Pearce v Ove Arup Partnership and Others

JurisdictionEngland & Wales
CourtChancery Division
JudgeMr Justice Peter Smith
Judgment Date29 June 2004
Neutral Citation[2004] EWHC 1531 (Ch)
Date29 June 2004
Docket NumberCase No: CH/2004/APP/20

[2004] EWHC 1531 (Ch)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

ON APPEAL FROM THE SUPREME COURT COSTS OFFICE

Before:

The Honourable Mr Justice Peter Smith

Sitting with Assessors:

Costs Judge Wright

Mr Peter Todd

Case No: CH/2004/APP/20

Between:
Gareth Pearce
Appellant
and
(1) Ove Arup Partnership Ltd.
(2) Remment Lucas Koolhaas
(3) Office for Metropolitan Architecture
(4) City of Rotterdam
Respondents

Mr Nicholas Bacon (instructed by Anthony Gold) for the Appellant

Hearing dates: 15 th June 2004

Approved Judgment

Mr Justice Peter Smith Mr Justice Peter Smith

Mr Justice Peter Smith:

INTRODUCTION

1

This is the judgment in the review by nominally the Claimant in this action, Gareth Pearce, of the decision of Master Simons on 23 rd December 2003, when he disallowed all the costs submitted by the Appellant for the detailed assessment of his costs in the above action.

2

Master Simons granted the Claimant permission to appeal.

3

I say nominally, because the Appellant, the Claimant, has no interest in the outcome of this assessment; the interest is entirely that of the various firms of solicitors and Counsel who acted for him in the action.

BASIS FOR DISALLOWANCE

4

The disallowance of the entirety of the costs was because the Master formed the view that the entirety of the costs were claimed contrary to the provision of regulation 46 (3) Civil Legal Aid (General) Regulations 1989. That regulation provides as follows:-

"Scope of Certificates

46.(1) A certificated may be issued in respect of the whole or part of the proceedings and may be extended to cover appellate proceedings other than those mentioned in paragraph (2).

(2) A certificate shall not be extended to cover proceedings in the House of Lords or on appeal from a magistrate's court.

(3) A certificate shall not relate to more than one action, cause or matter except in the case of:-

(e) Proceedings which under the act may be taken to enforce or give effect to any order or agreement made in the proceedings to which the certificate relates and for the purposes of this sub agreement proceedings to enforce or give effect to an agreement or order shall include proceedings in bankruptcy or to wind up a company".

5

The Claimant in this matter had commenced proceedings ( CH 1996 1927 "action number one") against the four named Defendants on 22 nd March 1996. That writ was marked not for service out of the jurisdiction.

6

A second set of proceedings against the same Defendants was issued on 30 th September 1996 (action CH 1996 P 6040 "action number two").

7

The writ in action number one was served on the First Defendant by a letter dated 19 th July 1996. The letter purporting to serve the writ was dated 19 th July 1996, but the writ was only served by hand on 22 nd July 1996. That was outside the four month period for service of the writ and the first Defendant took that point by letter dated 29 th July 1996.

8

Accordingly, rather than seek to renew the writ, the Claimant's solicitors caused a further writ to be issued (the second writ), which was served on 30 th September 1996.

9

The issue raised by regulation 46 (3) was that the Claimant's solicitors were in effect claiming costs under both action number one and action number two under the one certificate. None of the exceptions applied, so that the Master determined that there was a breach of regulation 46 (3).

10

It is clear that the bill sought to cover all costs from the issue of the first certificate on 13 th March 1995 down to the trial and the order for assessment made on the trial on 31 January 2002. Accordingly the learned Master felt constrained by the decision of Burton J in Bridgewater –v—Griffiths [2000] 1WLR 524 to determine that the costs were not recoverable because it was claimed in respect of two actions. He rejected a number of submissions (which were repeated before me sitting with my assessors) as to the basis for distinguishing Bridgewater.

FACTUAL BACKGROUND

11

As I have said above, the Claimant had a Legal Aid Certificate issued on 13 th March 1995 (number 01/01/94/64612/J). That certificate enabled him to commence proceedings in action for breach of contract and other causes of action within the same proceedings against the identified Defendants.

12

Action Number 1 had a short life, as I have set out above. Action Number 2 went through to trial despite various attempts by the Defendants to stop it. When the writ in Action Number 2 was served on 30 th September 1996, notice of issue of the Legal Aid Certificate was served on the relevant Defendants. No such certificate was served in Action Number 1. I mention this because it is a point of significance according to the submissions of Mr Bacon, who appears for the Appellant.

13

Action Number 2 was dismissed on 7 th March 1997, but the Claimant appealed that order and ultimately on 21January 1999, the Court of Appeal allowed the appeal ordering the Defendants to pay half the costs of the appeal. Thereafter the matter proceeded to trial on 31 st January 2002, when the action was dismissed. The Claimant was ordered to pay the costs of the Second, Third and Fourth Defendants, such costs to be determined by the Costs Judge. An order also was made for the Claimants costs payable by the CLS fund to be determined by the Costs Judge. The Defendants, on 25 th January 2002, issued an application for a wasted costs order against the Claimant and his legal advisors. That application was dismissed, with costs payable by the Defendants.

14

The Claimants liability for costs payable to the Defendants were assessed at nil on 14 th May 2002, after a disputed hearing. At the same hearing an order was made for payment of the Second and Third Defendant's costs out of the CLS Funds. Directions were thereafter given for an assessment of the Claimants costs which led to the hearing, the subject matter of this appeal.

REPRESENTATION

15

The Claimant was represented by a number of different firms of solicitors. First McKenzie Persaud represented him up until 3 rd March 1996. From 3 rd March 1996 to 24 th March 1997 the case was handled by Sheratte Calaeb & Co. From 24 th March 1997 to 20 th November 1998 the case was handled by Landau & Cohen (excluding the costs of proceedings in the Court of Appeal). From 20 th November 1998 to August 2000 the case was handled again by Landau & Cohen, and finally, from September 2000 until now the case was handled by Anthony Gold.

16

The costs are considerable. All work was done under the one certificate; it being amended form time to time with the changing of solicitors. It is not suggested that the LSC was ever aware of the fact that two separate actions had been commenced under the aegis of the one certificate.

17

The bill of costs in issue in this case comes to a total of £278,005.14. The successive firms of solicitors in this case were all aware Mr Bacon conceded of the fact that the Claimant had commenced two separate proceedings and that there was only in force one certificate, which was progressively transferred to them as and when they became retained by him.

18

Absent an ex-gratia payment from the LSC or possible retrospective amendment of the certificate (neither of which is for consideration before me) if Master Simons' order stands the Claimant's solicitors will suffer catastrophic financial consequences. In the case of Laundau and Cohen the potential claw back from that term represents 10% of the firms turn over and could not be done without remortgaging their houses.

19

Counsel for the Claimant in the original action acted in this case from 1997 until the trial. The total fees of Counsel were £74,505.59 of which she has received £55,879.15. Counsel is therefore owed £18,626.44 and has the possibility of having to repay the sums received on account. Landau & Cohen have received £81,709.06 on. Anthony Gold has received sums on account and a liability to repay these, obviously will have a substantial impact on them although I have not been provided with any evidence in respect of that.

20

There is no criticism over the conduct of the case by the Claimants Solicitors, (subject to an assessment if allowed to proceed). Indeed, it is clear that there was a case justifying in bringing it to trial, bearing in mind the fact that the Court of Appeal overturned a striking out of Action Number 2 and a wasted costs application made by the Defendants failed, as I have set out above. Notwithstanding that the consequence of the order if it stands will deprive them of obtaining remuneration for work that they have done good faith.

BRIDGEWATER-V-GRIFFITHS

21

As I have said above, Master Simons felt constrained by this decision. In that case the Plaintiff was granted a Legal Aid Certificate for proceedings against the Defendant for personal injuries and loss sustained from an accident. The writ with a legal aid certificate was lodged at court, was not served in time and expired. A second writ in respect of the same cause of action against the same defendant was issued and served and the Plaintiff served notice that she was Legally Aided, relying on the same certificate. Thereafter the Plaintiff instructed three different solicitors in succession and incurred substantial costs whilst unaware of the first writ. The action was settled by consent under an order, which provided for the payment by the Defendant of the Plaintiff's costs of the action. Upon taxation the Defendant asserted that regulation 46 (3) precluded any recovery because the certificate could only relate to one action being the first in time and that since there was no certificate covering the...

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