Abbotsley Limited & Anor v Pheasantland Limited & Ors

This is an unusual, informal, application made on behalf of the first defendant, Pheasantland Limited (“Pheasantland”), against the claimants, Abbotsley Limited and Ms Saunders, on her own part and as the sole director of Abbotsley Limited, for costs that it is said have been “wasted” by reason of the conduct of Ms Saunders.

In total, Pheasantland seek five additional days of refreshers together with an additional four days for the drafting of the written submissions. The reason for that request is that, despite the court sitting early and late, the fifteen-day trial (including a day for closing submissions) has already taken 19 days for the taking of evidence and another day for the giving of oral submissions. Additionally, given the minute detail in which issues have been canvassed with the witnesses, it is very clear that one day would not be sufficient for all submissions to be made and it has been agreed that written submissions are required. For the first defendant, having calculated the need to raise funds to cover a 15 day trial, a 20 day trial (including a day of submissions) together with an additional 4 days for written submissions, is a very heavy burden.

It was agreed between counsel and the court that there was no requirement for Pheasantland to make a formal application with respect to this issue. The claimants now say that Pheasantland have failed to identify the basis upon which such an application for costs can be made at this time before a final determination is made.

In this case, there has been a considerable amount of court time spent in preliminary applications brought by the claimants:

All the applications were brought on behalf of Ms Saunders by her directly instructed junior and leading counsel. Both the application to adjourn and the redaction application were very straightforward and easily dealt with. The application for “early determination” and the subsequent unsuccessful appeal were lengthy and complex matters which took a considerable amount of court time – both in court and also, so far as I was concerned, dealing with all the points raised in great detail. Similarly, the application to recuse, while misconceived and brought on the wrong legal test, still took a significant period of time. Costs have been ordered, dependent upon who was successful and who failed, taking into account the issues contained within CPR 44.2.

While I understand the frustrations of the first defendant with respect to the way in which this litigation has been conducted – as if the court had nothing else to do than deal with any of the concerns that Ms Saunders may have – I do not consider that the court is in a position at this time to deal with the more general issues as to the need for written submissions and the reasons as to why witness evidence, particularly that of Ms Saunders, took so long as there are nuanced arguments on both sides. In my judgment, those matters can only properly be dealt with at the end of the trial.

The one area in which I consider the court can properly determine costs at this stage of the proceedings, and indeed should deal with costs now rather than at the end of the proceedings and after judgment has been given, are the delays caused that are clearly attributable to conduct. There were, for example, a number of occasions when it was necessary to halt the progress of the case in order to lift the embargo to talk to legal representatives when giving evidence, in order that Ms Saunders could give instructions, because her answers on oath were potentially causing professional embarrassment to her KC. That was highly unusual and not something that has happened in any other civil case I have heard as a judge or previously in the years I appeared as Counsel. It was not a singular incident.

I have considered with care the written submissions on this issue from both the first defendant and the claimants in response. The underlying submission on the part of the first defendant is that the claimants appear to have unlimited resources whereas the first defendant, which operates for the purpose of managing the leasehold of the Abbotsley Country Homes land and lodges, has very limited resources and is reliant upon the loans of the wealthier lodge owners to be able to continue to defend the claims with legal representation.

It is clear from the evidence that I have heard, that Ms Saunders is an experienced litigator and that she is very well aware of her ability to run a case at great cost, instructing senior counsel, with the idea that, if successful she will be able to recover those costs against the party she has decided to litigate against. I have expressed my concern during the course of this trial that the court is being used as a weapon to bully the defendants into behaving in the way that she wishes them to behave. I have been assured by leading counsel that is not the case and I accept that there are legal and factual issues between the second claimant and all the defendants that need to be resolved.

The individual defendants in this case are in no financial position to pay for their own legal representation through the proceedings and many gave evidence of how this litigation has both locked them into not being able to sell their property and has taken all their savings – at least one described being on their knees. The first defendant is struggling to be able to pay for ongoing legal representation and is facing First Tier Tribunal proceedings with respect to whether the service charge can be used to fund any part of the litigation. On the other hand, the claimants have not baulked at paying very significant legal fees of both leading counsel, junior counsel and a paralegal on a noting brief, even though the cost budgeting clearly provides only for one counsel with Ms Saunders deciding not to instruct a solicitor. The first claimant is a significant land owner and the second claimant is the sole director and shareholder of the first claimant. At least a significant part of the land owned by the first claimant is currently subject to a promotion (or option) agreement with a significant local house builder. The land falls very close to the development of train and road transport links between Oxford and Cambridge and has been an area of recent significant housing development. In addition the second claimant is the owner of a now unused hotel and sports complex, which appears ripe for development. There is an apparent and clear significant financial inequality of arms and, while I do not have bank statements or other evidence before me, all the evidence available, and Ms Saunders’ conduct, indicates that she does not struggle with paying what must be very high legal costs. The court has no role in rebalancing financial inequalities.

The court has a wide discretion with respect to the ordering of costs, both by reason of the provisions of section 51 of the Senior Courts Act 1981 and CPR 44.2, and the claimants’ counsel does not seek to suggest that the court does not have jurisdiction to award costs at this time, only that it should not do so in all the circumstances.

Three general reasons for the delay in Ms Saunders giving evidence are relied upon by the first defendant in order that a costs order be made against Ms Saunders: the time she took to give her answers; the need to put every point to Ms Saunders in order to avoid any potential future argument that something had not been put to the claimants; and the time taken to take instructions or give advice, during the course of Ms Saunders’ evidence.

The time taken by Ms Saunders to give her answers, and her desire to explain to Chancery counsel just how difficult the construction of a lease can be, undoubtedly increased the time it took for the evidence to be given. In addition, there were a number of times when Ms Saunders would not answer the question put to her, but another question giving the same answer she had already given. I generally do not like witnesses to be interrupted when they are giving their evidence and, as counsel for the claimants acknowledges in her written submissions on this point that the “court was entirely consistent in giving all witnesses the opportunity to give full answers.” While I did eventually intervene in the cross examination in order to ensure that Ms Saunders focussed on answering the question put, I initially allowed her the latitude to answer as she wished - not least because she has shown that she can perceive unfairness against herself (even where that is not the case) and I wanted to ensure that even she could not suggest that she had been prohibited from giving her evidence as she wished.

I can fully understand the position of counsel for the first defendant that he needed to put every point to Ms Saunders. Ms Saunders is the driving force behind this litigation and she has a very clear view as to her own interpretation of the documents. She has shown by her actions that a failure to agree with her view is not something she can accept. Her own counsel needed to obtain her written agreement at the end of each witness being cross examined to ensure that she was satisfied that the KC she had instructed had taken every point she wished to have taken. I was willing to accommodate that, in the same way that I was willing to accommodate the cross-examination of Ms Saunders dealing with all points, even if some will ultimately be determined upon a construction of the lease. It would not have been fair for the first defendant to have been prohibited from asking a line of questions, for the claimants to then contend that the view expressed by Ms Saunders had not been challenged in court. While counsel for the claimants had sensibly conceded that construction was a matter for the court, given the way in which this case has been litigated and the way that Ms Saunders’ own counsel had to take instructions both during the cross examination and, as I have set out, obtain written acknowledgment from her lay client that she was satisfied with the cross examination, it was appropriate for all of Ms Saunders’ evidence to be explored. It was not possible to know that Ms Saunders may have disagreed with the stance her counsel had taken. As her counsel has acknowledged, Ms Saunders cannot now complain that her views were not fully aired and explored. The time that took may be something that will be relevant to determinations on costs at the end of the trial, but it is not something I can properly take a view upon at this stage.

The third point raised on behalf of the first defendant is with respect to the time “wasted” by reason of Ms Saunders’ own behaviour: both in giving answers while being cross examined, which gave counsel concern that she might be professionally embarrassed, and the time that the court had to spend time resolving issues created by Ms Saunders’ own conduct. I will come to the detail of those matters in due course, but in my judgment those incidents clearly wasted court time, delayed progress of the case and the costs consequences should properly be dealt with now.

With respect to the other matters that have been raised in the written submissions, it is not appropriate for the claimants to be held responsible for the fact that the conditions in court were unacceptably hot such that it became impossible to continue with the trial. That is a matter I have raised with those who are obliged to provide workable court facilities and continues to be an issue. Similarly, the claimants cannot be held responsible for a technical glitch. In any event, the fact that the court sat both early and late in order to make best use of court time cancelled out any delays caused by the inadequacies of the court and the difficulties with equipment.

With respect to the schedule of incidents, the matters where there was court time wasted as a consequence of the conduct of the second claimant and/or the need to take further instructions to avoid professional embarrassment were as follows. Where I am in any doubt as to whether the fault lies directly with the second claimant, I have not included these matters. Having been presiding over this trial, I can be absolutely certain where I have referred to time being wasted – this is time that was wasted because of the second claimant’s conduct.

By listing out these incidents it can be seen just how “out of the norm” the behaviour of the second claimant has been within the litigation. The total wasted time on these various points amounts to 7 ½ hours or 1 ½ days of court time. At a rate of £3,500 – which is entirely reasonable and proportionate - that is an identifiable and wasted cost of £5250 awarded on the indemnity basis.

Those costs should have VAT at 20% added to them in the sum of £1050 (a total figure of £6300). The first and second claimant, who are jointly represented, agree that the costs should be borne by Ms Saunders – the second claimant. It has been submitted by counsel that Ms Saunders is not registered for VAT and therefore VAT should not be added. That submission is not correct. The paying party is obliged to pay VAT regardless of the status of the paying party. The only time that VAT is not recoverable is if the receiving party is able to recover the VAT themselves. The total sum of £6300 should be paid to the first defendant within 14 days of today. While there has been a submission to pay in 21 days, the second claimant has given no justification for why she needs that additional time and there is no reason for the court to extend time.

The second claimant further seeks additional time to appeal, beyond the time given in the civil procedure rules of 21 days from the decision being made. It appears that the second claimant wishes to extend time until after the full judgment. There is no justification for such an extension of time. This is a discrete issue and if counsel for the second claimant considers there is a proper basis for bringing an application for permission to appeal on this determination on costs then that properly should be dealt with within the period allowed for in the rules.

If the counsel for the second claimant considers that there is a good basis for bringing an application for permission to appeal this costs order then that application should be made now. There is no reason for delay and, to my recollection, this is the third or fourth time the claimants have sought to hold over seeking permission to appeal until final judgment is given. It gives the appearance that the second claimant wants to have the opportunity to keep litigation on these points alive, when there should be finality.

In the course of providing spelling corrections, counsel for the claimants have drawn the court’s attention to paragraphs 8 and 25 of written submissions. I have already had to say in open court that the parties must understand that if a particular point is not dealt with, or if matters are not raised specifically in the course of the oral submissions, that does not mean that a point is being accepted. It is impossible in any case, and particularly in a case with this number of individual issues, for a judgment to expressly deal with all points. That is not a failing in the judgment and it will need to be understood that all submissions are taking into account when a determination is made.

The same applies with respect to points raised in submissions. It is for the judge to determine which points need to be dealt with and, while I have accepted that there are legal and factual issues between the parties which need to be dealt with, I am very concerned that the way in which this case is being conducted with a requirement that every single point, including bad points, is dealt with in specific detail is highly unusual and is evidence that the proceedings themselves are being used to wear down those who are seeking to defend themselves. It is a waste of court time and, while I am now dealing with these points, having already considered them once, I could of course have been dealing with other matters.

With respect to paragraphs 8 and 25, I have already said “I have considered with care the written submissions on this issue from both the first defendant and the claimants in response”. That did not mean “I have considered with care the written submissions on this issue from both the first defendant and the claimants in response save for paragraphs 8 and 25 of the claimants’ submissions”. The reason I did not need to waste time with dealing with these points expressly as my judgment only deals with the significant amount of costs wasted by the second claimant by reason of her conduct. Neither paragraph 8 or 25 have any impact upon issues of conduct of the second claimant: paragraph 8 deals with the financial difficulties of the first defendant, that is not relevant to the second claimant’s poor conduct and is something which can be considered after final judgment is given; paragraph 25 deals with the fact that more witnesses were called to support the first defendant’s defence, that it not relevant to the second claimant’s poor conduct and the court time wasted by her.

Consequently, the claimants can be assured that I did, and will always, consider all the points made by or on their behalf even if I do not write out each point and then state why I agree or disagree. That is simply not how a judgment is written.