Mr Peter Mills Dammermann v Lanyon Bowdler LLP
| Jurisdiction | England & Wales |
| Judge | Lord Justice Longmore,Lord Justice McFarlane |
| Judgment Date | 12 April 2017 |
| Neutral Citation | [2017] EWCA Civ 269 |
| Docket Number | Case No: A2/2016/0277 |
| Court | Court of Appeal (Civil Division) |
| Date | 12 April 2017 |
[2017] EWCA Civ 269
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM the COUNTY COURT AT TELFORD
HIS HONOUR JUDGE MAIN QC
A1QZ027T
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Longmore
and
Lord Justice McFarlane
Case No: A2/2016/0277
The Appellant appeared in person
Ms Hannah Tildesley (instructed by) for the Respondent
Hearing date: 6 April 2017
Approved Judgment
Lord Justice Longmore and
This is the judgment of the court, to which we have both contributed.
In this appeal Mr Peter Dammermann seeks to overturn a costs order made against him at the conclusion of a first appeal in a case which had been allocated to the Small Claims Track.
Factual background
The factual background can be shortly stated. Mr Dammermann entered into a legal mortgage with United Trust Bank Limited in February 2002. Mr Dammermann subsequently defaulted on his mortgage payments and, consequently, the bank appointed receivers to sell the charged property under the terms of the mortgage and the Law of Property Act 1925.
The appointed receivers retained a local firm of solicitors, Lanyon Bowdler LLP, to conduct the sale of the charged property. In due course the property was sold and Lanyon Bowdler rendered a bill to the receivers which was duly paid and became part of Mr Dammermann's overall liability under the terms of the mortgage.
By a claim brought in the Telford County Court against Lanyon Bowdler, Mr Dammermann sought to challenge the level of fees charged by that firm for this work. As Lanyon Bowdler had already been paid by the receivers the claimant's claim was, effectively, for a refund of a proportion of the overall charge.
At a hearing on 14 August 2015, Deputy District Judge Holden held that there was neither an agency nor any contractual relationship between Mr Dammermann and the solicitor's firm and that, consequently, he had no standing to make a claim against them. The contract for solicitor's services was between the receivers, who had been appointed by the lenders, and Lanyon Bowdler. In the circumstances the Deputy District Judge dismissed the claim, no order as to costs at the first instance hearing.
Mr Dammermann sought to appeal against the Deputy District Judge's decision. He was granted permission to appeal by His Honour Judge Main QC, following consideration of the papers on 21 September 2015.
In a skeleton argument dated 16 October 2015 counsel then instructed by Lanyon Bowdler, set out a succinct and clear legal argument demonstrating that the principles of the ordinary law of agency were not applicable in the particular circumstances of an agency that exists between a receiver and a mortgagor. Reliance was placed, in particular, on the observations of Hildyard J in an unreported decision relating to administrative receivers, Edenwest v CMS Cameron McKenna (a firm) [2012] EWHC 1258 (CH). The skeleton argument supported the Deputy District Judge's decision and submitted that the appeal should be dismissed "with costs".
The appeal hearing
The appeal was heard by HHJ Main on 14 December 2015. Mr Dammermann appeared in person and Lanyon Bowdler was represented by counsel, Ms Hannah Tildesley. Having heard arguments, the judge, in a relatively detailed judgment referring to the case law relied upon by Lanyon Bowdler, concluded that the contract for services in this case was "not an agency contract properly so called as known at common law. The principles that would apply to a common law agency contract, do not apply I find on the facts of this case." Insofar as the appeal was concerned, therefore, the judge concluded (paragraph 16):
"Standing back from this, it is entirely clear to me that the learned district judge, for reasons that she did not actually properly exemplify or set out other than in the most general terms, in fact got the law entirely correct, and that so far as the primary submission made by Mr Dammermann is concerned, it is wrong."
and …
"Therefore the primary case presented by Mr Dammermann is simply not right."
As a result the appeal was dismissed.
Lanyon Bowdler applied for costs and, following a brief discussion regarding one or two elements of the costs schedule, the judge began to give a judgment seemingly based upon the court having a wide discretion on the issue of costs.
Quite properly, Ms Tildesley sought to interrupt the judge in order to point out that, as this was a case allocated to the Small Claims Track, the court's jurisdiction was proscribed (as I will explain in due course) and Lanyon Bowdler's application for costs could only succeed on the facts of this case under CPR 1998, Part 27.14(2)(g) on the basis that Mr Dammermann had "behaved unreasonably". Thereafter the judge heard very brief submissions from each side before concluding his judgment, now within the terms of Part 27.14 (2)(g) as follows (para 29, page 43):
"I am satisfied he has acted unreasonably. I was not aware until just a moment ago, that an offer had been paid of £1,000 to seek to mollify his concerns in any way in respect of this bill. I would have thought that was a very generous offer that should have been accepted, but leaving that to one side, he has persisted in an argument, notwithstanding – and I agree with the submission made by Ms Tildesley – that it is entirely clear on the basis of this skeleton argument, very clearly argued and presented by Mr Millington, an argument which I noted is dated 16 th October 2015 and probably would have been in the hands of Mr Dammerman six or seven weeks ago, that he could have backed off this appeal, not proceed with it, and matters probably would have rested there. He has not done so. It is obvious from that skeleton argument that he was barking up the wrong tree, he had confused himself, he was applying principles of general agency law which could not apply and did not apply, if he had even read those authorities, which are referred to in the skeleton argument and the extracts therein. In those circumstances, I do take the view he has behaved unreasonably, and in those circumstances, I do continue therefore with the assessment of these costs. I am not going to repeat myself in respect of what I have hitherto said in the course of this summary assessment."
The judge did, however, make some reduction to the bill to reflect the particular matters of potential overcharging that he had previously identified.
The legal context
The costs regime applicable to cases under the Small Claims Track is set out in CPR, Part 27.14. In particular, by Part 27.14(2):
"the court may not order a party to pay a sum to another party in respect of that other party's costs, fees and expenses, including those relating to an appeal, except: …". (emphasis added)
There then follows a list of exceptions, the only one applicable to this case is (g):
"Such further costs as the court may assess by the summary procedure and ordered to be paid by a party who has behaved unreasonably."
Attention must also be paid to Part 27.14(3):
"A party's rejection of an offer in settlement will not of itself constitute unreasonable behaviour under paragraph 2(g) but the court may take it into consideration when it is applying the unreasonableness test."
The first point to note about the provisions in Part 27.14 is that they apply to an appeal. Ms Tildesley was...
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