Royal Borough of Kensington & Chelsea v Beko Poland Manufacturing & Ors

This is part of a hearing consequential on an application by the claimants, the Royal Borough of Kensington Chelsea, to strike out the Defence of the Celotex defendants. That application was heard by me on 8 and 9 October and resulted in a concession by Celotex that the Defence and Counterclaim were not in accordance with the Rules and should be struck out and that the matter should be entirely repleaded. The Defence and Counterclaim in question was served on 18 July. The application to strike out was made on or about 30 July and inquiries were made with the court about listing, resulting in a date being fixed, in the course of August, for the hearing in October.

It is I think important to observe that the basis for the application was one of form, not substance. In other words, it was not the case that RBKC alleged that something pleaded in the Defence was so outrageous or so wrong in law that it amounted to an abuse, but rather that the Defence in its then form was prolix and not in accordance with the Civil Procedure Rules, and, in particular, not in accordance with the overriding objective.

One particular aspect of that complaint which was considered at the hearing in October, and certainly concerned or exercised me, was that there was pleading in the Defence of matters which were not truly defences but were rather allegations against the Part 20 defendants who were already defendants in the proceedings. Those allegations were set out in a series of Appendices to the Defence and Counterclaim which added to its already extreme length. In accordance with the directions that had been given at the last case management conference in December 2024, Part 20 claims were served at the same time as the Celotex Defence.

The normal course that one might have expected to see was that those Part 20 claims were fully pleaded out in the sense of full pleading of the allegations that were made in respect of fault of other defendants and positive consequences of their acts or omissions, and that there was perhaps some cross reference to that in the Defence. Instead, the approach that Celotex, slightly unusually, took was to do things the other way round and to put their allegations against the Part 20 defendants into the Appendices to the Defence and then incorporate those by reference into the Part 20 Particulars of Claim. It is also worth noting that when those Part 20 Particulars of Claim were served, there were no applications made by any of the defendants on whom they were served to strike them out for any reason.

In the course of August, however, the prospect of the Celotex Defence and Counterclaim being struck out led to issues about the timetable and dates for service of further pleadings including in the Part 20 proceedings. That resulted in a Consent Order made at the end of August the effect of which was to put everything on hold pending the outcome of the application to strike out. The application was listed for one and a half days and, as I have said, conceded on the second day. When originally making the application, RBKC had asked for a listing of one and a half days followed by a further half day for judgment and consequential matters.

It seemed and seems to me quite obvious from that that it was not anticipated that the Court would, at the end of one and a half days of hearing, which, in the event, and even with the concession, were hard fought, give an extempore judgment and immediately move on to any consequential directions. Indeed, the absolute opposite was what was contemplated when the application was made.

In the event, the application having gone by concession on day two, I directed that there should be a further hearing on the first available date, with a view to resolving matters that followed from the strikeout application, in advance of the four day case management conference which is already listed in December before both me and Senior Master Cook.

One of the matters left over was costs as between the claimants and Celotex. That has been agreed and a draft order has been approved by me. It is not clear whether it has yet been sealed but undoubtedly will be.

The matters before me today are, therefore, other aspects of costs, principally, but not exclusively, claims by the various defendants for costs, the exceptions being Beko and Arconic who seek no costs orders but reserve their position in the event, which I will come to, that there are amendments to the contribution claims against them.

The first matter is the bearing of the costs of the Celotex Defence and Counterclaim which has been struck out. All of the defendants have been concerned with the point, first raised by Ms Piercy KC on behalf of Harley, that there should be no circumstances in which at the end of the proceedings they could find themselves liable for the costs of the statement of case that was struck out. It is common ground that that would be wrong and it was also common ground by the end of this hearing that that position is in fact already covered by the Order that was agreed between the claimants and Celotex because it refers to these proceedings which include the Part 20 proceedings within the scope of the proceedings between RBKC and Celotex.

Accordingly, it seems to me that it is not necessary to make any further orders in that respect, or indeed to amend, if it were possible, the draft Order (if not yet sealed). A statement to the relevant effect by the court should be sufficient, in other words, a statement that there are no circumstances in which at the end of the proceedings the defendants other than Celotex could find themselves liable for the costs of the statement of case that was struck out.

For the avoidance of doubt that is not to say that the costs relating to the Part 20 Particulars of Claim could not be recovered by Celotex at the end of the proceedings. Those Particulars of Claim have not been struck out. There was no application to strike them out and I take the view that the Appendices to the Defence and Counterclaim, although struck out in terms of their existence within or relevance to the Defence, continue to have an existence as part of the Part 20 Particulars of Claim.

The second issue is other parties’ costs in relation to the Defence and Counterclaim that has been struck out.

Mr Stokell, on behalf of Rydon, submits that there should be an order for costs in Rydon’s favour and, summarising his position, an order for costs spent on considering the Defence and Counterclaim that has been struck out, including the costs of work that may have been wasted on that Defence and Counterclaim. He asked that that be subject to a detailed assessment. Mr Henderson for CEP made a similar submission.

That is not a submission that I accept. Whilst there is, as it was put, interrelatedness of the pleadings, that does not seem to me to be sufficient for the costs order sought. The point on interrelatedness as made by Mr Stokell was that the Rydon contribution notice or Part 20 claim against Celotex repeated RBKC’s claim. Therefore, it was submitted, it could be anticipated that a similar defence would be raised by Celotex to those contribution proceedings and, therefore, the Defence had to be considered despite the fact that there was the application to strike it out. That was in part because of the short timescale that had been provided for the Reply. That does not seem to me to have sufficient regard to the point that the Defence and Counterclaim was not a pleading in the contribution proceedings and that the issue on the application to strike out was one of form not substance. Rydon were not or should not have been engaged in pleading to the Celotex Defence and Counterclaim in the main action but rather, if anything was being done, Rydon would and should have been considering the substance for the purposes of the contribution proceedings between these parties.

Also as Mr Orr of KC submitted, if the substance of the case changes in the Part 20 proceedings as a result of anticipated or potential amendments, then costs thrown away as a result of the amendments will still be recoverable, subject to any further submissions in that respect. In saying that, I recognise that Mr Henderson was right to say that the issue becomes muddled with one of detailed assessment. I agree with that but I do not see how the principle and the assessment can in these circumstances sensibly be disentangled.

In a slightly different context, Ms Piercy KC also made the point that it would be unfair if the claimants were awarded costs referable to consideration of the Celotex Defence and Counterclaim but the other defendants were not. That submission again seems to me to ignore the relationship between the parties in these proceedings and, indeed, Mr Orr’s submission, which has considerable force, that it would be disproportionate and wrong in principle if every step taken by a party that had cost consequences for other parties led to both an argument about and an award of costs. That is a matter for the Court’s discretion and, in this instance, I do not exercise my discretion to make the sort of order that is set out in Mr Stokell’s skeleton argument.

The amendments to the Part 20 Particulars of Claim are a different matter. That arises in this way. At the close of the hearing in October or thereabouts, Mr Orr commented that while revising or repleading the Defence and Counterclaim, Celotex would also look at the Part 20 Particulars of Claim and consider whether they needed revision. I took that to be a reference to form rather than substance and Mr Orr has confirmed today that that was how he intended his remark. It was an understandable remark in the context of the hearing that had just taken place.

It is to be anticipated, therefore, that amendments to the Part 20 Particulars of Claim, if there are any, will be amendments of form rather than substance. Not least because matters were put on hold by the consent order made at the end of August, it would be surprising if any drafting work had been undertaken by other parties in responding to the Part 20 Particulars of Claim. Even if it had, it can be the subject of the usual type of order, whether it be an order for costs occasioned by amendments or for costs thrown away by amendments, and I do not suggest that they are identical, made following any application to amend. If there are changes in substance, then the same applies.

It is only Harley and Rydon who have sought costs orders today, rather than deferring any issues of costs arising from amendments until after permission to make those amendments is sought. I can see no reason to anticipate what might happen and make such a prospective order. I accept Mr Orr’s submission that it remains to be seen whether any amendments are made and what consequential costs orders should be made and to look at the matter at that stage in the round.

The next matter is the hearing in October. With the exception of the parties who do not seek any costs order, the other defendants who were not party to the application itself nonetheless seek some measure of costs in relation to that hearing.

The first issue is the application itself. The application itself, as I have just said, was between the claimants and Celotex. Mr Stokell helpfully provided with his skeleton argument an Appendix which summarized correspondence which had taken place between the parties over the course of August and September. There were some inconsistencies in positions adopted in that correspondence which I do not intend to go into in detail. There were comments to the effect that all defendants ought to have the opportunity to participate in relation to the application but then again, to the contrary, that their attendance was not necessary. There was reference to the further half day hearing for consequential matters being sought but then the suggestion that the Court might want to deal with consequential matters at the end of the application hearing itself.

It seems to me that on the question of participation in the application, it was for the parties to decide whether to attend or not. Some did; some did on a noting brief; and some did not attend at all. On the specific question of the consequential matters, it was again a matter for the parties whether they attended or not. The argument advanced is that some of the correspondence made it unclear whether any application was going to be made for consequential directions at the end of the hearing and that that might have justified attendance at the hearing throughout by defendants who were not party to the application. I simply do not accept that that position makes any sense for two reasons.

Firstly, it has always been quite clear that it was anticipated by the claimants that there would be a further half day hearing. Secondly, when the matter came before me in a rather roundabout way, with a query about timing of skeleton arguments, my response was clear in stating that the matter listed on 8 and 9 October was the strikeout application and not a case management conference. Also, as I said in the course of argument, in the context of the query that was a response to the expression “case management conference” was clearly a reference to any hearing at which case management directions would be given. In any event, it was simply inconceivable, the parties having corresponded in the way that they had, that, even if the Court was able to come to a decision immediately, it would go on, at the end of the hearing, to give further directions without the presence of all parties.

It seems to me, therefore, that attendance at the hearing was a matter of choice for any defendant, and not a matter which should be visited in costs upon the unsuccessful Celotex.

Ms Piercy again made the submission that it would be unfair for the defendants, in her case Harley Facades, to bear their own costs not only of attendance, which was by noting brief, but of all the matters that went before. None of these, she submitted, were of their making, since they were not in any sense responsible for the Defence and Counterclaim which was struck out. That does not seem to me to be a reason to make a costs order against Celotex in favour of Harley or any other defendant because, I repeat, the extent to which they participated in the application was a matter of choice.

The same is, in my view, true of the correspondence that the parties engaged in about consequential directions and skeleton arguments which were provided to the court about consequential directions in advance of the hearing, since it was clear that what directions were to be given would be a product of the outcome of the hearing, and seeking to argue that point in advance was premature.

Accordingly, in my view and as Mr Orr submits, the appropriate order in respect of both the hearing in October and any matters that preceded it is costs in the case. Mr Turner KC at the outset of this hearing expressed concern about that because of the potential for that to mean that the claimants at some point ended up bearing those costs. Mr Orr is content to formulate a proviso in the order that follows this hearing that makes it clear that that position would never be reached. I am going gratefully to leave it to counsel to formulate that proviso.

That leaves lastly the costs of today’s hearing. I take a different view in respect of today’s hearing which, subject to the claimant’s attempt to include some additional matters, is entirely a consequence of the Defence and Counterclaim of Celotex being struck out. The principal purpose of this hearing, as I think should be clear from the discussions in October, was to give further directions in terms of timetabling. In fact, the vast majority of this hearing has been devoted to costs applications by the defendants, most of which had not been advertised prior to the hearing in October. There was some suggestion in some of the skeletons that there might be such applications but in relatively generic terms.

It seems to me that Celotex ought to bear the costs of the attendance of all affected parties at this hearing, at least insofar as it is concerned with what are properly regarded as case management issues of timetabling. I say that despite Mr Orr’s submissions that, so far as timetabling is concerned, nothing that concerns Celotex is controversial and the only controversial issues concern timing of other defendants defences to contribution notices served other than by Celotex, on which Celotex is neutral. Whilst I see the attractiveness of that submission, it ignores the fact that, as a number of counsel have said in the course of the hearing, the effect of the application to strike out, which was in effect successful, is to have derailed the timetable set last December. It is for that reason, and not because of a failure of the other parties to agree what to do, that this further hearing in this respect has been necessary.

Having said that, I do not think it would be right for Celotex to bear all of the costs of attendance or preparation for this hearing when the defendants have been unsuccessful in their applications for costs. Accordingly, and again I will be grateful for the assistance of counsel in this respect, I would intend to make an order that Celotex should pay the claimants’ and defendants’ costs of this hearing insofar as they relate to case management – that might be framed in terms of timetabling issues – but not otherwise. I am certainly not going to make any orders against the defendants in respect of any other matters.

It follows from that that I do not consider that those costs can sensibly be summarily assessed. It might be possible to unpick the statements of costs for the purposes of doing so but I do not think that would be a sensible approach to take and I do not do so. For the avoidance of doubt when I say the defendants in that respect, I exclude Arconic and Beko since their position remains that they do not make any application for costs of today’s hearing.