No.1 of 2004
M G Young v J R Smart (Builders) Ltd
15 January 2004
Mr Justice Henriques (Sitting with Assessors)
Difficulty was encountered by the Defendant in formulating the counterclaim. It was struck out by the Circuit Judge on 12 March 1999 after the Defendant had been given a partial reprieve by his order dated 18 December 1998 prior to which there had been other attempts to amend the counterclaim.
Leading counsel was instructed in relation to the appeal against both orders. Various drafts of the counterclaim and skeleton arguments for the appeal were exchanged between leading and junior counsel. In addition at least one consultation took place. Leading counsel appeared on the hearing for permission to appeal on 14 July 1999 (which lasted 35 minutes) and at the appeal itself on 7 February 2000 (which lasted a day) when the appeal was allowed. The Court of Appeal dismissed another appeal by the Defendant and awarded the Defendant two thirds of their costs.
The Defendant lodged a bill for £102,000 of which the fees of leading counsel were some £62,000 and for junior counsel some £25,400. Leading Counsel provided a note explaining his involvement. Submissions were made to the Deputy Costs Judge about the proportionality of counselís fees. He concluded that the total was disproportionate and in principle there had been an over involvement generally of counsel. He allowed Leading Counsel £12,200.
The Judge reviewed the authorities which included Lownds v Home Office  1 WLR 2450, R v Dudley Magistrates Court ex p. Power City Stores Ltd  140 NLJ 361, the dicta of Arden LJ in Contractreal Ltd v Davis  EWCA Civ 928 and the reference to the judgment of Lord Fraser in G v G  2 All ER 225 and also CPR 44.4 and 44.5.
There were two issues, namely did the Deputy Costs Judge apply the right test and did he give sufficient weight to the conduct of the Claimant? The second ground was conceded since no criticisms of the Claimant had been made before the Deputy Costs Judge. If they had been they would have been a matter to be considered. The point did not arise on the appeal.
The Judge rejected the Defendantís submissions that, relying on the test in R v Dudley Magistrates Court, the issues were of such complexity that it warranted the use of leading counsel because the counterclaim had been struck out. He accepted the Claimantís submission that the Dudley case must now be subject to the Lownds judgment. The instruction of leading counsel was not exceptional to the general rule concerning expenditure. The Judge considered the only possible conclusion in relation to the global approach was that the costs claimed were ridiculously high.
The Judge also considered other heads including conduct and the amount involved. A claim for nearly £102,000 costs on an interlocutory appeal which the Court of Appeal disposed of in short time was manifestly excessive when viewed globally giving appropriate weight to proportionality and reasonableness. It was manifest that the pleading of the counterclaim had become complicated by reason of the number of drafts put forward on behalf of the Defendant. The issue itself was not complicated. As Mantell LJ had pointed out the case turned on the contents of a single telephone conversation. Even taking into account additional costs considerations under which the total sum involved might perhaps be £250,000 the amount of costs claimed appeared excessive. The Judge also considered importance and complexity. He considered individually the seven items under 44.5(3). He noted that such a structured exercise was not required under the judgment of Lloyd J in Ortwein v Rugby Mansions Ltd  EWHC (Ch) 2077. He concluded that he had no doubt that the Deputy Costs Judge had in mind all the seven matters so far as they were of assistance. Neither the approach nor the conclusion of the Deputy Costs Judge could be faulted.
The Judge concluded with a reference to the observations of Moreland J in Giambrone & Ors v JMC Holidays [CLR 2003 Part 2 p.189] in which he said:
"I express the hope that it should be almost never necessary to appeal the preliminary decision, at the first stage, of proportionality. I would advocate active discouragement of such appeals."