England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM ORDER OF MR JUSTICE CARNWATH

		Royal Courts of Justice Strand London WC2 Monday, 12th November 2001

1. THE VICE-CHANCELLOR: In Summer 1999 we referred to the European Court of Justice four questions in order to enable us to determine certain issues arising on a counterclaim of Mr Crehan in an action involving beer ties. The result of the answers from the European Court of Justice means that Mr Crehan does have available, if he proves the underlying facts, a cause of action for infringement of Article 85 notwithstanding that he was a party to the beer tie agreement, provided that he did not bear any significant responsibility for the distortion of competition that was assumed in his cause of action.
2. The matter having been restored to consider the further conduct of the proceedings, the other side, Courage and Inntrepreneur Estates Plc, seek an order from this court for the trial of two further preliminary issues. The first is the question whether if Mr Crehan is successful in proving his claim for breach of Article 85 it would nevertheless be defeated by the application of the block exemption contained in EC Regulation 1984/83; and, secondly, assuming the block exemption did not apply but Mr Crehan was otherwise successful, whether the loss which he claims was indeed caused by the wrong of which he complains. It is submitted that either or both those preliminary issues would, if decided in Courage's favour, bring to an end this litigation and would save many weeks of hearing and not inconsiderable sums in respect of costs.
3. As against that, the history of this action shows that eight years have already passed since the proceedings were commenced by Courage's claim issued on 9th June 1993 and the counterclaim of Mr Crehan served on 12th August 1993. The first four years were taken up by the application of Inntrepreneur for individual exemptions and confirmation that the block exemption applied which, before it was resolved by the European authorities, was withdrawn. The application which led to the reference to the European Court of Justice was instituted in 1997/1998; and here we are in 2001, not much further forward than in Summer 1993 when Mr Crehan's counterclaim was originally instituted. It seems to me that the preliminary issues would only be effective if decided in favour of Courage. That, in relation to the exemption, should, if it was to be raised, have been raised four years ago and that in relation to causation is inappropriate because it would involve substantial issues of fact. In the light, particularly, of the delay of eight years, I would not order either of the preliminary issues for which orders are sought; rather I would direct or give such directions as may be necessary to ensure the trial of the action or the remaining issues in the action as soon as reasonably possible.
4. LORD JUSTICE SCHIEMANN: I agree.
5. LORD JUSTICE MANCE: I also agree.
(Discussion regarding costs)
6. THE VICE-CHANCELLOR: We dealt this morning with the consequences for the further conduct of these proceedings arising from the answers of the European Court of Justice to the reference we made in July 1999.
7. We now have to deal with the costs of the proceedings in this court, before the European Court of Justice and before Mr Justice Carnwath from whom the appeal came in the first place.
8. The first question to be determined is whether in relation to the costs in this court we are able to make any order at all given the form of order drawn up on 29th May 1999. The form of the order was as follows. It recited a notice of appeal from an order of Mr Justice Carnwath and then set out the terms of Mr Justice Carnwath's order. No point arises in relation to paragraphs 1 and 2 whereby he gave judgment for Courage in respect of their claim. In paragraph 3 he directed that the defendant's counterclaim be dismissed. That part of his order must now be set aside because that is a consequence of the order we made this morning. In paragraph 4 he said the defendant Mr Crehan should pay Courage's costs of the action not to be enforced without leave, such costs to be taxed if not agreed. That order plainly envisaged the costs of both the claim and the counterclaim because he had dismissed the counterclaim and had given judgment in the action.
9. When it came to the order made on the appeal (at the foot of page 38 of the bundle before us), it is recorded that we ordered two questions to be referred to the European Court of Justice in a form to be subsequently settled, and continued:

"2 the plaintiff's (by original action) costs of this appeal be paid by the defendant (by original action), such costs to be assessed if not agreed ..... "

10. There was further reference to the legal aid position and a stay granted by Master Moncaster.
11. There was an application by the plaintiff by original action for an order for costs against the Legal Aid Board under Section 18 of the Legal Aid Act 1988. The order goes on to record that -

"The court has determined .....

(i) that it is just and equitable that provision for the Court of Appeal costs should be made out of public funds"

and

(ii) that the defendant (by original action) shall have no liability to satisfy any part of the Court of Appeal costs."

12. It is the contention before us today of counsel for Courage and Inntrepreneur that the effect of paragraph 2 of the order was to give them the costs of the appeal both in relation to the claim and the counterclaim. That is disputed by counsel for Mr Crehan. It has been drawn to our attention that following the order of 29th May 1999 as drawn up being circulated, Mr Crehan's solicitors made an application to this court which included an application to clarify the order for costs made against Mr Crehan. That was reflected in a witness statement of Mrs Bidwell signed on 12th July 1999 and by the note made by Mrs Bidwell at the hearing which records that something was said, but it was not clear what, in relation to the previous order for costs.
13. In the light of this confusion we requested the Mechanical Recording Department to find the original tape of the hearing on 16th July 1999 when that particular point was raised for the court's consideration. The tape was obtained. I understand it was listened to by counsel for both sides and a transcript of part of it has been provided for us. That reveals that counsel for Mr Crehan raised a point about the costs. He said, and I quote from the transcript that has been prepared somewhat hurriedly and is therefore not as good as it normally would be:

"So effectively the costs of the appeal, save in so far as would normally be reserved pending the result of the Court of Justice, and we would contend that the proper order really should be costs reserved pending the result of the Court of Justice. But on the face of it it looks as though the plaintiff is entitled to costs in this court to be paid by Mr [Green(?)] ..... "

14. That clearly raised the point as to whether the order for costs which was plainly intended in relation to the costs of the appeal relating to the claim was intended also to cover the costs of the appeal in relation to the counterclaim.
15. At the top of page 2 of the transcript it is recorded that I intervened to observe:

"The point is quite simply this, is it, that it relates to the appeal which related only to the counterclaim which has not been concluded?"

16. Counsel responded, "Which was not concluded, yes."
17. It appears that the associate intervened to point out that the order for costs made on 29th May 1999 against Mr Crehan was a necessary preliminary to the order for costs against the legal aid fund on the next page. He pointed out that in paragraph 2 of the legal aid part it was specifically stated that Mr Crehan would have no liability to satisfy any part of the Court of Appeal costs order. On that basis it was recorded on page 3 that counsel for Mr Crehan expressed his contentment that, effectively, it was merely a figure for the legal aid taxation and not a liability for Mr Crehan. It says:

" ..... if Mr Green accepts his client gets no money after the order." -

then he is content with it. That is the way the matter was left. It was not reflected in the order the court later made, nor was it reflected in the judgment of the court given later that day.

18. Counsel for Mr Crehan submits that in those circumstances it can be seen that it never was the intention of this court in the order drawn up following the hearing in May 1999 to give the costs of the appeal relating to the counterclaim to Courage or to Inntrepreneur because in accordance with the normal procedure that would not be dealt with until such time as the reference to the European Court of Justice had been made and responded to.
19. For Inntrepreneur it is submitted that that is not a correct reading of the matter, that the parties were perfectly content with the order for costs covering the costs of the appeal relating to both the claim and the counterclaim on the footing that Mr Crehan was not going to be personally liable for any of it anyway.
20. I consider that the submissions for Mr Crehan are correct. It seems to me to be plain that this court did not intend in the original order made in May 1999 to make any order for costs of the appeal in so far as it related to the counterclaim. That counterclaim was not determined because a reference had been made to the European Court of Justice specifically for the purpose of enabling us to determine. It would be most unusual to deal with costs of the counterclaim before the counterclaim had been disposed of.
21. For that short reason it appears to me that it is now open to this court to deal with the costs of the appeal in relation to the counterclaim as well as the costs of the reference and the costs before Mr Justice Carnwath.
22. Turning to those matters, for my part, I would make the following order. I do so by reference to page 38 of the bundle which sets out the terms of Mr Justice Carnwath's judgment. In paragraph 4 as now amended, as it needs to be, the order with regard to the costs before Mr Justice Carnwath was that the defendant, that is to say Mr Crehan, would pay the costs of the plaintiff, that was Courage, in relation to the claim but not in relation to the counterclaim. That is somewhat ambiguous because, as Mr Field pointed out this morning, the defence to the claim necessarily incorporated parts of the counterclaim. The parts it incorporated were the question whether the individual supply contracts for the supply of the beer were themselves invalid if there was a breach of Article 85 and, second, whether there was an Article 85 liability in respect of the concerted practices part of the claim, that is to say, the horizontal practices which had been the subject matter of argument. Those were two of the issues on which Mr Crehan lost.
23. It is probably plain to a taxing master or to a costs judge that the costs of the claim must necessarily include those parts of the defence to the claim which themselves incorporated parts of the counterclaim. On that point being made clear, it seems to me the matters on which Mr Crehan lost will be picked up on the order for costs before Mr Justice Carnwath which has already been made. On that footing I can see no reason why Mr Crehan should not get his costs of the counterclaim, the costs incurred before Mr Justice Carnwath or the costs incurred in this court. The cost of the counterclaim, on that footing, would be in relation to the part of the Article 85 argument which was described as the co-contractor point on which Mr Crehan was successful, the parts of the argument on which he was unsuccessful having been picked up as parts of the costs in the claim.
24. In summary, therefore, so far as the costs of the counterclaim are concerned in this court and before Mr Justice Carnwath, I would order them to be paid to Mr Crehan by the other parties, that is, the opposite parties. So far as the costs of the reference to the European Court of Justice are concerned, questions of winning and losing do not arise because Mr Crehan was wholly successful and he should get the costs of the reference likewise.
25. LORD JUSTICE SCHIEMANN: I agree.
26. LORD JUSTICE MANCE: I agree.
Order: There to be payment on account of £100,000 in respect of Mr Crehan's costs. Costs of today to be in the counterclaim. Counterclaim remitted to High Court judge to be designated. Legal aid assessment of Mr Crehan's costs.