COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
QUEENS BENCH DIVISION
His Honour Judge Seymour QC
HQ08X02310
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE HUGHES
and
LORD JUSTICE LEVESON
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Baker Tilly (a firm) |
Appellant |
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- and - |
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Mira Makar |
Respondent |
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Mr Christopher Semken (instructed by Reynolds Porter Chamberlain) for the Respondent
Hearing dates: 11th and 19th November 2010
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LORD JUSTICE HUGHES :
i) An initial agreement, made on or about 17 October 2006, under which Baker Tilly agreed to read into the case pending the agreement of formal instructions to provide a report for the ET proceedings. That contract, the judge found, was formed by Miss Makar's employment solicitors, Messrs Burges Salmon, inviting such action in an Email of 17 October and then sending the documents which needed to be read, and by Baker Tilly accepting it by starting work. No fee or fee scale was at that point agreed, so the implied agreement was to pay a reasonable sum. Nor was it known at that point exactly which topics would need to be covered by the expert evidence, because that was being debated before the ET, with a further hearing shortly expected.ii) An agreement made on 30 October 2006, under which Baker Tilly agreed to "prepare a written independent expert report addressed to and for production to the Tribunal, and, if required, to give evidence at the hearing." That contract, the judge found, was formed by two letters. The first was a letter of formal instruction issued on that date on Miss Makar's behalf by Messrs Burges Salmon, containing the precise terms which I have just set out, as well as much detailed further instruction as to the scope of the evidence required. The second was a letter which amounted to an acceptance of the first, written the same day by Mr White of Baker Tilly. The judge rejected Baker Tilly's assertion that this, the crucial, contract was not formed until Baker Tilly had sent its own standard terms of engagement to Burges Salmon the next day. By then the parties were in contract. The exchange of letters which did form the contract did not, however, deal with the important matter of the fee. That was negotiated directly between Miss Makar and Mr White, at her request. It was common ground at the trial that by the time the terms of Baker Tilly's formal instructions were agreed, there was agreement between Miss Makar and Mr White that Baker Tilly's charges should be "capped" at £30,000 plus VAT, which cap should apply also to the reading-in, although not to attendance at the hearing if that should be necessary. This contract, the judge held, was brought to an end by the solicitors telephoning Baker Tilly on the morning of Saturday 4 November, immediately after the late-night settlement, to tell them that the ET claim had settled.
iii) An agreement made after the ET claim was settled. The judge held that this arose because Mr Britton, Miss Makar's solicitor, told Mr White on Monday 6 November that she still wanted a "preliminary report", and within the cap, and that although Mr White responded that that was "a different ballgame" he had accepted further instructions by subsequently agreeing to meet Miss Makar and thus carrying on with the work. However, this contract, the judge held, came to nothing because at a meeting on 20 November it was agreed to wait for Triad's half year figures, and for further instructions from Miss Makar, which never came.
i) Reading in between 17 October and 30 October: £5850 plus VATii) Work between 30 October and settlement being notified: £21767.50 plus VAT
iii) Work between 6 and 20 November (after settlement): £12350 plus VAT.
That would have totalled significantly over the agreed £30,000 cap, but the claim was limited to the amount of that cap.
"…to prepare a written independent expert opinion addressed to and for production to the Tribunal and, if required, to give evidence at the hearing in this matter."
"when there is some form of public censure and some blood letting. It is more likely to be effective if [the solicitors] and [the auditors] are criticised, since the directors have lost market credibility."
The meeting itself confirmed this stance. It is apparent from the notes of the meeting, as well as from the evidence of the accountant participants, that they did not share Miss Makar's enthusiasm for her cause at this stage. They made it clear to her that in their view her reputation had already been vindicated by the published terms of the settlement, which did accept that she had had "a reasonable basis for concerns on a number of financial issues" as well as incorporating the company's publicly expressed regret at the "unfortunate" events leading to her dismissal. The accountants also addressed her fundamental complaint, namely that there was serious financial irregularity in Triad. It was the fact that the auditors had, in July 2005, warned the directors that the accounts would be likely to be qualified. However, when the time had come in September 2005 to issue the annual accounts, they were not qualified. Subsequently these auditors had resigned, but they had done so saying formally that there was no matter which needed to be drawn to the attention of shareholders. The Baker Tilly accountants, particularly those with auditing expertise, told Miss Makar at this meeting on 20 November that (a) the unqualified accounts almost certainly meant that there was nothing seriously wrong and (b) that the resignation of the auditors could not be read as suggesting that they thought there was; it was likely that Triad simply did not suit their portfolio. At that time Triad's next set of figures were due in December. There were different auditors now. The Baker Tilly accountants told Miss Makar, in graphic terms, that if these new auditors' figures did not show up what was described as a 'black hole' in the accounts, then it had to be accepted that there was not one there.
Lord Justice Leveson:
The Chancellor