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GIBBON EQUIPMENT HIRE LIMITED v. CONSTRUCTION INDUSTRY TRAINING BOARD [2001] EWHC Admin 954 (23rd November, 2001)

		Neutral Citation Number: [2001] EWHC Admin 954
		Case No: CO/2888/2001

IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
ADMINISTRATIVE COURT

Royal Courts of Justice
Strand, London, WC2A 2LL

23 November 2001

B e f o r e :

THE HONOURABLE MR JUSTICE KEITH
____________________

Gibbon Equipment Hire Limited
Appellant

- and -

Construction Industry Training Board
Respondent

____________________

(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)

____________________

Mr S Wilken (instructed by Gateley Wareing for the Appellant)
Mr A George (instructed by CMS Cameron McKenna for the Respondent)
____________________

HTML VERSION OF JUDGMENT
AS APPROVED BY THE COURT
____________________

Mr Justice Keith

Introduction

The Respondent, the Construction Industry Training Board (“the Board”), provides training for the construction industry. In order to fund the provision of that training, it imposes a levy on employers in the industry. Last year, it imposed a levy on the Appellant, Gibbon Equipment Hire Ltd. (“the Company”), for the first time. The question which this appeal raises is whether the Company was an employer in the construction industry upon whom the levy should have been imposed. Although the amount of the levy was small, the cases of a number of other companies are said to be similar to that of the Company, and a stand has been taken in the present case as a matter of principle.

The material facts

The relevant facts are not in dispute. The Company’s principal business is the hire of plant and equipment. It operates from two sites in South Wales. The items available for hire are listed in the Company’s brochure: some items are suitable for domestic use (for example, some of the plant listed in the gardening and leisure section of the brochure), while other items are only suitable for use by the building trade. Examples of plant suitable only for trade use are those in the accommodation section of the brochure. They include offices and toilets of the portakabin variety. The hire of plant and equipment represented about three-quarters of the Company’s turnover in the year upon which the levy assessment was based. Its remaining turnover came from the sale and haulage of plant and equipment and the sale of Calor gas.

The Company has a varied customer base. A large proportion of its business involves the hire of plant and equipment to local authorities. Its customers also include local businesses not connected with the construction industry - for example, garden centres, golf clubs and manufacturing outlets. A small proportion of its customers are individual DIY enthusiasts. The remainder of its customers are what the Company calls “jobbing builders”, which I take to mean individuals and companies in the building trade. The hire, sale and haulage of the plant and equipment to them represents about 25% of the Company’s turnover.

In 1993, the Board sent a questionnaire to the Company for the purposes of determining whether a levy should be imposed on it. The Company returned the completed questionnaire to the Board. A copy of it has not survived, but later that year the Board informed the Company that for the present its enquiries would not be taken further. In 1999, the Board sent a further questionnaire to the Company, requesting the Company give details of its employees for the year ending 5 April 1999. The Company returned the questionnaire duly completed, stating that it was a member of the Construction Plant-Hire Association, that the average number of employees on its payroll during that year had been 22, and that the total payments which it had made to them amounted to Ł320,000. On the basis of that information, the Board issued a levy assessment notice for the year ending 5 April 1999. The notice was dated 10 March 2000, and required the Company to pay a levy of Ł1,600 (calculated at the rate of 0.5% of the Company’s annual employee payroll) by 11 April 2000.

The Company appealed against that assessment to an employment tribunal pursuant to section 12(4) of the Industrial Training Act 1982 (“the Act”). The burden of proving that it was not liable for a levy was on the Company, because section 12(5)(a) provided as follows, so far as is material:

“........if the appellant satisfies the tribunal that he ought not to have been assessed to the levy............the tribunal shall rescind.........the assessment but .........in any other case shall confirm it..........”

The Company contended that, since only about one-quarter of its turnover related to the hire or sale of plant and equipment to customers engaged in the construction industry, it was not liable to pay any levy at all. An employment tribunal sitting at Cardiff disagreed. It dismissed the Company’s appeal, and the Company now appeals to the High Court pursuant to section 11(1) of the Tribunals and Inquiries Act 1992. The appeal lies on a point of law only.

The statutory framework

The Board is one of a number of industrial training boards established by the Secretary of State under section 1(1) of the Act “[f]or the purpose of making better provision for the training of persons over compulsory school age ........for employment in any activities of industry or commerce”. The Board’s power to impose levies is derived from a levy order made by the Secretary of State, pursuant to sections 11(1) and 11(2) as amended of the Act, which provide, so far as is material:

“(1) An industrial training board may from time to time, submit to the Secretary of State proposals (in this Act referred to as ‘levy proposals’) for the raising and collection of a levy to be imposed for the purpose of raising money towards meeting the board’s expenses.

(2) The levy shall be imposed in accordance with an order made by the Secretary of State (in this Act referred to as a ‘levy order’) which shall give effect to levy proposals submitted to him under subsection (1) above and shall provide for the levy to be imposed on employers in the industry..........”

The levy order which the Secretary of State had made and which was in operation on 10 March 2000 (when the levy assessment notice was issued to the Company) was the Industrial Training Levy (Construction Board) Order 2000 (S.I. No. 434 of 2000) (“the 2000 Order”). The 2000 Order covered the period from 23 February 2000 to 31 March 2000: see Arts. 1 and 2(1)(n) of the Order. It followed the format of previous levy orders, and broadly speaking required those employers to whom it related to pay a levy based on 0.5% of the total payments which they had made to their employees.

The issue on this appeal is whether the Company was in law an employer to whom the 2000 Order related, since Art. 3(1) of the 2000 Order provided that the levy was to be imposed on “employers”. At one stage, it was thought that another of the issues on this appeal was whether each of the Company’s two sites was a “construction establishment”, since Art. 3(2) of the 2000 Order provided that the levy was to “be assessed by the Board separately in respect of each construction establishment of an employer”. However, it is now accepted that that is not one of the issues on this appeal, because Art. 3(2) relates only to the method of assessing the levy, not to the liability of the employer for the payment of the levy in the first place.

Reverting, then, to the question whether the Company was in law an employer to whom the 2000 Order related, the word “employer” was defined in Art. 2(1)(i) as meaning “a person who is an employer in the construction industry at any time in the ..............period” to which the Order related. The words “the construction industry” were defined in Art. 2(1)(g), so far as is material, as meaning

“............any one or more of the activities which, subject to the provisions of paragraph 2 of the Schedule to the [Industrial Training (Construction Board) Order 1964 (S.I. No. 1079 of 1964) (‘the 1964 Order’)], are specified in paragraph 1 of that Schedule as the activities of the construction industry........”

(In fact, there were two schedules to the 1964 Order, but it is plain that it was to Schedule 1 that Art. 2(1)(g) of the 2000 Order related). A new Schedule 1 was substituted by the Industrial Training (Construction Board) Order 1964 (Amendment) Order 1992 (S.I. No. 3048 of 1992), and the relevant paragraphs of the new Schedule 1 are paras. 1, 2 and 3. Para. 1 identified those activities which are the activities of the construction industry. The material part of para. 1 provided:

“Subject to the provisions of this Schedule, the activities of the construction industry are the following activities in so far as they are carried out in Great Britain:-..........(f) the installation, testing, inspection, maintenance or repair of contractors’ plant, or the letting out on hire of such plant or scaffolding.......”

Para. 2 identified the activities which are not to be treated as activities of the construction industry. The material parts of para. 2 provided:

“Notwithstanding anything contained in this Schedule, there shall not be included in the activities of the construction industry:-......

(c) the activities of any establishment engaged wholly or mainly in the activities following or any of them, that is to say-...........

(vi) the installation, testing, inspection or repair of machinery or plant (other than contractors’ plant);.........

(xviii) the provision or continued provision for any building or other construction or work or operations carried out on any site referred to in paragraph 1(a)(i) to (vii) of this Schedule of water, gas, electricity, lighting, heating, ventilation or air-conditioning, where undertaken in, upon, above or under the building or the close curtilage or precincts thereof, or such construction or work or operations on any such site;.....

(e) the activities of a local authority.........”

Para. 3 was a definitions section, and it defined the words “contractors’ plant” as meaning

“....... machinery, plant or equipment of a kind used or intended for use in operations on the site of any building work or civil engineering work, but does not include lorries, ready-mixed concrete vehicles or other mechanically propelled vehicles mainly used for carriage of goods on roads .........”

Mr Sean Wilken for the Company argued that para. 2 was the dominant provision, and that it was first necessary to consider whether a particular activity was excluded by virtue of para. 2. If it was, no question of its inclusion by virtue of para.1 arose. The alternative view is that it is first necessary to consider whether a particular activity was included by virtue of para.1. If it was not, the question of its exclusion by virtue of para. 2 did not arise. I can see the force in the suggestion that para. 2 is the dominant provision, because its provisions apply “[n]otwithstanding anything contained in this Schedule”, whereas the provisions of para.1 apply “[s]ubject to the provisions of this Schedule”. But I prefer to deal with the two issues of construction which arise in the order in which they were considered by the tribunal. First, although the Company’s principal activity was the “letting out on hire of .........plant” and equipment, did the plant which it hired out amount to “contractors’ plant”, i.e. plant “of a kind used or intended for use in operations on the site of any building work or civil engineering work”? Secondly, did the Company’s activities come within one of the excluded activities set out in para. 2?

The definition of “contractors’ plant”

The levy which the Board imposed was in the nature of a tax imposed on those engaged in the construction industry: see N.A.S. Airport Services Ltd. v. Hotel and Catering Industry Training Board [1970] 1 WLR 1576 at p.1580H. Accordingly, the Board could not impose the levy on the Company unless that was “clearly and unequivocally the effect of the statutory provisions” (per Evans L.J. in Ingram v. Inland Revenue Commissioners [1997] 4 All E.R. 395 at p.414e), and any ambiguity should be resolved in favour of the company upon whom the levy is imposed. But in my opinion, the proper construction of the definition of “contractors’ plant” is clear, unequivocal and unambiguous. The focus of the definition is not on the particular plant which a plant hire company happens to have in stock at any particular time, or on the particular customer who happens to hire such plant as the company has in stock, or on the particular use to which that customer intends to put the plant. The definition focuses on the generic nature of the plant which the company hires. You look, in other words, at the type of plant which the company hires, and then determine whether plant of that type would be “used or intended for use in operations on the site of any building work or civil engineering work”. Otherwise, the words “of a kind” in the definition of “contractors’ plant” would be unnecessary.

This approach serves to explain the words “used or intended for use” about which there was some discussion in the course of the hearing of this appeal. Since it is the type of plant on which attention has to be focused, the words “intended for use” cannot refer to the particular use to which the hirer intends to put the plant. They refer, I think, to the use for which the manufacturers of the plant thought the plant would be most suitable. Moreover, the definition uses the phrase “used or intended for use”, and if the words “intended for use” mean the use for which the manufacturers of the plant thought the plant would be most suitable, the words “used or” are likely to refer to the uses to which the plant could be put, even if it was not the use for which the manufacturers thought might be the most suitable.

I should add that, even if the focus of the definition of “contractors’ plant” was on what the persons and companies who hired the plant intended to use it for, that would not have helped the Company in this case. When one looks at the many items of plant in the Company’s brochure, it is plain that the overwhelming majority are of a kind which even the hirers of them would have intended for use in operations on building or civil engineering sites. The fact that only 25% or so of the Company’s customers were individuals and companies in the building trade did not mean that the Company’s other customers did not intend to use the plant in operations on such sites. For example, a site on which a local authority uses its own workforce to carry out building works with plant hired from the Company is no less a site on which building works take place and on which the Company’s plant is intended to be used.

I accept that the phrase “contractors’ plant” might in ordinary English mean plant used by building contractors. In that case, since the majority of the Company’s customers are not building contractors, most of the plant hired out by the Company would not be “contractors’ plant”. But that simplistic approach (which in essence is the Company’s case) ignores the statutory definition of “contractors’ plant”. Indeed, if the Company’s argument was correct, a simple method of determining whether a plant hire company is liable to pay a levy - namely by examining its brochure to see if the plant which it hires is of a kind intended to be used on building sites - would have to be abandoned, and a detailed inquiry about the company’s customer base would have to be conducted, an inquiry which might be inconclusive if the company did not keep records of its customers. I do not believe for one moment that those who drafted the definition of “contractors’ plant” could possibly have had that sort of inquiry in mind.

In reaching the construction which I have on the definition of “contractors’ plant”, I have not overlooked two important points made by Mr Wilken. The first focused on the reason for the imposition of the levy, namely to fund the provision of training for those who work in the construction industry. The evidence before the tribunal was that only one of the courses which the Company provided for its workforce was eligible for a grant from the Board, and since the Company did not derive any significant benefit from the training programmes which the levy was supposed to fund, that militated against a construction of the definition of “contractors’ plant” which would result in the Company being liable for the levy. Secondly, the various activities described in para.1 of the new Schedule 1 to the 1964 Order were for the most part what Mr Wilken described as “hard-core construction activities”. That was to be distinguished from activities which were ancillary to construction activities, and the hire of plant and equipment was an example of an ancillary activity of that kind: it was ancillary in the sense that it enabled the hard-core construction activities to take place. Ancillary activities are excluded from the scheme: see, for example, para. 2(c)(xviii) of the new Schedule 1 to the 1964 Order. That consideration, too, was said to militate against a construction of the definition of “contractors’ plant” which would result in the Company being liable for the levy.

I cannot go along with these arguments. They might have amounted to powerful reasons for saying that the letting out on hire of plant and equipment should not have been included in the list of the activities of the construction industry in the first place. But once the letting out on hire of plant or equipment had been included in para.1 of the new Schedule 1 to the 1964 Order, no room was left for these two considerations (the allocation of training resources to areas which did not benefit plant hire companies and the ancillary nature of their business) to assist on the issue of construction which this appeal raises. Once plant hire companies are brought within the statutory scheme, these considerations do not help on the question whether attention is to be focused on the nature of the plant, or on the company’s customer profile, or on the use to which the hirers intend to put the plant.

As a final aid to construction, Mr Wilken relied on the exclusion in para. 2(c)(vi) from the activities of the construction industry of “the installation, testing, inspection or repair of machinery or plant (other than contractors’ plant)”. I do not see how that helps on the construction of the definition of “contractors’ plant”. I accept, of course, that it shows that there can be plant which is not contractors’ plant, but it does not help to identify where the demarcation line should be drawn. And even if it can be said that para. 2(c)(vi) shows that less items of plant fall into the category of “contractors’ plant” than those which cannot be classified as “contractors’ plant” (which I doubt), that factor again tells us nothing about where to draw the dividing line between the two.

For these reasons, I have concluded that the overwhelming majority of the items of plant which the Company let out on hire amounted to “contractors’ plant” within the meaning of para.1(f) of the new Schedule 1 to the 1964 Order.

The local authority exclusion

Whether that conclusion be right or not, it is argued on the Company’s behalf that because the majority of the items of plant which it hired were hired to local authorities, that part of the Company’s activities were not to be included in the activities of the construction industry because those activities were the activities of a local authority. The hire by a local authority of plant and equipment from a plant hire company may well be one of the activities of the local authority, but what the present case is all about is the hire to a local authority of plant and equipment by a plant hire company. That activity cannot be said to be one of the activities of the local authority. In other words, the effect of para. 2(e) is to exclude local authorities from liability for the levy, but not to exclude from that liability companies in the private sector which deal with local authorities. As the tribunal pointed out, it would be absurd if a company in the private sector which was engaged by a local authority on a building project was to be exempted from the levy simply because it was engaged by an employer in the public sector. Accordingly, I have concluded that the Company’s activities, to the extent that they included the hire of plant and equipment to local authorities, were not excluded activities within the meaning of para. 2 of the new Schedule 1 to the 1964 Order.

The Board’s reasoning

When the Board issued its levy assessment notice to the Company, it did not know the nature of the plant and equipment which the Company let on hire. It only asked for, and obtained, a copy of the Company’s brochure after the Company’s appeal to the tribunal had been lodged. Moreover, it did not explain to the Company how it decided whether a company was liable for the levy, or why it regarded the Company as liable for the levy, or why the Company had not been regarded as liable for the levy in recent years. It is said that (a) the effect of all that was that the Company did not know, when it lodged its appeal to the tribunal, what case it had to meet, and (b) that made it particularly hard for the Company to get round section 12(5) of the Act which required the Company to prove that it was not liable for the levy.

At first blush, the Board’s procedure for making decisions about whether a company is liable for the levy is not relevant at all to the outcome of this appeal. The tribunal was not reviewing the Board’s procedure, nor was it determining whether, on the material which the Board had at the time of its decision, it was open to the Board to conclude that the Company was liable for the levy. The tribunal was exercising its statutory function of determining whether, on the material before the tribunal, the Company ought not to have been assessed as liable for the levy. The methodology by which the Board had reached its original decision was beside the point.

However, the flaws which are said to have existed in the Board’s decision-making process are said to engage the Human Rights Act 1998. It is not contended that the casting of the burden of proof on an appellant by section 12(5) is of itself incompatible with a Convention right. The argument proceeds on the assumption that the definition of “contractors’ plant” is unclear, equivocal and ambiguous, and that it therefore lacks the legal certainty which is a necessary pre-condition for the imposition of the levy. The fact that it is a necessary pre-condition for the imposition of the levy (which amounts to the dispossession of property) is apparent from Art.1 of the First Protocol to the Convention, which provides;

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.” (Emphasis supplied)

The phrase “provided for by law” was considered by the European Court of Human Rights in The Sunday Times v. The United Kingdom (1979) 2 EHRR 245 at para. 49:

“....a norm cannot be regarded as a ‘law’ unless it is formulated with sufficient precision to enable the citizen to regulate his conduct: he must be able - if need be with appropriate advice - to foresee, to a degree that is reasonable in the circumstances, the consequences which a given action may entail. Those consequences need not be foreseeable with absolute certainty: experience shows this to be unattainable. Again, whilst certainty is highly desirable, it may bring in its train excessive rigidity and the law must be able to keep pace with changing circumstances. Accordingly, many laws are inevitably couched in terms which, to a greater or lesser extent, are vague and whose interpretation and application are questions of practice.”

Thus, the argument is that the imposition of the levy on the Company is incompatible with the rights accorded to the Company by Art.1 of the First Protocol because the ambiguity of the definition of “contractors’ plant” violates the principle of legal certainty when viewed against the background of

(a) the Company’s unawareness of how the Board construed that definition, of why the Board thought that its construction of the definition justified the imposition of the levy on the Company, and of the reasons for the Board’s volte-face in now imposing a levy when it had not done so in previous years, and

(b) the fact that the Company’s unawareness of those facts made it all the more difficult for it to surmount the reverse burden provision in section 12(5) when it decided that it wanted to appeal against the imposition of the levy.

In my opinion, this elaborate argument falls at the first hurdle. I do not regard the definition of “contractors’ plant” as being unclear, equivocal or ambiguous. Had I thought that it was, I would not have construed it in the way I have, having regard to the need to accord to the definition, in the event of ambiguity, a benevolent construction in favour of the Company. For the reasons which I have endeavoured to give, the construction of the definition is plain, and if the Company had had its attention drawn to the relevant provisions in the new Schedule 1 to the 1964 Order, in particular to the definition of “contractors’ plant”, it would have been able, with appropriate advice, to foresee, to a degree which was reasonable in the circumstances, the consequence which hiring out plant of the kind set out in its brochure might have entailed.

Conclusion

For these reasons, this appeal must be dismissed.

- - - - - - - - - -

MR JUSTICE KEITH: For the reasons given in the judgment handed down today, this appeal is dismissed.

MR WILKEN: My Lord, there are two issues that flow from that. The first is costs and the second is permission to appeal. My Lord, so far as costs are concerned, I cannot resist my learned friend's application for her costs in principle. The difference between herself and myself is that she wants your Lordship to assess costs summarily today, where as I would submit that the appropriate order would be that the matter of costs go off to the costs judge for detailed assessment, if not agreed. The reason for that is that the rates Cameron McKenna are charging are significantly higher than the guideline rates for City of London solicitors. On a rough totting estimate that amounts to at least Ł2,500, Ł3,000 between us.

MR JUSTICE KEITH: There is an issue of principle as to the charging rates and you say that issue of principle is best decided by a costs judge rather than a judge on a summary assessment.

MR WILKEN: My Lord yes.

MR JUSTICE KEITH: The one I do not have is the estimate of costs, their schedule, it should have been handed in 24 hours before now and I do not think it was in (Same Handed).

MR WILKEN: Your Lordship will see there it is items a and b are the vice. Senior partner grade A, Ł400 per hour; grade C, Ł250 an hour. Your Lordship will then see on that page, 5 hours, 1 hours, 2 hours, 5 hours, 11 hours all at Ł250.

MR JUSTICE KEITH: The problem is not the number of hours, the problem is the charging rates. Is that going to be the only issue?

MR WILKEN: I do not know, my Lord, is the answer to that. That is something that immediately struck me when I saw the bill. My Lord, it may help if I hand up the guideline of charging rates. My Lord it is the right- hand column of the page. Your Lordship will see City of London and your Lordship will see there are four columns a, b, c and d, a is Ł325, c is Ł180.

MR JUSTICE KEITH: Yes.

MR WILKEN: On any view Ł400 and Ł250 are too high.

MR JUSTICE KEITH: Yes.

MR WILKEN: I submit it is a matter for an experienced costs judge rather than summary assessment.

MR JUSTICE KEITH: Rather than an inexperienced High Court judge when it comes to determining what is the appropriate rate per hour. I understand the point.

MR WILKEN: Of course inexperienced counsel when it comes to costs as well.

MR JUSTICE KEITH: Yes, very well. What do you wish to say. We are only talking, are we not, about the cost of appeal, I know that that in the summary assessment filed by your clients, had you won, you would have asked for the costs below as well, but the costs below lie where they fall? You are only asking, I assume, for the costs of the appeal.

MISS CALLAGHAN: That does not relate to the tribunal below. My Lord, the statement of costs put in by the respondents does need to be amended in one small respect. If one looks to the second page, under the heading "attendance at hearing", one can see that the fee earner SAA was expecting to attend for two days at 10 hours but of course the matter only lasted one day, so that should be 5 hours. That makes a total of Ł875 rather than Ł1,750. In addition, counsel's fees were calculated on the basis of a two day hearing, so the fee for hearing should not be Ł2,300, it should be Ł1,800.

MR JUSTICE KEITH: That reduces it by Ł1,375.

MISS CALLAGHAN: That is correct so the total then becomes Ł15,130.65.

MR JUSTICE KEITH: What do you say about the issue in principle?

MISS CALLAGHAN: On the issue in principle, the first submission would be that you are of course entitled to make a summary assessment, at a level that you see fit, my Lord. It would be submitted that Ł400 per an hour and Ł250 is not unreasonable. Certainly it is reasonable in the circumstances of this case. If one looks at the partner, the partner has only spent a total 2 hours and 5 minutes in this case. That can easily be calculated, if your Lordship wished to drop that sum to Ł325 per hour.

MR JUSTICE KEITH: The question is - I am sure the calculation is easy - the question is though, who is the right person to decide what is the proper charging rate?

MISS CALLAGHAN: My Lord, in the respondent's submission, your Lordship is perfectly able and entitled to make the calculation here and now.

MR JUSTICE KEITH: As I say the calculation is easy; it is the appropriate rates.

MISS CALLAGHAN: That is a matter for your Lordship. Your Lordship can either come to the view that the rates as stated are reasonable. In the alternative, your Lordship is entitled to come to the view that the guidelines should be followed in either fashion.

MR JUSTICE KEITH: Do you want to give me a reason why the guidelines should not be followed in this particular case. That is what you are asserting in your statement of costs.

MISS CALLAGHAN: Because, of course, these are the charging rates that are used by this law firm on a daily basis with its own clients.

MR JUSTICE KEITH: Why does that mean that its own internal charging rates should override the guide to the summary assessment?

MISS CALLAGHAN: There is no particular reason that I am able to put forward, my Lord. They are the rates that are charged. In my submission, they are perfectly reasonable.

MR JUSTICE KEITH: Yes, very well. Can I come back to you, Mr Wilken? Supposing I do adopt the hourly charging rates contained in the guideline, are you in fact, as I think I need to know, challenging anything else? If you are that may affect my decision whether it is an appropriate case for summary assessment.

MR WILKEN: The simple answer to that is I do not know.

MR JUSTICE KEITH: When were you served with this?

MR WILKEN: I saw that this morning.

MR JUSTICE KEITH: When were your solicitors served with it?

MR WILKEN: They were served with it I think the morning of the appeal.

MR JUSTICE KEITH: I see. They have had time to take instructions on, although it is dated 12th November.

MR WILKEN: My Lord, the point is this. I do not know whether the hours - and this is the real vice - the hours on page 1, Ł250 an hour, are appropriate. We have 11 hours and 45 minutes done on documents. I simply do not know. I would submit it is worthy of further investigation.

MISS CALLAGHAN: May I make a point?

MR JUSTICE KEITH: I am pretty inexperienced in this kind of thing, Mr Wilken, therefore I really want your help as to the practice. Where you do have an assertion that a particular number of hours were expended, and you are not denying the work was done. Those hours were done. What you are questioning is as to whether it was needed. What is normally done? Does the judge just make a guess at it or?

MR WILKEN: There is a polite and an impolite answer to that. The polite answer is that the costs judge applies his experience to the complexity of the matter and comes to both an hourly rate and says: well, that cannot have taken you 12 hours. There is an impolite answer which is there is an element of guesstimation that goes on, my Lord.

MR JUSTICE KEITH: If I were to say, for example, eight hours rather than eleven hours, I would just be guessing. It is no more than gut feel instincts, it is not actually that, there is not any material upon which I can base that instinct.

MR WILKEN: When one goes to the costs judge, there are of course more detailed submissions as to the nature of the case, the amount of documents at issue, those sorts of things. Matters which although we can present to your Lordship, I could not package in a way that help your Lordship to come to a decision because counsel very rarely do detailed assessments. So, my Lord, I am at the parameters of my knowledge and I cannot really assist your Lordship any further than I have.

MR JUSTICE KEITH: I understand. Is there anything else you want to say?

MISS CALLAGHAN: May I make the point that in fact the respondent's statement of costs was served on the appellant's solicitors on 12th November, the day before the hearing so, as I understand it, it was served in immediate response once the respondent had received the appellant's statement of costs. It has had some time to consider this matter.

MR JUSTICE KEITH: I am going to tell you what I am going to do. I am going to make the order that Mr Wilken seeks, detailed assessment, if not agreed, so there is the opportunity to agree it to avoid a detailed assessment. But now I have made my decision, and the answer that I get to the next question cannot effect it, is that, is that what a judge would normally have done in relation to a case of this size in the light of this dispute?

MR WILKEN: My Lord, in this decision probably, yes. The reason for that is, as your Lordship and I discussed on other occasions, there are so many legal aid matters in this division that they would normally go off for legal aid assessment and of course when it is Central Government against the Legal Aid Board while the Secretary of State pays the costs when he loses, there is no order as to costs if he wins.

MR JUSTICE KEITH: All right then. When you say 'in this division', you mean in these courts.

MR WILKEN: In the Admin court.

MR JUSTICE KEITH: If this had been a statutory appeal outside the Administrative Courts, in the Queen's Bench list, are you saying that more likely than not the judge would have taken a punt?

MR WILKEN: It is difficult to say, my Lord, very difficult to say.

MR JUSTICE KEITH: I want to know whether my decision was in line or out of kilter with what judges would normally have done.

MR WILKEN: My experience is that most judges would tend to feel that, unless it was a plain and straightforward matter, let us say half a day or 14, something like that, they would say costs judge.

MR JUSTICE KEITH: I understand. Thank you Mr Wilken.

MR WILKEN: The second point is permission to appeal. As far as the importance of the matter s concerned, as your Lordship was aware throughout the appeal, there are other cases backed up behind it. We say it is a point of principle that is of importance. We say it is not a straightforward point, although your Lordship is against us on that. We say that there are two difficulties we have with your judgment which is at paragraphs 10 and 16 which is the consideration of contractor's plant.

Your Lordship heard, in detail, my arguments on the day so I do not wish to reiterate them. My Lord, we say it is therefore an appropriate case for appeal, and we would therefore ask for permission to appeal. My Lord those are my submissions.

MR JUSTICE KEITH: On this issue, Miss Callaghan, I need not trouble you. I do not think this is an appropriate case for me to give permission to appeal. I think that the issue is sufficiently plain for the Court of Appeal itself to decide whether or not the judgment is sufficient to justify for permission to appeal.

MR WILKEN: I am grateful my Lord.

MISS CALLAGHAN: I am much obliged my Lord.

MR JUSTICE KEITH: Can I keep this?

MR WILKEN: Yes.