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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Burchell v Bullard & Ors [2005] EWCA Civ 358 (08 April 2005) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2005/358.html Cite as: [2005] CP Rep 36, [2005] BLR 330, [2005] 3 Costs LR 507, [2005] EWCA Civ 358 |
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM BOURNEMOUTH COUNTY COURT
District Judge Tennant
Strand, London, WC2A 2LL |
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B e f o r e :
and
LORD JUSTICE RIX
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MR N.F. BURCHELL |
Appellant |
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- and - |
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MR AND MRS BULLARD AND OTHERS |
Respondent |
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Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Mr James Counsell (instructed by Messrs Ian Newbery & Co.) for the Respondent
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Crown Copyright ©
Lord Justice Ward :
Introduction
The Background
The trial
"I found that the claimant was a transparently honest witness, more than ready to admit where he was wrong and to shoulder responsibility for it," and, "I am satisfied that the claimant was an honest man and a conscientious builder. If he had been allowed to do so he would probably have completed the contract and rectified any defects."
"There is thus to be excluded from the counterclaim, the cost (to the defendants) of completing the work. The defendants are not entitled to that as part of the counterclaim, as it was they who brought the contract to an end by their breach. The value of that work falls to be considered as an allowance against the contract price. The claimant's case as pleaded was that the value of the work necessary to complete the contract was £5,805."
- "No valley boards.
- No lay boards or tilt fillets.
- Nails missing rafters.
- Holes in the Tyvek roof covering.
- On the rear slope of the rear extension an overlap of 80 mm between two sheets of Tyvek."
"Mr Miles' [the defendants' expert's] opinion that the roof should be stripped was largely arrived at by applying a standard approaching perfection that exceeded the contractual standard. … [He] appears to have formed an opinion as to what the roof might possibly contain, having inspected only a small part of it and that in circumstances where there should have been little difficulty in examining the roof to the extent to which Mr Rougier [the claimant's expert] apparently examined it. Mr Miles' evidence as to what might be the extent of the problems in the roof is mere speculation. … The defendants are only able to satisfy me on the evidence that the roof needs repair and that the repairs [set out above] are appropriate."
"It is not surprising in the circumstances that the claimant brought a Part 20 claim against Dean Teversham for an indemnity as to the roof."
He concluded, however, that it was plainly the responsibility of the claimant to fit the valley boards and tilt fillets so that no part of the counterclaim in respect of that defective work could be laid at the Part 20 defendant's door. He said:-
"By far the major problem stems from the lack of valley boards and layboards. The other defects are relatively minor. … Thus, the Part 20 defendant is liable to the claimant for only £79.50 of the cost of the remedial work."
He entered judgment for the claimant accordingly.
The Judgment as to Costs.
"It reflects the reality of what has happened and is clearer. To do otherwise would distort the VAT position and might lead to difficulties. It will make no difference as to costs. The court has a wide jurisdiction which it must exercise to see that the case is dealt with justly. This will not be affected by the way in which the judgment is expressed." (I add the emphasis.)
"There were no payments into court and no Part 36 offers. In the context of the Civil Procedure Rules, those who do not take advantage of Part 36 run serious risks as to costs. The starting point is that the claimant must have the costs of the claim, the defendant must have the costs of the counterclaim, and the claimant must have the costs of the Part 20 claim. The court has a wide discretion which it must exercise to ensure that the case is dealt with justly. The Civil Procedure Rules allow for the costs to be dealt with on the basis of issues. If the court makes an order that requires an analysis of work done on particular issues, it makes the preparation of a bill of costs for detailed assessment much more difficult and enormously complicates the process of detailed assessment. It just risks substantially increasing the costs in a case in which the costs outweigh the value of the matters in dispute. It is better if possible to deal with the matter another way."
"Before the Civil Procedure Rules, if the court made an order that the defendants had the cost of a counterclaim without qualification, the defendants would only recover the additional costs of the action occasioned by the counterclaim itself. That is no longer the position."
"There are faults on both sides, and I exclude the Part 20 defendant, as to the conduct of the litigation. On balance however, I am satisfied that quite apart from the net amount actually recovered by the claimant, the defendants are more at fault than the claimant in the sense that they have conducted the litigation more unreasonably. It is of course speculation as to what would have happened if the defendants had taken up the offer of mediation made by the claimant. There is a difference between mediation that fails and mediation that does not even start because one party refuses to participate at all. This type of dispute should have lent itself to that approach. On the other hand, the outcome is always difficult to predict and largely a matter for speculation. I accept that most of the work may have been association with the counterclaim. That remains to be seen. … I am satisfied that at this stage the only possible order that will do justice is an order that the defendants pay the costs of the claimant of the claim and the claimant pays the defendants' costs of the counterclaim. Of course it may well be appropriate to disallow some costs particularly some of the costs of Mr Rougier though not all of them. That can only be done after analysing his fees. An order to disallow part of them will be arbitrary. This is particularly so, because I propose to reserve the detailed assessment of costs to myself as District Judge. Most of the considerations urged by the parties can be dealt with in that context."
"I am satisfied that the claimant should be ordered to pay those costs. The idea that the Part 20 defendant should be ordered to pay the claimant's costs when he has lost to the extent of £79.50, and that when he has made offers to settle from the beginning, seems to me to be almost absurd. It would certainly not be just. The fact is that he has succeeded on the issues. There can be no question of the defendants being ordered to pay those costs. The Part 20 defendant was just that, not a joint defendant. He was not a party to the contract between the claimant and the defendant. I do not consider that an order is appropriate that those costs should be recovered by the claimant from the defendants. I accept that the claimant was placed in a difficult position when the counterclaim was made particularly in relation to the roof. It is not surprising that given the nature of the counterclaim, the claimant should have made a claim against the Part 20 defendant, but that does not mean that it was wise. The claimant might have protected his position in a different way perhaps by putting the Part 20 defendant on notice of a possible claim depending upon the fate of the counterclaim. The claimant nevertheless took a risk when dragging the Part 20 defendant into the litigation. Again, I will reserve the assessment of costs to myself as a District Judge."
"Our clients' position is very clearly set out in counsel's skeleton argument. The issues are straight forward and although our clients would remain willing to listen to any sensible proposals that your client has to make in this matter, we do not see that involvement of the Court of Appeal mediation scheme would be necessary or appropriate."
This response will have no bearing on the issue of costs in the court below but it may be a factor which becomes relevant when dealing with the costs of the appeal.
Discussion on the appropriate order for costs
"Where a claim and counterclaim are both dismissed with costs, upon the taxation of the costs, the true rule is that the claim should be treated as if it stood alone and the counterclaim should bear only the amount which the costs of the proceedings have been increased by it. No costs not incurred by reason of the counterclaim can be costs of the counterclaim. In the absence of special directions by the court there should be no apportionment. The same principle applies where both the claim and the counterclaim have succeeded."
I do not know why he said that is no longer the position. Part 48 of the CPR sets out the "general principles and case law relating to costs and their assessment" and in the introductory note at 48.11.1 it is stated that:-
"This section is not intended to be a definitive work on the general principles of assessment, but a compilation of decisions and commentary which may from time to time need be referred to."
Part 48.15.3 deals with a counterclaim and cites Medway Oil & Storage Co. with apparent approval. Although I disagree with the Recorder's observation, it is not a point going to the heart of this appeal.
"(2) If the court decides to make an order about costs –
(a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but
(b) the court may make a different order. …
(4) In deciding what order (if any) to make about costs, the court must have regard to all the circumstances, including –
(a) the conduct of all the parties;
(b) whether a party has succeeded on part of his case, even if he has not been wholly successful; and
(c) any payment into court or admissible offer to settle made by a party which is drawn to the court's attention (whether or not made in accordance with Part 36).
(5) The conduct of the parties includes –
(a) conduct before, as well as during, the proceedings, …
(b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;
(c) the manner in which a party has pursued or defended his case or a particular allegation or issue;
(d) whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim.
(6) The orders which the court may make under this rule include an order that a party must pay –
(a) a proportion of another party's costs;
(b) a stated amount in respect of another party's costs;
(c) costs from or until a certain date only; …
(f) costs relating only to a distinct part of the proceedings; …
(7) Where the court would otherwise consider making an order under paragraph (6)(f), it must instead, if practicable, make an order under paragraph (6)(a) or (c)."
"Worse still, the defendants then "adopted" Mr Gardner as their "expert" and took issue with the contribution of Mr Rougier."
"There are faults on both sides … as to the conduct of the litigation. On balance however, I am satisfied that quite part from the net amount actually recovered by the claimant, the defendants are more at fault than the claimant in the sense that they have conducted the litigation more unreasonably."
That is a finding which must bear upon the allocation of costs.
Lord Justice Rix :
1. The Appeal be allowed and the cost order as between the Appellant and the Respondents made by the Recorder at the trial of this matter be discharged.
2. The Respondents do pay 60% of the Appellant's costs of the claim, counterclaim and Part 20 proceedings, and do pay 60% of the costs which the Appellant is liable to pay to the Part 20 Defendants to be the subject of detailed assessment on the standard basis if not agreed.
3. The Respondents do pay the Appellant's costs of the appeal to be the subject of detailed assessment on the standard basis if not agreed, any such assessment to be heard together with the assessment of the costs below.
4. Permission to appeal to the House of Lords refused.