McGlinn v Waltham Contractors Ltd (No 1)
| Jurisdiction | England & Wales |
| Judgment Date | 24 June 2005 |
| Neutral Citation | [2005] EWHC 1419 (TCC) |
| Docket Number | Case No: HT-05–120 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 24 June 2005 |
[2005] EWHC 1419 (TCC)
His Honour Judge Peter Coulson QC
Case No: HT-05–120
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Introduction
Mr Ian McGlinn, the Claimant, has issued these proceedings as a result of alleged deficiencies in the building work carried out at his property, Maison d'Or, on Jersey ("the property"). The Defendants are, respectively, the building contractors, Waltham Contractors Ltd ("Waltham"); the Architects, Huw Thomas Associates ("HTA"); and the Engineers, DJ Hartigan & Associates Ltd. The claims involve allegations of defective work which, on the Claimant's case, was so extensive that the property had, eventually, to be demolished. Against Waltham there is an additional claim for over-payment arising out of a dispute over the true value of the Final Account. The claims in total amount to about £4.5 million.
Before commencing these proceedings, the Claimant properly went through the steps prescribed by the Pre-Action Protocol for Construction and Engineering Disputes. This led to a mediation in November of last year, which was unsuccessful. The claims now made by the Claimant in the Particulars of Claim are, in some cases, different to those which existed at the commencement of the Pre-Action Protocol procedure.
In particular, HTA point out that the claims now made against them in the Particulars of Claim do not include claims in respect of over-payment to Waltham, nor claims in respect of loss and expense paid to Waltham. This is despite the fact that, at the outset of the Pre-Action Protocol procedure, both such claims were asserted by the Claimant against HTA.
At the First Case Management Conference, on 24/6/05, HTA sought an interim payment in the sum of £20,000 in respect of the costs which they say were thrown away at the Pre-Action Protocol stage in considering and responding to those two claims (for over-payment and loss and expense). The application was resisted by the Claimant. In deference to the careful submissions made by Mr Roger Stewart QC, for HTA, and Miss Lucy Garrett, for the Claimant, and in the absence of any direct authority on the point, I reserved judgment in order to reflect upon the principles involved. I have now concluded that I should refuse this particular application. My reasons for so doing are set out below.
JURISDICTION: 'Costs of and Incidental to'
Section 51 of the Supreme Court Act 1981 provides as follows:
(1) Subject to the provisions of this or any other enactment and to rules of court, the costs of and incidental to the proceedings in –
(a) The Civil Division of the Court of Appeal;
(b) The High Court, and
(c) Any County Court Service
shall be in the discretion of the court.
Mr Stewart QC submitted that the costs incurred by a party in complying with any Pre-Action Protocol are capable of being costs "incidental to" any proceedings which are subsequently commenced if the Protocol procedure fails to lead to an early settlement. I did not understand Miss Garrett to dispute that, as a matter of principle, costs incurred during a Pre-Action Protocol procedure may be costs "incidental to" any subsequent proceedings. In my judgment, it seems clear that, as a matter of construction of Section 51, the costs so incurred are capable of being costs "incidental to" the proceedings.
I am fortified in this view by the decision of Sir Robert Megarry, Vice Chancellor, in the case of In re Gibson's Settlement Trusts [1981] Ch 179. In that case the Vice Chancellor decided that, on an order for the payment of costs of proceedings, costs incurred before the proceedings commenced would not be disallowed solely on that account. He said that "on an order for taxation of costs, costs that otherwise would be recoverable are not to be disallowed by reason only that they were incurred before action brought". He also made plain that the words "incidental to" extended, rather than reduced, the ambit of any order, although he said that it was important to identify what the proceedings were in any case and how and why the costs claimed were incidental to those proceedings. As to costs incurred before the proceedings commenced he said :
"Of course, if there is no litigation there are no costs of litigation. But if the dispute ripens into litigation, the question then arises how far the ambit of the costs is affected by the shape that the litigation takes"
As I have already noted, there is no direct authority on the question of the general recoverability of costs incurred in compliance with Pre-Action Protocols. However in Callery v Gray [2001] 1 WLR 2112, the Court of Appeal were concerned with what costs were recoverable in circumstances where claims had settled without the need for substantive proceedings. At paragraph 54 of his judgment, Lord Woolf CJ said:
"(2) Where an action is commenced and a costs order is then obtained, the costs awarded will include costs reasonably incurred before the action started, such as costs incurred in complying with a Pre-Action Protocol".
Accordingly, both as a matter of construction of Section 51, and by reference to In re Gibson's Settlement and to Callery v Gray, I am of the view that, as a matter of principle, the costs incurred...
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