the CCMC for hearing in the BPC on 10.12.19 with a time allowance of 2 hours. The notes accompanying that Notice state at paragraph 3
“ Budgets – These must be filed by the date specified in CPR 3.13”
and give further explanatory information about the court's powers and the approach to be taken to preparing budgets.
In relation to the filing of budgets CPR 3.13 provides
“(1) Unless the court otherwise orders, all parties except litigants in person must file and exchange budgets—
….
(b) … not later than 21 days before the first case management conference”.
Based on the court's directions budgets were required to be filed by 18.11.19.
C and D1 filed and exchanged budgets on 18.11. 19. D2 did not file a budget nor did it seek an extension of time or other order releasing it from the obligation to file and exchange by 18.11.19.
By an order made on and dated 6.12.19, but sealed and issued on 17.12.19, the court vacated the CCMC listed for 10.12.19 and relisted it for 30.4.20 allowing a full day so that the hearing could also accommodate the determination of security for costs applications which D1 and D2 had intimated they intended to issue. The making of the order was communicated to the parties prior to 10.12.19. The recitals to this order state that ( 1) D1 and D2 had confirmed their intention to make applications for security for costs and (2) the parties had agreed that those applications should be heard at the same time as the CCMC.
The evidence filed by the parties does not state or show the date when the parties jointly approached the court to request that the CCMC be adjourned. D2's solicitor, Mr Mobin Hussain, says, at paragraph 12 of his witness statement dated 27.4.20, that
“ It should be noted that [D2] did not file a costs budget (Precedent H) as the parties had agreed for the CCMC to be relisted”.
That is somewhat ambiguous. On one reading it implies that the agreement had been made before the filing date (18.11.19) and communicated to the court in good time for the court to vacate the CCMC and, thereby, the filing obligation; on another, it is an explanation why no later application was made for relief from the automatic consequence of CPR 3.14 which leaves the original failure to comply unaddressed.
CPR 3.14 provides
“ Unless the court otherwise orders, any party which fails to file a budget despite being required to do so will be treated as having filed a budget comprising only the applicable court fees”.
Mr Hussain's evidence is challenged by a witness statement of Mr Nishad Nijamali, a director of C, dated 29.4.20 made in response to D2's application for relief from sanctions for not filing a costs budget. At paragraph 6 Mr Nijamali says that the application to adjourn the CCMC and subsequent order were made after the deadline (18.11.19) which is why C and D1 filed and served their budgets.
Mr Hussain's evidence sits uncomfortably with a letter dated 23.4.20 from C's solicitor, Mr Andrew Garland of The Wilkes Partnership LLP, to D2's solicitor, Mr Hussain. I am not aware of any detailed answer to this letter. The letter was sent as a covering letter to C's Precedent R response to D2's budget, eventually served by D2 on 14.4.20. Mr Garland's letter contains the following narrative setting out D2's (in)activity in relation to budgets (typographical errors uncorrected)
“ Originally the CCMC was listed on 10 December 2019 at 2pm. Accordingly costs budgets were due to be served by 18 November 2019. Both the Claimant and the First Defendant produced, served, and lodged with the Court costs budgets within the prescribed timeframe. The Claimant also served its precedent H on the Second Defendant's solicitors in time. The Claimant and the First Defendant thereafter complied with the Court budgeting process with precedent R's etc. The Second Defendant neither served its Precedent H on time, asked for an extension nor applied for an extension of time, within time and failed to apply for relief form sanction out of time.
When the CCMC was re-listed for the 30 April 2020, any costs budgets / revised costs budgets were again due to be served by 8 April 2020. Both the Claimant and the First Defendant complied with the deadline, albeit in the first Defendant's case they wrote within the stipulated timescale confirming their budget was unchanged. The Second Defendant's solicitors on 8 April 2020 confirmed that it would accept service by email of any precedent H and the Claimant served its Precedent H on the Second Defendant. The Second Defendant's solicitors wrote, asking as to whether the Claimant would accept service of its precedent h budget by email. The Claimant confirmed that it would but its rights to object to the same on the basis of late service were fully reserved. Despite this the Second Defendant's budget was still not served, in accordance with the timescale ordered by the Court.
The Second Defendant's Precedent H was only sent by email on 14 April 2020, 6 days after its deadline. Again, neither in that occasion the Second Defendant asked for an extension or applied for an extension of time, not has applied for and been granted relief from sanction. It has provided no explanation for its complete disregard for court procedure”.
C's solicitor concluded the letter by stating that C's Precedent R form relating to D2's budget was produced without prejudice to the contention that D2 should not be entitled to costs.
However, further relevant light appears from the court file. It appears from documents on the file that the request to adjourn the CCMC was made by an application and draft consent order delivered by hand to the court on 4.12.19 under cover of a letter from C's solicitor. This casts further doubt on the explanation given in evidence by Mr Hussain.
It is not appropriate to attempt to reconcile or to decide where the truth lies between this conflicting material at an interim hearing, particularly one which, by consent, is to be decided on paper. However, in the light of the date of the lodging of the draft consent order seeking vacation of the CCMC (4.12.19) it is fair to regard Mr Hussain's evidence as less than complete and open to doubt.
D2's security for costs application is dated 6.2.20 as is the supporting witness statement. This was some 10 months after the intimation in the Directions Questionnaire (8.4.19) that a security for costs application would be made. It is not clear on the information before me when the application was sent to the court for issue. By a Notice of Hearing dated 10.3.20, but not issued until 1.4.20, the hearing of D2's security for costs application was confirmed for 30.4.20 and directions were given for service and filing of evidence in response 21 days before the hearing and evidence in reply 14 days thereafter. Given a hearing date of 30.4.20 it was incumbent on D2 to serve its application and supporting evidence promptly. In the event the application and supporting evidence were not served until 15.4.20. This obviously thwarted the court directed timetable.
In the meantime, and as is apparent from the extract from Mr Garland's letter of 23.4.20 cited above, on 8.4.20, 22 days before the CCMC, C again served its budget on D2. It appears from Mr Garland's letter that on 8.4. 20 D2 was...
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