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England and Wales High Court (Chancery Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> London Tara Hotel Ltd v Kensington Close Hotel Ltd [2011] EWHC 29 (Ch) (14 January 2011) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2011/29.html Cite as: [2011] Costs LR Online 197, [2011] 2 Costs LO 197, [2011] EWHC 29 (Ch) |
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CHANCERY DIVISION
Strand, London, WC2A 2LL |
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B e f o r e :
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LONDON TARA HOTEL LIMITED |
Claimant |
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- and - |
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KENSINGTON CLOSE HOTEL LIMITED |
Defendant |
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Nicholas Dowding QC and Stephen Jourdan QC (instructed by Payne Hicks Beach)
for the Defendant
Hearing dates: 3 December 2010
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Crown Copyright ©
Mr Justice Roth :
i) whether there should be some disallowance or discount from the defendant's costs which the claimant otherwise would be liable to pay;
ii) whether the defendant's costs as regards two particular periods should be on the indemnity or standard basis;
iii) whether interest on those costs at the judgment rate should run from the date of the order for costs or be postponed to the date of the assessment.
(i) Disallowance from defendant's costs
"The defendant is put to proof of any facts upon which it relies to show that the claimant and its predecessors in title knew or ought to have known that access by the Kensington Close Hotel was gained otherwise that pursuant to the [1973 Licence], whether before 14 July 1988 or thereafter."
"Does the defendant assert that the claimant or its predecessors in title knew that the licence had come to an end?"
The defendant's reply, served on 18 December 2007, stated:
"Yes, insofar as it is necessary for the defendant to make such assertion (as to which no admissions are made). Such knowledge is to be inferred from the fact that the claimant and its predecessors in title would have known of the existence of the licence, and therefore its terms."
(ii) Indemnity or standard costs
"(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, and which is not an offer to which costs consequences under Part 36 apply.
(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."
(a) The period 30.11.07 to 15.2.10
"…there may be situations where the nature of the litigation means that the parties could not be expected to conduct the litigation in a proportionate manner. Again the conduct would not be unreasonable and it seems to me that the court would be entitled to take into account that sort of situation in deciding that an indemnity order was appropriate."
(b) From 19.4.10 onwards
"(1) An offer to settle which is made in accordance with this rule is called a Part 36 offer.
(2) A Part 36 offer must-
(a) be in writing;
(b) state on its face that it is intended to have the consequences of Part 36;
(c) specify a period of not less than 21 days within which the defendant will be liable for the claimant's costs in accordance with rule 36.10 if the offer is accepted;
(d) state whether it related to the whole of the claim or to part of it or to an issue that arises in it and if so to which part or issue; and
(e) state whether it takes into account any counterclaim.
(3) Rule 36.2(2)(c) does not apply if the offer is made less than 21 days before the start of the trial."
"(1) This rule applies where upon judgment being entered-
(a) a claimant fails to obtain a judgment more advantageous than a defendant's Part 36 offer; or
(b) judgment against the defendant is at least as advantageous to the claimant as the proposals contained in a claimant's Part 36 offer.
(2) …where rule 36.14(1)(a) applies the court will, unless it considers it unjust to do so, order that the defendant is entitled to-
(a) his costs from the date on which the relevant period expired; and
(b) interest on those costs.
(3) … where rule 36.14(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) his costs on the indemnity basis from the date on which the relevant period expired; and
(c) interest on those costs at a rate not exceeding 10% above base rate.
(4) In considering whether it would be unjust to make the orders referred to in paragraphs (2) and (3) above, the court will take into account all the circumstances of the case including-
(a) the terms of any Part 36 offer;
(b) the stage in the proceedings when any Part 36 offer was made, including in particular how long before the trial started the offer was made;
(c) the information available to the parties at the time when the Part 36 offer was made; and
(d) the conduct of the parties with regard to the giving or refusing to give information for the purposes of enabling the offer to be made or evaluated.
(Rule 44.3 requires the court to consider an offer to settle that does not have the costs consequences set out in this Part in deciding what order to make about costs.)"
"(1).. where a Part 36 offer is accepted within the relevant period the claimant will be entitled to the costs of the proceedings up to the date on which notice of acceptance was served or the offeror.
…
(6) The claimant's costs include any costs incurred in dealing with the defendant's counterclaim if the Part 36 offer states that it takes into account the counterclaim."
"…it will be a rare case indeed where the refusal of a settlement offer will attract under Part 44 not merely an adverse order for costs, but an order on an indemnity rather than standard basis."
The question here again is whether there is something in the conduct of the action that takes the case out of the norm so as to justify an order for indemnity costs.
(iii) Date from which interest should run
"The heart of the problem lies only partly in the newly-arising differential interest rates. The other part lies in the anomaly referred to above, namely that the judgment debt rate applies from the date of the costs order whereas on the damages it applies from the date of the assessment. What Mr. Burkill is asking me to do is really to address that anomaly. If his arguments are good in this case, they are good in every case. The real problem is that anomaly. If the problem is to be addressed then it should be confronted head on and that anomaly addressed rather than trying to work around the edges and introduce temporary fixes by deploying provisions for the purposes of which they were almost certainly not intended with uncertain wider consequences. It is beyond the powers of this court to address the anomaly, the law having been fixed by higher courts than this."
"I conclude that justice requires a postponement of the liability for the interest until a later date. This was indeed a case very much out of the norm where the costs are very large indeed. Indeed the claimants themselves wish to double the time allowed for the presentation of a detailed account for assessment. The disparity between the claimants' costs and those assessed as due may, it is contended, run to millions. It follows that payments on account are exposed to an enormous margin of error. In my judgement the starting date should be extended to 6 months from today."