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England and Wales High Court (Technology and Construction Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> Vector Investments v Williams  EWHC 3601 (TCC) (05 November 2009)
Cite as:  BLR 195,  EWHC 3601 (TCC)
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QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
133-137 Fleet Street
London EC4A 1HD
B e f o r e :
| VECTOR INVESTMENTS
- and -
1st Floor, Quality House, 6-9 Quality Court, Chancery Lane, London WC2A 1HP
Telephone: 020 7067 2900 Fax: 020 7831 6864 DX: 410 LDE
Crown Copyright ©
MR. JUSTICE RAMSEY :
The costs proceedings
The issues in relation to costs
The applicable principles
"(i) the court has power to make a costs order when the substantive proceedings have been resolved without a trial but the parties have not agreed about costs.
(iii) the overriding objective is to do justice between the parties without incurring unnecessary court time and consequently additional cost;
(iv) at the end of the spectrum there will be cases where it is obvious which side would have won had the substantive issues been fought to a conclusion. In between, the position will, in differing degrees, be less clear. How far the court will be prepared to look into the previously unresolved substantive issues will depend on the circumstances of the particular case, not least the amount of costs at stake and the conduct of the parties.
(v) in the absence of a good reason to make any other order the fall back is to make no order as to costs.
(vi) the court should take care to ensure that it does not discourage parties from settling proceedings ."
"I recognise, of course, that costs applications have to be entertained and resolved. But not, I would suggest, by litigating the case for all the world as if the substantive issues need to be resolved for their own sake. In my judgment, an altogether broader approach should be adopted. One which enables the court in a comparatively short time to decide, and decide, moreover, without giving a fully-reasoned judgment, into which general category of discontinuance the case falls."
"Can it really be an appropriate use of court time (not to mention the parties' ever escalating costs) to resolve in a series of decisions (including perhaps the House of Lords hereafter?) what, in all other respects, is a purely academic question, even if an important one, just so as to deal fairly and properly with the costs incurred by the parties before that question became academic? I would hold not. I would suggest instead that the costs can and properly should be dealt with once only, and even then generally on a broad-brush approach. That would not seem to me unfair. And it would certainly be a great deal more economical and expeditious."
" namely that it was a case where it was obvious which side would have won had the substantive issues been fought to a conclusion. [The judge] decided that the claimant, having been kept out of the money to which he was entitled for many years, until the settlement of 1999 and indeed until the further settlement of the amount due in 2001, was clearly the overall victor. I, for my part, not only am not minded to say that the learned judge in any way erred in his discretion; I go further and say that the decision reached by the judge is a decision to which I myself would have come."
The application of the principles to this case.
The law on costs
"(i) In commercial litigation where each party has claims and asserts that a balance is owing in its own favour, the party which ends up receiving payment should generally be characterised as the overall winner of the entire action."
"In deciding who is the successful party the most important thing is to identify the party who is to pay money to the other. That is the surest indication of success and failure."
"Costs following the event is the general rule and in this kind of litigation the event is determined by establishing who writes the cheque at the end of the case. Here the defendants do. They were the unsuccessful parties and my starting point is that the claimant is entitled to the costs of the proceedings "
Conduct in relation to the Claim
"we consider that it is entirely reasonable that the parties should take this opportunity to consider the merits of their respective positions with a view to seeing whether the matter is capable of settlement before incurring further potentially unnecessary costs."
The offer of 29 August 2007
"This offer is made in a genuine attempt to resolve this matter with the minimum of further cost to both parties. Notwithstanding the same our client recognises that significant costs have been incurred by both parties to date and with that in mind, to the extent that the only issue preventing the matter being settled is agreement on those costs, we suggest that the offer of £400,000 be accepted and the issue of costs alone be remitted to the court for determination."
"Your letter provides no indication of, or information about, how the offer sum is calculated. At summary level the sum claimed in respect of items 1.00 to 15.00 and 17.00 of Appendix 5 of the Amended Particulars of Claim together with associated fees, interest and finance, exceeds £2 million. We require an indication of how the sum of £400,000 is built up before we can even begin to properly advise Vector on whether [Williams'] offer is capable of acceptance. Without such information Vector cannot sensibly respond to the offer."
"However, we understand from your response that your client has refused to consider the offer and has evidently rejected the same."
"Given that there is no apparent basis for the offer based in the claim or [Williams'] response to the claim, the offer is not capable of acceptance by Vector."
"(vii) If (a) one party makes an offer under part 36 or an admissible offer within rule 44.3(4)(c) which is nearly but not quite sufficient, and (b) the other party rejects that offer outright without any attempt to negotiate, then it might be appropriate to penalise the second party in costs."
"that at no stage did Mrs Painting manifest any willingness to negotiate or to put forward a counter-proposal to the Part 36 payment. No one can compel a claimant to take such steps. However, to contest and lose an issue of exaggeration without having made ever a counter-proposal is a matter of some significance in this kind of litigation. It must not be assumed that beating a Part 36 payment is conclusive. It is a factor, and will often be conclusive, but one has to have regard to all the circumstances of the case."
"I agree with my Lord that it is relevant that Mrs Painting herself made no attempt to negotiate, made no offer of her own and made no response to the offers of the University. That would not have mattered in pre-CPR days but, to my mind, that now matters very much. Negotiation is supposed to be a two-way street, and a claimant who makes no attempt to negotiate can expect, and should expect, the courts to take that into account when making the appropriate order as to costs."
" the landlord was, throughout, seeking damages and amounts which were far in excess of the amount to which it was ultimately held entitled; and that it was the landlord's inflated and unrealistic valuation of the claims which had made it impossible to dispose of the action by agreement in 1996. He accepted, of course, that the amount of the first payment in turned out to be less than the amount to which the landlord was entitled; but he submitted that that was irrelevant; when the Secretary of State increased the amount notionally in court to £450,000, the landlord would not accept it. The action went on because the landlord was not interested in any reasonable offer; and, in those circumstances, the landlord must bear its own costs."
"I would reject it. It seems to me that a court should resist invitations to speculate whether offers to settle litigation which were not in fact made might or might not have been accepted if they had been made. There are, I think, at least two reasons why a court should not allow itself to be led down that road. First, the rules of court provide the means by which a party who thinks that his opponent is not open to reason can protect himself from costs. He can make a payment in; he can make a Calderbank offer; now, under the Civil Procedure Rules 1998, he can make a payment or an offer under CPR Pt 36. Second, speculation is likely to be a most unsatisfactory tool by which to determine questions of costs at the end of a trial. It is not, I think, suggested that each party would be required to disclose, at that stage, what advice it had received, from time to time, as to the strengths and weaknesses of its claim or defence. But without knowing that and without a detailed knowledge of the financial and other pressures to which each party was subject from time to time - speculation would be hopelessly ill-informed."
"Are the concepts of bettering a Part 36 payment and obtaining a judgment more advantageous than the Part 36 offer synonymous? Posed in that way, perhaps they are. But in the context of the new Part 36, where money claims and non-money claims are to be treated in the same way, 'more advantageous' is, as Rix L.J. observed in the course of argument, 'an open-textured' phrase. It permits a more wide-ranging review of all the facts and circumstances of the case in deciding whether the judgment, which is the fruit of the litigation, was worth the fight."
"However, exaggeration can take many forms and the rule makes no distinction between intentional exaggeration or unintentional exaggeration. Here, Mr Farmer was constrained to accept that Mrs Painting had been deliberately misleading in the course of the claim, and the fact that the exaggeration is intended and fraudulent is, to my mind, a very important element which needs to be addressed in any assessment of costs."
"41. Williams had indicated for the first time since the discussions in March 2002 that it was prepared to make some contribution to the costs of the delays. Although the amount of this claim was £900,000, and this was supported by Mr. Stickland (as to time) and by Mr. Fitch (as to quantum) it had always been understood by me that the supporting documentation from Wates (and in particular its subcontractors) was poorly organised. As I have explained, I had always been keen to reach agreement on the apportionment of this claim, and it was Williams who had refused to discuss it after March 2002.
42. The claim for the rent-free period (of £750,000) faced difficulties: in particular, Williams had a case that the relevant clause was either a penalty or incapable of application. From a layman's viewpoint I did not see it as likely that Vector would ever recover both this sum and the loss and expense claim."
The costs of inspection of Vector's documents
"46. It is wrong just to disclose a mass of background documents which do not really take the case one way or another. And there is a real vice in doing so: it compels the mass reading by the lawyers on the other side, and is followed usually by the importation of the documents into the whole case thereafter hence trial bundles most of which are never looked at.
47. Now it might be suggested that it is cheaper to make this sort of mass disclosure than to consider the documents with some care to decide whether they should be disclosed. And at that stage it might be cheaper just run it all through the photocopier or CD maker especially since doing so is an allowable cost. But that is not the point. For it is the downstream costs caused by overdisclosure which so often are so substantial and so pointless."
"a. There were a significant number of the documents that had no relevance to the issues in dispute. There were a number of documents found which had no relevance to the project or the parties at all.
b. The documents were not in a consistent chronological order. Although sections of individual files do appear in chronological order, there are, at times, large jumps between time periods.
c. As bundles of documents had been provided to the claimant by various parties and had literally been disclosed in the same format, there is massive duplication between the files.
d. Where documents did appear to be sorted into rough categories, these categories were found to be entirely unhelpful in the inspection process."
"The three main deficiencies to the claimant's disclosure can be summarised as: (1) irrelevant documents; (2) duplication and (3) the order of documents. Specific instances of these deficiencies are set out in a letter from Halliwells to Hammonds on 1 May 2008. For example: the files contain a large amount of out of office e-mails; numerous e-mails setting up meetings or requesting an individual's availability; in one file there were 17 copies of the MEN Events List; all of the documents that appear in Vector File 77 also appear in Vector File 14 (amounting to over 100 documents); files contain both faxed and hard copies of letters; the documents have been disclosed in the order in which they were originally filed by their author, therefore there is no consistency throughout the files as to how the documents are categorised."
"In summary, Vector disclosed documents that it considered were within its possession and control and relevant to the proceedings. Vector's Building Contractor, M&E Engineer, Architect, Project Manager, Quantity Surveyor, ECH, Addleshaw Goddard and Vector itself provided such documents. As stated above, the documents from these parties were provided on a piecemeal basis with full access to all documents being logistically complicated. I do not consider that the volume of documents (over 800 files) disclosed was unusual given the size, complexity and number of parties involved in the project."
"I note that [Williams'] complaints about Vector's disclosure include the presence of duplicated documents the order of the documents the size of the files the nature of the files and the contents of the files ... I consider these complaints are both misguided and wrong."