Mark Forstater and Another v Python (Monty) Pictures Ltd and Another
| Jurisdiction | England & Wales |
| Judge | Mr Justice Norris |
| Judgment Date | 29 November 2013 |
| Neutral Citation | [2013] EWHC 3759 (Ch) |
| Court | Chancery Division |
| Date | 29 November 2013 |
| Docket Number | Case No: HC11C01394 |
[2013] EWHC 3759 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
The Rolls Building
Fetter Lane
London
EC4A 1NL
Mr Justice Norris
Case No: HC11C01394
Tom Weisselberg & Mark Vinall (instructed by Fladgate LLP) for the Claimants
Amanda Michaels (instructed by ENT Law) for the First Defendant
Edmund Cullen QC (instructed by Lee & Thompson) for the Second Defendant
Hearing dates: 28 & 29 October 2013
I must now address the issues arising in relation to costs in this case. I suspect that these are every bit as important as the underlying issues in the case itself.
The familiar starting point is the provisions of CPR 44.2. I have reminded myself of their terms. In the present case important factors will be:-
a) The need to have regard to all the circumstances:
b) The conduct of all of the parties before as well as during the proceedings (and in particular the extent to which they followed any relevant pre-action protocol):
c) The extent of any success:
d) Whether it was reasonable to pursue a particular issue:
e) If an order is to be made which takes into account a degree of success on an issue or the manner in which that issue was pursued, then whether it is possible to avoid making orders as to costs in relation to a distinct part of the proceedings by instead making an order in relation only to a portion of a party's costs or in relation to costs for a particular period.
In approaching this task I adopt as my own the views expressed by Mr Justice Sales in F & C Alternative Investments (Holdings) Limited v Barthelemy (Costs) [2011] EWHC 2807 (Ch) at paragraph 5, expressed in these terms:-
"In devising suitable costs orders which meet the justice and merits of a particular case… there is considerable value in attempting to keep things as simple as is reasonably possible, in order to minimise the detail and complexity (and hence the time and costs) involved in both arguing about what costs order should be made and, once made, of arguing about how they should be implemented".
In the context of litigation involving relatively indeterminate legal standards which raised a plethora of issues and sub-issues he expressed the view that:-
"A fairly broad brush approach is likely to meet the overall justice of the case while keeping the costs of arriving at a fair result within proportionate and reasonable limits".
The principle seems to me to be one which it is desirable to adopt even in a case of modest factual or legal complexity. But it is not a warrant simply to pluck figures or percentages from the air. A principled approach is still required, and any exercise of discretion must be properly grounded.
I approach the exercise of that discretion bearing in mind the summary of the relevant principles given by Mr Justice Jackson in Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd (No.7) [2008] EWHC 2280 (TCC) at paragraph 72. These principles fall to be applied in the present case in the context of a multi-party action pursuing multiple causes of action.
The first step is to endeavour to identify the overall winner. For this purpose it is necessary to separate out what were in effect two combined cases. The first was the case about what was due under the MF Agreement. That was fought between Mr Forstater and MFPL on the one side and PMP on the other. There the overall winner was MFPL. Mr Forstater was unsuccessful. PMP was unsuccessful. The second case concerned what deductions would properly be made by NFTC (the description I used for the Second Defendant Freeway Cam (UK) Ltd) from gross receipts before distribution. This was fought out between Mr Forstater and MFPL on the one hand and PMP (accused of breach of contract) and NFTC (accused of breach of trust) on the other. In this claim PMP and NFTC were the overall winners. I will treat these combined cases separately.
I deal first with the case centred upon the MF Agreement. I take as my starting point that as the overall winner MFPL is entitled to an order for costs. But I must consider whether there should be a departure from that starting point.
PMP submits that there is an aspect of conduct that bears on the exercise of discretion. At the start of the trial Mr Forstater/MFPL made an application to amend the Particulars of Claim to bring the pleaded case into line with that recounted in the evidence of Mr Forstater. It did not add any new cause of action. It provided different particulars of general events already pleaded. This enabled him to avoid criticism that the case verified in the Particulars did not accord with the case verified in the witness statement. But it exposed him to the criticism that the demonstrable change in story undermined his credibility. The amendment took time to argue and allow. It affected the trial in providing additional material for cross-examination. Had the correct case been pleaded from the outset it would not have had any impact upon whether the case proceeded to trial or not. In these circumstances the late amendment is a matter to put into the scale when all the circumstances have to be weighed: but it is not a factor that of itself calls for specific adjustment of the costs order (as was done in Gold v Mincoff Science & Gold [2004] EWHC 2036 (Ch)).
MFPL was not an original party to the action. It was joined as an additional Claimant by order dated 23 April 2012 which contained an undertaking by MFPL:-
"to be jointly and severally liable with [Mr Forstater] for any costs… orders made in [the] proceedings".
PMP submits that MFPL is only entitled to an order for costs from and after 23 April 2012 and (more faintly) that PMP is entitled to its costs up to that date from Mr Forstater. MFPL says that this produces an unjust result. It submits that it was only allowed to join the action on the footing that it became jointly and severally liable for all costs orders made in the action, and that when it joined it did so upon the terms of an agreement negotiated with Mr Forstater that it would pay any existing legal bills for which he was liable. In answer to the question of why its voluntary assumption of responsibility for Mr Forstater's existing legal bills should be visited upon the unsuccessful Defendants, Counsel for MFPL submitted that it was not so much a voluntary assumption of responsibility as a commercial bargain to secure the benefit of the work that had already been undertaken. That argument is sound only in relation to work which remained of real value in the action going forward from 12 April 2012. It is not a sound argument in relation to work actually undertaken by Mr Forstater which it had been established by 23 April 2012 would not be of use and was (with the hindsight then available) unnecessary; nor is it a sound argument in relation to work which the late amendment showed to have been misdirected.
In dealing with this issue one must remember that dealing with costs is a two stage process. There is the order directing what costs are recoverable: and there is the order which assesses the amount of those costs. Care must be taken in considering the terms of the costs order itself not to seek to make provision for matters that will in due course be considered by the costs judge in the course of assessment. The fundamental order (subject to further adjustment) will be that MFPL shall have its costs of the action on and from 23 April 2012 on the standard basis: but I direct the costs judge that in assessing those costs the judge shall include in the assessment all such costs (being reasonable in amount) as it was reasonable for MFPL to assume liability for on 23 April 2012. The relevant question is whether it was reasonable for MFPL to incur liability for those costs on 23 April 2012: that is different from the question whether it was reasonable for Mr Forstater to have incurred those costs in the first place. For example, the question will be particularly relevant to the "brand recognition" issue (to which I will turn) which was to be discontinued so soon after joinder of MFPL. I do invite the costs judge to subject any claimed pre-joinder costs to particular scrutiny. This seems to me to strike a fair balance between (a) the fact that until MFPL joined the action PMP had a complete answer to Mr Forstater's claim; and (b) the need to avoid PMP escaping responsibility for costs actually needed to bring home MFPL's successful amended claim simply because they were incurred before MFPL was joined.
The next question is whether MFPL should recover all of its costs for that period. MFPL's claim as to what was due under the MF Agreement has three branches. There was the construction argument. There was the rectification argument (with a variation on that theme based upon estoppel by convention). There was a claim that either Mr Forstater or MFPL was entitled to money under an agreement that had been entered into between PMP and Ostar Enterprises Inc relating to "Spamalot" ("the Ostar Agreement").
MFPL lost on the construction argument. It did not in the end run at trial the "estoppel by convention" argument. MFPL succeeded on the rectification claim. Although CPR 44.2(4)(b) directs me to consider the fact that MFPL has not been wholly successful, I do not consider it just to treat these three issues separately. Construction and rectification are almost invariably alternatives: and in the instant case the rectification claim relied upon subsequent conduct (which was the conduct that would have been relevant to an argument based on estoppel by convention). These three issues were so closely intertwined that it would not be fair (or, I suspect, practicable for the costs judge) to make an...
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