Tinseltime Ltd v Eryl Roberts and Others (Defendants/Applicants) Gavin Edmondson
| Jurisdiction | England & Wales |
| Judge | His Honour Judge Stephen Davies |
| Judgment Date | 28 September 2012 |
| Neutral Citation | [2012] EWHC 2628 (TCC) |
| Docket Number | Case No: 9MA50096 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 28 September 2012 |
[2012] EWHC 2628 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
MANCHESTER DISTRICT REGISTRY
TECHNOLOGY AND CONSTRUCTION COURT
Manchester Civil Justice Centre,
1 Bridge Street West, Manchester M60 9DJ
His Honour Judge Stephen Davies
Sitting as a Judge of the High Court
Case No: 9MA50096
and
Richard Coplin (instructed by GHP Legal, Wrexham) for the Defendants / Applicants
Simon Wilton (instructed by Berrymans, Manchester) for the Respondent
Hearing date: 7 September 2012
JUDGMENT ON THE DEFENDANTS' APPLICATION FOR COSTS AGAINST THE SOLICITOR FOR THE CLAIMANT
INTRODUCTION
In this case the defendants (respectively "Mr Roberts", "Davies", "DCC" and "WAG") have brought an application against the solicitor ("Mr Edmondson"), who acted for the claimant, Tinseltime Limited ("Tinseltime"), in the substantive action, for an order that he should pay their costs of the proceedings pursuant to s.51(3) Senior Courts Act 1981 and/or CPR 48.2 as a non-party "funder" of those proceedings ("a non-party costs order") and/or pursuant to s.51(6) Senior Court Act 1981 and/or CPR 48.7 as wasted costs ("a wasted costs order"). The matter was listed for an oral hearing on 7 September 2012 to decide whether or not the application should be permitted to proceed further. At the outset of the hearing I suggested, and the parties agreed, that the application for a non-party costs order could and should be determined substantively at that hearing. In contrast, the application for a wasted costs order proceeded on the permission-only basis as originally ordered, because it was not possible fairly to determine the wasted costs application on a substantive basis without first affording Mr Edmondson the opportunity to file further witness evidence in response following the service by the defendants of their statement of case in the application.
The application for a non-party costs order in this case raises an issue of some general importance and controversy, namely whether or not a solicitor who takes on a case for an impecunious claimant under a conditional fee agreement (CFA) where there is no after the event (ATE) insurance policy in place, and who also agrees to fund the disbursements necessary to allow the case to proceed, thereby constitutes himself a non-party funder and renders himself liable to a non-party costs order in the same way as if he was a commercial non-party litigation funder.
I will begin this judgment by referring to the history of the proceedings. I will then deal with the circumstances in which Mr Edmondson came to take on the case on behalf of Tinseltime, and address the specific criticisms made of his conduct of the action. I will then refer to the relevant legal principles in relation to non-party costs orders, and determine that application. Finally, I will determine the question as to whether or not the application for a wasted costs order should be permitted to proceed further.
THE HISTORY OF THE PROCEEDINGS
These proceedings were issued on 23 February 2009, initially against Mr Roberts alone. In short, the claim arose out of events which occurred in February 2007 when Mr Roberts, a self-employed building contractor, was engaged as subcontractor to Davies, a building firm, to undertake works as part of a road-building scheme known as the A5 Pont Melin Rhug Bridge project in Clwyd. These works included the demolition of part of a building known as the "Old Creamery". That part of the building which was not to be demolished was occupied by a tinsel manufacturing business. The essential complaint was that when Mr Roberts was engaged in cutting concrete blocks on adjacent land, to be used to infill existing openings in the dividing wall between the two parts of the building, dust was produced by the cutting operation, which was carried into the premises and settled on machinery situated on those premises, that machinery being used for the purposes of the tinsel business. It was said that this dust had caused significant damage to the machinery, which had to be repaired and, until repairs could be completed, there was a loss of production resulting in a loss of sales and, hence, profit.
The claim which was advanced in the particulars of claim in its original version was that it was Tinseltime which occupied the premises, pursuant to a lease dated January 2007, and which undertook the tinsel manufacturing business from the premises at the relevant time. On that basis there was no difficulty about Tinseltime as an entity advancing the claim, which was advanced in negligence and in nuisance. However in Mr Roberts' lengthy and detailed Defence, dated 8 May 2009 and drafted by his solicitor, Mr Peter Butler of GHP Legal, these assertions were contested. It was asserted that the lease relied upon was in fact a licence made between the owner of the property and the licensee, who was stated to be "Peter Ridgway of Fountain of Youth Ltd" ("Mr Ridgway" and "FOY" respectively). No admissions were made as to the occupation of the premises, and the point was taken that the license contained a prohibition against assignment. No admissions were made as to the loss and damage alleged and, in particular, it was observed that invoices relating to machinery repairs were addressed to FOY and not to Tinseltime. However Tinseltime maintained its position in its Reply to the Defence, contending that it occupied the premises under the licence referred to with the permission of Mr Ridgway, who it said was the licensee.
The claim was then transferred to the Technology and Construction Court and an order was made in March 2010, giving directions with a view to there being a mediation later that year. In the light of the points being taken by Mr Roberts Tinseltime was ordered to provide a formal statement setting out the relationship between FOY and Tinseltime and to provide specific disclosure of financial and accounting records relating to both companies.
There was a further hearing on 15 October 2010. Unfortunately the case had got nowhere near mediation. Instead, each party had made what were to be heavily contested applications. Tinseltime had issued an application seeking permission to amend the Particulars of Claim to join in Davies as second defendant, DCC as third defendant and WAG as fourth defendants. In effect, Tinseltime was seeking to hold one or more of these additional parties liable for Mr Roberts' alleged conduct on the basis that they were responsible as a matter of law for the work he undertook. At the same time Tinseltime was seeking substantially to increase its claim for loss of profit. At around the same time Mr Roberts had issued an application seeking to strike out or to obtain summary judgement on the claim, alternatively seeking specific disclosure and/or security for costs. The principal basis for the application to strike out / for summary judgement was, as set out in great detail in the witness statement made by Mr Butler in support of the application, that on a thorough review of the available evidence, including the documentation disclosed by Tinseltime, it was apparent that "during the period when the defendant carried out the work in question … Tinseltime was dormant and was not carrying on business and was not in occupation of the premises and did not own … any of the equipment in respect of which the claim has been made" [paragraph 34].
So far as the application for security for costs was concerned, that was made on the basis that the financial information provided by Tinseltime showed quite clearly that it was insolvent. It is worth noting that in his witness statement dealing with this part of the application Mr Butler said:
"64. The claimant is pursuing the claim under a conditional fee agreement dated 21st of June 2008 made with Gavin Edmondson solicitors. I put the claimant to strict proof whether the CFA has been made with FOY or whether it has been made with Tinseltime. If the CFA was made with FOY, Gavin Edmondson solicitors are funding this litigation. …
65. The claimant does not have legal expenses insurance."
The draft amended Particulars of Claim dated 24 August 2010, produced in support of the application to amend, did not seek to revise the basis on which Tinseltime claimed to be entitled to bring the claim. Remarkably however, when he came to respond to Mr Roberts' application to strike out / for summary judgment, Mr Edmondson admitted on behalf of his client, in a witness statement made on 17 September 2010, that what Mr Butler was saying about Tinseltime's position in February 2007 was correct, and that it would be necessary further to amend the Particulars of Claim to reflect this. Even more remarkably still, at the hearing itself counsel for the claimant said, on express instructions from Mr Ridgway, that the admissions made by Mr Edmondson had been wrongly made and reflected a misunderstanding of the position, and that the claimant's case continued to be that Tinseltime was entitled to advance the claim on the basis already pleaded.
It was in those extremely unsatisfactory circumstances that I made an order that the question as to whether or not Tinseltime had a valid cause of action in nuisance or in negligence, and if so on what basis, should be tried as a preliminary issue. The intention was to seek to achieve a final resolution of the issue of Tinseltime's entitlement to bring these proceedings in the most speedy and cost-effective manner available. I ordered Tinseltime to serve a further amended Particulars of Claim, which fully particularised its case as to the preliminary issue, and gave further directions leading to a trial...
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