Jenkins v Young Brothers Transport Ltd
| Jurisdiction | England & Wales |
| Judge | MRS JUSTICE RAFFERTY DBE,Mrs Justice Rafferty |
| Judgment Date | 21 February 2006 |
| Neutral Citation | [2006] EWHC 151 (QB) |
| Docket Number | Case No: HQ03X00712 |
| Court | Queen's Bench Division |
| Date | 21 February 2006 |
[2006] EWHC 151 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Mrs Justice Rafferty Dbe
(Sitting with Master Wright and Gregory COX Esq as Assessors)
Case No: HQ03X00712
Alexander Hutton (instructed by Thomson Snell & Passmore) for the Claimant
Nicholas Orr (instructed by QM Solicitors) for the Defendant
Hearing dates: 6 th February 2006
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Mrs Justice Rafferty:
This is an appeal from the decision of Master Campbell who on 22 nd June 2005 determined the preliminary issue on detailed assessment in the Respondent's favour when he awarded to him his costs not only up to but after 1 st April 2002
That decision involved a finding that the Conditional Fee Agreement ("the CFA") made on the 7 th August 2000 between the Respondent and Girlings had been assigned firstly by Girlings to T G Baynes ("TGB") and subsequently by TGB to Thomson Snell & Passmore ("TSP"). On 22 nd August 2005 the Appellant was on the papers granted an extension of time and permission to appeal by Fulford J. The facts supporting the action need not concern us.
The chronology is as follows:
Aug 1999 Respondent injured
Aug 2000 CFA signed allowing a success fee of 58% but Respondent not liable to pay unless claim succeeded or the CFA ended prematurely. Respondent took out ATE (after the event insurance).
Sep 2000 Notice of funding served by Girlings
May 2002 TGB serve notice of funding
May 2002 Client care letter from TGB to Respondent including statement that CFA is to be assigned by Girlings to TGB
May 2002 Client care letter signed by Respondent
Aug 2002 Agreement containing purported assignment of CFA by Girlings to TGB stated to be effective from 8 April 2002
Aug 2002 Proceedings issued by Respondent
Dec 2002 Judgment entered for Respondent
April 2003 Agreement containing purported assignment of CFA by TGB to TSP stated to be effective from 1 April 2003
April 2003 Client care letter by TSP to Respondent referring to TSB acting under a conditional fee agreement. Notice of funding by TSP referring to the CFA
April 2003 Client care letter signed by Respondent
Oct 2003 Case settled on terms of damages of £445,000 and costs to be assessed on standard basis
The course of action which was taken by the solicitors was the result of Frances Pierce (FP) the solicitor who acted throughout on behalf of the Respondent, moving from Girlings to TGB and then to TSP.
Raised before us were two principal issues:
Where a solicitor makes a professional move, taking with her to her new firm a client on a CFA, can the CFA lawfully be assigned to the new firm or is the client obliged to enter into a new CFA with the new firm?
If the CFA cannot lawfully be assigned, does it follow that no costs incurred after the purported assignment can be recovered from the paying party?
Master Campbell found for the Respondent on the first, that the CFA was lawfully assigned, and that were he wrong then it did not follow that costs after the purported assignment must be disallowed.
The first is a question of whether the Master were wrong in law, the second turns upon his knowledge and experience as a specialist Costs Judge. Hence, before this court could interfere with his finding that there was no materially adverse effect on the interests of the client or the administration of justice, it would have to conclude that his was a decision "outside the generous ambit within which reasonable disagreement is possible."
The Master set out the salient facts as follows:
a) When FP moved from Girlings to TGB, if the client moved and had terminated the CFA Girlings could have elected to enforce payment of its basic charges and disbursements in full at that stage, despite the client having thought himself safe from payment unless he won. A lawful assignment of the CFA avoided this unhappy position because it continued in existence with the new firm;
b) The Respondent had been taken through all the consumer protection requirements in the CFA Regulations 2000 before he entered the original CFA with Girlings;
c) By letter dated 20 th May 2002 TGB made it clear to him that the terms of the original CFA continued in all respects, save that it was now with them, the new firm. A number of matters was explained once again in the letter and the Respondent signed it to show his agreement to its terms;
d) When FP moved from TGB to TSP the Respondent was again sent a detailed letter explaining the position, how he was to be charged and in what circumstances. Again he can have been left in no doubt that he was liable for costs to TSP on precisely the same basis as he had been at TGB and Girlings before. Again, he signed that agreement.
Master Campbell described the Appellant as advancing an "unabashedly and unashamedly technical objection" to the costs of TGB and TSP. The submission by Mr Alexander Hutton for the Respondent is that it was and remains entirely meritless and is simply a device to avoid liability under the costs order. Though this is arguably not relevant to issue 1, that the CFA was lawfully assigned, it is undoubtedly relevant to issue 2, that it did not in any event follow that costs after the purported assignment must be disallowed.
ASSIGNMENT
Mr Orr who did not appear below contends for the Appellant that there can have been no assignment and that what, if anything, took place was a novation, new agreements with TGB and with TSP. It is conceded that the CFA as between Mr Jenkins and Girlings was valid and complied with S58 Courts and Legal Services Act 1990 (as substituted by the S27 Access to Justice Act 1999) and the Conditional Fee Agreements Regulations 2000 (CFAR 2000). If however the Appellant can establish that the Respondent is not for whatever reason liable to pay TGB or TSP, then the indemnity principle would protect the Appellant from paying their costs notwithstanding its consent on 14 th October 2003 to an order to pay costs subject to detailed assessment.
Mr Orr accepted that but for the, as he puts it, purported CFA, TGB and TSP would arguably have been entitled to quantum meruit payment for work done irrespective of our findings on the validity or otherwise of the purported assignments. This route was not open to us and, as far as the costs incurred by TGB and TSP are concerned this is an all or nothing case. Either TGB and/or TSP are not entitled to recover their costs (including success fee) at all from Mr Jenkins (and consequently he is not entitled to recover those costs from the Appellant) or they are entitled to recover the whole of their costs from Mr Jenkins and consequently from the Appellant, subject to detailed assessment. It is open to us to find that the costs of TGB but not of TSP are recoverable.
Master Campbell considered the issue, necessarily not as extensively argued before him as before us, of whether the CFA could be assigned and after considering Rhone –v—Stephens [1994 2 AC 310] in particular, held that the assignments were valid. It is submitted by Mr Orr that Master Campbell's decision was wrong in law for the reasons set out in the Grounds of Appeal, in his skeleton argument and orally. We have considered the arguments afresh.
Mr Orr referred us to Treitel, The Law of Contract 6 th Edition 9 th Edition, pages 610 to 620, with emphasis upon the principle that contracts personal in nature and in particular involving personal skill and confidence cannot be assigned. In support of that contention he referred us to the judgment of Collins MR in Tolhurst v Associated Portland Cement [1902] 2 KB 660;
"The special right of ignoring altogether the consent of the person on whom the obligation lies …would seem in principle and in common justice to be confined to those cases where it can make no difference to the person on whom the obligation lies to which of two persons he is to discharge it".
The example Treitel gives of a publisher not being entitled to assign the benefit of an author's contract to write a book if the author relied on the publisher's skill and judgment as a publisher is illustrative and a point to which we shall return.
Both Counsel referred us to Rhone and to Tito –v—Waddell (No.2) [1977] 1 CH 106 and Mr Orr to Thamesmead –v—Allotey (Court of Appeal 13 January 1998). It is common ground that the benefit of a contract can be assigned but that, subject to limited exceptions, the general rule is that the burden cannot. The parties differed as to the extent of those exceptions. Mr Orr accepted that there was an exception to the general Rhone rule where the exercise of a right is expressly or impliedly conditional on the performance of a covenant and the performance of the covenant is related to the right. Mr Hutton submits that the benefit of a contract is a chose in action and thus capable of assignment under Section 136 of the Law of Property Act 1925 so long as the requirements of that Act are complied with, namely
(i) it must be absolute;
(ii) it must be in writing under the hand of the assignor;
(iii) express notice in writing thereof must be given to the debtor,
requirements Master Campbell found to have been satisfied. Mr Orr submits that the only chose in action which existed at the date of the Agreements was such debt as then existed in favour of the assigning parties and that the burden of a contract is not a chose in action capable of being assigned under Section 136 so that the Master was wrong in law in treating the burden of the...
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