R.G. Carter Projects Ltd v Cua Property Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Pepperall |
| Judgment Date | 17 December 2020 |
| Neutral Citation | [2020] EWHC 3417 (TCC) |
| Docket Number | Case No: HT-2019-000191 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 17 December 2020 |
[2020] EWHC 3417 (TCC)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (QBD)
Rolls Building
Fetter Lane, London EC4A 1NL
THE HONOURABLE Mr Justice Pepperall
Case No: HT-2019-000191
Steven Walker QC and Peter Land (instructed by Kennedys Law LLP) for the Claimant
Anneliese Day QC and George Woods (instructed by Costigan King) for the Defendant
Hearing date: 14 December 2020
Approved Judgment
I direct that no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This judgment concerns the proper approach to costs where a party in effect discontinues a number of claims by a radical amendment to its Particulars of Claim. By a claim issued on 7 June 2019, RG Carter Projects Limited sued CUA Property Limited for damages of £14,225,768 for alleged misrepresentations. In the alternative it claimed extensions of time pursuant to a building contract and declaratory relief as to the proper sum due on its final account. RG Carter now seeks permission to amend its case to abandon the misrepresentation claim, abandon one head of claim on which an extension of time was previously sought, and reduce its claim on the final account. The overall effect of the amendments is to reduce the value of the claim by almost 87% from over £14 million to £1,852,338.57.
There is, unsurprisingly, no dispute as to RG Carter's entitlement to amend, but the parties are unable to agree the appropriate costs order:
2.1 Steven Walker QC and Peter Land, who appear for RG Carter, accept that their client should pay the costs of and occasioned by the amendments. They contend that that is the usual order and that there is no good reason to depart from such practice.
2.2 Anneliese Day QC and George Woods, who appear for CUA, complain that such conventional order would not compensate their client for the considerable wasted work undertaken in investigating and defending the now abandoned heads of claim. They assert that the amendments in this case amount in substance to the partial discontinuance of RG Carter's claim. Accordingly, they seek an order that RG Carter should pay 80% of CUA's costs to date, alternatively that it should pay the costs of the abandoned issues. Further, they argue that the abandoned case was always hopeless such that the court should order such costs to be paid on the indemnity basis. They also seek an order for summary assessment or, failing that, an order for detailed assessment with a substantial payment on account of such costs liability.
BACKGROUND
By a building contract dated 19 May 2015, CUA employed RG Carter as the main contractor in respect of works to demolish and rebuild the Cambridge University Arms Hotel. The total contract price was £34 million. Works were carried out between 2015 and 2018. RG Carter's original Particulars of Claim pleaded five heads of claim:
3.1 A claim in misrepresentation by which RG Carter sought damages of £14,225,768.
3.2 A claim for an extension of time of 53 days in respect of works to create an electrical sub-station.
3.3 A further claim for an extension of time of an additional 35 days in respect of changes to the roof height.
3.4 A yet further claim for an extension of time of an additional 15 days in respect of the need to remove asbestos from the site.
3.5 A declaration valuing the final account at £40,347,677.
CUA pleaded a detailed Defence on 29 November 2019 and RG Carter responded by its Reply on 20 December 2019. RG Carter interrogated CUA's defence to the misrepresentation claim by a detailed Request for Further Information which CUA duly answered on 24 January 2020.
Kennedys Law LLP were instructed by RG Carter after the close of pleadings. On 10 July 2020, Kennedys gave notice that, having reviewed matters, they proposed to amend their client's case. A draft was promised “in good time” before the Case Management Conference that was then listed for 9 September 2020. That hearing and subsequent dates in October and early December 2020 were vacated and the matter came before me for the first Case Management Conference on 14 December 2020. On 24 November 2020, Kennedys served their client's draft Amended Claim Form and draft Amended Particulars of Claim. Among other amendments, the draft:
5.1 abandoned the claims in misrepresentation and for an extension of time in respect of alleged changes to the roof height;
5.2 reduced the sum sought on the final account from £40,347,677 to £36,866,260; and
5.3 challenged the sums deducted by CUA in respect of liquidated damages.
As already explained, the net effect of the amendments was significantly to reduce the value of the claim to £1,852,338.57.
DISCUSSION
THE PROPER ORDER AS TO COSTS
Practice Direction 17 to the Civil Procedure Rules 1998 states the general rule upon amendment:
“A party applying for an amendment will usually be responsible for the costs of and arising from the amendment.”
The editors of the 2020 edition of Civil Procedure (the White Book) observe, at para. 17.3.10, that such orders are “often” made. Paragraph 4.2 of Practice Direction 44 explains the meaning of some of the standard costs orders made in civil proceedings. It explains an order for “costs of and caused by” in the following terms:
“Where, for example, the court makes this order on an application to amend a statement of case, the party in whose favour the costs order is made is entitled to the costs of preparing for and attending the application and the costs of any consequential amendment to his own statement of case.”
It is common ground that the position in this case is akin to a partial discontinuance of a claim. In my judgment the analogy is well made at least in respect of the abandonment of the misrepresentation claim:
8.1 While the abandonment of one or more remedies is not to be treated as discontinuance where the claimant continues his claim for other remedies (r.38.1(2)), a claimant may discontinue “all of part of a claim” (r.38.2(1)).
8.2 The “claim” for the purposes of Part 38 probably means the entirety of the claimant's action against a particular defendant: per Leggatt J as he then was in Kazakhstan Kagazy plc v. Zhunus [2016] EWHC 2363 (Comm), [2017] 1 W.L.R. 467.
8.3 In this case, the deletion of the discrete cause of action in misrepresentation was in substance a discontinuance of a part of RG Carter's claim and not just the abandonment of a claim for a particular remedy, albeit one effected by an amendment pursuant to Part 17 rather than service of a notice of discontinuance under Part 38.
It is therefore instructive to consider the consequences that would have flowed in the event that RG Carter had served a notice of discontinuance in accordance with Part 38. Rule 38.6 provides:
“(1) Unless the court orders otherwise, a claimant who discontinues is liable for the costs which a defendant against whom the claimant discontinues incurred on or before the date on which notice of discontinuance was served on the defendant.
(2) If proceedings are only partly discontinued –
(a) the claimant is liable under paragraph (1) for costs relating only to the part of the proceedings which he is discontinuing; and
(b) unless the court orders otherwise, the costs which the claimant is liable to pay must not be assessed until the conclusion of the rest of the proceedings.”
In many instances, an order for the costs of and caused by (or, as we used to say, occasioned by) an amendment or (as PD17 puts it) the costs of and arising from the amendment, will meet the justice of the case. There will, however, be cases where the amendment abandons a particular cause of action that the defendant has spent a significant sum defending. Even in such cases, sometimes the amended statement of case will still pursue other causes of action arising out of the same facts, or the amendment will essentially just put a new label on previously pleaded facts such that the earlier costs have not been entirely wasted: see, for example, Begum v. Birmingham City Council [2015] EWCA Civ 386, [2015] H.L.R. 33.
Yet in other cases, the cause of action is simply abandoned and substantial costs will have been wasted. An award of costs on the conventional basis would, in such cases, cover the defendant's costs of amending his Defence to delete the now redundant answer to the abandoned plea, but would not recompense such defendant for the costs of investigating the original case or of pleading the first Defence. On such facts, the usual order would not be just and the appropriate order will often be to award the defendant not just the costs of and caused by the amendment, but also the costs in respect of the abandoned cause of action.
Accordingly, in my judgment the just order in this case is that RG Carter should pay both:
12.1 the costs of and caused by the amendment; and
12.2 the costs of the abandoned claims in misrepresentation and for an extension of time for the alleged change in the height of the roof.
THE BASIS OF ASSESSMENT
Ms Day argues that costs should be payable on the indemnity basis. The proper approach to applications for indemnity costs is not in dispute. In Elvanite Full Circle...
To continue reading
Request your trial
-
Skatteforvaltningen (The Danish Customs and Tax Administration) (“SKAT”) v Solo Capital Partners LLP (in Special Administration) & Others
...case, as to whether to make any costs order at that point, and if so, what order to make. Mr Justice Pepperall in RG Carter Projects Limited v CUA Property Limited [2020] EWHC 3417 (TCC) at [10]–[11] addressed the position of a party who abandoned a cause of action as follows: “10. In many......