ON APPEAL FROM CENTRAL LONDON COUNTY COURT
HIS HONOUR JUDGE COLLINS CBE
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE MOORE-BICK
LORD JUSTICE RIMER
| Camertown Timber Merchants Limited
Gurpartat Singh Bhullar
|Sabrinder Singh Sidhu
Kas & Co Limited
Mr David Holland (instructed by CKFT Solicitors) for the respondents
Hearing date: 9th March 2011
Crown Copyright ©
LORD JUSTICE WARD:
"This is a case in which the claims on one side are about £71,000, of which some £32,000 is admitted. The claims on the other side are about £34,000. The parties have incurred costs in litigating this dispute of about £150,000. There are eight bundles of documents. Counsel have spent days cross-examining the witnesses on the documents in an effort to unearth clues to puzzles which have only come into existence because of the failure of the parties, both experienced businessmen, to record their agreements in writing. This case should have been settled at a fraction of the cost by mediation, having regard to the doubtful outcome which, as counsel agree, depends substantially upon an evaluation of the credibility of oral evidence."
"The case has been presented on both sides on the basis that in the absence of any clear evidence in writing of the agreements between the parties the outcome would turn on the court's assessment of the credibility of Mr Bhullar and Mr Sidhu in the light of the points made on the documents, especially Kas's invoices. The fact that their respective evidence about the oral agreements is less than clear and well particularised increases the difficulty."
"10. … While it is true that Mr Bhullar's claim in this respect was not articulated in writing until February 2007 I have no hesitation in the light of the whole of the evidence in concluding that his evidence was substantially correct. The defendant intended him to be the builder in charge and he exercised that function until the parties ended their relationship. I concluded that Mr Sidhu was deliberately untruthful about this; he was evasive and tricky in the witness box about this and many other issues, including issues relating to documents for which he was responsible. In the light of this conclusion I approached the whole of the defendant's case with great care."
Going on to deal with remuneration he said:
"11. The question of remuneration on a quantum meruit basis ought to be disposed of now rather than be left to another hearing and I have heard counsel's submissions. There were no formal arrangements, no project management records and the open market rate for project managers suggested to be in excess of £200 per day would be quite inappropriate. The bricklayer was being paid £65 per day and the other workers were being paid startlingly low daily rates. In the absence of daily records from Mr Bhullar or any agreement between the parties I propose to award him £100 per day for 3 days per week for the 15 weeks he was on site - a total of £4,500. There were a number of delivery notes to the site signed by other people and his account of having been on site 10 hours a day, 6 days a week was an undoubted exaggeration."
"what is missing is any evidence apart from that of Mr Bhullar himself that Mr Sidhu agreed to reimburse him the finder's fee. The fact that the claim did not see the light until February 2008 speaks volumes. I am not satisfied there was any such agreement."
"19. There was no serious case put forward to justify a finding that the contract to provide materials was with Kas rather than Mr Sidhu. The house belongs to him, not the company. The confusion here is because Mr Sidhu drew no distinction in this area between his practice and himself. Over a period of months a huge quantity of materials were (sic) delivered to site without any payment being made or asked for, so far as any documentary evidence is concerned, and without any threat to withhold materials and labour until payment was made. The only sensible explanation can be that it was agreed that the cost of materials would be set off against accountancy fees due to Kas."
"20 . … The claimants accused Mr Sidhu of manufacturing his invoices after the event. The evidence that he did this is formidable. He gave a wholly unconvincing explanation for having printed them off on outdated headed paper. Other anomalies were clearly identified by Mr Buttimore in his closing written and oral submissions. But the fact is that Kas did provide accountancy services and the invoices mirror very closely indeed the sums for accountancy services written in to the accounts of Camertown, Bellforce and the Bhullar family, which Mr Bhullar and family accepted and presented for tax purposes. The question of invention of the claim, as opposed to the invoices, after the event does not seem sensibly to arise for consideration. I do not believe that Mr Bhullar made any distinction between the fees owed in respect of Camertown on the one hand and Bellforce and the family on the other, when it came to setting off accountancy fees against the cost of materials.
21. The disputed sums, following the summary in Mr Buttimore's closing written submissions are: …
(ii) £9,987.50 for y/e 31 March 2005. One defence here is the set off of the finder's fee which I have already held fails. Kas says this sum is for Camertown alone – Camertown and Mr Bhullar say it was for Camertown, Bellforce and the Bhullar family. There is no direct evidence as to what the agreement was about this apart from the conflicting accounts of Mr Bhullar and Mr Sidhu. But as the fees now claimed were written into Camertown, Bellforce and personal accounts by Mr Sidhu and then signed off and presented for fiscal purposes by the directors, and individuals, compelling evidence would be required to avoid the inference that they fully accepted them. There is no such evidence. Mr Bhullar gave no satisfactory explanation for these accounts being signed off and presented to the Revenue before any dispute arose. Notwithstanding the unhappy evidence of Mr Sidhu about the way in which documents came into existence and his dubious explanations for the reason for the increase in annual fees, again before the dispute arose, that essential points stands.
iii. Fees for y/e 31 March 2006 in the same sum where Camertown admits only £2,400 + VAT by way of quantum meruit. I accepted Mr Sidhu's account that fees were agreed in advance. There was inadequate material for me to conclude that he had not done what was needed – the evidence suggests that even after a dispute arose he was seeking information for accounting purposes."
"22. In the event Camertown succeeds in its claim for £40,900.53 and Mr Bhullar succeeds in his claim to the extent of £4,500. Kas succeeds in its claim (including by way of set off) for the sum of £29,022.51. The balance in favour of the claimants is £16,378.02. I am conscious that in reaching this conclusion I have not done justice to all the evidential points made by counsel on both sides. I found neither of the protagonists witnesses in whom I could repose great confidence and have had to evaluate the probabilities on the basis of much documentary evidence that is capable of more than one interpretation."
There ended the judgment.
Set off and the global agreement
"I ask him for a rate. He gave me the rate. There is no dispute about his rate. I have not disputed what he was charging us, sir, I am not disputing what is charging us. My dispute is that we had a global agreement for payment for Bellforce, Camertown and Bhullar family.
Judge Collins: No, I understand.
A. Yes? I am not disputing the invoicing which is £8,500 plus VAT. It is accepted in its entirety. Whether he rendered it to us, how he rendered it, is an element to me. We paid and that is what we agreed, and would pay."
At p. 42 line 17 he said:
"… but in my version is that it was myself who asked Mr Sidhu who asked for his rate; it was myself who agreed this with him in January every year, you (sic) paid him and I am not disputing now, I am not disputing the amount that you (sic) paid him. No rates are disputed. My dispute is that what my agreement with him was that we would pay him global fee of £8,500 plus VAT for the accounts of Camertown, Bellforce and family and we paid him that."
"Notwithstanding the unhappy evidence of Mr Sidhu about the way in which documents came into existence and his dubious explanations for the reason for the increase in annual fees, again before the dispute arose, that essential point stands."
That was enough to dispose of the global agreement argument.
Accountancy fees for 2006
Project management fees
The finder's fee
"Mr Buttimore not surprisingly asks me to accept that in so far as his clients have ended up with a judgment in their favour I should follow the general rule that they should be regarded as the winner and have their costs. In order to test that submission and see if it applies it is necessary to stand back ..."
So he analysed the various claims. Kas had succeeded save as to £5,000 which "was only raised by way of amendment on the first day of the trial". Then he said:
"A large amount of the time at trial was taken up with the claim for accountancy fees and the claimant mounted the strongest of attacks on Mr Sidhu's integrity by attempting to establish the invoices and therefore the claim for fees was invented. I dealt with that in my judgment and I accepted without making positive findings because it was unnecessary and said there were serious reasons to doubt the integrity of the invoices but for the reason I gave the claim for accountancy fees was justified on the basis the claimants had signed accounts on the basis of those accountancy fees and it is important to distinguish the forensic approach from the substance of it and in effect I found that the claimants had assented to the accountancy fees which had been claimed by signing the accounts prior to the delivery of the invoices and any order which failed to reflect the fact that the claim by Kas & Co and its defence in the Camertown action would have succeeded 100% but for the defence raised as to £5,000 on the first morning of the action would be an injustice."
He pointed out with regard to the claim for building materials:
"It would be wrong for any order of costs not to reflect that the dispute was only for £8,000."
As to Mr Bhullar's claim for £10,000:
"In truth there was not a scrap of evidence that Mr Sidhu agreed to pay that money and had been raised only by way of a defence to the accountancy fees claim."
"The third claim for project management fees where over £20,000 was claimed, eventually ended up in a judgment for £4,500 on the basis of the judge doing the best he could with very little material showing a complete mismatch between the amount claimed and the amount recovered so although it turns out that on balance the claimant gets a judgment for £16,000 when one looks at the case to see what it was about, the defendant was a very substantial winner on his own claims and [Mr Bhullar] was a very limited winner on his own claims and where he was undoubtedly the winner of only £8,000."
"It is clear from this judgment and my judgment that there are areas where both sides are winners and both sides are losers."
So he concluded there should be no order for costs, each side having to pay for their own "in following and in pursuing and conducting the litigation in the way they have." That analysis is unassailable.
"The exigencies of daily court room life are such that reasons for judgment will always will be capable of having been better expressed. This is particularly true of an unreserved judgment such as the judge gave in this case but also of a reserved judgment based upon notes, such as was given by the District Judge. These reasons should be read on the assumption that, unless he has demonstrated the contrary, the judge knew how he should perform his functions and which matters he should take into account. This is particularly true when the matters in question are so well known as those specified in section 25(2) [of the Matrimonial Causes Act 1973 setting out the factors to take into account in making orders for ancillary relief]. An appellate court should resist the temptation to subvert the principle that they should not substitute their own discretion for that of the judge by a narrow textual analysis which enables them to claim that he misdirected himself," (with the emphasis added by me).
Lord Justice Moore-Bick:
Lord Justice Rimer: