Michael Earl Wilson v John Forster Emmott
| Jurisdiction | England & Wales |
| Judge | Mr Justice Saini |
| Judgment Date | 05 April 2023 |
| Neutral Citation | [2023] EWHC 816 (KB) |
| Court | King's Bench Division |
| Docket Number | Case No: QA-2017-000001 |
[2023] EWHC 816 (KB)
Mr Justice Saini
sitting with
SENIOR COSTS JUDGE Gordon-Saker
as Costs Assessor
Case No: QA-2017-000001
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
ON APPEAL FROM THE ORDER OF MASTER ROWLEY
DATED 28 JUNE 2017
Royal Courts of Justice
Strand, London, WC2A 2LL
Roger Mallalieu KC (instructed by Michael Wilson & Partners Ltd) for the Appellant
The Respondent appeared in person by remote link
Hearing dates: 4 April 2023
Approved Judgment
This judgment was handed down remotely at 5pm on Wednesday 5 April 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
This judgment is in 5 main sections as follows:
| I. Overview: | paras. [1]–[6]. |
| II. The Factual Background: | paras. [7]–[16]. |
| III. The Arguments: | paras. [17]–[27]. |
| IV. Analysis: | paras. [28]–[31]. |
| V. Conclusion: | para. [32]. |
I. Overview
This is an appeal against a decision made by Master Rowley (“the Master”) in the course of detailed assessment of the Claimant/Appellant's costs in the proceedings below. The decision under appeal was made by the Master in an extempore ruling on 18 January 2017 and the assessment proceedings concluded on 28 June 2017. It is not altogether clear why it has taken so long for this appeal to come on, but permission to appeal on a single ground was granted only relatively recently by a judge on 14 November 2022. At the conclusion of oral argument, I indicated that the appeal would be dismissed with reasons to follow. I am very grateful for the assistance of Senior Costs Judge Gordon-Saker as Costs Assessor.
I will refer to the Claimant/Appellant as “Mr Wilson” and the Defendant/Respondent as “Mr Emmott”. The costs orders which were the subject of the assessment proceedings were made following unsuccessful committal proceedings brought by Mr Emmott against Mr Wilson and an entity called Michael Wilson & Partners Limited (“MWP”). MWP is a BVI registered company which provides legal and business consultancy services in, among other places, Kazakhstan and Azerbaijan. Mr Wilson is the managing director of MWP. He is also an English Solicitor who at all material times held a practising certificate. Mr Emmott is a former director and employee of MWP.
The underlying proceedings which lead to this appeal have a complex and unedifying history. I will set out below such facts as are necessary to explain and resolve the issues before me, but it is clear the present appeal is yet another chapter in long-running litigation between Mr Wilson and Mr Emmott. That litigation has been the subject of adverse comment by the Court of Appeal on one of the parties' trips to that court: [2019] EWCA Civ 219. It was described at [70] by Peter Jackson LJ as a “shameful waste of time and money” caused by a private dispute. He also observed that “this pathological litigation has already consumed far too great a share of the court's resources”.
Returning to the present appeal, in the committal proceedings in which he succeeded Mr Wilson acted in person for various stages of the proceedings. The issue arose in the detailed assessment as to the hourly rate he was entitled to recover. That depended on whether Mr Wilson was a “litigant in person” for the purposes of CPR 46.5, or fell within the exception in CPR 46.5(6)(b) as a person “…represented by a firm in which that person is a partner”. I will refer to this below as “the exception”. The Master held Mr Wilson did not fall within the exception, that he was a litigant in person, and was therefore limited to recovering costs of £19.00 per hour, as opposed to a commercial rate.
CPR 46.5 provides as follows (with my underlining of the exception):
(1) This rule applies where the court orders (whether by summary assessment or detailed assessment) that the costs of a litigant in person are to be paid by any other person.
(2) The costs allowed under this rule will not exceed, except in the case of a disbursement, two-thirds of the amount which would have been allowed if the litigant in person had been represented by a legal representative.
(3) The litigant in person shall be allowed –
(a) costs for the same categories of –
(i) work; and
(ii) disbursements,
which would have been allowed if the work had been done or the disbursements had been made by a legal representative on the litigant in person's behalf;
(b) the payments reasonably made by the litigant in person for legal services relating to the conduct of the proceedings; and
(c) the costs of obtaining expert assistance in assessing the costs claim.
(4) The amount of costs to be allowed to the litigant in person for any item of work claimed will be –
(a) where the litigant can prove financial loss, the amount that the litigant can prove to have been lost for time reasonably spent on doing the work; or
(b) where the litigant cannot prove financial loss, an amount for the time reasonably spent on doing the work at the rate set out in Practice Direction 46.
(5) A litigant who is allowed costs for attending at court to conduct the case is not entitled to a witness allowance in respect of such attendance in addition to those costs.
(6) For the purposes of this rule, a litigant in person includes –
(a) a company or other corporation which is acting without a legal representative; and
(b) any of the following who acts in person (except where any such person is represented by a firm in which that person is a partner) –
(i) a barrister;
(ii) a solicitor;
(iii) a solicitor's employee;
(iv) a manager of a body recognised under section 9 of the Administration of Justice Act 19851; or
(v) a person who, for the purposes of the 2007 Act, is an authorised person in relation to an activity which constitutes the conduct of litigation (within the meaning of that Act).
The Practice Direction to CPR 46.5 provides as follows:
3.1 In order to qualify as an expert for the purpose of rule 46.5(3)(c) (expert assistance in connection with assessing the claim for costs), the person in question must be a –
(a) barrister;
(b) solicitor;
(c) Fellow of the Institute of Legal Executives;
(d) Fellow of the Association of Costs Lawyers;
(e) law costs draftsman who is a member of the Academy of Experts;
(f) law costs draftsman who is a member of the Expert Witness Institute.
3.2 Where a self represented litigant wishes to prove that the litigant has suffered financial loss, the litigant should produce to the court any written evidence relied on to support that claim, and serve a copy of that evidence on any party against whom the litigant seeks costs at least 24 hours before the hearing at which the question may be decided.
3.3 A self represented litigant who commences detailed assessment proceedings under rule 47.5 should serve copies of that written evidence with the notice of commencement.
3.4 The amount, which may be allowed to a self represented litigant under rule 45.39(5)(b) and rule 46.5(4)(b), is £19 per hour.
II. Factual Background
A former client of MWP had engaged MWP in connection with various natural resource transactions in Kazakhstan and elsewhere, including the purchase and on-sale of interests in certain oilfields in Kazakhstan, to a company known as Max Petroleum (“Max”). Mr Emmott acted in relation to that transaction on behalf of MWP as its employee and director.
Shortly before conclusion of the transaction, certain parties who are said to have been important to the success of the transaction were awarded shares in Max. A substantial number of shares in Max were issued to Eagle Point Investments Limited (“Eagle”), a Bahamian international business company, which is said to be directly or indirectly owned by a trust in which Mr Emmott is interested.
Mr Wilson's position in other proceedings is that the Max shares issued to Eagle were for the benefit of Mr Emmott, and that as he was involved in the transaction as an agent and employee of MWP, the shares ought to have come to MWP. It is MWP's case that Mr Emmott was involved with other parties in diverting the Max shares to himself, in breach of his contractual and fiduciary duties to MWP.
Following the breakdown of the relationship between MWP, Mr Wilson and Mr Emmott, the parties engaged in an arbitration resulting in a substantial financial award in favour of Mr Emmott payable by MWP. On 5 December 2014, Mr Emmott obtained a freezing order (“the Freezing Order”) against MWP in aid of that award from the Commercial Court in London, preventing MWP from making payment to any party other than as provided for within an exception clause in the order. So, in the normal form, the Freezing Order did not prohibit MWP “from dealing with or disposing of any of its assets in the ordinary and proper course of business”.
Following certain large payments made by MWP of funds from its bank accounts, Mr Emmott made an application alleging conduct in contempt of the Freezing Order by MWP, and by Mr Wilson (as the party controlling MWP). Mr Emmott argued that the payments made were in breach of the Freezing Order and were not made in the ordinary and proper course of the business of MWP. At first instance, MWP and Mr Wilson were held by Andrew Smith J to be in contempt. On 10 August 2015, Andrew Smith J ordered MWP and Mr Wilson to pay substantial fines and costs. Mr Wilson was also ordered to be committed to prison for contempt.
MWP and Mr Wilson successfully appealed these orders which were set aside by the Court of Appeal: see [2015] EWCA Civ 1028. The Court of Appeal held there was no breach of the Freezing Order and made an order on 14 October 2015 directing that Mr Emmott pay the costs of MWP and Mr Wilson in respect of the appeals and below. Mr Emmott made an application to the...
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