Clarke v Meadus

Following my judgment handed down on 1 December 2010, Mrs Clarke seeks the costs of her successful appeal. It is argued on behalf of Mrs Meadus, in the light of the amendment which I allowed (in particular, the addition of the new paragraph 20A of the APoC), that I should l award Mrs Clarke only a proportion of her costs.

I have already noted in the final paragraph of my judgment that I would have allowed the appeal even if the later representation had not been made. But that is not to say that the later representation was simply a continuation of the same thrust as Mrs Clarke’s case based on earlier representations. The later representation is important not least because it came after the September 1996 documentation.

The later representation was raised quite late in the day, well after the summary judgment application had been launched. It does not appear that any formal application was made before the Master to amend the pleading. The Master did not deal with the later representation in his judgment and it is not clear precisely what reliance was placed on it before him. As it happens, his decision based on lack of detriment and the inability of Mrs Clarke to establish an equity going beyond the 50% which she had already received, did not depend on the representations made: it was assumed that there had been reliance (on the earlier representations) so it might be thought that it would have made no difference to his decision that the later representation had been made too.

That, however, may not be so. The Master relied on the 1996 documents, in particular the DADT, in rejecting the constructive trust argument; and his rejection of that argument had, as I said, an impact on his approach to the proprietary estoppel argument.

I think that it must be questionable whether Mrs Meadus would ever have commenced her summary judgment/strike out application if the later representation had been pleaded. It is submitted on behalf of Mrs Clarke that Mrs Meadus clearly would have done so as is shown by her conduct of the application once the later representation had been raised, and by her forceful opposition to the appeal in the face of reliance on the later representation. But I do not accept that submission. It is hardly surprising that, the application having been made, Mrs Meadus continued with it in the absence of any application by Mrs Clarke to amend her pleading.

It would be wrong, I think, to allow Mrs Clarke, in these circumstances, to recover the entirety of her costs of the application, although having been successful, it would be wrong to deprive her of all the costs or to allow Mrs Meadus to recover any of her own costs. In my judgement, Mrs Meadus should pay to Mrs Clarke 2/3^rds of her costs of the application. In addition, Mrs Meadus should repay to Mrs Clarke the amount which she has received from Mrs Clarke in respect of costs of the application pursuant to the Master’s costs order. This should be repaid by 3 February 2011 with interest at the judgment rate from that date on any amount remaining unpaid.

So far as concerns the appeal, Mrs Clarke has been wholly successful. She would, as I have said, have been successful even if the later representation had not been made and thus she would have succeeded even in the absence of the amendment. A considerable part of the appeal – both its preparation and it hearing – was concerned with the issues of detriment and satisfaction of any equity which Mrs Clarke might establish. Time was also spent on various other aspects. On none of the arguments was Mrs Meadus successful in the sense that the case against her on behalf of Mrs Clarke was unarguable whatever might be the eventual outcome after a full trial. The only reason for which Mrs Clarke might be deprived of some of her costs is, again, the late application for the amendment.

It seems to me that, even if the application to amend had been made to the Master and granted by him, the appeal would have taken very much the course which it did. Arguments about detriment and satisfaction of the equity would still have featured large, as would arguments about the effect of the 1996 documentation and whether it was possible to go behind the beneficial interests declared in the DADT. In the course of argument, I asked to be addressed on the position assuming, without then deciding, that the amendment would be allowed. There was no hint of a concession on behalf of Mrs Meadus that in those circumstances, the case was not appropriate for strike-out or summary judgment. In my judgment, Mrs Clarke should have her costs of the appeal.

I have been provided with schedules of costs for the application and the appeal. Significant costs have been incurred. In the light of the submissions which have been made, I do not consider that I should conduct a summary assessment. Having said that, I should record that I do not consider that the application or the appeal required leading counsel to be instructed or that the appeal required two counsel to be instructed. In conducting a detailed assessment, the costs judge should allow fees appropriate to a junior barrister of 15 years’ call. It will be for the costs judge to determine whether there has been unnecessary overlap of work by two fee-earning solicitors. I am not clear from the schedule of costs whether two solicitors attended court on any occasion. It is not easy to see how that could be justified, if it took place, and is again something which the costs judge will take into account. It will also be for the costs judge to determine the level of the success fee. I should indicate my view that the success fee should not be anything approaching 100%.

As to the costs incurred in relation to the costs hearing and written submissions in relation to costs, my decision is that there should be no order. Neither party has achieved payment of as much or as little as it sought. It would not be fair to order that the costs of this exercise be treated as costs of the appeal. It is disproportionate to have a further round of submissions on this aspect after the detailed assessment has been completed. The fair solution is to make no order.

Although I am not assessing the costs summarily, it is open to Mrs Clarke to make an application for a payment on account under CPR 44.3(8). She should think carefully before doing so in the light of paragraph 30 of Mr Sinnatt’s Supplemental Written Submissions on costs dated 6 December 2010.

My conclusions, therefore, are these: