Savoye and Savoye Limite v Spicers Limite
| Jurisdiction | England & Wales |
| Judge | Mr Justice Akenhead |
| Judgment Date | 15 January 2015 |
| Neutral Citation | [2015] EWHC 33 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 15 January 2015 |
| Docket Number | Case No: HT-14-311 |
[2015] EWHC 33 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Akenhead
Case No: HT-14-311
Anneliese Day QC (instructed by Reed Smith LLP) for the Claimant
Jonathan Acton Davis QC (instructed by Olswang LLP) for the Defendant
Submissions in writing
I handed down judgment in this matter on 15 December 2014 ( [2014] EWHC 4195 (TCC)). The parties have exchanged written submissions concerning costs. It is common ground that this Court should summarily assess the costs. I will not set out the facts which are fully set out in the earlier judgment.
Essentially, Savoye "won" in that it secured its judgment for the full sum claimed (about £889,300) and successfully secured the enforcement of the adjudicator's decision. The case was a "one issue" case, that issue being whether the work done and to be done by Savoye amounted to "construction operations" as defined in Section 105 of the Housing Grants, Construction and Regeneration Act 1996 (" HGCRA") in the context of the facts and the contract between the parties. The issue broke down still further into a consideration of whether as a matter of fact and degree the conveyor system (installed by Savoye) as a whole could be said to "form part of the land" as called for in Section 105(1) (a) to (c) of the HGCRA.
Savoye's costs bills total £201,790.66, this covering the hearings on 8 and 14 October, 13 November and 3 December 2014. Savoye seeks its costs on an indemnity basis saying that Spicer's acted "unreasonably to a high degree both in raising an unmeritorious defence and/or jurisdictional challenge and subsequently maintaining such a challenge to the adjudicator's decision on the basis of evidence which turned out to be misleading" (Paragraph 10 of Ms Day QC's Submissions on Costs). Spicers respond by saying that this is not a case for indemnity costs as there was always a genuine area of factual dispute between the parties which could only be resolved by a trial rather than by way of a summary judgment application and by challenging the overall costs bill in effect as excessive, unreasonable and disproportionate.
It is accepted, rightly, by Mr Acton Davis QC that his client, Spicers, in principle has to pay the costs as it "lost" the case but argues that the summary judgment application was or at least became misguided and that therefore his client should not have to pay for all or a substantial part of costs of the summary judgement application.
Indemnity Costs
There are numerous authorities on the principles or criteria applicable to justify an award of indemnity costs. In The Board of Trustees of National Museums and Galleries on Merseyside v AEW Architects and Designers Ltd [2013] EWHC 3025 (TCC), this Court reiterated those, based on an earlier decision:
"12. The principles upon which indemnity costs may be awarded have been addressed in numerous cases and in broad terms, this Court in Igloo Regeneration (GP) Ltd v Powell Williams Partnership [2013] EWHC 1859 (TCC) broadly summarised the position:
"2 The authorities are now well established and I do not intend to repeat them. There is largely, if not entirely, an overlap between what both counsel are putting forward as the appropriate basis: cases such as Excelsior Commercial & Industrial Holdings Ltd v Salisbury Hammer Aspden & Johnson (a firm) [2002] EWCA Civ 879, per Waller LJ, in which he said:
"Is there something in the conduct of the action or the circumstances of the case which takes the case out of the norm in a way which justifies an order for indemnity costs?"
3. There are also the well known cases of Kiam v MGN Ltd (No 2) [2002] 2 All ER 242, in particular the judgment of Simon Brown LJ (as he then was), Gloster J (as she then was) in Euroption Strategic Fund Ltd v Skaninaviska Enskilda Banken AB [2012] EWHC 749 (Comm), and this Court in Walter Lilly & Co Ltd v Mackay & Anr [2012] EWHC 1972 (TCC), although this was on obviously on different facts and considerations, when the Court referred to yet more authority, in particular Andrew Smith J in Fiona Trust & Holding Corporation v Yuri Privalov [2011] EWCR 664 (Comm) and The Mayor & Burgesses of the London Borough of Southwark v IBM UK Limited [2011] EWHC 653 (TCC). I do not intend to repeat the summary of principles
and considerations to be taken into account. Obviously, the fact simply that one parties loses the case, and maybe loses it on the basis of a firm judgment, does not mean, as such, that the losing party should pay costs on an indemnity basis. There must be some conduct which takes the case out of the normal run of the mill."
The conduct of the party against which indemnity costs are sought does not have to be lacking "in moral probity or deserving of moral condemnation" but the conduct should generally be unreasonable to a high degree."
What one is therefore seeking to find is whether or not, in this case, there has been conduct on the part of Spicers which takes its conduct in or during this case out of the norm such that it can be considered as unreasonable to a high degree.
I have formed the very clear view that this is not a case in which Spicer's conduct is such as to justify an award of indemnity costs against them. One needs to bear in mind that, apart from significant differing areas of emphasis between the parties on the precise legal tests and criteria to apply, there were differences between the parties on the facts. Indeed, both Leading Counsel accepted that the primary underlying issue involved a question of fact and degree, namely the extent to which, looked at overall, the conveyor system to be installed by Savoye could or could not be considered as forming part of the land. As set out in Paragraph 37 of the earlier judgment, there were substantial pieces of equipment which were not physically attached to the underlying concrete floor and, at two thirds of the fixing plates on much of the conveyor racking, there was no connection of them to the concrete floor. Based on that, it was not unreasonable let alone out of the norm for a defendant such as Spicers to seek to argue that, looked at overall, it being a matter of fact and degree, the conveyor system did not or was not to form part of the land.
It is right to observe that Mr Michael in his first witness statement (submitted after the first summary judgment hearing) made several factual assertions which were either misleading or at least wrong. For instance, he said at Paragraph 5 that the racking was not installed by Savoye and pre-dated the installation by Savoye; that was accepted (by Mr Acton Davis QC to be wrong during the third summary judgment hearing), albeit that it emerged that some of the racking (pale yellow in colour) was original, it being refurbished and re-fixed by Savoye along with the new blue racking. Paragraph 9 of the statement was to the effect that it was only at the end of the racking lanes that a bolt had sometimes been placed into one or two of the holes in the square feet attached to the racking. This was wrong because all along the racking lanes the rear uprights every 2 or 3 metres were bolted to the floor. However, having seen Mr Michael in the witness box, I did not begin to draw any impression that he was dishonest or had been consciously trying to mislead.
The reality was that it was only during the site visit and the subsequent oral evidence at the trial that I was able to form a clear view as to whether overall the conveyor system was to form part of the land for the purposes of Section 105(1) of the HGCRA. I was particularly impressed by the evidence submitted for the purposes of the trial by Savoye and in particular by the evidence, tested in cross-examination, about the numbers and robustness of the M12 and M8 bolts which were used to fix the system to the floor.
Costs therefore should be assessed on a standard basis.
The Summary Judgment Application
I do not consider that it was unreasonable of Savoye to have issued a summary judgment application. It had secured an adjudicator's decision in its favour and the adjudicator had given a reasoned (albeit not binding) view on the issue which taxed the Court, namely whether the conveyor system formed part of the land; it was non-binding because it went to his jurisdiction. In the light of the evidence submitted by Spicers before the first hearing on 8 October 2014, it might well have been sensible for Savoye then to have taken stock; there would have been at least some litigants who might have decided on or by the first hearing that it would be better to have an expedited and short trial on the issue given that it involved a question of fact and degree which it might well be difficult for the Court to resolve on a summary judgment application. Although I had started to write my judgment on the summary judgement application within several days, I had not at that stage formed a concluded view on the evidence and arguments as to whether it was going to...
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