COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
MRS JUSTICE SHARP
HQ08X01651
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE ELIAS
and
LORD JUSTICE PATTEN
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Peter Carroll |
Appellant |
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- and - |
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Christine Kynaston |
Respondent |
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Mrs Christine Kynaston appeared in person
Hearing date: 13th July 2010
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Crown Copyright ©
Lord Justice Ward:
"1. Upon:-
e. the parties unequivocally agreeing to forego all claims (Civil and Criminal) against each other howsoever arising and in whichever jurisdiction, that arose before the date of this agreement whether known or not at that time, and
g. the Claimant waiving the outstanding costs due form (sic) the defendant at £3,500, and
h. the Claimant waiving the cost of his successful application to vary the order of 24th April 2007 before Mr J Eady on 16th May 2007, and
i. the Claimant waiving the costs of his successful application before Master on 17th May 2007,
2. The Counterclaim be dismissed with no Order as to Costs.
I agree to the terms of this Order.
Signed: .. Signed: ..
Peter Carroll (Claimant) Christine Kynaston (Defendant)"
On 21st May 2007 Mrs Kynaston replied, "I accept your offer dated 18th May 2007" and she attached her signed acceptance of that offer, a copy of her draft consent order giving effect to it and a copy of the letter to the court presumably explaining what had happened. Later that day Mr Carroll acknowledged receipt.
"The question I have to decide is whether or not a binding agreement of settlement, putting an end to the litigation between the parties, resulted from Mrs Kynaston's acceptance of the terms proffered by Mr Carroll."
"6. In my judgment, it is perfectly clear that a binding agreement of settlement came into existence when Mrs Kynaston signed the offer and returned it to Mr Carroll under cover of a letter and an email in which she said, "I accept your offer dated 18th May 2007." The offer is a detailed offer. There may be questions as to its effect but it is plainly sufficient for a binding contract to come into existence upon acceptance of the offer
7. I therefore find that this very troublesome and prolonged litigation was brought to an end on 21st May when Mrs Kynaston accepted this offer. In legal terms, the consequences of that acceptance was that all the claims which are identified as being settled in the offer merge in the agreement and no longer have any independent existence as claims they are gone. What remains is the agreement, and there may or may not be a dispute over the meaning of the agreement, but from now on, it is the agreement that governs the relationship between the parties so far as the matters set out in the agreement are concerned.
8. I propose to draw up an order under which the counter-claim is dismissed
9. It is plain from what I have heard that there is similar disagreement as to the effect of the order." [I suspect he meant to say "agreement".] "It would be regrettable if there is to be yet further litigation on whether this order" [sic?] "has an effect contended for by one party and disputed by another. But if it is going to be the position (and I hope very much it is not) there must be fresh proceedings to determine the rival contentions. I do not propose, without properly constituted legal proceedings on the agreement, to determine its meaning at this point. I am going to order that there is a cooling off period of 24 days and thereafter either party will free, without any encouragement from the court, to state in a letter to the other any claim which is intended to be pursued on the agreement, or, alternatively, in respect outstanding costs orders. Such a letter setting out claims under the agreement, or claims as to costs, must be sent by one party to the other within 7 days of the end of the cooling off period. That letter must then be responded to within 14 days. Thereafter, if any claim is to be made to the court in respect either of costs or in respect of the agreement, then the court procedures must be complied with by both parties.
10. I am sure I am not the first judicial officer to urge both sides to bury the hatchet and spend their time on matters far more fruitful and less painful and vexing than pursuing allegations against each other. I urge both sides to call it a day. The litigation is at an end by virtue of the settlement. Let that be that.
11. The courts are not here to allow parties to engage in personal vendettas. They are here to determine bona fide and reasonable disputes which are not settled by agreement between the parties. That is all I have to say. An order encompassing what I have directed will be drawn up, I will initial it and it will be sealed and it will go on the court file."
"I was simply not permitted to raise the issue of costs And I was never given the opportunity to raise the issue of costs. The judge, like so many before him, simply threw up his hands and walked away. He said, he actually said, "That's it, I'm doing nothing else" and he walked out of the room, so I didn't as I stood to address the issue of costs at the end of his judgment, he walked out of the room, so now I'm left carrying two lots of costs and a damages claim of £5,000."
Mrs Kynaston explained to Sharp J. in the proceedings now under appeal:
"I submitted costs for summary assessment on paper. As far as I know, Mr Carroll didn't do so, but at the end of the hearing, Mr Justice Field said at the end of his judgment "I'm going to say no more." Mr Carroll immediately stood up and tried to say, well he did say, "But what about my costs?" and Mr Justice Field I think repeated "I'm going to say no more" and he walked out."
A Mr Wynne Edwards, who has acted as Mr Carroll's solicitor, was in court and gives this account:
"At the end of his judgment the judge rose to leave the court. The appellant stood up to, I believe, addressed the issue of costs. The judge walked away and out of the courtroom whilst the appellant was still standing and without having had the opportunity to present the argument that he wished to advance."
"IT IS HEREBY DECLARED that a binding agreement of settlement of the litigation herein was concluded when the Defendant accepted the Claimant's offer to settle on the terms therein set out on or about 21st May 2007
AND IT IS HEREBY ORDERED
1. The Counterclaim herein is dismissed with no order as to costs.
4. No claims are to be made concerning: (a) the meaning or effect of the said settlement agreement (including a claim for a declaration as aforesaid); or (b) as to any outstanding costs order or orders in these proceedings for a period of 14 days from the date hereof. Thereafter any such claim is to be set out in a letter sent by the party making it to the other after a further period of 7 days.
5. If any claim for breach of the settlement agreement or for a declaration as to its meaning or effect is made by either party after the aforesaid total period of 21 days fresh proceedings must be issued and served in accordance with CPR. "
It is not suggested that Mr Carroll wrote to the judge inviting him to vary the order the judge had drawn which expressly made no order as to costs. Nor did he apply to the judge or to this court for permission to appeal that order.
"the settlement Agreement dated 21st May 2007 does not preclude the Claimant from recovering the costs that were awarded to him by way of the orders for costs detailed at paragraph 12 above [the unpaid costs orders in his favour]"
This was clearly within the range of further disputes contemplated by Field J as is evident from the terms of the order he made.
"18. By attempting to continue with the Trial of her counter-claim, the defendant was in breach of the Agreement dated 21st May 2007 as a consequence of which, the claimant suffered loss and damage.
Particulars of loss and damage
19. Legal fees paid to Greene Wood and McLean LLP £5,000
20. Claimant's travelling expenses in attending court on 11th June 2007 of £54.
And the claimant claims:
22. Damages of £5,054 in respect of losses incurred arising from the defendant's breach of the Agreement dated 21st May 2007."
"You are an ungrateful monster. After all the harm you have done and the mercy I have shown you, you could at least have shown some gratitude but not you, you lying grasping monster."
The appeal on costs as damages for breach of agreement
"34. The costs now claimed as damages for breach of the settlement agreement were incurred in the course of a previous action in order, says the claimant, to prepare for the trial. As such, they fell to be awarded or not at the hearing before Mr Justice Field on 11th June 2007. At that hearing Mr Justice Field did not, it appears, make any order for costs. It is common ground that paragraph 1, which is in these terms:
'1. The counterclaim herein is dismissed with no order as to costs.'
only purported to reflect what the parties had agreed with regard to the costs of the counterclaim as part of the settlement agreement. It is said on behalf of the claimant that he was in person and did not make any application for costs. The defendant says that he attempted to ask for them, but Mr Justice Field refused to deal with the matter. Be that as it may, the position was that the claimant's entitlement to costs which are claimed in these proceedings crystallised at the point when Mr Justice Field determined the argument before him in the claimant's favour. That argument was whether the agreement was binding or not and it was an argument that the defendant lost."
"35. What Mr Justice Field was contemplating, so it seems to me, was the parties resolving their dispute as to the meaning of the settlement agreement by way of a fresh action if necessary. He was not contemplating a fresh action for the recovery of costs that had been incurred in the first action and could have been awarded in it."
"37. The claimant could have asked for the costs in the earlier action and on his case he did not. Whilst it might have been argued there was room for permitting a claim for his irrecoverable costs, that is not the nature of the claim now being made. In these circumstances it seems to me that the general rule and policy considerations which underlie it should apply, and having failed to ask for or recover his costs in action number one, he should not now be entitled to recover them in this second action."
"That parties should not usually be entitled to bring a fresh action for damages for costs unrecovered in a prior action between the same parties. The policy reasons for this are obvious: - it would make a nonsense of the rules of the Court as to the award of costs and the assessment of costs if the successful party could recover as damages either the costs withheld by the court or any further costs he has incurred to his solicitor beyond the assessed costs, whether in the same action or in a further action brought solely for this purpose. Further, the trial judge is in the best position to determine the position, and further litigation based solely on costs should be discouraged."
Nevertheless he submits that this case forms an exception to the general rule because:
"a. the facts of the case specifically contemplate the possibility of further proceedings between the parties;
b. the appellant was not given an opportunity to ask for his costs before the trial judge;
c. the general rule is not of application as it relates to a different situation to the one in the instant case."
"1. The counterclaim herein is dismissed with no order as to costs",
he could and should have sought permission to appeal it just as he sought permission to appeal the costs order made by Sharp J. He did not do so.
"In a civil action the successful party will generally recover costs against the other party. In earlier days these were called party and party costs, or taxed costs, to be distinguished from solicitor and client costs which was the term formerly used for the greater amount of costs, however reasonable, payable by the client to his solicitor. It would make nonsense of the rules about costs if the successful party in an action who has been awarded costs could claim in a further action by way of damages the amount by which the costs awarded him fell short of the costs actually incurred by him. This has naturally never been allowed, and it is hardly surprising that there is a dearth of authority on the point. Cockburn v Edwards (1881) 18 Ch D 449 is probably the only case in which such a claim was attempted but without success "
"I am of opinion that it is not according to law to give to a party by way of damages the costs as between solicitor and client of the litigation in which the damages are recovered. The law gives a successful litigant his costs as between party and party, and he cannot be said to sustain damage by not getting them as between solicitor and client."
Brett L.J. explained at p. 462:
"The law considers the extra costs which are disallowed on taxation between party and party as a luxury for which the other party ought in no case to be liable, and they cannot be allowed by way of damages."
"The bringing of an ordinary action does not as a natural or necessary consequence involve any injury to a man's property, for this reason, that the only costs which the law recognises, and for which it will compensate him, are the costs properly incurred in the action itself. For those the successful defendant will have been already compensated, so far as the law chooses to compensate him. If the judge refuses to give him costs, it is because he does not deserve them: if he deserves them, he will get them in the original action: if he does not deserve them, he ought not to get them in a subsequent action."
"I find it difficult to see why the law should not now recognise one standard of costs as between litigants and another when those costs form a legitimate item of damage in a separate cause of action flowing from a different and additional wrong."
That was a claim for malicious prosecution where the special damage included the sums actually expended by way of costs on the plaintiffs defence in the magistrates court and quarter sessions, credit being given for the small award of costs made in her favour on her acquittal on appeal. Other passages from the judgment of Devlin L.J. are worth citing. At p. 320/1 he said:
"The reason for the rule [that solicitor and client costs are not recoverable as damages] is not that the costs incurred in excess of the party and party allowance are deemed to be unreasonable; it is that what is presumed to be the same question cannot be gone into twice. The rule appears to have been first laid down by Mansfield C.J. in Hathaway v. Barrow (1807) 1 Camp. 151 where he put it on the ground that "it would be incongruous to allow a person one sum as costs in one court, and a different sum for the same costs in another court." If in the earlier case there has been no adjudication upon costs (as distinct from an adjudication that there shall be no order as to costs), a party may recover all his costs assessed on the reasonable, and not on the necessary, basis. If a party has failed to apply for costs which he would have got if he had asked for them, a subsequent claim for damages may be defeated; but that would be because in such a case his loss would be held to be due to his own fault or omission."
At p. 325 he said:
"In civil cases a successful party may not without good reason be deprived of any part of his costs. If he does not get his costs, it means either that it was not necessary for him to incur them or that there has been some fault or misconduct for which he is responsible. It is thus possible to say that in a civil case, as Bowen L.J. said in Quartz Hill Consolidated Gold Mining Co. v. Eyre, a successful party gets all the compensation which in the eyes of the law he deserves. This cannot be said in a criminal case, for there the exercise of the discretion is entirely unfettered."
Danckwerts L.J. said at p. 336:
" the court is given a judicial discretion [as regards costs in civil proceedings], and, in practice, the costs are taxed, and as a result the costs so ascertained are treated as the maximum proper costs which the party deserves to receive; anything beyond that is treated as something not recognised by the law. Consequently, if a successful party is, in an exercise of the judicial discretion in any particular case, refused costs, that also is an end of the matter. Likewise, if the successful party failed to ask for costs."
Because the costs involved in that case were incurred in criminal proceedings which are different from civil proceedings the claimant succeeded.
"1. [This case] concerns the correctness of the statement in Halsbury's Laws of England that: "Costs incurred in foreign proceedings cannot be recovered in an English action between the same parties"."
"whether the defendants are right to assert that as a matter of law the costs of litigation cannot be recovered as damages for breach of contract by one party to the said litigation against another or whether the true principle of law is that: 'The costs of prior proceedings between the same parties may be recovered as damages for breach of contract if (as in the present case) the party seeking to recover the costs of the prior proceedings as damages could not in the circumstances of the prior proceedings have obtained an order for the payment of those costs as costs"."
The court's conclusion was:
"34. In circumstances such as the present we do not consider that the public interest requires that the claimant should be deprived of its reasonable expenses in litigating at the instance of the defendant in a jurisdiction which the defendant chose in breach of an exclusive jurisdiction clause. The proposition quoted in paragraph 1 of this judgment is too widely stated."
The distinguishing feature of that case was, therefore, that justice required that the claimant should be permitted to recover costs which the foreign law did not allow him to recover in the foreign proceedings. The case is not authority for a case such as the instant one where the claim relates to costs which could have been recovered in the domestic proceedings.
"25. If the winning party can formulate a claim for the whole or part of such costs [the costs of proceedings in a foreign jurisdiction with a costs regime under which the winning party was unable to recover all such costs] in the English Courts as a claim for damages for breach of a separate cause of action (such as breach of a jurisdiction or anti-suit clause as here) there is, in my judgment, no reason as a matter of public policy or otherwise, why he may not recover them subject to ordinary damages rules. Under those rules the burden of proof of failure to mitigate rests on the party in breach ..."
The appeal against the order of only 70% for the costs of the application for summary judgment
"The costs of this hearing fall to be dealt with in accordance with the ordinary principles which are applied by the Court, namely that normally the party who is successful should recover his costs or at least a proportion of them."
Then Mr McNae asked for the costs reserved in the summary judgment application. Mrs Kynaston said this:
"My Lady, Master Eyre made a remark which I am sure counsel will recall. At the end of the hearing counsel asked for costs when Master Eyre said that I had lost the application, and learned counsel said: 'Clearly we've won this application; we should have our costs', and Master Eyre initially said, 'I'm not sure whether any should be awarded in this application, and when counsel pressed the matter, he said it should go before the trial judge." (The emphasis appears in the transcript.)
Mr McNae did not seem to dispute her recollection.
" on the question of costs the claimant has succeeded in these proceedings in relation to the principal matter which was before me. Having regard to the fact that he failed in respect of his action for breach of contract, and the time which the hearing of that took, he shall have 70% of his costs of and occasioned by the hearing today, on a standard basis to be taxed if not agreed, less the amount which Mrs Kynaston is able to identify. I think she said £280.
Mrs Kynaston: Yes, my Lady.
Mrs Justice Sharp: Being the costs of the preparation of her bundles, and that will include the costs which were reserved to me of the hearings of 19th (sic) of September 2008 and 30th October 2008 before Master Eyre, but there shall be no order for costs in respect of the hearing on 12th November of 2008."
It is clear to me that the judge was taking the same view of the summary judgment application as she did of the trial, namely that the claimant had in reality succeeded only in part. She was entitled to treat the summary judgment application in the same way as the trial given that costs were at large in the light of the reservations expressed by Master Eyre who, after all, did not award the claimant the costs of that summary judgment application which indicates he was not wholly convinced that the application was totally without merit. Treating the reserved costs as costs in the case was a perfectly permissible approach. Reading the transcript as a whole, I am satisfied that the reason why the claimant did not succeed was because he failed in respect of his action for breach of contract.
The appeal against the findings of contempt
"8. It is submitted by Mrs Kynaston, and in my judgment rightly, that the email that was sent" [by Mr Carroll on 23rd May 2007 (see paragraph 10 above)] "was in direct contravention of the order that was made and the undertaking that was given to Mr Justice Eady on 21st November 2006. It is plain in my judgment that it is abusive, insulting and also threatening. Particularly unpleasant is the last line which in my judgment is an implicit threat to go public with allegations about Mrs Kynaston to the Press.
9. I am quite satisfied to the criminal standard that Mr Carroll is, in these circumstances, in breach of the undertaking which was given on 21st November 2006."
"While I would most certainly not encourage any such application, if it be the case that there has been further harassment by Mr Carroll, the appropriate course would be to apply in connection with the order made by Cooke J (the suspended committal order) and to invite the judge to lift the suspension. Even if there have been further acts of harassment, it may be that the delay between those acts of harassment and any such application would be enough to justify the judge in not going further in considering such an application. However it would be wrong for me to express any concluded view on any such application."
" you may wonder why it is that I waited so long to bring this application. The fact of the matter is that we had just signed a settlement. At that moment I was hoping that settlement would hold together and I was hoping this was, if you like, a last kick of the corpse, and that we wouldn't have any more harassment. When Mr Carroll brought this claim against me, I thought, it's all starting again; he's going to cause me all manner of grief through hearings and trials and so on I need to make this application. And that's why I brought it at this late stage."
"More importantly is the point about delay, and the way I put it is as follows. There is an email that is sent on 23rd May 2007 and there is an application for committal for contempt made on 8th September 2008 some 15 months almost after the date of the act complained of."
The judge asked him to deal with other matters before dealing with delay and he returned to the issue later in the transcript saying:
"My Lady, if I move on to the point on delay, this is a crucial point. Not only is delay about the hearing an application for committal, it is also a point that has been made clear in my submission to both Mrs Kynaston and Mr Carroll in previous proceedings and there has been reference already to the decision of Lord Justice Neuberger, as he was, on an appeal in respect of a previous committal application made by Mrs Kynaston made by Mr Carroll."
In the exchanges that followed the judge observed that delay "may" not "would" be enough to justify judges not going further in considering applications for committal. She pointed out the fact that contempt involves the public interest, not just the interests of litigants themselves. She ended the discussion saying: "Well, it's a factor for me to consider", and Mr McNae agreed. Judgment followed shortly after that exchange.
Conclusion
Lord Justice Patten:
Lord Justice Elias: