Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd (No. 3)
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE JACKSON |
| Judgment Date | 29 September 2008 |
| Neutral Citation | [2008] EWHC 2280 (TCC),[2007] EWHC 659 (TCC) |
| Docket Number | No HT-04-314,Claim No: HT-04–314 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 29 September 2008 |
[2007] EWHC 659 (TCC)
The Honourable Mr Justice Jackson
Claim No: HT-04–314
IN THE HIGH COURT OF JUSTICE
QUEEN's BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
St. Dunstan's House
131–137 Fetter Lane
London EC4A 1HD
MR ROGER STEWART QC and MR PAUL BUCKINGHAM (instructed by Messrs. Clifford Chance) appeared on behalf of the Claimant
MR ADRIAN WILLIAMSON QC and MS LUCY GARRETT (instructed by Reid Minty LLP) appeared on behalf of the Defendants
Monday, 12 th March 2007
This judgment is in six parts, namely Part 1 – Introduction; Part 2 – The Facts; Part 3 – CB's Application for Costs; Part 4 – The Legal Principles; Part 5 – Decision on Application for Costs; Part 6 – Payment on Account.
Part 1: Introduction
This is an application for costs following this court's judgment in the second round of the litigation between Multiplex Constructions (UK) Limited (“Multiplex”) and Cleveland Bridge UK Limited (“ CB”). That judgment is Multiplex Constructions (UK) Limited v Cleveland Bridge UK Limited (No. 2) [2007] EWHC 145 (TCC). CB's parent company, Cleveland Bridge Dorman Long Engineering Limited, is second defendant in the litigation but has taken no part in the current round.
The present application for costs has been fought with the same degree of vigour and enthusiasm as all other issues in the litigation between these two parties. As before, counsel for Multiplex are Roger Stewart QC and Paul Buckingham; counsel for CB are Adrian Williamson QC and Lucy Garrett. I am grateful to all counsel for their assistance.
In this judgment I shall use the same abbreviations as in the two previous judgments.
After these brief introductory remarks I must now turn to the facts.
Part 2: The Facts
On 2 nd August 2004 CB ceased work as Multiplex's steelwork sub-contractor. It is common ground that on that date one or other party repudiated the sub-contract. Multiplex and CB each allege that the other repudiated the sub-contract. Both Multiplex and CB claim damages for repudiation.
Multiplex's claim for damages for repudiation was originally quantified in the sum of £3,114,905.00. See paragraph 77 of Multiplex's amended consolidated particulars of claim.
On 6 th December 2005 Multiplex, by its solicitors' letter of that date, made an open offer of settlement. Multiplex offered to accept £5,999,999.00 in full and final settlement of all Multiplex's claims for damages for breach of contract, including the claim for repudiation. That offer was not accepted by CB.
On 18 th April 2006 Multiplex made a Part 36 offer to CB. I do not know the terms or substance of that offer, save that it did not relate to Multiplex's claims for damages for breach of contract. CB did not accept the Part 36 offer.
The litigation duly proceeded. The first ten preliminary issues were the subject of a trial in April and May 2006. Preliminary issue 8 posed the question of which party was in repudiatory breach. In a judgment dated 5 th June 2006 I held that CB was the party in repudiatory breach. CB's application for permission to appeal against that decision is still under consideration by the Court of Appeal and that application has not yet been determined.
In August 2006, following its success on preliminary issues 1 to 10, Multiplex served amended Scott Schedules, claiming vastly increased damages for repudiation. In schedules 4B and 4D Multiplex claimed a total of £16,271,434.00 in respect of the design and fabrication of temporary work undertaken by Hollandia. Approximately £15 million is attributable to temporary works for the roof.
CB c hallenged the legal basis of Scott Schedules 4B and 4D. CB maintained that under the supplemental agreement it had no continuing responsibility for the design or fabrication of temporary works for the roof. On 20 th October 2006 CB applied for and obtained an order that this question should be resolved as a further preliminary issue, namely issue 11.
On 13 th November 2006 Multiplex made a second Part 36 offer to CB. Again, I do not know the terms or substance of that offer, save that it did not relate to Multiplex's claims for damages for breach of contract. CB did not accept the second Part 36 offer.
The trial of preliminary issue 11 was held in January 2007. Issue 11, like the previous preliminary issues, was hard fought. Multiplex called two witnesses, CB called three witnesses. All witnesses were rigorously cross-examined. The outcome of preliminary issue 11 was a clear victory for CB. (See the judgment of this court dated 31 st January 2007.)
On the day that judgment was given I dealt with Multiplex's application for permission to appeal. By consent CB's application for costs was stood over to be dealt with at a later date.
Part 3: CB's Application for Costs
CB a pplies for an order that Multiplex do pay (a) CB's costs of responding to schedules 4B and 4D and (b) CB's costs of and occasioned by preliminary issue 11, to be assessed on the standard basis. CB estimates that the total amount of those costs is £426,095. 00. CB seeks a payment on account of that costs liability in the sum of £275,000.00.
Multiplex's position is that no costs order should be made in respect of preliminary issue 11, since one open offer and two Part 36 offers have been made. Multiplex points out that it cannot be known until the end of the litigation whether or not Multiplex will do better than the offers which it has made. Accordingly, says Multiplex, a proper order is that costs should be reserved. Furthermore, Multiplex contends, for a number of other reasons, that no payment on account of costs should be ordered.
CB 's application for costs was adjourned to allow consideration of the issues, on the basis that it would be re-fixed at a time convenient to leading counsel. The only time convenient to leading counsel was, as it turned out, 5 p.m. on Wednesday 7 th March. After two hours of detailed submissions and citation of authority, I declined to give judgment at 7 p.m. that evening. Owing to TCC commitments out of London for the following two days, I said that I would give judgment on the next occasion that I am sitting in the London TCC, namely today.
I shall first set out the legal principles, then give my decision on the application for costs, and finally consider the question of payment on account.
Part 4: The Legal Principles
CPR r 44.3 provides:
“(2) If the court decides to make an order about costs:
(a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but
(b) the court may make a different order…
(4) In deciding what order (if any) to make about the costs, the court must have regard to all the circumstances including:
(a) the conduct of all the parties;
(b) whether a party has succeeded on part of he case even if he has not been wholly successful; and
(c) any payment into court or admissible offer to settle made by a party which is drawn to the court's attention (whether or not made in accordance with Part 36)…
(6) The orders which the court may make under this rule include an order that a party must pay:
(a) a proportion of another party's costs;
(b) a statement amount in respect of another party's costs;
(c) costs from or until a certain date only;
(d) costs incurred before proceedings have begun;
(e) costs relating to particular steps taken in proceedings;
(f) costs relating only to a distinct part of the proceedings…
(7) Where the court would otherwise consider making an order under paragraph 6(f), it must instead, if practicable, make an order under paragraph 6(a) or (c)”.
In AEI Rediffusion Music Limited v Phonographic Performance Limited [1999] 1 WLR 1507 at 1522 to 1523 Lord Woolf MR made the following comments on Part 44 of the CPR, which was then about to come into force:
“I draw attention to the new rules because while they make clear that the general rule remains that the successful party will normally be entitled to costs, they at the same time indicate the wide range of considerations which result in the court making different orders as to costs. From 26 th April 1999 the 'follow the event principle' will still play a significant role, but it will be a starting point from which the court can readily depart. This is also the position prior to the new rules coming into force. The most significant change of emphasis of the new rules is to require courts to be more ready to make separate orders which reflect the outcome of different issues. In doing this the new rules are reflecting a change of practice which has already started. It is now clear that too robust an application of the 'follow the event principle' encourages litigants to increase the costs of litigation, since it discourages litigants from being selective as to the points they take. If you recover all your costs as long as you win, you are encouraged to leave no stone unturned in your effort to do so”.
It follows from the foregoing that in many cases where one party wins on a preliminary issue, that party may obtain relief in respect of costs even if unsuccessful in the litigation as a whole. Nevertheless, the circumstances of each particular case must be considered.
In David de Jongh Weill v Mean Fiddler Holdings Limited [2003] EWCA Civ 1058 Lightman J. said this at paragraph 33:
“33. The fact that only nominal damages are awarded after a single trial of the issues of liability and damages in the circumstances of a particular case may constitute...
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