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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> W Portsmouth and Company Ltd v Lowin [2017] EWCA Civ 2172 (19 December 2017) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2017/2172.html Cite as: [2018] 2 All ER 896, [2017] WLR(D) 851, [2018] 1 WLR 1890, [2018] 1 Costs LO 1, [2017] EWCA Civ 2172, [2018] WLR 1890 |
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CIVIL
DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(Mrs Justice Elisabeth Laing and Master Leonard as a Costs Assessor)
Strand, London, WC2A 2LL |
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B e f o r e :
VOS,
THE CHANCELLOR OF THE HIGH COURT
LORD JUSTICE McCOMBE
and
LADY JUSTICE ASPLIN
____________________
W ![]() ![]() |
Appellant |
|
- and - |
||
CHRISTINE LINDA ![]() (Daughter ![]() ![]() ![]() |
Respondent |
____________________
Mr Gurion Taussig (instructed by Boyes Turner LLP) for the Respondent
Hearing date: 5 December 2017
____________________
VERSION
OF JUDGMENT
Crown Copyright ©
Lady Justice Asplin:
"Assessment of the claimant's costs of the assessment can properly be undertaken pursuant to CPR 36.17(4)(b)/(c) but this does not, in my judgment, dislodge the effect of CPR 47.15(5) which has the effect of capping the 'maximum amount the court will award' to the receiving party to £1,500 plusVAT
plus court fees which in [this] case was £1,005."
"Please see reasons attached to the original order. The decision in Broadhurstv
Tan . . . has, in my
view,
no application as there is a conceptual difference between "fixed costs" and as here assessed costs subject to the cap in CPR 47.15(5)."
Permission to appeal was granted subsequently by Globe J. Ms Lowin
appealed on three bases, namely that: the Master erred in law and in principle when he capped the summarily assessed costs on the grounds that CPR rule 36.17(4) did not dislodge the effect of CPR rule 47.15(5); he erred in failing to decide that CPR rule 36.17(4)(b)/(c) does dislodge CPR rule 47.15(5) and therefore full rather than capped indemnity costs were recoverable; and he erred in law and principle in not applying the decision in Broadhurst
v
Tan and in deciding that there was a conceptual difference between fixed costs and assessed costs subject to the cap.
"25. Mr Taussig for the appellant submits that the Master erred in not applying the principles which were elucidated by the Court of Appeal in the Broadhurst decision. We accept that Broadhurst was concerned with different provisions of the CPR and we also accept, although the precise role that this argument played in the Court of Appeal's reasons is not clear, that one of the points that was argued in the Broadhurst case was that the construction of the two rules which had been considered in that case all turned on conflict between fixed costs and assessed costs.
26. We do not consider that we are much helped by whether or not costs subject to a cap are fixed costs or assessed costs, although it is our clearview
that costs which are subject to a cap are not fixed costs. It is clear from paragraph 30 of the decision of the Court of Appeal in Broadhurst and from the more detailed reasoning in Nizami that, where there is a fixed-costs regime, a party gets the amount fixed irrespective of the costs actually incurred, so that if the party has incurred more costs than the fixed costs then they only get the fixed costs, but conversely, if they had not incurred any costs at all or had incurred costs which are lower than the fixed costs, they still get the fixed costs.
27. In brief, where costs are assessed, the receiving party gets the costs that he or she has actually incurred, subject to the detailed principles which apply to such an assessment and subject to whether the costs are assessed on the indemnity basis or the standard basis.
28. It seems to us that where a cap applies, the costs are assessed but the receiving party does not in fact get costs assessed on the indemnity basis. What the receiving party gets is costs assessed on an indemnity basis, subject to a cap.
29. There was some discussion in argument before us about the principle of construction which is expressed in Latin as generalia specialibus non derogant. We do not consider that that principle is particularly helpful in this case, nor do we consider that we are assisted by the reasoning of the Court of Appeal in the Solomon case in deciding, if we had to decide, which of the two provisions of the CPR that we are considering is the general and which is the specific provision. We are not assisted by the reasoning in Solomon because it applied to aversion
of the rules which has since in a material respect been amended. The amended
version
is the
version
that was considered by the Court of Appeal in Broadhurst. The reason that the Court of Appeal in Broadhurst did not need to decide which provision is the general one and which provision is the specific one, was precisely because the draftsman in Part 36.14A(1) had made specific provision for the relationship between Part 45 and Part 36.
30. We do consider, however, that the general scheme of the reasoning in Broadhurst does assist us because we consider that, as in Broadhurst, the draftsman of Part 47 has made specific provision for the relationship between Part 47 and Part 36. That is the provision made in rule 47.20(4). In other words, the draftsman has considered how Part 36 should apply to the procedural provisions which are contained in Part 47. The provision which he has made is that the provisions of Part 36 apply to the costs of the detailed assessment with the four irrelevant modifications which are set out in sub-rule (4) of rule 47.20.
31. It seems to us that there is a conflict in a sense between Part 47.15(5) and Part 36. This conflict arises not because Part 47.15(5) provides for fixed costs, because it does not provide for fixed costs. Rule 47.15(5) does potentially derogate from the entitlement to have costs assessed on an indemnity basis which is conferred by Part 36. For it to derogate in fact, the draftsman would, it seems to us, have had to have provided specifically in rule 47.20 that the provisions of Part 36 would apply to the costs of the detailed assessment with modifications that included 47.15(5).
32. It seems to us that, because he has not so provided, it must follow that the provisions of Part 36 apply to this case and that they are not displaced by a provision of rule 47.15(5). To that extent it seems to us that the scheme of the reasoning in Broadhurst helps us to reach a conclusion on the correct relationship between Part 36 and Part 47 on the facts of this case.
33. Both sides in their arguments urged on us the undesirable policy consequences of accepting the other side's argument. It seems to us that there is one potentially undesirable consequence from our conclusion. That is that it may reduce incentives for people to keep the costs of a provisional assessment as low as possible. On the other hand, it seems to us that, one consequence of our conclusion is that it increases the incentives on parties to accept sensible Part 36 costs offers because, if they do not, then there is the potential for them to incur further costs if that rejection is proved wrong by a detailed assessment."
Relevant provisions of the CPR
(1) Subject to rule 36.21 this rule applies where upon judgment being entered . . .
(b) judgment against the defendant is at least as advantageous to the claimant as the proposals contained in a claimant's Part 36 offer.
. . .
(4) Subject to paragraph (7), where paragraph (1)(b) applies, the court will, unless it considers it unjust to do so, order that the claimant is entitled to—
(a) interest on the whole or part of any sum of money (excluding interest) awarded, at a rate not exceeding 10% above base rate for some or all of the period starting with the date on which the relevant period expired;
(b) costs (including any recoverable pre-action costs) on the indemnity basis from the date on which the relevant period expired;
(c) interest on those costs at a rate not exceeding 10% above base rate; and
(d) provided that the case has been decided and there has not been a previous order under this sub-paragraph, an additional amount, which shall not exceed £75,000, calculated by applying the prescribed percentage set out below to an amount which is—
(i) the sum awarded to the claimant by the court; or
(ii) where there is no monetary award, the sum awarded to the claimant by the court in respect of costs - . . . "
It is accepted that Master Whalan applied the current version
of CPR rule 36.17 despite the fact that an earlier
version
was relevant because of the date of the Part 36 offer. However, it is also accepted that the
versions
are not materially different. The case was put both before us and before Elisabeth Laing J and Master Leonard on the basis of the current
version
and it is that
version
which I will address.
"(1) Where a claim no longer continues under the RTA or EL/PL protocol pursuant to rule 45.29A(1), rule 36.17 applies with the following modifications.
It is referred to in CPR rule 36.17(1) and is relevant to the matters under consideration in Broadhurst v
Tan, albeit under its previous numbering. CPR rules 45.29A and 45.29B are also relevant to the Broadhurst decision and therefore, it is convenient to mention them here. They are both under the heading "IIIA. Claims Which No Longer Continue Under the RTA or EL/PL Pre-Action Protocols – Fixed Recoverable Costs" and contain fixed cost provisions. CPR rule 45.29A provides that, subject to sub-rule (3), which provides that the court may make another order under CPR rule 45.24, the section applies to a claim started under the Pre-Action Protocol for low
value
personal injury claims in Road Traffic Accidents (the "RTA Protocol") and the "EL/PL Protocol" but no longer continue under the relevant protocol or another procedure which is irrelevant for these purposes. CPR rule 45.29B goes on to provide that, subject to a number of specific rules, including CPR rule 45.29F, which is concerned with defendants' costs, as long as the case is not allocated to the multi-track, if it is started under the RTA Protocol and the Claim Form Notification was submitted on or after 31st July 2013, the only costs allowed are fixed costs under rule 45.29C and disbursements in accordance with rule 45.29I.
"The provisions of Part 36 apply to the costs of detailed assessment proceedings with the following modifications –
(a) 'claimant' refers to 'receiving party' and 'defendant' refers to 'paying party';
(b) 'trial' refers to 'detailed assessment hearing';
(c) a detailed assessment hearing is "in progress" from the time when it starts until the bill of costs has been assessed or agreed;
(d) for rule 36.14(7) substitute "If such sum is not paid within 14 days of acceptance of the offer, or such other period as has been agreed, the receiving party may apply for a final costs certificate for the unpaid sum.";
(e) a reference to 'judgment being entered' is to the completion of the detailed assessment, and references to a 'judgment' being advantageous or otherwise are to the outcome of the detailed assessment."
CPR rule 47.20(7) provides that for the purposes of Rule 36.17, detailed assessment proceedings are to be regarded as an independent claim.
"In proceedings which do not go beyond provisional assessment, the maximum amount the court will award to any party as costs of the assessment (other than the costs of drafting the bill of costs) is £1,500 together with anyVAT
thereon and any court fees paid by that party."
Broadhurst v
Tan
"23. If rule 45.29B stood alone, then subject tovarious
rules in Part 45 which are immaterial, the only costs allowable in a section IIIA case to a claimant who was awarded costs following judgment in his favour would be "(a) the fixed costs in rule 45.29C and (b) disbursements in accordance with rule 45.29I". But rule 45.29B does not stand alone. The need to take account of Part 36 offers in section IIIA cases was recognised by the draftsman of the rules. Indeed, rule 36.14A is headed "costs consequences following judgment where section IIIA of Part 45 applies". Rule 45.29F (8) provides that, where a Part 36 offer is accepted in a section IIIA case, "rule 36.10A will apply instead of this rule". And rule 45.29F(9) provides that, where in such a case upon judgment being entered the claimant fails to obtain a judgment more advantageous than the claimant's Part 36 offer, "rule 36.14A will apply instead of this rule". Rule 45.29F does not, however, make provision as to what should happen where the claimant makes a successful Part 36 offer.
24. Mr Laughland submits that, since rule 45.29F makes no such provision, the basic or general rule in rule 45.29B that the only costs allowable are fixed costs and disbursements carries the day. But that is to ignore rule 36.14A which is headed "Costs consequences following judgment where section IIIA of Part 45 applies". Rule 36.14A(1) provides that in a section IIIA case "rule 36.14 applies with the following modifications". As we have seen, rule 36.14(3) provides that, where a claimant makes a successful Part 36 offer, the court will, unless it considers it unjust to do so, order that the claimant is entitled to four enhanced benefits including "(b) his costs on the indemnity basis from the date on which the relevant period expired".
25. The effect of rules 36.14 and 36.14A when read together is that, where a claimant makes a successful Part 36 offer, he is entitled to costs assessed on the indemnity basis. Thus, rule 36.14 is modified only to the extent stated by 36.14A. Since rule 36.14(3) has not been modified by rule 36.14A, it continues to have full force and effect. The tension between rule 45.29B and rule 36.14A must, therefore, be resolved in favour of rule 36.14A. I reach this conclusion as a straightforward matter of interpretation and without recourse to the canon of construction that, where there is a conflict between a specific provision and a general provision, the former takes precedence. As we have seen, there is disagreement as to which is the relevant general provision in the present context. Mr Williams submits that it is rule 36.14; and Mr Laughland submits that it is rule 45.29B. I do not find it necessary to resolve this difference.
26. Rule 36.14A(8) provides further support for my conclusion. This provision states that in a section IIIA case the parties (i.e. claimant as well as defendant) are entitled to disbursements allowed in accordance with rule 45.29I in any period for which costs are payable to them. This reflects rule 45.29B(b). If, as Mr Laughland contends, rule 45.29B prevailed over rule 36.14A in any event, this provision would have been unnecessary. It is significant that rule 36.14A does not contain a provision which reflects rule 45.29B(a) and 45.29C. In myview,
the fact that rule 36.14A contains provision for payments of disbursements in accordance with rule 45.29B(b), but not for payment of fixed costs in accordance with rule 45.29B(a) confirms that the interpretation that I have adopted above is correct.
27. I find yet further support for the conclusion that I have reached in the wider contextual points made by Mr Williams to which I have referred at para 13 above which it is unnecessary to repeat."
"Where a claimant makes a successful Part 36 offer in a section IIIA case, he will be awarded fixed costs to the last staging point provided by rule 45.29C and Table 6B. He will then be awarded costs to be assessed on the indemnity basis in addition from the date that the offer became effective. This does not require any apportionment. It will, however, lead to a generous outcome for the claimant. I do not regard this outcome as so surprising or so unfair to the defendant that it requires the court to equate fixed costs with costs assessed on the indemnity basis. As Mr Williams says, a generous outcome in such circumstances is consistent with rule 36.14(3) as a whole and its policy of providing claimants with generous incentives to make offers, and defendants with countervailing incentives to accept them."
Rival submissions
"It follows from the above, and in particular that Part 36 is a self-contained code, that the discretion under rule 36.14 relates not only to the basis of assessment of costs, but also to the determination of what costs are to be assessed. I agree with the judge that Part 36 does not preclude the making of an issue-based or proportionate costs order. However, a successful claimant is to be deprived of all or part of her costs only if the court considers that would be unjust for her to be awarded all or that part of her costs. That decision falls to be made having regard to "all the circumstances of the case. . .""
Conclusion:
McCombe LJ:
Sir Geoffrey Vos, Chancellor of the High Court: