Lovell Partnerships Ltd & Anor v Merton Priory Homes

In the light of my judgment handed down on 23 May 2014 the Defendant accepts that it should pay the Claimants’ reasonable cost of the proceedings. However it contends that the costs claimed, and the costs incurred by the Defendant, have been increased by the manner in which the Claimants have pursued this claim.

I do not consider that there is any real substance in the complaint that the Claimants did not comply with the protocol. The letter from their solicitors, Pinsent Masons, dated 24 October 2012 set out the Claimants’ position sufficiently clearly. It is true that the Claimants’ argument became more nuanced in the course of the oral argument, but the thrust of it was largely unchanged. They relied, from first to last, on clause 13.10: see Lovell’s letter of 17 December 2010.

However, I do think that there is some force in the submission that the delay in bringing the claim has unreasonably increased the costs to both sides. The Claimants knew what their claim was by the end of 2010, and yet no proceedings were issued until March 2014. The result was that their solicitors, and the Defendant’s solicitors also, had to trawl through three and a half years of correspondence when preparing for this hearing.

There is a further complaint that the Claimants would not give an undertaking to meet any costs order made in favour of the Defendant. I consider that there is something in this, although the issue was really only live for about a month. It probably did add to the costs, but not by much.

It is interesting to note that the Claimants’ costs are substantially less than those of the Defendant, even though the Claimants had the carriage of the action.

In the light of these considerations the Defendant submits that the Claimants should only recover two thirds of their costs. This proportion reflects, of course, not only costs unnecessarily or unreasonably incurred by the Claimants, but also the additional costs occasioned to the Defendant by reason of the matters I have mentioned.

In my view the costs incurred by both parties should have been less than they were. That is in part attributable to the matters about which the Defendant complains, although I consider that it has rather overstated the position.

The Claimants’ costs are a little over £55,000, divided roughly equally between solicitors and counsel. Doing the best I can, I consider that the Claimants should recover £45,000, which I consider represents a proportionate amount after making a fairly modest reduction to reflect those costs that I consider were unnecessarily occasioned to the Defendant by the matters of which it has complained.

This sum should be paid to the Claimants’ solicitors within 14 days of the issue of this judgment.

The Defendant seeks permission to appeal. I do not consider that this is a case where I should grant permission. As I explained in my judgment, there are several reasons for preferring the Claimants’ approach to the construction of clause 13.9. I therefore do not consider that an appeal has a realistic prospect of success.

Further, I doubt if this is a situation that will arise that often in practice. At least, no evidence has been put before me to this effect. Accordingly, I do not consider that there is some other reason for giving permission to appeal.

I will extend the Defendant’s time for making any application to the Court of Appeal to 14 days from the handing down of this judgment.