Littlestone and Ors v MacLeish
| Jurisdiction | England & Wales |
| Judge | Lord Justice Briggs,Lady Justice Gloster,Lady Justice Black |
| Judgment Date | 10 March 2016 |
| Neutral Citation | [2016] EWCA Civ 127 |
| Docket Number | Case No: A2/2015/0383 and A2/2015/0508 |
| Court | Court of Appeal (Civil Division) |
| Date | 10 March 2016 |
[2016] EWCA Civ 127
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE COUNTY COURT SITTING AT LONDON
HHJ Deborah Taylor
3CL20079
Royal Courts of Justice
Strand, London, WC2A 2LL
Lady Justice Black
Lady Justice Gloster
and
Lord Justice Briggs
Case No: A2/2015/0383 and A2/2015/0508
Edward Pepperall QC and Alan Tunkel (instructed by Prettys) for the Appellants
Nicholas Bacon QC and Adam Walker (instructed by Edwards Duthie Solicitors) for the Respondent
Hearing dates: Tuesday 9 th February 2016
Introduction
This appeal and cross-appeal raise two short points arising from the decisions as to costs embodied in the Order of HHJ Deborah Taylor made in the County Court at Central London on 5 February 2015, following the trial of a claim by Terence Nicholas Macleish, as landlord, against his colleagues in a solicitors' partnership, as tenants, following the termination of a lease of office premises in Snaresbrook, London E11. The claim was for damages for breach of the defendants' repairing obligations, originally quantified in the Claim Form in the sum of £74,820.93 plus interest.
After a full trial, the judge awarded the claimant damages of £48,409.40 together with interest, and agreed service charges, with a small deduction for an agreed insurance premium rebate. She ordered the defendants to pay the claimant's costs of the proceedings, on the standard basis.
Both sides have appealed the judge's order. The defendants (as appellants) say that the claimant failed to do better than the amount reflected in their Part 36 offer made on 13 February 2013 within days of service of the Claim Form, so that they should have been awarded their costs from 13 or 15 March 201The claimant seeks to uphold the judge's award of costs in his favour, but cross-appeals on the ground that the judge should have made the award on the indemnity basis, so as to reflect his contractual entitlement to an indemnity for costs incurred in the recovery of sums due from the defendants as tenants, pursuant to clause 2.12.2 of the Lease.
Save only that the claimant's cross-appeal depends upon his successfully resisting the defendants' appeal, the two issues thus raised are entirely independent from each other, and I propose to deal with them separately.
The Part 36 Issue
The defendants vacated the premises when the Lease terminated at the end of March 2012. After an inspection by his surveyor, Mr Dadd, the claimant served a Schedule of Dilapidations on the defendants in April 2012. Remedial works were carried out by the claimant between August and December 2012. Thus the claimant was able to, and did, quantify his claim for damages for the defendants' breach of repairing covenants in the Lease by reference to amounts invoiced to the claimant by his builders for the making good of each item alleged to have been in disrepair.
The claimant therefore annexed to his Particulars of Claim, served with the Claim Form on 30 January 2013, a fully costed Schedule of Dilapidations containing some 83 items, supporting his overall claim for £74,820.93 damages plus interest. This method of quantification of the claim followed the established principle that a landlord's cost of repair is usually the best measure of his loss occasioned by breach of a tenant's repairing covenant.
On 13 February the defendants served their Part 36 offer by DX. It was in standard form, and its relevant parts for present purposes, stated as follows:
"The Defendants offer to pay the Claimant the sum of £35,000 in full and final settlement of this claim.
Payment will be made in full within 28 days of the Defendants receiving written acceptance of this offer and an invoice from the Claimant.
This offer is intended to have the costs consequences set out in Part 36 of the Civil Procedure Rules.
The period within which the Defendants will be liable to pay the Claimant's costs in accordance with Rule 36.10 if the offer is accepted, is 28 days from the date of service of this letter ("the relevant period")."
Deemed service of the Part 36 offer occurred on 15 February, so that the relevant period was due to expire on 15 March.
Meanwhile, on 1 March, the defendants served their Defence. In paragraph 34 they admitted liability in the aggregate amount of £17,504, broken down by reference to the 17 subheadings in paragraph 25 of the Particulars of Claim, and further broken down by reference to an annexed copy of the Schedule of Dilapidations in which, item by item, the amounts admitted were specified. Thus the aggregate amount admitted was made up both from items in the claim which were admitted in full, and items which were admitted in part. The claim for Mr Dadd's fee was admitted in part, by reference to the same formula (12.5% of the costed works) as claimed, but in a smaller amount because of the defendants' limited admissions as to the works required.
On 7 March the defendants wrote to the claimant in the following terms:
"We have been instructed to arrange for payment of £17,504.00 to be remitted to you in this matter pursuant to the terms of the Defence.
Please let us have your firm's details in order that payment can be made electronically."
The claimant replied on the same day, providing his banking details, and continuing:
"For the avoidance of any doubt we are instructed to point out that the payment you propose to make will be accepted by our client on account of his claim only, since of course the figure in your Defence is disputed and we shall be serving a Reply when we file the Claimant's Allocation Questionnaire with the court."
On 12 March, without further correspondence, the defendants duly made payment of £17,504.00 to the claimant's specified account. The relevant period specified in the defendants' Part 36 offer ended three days later.
The issue with which the court is now concerned surfaced only in October 2013, when the claimant made a Part 36 offer to accept the sum of £54,000 inclusive of interest and VAT but less the £17,504 already paid on account. The defendants responded, on 14 October, by suggesting that this offer was only £1,496 apart from their own Part 36 offer, it being implicit in their response that the £35,000 thereby offered had been available for acceptance in full, without the claimant having to give credit for the £17,504 already paid by the defendants pursuant to their admissions. The claimant challenged this approach as disingenuous and, in due course, the judge found that the defendants had not genuinely intended that their admitted payment could be aggregated with their Part 36 offer of £35,000, but rather had taken advantage of an ambiguity, following the claimant's Part 36 offer in October.
Thus identified, the issue continued to fester away, bedevilling attempts to settle, so that the proceedings went to a full 5-day trial in January 2014, by which time the parties had, as so often occurs in hard fought disputes about relatively modest amounts, incurred costs out of all proportion to the value of the underlying issues. The judge's detailed judgment on the issues amounted to a finding that the damages payable for the dilapidations found to have been proved amounted to £48,409.40. She adjourned the questions of interest and costs for further argument which took place on 2 December 2014, following which she handed down a further judgment on 20 December (amended in January 2015), awarding interest of £3,091.90, so that the aggregate of damages and interest was £51,501.30. She adjusted the judgment sum upwards to £55,463.11 by adding an agreed amount for service charges of £4,112 and deducting an agreed insurance premium rebate due from the claimant to the defendants in the sum of £150.19.
By this time, the defendants had, shortly after receipt of the judgment on the main issues, paid a further £36,314.52 to the claimant. Paragraph 2 of the judge's Order recited the claimant's receipt of the two sums of £17,504 and £36,314.52 and directed the defendants to pay the claimant the balance of £1,644.59.
The judge rejected the defendants' argument that the Part 36 offer should be aggregated with the £17,504 payment following admissions for the purpose of deciding whether the claimant had obtained a judgment more advantageous than the Part 36 offer, and ordered the defendants to pay the claimant's costs of the action, to be assessed on the standard basis.
It was common ground in this court that, for the purpose of assessing the value of the judgment as at the relevant date (that is 15 March 2013), the addition of interest accrued until then upon the damages of £48,409.40 produces a gross value of £49,534.79. Plainly, if the Part 36 offer is to be aggregated with the admissions payment (in the sum of £52,504) the claimant's judgment was less advantageous than the defendants' offer. Conversely if as the judge held the Part 36 offer stood alone, the claimant's judgment was substantially more advantageous, within the meaning of Part 36.14(1)(a).
Analysis
The defendants have, at various times, put their case in relation to the Part 36 issue in three main ways. In the forefront of his submissions on this appeal Mr Edward Pepperall QC, supported by Mr Alan Tunkel advanced this analysis:
The best way of addressing the Part 36 issue was to ask what payment would have been due to the claimant if he had accepted the Part 36 offer on or after 15 March, following the making of the admissions payment on 12 March.
Part 36 is a statutory code, not to be subjected to contractual analysis, such as implied revocation, and...
To continue reading
Request your trial
-
Euro-Asian Oil SA v Credit Suisse AG
...The upshot, he submits, is that indemnity costs should be awarded. 3 Mr Swaroop also invokes authority. He relies in particular to Littlestone v Macleish [2016] EWCA Civ 127 [2016] 1 WLR 3289 and quotes paragraph 41 of the judgment of Briggs LJ, which was agreed to by Black and Gloster LJJ.......
-
Criterion Buildings Ltd v McKinsey & Company Inc. (United Kingdom)
...attributable to that lease will be modest. 5 The claimant relies on the decision of the Court of Appeal in Macleish v Littlestone [2016] 1 WLR 3289, where a decision as to the assessment of costs on the standard basis was in issue. Briggs LJ (with whom Black and Gloster LJJ agreed) said: “......
-
IsZo Capital LP v Nam Tai Property Inc. et Al
...9 [2020] BVIHC (COM) 142 of 2019, at [11]. 10 [2021] BVIHCV 2021/0210. 11 BVIHC( COM) 2020/0055. 12 [1997] 1 EGLR 13. 13 [2016] EWCA Civ 127. 14 BVIHCMAP ...
-
Zhongzhi Capital (HK) Company Ltd v Geopay Holding Ltd
...2020, unreported 10 [2012] (2) CILR 1 11 [2002] EWCA Civ 879, 12 [2002] 2 All ER 242 13 [ 2010(1) CILR 478] 14 (2002) 1 WLR 953 15 [2016] EWCA Civ 127. 16 CPR r ...
-
Indemnity Costs Awarded Based On The Contractual Terms Of A Contract Providing For 'All Reasonable Costs'
...and held that would extend to the costs of any litigation. Moulder J saw no reason to depart from Briggs LJ in Macleish v. Littlestone [2016] EWCA Civ 127 (Macleish) where the Court of Appeal ordered indemnity costs in reliance upon a similar contractual provision. The Court declined to fol......