Michael Wilson & Partners Ltd v T.I. Sinclair
| Jurisdiction | England & Wales |
| Judge | Mr Justice Chamberlain,Mr. Justice Chamberlain |
| Judgment Date | 24 March 2020 |
| Neutral Citation | [2020] EWHC 704 (QB) |
| Date | 24 March 2020 |
| Docket Number | Case No: QA 2019-000090 |
| Court | Queen's Bench Division |
[2020] EWHC 704 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ON APPEAL FROM THE SENIOR COURTS COSTS OFFICE
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr. Justice Chamberlain
SITTING WITH AN ASSESSOR ( Master Rowley)
Case No: QA 2019-000090
Joshua Munro (instructed by Michael Wilson & Partners, Ltd.) for the Appellant
The Respondents did not appear and were not represented
Hearing dates: 17th March 2020
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
This is an appeal from the order of 12 March 2019 by Master Gordon-Saker, the Senior Costs Judge (‘the SCJ’). The SCJ ordered that, provided the first and second defendants file and serve points of dispute by 4 pm on 19 March 2019, a default costs certificate obtained by the Appellant dated 22 January 2019 be set aside. The SCJ's reasons were given in an ex tempore judgment.
Permission to appeal was initially refused by Stewart J, but granted by Murray J after a hearing on 18 October 2019.
Shortly before the hearing, Mr Sinclair, who represents both himself and the Second Respondent, applied by email to the court for an adjournment of the appeal hearing on the basis that he had to travel to New Zealand to attend his father's funeral. At the outset, I indicated that, rather than determining the adjournment application, I would hear submissions from Mr Munro on behalf of the Appellant. After the hearing I indicated that, after consulting with the assessor, I would consider further whether it was necessary to adjourn the hearing in order to permit Mr Sinclair to make submissions.
Background
The Appellant, Michael Wilson & Partners Ltd, is based in the Republic of Kazakhstan. It provides legal and consultancy services. It has been in dispute since 2006 with the Respondents and a third party, John Emmott, a sometime director and employee of the Appellant. There have been proceedings in many different fora, including England & Wales, the Bahamas, the British Virgin Islands, New South Wales and New Zealand. Given the limited scope of this appeal, it is not necessary to describe or summarise those proceedings, save to say that they have been hard fought on both sides.
Indeed, it would take a long time to describe fully even the proceedings in this jurisdiction. I do not attempt to do so. The background up to 13 January 2017 can be found in the judgment of Simon LJ of that date in the Court of Appeal: [2017] EWCA Civ 3. The more recent history of the ‘seemingly interminable, unhappy background saga’ is to be found in the judgments of Gross and Peter Jackson LJJ of 26 February 2019 in proceedings between the Appellant and Mr Emmott: [2019] EWCA Civ 219, [2019] 4 WLR 53. (Mr Munro criticises the SCJ for referring to an excerpt from Peter Jackson LJ's judgment, but, for reasons which follow, I am wholly unpersuaded by that criticism and have found both judgments illuminating and helpful.)
The chronology that is directly relevant to this appeal begins in 2006, when the Appellant began arbitration proceedings against Mr Emmott, alleging that he had received shares and funds as a bribe or secret profit from the Respondents. The main part of those allegations were determined against the Appellant (though there have been satellite proceedings to determine what issues remain undetermined). As a result of a series of arbitral awards, the last of which was in 2014, the Appellant was ordered to pay Mr Emmott approximately £3.2 million and USD 841,000. A freezing order against the Appellant was granted in Mr Emmott's favour. It has been varied but remains in force.
In 2010, the Appellant brought a claim against the Respondents and others in the Commercial Court, raising similar allegations. The Respondents and Mr Emmott applied to strike out the claim as an abuse of process. That application substantially succeeded before Teare J in 2012. The Appellant appealed to the Court of Appeal, which on 13 January 2017 allowed the appeal and ordered the Respondents to pay the Appellant's costs of the application and appeal, to be subject to detailed assessment if not agreed. There was an order for an interim payment of about £670,000, which has been satisfied by way of set-off against sums owed to Mr Emmott in other proceedings. An application by the Respondents and Mr Emmott for permission to appeal to the Supreme Court was refused in September 2017.
The costs proceedings
The Appellant's bill of costs ran to some 268 pages. It was sent to the First Respondent, Mr Sinclair, by email on 24 December 2018, over a year after the refusal of permission to appeal by the Supreme Court. It was served in hard copy, together with a notice of commencement, on the same day. The notice of commencement provided that points of dispute should be served by 21 January 2019. The First Respondent filed evidence before the SCJ indicating that he was busy at the time, working on business projects in Oman. Neither Respondent filed points of dispute by 21 January 2019. The Appellant therefore obtained, on 22 January 2029, a default costs certificate in the sum of £1,342,122.93 (the total amount claimed, making no allowance for the interim payment which had been made).
On 28 January 2019, the First Respondent emailed the Appellant suggesting the setting aside of the default costs certificate and suggesting an extension of time for service of the points of dispute. That was refused and the Respondents made the application to set the certificate aside on 1 February 2019. The application was not accompanied by draft points of dispute.
The SCJ's judgment
In a detailed ex tempore judgment after a hearing on 12 March 2019, the SCJ set out the terms of CPR r. 47.12(2), which confers a discretion to set aside a default costs certificate ‘if it appears to the court that there is some good reason why the detailed assessment proceedings should continue’, and of CPR 47PD para. 11.2. He noted that relief from sanctions was required pursuant to CPR r. 3.9 and applied the three-stage test outlined in Denton v T.H. White Ltd [2014] 1 WLR 3296.
At the first stage, the SCJ concluded that ‘this was a serious breach’ by the Respondents. They knew the rules and failed to comply with them: [15].
At the second stage, the SCJ noted that oversight was not a good reason for the failure to serve the points in dispute by the required date: [16].
At the third stage, the SCJ drew attention to the remarks of Peter Jackson LJ reported at [2019] EWCA Civ 219, [70], which included the observations that Mr Wilson (the principal of the Appellant) ‘will stop at nothing to prevent Mr Emmott from the receiving the award to which, for all his deceit, he is entitled’ and the description of the litigation as ‘pathological’. In view of this, it was, the SCJ said, ‘surprising that neither party in this case has behaved as they should have done’: [17].
The Appellant was criticised for serving a 268 page bill of costs for £1.3m on Christmas Eve (rather than after the Christmas holiday or after the New Year) and for obtaining a default costs certificate for that sum, rather than for the balance of £776,000-odd, which was due after giving credit for the interim payment. The First Respondent, for his part, was criticised for not serving his points of dispute ‘or, perhaps more realistically, asking the claimant for an extension of time in which to do so’ by 21 January 2019: [20]. At [21] the SCJ said this:
‘Given the size of the bill, both in terms of money and in terms of length, no reasonable solicitor would have refused any prospective application for an extension of time and I have no doubt that no court would have refused an extension of time had it been made prospectively. Instead, Mr Sinclair did nothing until the default costs certificate was brought to his attention. He did then act promptly insofar as he made his application within about a week but he did not do what the practice direction requires and that is to exhibit a copy of the bill and a copy of his draft points of dispute. Mr Sinclair tells me that he has been working on the points of dispute but has not yet completed them, although he would hope to complete them by the end of this week, so within five days.’
In relation to the ‘justice of the case’, the SCJ noted at [23] that he was in some difficulty in answering the question whether a detailed assessment should be allowed to continue because he had not seen the bill. He had, however, assessed another bill relating to proceedings between the Appellant and the first respondent. On that occasion, the first respondent did serve points of dispute, though he did not attend the detailed assessment hearing. He recalled that, because of the way the Appellant charged for its time and because of the hourly rates sought, there was a substantial reduction. This was supported by an email dated 23 January 2019 from Mr Wilson to the First Respondent, among others. The email was in these terms:
‘We note and remind you that, unfortunately, MWP never received any reply from you to our letter of 03.12.18, further copy attached.
As we set out in paragraph 2 on page 2 of that letter, we then conservatively estimated that at least a further £275,933 would be certified in MWP's favour, however that amount has now been certified as per the attached as at 22 January 2019 in the net amount now payable by Sinclair and Sokol to MWP of £776,209.28 (of course, plus interest from the date of judgement/order in our favour, plus assessment, enforcement and recovery costs, plus on-going interest...
To continue reading
Request your trial
-
Michael Wilson & Partners Ltd v T I Sinclair
...Mr Justice Chamberlain Introduction 1 This second judgment should be read with my first judgment of 24 March 2020 (neutral citation: [2020] EWHC 704 (QB)). In the first judgment, I gave my reasons for concluding that the Appellant's (“MWP”) appeal against the order of Master Gordon-Saker (......