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 THE CENTRAL LONDON COUNTY COURT
(HIS HONOUR JUDGE HOLMAN)

		Royal Courts of Justice Strand London, WC2 Wednesday, 31st October 2002

Thursday, 31st October 2002

1. LORD JUSTICE CLARKE: This case has a long and involved history which I can see has caused a considerable amount of hurt, worry and expense to the applicant, Lady Clieve Roberts. It is not, I think, necessary to set out the history in any great detail in order to resolve the issues on this application.
2. The application is an application for permission to appeal the order of His Honour Judge Holman in the Central London County Court on 24th May 2002. The order was made following a hearing on that day in which the judge had to decide whether to lift the automatic stay of the action which came into operation on 26th April 2000 under the provisions of paragraph 19 of the Practice Direction to Part 51 of the CPR. The applicant's appeal relates to the order for costs only.
3. In a letter to the Civil Appeals Office dated 13th June 2002 the applicant says, among other things:

"I am advised to appeal the whole matter but, mindful of the reprehensible waste of court and judicial time, I am prepared to forego the case itself and simply limit it to an appeal against the costs. Thus I am losing the £7,000."

4. The applicant seeks an order that the order dated 24th May be varied in relation to the costs to the effect that:

(1) each party bear their own costs from the institution of the proceedings; and.

(2) the applicant recovers her legal costs from the respondent incurred in her attempts to establish legal responsibility for the claim.

5. The grounds of the proposed appeal are stated to be:

(1) that the judge failed to exercise his discretion fairly in all the circumstances of the case; and

(2) that his order for costs was wrong.

6. Both parties have some links to the judiciary, which it is not necessary, I think, for me to spell out. Fortunately, the judge, His Honour Judge Holman, is entirely unacquainted with any of those members of the judiciary, as indeed am I.
7. The dispute stems from an incident as long ago as 1993, which, as Lady Clieve-Roberts has pointed out, is some nine years ago, and has been on-going ever since.
8. The story of the dispute is somewhat complicated. It is set out in the first 23 pages of the judgment of the judge given on 24th May. I shall not repeat the facts here as set out by the judge, save in very broad outline. I accept his account of them in a judgment which ran to no less than 46 pages altogether. It began with this plea to the parties:

"It is desirable that I go into the chronology of events in considerable detail, not merely because it informs the decision I have to make but also in the hope that the parties will stand back and, having reflected, will accept that, with the application on both sides of common sense and goodwill, much time, expense, energy, aggravation and inconvenience could have been saved to their mutual benefit."

9. I am bound to say that it seems to me to have been a very sensible decision of the applicant, Lady Clieve-Roberts, to restrict her application today and not to seek to continue the battle which has been proceeding, sometimes raging and sometimes not raging, over the last nine years.
10. In broad outline the facts were these. On 15th May 1993 the applicant went into the respondent company's antique shop and left three damaged items which needed restoration: a Minton plate, a Servres saucer and a figurine of a man. The respondent sent these items to a restorer who provided estimates in June 1993. The applicant accepted the quote only for the Minton plate, some £40 plus VAT. On 24th August the restorer returned the Minton plate. It is not clear whether he returned the other items. On 10th November 1993 the manageress of the shop wrote an apologetic letter to the applicant explaining that the saucer and the figurine could not be found. The letter was followed a few days later by a letter from Mrs Samuels which invited the applicant to formulate a claim for the missing items which she would discuss with the restorer.
11. There followed several hostile letters to the respondent, first from a Mrs Elizabeth Beresford on behalf of the applicant and then from the applicant herself. The letters suggested dishonesty on behalf of the respondent.
12. Further correspondence ensued until October 1994. There was then a gap until June 1995, when the applicant wrote threatening proceedings to which the respondent replied asking for a valuation. There was a further exchange of correspondence and then another gap between 14th July 1995 and 10th March 1996, when the applicant sent the respondent a valuation from a company called "RS Antiques" which suggested a value of £100 to £200 for the Serves saucer and £2000 to £2200 for the figurine. Mr Samuels replied to the letter in a reply which ignored the applicant's point that her contract was with the defendant and not with the restorer.
13. The applicant instructed solicitors, who sent a letter before action on 19th July 1996. In reply to this Mr Samuels made several requests for a meeting. One of the points that the applicant has made to me this morning is that she was forced to consult solicitors. The solicitor told her that the matter could be resolved shortly over some six weeks, but she says that because of the attitude of the respondents she incurred substantial solicitors' costs which, she says, she would not otherwise have incurred.
14. The respondent suggested that the valuation was bogus, as the valuer, Mr Trevor, was not at that time a member of the well-known antique dealers association LAPADA. Correspondence continued until December 1996, with the applicant's solicitors on several occasions inviting Mr Samuels to put forward an offer to dispose of the claim. However, each time Mr Samuels laid down conditions which he required to be complied with before he would put forward an offer. This resulted in deadlock.
15. On 28th April 1997 the applicant's solicitors wrote to Mr Samuels, stating:

"We are instructed that our client will be issuing proceedings against your firm shortly, and that she will be acting in person in those proceedings, which will be pursued vigorously."

16. Further correspondence followed in which the applicant made intemperate comments, including some personal comments about the competence of Mr Samuels. The applicant obtained a further valuation dated 24th June 1997, from Mr Buck, who valued the figurine at £5,000 and the Sevres Saucer between £100-£200.
17. On 2nd June 1998, which was itself over five years after entrusting the items to the defendant, the applicant issued proceedings in the West London County Court seeking the return of the missing pieces, alternatively their value estimated at £5,150, with credit to be given for the £40 owing for the repair of the Minton plate. The claim was issued against Mr and Mrs Samuels personally and against the company but with the incorrect name of the company. That led to an application to strike the claim out, but the claim was amended and an amended defence was filed on or about 19th August 1998. That defence denied liability for the loss of the items and included a counterclaim, in spite of the fact that in 1993 the respondent had said that they would not charge for the repair of the plate. The directions issued warned the parties that they must be ready for trial no later than 2nd December 1998. The parties did make some attempt to progress the matter at that stage: for example, in November 1998 the applicant disclosed Mr Buck's valuation. There was also some further correspondence.
18. On 4th March 1999 the respondent's solicitors wrote to the applicant regarding whether certain witnesses needed to attend personally and to agree a date for mutual exchange of witness statements. A letter followed from the applicant's daughter and the applicant herself on 12th April 1999. There was then a further gap until 4th August 1999, when the applicant's daughter wrote again. During that period the applicant, although she had been ill, had obtained some further valuations.
19. Correspondence which included an attempt by the respondents to seek clarification as to the number of witnesses and that all witness statements would be exchanged at the same time continued, but on 28th April 2000 the automatic stay came into force as the claim had not been before a judge since 26th April 1999, which was also the date that the Civil Procedure Rules had come into force.
20. The applicant wrote again on 19th May 2000 relating to statements of truth. The respondent replied on 19th July and pointed out that the proceedings had now been automatically stayed and they would oppose any application to remove the stay. The applicant responded on 8th August 2000, describing this as yet another attempt to obfuscate delay and, if possible, avoid a further court hearing.
21. The applicant wrote to the court on 26th September 2000, and then again on 3rd January 2001, claiming to be "anxious to ensure that the case is properly held in suspension to be brought before the court as soon as possible". That letter led to the file being referred to District Judge Madge, who made an order of the court's own motion on 26th January 2001 which included the following:

"Upon the Courts own motion. The Court has made this order of its own initiative without a hearing. If you object to the order, you must make an application to have it set aside, varied or stayed within 7 days of receiving it.

IT IS ORDERED THAT

1. The Civil Procedure Rules 1998 shall apply to this case as from today save in respect of steps already taken.

2. Both parties shall lodge with the court fully completed Allocation Questionnaires by no later than 4 pm on 30 June 2001.

3. By the same date as set out in paragraph 2 above the Claimant shall pay the allocation fee of £80 to the court and shall lodge with the court:

(a) a brief summary of the case in no more than 250 words.

(b) a short chronology.

(c) their proposed directions for the future conduct of the case, up and including the fixing of a trial window.

4. The documents referred to in paragraph 3 above shall, wherever possible, be agreed with the defendants' solicitors and if not agreed the claimant solicitors shall, when lodging the documents with the court, state why this could not be done."

22. The respondents wrote to the court several times but did not make an actual application to have the order set aside or varied. That application was finally issued on 21st June 2000. The respondent's application was dismissed by District Judge Mendel on 8th August 2001. The respondent appealed against that order. On 18th October His Honour Judge Cowell ordered the claim be transferred to the Wandsworth County Court, since it appeared that both parties had connections with circuit judges. The claim was then transferred to Willesden and then back to West London and to Judge Cowell. On 3rd December Judge Cowell made an order giving permission to appeal and directing that the appeal be heard by the designated civil judge.
23. The appeal hearing took place on 21st March 2002 before His Honour Judge Collins. He noted that he was friendly with both Judge Gordon and Judge Samuels, but both parties agreed that he should hear the matter.
24. I should interpose to note that the Mr Samuels to whom I referred earlier had by now become His Honour Judge Samuels.
25. Judge Collins concluded that the decision of Deputy District Judge Mendel could not stand and that the judge should have heard the issue of lifting the stay on its merits. The appeal was adjourned.
26. On 10th April Mrs Samuels made a further witness statement in which, among other things, she objected to Judge Collins continuing to hear the case. As a result the matter was referred to Judge Holman.
27. Judge Holman had to consider the respondent's application to set aside the order of District Judge Madge made in January 2001. He accepted that the lifting of the stay, which came into effect on 26th April 2000, was implicit in the order made by District Judge Madge.
28. Judge Holman, whom I will call "the judge", considered four witness statements on behalf of the respondents. He also considered four witness statements on behalf of the applicants. All those are in the bundle which I have seen. The judge noted that an automatic stay is a sanction and that rule 3.9 of the CPR, which deals with relief from sanctions, applied. That approach had been confirmed recently by the Court of Appeal in Woodhouse v Consignia Plc. That rule sets out nine factors to be taken into account by the court when exercising its wide discretion. The judge noted that the court had to take into account, among other things, the interest of both parties and also to bear in mind the overriding objective with, as he put it, the five pillars of equality, economy, proportionality, expedition coupled with fairness and appropriate allocation of court resources. The judge then considered each of the nine factors in turn at page 26 of his judgment and following. In particular he noted:

(1) that the application for relief had not been made promptly;

(2) that there was no good explanation for failure to bring the claim before the court in the 12 month period starting 26th April 1999;

(3) that as the applicant was a litigant in person she was not able to blame any fault on her legal representative; and

(4) that the central issue was factor (i), the effect which the granting of relief would have on each party.

Thus, if the court concluded that the stay should not be lifted, the inevitable consequence was the dismissal of the claim.

29. The judge noted that liability had now been conceded by the defendants. He considered whether it would still be possible to have a fair trial and concluded that at trial the judge would have to make several findings of fact which would rely largely on oral evidence and that, as a result, the respondent may be prejudiced by the passage of time and the effect that this had on the witnesses' memories. He concluded that a fair trial was no longer possible.
30. Having considered those factors and the overriding objective, Judge Holman concluded that the order made by District Judge Madge should be set aside, and therefore that the stay remained and that the claim should be dismissed. As part of his case management powers he also dismissed the counterclaim.
31. In the context of this application for permission to appeal it is important to note that the applicant does not seek permission to appeal the decision of the judge setting aside the order of District Judge Madge or, indeed, his order that the stay should remain and the claim be dismissed. I entirely recognise the applicant's point that she did not lose on the merits of the claim. Indeed, it is plain that she had a good claim on liability. The issue, it appears, would have been one on quantum.
32. The basis upon which the judge held that the stay should remain when the claim had been dismissed was the exercise of his discretion under rule 3.9 of the CPR, having regard to the very, very long period over which the dispute had lasted without the claimant bringing it to fruition before the courts. I can well understand the frustration of the applicant in those circumstances, but the fact remains that this application challenges, not the decision relating to the dismissal of the claim, but the decision of the judge on costs.
33. The order which the judge made on costs was that the applicant pay half the respondent's costs to be the subject of detailed assessment if not agreed. The judge directed himself in this way:

"The general rule is of course that the unsuccessful party will be ordered to pay the costs of the successful party, and that is the foundation of Mr. Horler's application. However, r.44.3(2)(b) makes it clear that the court may make a different order, and indeed it has a general discretion."

The judge then set out rule 44.3(4) and 44.3(5). The judge thus recognised that the general rule is that the unsuccessful party will be ordered to pay the whole of the costs of the successful party. In the context of this case the unsuccessful party, I am sorry to say, was the applicant. So in principle the ordinary rule would be that she should pay the whole of the costs of the respondent, who was the successful party, albeit, as the applicant rightly says, not on the merits.

34. The judge, having set out the rules, said this:

"But I have to be concerned with the principle. The matters which concern me are these, and I have adverted to them in the earlier part of my judgment: first, the fact that Mr. Samuels (as he then was) declined to put forward any offer at all, although enjoined to do so by Lady Clieve-Roberts' solicitors.

The second, and perhaps even more concerning issue, is the failure by the defendant to concede liability until 21st March 2002, when Mr. Horler, entirely properly, accepted that there could be no defence. I have noted already that the early letter written by Mrs. Samuels referred to passing the matter on to the restorers, and the defendant appears to have adopted the position that it would be seeking redress from Mr. Simpson and that the responsibility should be passed to him. That of course ignored the defendant's obligation as bailee, and the fact that the law is that where an item is lost or damaged the burden shifts to the bailee to establish absence of fault on his or her part.

Matters were significantly compounded by the fact that there is a denial of liability in the defence, and the defendant specifically avers, although no particulars are given, that the loss occurred through no fault on the part of the defendant. Even before [the restorer's] witness statement was obtained, in which he suggests that in fact the items were returned to the defendant so it was the defendant who had lost them, even before that, given that the defendant was the bailee, it should have conceded liability and admitted quite openly to Lady Clieve-Roberts that it had to pay compensation. That would have set the scene, in my judgment, for a rational discussion as to what the missing items were worth. Instead, because the defendants appeared to be trying to wriggle and to get off the hook altogether, one cannot overlook the fact that this will have played its part in the correspondence and the antagonism which then ensued.

I have also to take into account, however, that I cannot exonerate Lady Clieve-Roberts' conduct entirely. I have been critical of the correspondence which she wrote and its intemperate nature. I have been critical of her allegation, even if she did not really intend it or certainly the inference that there was the smell of fraud about this when she had no evidence other than gossip in the trade that this might be the case. Those are matters which I cannot overlook, and they also fall to be weighed in the balance.

Nevertheless, in my judgment, it would be wholly unreasonable in the circumstances of this case for the defendant to be able to recover its costs in full. That overlooks its part in failing to enter into proper discussions before proceedings were ever started, and indeed I venture to suggest that, had it held up its hands and acknowledged its liability to compensate Lady Clieve-Roberts, discussions could have taken place at a much earlier stage before the parties had taken their entrenched positions, and I cannot overlook the pleading in the defence and the very late concession on 21st March this year that there could be no dispute on liability. Those are significant matters which I have to weigh in the balance. They cannot, in my judgment, extinguish the claimant's liability altogether given my criticism of her conduct and the fact that the claim has, at the end of the day, fallen to be dismissed because of failure on her part to progress it in an adequate manner, leading to the situation of such prejudice so far as the facts are concerned.

In my judgment, this is an entirely suitable case for the court to exercise its powers under sub-section (6) to award the defendant only a proportion of its costs. What those costs will ultimately be has to await a detailed assessment, taking into account the requirements of the relevant parts of the rules in that regard. But, in my judgment, looking at the matter in the round, the appropriate order is that the claimant should pay one-half of the defendant's costs."

35. The applicant, Lady Clieve-Roberts, seeks permission to appeal against that order. Her difficulty is, however, that the judge correctly directed himself as a matter of law. She does not challenge the underlying decision. The judge had a wide discretion under the CPR. So far as I can see he took into account relevant considerations and did not take into account any irrelevant considerations or, indeed, fail to take into account any relevant consideration.
36. In these circumstances, I can see really no prospect whatever of the Court of Appeal allowing an appeal against his order for costs, and I therefore really have no alternative but to dismiss this application. Now I would like to add this. I can well understand the frustrations of Lady Clieve-Roberts in this connection, and she has expressed two further particular concerns, one relating to the administrative costs which she has incurred over nine years. I do not think that that could be laid at the door of the respondents. But she also says that the respondents unnecessarily employed expensive solicitors. Of course this order simply orders her to pay half the costs as they are assessed. The applicant will be able to object to any particular item which the respondents put forward in their claim for costs against her when it comes to assessment. Thus, if there are any costs which have been unreasonably incurred, or any costs which can be said to be in any way disproportionate, then the applicant can invite the costs judge to refuse to include those in the costs to be recovered by the respondent. I would finally add that I very much hope that it will be possible to reach some solution as to the quantum of those costs to avoid yet further litigation.
37. Although I know that is a disappointing result for the applicant, I do not think I have any alternative but to refuse the application.
Order: Application dismissed.