Re Glatt
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE MITTING |
| Judgment Date | 29 June 2012 |
| Neutral Citation | [2012] EWHC 2015 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 29 June 2012 |
| Docket Number | CJA/32/1997 |
[2012] EWHC 2015 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
Royal Courts of Justice
Strand
London WC2A 2LL
Mr Justice Mitting
CJA/32/1997
Mr Edmund Cullen QC appeared on behalf of the Claimant - the Receiver
The Defendant Louis Glatt appeared in person
Mr Geoffrey Zelin appeared on behalf of the Intervenors
On 14 December 2010 I acceded to an application by Mr Louis Glatt that the receiver's costs, expenses and remuneration should be the subject of a detailed assessment if not agreed.
In the course of conducting that detailed assessment, costs judge Gordon-Saker determined a number of preliminary issues. He identified the two of them with which I am concerned as follows:
i. "New Preliminary Issue
ii. Whether by reason of the orders of 15- 2-2001 and 14-12-2001 the receiver is entitled to remuneration only down to his discharge of 25 April 2006."
and -
i. "Whether the respondent can recover any costs where the 'care and maintenance' budget is exceeded."
His answer to the two preliminary issues were as follows. As to the first:
i. "The first part of paragraph 2 in the order of Mitting J only entitles the receiver to receive remuneration for expenses and disbursements whilst he is the receiver. It is the determination of the receivership in relation to expenses and disbursements ….. It follows that the receiver cannot claim personal costs after discharge on 25 April 2006 because they do not fall to be allowed under paragraph 2."
He indicated that he was "happy for either party to return this matter to Mitting J for clarification".
As to the second issue, he stated:
i. "I cannot see how the court can override the clear mandatory nature of the caps set by the court."
The second issue in fact contains two subsidiary questions. The first question is whether the cap applies throughout the period in respect of which the receiver claims his remuneration; and, secondly, if not - and that it applies only to an earlier and more limited period - whether it can or should be exceeded retrospectively.
I turn to the first issue. The order which I made was drawn up by counsel for the receiver and for Mr Louis Glatt at my request following upon a reasoned oral judgment which I delivered at the conclusion of submissions. Paragraph 2 of the order stated:
i. "The application for an order for a determination of the former receiver's remuneration, expenses and disbursements be granted on the following terms:
ii. there be a determination of the receivership remuneration, expenses and disbursements (costs) pursuant to CPR 69 (7) (4) following the appointment of Heath Sinclair ….. receivers ….. pursuant to Section 77 (8) of the Criminal Justice Act 1988 on 15 February 2001, that determination being referred to a costs judge pursuant to CPR 69 (7) (5)."
There then followed a proviso which would have permitted the parties to agree costs before 31 January 2011. In the event they did not, and it is unnecessary for me to refer therefore to the terms of the proviso.
The costs judge and Mr Zelin (for the intervenors in the receivership) determined and submit respectively that paragraph 2 of the order is subject to only one interpretation in that what it provides for is remuneration of the receiver during the period between the appointment of the receivers and discharge in April 2006. On the judge's order and Mr Zelin's submissions, no remuneration for work undertaken thereafter is recoverable under paragraph 2 of the order. Mr Zelin submits that it is not open to the costs judge to refer the matter to me for clarification, still less for me to rack my brain to remember what I had in mind.
As to the latter point, I accept it. As to the former point, I do not. There is nothing wrong in principle or in practice in a costs judge, uncertain about the meaning and effect of an order made by a High Court judge, referring the matter back to him for clarification. What I am not permitted to do is, by reference to my memory, to state what I intended where there is no objective material to permit my intention to be discerned, nor to vary the order which I made by reference to that which I wished in hindsight I might have done.
I therefore turn to the objective material for the purposes of interpreting paragraph 2 of the order. It is trite and accepted by Mr Zelin that for that purpose I can refer to the terms of the reasoned judgment which I delivered before the formal order was made. I set out the reasons why, despite the costs of the exercise, I concluded that the time had arrived at which an order for a detailed assessment should be made. I expressed my conclusions as follows in paragraph 4:
i. "Accordingly, I propose to make a deferred order for the assessment of the receiver's remuneration under CPR 69.7 (5) on terms which Mr Mitchell has outlined to me which gives the parties a short period in which to reach agreement if they can. I will leave the detail of that order until later. That disposes of the second of Mr Glatt's applications."
I went on to conclude that that made it unnecessary to make any further ruling on another of his applications - for the detailed provision of information to the receiver - on the basis that that would in any event be forthcoming during any detailed assessment.
I was invited to decide a number of issues. One of the issues was whether orders for interim payments should be made in respect of work already done by the receiver and whether interest should be awarded on those sums. The work done was broken down into four tranches as I explained in paragraph 7 of my judgment:
i. "The first tranche was the subject of an order by Mr Justice Munby of 25 July 2003. He assessed the sum which should be paid as an interim payment at eighty-five per cent of that claimed by the receiver. The second tranche which the receiver seeks is for budgetted costs totalling £92,605 odd which there is no reason to discount. Those were the costs authorised to be incurred. They have been incurred, and no reason has been advanced by Mr Jones as to why the full sum should not be payable. The third tranche is costs incurred over and above those budgetted. On the basis that only eighty-five per cent of those costs are to be recovered, the amount sought is £75,865. The fourth tranche is for yet further costs. Again, those costs are costs connected with litigation brought by or on behalf of the receiver in an attempt to realise the assets, the subject of the order. Eighty-five per cent of those costs amount, I am told, to £277,945. The total amount claimed in all four tranches is £530,201. All but the second tranche is claimed at the rate fixed by Mr Justice Munby when he ordered payment of the first tranche of remuneration and costs."
I went on to determine that the interim payment should be based on eighty-five per cent of the first, third and fourth tranches and that interest should be payable on each interim sum. The fourth tranche was principally remuneration claimed and costs incurred since the discharge of the receivership order. I have therefore made an interim order plus interest in respect of costs incurred since discharge.
To discern the precise meaning of paragraph 2 of the formal order it is necessary to examine the basis upon which I was invited to make that order. It is set out in a skeleton argument on behalf of Mr Louis Glatt prepared by Mr Jones QC and Mr Wignall, the latter being counsel with possibly unrivalled experience in costs litigation. Paragraph 8 of the skeleton argument stated:
i. "The amounts claimed are sensibly divided into tranches and the basis of those tranches are described in the fifteenth witness statement of the claimant. They obviously relate to remuneration and costs incurred at different stages of the receivership, and tranche 4, in general terms, arises after the discharge. There are two months of overlap."
Paragraph 11 went on to deal with the basis on which interest was claimed on remuneration and costs after discharge:
i. "After discharge the basis of it is asserted that the claimant is entitled to interest and is not known to the defendant."
At paragraph 12 Mr Jones and Mr Wignall stated:
i. "Application for detailed assessment/further information -
ii. The sums claimed by the receiver are in any view considerable. It is the defendant's case that it is for the receiver to justify the claim for remuneration ….."
Detailed submissions then followed about what was required to justify the claim for remuneration.
It is obvious from the material which I have cited that I was being invited by Mr Louis Glatt, with the concurrence of the receiver to order a detailed assessment of the receiver's costs and remuneration in respect both of the period before and after discharge. On that basis there can be no doubt about the interpretation of paragraph 2 of the formal order. I directed a detailed assessment of the former receiver's remuneration, expenses and disbursements before and after discharge. That is what the order means. I am happy to clarify it pursuant to the costs judge's requests in the terms that I have done.
I turn to the second issue. Again what must first be done is to interpret the order made by Mr Justice Munby. His order of 25 July 2003, sealed on 1 August 2003, contained the following provision in paragraph 3:
i. "The joint receivers shall utilise the most junior employee commensurate with work to be carried out and will ensure that their advisers, whoever they may be, incur costs applying the same...
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