John and Others v Price Waterhouse (A Firm) and Another
| Jurisdiction | England & Wales |
| Judgment Date | 12 July 2001 |
| Neutral Citation | [2001] EWHC 391 (Ch),[2001] EWHC 438 (Ch) |
| Date | 12 July 2001 |
| Court | Chancery Division |
CHANCERY DIVISION
Before Mr Justice Ferris.
Company - claim against auditor by company which appointed him - indemnity of auditor in successfully defending claim
The claim of a director or auditor of a company to an indemnity for all costs incurred by him in successfully defending a claim brought against him by the company by which he was appointed did not accrue until judgment in the proceedings brought against him was given in his favour.
Since the right to an indemnity had not been in issue in earlier proceedings it followed that the court could only award indemnity costs in favour of that director or auditor by reason of the right to an indemnity contained in Table A, scheduled to the Companies (Tables A to F) Regulations (SI 1985 No 805), where it was satisfied that there was no possible defence to a new, unpleaded claim.
The director or auditor nevertheless remained free to bring proceedings against the company claiming the difference between a full indemnity and costs recovered on the standard basis as a sum to which he was contractually entitled under the terms of his appointment.
Mr Justice Ferris so held in a reserved judgment in the Chancery Division, inter alia, dismissing the claim of the first and second defendants, Price Waterhouse (a firm) and Mr Andrew Mansel Haydon, that the second, third and fourth claimants, Happenstance Ltd, William A. Bong Ltd and J. Bondi Ltd, pay on the indemnity basis costs incurred in defending against the claimants' unsuccessful claim for damages for professional negligence against the defendants.
Frere Cholmeley and Frere Cholmeley Bischoff, the claimants' solicitors at the material time, were joined to the earlier proceedings as Part 20 defendants to the first defendant's claim for a contribution or indemnity against the primary claim.
Mr Jonathan Hirst, QC and Mr Neil Calver for the claimants; Mr Cyril Kinsky for Price Waterhouse; Mr Andrew Fletcher for Mr Haydon; Mr Michael Kallipetis, QC and Mr Simon Monty for Frere Cholmeley and Frere Cholmeley Bischoff.
MR JUSTICE FERRIS said that the contention of Price Waterhouse was that, judgment having been given in their favour in proceedings concerning their conduct as auditors of the claimant companies, they were entitled to be indemnified out of the assets of each of those companies against the costs incurred in defending the proceedings.
That was...
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