England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		The Rolls Building 7 Rolls Buildings New Fetter Lane London EC4 1NL
		13/01/2017

John Behrens:

1 Introduction

1. Judgment was formally handed down on 30^th November 2016. Fortunately, the parties were able to agree on a number of the outstanding matters. However, there were a large number of matters where there was no agreement and the argument in respect of the disputed items lasted for more than half a day. The principal area of dispute centred around costs. There was a wide difference between the parties' respective submissions.
2. Following the submissions and in the light of the substantial amount of costs involved I decided to reserve judgment.
3. In this judgment I shall adopt the abbreviations in the earlier judgment.

2 Areas of Agreement/Disagreement

4. The parties were agreed that GM should be responsible for MSCC's costs on an indemnity basis in respect of the costs of terminating the Licence and defending the Claimant's claim for relief from forfeiture up to and including the service of the Defence. There was a wide difference between the parties as to the costs of the application for relief after that date. GM suggested that MSCC should pay its costs in relation to the application for relief after that date. For the most part those costs were to be paid on the standard basis. However, a without prejudice letter was sent on 22 July 2016. In the light of that letter GM contends that the costs should be paid on an indemnity basis after that date. MSCC on the other hand contends that GM should pay its costs of defending the claim for relief on an indemnity basis up to 9 September 2016. Thereafter there should be no order for costs on this issue.
5. The parties were agreed that the rate of interest on the arrears of rent should be 3.5%. They were also agreed that MSCC should be entitled to interest on any damages it is entitled to if the appeal is allowed. Although the figure was not agreed Ms Holland QC accepted that the rate of 3.5% was appropriate.
6. There was a major disagreement over the costs of the claim under the 1885 Act. Ms Holland QC contended that this was a case for an issue based order and that MSCC should be entitled to its costs of the issue on a standard basis. Mr Norris QC urged me not to make an issue based order. He submitted that I should simply reduce the costs to which GM was entitled by 10% to reflect that GM had failed on this issue.
7. There was some dispute as to the extent to which I should grant permission to appeal. I gave a separate ruling on this and do not now repeat it. In summary I granted permission to appeal/cross appeal on questions relating to the granting of relief from forfeiture including the exercise of my discretion, the ruling in relation to damages for breach of clause 3(k) of the licence and the ruling in relation to the 1885 Act. I was not asked to grant permission on the estoppel issue or the quantum of damages for either the trespass or the breach of clause 3(k)
8. There was no dispute that if there was to be an issue based order as to costs MSCC should pay the costs of the estoppel issue.
9. There was no dispute that MSCC should pay the costs of the failed application it made on 18 October 2016 to adduce further evidence and to raise a question as to the quality of the water discharged by GM in the Canal.
10. There are minor disputes over 2 orders where costs were reserved on 26 August 2016. One concerned the costs of the amendments to the Particulars of Claim when the claim under the 1885 Act was introduced. The other related to the order for specific disclosure when MSCC were ordered to disclose the comparable rents it had achieved in relation to the discharge into the Canal.
11. There was a dispute as to the costs of the Counterclaim. GM points out that the Counterclaim was dismissed and that accordingly MSCC should pay GM's costs of the Counterclaim. MSCC submits that there should be no order as to costs.
12. The parties were agreed that there should be a stay on the assessment of costs and on the assessment of the loss suffered by MSCC as a result of the delay in making the application for relief pending the outcome of the appeal.
13. It will come as no surprise that the level of costs involved is high. GM's costs budget as at 9 September 2016 was in the sum of £626,436.95. MSCC's budget as at the same date was £730,584. In fact, I was told at the hearing that MSCC's costs were less than its budget and were approximately £590,000.

3 History

14. In the light of the submissions it is necessary to set out the history of the proceedings in a little detail.

The pre-action correspondence.

15. On 30 January 2015 Duane Morris on behalf of GM wrote to MSCC and asserted that GM was entitled to apply for relief against forfeiture. It is not necessary to set out the letter in detail but it is to be noted that the basis for the claim is set out in an analysis with five lettered paragraphs. Paragraph B asserted that GM's rights "although expressed to be a 'licence' were proprietary in nature and recognisable as an easement".
16. MSCC's in house solicitor replied to Duane Morris on 5 February 2015. The letter took issue with a number of points. In paragraph 3 he asserted that the Licence did not take effect as a lease and there was no right to relief from forfeiture. In any event the delay of more than 6 months was fatal.
17. Duane Morris replied on 13 February 2015. As paragraph 3 of this letter is relied by Mr Norris QC I shall set out the relevant part:

"The Court's discretion to grant relief from forfeiture is not limited to a lease but can be applied to any right which is proprietary or possessory in nature. For the reasons stated in our letter of 30 January 2015 we are satisfied the remedy is available."

18. Mr Norris QC relied on this passage because of the reference to rights which are possessory in nature. However, as Ms Holland QC pointed out, the letter refers back to the reasons given in the letter of 30 January 2015. That letter made no reference to possessory rights and asserted that the licence created an easement.

The pleaded cases prior to amendment

19. Proceedings commenced in March 2015. In the original Particulars of Claim GM asserted that the forfeiture was invalid. In paragraph 17 it asserted that GM was ready willing able to pay the arrears of rent and had offered to do so but MSCC had refused to accept it. In the prayer to relief GM sought relief against forfeiture on such terms as may be just and equitable.
20. Thus, at this stage, other than the assertion in paragraph 17, GM had not particularised the basis of the claim for relief and had not particularised the terms upon which it said that relief was appropriate.
21. The original Defence filed by MSCC concentrated on the allegation that the licence had not been terminated. However, in paragraph 21, it denied that GM was entitled to any relief whether as sought or at all.
22. It included two Counterclaims – one in respect of the trespass/licence at will in respect of the discharge of surface water following the termination of the licence; the other in respect of the failure to remove the spillway, the costs of which were then estimated to be £150,000.

The original costs budget

23. GM's first cost budget was dated 11 June 2015 and was in the sum of £227,732.95. It included provision for one expert and estimated the trial would last 4 days.
24. MSCC's first costs budget also dated 11 June 2015 was in the sum of £341,755.62. It included provision for 2 experts and also estimated a 4 day trial.

The notification of the amended case

25. Although permission to amend was not granted until August 2016, Duane Morris first notified Hill Dickinson of the proposal to rely on the 1885 Act in March 2016. It was accepted at the hearing before me in the light of the impending trial date that work would have started on the 1885 Act claim at about that time.

The without prejudice negotiations

26. It is not in dispute that MSCC took a relatively hard line in negotiations. In July 2015 it made a without prejudice offer to reduce the rent from £440,000 to £400,000 per annum. In August 2016 it rejected the offer made by GM and made no counter proposals.
27. The without prejudice offer relied on by GM is dated 22 July 2016 – that is to say before the pleadings were amended but after GM had notified MSCC that the claim that the termination was invalid was to be discontinued.
28. The offer was to pay:

1. The arrears of rent at £150 +VAT

2. An advance payment of rent for 100 years in the sum of £5,000 plus VAT

3. A contribution to MSCC's reasonable disbursements and compensation for managerial time spent being assessed on the basis of marginal costs incurred with the negotiations for the new licence.

4. Payment of GM's costs of the discontinued claims on the standard basis. Each side would otherwise pay its own costs.

29. As already noted this offer was rejected in August 2016. It is, however, significantly less advantageous to MSCC than the order actually achieved. It contains no order in respect of MSCC's costs in effecting the forfeiture or in respect of any part of the application for relief. It does not make clear what contribution is being offered in respect of MSCC's time; it limits the basis of the calculation and makes no provision for loss of other business opportunities.

The further pleadings

30. The further pleadings comprised an Amended Particulars of Claim dated 12 August 2016, an Amended Defence dated 22 August 2016, a Request for Information dated 17 August 2016 and a Response to that document dated 26 August 2016. Much of this further pleading is concerned with the claim under the 1885 Act and it is not necessary to refer to it further.
31. The relevant parts relating to the claim for relief were:
32. Paragraph 2A of the Amended Particulars of Claim dated 12.08.2016 contained the following averment:

"Although entitled a licence, the Deed created in favour of the Claimant a legal easement or other interest over the Defendant's land"

33. Paragraph 3A of the Amended Defence dated 22.08.2016 provided:

"As to Paragraph 2A:

3A.1 It is denied that the Licence created a legal easement in favour of the Defendant.

3A.2 Paragraph 2A is insufficiently particularised in merely alleging, in the alternative, that the Licence created some "other interest over the Defendant's land". For the avoidance of doubt, it is denied that the Licence created any interest in land"

34. By a Request for Further Information dated 17.08.2016 in respect of Paragraph 2A of the Amended Particulars of Claim MSCC requested:

"1. Please specify, with full particularity, all facts and matters (including propositions of law) relied upon in support of the averment that the Deed created a legal easement.

2. Please specify whether it is alleged that the Deed gave rise to a freehold easement or leasehold easement.

3. In respect of the alternative claim that it gave rise to some "other interest" over the Defendant's land, please specify precisely the nature of the interest alleged in respect of this alternative claim and all facts and matters (including propositions of law) relied upon in support of this alternative claim."

35. GM responded on 26.08.2016 as follows:

"The Claimant's case is that as the Deed permits, in perpetuity, the Claimant to discharge surface water and trade effluent into the Manchester Ship Canal through the spillway that the Claimant erected on the Defendant's land and to lay construct and maintain repair alter renew and use pipes and spillway on and under the Defendant's land as the Claimant requires for effecting and controlling the discharge and to have access to the spillway along a defined part of the Defendant's land for the aforesaid purposes, the rights thereby granted have all the characteristics of a legal easement. The Claimant's primary case is that it is a freehold easement but if it is not it is a leasehold easement.

So far as the alternative case is concerned, it is the Claimant's case that the rights granted by the Deed are in the nature of rights that bind the property itself and are sufficiently in the nature of proprietary or possessory rights such that the court has the jurisdiction to grant relief from forfeiture"

36. As Ms Holland QC points out GM's case at trial was different from this. Emphasis was placed on the possessory rights acquired under the licence rather than proprietary interest created by it. However, GM did not abandon its claim to a proprietary interest at trial and she had to deal with it. A good deal of time both in argument and in my judgment was spent dealing with the proprietary claim. As is clear from the judgment it failed.

The final costs budgets

37. Each of the parties produced final costs budgets on 9 September 2016. In each case the costs had substantially increased from the budget in June 2015. GM's budget had increased by £397,188 to £626,436.95. MSCC's budget had increased by £234,998 to £730,584.13. The length of the trial had increased to 5 days notwithstanding the discontinuance of the allegation that the forfeiture was invalid. There was now provision for 3 experts on each side.
38. An analysis of the costs budgets shows that the major increases between GM's costs budgets were in Disclosure (£72,149), Witness statements (£92,124), Experts (£85,970) and the costs of the trial itself (£136,710). MSCC's major increases comprised Disclosure (£48,939), Experts (£55,893), Trial Preparation (£50,341) and the costs of the trial itself (£69,860).
39. Ms Holland QC submitted that the major cause for these increases was the claim under the 1885 Act. She referred me to the witness statement of Mr Geisler dated 5 May 2016 in support of the application to amend and for the hydrological expert evidence to be admitted. In particular, she referred to paragraphs 20 – 22 where he set out the extensive nature of the work necessary as a result of the claim under the 1885 Act.
40. Mr Norris QC submitted that the costs involved in the claim under the 1885 Act were comparatively modest and in any event nothing like as large as the figure being suggested in a document submitted by MSCC.

4 Rules about costs

General Rules

41. Under CPR 44.2 the Court has a discretion as to costs but the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party but the Court can make a different order.
42. Under CPR 44.2(4) the Court has regard to all the circumstances of the case including whether a party has succeeded on part of its case even if that party has not been wholly successful.
43. It also has regard to the conduct of the parties which includes under CPR 44.2(5) whether it was reasonable to raise pursue or contest a particular issue and the manner in which allegations have been pursued.
44. Under 44.2(6) the Court has power to make a variety of orders including orders (a) for a proportion of another party's costs, (c) costs from or until a certain date and (f) costs relating only to a distinct part of the proceedings (issue based orders). However before making an order under paragraph (6)(f) the court must consider whether it is practicable to make an order under paragraph (6)(a) or (c) instead.

Issue Based Orders

45. There is extensive commentary on issue based orders for costs at pp 1252 – 1255 of the 2016 White Book. Ms Holland QC referred me to the seven principles set out on page 1254 – 1255:

"1. The rules themselves impose no requirement to the effect that an issue-based costs order should be made only "in a suitably exceptional case", and none is to be implied, although there needs to be a reason based on justice" for departing from the general rule, and that the question of the extent to which the costs of a particular issue are to be disallowed should be left to the evaluation and discretion of the judge, "by reference to the justice and circumstances of the particular case" (F& C Alternative Investments (Holdings) Ltd v Barthelemy (No.3) [2012] EWCA Civ 843; [2013] 1 WLR 548, CA, at paras 47 and 49 per Davis LJ (a case where a proportionate costs order, made in relation to two issues on which the parties who had succeeded overall had not succeeded, was upheld).

2. The reasonableness of the taking of failed points can be taken into account, and the extra costs associated with them should be considered (Antonelli v Allen, The Times December 8 2000 unrep. (Neuberger J); Sycamore Bidco Limited v Breslin [2013] EWHC 583 (Ch), March 2013, unrep. (Mann J).

3. Where the circumstances of the case require an issue-based order in the form of an order expressed by reference to the costs of the issue, that is what the judge should make; however, generally, because of the practical difficulties which this causes, the judge should hesitate before doing so and, where practicable, the order should be expressed as a percentage or with reference to a distance period of time (r.44.2(7)) (Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd [2008] EWHC 2280 (TCC); [2009] 1 Costs L.R 155 (Jackson J) at para 72).

4. There is no automatic rule requiring an issue-based cost order in the form of a reduction in the successful party's costs if he loses on one or more issues (HLB Kidsons v Lloyds Underwriters [2007] EWHC 2699 (Comm); [2008] 3 Cost L.R 427 (Gloster J) at para 10). The mere fact that the successful party was not successful on every last issue cannot, of itself, justify an issue-based costs order (J Murphy & Sons Ltd v Johnson Precast Ltd (No. 2) [2008] EWHC 3104 (TCC), December 16, 2008, unrep (Coulson J) at para 10).

5. The courts recognise that in any litigation, especially complex commercial litigation but including personal injury litigation, any winning party is likely to fail on one or more issues in the case (possibly issues on which the losing party could have taken steps to protect himself, at least to an extent, to costs liability). That point is frequently made; see e.g. Budgen v Andrew Gardner Partnership [2002] EWCA Civ 1125 at para 35 per Simon Brown L.J; Travellers Casualty and Surety Company of Canada v Sun Life Assurance Company of Canada (UK) Ltd [2006] EWHC 2885 (Comm) November 11 2006, unrep (Christopher Clarke J); at para 12; Goodwin v Bennetts UK Ltd [2008] EWCA Civ 1658 at para 13; Pindell Ltd v Airasia Berhad [2010] EWHC 3238 (Comm) December 9, 2010, unrep (Tomlinson LJ) at para 12; Fox v Foundation Piling Ltd [2011] EWCA Civ 790; [2011] C P Rep 41, CA at para 47 to 49.

6. In considering the circumstances of the case the judge will have regard not only to any Part 36 offers made but also to each party's approach to negotiations (insofar as admissible) and general conduct of the litigation (Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd above para 72(vi). However, the court should not approach r.44.2(4)(c) on the basis that it supports a special "near miss" rule that may be invoked to penalise a successful party in costs , because, to do so, would be to seek to use r.44.2(4)(c) to give "near miss" orders an effect similar to Part 36 offers, and would be to introduce an unwelcome degree of uncertainty (similar to that which existed in relation to Part 36 offers before r.36.14(1A) (now r.36.17(2) was enacted) Hammersmith Properties (Welwyn) Limited v Saint-Gobain Ceramics and Plastics Limited [2013] EWHC 2227 (TCC) July 24, 2013. Unrep. (Ramsey J). Sub-paragraph 72(vii) of Multiplex Constructions, which summaries the position before r.36(14)(1A) (now r.36.17(2)), should now be disregarded: Dufoo v Tolani [2014] EWCA Civ 1536).

7. In assessing a proportionate costs order the judge should consider what costs are referable to each issue and what costs are common to several issues. It will often be reasonable for the overall winner to recover not only the costs specific to the issues which he has won but also the common costs (Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd above para 72(viii); Mears Ltd v Leeds Coty Council [2011] EWHC 2694 (TCC) (Ramsey J) at para 28)"

Relief from forfeiture

46. It is not in dispute that the general rule does not apply in relation to relief from forfeiture claims. The most recent explanation of those rules is to be found in paragraphs 100 and 104 of the judgment of Lloyd LJ in Patel v K & J Restaurants [2010] EWCA Civ 1211:

100. Mr Small relied on a passage from the judgment of Chadwick LJ in Bland v Ingrams Estates Ltd (No 2) [2001] EWCA Civ 1088 at paragraph 14, as follows:

"Third, the object of the court when granting relief is to put the lessor (as well as the lessee) back in the position in which he would have been if there had been no forfeiture – see Egerton v Jones [1939] 2 KB 702, 706. It is this principle which underlies the practice of requiring the applicant, as a term of relief, to pay the costs properly incurred by the lessor in connection with the re-entry and the proceedings for relief. Accordingly, the applicant will normally be required to pay the lessor's costs of the forfeiture proceedings, save in so far as those costs have been increased by the lessor's opposition to the grant of relief, upon appropriate terms – see Howard v Fanshawe [1895] 2 Ch 581, 592, and Abbey National Building Society v Maybeech Ltd and another [1985] Ch 190, 206. Prima facie, the costs which the applicant will be required to pay to the lessor as a term of obtaining relief will be assessed on an indemnity basis; if it were otherwise the lessor would not obtain the indemnity against proper expenses to which he is entitled – see Egerton v Jones [1939] 2 KB 702, 710. But, to the extent that costs have been increased by the lessor's unnecessary opposition to the grant of relief, the normal rules apply: the lessor will normally be ordered to pay the applicant's costs on the standard basis, and the applicant will be able to set those costs off against what he would otherwise be required to pay to the lessor as a term of obtaining relief from forfeiture."

104. It seems to me that it would have been appropriate in the present case for the judge to order K&J to pay all the costs of the proceedings as a condition of obtaining relief against forfeiture, especially as K&J was not yet in a proper position to seek relief, because MPC was still trading in the premises. I do not consider that the Claimants can properly be said to have been unreasonable in resisting the claim for relief from forfeiture, particularly as the breach of clause 3(22)(a) had not been put right. I would not qualify that term as to costs on the ground that not all of Mr Leale's evidence was accepted. Having given closer consideration to the authorities on the appropriate basis of costs than was possible during the hearing of the appeal, I have come to the conclusion that the indemnity basis should apply as a general principle, despite what Lord Templeman said, and that there is nothing in the circumstances of the present case to make it appropriate either to adopt the standard basis or to disallow some part of the Claimants' costs. As it seems to me, the factors which led the Court of Appeal in Egerton v Jones to decide in favour of a more generous basis of costs than party and party (which seems to me to be the equivalent of the modern standard basis) are still relevant as a general principle, and that normally this should require that the applicant for relief should pay the landlord's costs on the indemnity basis, rather than only on the standard basis. I therefore consider that K&J should be required K&J to pay the Claimants' costs of the proceedings at first instance on the indemnity basis as a condition of obtaining relief against forfeiture.

47. It is to be noted that both Chadwick LJ (in Bland) and Lloyd LJ (in Patel) state that the general rule is that the tenant should pay the landlord's costs on an indemnity basis. However, there is a slight difference in the test they would apply in making an exception to that rule. Chadwick LJ uses the phrase "unnecessary opposition to the grant of relief"; Lloyd LJ did not consider the landlord unreasonable in resisting the claim.
48. Mr Edwards referred me to the Maybeech decision referred to in Chadwick LJ's judgment where a landlord resisted an application by the tenant's mortgagee for relief on equitable grounds. Nicholls J held there was jurisdiction to grant relief and made an order that the landlord pay the costs that had been increased by its opposition to the application. Although he gave no detailed reasons for the order on costs he must have taken the view that the opposition by the landlord was "unnecessary" or "unreasonable".

5 Discussion and Conclusions

Issue based order

49. I agree with Ms Holland QC that it is appropriate for an issue based order as to costs. There are a number of reasons for this:
50. There is already an order for GM to pay the costs of the discontinued claim. This is an issue based order. Thus the costs judge will in any event have to determine what element of the parties' costs relate to the discontinued claim. Some form of issue based order is thus already in existence.
51. Even if Mr Norris QC is correct that that the percentage of costs attributable to the claim under the 1885 Act has been placed too high it is plain from the analysis of the costs schedules and the witness statement of Mr Geisler that the costs of the claim under the 1885 Act are very substantial. It was a claim introduced at a late stage. It was a wholly different claim to the claim for relief from forfeiture. It is plain that the costs of the hydrologist experts were only allowed because of the introduction of that claim. It would, in my view, be unfair to MSCC to wrap up the costs of the 1885 Act claim within the overall costs of the proceedings.
52. If Mr Norris QC is right and only a small reduction (say 10%) is to be made because of the result of the 1885 Act claim it would mean that MSCC would end up paying 90% of the costs of the 1885 Act claim when it lost completely on that issue.
53. In view of the fact that there are detailed costs budgets in 2015 and 2016 it may not be as difficult as all that for the costs judge to sort out the costs of individual issues.

The without prejudice letter

50. I also agree with Ms Holland QC that the without prejudice letter does not affect the costs position. I agree that the offer fell short in at least two respects – that is to say the failure to make any offer for the costs of the forfeiture and the proceedings, and second the offer of uncertain but at best partial compensation in respect of MSCC's wasted time and effort caused by the delay in making the application for relief.

The claim under the 1885 Act

51. It is perfectly plain that GM lost on this issue. In my view GM should pay MSCC its costs of this issue on the standard basis. For the avoidance of doubt those costs include the costs of the hydrologists.

The claim for relief against forfeiture

52. I accept that GM obtained an order for relief. Thus the general rule as set out in the authorities applies. The question accordingly arises as to how far MSCC's opposition was "unreasonable" or "unnecessary". A number of factors seem to me to be relevant.
53. First, there is the history of the proceedings as set out above. It is to my mind significant that the claim for relief based on possessory rights was not made until 26 August 2016. Whilst it is true that there was a reference to possessory rights in the letter of 15 February 2015 that was not the basis upon which relief was sought. Up until that time GM had claimed in correspondence that the claim was based on a legal right of an easement. That basis of claim failed even though it was persisted in at the trial.
54. Second, this was a case where the application for relief was not made for a year after the forfeiture. On any view there was delay by GM. Ultimately I decided that it was not sufficient to deny GM's claim for relief but it is a factor to take into account when deciding if the MSCC's opposition was unreasonable or unnecessary.
55. Third, there is the fact that it was not until the service of GM's opening submissions that it was made clear that GM were prepared to offer to pay compensation for MSCC's wasted time.
56. To my mind these additional factors distinguish this case from other cases from relief from forfeiture including Maybeech.
57. In my view the fair order is similar (but not identical) to that proposed by Ms Holland QC. I would order GM to pay the costs of forfeiture and the relief application up to 26 August 2016 on an indemnity basis and make no order for costs in relation to the issue thereafter.
58. For the avoidance of doubt I am including within this order the issue relating to proprietary interest upon which MSCC undoubtedly won. Thus I am rejecting Ms Holland QC's submission that I should make a separate order in relation to that issue.
59. In my view no part of the expert evidence is attributable to the claim for relief against forfeiture.

The Counterclaim for trespass

60. The Counterclaim is to dismissed and thus Mr Norris QC submits that MSCC should pay GM's costs of the Counterclaim. However, the claim for damages for trespass is only dismissed because relief from forfeiture has been dismissed. If no relief had been granted the claim for trespass would have been unanswerable. It was therefore a valid claim as at the time it was issued. Furthermore, my assessment of the damages was close to that of MSCC's expert and very significantly higher than the sort of figures being suggested by GM's valuer.
61. I agree with Ms Holland QC that the appropriate order is that there should be no order for costs.
62. For the avoidance of doubt this includes the valuation experts.

The Counterclaim for removal of the Spillway

63. This claim was also dismissed. However, even if it had succeeded I would have awarded only nominal damages. Thus it seems to me that MSCC should pay GM's costs of this issue on the standard basis.
64. Ms Holland QC sought to avoid this analysis by a reference to the pleadings. She asserted that GM never pleaded that MSCC did not intend to remove the Spillway. I am not impressed with this argument. Apart from all other factors MSCC never pleaded that they did intend to remove the Spillway. Thus there was no reason to plead against an allegation that was not made.
65. For the avoidance of doubt I would include in these costs the costs of the quantity surveyors.

Reserved Costs

66. I can see no reason why the ordinary orders as to costs should not follow. In those circumstances GM should pay MSCC costs of and occasioned by the amendments. The documents were plainly relevant and used in the trial. MSCC must pay GM's costs of the application for specific disclosure.

Stay

67. The parties are agreed as to the stay and as to the extension as to the date for serving notice of appeal.

Interim Payment

68. In view of the fact that it is not clear what the ultimate liability for costs will be and that there is a stay as to the assessment of costs pending appeal I do not think it appropriate for there to be any order for an interim payment.
69. If I had been going to make an order I would have guessed that the costs payable by GM will be significantly more than the costs payable by MSCC. I would have made a small assessment in favour of MSCC. The amount of such assessment would have been little more than guesswork. During the course of the hearing Ms Holland QC did not press for an interim payment.