England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Rolls Building
		8th March 2013

MR. JUSTICE MORGAN:

1. This morning, I conducted a pre-trial review of a matter which is due to be tried at a hearing at the end of April 2013, with a current time estimate of between two and five days. In the course of the pre-trial review, there was substantial argument on an important issue which divides the parties. This judgment principally deals with that issue. I will also refer to one or two other minor matters that were raised at the pre-trial review.
2. The matter which is to be tried at the end April is an application by the claimants, Centrehigh Limited, against the fourth and fifth defendants. The fourth defendant is Joint Funding Partners Limited, and the fifth defendant is Telstar Music Group Limited. The claimants' application is for a third party costs order against the fourth and fifth defendants pursuant to s.51 of the Senior Courts Act 1981, and Rule 48.2 of the Civil Procedure Rules. As the nature of that application suggests, the fourth and fifth defendants were not originally parties to the underlying litigation in which the application is made. They have subsequently been added as defendants in order to meet the claimants' application for a third party costs order against them.
3. I will first say a word about the underlying litigation. I will take my summary of that litigation from the solicitor's witness statement served on behalf of the claimants. It may be that there are some matters there summarised with which there would not be complete agreement on the part of the fourth and fifth defendants. But her summary is sufficient for the purposes of this present judgment. She refers, by way of brief background, to the underlying litigation. That litigation took place between January 1997 and May 2004. She explains that the claimants now seek an order that the fourth and fifth defendants do to pay the claimants' costs incurred during only a part of the period of that litigation. The part in question, which she describes as the quantum phase, to distinguish it from the liability phase, covered the period November 1999 to May 2004.
4. The judgment and the consequential costs order in favour of the claimants in relation to the quantum phase remain unsatisfied. The claimants' solicitor attributes that fact to the sale of its assets by the third defendant and the subsequent liquidation of the third defendant. The claimants' unpaid costs in relation to the quantum phase are said to be around £580,000. It is those costs in respect of which the claimants seek a third party costs order against the fourth and fifth defendants.
5. The solicitor then describes that liability was in issue in the underlying litigation between January 1997 and November 1999. On the eve of the trial as to liability, the third defendant, in particular, conceded all of the claimants' heads of claim, save for a claim to statutory damages. I do not need to describe the position of the first defendant and the second defendant.
6. There being a concession by the third defendant, in particular, in relation to liability, on 15^th November 1999, the court ordered that there be injunctions and inquiries against the third defendant, and the third defendant was ordered to pay the claimants' costs. The solicitor points out that this meant that there was no trial on liability, the matter going by consent on the concession of the third defendant. Following those orders, the quantum phase took its course. During that phase, there were a large number of interlocutory applications, many of which were issued by the third defendant.
7. Before the question of quantum was determined, there was a press release in around July 2003, which indicated that there was to be an intended management buyout in relation to the third defendant. The circumstances of that management buyout are controversial in the application for a third party costs order. But what is said by the claimants' solicitor in that respect is that the main assets of the third defendant were transferred to a company called Firefly Entertainment Limited, to which I will refer as Firefly. The claimants' solicitor's witness statement gives further information about the circumstances in which assets were transferred to Firefly. She points out that, although assets were transferred to Firefly, the liability pursuant to the orders made in the litigation brought by the claimants remained with the third defendant.
8. Notwithstanding the management buyout or the other transaction which is described by the claimants' solicitor, the third defendant continued to defend the proceedings. There is reference to a strike out application made by the third defendant, which led to a hearing before the Master extending to some two days. I am told a little, but not much about the basis of that application and the outcome.
9. Thereafter, in March 2004, the third defendant was in default of compliance with a court order. The claimants issued an application for an unless order, which was made on 5^th April 2004. On 23^rd April 2004, the third defendant entered a creditor's voluntary liquidation. Following that, on 7^th May 2004, Evans-Lombe J. made an order in the underlying litigation. He entered judgment in the claimants' favour for £6,549,786. He ordered costs on the indemnity basis. He also ordered the third defendant to pay a sum on account of costs of £250,000. As I have indicated earlier, these sums have not been paid by the third defendant or by anyone else.
10. It is apparent from this history that there has not been a trial on the merits in relation to liability, that being conceded, and there has not been a trial on the merits in relation to quantum, as that essentially went by default. The claimants stressed to me at the pre-trial review that this means that the underlying facts of the litigation which has taken place have never been the subject of investigation at a trial.
11. The application by the claimants under s.51 of the Senior Courts Act 1981 was made approximately six years after the final order entering judgment against the third defendant. The application was made by application notice dated 5^th May 2010 and was supported by a detailed witness statement prepared by the solicitor acting for the claimants.
12. The parties appear to understand each other as to the issues which will need to be addressed at the hearing in April 2013 of the s.51 application. As is customary, there have not been pleadings and the matter is being dealt with by way of exchange of witness statements.
13. I think I can take a summary of the likely issues at the forthcoming hearing in April from a submission, which was prepared on behalf of the fourth and fifth defendants by their counsel on 8^th December 2010. That submission indicates that the claimants' case for a third party costs order is based on a number of allegations. The claimants allege that the fourth and fifth defendants directed the acts giving rise to the litigation, that they funded the litigation, that they conducted and controlled the litigation, that they acted improperly in the way they had done so, and they caused or procured assets to be removed improperly from the third defendant by way of dividends and a sale to Firefly.
14. Having identified the nature of the case the claimants wish to advance, the submission to which I have referred then sets out the nature of the defence to be mounted by the fourth and fifth defendants. What is said is that the third defendant had at all material times autonomy. It was part of a group of companies and the other defendants were in that group, but they were separate persons. It is said that the third defendant decided upon and carried out the acts, which were the subject of complaint. It was not the fourth and fifth defendants who decided upon and carried out those acts. The third defendant funded its own litigation. It conducted and controlled its own litigation. It did not conduct or control the litigation in an improper manner. No assets were removed improperly from the third defendant, whether by way of dividends or in the sale to Firefly.
15. It can be seen from that statement of the issues which required to be tried in April 2013 that there are very extensive disputes of fact at the heart of the application and the defence to it. As it happens, the claimants have been able to access a substantial quantity of documents, which may have some relevance to the dispute arising under s.51 of the 1981 Act.
16. As I have said, the third defendant went into liquidation and a liquidator was appointed. The liquidator has investigated the affairs of the third defendant. I was shown in the course of the argument reports prepared by the liquidator, which contain statements which one party or both parties now wish to rely upon in the context of the present application. So that material is available to the parties and to the court, based upon the investigations carried out by the liquidator.
17. Further, the liquidator of the third defendant has made available to the claimants a very substantial quantity of documents. I was told that altogether some 21 boxes of papers have been provided by the liquidator to the claimants. I was also told that there was no claim to legal professional privilege of any kind, so that the claimants have access to a substantial amount of material, which would otherwise be privileged, in the hands of the third defendant. The fourth and fifth defendants, consistently with their defence to the present application, do not assert that the privilege is available to be invoked by them.
18. In addition to these documents, the claimants applied to the Master for standard disclosure to be made by the fourth and fifth defendants in relation to the issues in the s.51 application. The application for standard disclosure was refused by the Master. However, the claimants did obtain an order for specific disclosure of specified classes of documents to be provided by the fourth and fifth defendants, and those documents have been provided. The claimants say that there are gaps in the documents which have been provided to the claimants, but there is no outstanding application for further disclosure against anyone.
19. The first matter which was raised at the pre-trial review and with which this judgment is principally concerned is a matter which is of undoubted importance to the parties, and the arguments put forward may have wider implications and significance in the context of s.51 applications. In short, the claimants want to be allowed to cross-examine eight witnesses who have signed witness statement on behalf of the defendants.
20. If there is no cross-examination of these witnesses, the parties estimate that the application can be heard and determined in around two days. If there is to be cross-examination of these eight witnesses and possibly cross-examination of witnesses called by the claimants, then the claimants' estimate as to the extra time that will be taken will be three days. I have been shown a draft trial timetable, which indicates three days of cross-examination of the defendants' witnesses. It may be that, if there were no direction given at this stage or at the hearing itself, the cross-examination would be more lengthy than that. However, the claimants meet that possibility by indicating today that they are prepared to submit to an order that the cross-examination must be fitted into a period of three days; in other words, they will be guillotined at that point.

21. The fourth and fifth defendants do not accept that the hearing in April will only be extended by three days if cross-examination is permitted. They point to the knock-on consequences of three days of cross-examination, in particular, as regards the time which will be needed to prepare closing submissions, which will have to refer to the transcript of the evidence given by the defendants' witnesses, and the length of time that will be needed in the course of delivering closing submissions. However, whilst there is some force in what the defendants say about that, I think I can approach the matter sufficiently, if I regard the comparison as being between a two-day hearing without cross-examination and a five day hearing with cross-examination.

22. I have already indicated the issues which seem to be in play for the hearing in April of this year. The claimants have made it clear in the course of their submissions today that the intended cross-examination of the eight defendants' witnesses will go to the whole range of factual dispute which exists between the parties. The fundamental questions as to control, funding, improper behaviour and alleged asset stripping of the third defendant will be the subject of cross-examination, if it is permitted by the court.
23. The claimants' arguments in favour of an order permitting cross-examination in this way were presented by Mr. Hornett. In summary, his submissions were as follows.
24. First, the court has jurisdiction to permit cross-examination in the context of an application of this kind. He referred me to the decision of Burton J. in Greco Air Inc. v. Tilling [2009] EWHC 115 (QB). In support of his submission that I should exercise the power which I have, as recognised in Greco Air, he reminded me that almost every fact to be investigated at the s.51 hearing was in issue. He submitted that those disputes of fact could only be dealt with justly if the witnesses whose witness statements are to be relied upon attend to give oral testimony and are cross-examined. He told me that, in April, the claimants' case will be that the court should not accept a great deal of the witness evidence tendered on behalf of these defendants. In some cases, the claimants will submit that certain witnesses are simply not telling the truth, or that inferences of wrongdoing should be drawn from the surrounding circumstances. He submitted that the court could not properly make findings without hearing oral evidence. He suggested that it would be unfair to the witnesses on behalf of the fourth and fifth defendants if findings were made against them without them having an opportunity to have their evidence tested, so that they could give a further and better explanation of the circumstances. He also relied on the possibility that the claimants would call a witness, and it would be in the defendants' interest to be able to cross-examine the claimants' witness.

25. He continued his submissions by giving examples of the sort of questions that he would wish to put by way of cross-examination of the defendants' witnesses. He wishes to explore - and I take the word from the skeleton argument - the allegation that the third defendant's solicitor's files were "filleted". He wishes to explore the evidence which there is as to minute taking at board meetings of the fourth and fifth defendants. He wishes to explore discrepancies in the evidence over documents which one might have thought would have been there, and which he alleges are "missing". He wishes to explore inadequacies in the disclosure. He wishes to explore further the absence of documents showing how it was that the managing directors of the third defendant gave instructions to their legal advisors. Questions are also to be raised as to the persons who authorised expenditure by the third defendant on legal costs in the quantum phase of the proceedings. It will also be appropriate, I am told, to ask questions as to the alleged belief of a Mr. Wale, one of the defendants' witnesses, and certain directors as to the value of the claimants' claim in the underlying litigation. Furthermore, questions will be asked as to the true source of funds for the underlying litigation. Questions will be asked as to the circumstances surrounding the Firefly transaction and the alleged sale at an under-value in the course of that transaction.
26. Based upon the matters in Mr. Hornett's skeleton argument, to which I have referred, the claimants' case is that the jurisdiction to make a third party costs order is fact sensitive. The outcome of the application in this case will turn upon findings of fact made by the judge in April 2013. The critical facts are in dispute. The claimants simply do not accept the factual accounts given by the eight witnesses on behalf of the fourth and fifth defendants. In those circumstances, it is submitted that it would quite simply be unjust to the claimants not to allow the claimants to explore the matters they have identified and to test the evidence of the eight witnesses by cross-examination.
27. Those submissions helpfully indicate the scope of the cross-examination which will take place, subject to any guillotine, if the court gives the permission sought.
28. The defendants oppose an order that the claimants be permitted to cross-examine the defendants' eight witnesses. The defendants' submissions have been presented by Mr. Freedman QC and Mr. Solomon. They make a number of preliminary points. They stress that an application of this kind for a third party costs order requires the court to engage in an exceptional jurisdiction. They stress that this case is extraordinary, even in the context of such applications. They refer to the delay on the part of the claimants, which they describe as extreme and unexplained. They refer to the fact that the claimants have had extraordinary access to what they describe as enormous amounts of documentation, and they refer to the documentation to which I have already referred.
29. They also say this; that the claimants have not produced evidence from individuals with direct knowledge of the relevant events, but what they have relied upon are statements from individuals making submissions or allegations based on what they have read in the disclosure documents, or allegations about what they would have expected the defendants to have done. It is said that these statements are matters of inference only, and are based upon simplistic, selective and inadequate analysis of the documents. On the other hand, the defendants' evidence has comprehensively rebutted these assertions with direct evidence from individuals with first-hand knowledge.
30. I am also reminded that cross-examination is most unusual in applications under s.51. In the course of argument, I was referred to a number of cases which deal with the court's jurisdiction under s.51. I will refer to some of those authorities, albeit briefly.
31. The principles applicable to an application under s.51 were summarised by Lord Brown giving the advice of the Board in Dymocks Franchise Systems v. Todd [2004] 1 WLR 2807. At para.25, Lord Brown said this:

    "Although costs orders against non-parties are to be regarded as 'exceptional', exceptional in this context means no more than outside the ordinary run of cases where parties pursue or defend claims for their own benefit and at their own expense. The ultimate question in any such 'exceptional' case is whether in all the circumstances it is just to make the order. It must be recognised that this is inevitably to some extent a fact-specific jurisdiction and that there will often be a number of different considerations in play, some militating in favour of an order, some against".

    A little later, Lord Brown said this:

    "Where, however, the non-party not merely funds the proceedings but substantially also controls or at any rate is to benefit from them, justice will ordinarily require that, if the proceedings fail, he will pay the successful party's costs. The non-party in these cases is not so much facilitating access to justice by the party funded as himself gaining access to justice for his own purposes. He himself is 'the real party' to the litigation, a concept repeatedly invoked throughout the jurisprudence".

    Lord Brown then went on to refer to a number of earlier cases.

32. I was also shown the decision of the Court of Appeal in Symphony Group Plc v. Hodgson [1993] 4 All E.R., in particular, the judgment of Lord Justice Balcombe at pp.152 to 153. At that place, Lord Justice Balcombe drew together a number of considerations which are applicable. His sixth consideration was expressed in these terms:

    "The procedure for the determination of costs is a summary procedure, not necessarily subject to all the rules that would apply in an action. Thus, subject to any relevant statutory exceptions, judicial findings are inadmissible as evidence of the facts upon which they were based in proceedings between one of the parties to the original proceedings and a stranger. Yet, in the summary procedure for the determination of the liability of a solicitor to pay the costs of an action to which he was not a party, the judge's findings of fact may be admissible. This departure from basic principles can only be justified if the connection of the non-party with the original proceedings was so close that he will not suffer any injustice by allowing this exception to the general rule".

    In that quotation, I have not read the names of the cases which were referred to in the judgment itself.

33. I was also shown a statement made by Lord Justice Lloyd in a more recent decision, Systemcare (UK) Limited v. Services Design Technology Limited [2012] 1 BCLC 14. That was a case in which the county court judge had made a third party costs order against the director of the company, which was the defendant to the claim. The Court of Appeal dismissed an appeal by the director. At para.65 of his judgment, Lord Justice Lloyd commented upon the appropriateness of an order for disclosure against the respondent to an application for a third party costs order. Then he said this:

    "If a s.51 application cannot be made on the documents already available it should not normally be made at all. The making of applications of that kind may be all of a piece with the judge's critical attitude to the Claimant's claim for costs below at the trial, and his disallowance of half of the Claimant's costs of the s.51 application".

34. Of course, whilst reading those passages, one must bear in mind that there are differences between a case where the court has tried the underlying dispute, has considered the documents relevant to that dispute, has perhaps assessed the reliability and the involvement of witnesses and officers of the various parties, and has got a very full idea of what has led to the matter up to that point. That is one class of case. The present is not in that class of case, as I have explained. This is a case where liability was conceded at the court door and there was no trial as to liability, and quantum was dealt with by default, so there was no trial as to quantum. It is also right to note that, even when there has been a trial of the issues in the action, the court may not have been asked to form a view, and may not have had the materials on which it could base itself as to the wholly separate issues which arise in the context of a s.51 application; namely issues as to control and funding, and perhaps even alleged asset stripping.
35. Going from those cases dealing with general principles, I was also shown other cases that deal with the procedure which should be adopted at the hearing of a s.51 application. I was first shown the decision of Laddie J. in Robertson Research International Limited v. ABG Exploration BV, a decision given on 13^th October 1999.
36. Much of the argument before Laddie J. addressed the question of what was involved in a summary determination of a s.51 application. Mr. Justice Laddie said a number of things which are helpful, both at p.4 of the printout of his judgment and at p.10. He said at p.4 (and I paraphrase) that a court hearing an application under s.51 has a number of powers available to it as to case management of such an application. It was said the court could limit the length of the hearing, it could limit the length of cross-examination, and could limit the issues, so that the parties are forced to concentrate on the big points. He also added that the court could decide to hear the matter on the basis of witness statements alone. I take that to mean that matters of fact would be determined without cross-examination of witnesses.
37. Later in his judgment, Laddie J. referred to the leading case, the decision of the House of Lords, Aiden Shipping Company Limited v. Interbulk Limited. He quoted from the speech of Lord Goff, where Lord Goff referred to the decision being made "in accordance with reason and justice", and Laddie J. added this:

"The same preoccupation with achieving a just result was reiterated by the Court of Appeal in Globe Equities (see 1999 BLR 232 at 240). None of the guidelines set out by Lord Justice Balcombe in Symphony Group Plc v. Hodgson require the imposition of the procedural straightjacket suggested by counsel. All that is required is that the court should exercise its considerable administrative powers to ensure that the application should be dealt with as speedily and inexpensively as possible, consistent with fairness to both sides. For example, in many cases, cross-examination will not be permitted, though sometimes it will be (see Nordstern Allgemeine Versicherungs AG v. Internav Limited [1999] 2 Lloyd's Rep 139, Court of Appeal, 25^th May 1999)".

38. Finally I go to the decision specifically relied upon by Mr. Hornett, namely Greco Air Inc. v. Tilling. Mr. Justice Burton decided two points, so far as material in that case. First, he held that the court had power to permit cross-examination of witnesses who had signed witness statements for the purposes of a s.51 application. That conclusion is not challenged before me. Secondly, Burton J. decided that, on the facts of that particular case, it was appropriate to give permission to cross-examine one witness, the one witness where cross-examination had been sought by the other party.
39. In relation to these matters, Burton J. said a number of things, which are material and helpful. He said at para.47 of his judgment:

"If this is the first time that an order is made and, as a result, orders will be sought on other occasions, that does not open too wide a floodgate, because I accompany it, and I am sure any other judge would accompany it with a substantial reminder that the procedure is ordinarily summary and that the procedure is ordinarily intended to reflect all the caveats which the s.51 jurisprudence in the reported cases are set out for us to bear in mind:

(i) These are ancillary proceedings and should not grow out of control into satellite litigation.

(ii) Proportionality must always be considered.

(iii) It must always be borne in mind that the ordinary process is a summary process".

He then added at para.48:

"Equally, however, it must be borne in mind that the issues in the satellite litigation will be issues which may well not have been resolved in the main action; whether a party was a funder, whether a party was controlling proceedings may well not have featured in the main action. If the only fair way in which those issues can be resolved is by the making of an order for oral evidence, then, bearing in mind the exceptional nature of the jurisdiction, such an order should be made. I have no doubt at all that there is no jurisdiction to prevent me from making such an order and I have jurisdiction to make it".

In para.50, dealing with the exercise of his discretion, he said this:

"This is a case in which, as I have already said, the applicants have no knowledge and are deprived of knowledge of the true position and, therefore, the only way in which the matter can be tested is by reference to the respondent's evidence. The respondent has taken the position that evidence given previously by him and others on oath is, for one reason or another, wrong. That may well be the case, and I say nothing which would foreclose the trial judge's decision, but that must be tested, and the only way it can be tested satisfactorily and fairly to both sides, in my judgment, is by the witness coming to give evidence".

40. In order to understand the context in which those comments were made, I have looked earlier in the judgment to the facts of the case and the nature of the application made for permission to cross-examine. That is described in para.21 of the judgment. It was apparently the case that a particular individual had said certain things on oath in Texas, on which the applicant for the s.51 order wished to rely. But yet, in the s.51 application, the same individual had put in a witness statement to the effect that what he had earlier said was wrong, and the position was quite otherwise. That would have been, it believed, unfavourable to the applicant's prospects of obtaining a s.51 order. The applicant understandably wished to be able to cross-examine that individual as to which version of the alleged facts was the reliable one, and the judge permitted that to occur. So far as I can see, there was no explicit discussion in the judgment as to the length of time that would be taken, the depth and scope of the cross-examination beyond what I have described, and any costs implications of that matter.
41. Normally, an applicant for an order under s.51 is not entitled to have a full trial with pleadings, disclosure, cross-examination of witnesses on every matter of fact which is potentially material to the outcome of the s.51 application. Normally, the court attempts to do justice by having regard to the material before it, having regard to the documents which have been made available, and having regard to witness statements which, in some cases, will be in conflict. The court does the best it can in an attempt to be fair to both parties and achieve a just result.
42. It must be recognised that an attempt to do justice in that way will often fall short of the very high standards which are conventionally applied where there is a full trial preceded by pre-trial procedures, and involving cross-examination of witnesses. The question can, therefore, be asked, why should not an applicant for a s.51 order have just the same entitlement to full pre-trial and trial procedures as any other applicant to the court for relief? In my judgment, the approach adopted in the cases to which I have referred appear to have taken the line, as a matter of policy, that s.51 applications are to be kept within proper bounds, and the court is to do the best justice it can without in every case having the full procedures pre-trial and at the trial.
43. In the present case, the following matters seem to me to be material. First, the claimants have identified the allegations they wish to make. Secondly, the claimants have had very extensive disclosure from the liquidator, including privileged documents, such disclosure being more extensive in this case than would typically be the case in an application of this kind. Thirdly, the court has also been persuaded to make an order for specific disclosure against the respondents to this application, and that disclosure has been given. Next, the defendants have filed very considerable evidence explaining, to the extent that they recall the detail of events many years ago, their particular involvement in the matters in dispute. Next, the claimants do not want to cross-examine one witness or a few witnesses on isolated matters central to their case. Instead, the claimants wish to cross-examine all of the eight witnesses intended to be relied upon by the defendants, and the cross-examination is to extend to every factual issue in dispute and, as is put in Mr. Hornett's skeleton argument, the scope of the cross-examination will in many respects be exploratory, rather than putting a direct case supported by direct evidence called by the claimants themselves.
44. In substance, the claimants wish to have a full blown trial in relation to this application. There will be no difference between the course they wish to take in April of this year and any other trial involving cross-examination in relation to disputed matters of fact. It is also relevant that this is not a case where the claimants have very much direct evidence of their own serving to contradict the eight witnesses of the defendants. No doubt, the claimants have very grave suspicions about the defendants' involvement. No doubt, the claimants have convinced themselves and have very firm views about the impropriety of the defendants' involvement. It would be wrong to say that the claimants have no direct evidence whatever to set against the statements of the defendants. They do have some material, but, on the whole, their wish is to build their case by cross-examining the witnesses who are going to be called to rebut their case.

45. My conclusion is that the right way forward in this case is that the court should be left to produce as just a result as is possible on the basis of the material already in play, which, so far as documents are concerned, goes considerably further than that which would normally be available on an application of this kind. In my judgment, there is no feature of this case which turns the case from one appropriate for a summary disposal to one which exceptionally should be regarded as requiring there to be a full trial of the whole range of the disputed matters of fact. What is sought here, I find, is very significantly on the wrong side of a line which the cases indicate it is the policy to maintain; namely that applications of this kind are not to be dealt with at a full trial of satellite litigation.
46. In the course of argument, I enquired as to the amount at stake, the sums already expended, and the sums which remain to be expended on the basis of a two day hearing in April, or alternatively a five day hearing in April, in the latter case involving cross-examination, with or without a guillotine. What emerged was that the sum at stake is £580,000, or possibly, at most £580,000. The sums spent, and which will be spent, to get to the end of a two day hearing are very substantial. Perhaps as much as £550,000 will be committed on the part of the defendants, and perhaps under £250,000 on the part of the claimants, together amounting to £800,000. Set against those very high figures, it might be said that the figures as to what remains to be spent, if there were three days or so of cross-examination, might only be as much as £100,000 between the two sides.
47. In fairness to the claimants, Mr. Hornett did not submit that, just because the two parties between them are already committed to spending between them £800,000 to get to the end of a two day hearing, then it would not matter if one threw in the extra burden of a further £100,000.
48. I am, of course, dismayed that the parties have already committed sums of this order to get to the end of a two day hearing of this application. That suggests to me that the case has already gone well beyond what was envisaged for an application of this kind being dealt with on a summary basis. What has happened to date is not a reason for imposing the further burden of costs which would be involved in extending the hearing from two days to five days.
49. Having come to those conclusions, I will dismiss the application that there be cross-examination of the defendants' witnesses. The defendants did not apply to me to permit cross-examination of the claimants' witnesses, and I make no such order.
50. I can deal briefly with the other matters that were raised at the pre-trial review. I will permit the claimants to serve a witness summary in relation to Mr. Dixon. The witness summary, which has been served in draft, does little more than exhibit a transcript of certain answers Mr. Dixon earlier gave when interviewed by the liquidator. That transcript, it is agreed, will be admissible as hearsay evidence in any event.
51. It remains to be seen whether Mr. Dixon will attend the hearing in April. If he does attend the hearing in April, it will be for the judge hearing the matter then to decide whether to allow the claimants to elicit further evidence orally from Mr. Dixon by way of evidence in chief.
52. In relation to another matter, I will extend the time for further evidence to be given by the claimants in accordance with an earlier order. Time will be extended to 4.30pm on Monday next, 11^th March 2013.
53. Finally, I will direct that the claimants provide further information and disclosure in relation to the quantum of their claim for a third party costs order. The terms of that direction were discussed in the course of submissions. I will not deal with them further in this judgment. If there is a disagreement between the parties as to the drafting of those terms, I will deal with it immediately following the conclusion of this judgment.
__________