Walsh v Singh

I now have to consider the costs consequences of the judgment that I have delivered in this case.

It is said on Mr. Singh’s part, that he has substantially won, and that he should enjoy the costs consequences, which are set out in a draft minute of order, which is that he should have the costs of the action on the standard basis, until 23^rd January 2009, and thereafter on the indemnity basis.

The reason for the reference to 23^rd January 2009, is that that is the date upon which a Part 36 offer was made. The Part 36 offer is set out on pages 1 and 2 of the bundle of correspondence that Mr. Roberts has helpfully prepared for me. It is clear that the offer took into account, because it said so, all counterclaims that had been made by Mr. Singh, and that might be made by him in future. It was also clear that the offer, if accepted, would be on terms that Miss Walsh would withdraw her claims against Mr. Singh, and agree not to issue any claims which she considered she had, or in the future might consider that she had, against Mr. Singh in relation to this matter, which I take to be the proceedings generally, “whether asserted or not.” Clearly, therefore, it was meant to sweep up everything, which is a very sensible approach.

The offer was that Mr. Singh would pay Miss Walsh a sum of £85,000 within 14 days of acceptance. There was also an offer for costs up to the date of acceptance.

The offer did not in terms deal with the Italian property. Mr. Brennan’s submissions in writing, which were prepared for today, were prepared on the assumption that the Italian property would remain owned 50/50. He was disabused of that notion by Mr. Roberts, who explained that the offer was intended to leave Mr Singh with the Italian property. Mr. Brenan, in conceding in his written submissions, that the offer was better than Miss Walsh achieved in the action, was therefore acting under a misapprehension. That may be advanced as a criticism of the offer. However, clarification could have been sought and was invited. No clarification was sought. Instead, a counter offer was made, dated 25rh February 2009, in which Miss Walsh made an offer to settle on terms which were far more favourable to her than what she achieved in this action. Had clarification been sought, I am prepared to accept, as Mr. Roberts tells me, that Miss Walsh’s solicitors would have been told that the £85,000, if paid, would be in return for Miss Walsh abandoning any claim, even for the half share that she was on the face of the documents entitled to, to the Italian property. It is not immediately clear, on that footing, whether or not the Part 36 offer did offer more than Miss Walsh has achieved in this action, so I should explore this issue further.

In this action, Miss Walsh is recovering, though she did not in fact claim, £25,000 in respect of the loan made for the 33 acres, and £7,500 in relation to the paddock. That is all she has recovered in monetary terms, though she has also recovered, by my order, the engagement ring, and by agreement, after Mr Singh’s Part 36 offer was made, another ring. The figure of £85,000 therefore includes those two figures of £32,500, plus any interest referable thereto, which I will deal with in due course, plus the two rings, plus half of the Italian property. The two rings did not have a great value, but I have no reliable evidence as to what their value is. Mr. Brennan did not suggest that they would tip the scales, and very fairly acknowledged that he could not demonstrate that the £85,000 is less than his client has since recovered. On the other hand, the question may be: has Mr. Roberts demonstrated that it is more?

There was a 2008 valuation of the Italian property, which in Sterling terms at the then exchange rate, valued it at £47,900. Miss Walsh has got half of that. That is in very round figures, £24,000. I round it upwards slightly for ease of arithmetic. On that footing, she has recovered £24,000, plus £32,500, plus the rings, which I shall assume are worth between them £5,000. My understanding of the evidence is that this is probably a generous amount, because Mr. Singh did not pay as much as the rings looked as if they might be worth. The value of the recoveries therefore totals £61,500, which is still £23,500 short of the £85,000. However, the 2 rings were recovered in specie, which was Miss Walsh’s choice and, as they were hers, she was not obliged to take money in lieu.

By this time, January 2009, various counterclaims had been abandoned, in respect of which some significant costs had been incurred. There remained a counterclaim in respect of expenditure on the various properties, and for what were said to be joint losses, and a counterclaim for the return of maintenance payments or allegedly negligent advice, all of which was covered by the offer. At the trial, Mr. Roberts’ client, Mr. Singh, did not succeed on those claims, though as finally formulated (but only at a late stage of the trial itself) the claims in respect of expenditure and losses only arose if Miss Walsh in turn won on her main claim.

The missing element is interest, which in order to top the offer has to exceed £23,500. That requires me to consider what interest I should award in relation to the sums totalling £32,500. So far as the £25,000 is concerned, Mr. Singh’s evidence was that there was an agreement that it should bear interest, implicitly at a commercial rate. The entitlement to interest is therefore not discretionary, but contractual. In my judgment therefore, interest has run on that loan from the date of the loan, which was around August 2005, of which a sum just in excess of £1,000 was paid in or around March 2006. I shall require interest to be paid at the rate of 2 per cent above Lloyds TSB bank rate from time to time. The words “Lloyds TSB” shall be taken as a reference to whatever that entity has been called over the period in question, the key word being Lloyds.

So far as the £7,500 is concerned, that is different. There is no evidence that any contractual interest was ever agreed. Accordingly, the only claim is for statutory interest, which could, in theory at any rate, run from September 2003, the date the loan was advanced, that being the date upon which the cause of action arose, in my judgment. There is no evidence that demand was a condition precedent to recovery of the loan. However, the parties for a considerable period after that date, lived together in relative harmony, and there was give and take, as I explained in my earlier judgment, in relation to financial matters. The assistance that Mr. Singh gave to Miss Walsh over the years was considerable, and I do not think that it would be just to award interest for the whole of the period in question. It is well established that I am entitled to consider a period of delay before a claim is made. No formal claim for that loan was made until the last day of the hearing in April of last year. However, Miss Walsh was clearly requiring, as Mr. Brennan has pointed out, a final settlement of the financial consequences of the split, in March 2006, and I accept Mr. Brennan’s submission that it would be just in those circumstances for interest to run from the date of the gentleman’s agreement, which was 7^th March 2006, although not an agreement that was legally binding. It is clear from that date at the latest, that Miss Walsh was requiring her dues, whatever they were. As it happens, I have found that her dues included this £7,500, and it seems just to me that interest at the rate I have specified, 2 per cent above the relevant base rate, should run from that date.

I have not done the detailed arithmetic, but Mr. Brennan has calculated that, at the somewhat ambitious rate of 8 per cent, being the judgment rate, from 7^th March 2006, there is a sum of approximately £6,500 due. It seems to me that, with the adjustments I now require, which involve a slightly longer period of interest for the £25,000, but at a variable rate referable to a base rate which for much of the period has been well below 8 per cent, it is unlikely that the gulf between the £61,500 that I have referred to and the £85,000 referred to in the offer, has any realistic chance of being filled. That is also the case even if I assume that the sterling figure of £24,000, which I have attributed to the Italian property, has increased in line with the increased value of the Euro. There is still a large gulf, and it is unlikely that that gulf will have been filled.

Therefore, I am satisfied that the claimant has failed to obtain judgment which in terms of value is more advantageous than the defendant’s Part 36 offer. That is so on the assumption that I do need to take into account, as in my judgment I do, the fact that the £32,500 plus interest at the appropriate rate and for the appropriate period, is something that I need to factor into the calculation. Miss Walsh, as Mr. Roberts points out, was not claiming these sums; she was making the entirely different claim for an interest in the Leire properties. Mr Singh’s defence was that the £25,000 with ongoing interest remained due. It seems to me however that when considering the offer that was made, which was intended to sweep up claims which might be made, whether asserted or not, that the £25,000 plus interest is something I have to take into account. Likewise in relation to the £7,500, Mr. Singh’s defence was not that the £7,500 was due, but that it was a loan and had been repaid. I accepted the first limb of that defence, but not the second. Therefore, on that issue, Mr Singh won in part and lost in part. Miss Walsh’s claim (initially) was that the £7,500 was not a loan at all. On that issue she lost, though she also contended successfully that, if it was a loan, it had not bee repaid. On that issue, she won. Although she only claimed repayment of the £7,500 as a loan on the last day of the hearing, its potential recovery at the date of the Part 36 offer is something I need to factor in, as the offer related to all claims whether asserted or not.

Even taking those matters into account, Mr. Singh has done better at trial than he would have done had the Part 36 offer been accepted, and Miss Walsh has failed to obtain a judgment more advantageous in value terms than Mr. Singh’s Part 36 offer. That brings the case within CPR 36.14(1)(a).

CPR 36.14(2) provides:

“Subject to paragraph (6)…” – which has no application – “… 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.”

CPR 36.14(4) provides:

“(4)

In considering whether it would be unjust to make the orders referred to in paragraphs (2) and (3) above…” – and I am concerned only with paragraph (2) – “…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.”

Sub-paragraph (5) then provides:

“(5)

Where the court awards interest under this rule and also awards interest on the same sum and for the same period under any other power, the total rate of interest may not exceed 10% above base rate.”

The phrase ‘all the circumstances of the case’ is also used in another rule on costs, which is to be found in Part 44. Under that part:

“44.

3(1) The court has discretion as to –

(a)

whether costs are payable by one party to another…”

However, if the court decides to make an order about costs, CPR 44. 3(2) provides:

“(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.”

CPR 44. 3(4) provides:

“…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.”

Paragraph (5) then develops reference to the conduct of the parties, which makes it plain that the court has a very wide discretion in relation to issues raised and the manner in which the claim has been pursued, and the extent to which a claim is exaggerated. That is just a summary.

Those factors, it seems to me, especially conduct, are also potentially relevant when considering the generality of the words, ‘all the circumstances of the case,’ in CPR 36.14(4), though losing on some issues, and other offers, will normally be insignificant once CPR 36.14(1) is engaged. However, I do need to consider the degree of overall success in this case, as that is relevant to costs before the Part 36 offer.

When I ask myself the question which party was successful on the claim, there is no doubt that largely, though not entirely, Mr. Singh has succeeded in rebutting the claims in respect of property ownership. He has wholly succeeded as regards the Leire project, as I referred to it in my judgment, although his claim failed, as did Miss Walsh’s, in relation to entire ownership of the Italian property. Miss Walsh did however succeed in respect of the recovery of two rings, one of which was recovered shortly before the trial began, but after the Part 36 offer, and another of which is recoverable by virtue of the order that I am now making. I note that the ring has not yet been handed over, but Mr. Roberts tells me, on instructions, that his client was under the impression that the obligation to hand over the ring will not arise until any order I make today, and points out, which has not been contradicted by Mr. Brennan for Miss Walsh, that in the correspondence over the form of order, delivery up of the ring before today has not been earnestly pursued. In those circumstances, I do not think it would be right to take into account the failure since my judgment was handed down, to hand over the second ring. Nonetheless, Mr. Singh lost on that issue.

That issue relates to a relatively minor part of the action in terms of overall value. However, a considerable amount of time was spent in the course of the hearing, detailing the nature of the relationship, and exploring the issue of whether or not the parties ever were properly engaged. I was left under the impression at times from Mr. Singh’s evidence - and I should say that I have before coming into court today re-read my notes of Mr. Singh’s evidence and of Miss Walsh’s evidence, though not the other evidence, which I consider to be adequately summarised in my judgment - that Mr. Singh was effectively saying that the parties were never really engaged in any serious sense at all. He sought to pray in aid the absence of formal announcements, and in any event, sought to persuade me that the engagement was off almost as soon as it was on (though in fact there was a period of a year or so before the ring was handed back for, as I found, re-sizing) and that Miss Walsh’s aspirations in relation to the relationship and her continuing insistence in front of friends that they were still engaged, was a product of her living in a fantasy world, which he himself dubbed ‘Moira world.’ He sought to buttress that by the suggestion that Miss Walsh was less than mentally stable. This resulted in the production and (as it turned out) pointless examination of her medical records. Mr. Brennan, grounding himself upon that and other examples, submitted that Mr. Singh’s conduct throughout the trial was deserving of censure, as he lost no opportunity to belittle or discredit Miss Walsh, an approach which he must have appreciated, according to Mr. Brennan, was particularly damaging, potentially, given Miss Walsh’s professional status.

I recorded in my judgment, the unattractiveness of Mr. Singh’s attitude towards the ring, and having looked at my notes of evidence again, my lack of attraction to his attitude is unaltered. I regard Mr. Singh’s conduct of the action as wholly deserving of the censure which Mr. Brennan heaped on him.

In addition to the two aspects that I have mentioned in relation to the engagement and the attempt to characterise Miss Walsh as mentally unstable, Mr. Singh sought to rely upon material that he had obtained by the use of spyware on a laptop which Miss Walsh was using. Amongst other things, this revealed privileged material, which Mr. Roberts, no doubt upon instructions, and I intend to criticism of him, sought to explore in cross-examination, until a very determined resistance from the Bench persuaded him to step down. The capture and use of this material caused obvious and visible distress to Miss Walsh. In addition too, much of Mr. Roberts’ cross-examination, again I have no doubt reflecting the instructions he received from his client, was, as Mr. Brennan has submitted, calculated to belittle and discredit Miss Walsh, portraying her as a silly woman who lived in a fantasy world. There was one notable occasion when I had to stop Mr. Roberts from adopting a line, which it seemed to me could only be described as bullying Miss Walsh. None of this does any credit to Mr. Singh, because I have no doubt that the case was conducted strictly in accordance with his instructions, as his own evidence amply confirmed.

There was, during the hearing, an attempt to issue a witness summons against Miss Walsh’s new boyfriend. I could not see why that had any relevance to the issues I had to decide. There is no doubt that this proposal was based upon Mr. Singh’s instructions. Mr. Roberts told me today that that might have reflected upon the seriousness of the relationship, i.e. the issue of whether or not the parties ever were properly engaged, or more accurately, how long the engagement lasted. The suggestion was, I think, that if Miss Walsh was misbehaving sexually with some other party whilst the relationship was still in train, this would in some way undermine her case. In the event, the evidence was not called, no doubt in response to my repeated discouragement, but the threat was there, and Miss Walsh had to give her evidence against that threat, and was cross-examined along the lines which I have just indicated. It seems to me that in old fashioned terms, Mr. Singh betrayed himself in this respect as somewhat lacking in gentlemanliness, to put it at its lowest. He was no doubt responding to what he regarded as an outrageous claim, but I do not think that his sense of outrage (however genuine) justified him in adopting a no holds barred approach or to delve into the irrelevant in an endeavour to blacken Miss Walsh’s character.

Mr. Roberts has sought to portray the claim that Miss Walsh put forward as an essay in hyperbole, where she ramped everything up, assembling a small platoon of friends to come and give tainted evidence, all of which had, according to him, a consistent literary style, which I was asked to infer was Miss Walsh’s. Mr. Roberts also explained to me that Mr. Singh felt, as clearly he did, strongly about a number of matters, including the matters I have mentioned.

I should say straightaway that although I did not accept Miss Walsh’s claim, I did, as I stated in my judgment, find her in general terms a more satisfactory witness than Mr. Singh, though there were a number of the more ambitious parts of her claim which I was unable to accept. I did not, however, consider that she at any stage consciously told me any lies. The events with which I was concerned spanned a number of years, and experience shows that honest witnesses often do, in digging back into their memories, genuinely persuade themselves of a chain of events, which though based on the truth is not in fact accurate or entirely reliable. I consider that that is what happened to Miss Walsh in this case. Whilst I had doubts also about some of the supporting witnesses, I am not satisfied that any of them were deliberately telling me untruths, though it is possible that one or two of them may have been.

That contrasts with Mr. Singh’s position, who I am quite satisfied did not tell me the truth, and knew he was not telling me the truth, about the engagement and the ring. It seems to me that there is a major difference between the conduct of the parties in that respect. Miss Walsh brought a claim in good faith that failed, Mr. Singh chose to embellish his evidence with untruths, and hurtful cross-examination, which was not necessary, and which raised the temperature of an already emotional case, much higher than it need have been. It seems to me that it would be quite unjust if that was not reflected in some way in my rulings as to costs, notwithstanding the Part 36 offer. A well-judged Part 36 offer does not give the offeror licence to conduct the trial thereafter in whatever way the offeror thinks fit without fear of costs reprisals, where appropriate.

Mr. Brennan also points out that until October 2008, there was a counterclaim, which has now been abandoned. Mr. Roberts tells me that it was abandoned for pragmatic reasons, but was genuinely reflective of Mr. Singh’s intentions and views. That may be so, but the claim was abandoned, and I can see no basis for the costs consequences of that abandonment not being visited upon Mr. Singh, down to the date of abandonment, which pre-dated the Part 36 offer. Yet Mr Roberts seeks the whole of his client’s costs down to the Part 36 offer on the standard basis, and indemnity costs thereafter.

From the very rough and ready figures that I have seen, the costs incurred down to the abandonment of the counterclaim are substantial, and at least equal to and probably exceed the costs that Mr. Singh incurred after the Part 36 offer. Not all the costs incurred down to October 2008 would of course be referable to the abandoned counterclaim, but I am satisfied that a substantial part of them would be. As to the reformulated counterclaim which remained for determination at trial, Mr Singh was wholly unsuccessful in relation to his claim for recovery of maintenance payments or damages and would ordinarily have to pay the costs of that counterclaim (subject to the Part 36 offer). He lost also on his claim for contributions to losses and expenditure, which remained free-standing claims (not dependent on success in his defence) through most of the trial. Though successful in his defence to the claim for the Leire properties, he was unsuccessful on one quite important issue which required me to consider 2 different versions of events, and some documentary evidence – namely whether the £7,500 had been repaid. Neither side won as regards the Italian property. Given also Mr. Singh’s defeat on the issues of the engagement and ring, which took up a disproportionate amount of the hearing, and required evidence to be given from a number of sources to prove what should never have been in issue, it seems to me that were it not for the Part 36 offer, Mr. Singh might have ended up paying, in respect of his defeat on the ring claim, his abandonment of the original counterclaim, his defeat on other parts of the counterclaim, and other issues upon which he lost, rather more than he would recover by way of costs in respect of his successful defence of Miss Walsh’s main claims. .

When I add to that the disgraceful behaviour in relation to the spyware, the unjustified attempts to portray Miss Walsh as mentally unstable, and Mr Singh’s general conduct of the trial as already summarised, it seems to me that it would be unjust (notwithstanding the Part 36 offer) to order Miss Walsh to pay costs and interest from the date of the Part 36 offer, even assuming, as I do for argument’s sake, that they would exceed the costs which Mr Singh could have been called upon to pay down to that date. Equally, in the light of that offer, it would not be right for Mr Singh to pay any part of Miss Walsh’s costs. In all the circumstances of the case, justice would be done by making no order as to costs one way or the other. That is my order, and I shall now hear counsel upon any other matters that may arise on the form of order.

I am going to make no order as to the costs of today. Mr. Roberts points out that there has been a lengthy dialogue, and that the points upon which I have decided the costs issues today, have only emerged late. He complains of ambush. I did offer Mr. Roberts time to put in written submissions if he wished to, but he understandably chose to make his points today, and he made them very well, albeit with relative lack of success. In those circumstances, it seems to me that the costs of today should follow the main costs order I have made. Now, what about the main order?

I will have to fill in a formal piece of paper, which I will ask the clerk to get me, but I am going to refuse permission to appeal, because costs are in the discretion of the court. It may be that you can persuade the Court of Appeal that I have gone off the rails, but I think it is for you to persuade the Court of Appeal on an application for permission to appeal to that effect, not for me to lumber them with it.