Broseley London Ltd v Prime Asset Management Ltd

On the 21^st April I “handed down” judgment in this matter in a judgment dealing with the Claimant’s application for summary judgment and the Defendant’s application for a stay of execution.

By the time of the hearing before me, the application for summary judgment was not opposed, but the application for a stay was. I resolved that issue against the Defendant (“PAML”) and in favour of the Claimant (“BLL”).

This judgment now deals with the following consequential matters, all of which have been dealt with without any further hearing:

Before turning to contested issues, I should record the orders which are agreed:

There is a difference between the parties as to the terms of the order as to interest. BLL’s formulation is:

“The Defendant shall pay the Claimant simple interest on the principal sum at the rate of 5.75% per annum from 1 August

2019 until payment of the principal sum is made.”

PAML’s formulation is:

“The Defendant shall pay interest on the Judgment Sum at a rate of 5.75% from 1 August 2019 to the date of payment, being £20,356.11 at 23 April 2020, and thereafter at a daily rate of £76.44.”

BLL says that it does not agree with PAML’s interest calculation and prefers its own formulation of the order. BLL’s formulation preserves the position of both parties as to what the correct sum is: the order will be in the terms set out at paragraph 5 above.

The following matters arise relating to costs:

As will be seen below, PAML seeks directions for this court to proceed to a determination of the true value of the account between the parties. I regard that as an appropriate way of proceeding.

The consequence will be that the judgment of BLL will not be the end of this action. However, the costs to date for both parties will overwhelmingly, if not completely, be the costs of the applications with the significant exception of the court fee for commencing these proceedings.

In my view, the appropriate course is for a costs order to be made which is for the costs of the two applications (for summary judgment and for a stay), but for the reality of how the costs to date have been incurred to be reflected in the amount of costs to be ordered to be paid at this stage.

For BLL Mr Choat contends that costs should be assessed on the indemnity

In support of that submission he relies upon the general principles for awarding costs on the indemnity basis set out by Gloster J. in JP Morgan

Mr Choat also relied upon four cases in which this Court has ordered the payment of costs on the indemnity basis in respect of adjudication enforcement proceedings: Gray & Sons Builders (Bedford) Ltd v Essential Box Co Ltd [2006] EWHC 2520 (TCC); (2006) 108 Con L.R. 49; Harris Calnan

Mr Choat relied on features of those cases which he submits were also features of the present case insofar as the application for summary judgment is concerned:

In respect of the application for a stay of execution, Mr Choat argues:

For PAML, Mr Townend accepts that the costs of the applications should be paid by PAML, but argues that the assessment should be on the standard basis.

For his part he refers not only to Gray & Sons Builders, but also to Mead General Building Ltd v Dartmoor Properties Ltd [2009] EWHC 200 (TCC); [2009] BLR 225 and then cites paragraph 16.24 of Coulson on Construction Adjudication, 4^th edition, which says:

“Notwithstanding this, it must always be remembered that the test for indemnity costs is a high one and will not ordinarily be granted. Thus in Supablast (Nationwide) Ltd v Story Rail Ltd,

Akenhead J found that there was ‘an absence of reality’ about the defendant’s argument that there was more than one subcontract, but, because he did not consider that the argument was put forward in bad faith, unprofessionally or wholly unreasonably, he declined to order indemnity costs. Similarly, in Mead General Building Ltd v Dartmoor Properties Ltd the judge declined to make an order for indemnity costs on the grounds that the argument put forward by Dartmoor in support of a stay of execution was at least arguable, even if it had ultimately proved to be unsuccessful. The judge reiterated that it was not appropriate to make an indemnity costs order simply because a point raised by a defendant had failed.”

Basing himself upon these authorities, he argues:

I accept that the test for indemnity costs is a high one, and that the order should only be made if there is something out of the norm justifying the making of such an order.

I also accept that a significant part of the delay between the commencement of proceedings and the making of the application for a stay was caused by settlement discussions.

It seems to me that the greater part of the costs on both sides is likely to be related to the application for the stay rather than application for summary judgment not only because there came a time when the application for summary judgment was conceded, but also because the overwhelming mass of the evidence went to an examination of BLL’s financial position for the purposes of supporting the stay application.

In my judgment, the strongest parts of the argument in support of the application for indemnity costs are the points raised in paragraph 44 of Mr

Given that the vast majority of the costs related to the stay application, it is to that application that greatest weight should be given. Whilst in the end the application did not succeed, there were serious points to be made and considered as to whether the grounds for a stay were made out. Whilst the allegations made were regrettable, in my judgment the making of those allegations is not sufficient to make this a case for indemnity costs given that there were many legitimate points which were reasonably raised and required consideration. I have in mind, in particular, that given the concerns as to repayment which any paying party is likely to have in the current climate and given the interrelated nature of the accounts of the Broseley companies, it was legitimate for the points to be raised and considered, albeit that in the end

For those reasons, in my judgment BLL’s costs should be assessed on the

Mr. Choat contends that this is a case where the normal practice under CPR PD 44, paragraph 9.2 should be followed, namely that as the hearing did not last more than one day there should be a summary assessment of the costs.

Whilst that is, of course, the usual practice, in this case the scale of costs sought (over £100,000) seems to me to make this an appropriate case for a detailed assessment of the costs.

However, it is also a case in which it is clearly appropriate for a substantial payment on account of costs to be made.

As yet, BLL has not put forward a statement as to the costs of the applications, as opposed to the costs of the action. It should do so. Subject to liberty to both parties to apply to vary these directions: BLL will have until close of business on Thursday 30^th April to put forward a statement as to the costs of the applications and to make an application for a payment on account of costs. PAML will have until close of business on Monday 4^th May to object, and

PAML has expressed its desire to have a determination as to the final account. Part 7 proceedings being on foot, PAML seeks what it contends is a reasonable time within which to plead out its cross-claim for the Judgment sum and a further £270,000 which it says that it will plead formally as a set-off in the Defence and claim in the Counterclaim. Given the present COVID circumstances, PAML seeks an order that it does so within 56 days of the date of handing down Judgment, namely, by the 16^th June 2020.

This appears to be a sensible approach to resolving the dispute between the parties as to the true value of the account and this timetable is at first sight acceptable to the Court. I direct that by Monday 4^th May 2020 BLL shall set out any alternative timetable and the time which BLL needs in order to plead to the claim once put forward, it being the Court’s assumption that BLL already knows in broad terms at least the areas of dispute between the parties, and any other directions proposed by BLL. PAML will then have until Thursday 7^th May 2020 to respond to BLL’s proposals.

PAML seeks permission to appeal.

This application is refused.

The first ground of appeal raises the question as to whether my approach to whether PAML could mount a “true value” adjudication without first paying the amount found due in the first adjudication was right in law. Whilst I accept that my decision is an extension of the principle established by the

The other four grounds raise no fresh points of law, but are rather criticisms of the manner in which I applied what are now well established principles to the facts of this case. In my judgment there are not sufficient prospects of success in the points raised individually or cumulatively to justify the grant of permission.

PAML seeks, in the event that I refuse the application for permission to appeal, that I grant 42 days from the date of handing down of the judgment for an application to be made to the Court of Appeal.

Given that, through no fault of the parties, a week will have passed from the date of handing down of the judgment to the date of receipt of this second judgment in draft, I do not regard the extension sought as unreasonable, and that extension is granted.

At 17.30 on the 21^st April 2020, Mr Choat communicated by email with my clerk, passing on some Land Registry entries.

At present there is no application before me arising out of the matters raised in that email. For the avoidance of doubt, no decision on any matter contained in that email is made in this judgment.