England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		08/09/2005

Mr. Justice Jack :

Introduction

1. This is an action against a solicitor for alleged negligence. The claimant, Kevin Feakins, carried on a business of exporting live sheep. Under European Community law as applicable only to the United Kingdom, in the relevant period a premium was payable on lambs of appropriate quality when they were sold in the market for slaughter. If such lambs were then exported within the Community, an amount supposed to be equivalent to the premium had to be paid by the exporter with the aim of removing the price advantage that he would otherwise have over producers in the country of import. This was called 'clawback'. Categories of sheep which did not attract the premium when sold were exempt from clawback on export, and were referred to as exempt sheep. The scheme came to an end in February 1992.
2. The recovery of clawback was provided for by a Community Regulation made in 1984. A decision of the European Court delivered in 1992 declared that the provision it contained for the calculation of clawback was invalid. A further Regulation was made later that year to replace it. In 1992 together with a number of other exporters Mr Feakins instructed the defendant solicitor, Mr Anthony Burstow, to act for him in actions claiming recovery of clawback which they had paid. The defendant was the Intervention Board for Agricultural Produce, often called IBAP, which was the government body responsible for the payment of premium and the collection of clawback on behalf of the Community. It later became the Rural Payments Agency. In the course of that litigation the Board, as I will refer to it, made a counterclaim against Mr Feakins for unpaid clawback in the sum of £406,298 calculated under the 1992 Regulation. The 1992 Regulation was held to be valid and IBAP obtained summary judgment against Mr Feakins for that sum and interest, a total of £650,644. It was Mr Feakins' case that £194,708 of the £406,298 related to exempt sheep in respect of which no clawback was payable. In the present action he asserts that Mr Burstow was negligent in relation to his exempt sheep case, and in particular that he failed to raise it as a defence to the counterclaim. On his part Mr Burstow has advanced a number of defences which include that Mr Feakins failed himself to take the matter up with IBAP when he was first invoiced by the Board, and failed adequately to instruct him. This is a summary and it is also a simplification of a more complex situation.

The litigation concerning the Regulations

3. The 1992 regulation to which I have referred was Commission Regulation (EEC) No 1922/92, which was made on 13 July 1992. It was made because on 10 March 1992 in what I can call the first Lomas case the European Court of Justice held that the relevant part of the 1984 Regulation relating to the calculation of clawback, namely Article 4(1) of Commission Regulation (EEC) No 1633/84, was invalid: [1992] ECR-1 1781. The first Lomas case came about because English sheep exporters had been prosecuted in the Crown Court for breach of the 1984 Regulation, which had resulted in references to the European Court as to its validity. So the 1992 Regulation was made to amend Article 4(1) and was retrospective. It related to a scheme which had already ended.
4. Meanwhile shortly before the delivery of the first Lomas judgment a number of actions had been commenced against the Board by exporters claiming the repayment of clawback paid under the 1984 Regulation between 1988 and 1992, or repayment of such sums as exceeded the clawback properly chargeable. One such writ was issued by Mr Feakins. I will call these 'the English actions'. Some exporters had stopped paying clawback pending the first Lomas decision.
5. It was however considered by exporters' advisers that the new 1992 Regulation was also capable of challenge. Two sets of proceedings were started in Europe. One, called the FMC case, was commenced by representatives of the carcase trade, and was initiated by a reference from the English High Court. Mr Burstow did not act for the claimants in that action. The other, the second Lomas case, in which Mr Burstow did act, was commenced by representatives of the live trade in the European Court of First Instance in September 1992, and Mr Feakins was among the claimants. Proceedings in the second Lomas case were stayed pending the decision of the European Court in the FMC case. On 8 February 1996 judgment was given in the FMC case dismissing the carcase trade's attack on the 1992 Regulation. The live traders then sought in the second Lomas case to introduce an expert's report distinguishing their position under the Regulation from that of the carcase trade. In its judgment dismissing the case delivered on 9 July 1997, [1997] ECR-2 1095, the Court of First Instance held that the new material could not be admitted pursuant to its rules but noted that it could be admitted in the pending proceedings before the national court, that is, in the English actions.
6. Meanwhile, in the English actions statements of claim, defences and replies had been served in 1993, and they had then hung fire pending progress in Europe. On 11 January 1996 the Board served defences which were amended to add counterclaims for the amount of clawback outstanding under the 1992 Regulation. The sum claimed from Mr Feakins was £406,298. On 29 March 1999 the Board issued summonses applying for the statements of claim to be struck out as disclosing no reasonable cause of action, and for summary judgments on the counterclaims. Those summonses were heard before Ian Kennedy J. He considered the claims on the basis of draft amended pleadings served on behalf of the claimants. The proposed amendments raised the points which it had been sought to raise in the second Lomas action before the European Court of First Instance as to the validity of the 1992 Regulation and also a plea that the counterclaims were barred by limitation. They simply put the Board to proof of the amounts of clawback that the Board counterclaimed. In a judgment delivered on 14 April 2000 Ian Kennedy J held that the decision of the European Court in TWD Textilwerke Deggendorf v Germany [1994] ECR-1 833 barred the claimants from raising the arguments which they sought to raise as to the validity of the 1992 Regulation. He also held that the Board's claims were not barred by limitation. He held that the Board succeeded on the claims and counterclaims. There was a further hearing before Ian Kennedy J on 23 June 2000. It was argued on behalf of the claimants that the amount of the clawback that was outstanding had not been in issue on the summonses and remained to be determined. It was sought to raise on behalf of Mr Feakins the issue of exempt sheep. The judge held that there were no issues as to the amount save in respect of one claimant where the Board had accepted that there was an issue. He held that it was too late to raise the issue of Mr Feakins' exempt sheep. On 23 October 2001 the Court of Appeal dismissed appeals from the decisions of Ian Kennedy J.
7. The present action was commenced by Mr Feakins on 18 June 2003. The claim form claimed damages for breach of contract and negligence in the conduct of Mr Feakins' action against the Board. A second action was commenced on 5 May 2004 in which Mr Feakins sought damages for negligence in the conduct of the second Lomas case. Those causes of action were combined in an amended statement of case served on 12 May 2004, but the second was abandoned by its deletion by a re-amendment made on 6 October 2004. In the action as it now stands Mr Feakins claims damages in respect of the Board's counterclaims against him.

The system relating to clawback and exempt sheep.

8. Clawback was payable on the export of sheep other than exempt sheep. Some exporters paid what was due to Customs on export by, for example, banker's draft. Other exporters gave security and were invoiced by the Board in due course. Mr Feakins was among the latter and the Board held a bank guarantee from him for £50,000.
9. The primary document required for the export of sheep was called a C1220. This form was used whether or not the export attracted clawback. It was presented to Customs at the port by the exporter, or in practice, by his agent, when the lorry carrying the sheep arrived and was waiting to be loaded on ship. Only on its completion by Customs could the lorry be loaded. If the sheep were exempt from clawback a second form had to be provided to Customs. This was the CES 3. It has different initials in earlier periods. The CES 3 also required completion by Customs.
10. The CES 3 originated at the lairage close to the port where the sheep were required to rest for a minimum of 10 hours before shipment. At the lairage the sheep were inspected by inspectors employed by the Meat & Livestock Commission, the MLC. The inspectors checked the sheep to see that they were each exempt, and then the CES 3 was completed by the MLC inspector to certify that they were. Sheep on which premium had been paid were readily identifiable and so could not be presented for certification as exempt because they were punched through the right ear with a hole 12 mm in diameter by MLC graders at the market where the sale attracting premium occurred. Sheep without such a hole were sometimes called clean-eared sheep and only they were potentially exempt from clawback. Once a sheep was accepted as an exempt sheep by the MLC inspector at the lairage, a 6mm hole would be punched in its left ear. If the sheep were exempt, the inspection ports of the loaded transporter were sealed by the MLC so there could be no interference with the load. The seal numbers were recorded on the CES 3. Shipments which were not exempt were not sealed. A copy of the CES 3 was put in an envelope, which was sealed with the MLC seal stamped on its reverse. The envelope was given to the driver to give to the agent at the port, who would hand it to Customs. A second copy of the CES 3 was sent by MLC to the Board. A third copy was retained by the MLC. The exporter did not receive a copy.
11. At the lairage, with exempt sheep a further form, a CES 4, was also completed by the MLC. It did not go on to Customs. A copy went to the Board. A copy went to the exporter via the driver. A copy was retained by the MLC. It was a more detailed form and listed each sheep. The completion of the CES 3 followed the completion of the CES 4.
12. The Board set out the procedure in a leaflet ET2 titled 'External Trade, the System of Licences, Levies & Refunds'. This was published in January 1990 but so far as I am aware the system did not change in any material way during the period with which this action is concerned. In accordance with ET2 the C1220 had to be filled in as follows:

Box 31 required the insertion of the number and kind of sheep being shipped.

Box 33 required the insertion of the IBAP code for the sheep in question. These codes were set out in an appendix to the leaflet, as follows:

Sheep certified SVPS 01041090 – 00

Ewes - 01

Rams - 02

Light lambs - 03

Others - 04

SVPS stood for Sheep Variable Premium Scheme. It signified sheep within the premium and clawback scheme. The other codes were outside the scheme and so would not attract clawback on export. They were 'exempt sheep'.

Box 44 required the insertion of the number of the CES 3. Although that is what paragraph 59 of ET2 stated, the box itself was headed 'Additional information. T5 No. IMD No. BEC No.' There was no mention of a CES 3 number. There was also a second and very considerable difficulty. The C1220 was filled out by the agent at the port. He would not see the CES 3: he would take the sealed envelope containing the CES 3 from the driver and hand it to Customs. In theory he could ask the Customs officer for the number. In theory the driver could make a note of it at the lairage. The evidence I heard shows that both would have been difficult. It appeared that very few if any CES 3 numbers were ever included by exporters on the C1220s. Sometimes the number was inserted by Customs. The exporter would in due course receive a copy of the CES 4. This would have the CES 3 number on it, but it would then be too late for insertion on the C1220.

13. A copy of the C1220 was sent by Customs to the Board. It would seem that the system should have provided for a copy to be retained by Customs: but I heard no evidence as to that.

Mrs Sarah Feakins.

14. Kevin Feakins and his first wife, Sarah, were divorced in 2000. Although they also used other trading vehicles, it appears that in relation to at least the export of sheep they had traded as a partnership. He was responsible for the dealing and she kept the books. Sarah Feakins was a claimant in the action which she and her husband brought against the Board, and was in due course a defendant to the counterclaim. Judgment was obtained by the Board against her. As part of the divorce settlement Mr Feakins has agreed to indemnify her against the Board's claim. She was the client of Mr Burstow equally with her husband. But he is the sole claimant in the action, and because of the indemnity he seeks to recover the whole of the alleged loss. His right to do so is accepted. He has since remarried, but all my references to Mrs Feakins are to Mrs Sarah Feakins. She did not give evidence. I have not therefore had such assistance as she might have given as to the records which she maintained.

The detailed history.

15. On 28 November 1991 Mrs Feakins wrote to the Board enclosing a cheque for £113,004.88 being the balance owed according to the Board's statement less one invoice for £3,956.51, which, she stated related to ewes and not to lambs – and so was exempt. The Board replied on 30 January 1992 stating that the relevant CES 3 had not been stamped by Customs, and enclosing it. Mrs Feakins got the form stamped and it appears that a credit was obtained. I mention this because it shows how the system could work. It was important that in this instance Mrs Feakins was able to relate the invoice to the shipment.
16. As I have stated, on 17 January 1992 a writ was issued on behalf of Kevin and Sarah Feakins against the Board claiming the repayment of clawback. It was issued in anticipation of the first Lomas judgment which was delivered on 10 March 1992. It was issued by Parker Bullen, who were then acting on behalf of them. The partner involved was Mr Colin Carnegy. Parker Bullen now act for Mr Feakins in the present action in the person of Mr James Welsh. In 1992 Mr Burstow was acting for a number of other live sheep exporters. On 18 March 1992 he wrote to Mr Carnegy suggesting a common approach to the litigation. On 3 April 1992 there was a meeting at the home of Mr Stephen Wood, one of the exporters, attended by 18 exporters including Mr and Mrs Feakins, and also Mr Burstow, Mr Carnegy and a third solicitor. It was agreed to set up a fighting fund and to form the British Association of Sheep Exporters. (Later Mr Feakins became chairman of the Association.) There was a discussion of reclaiming clawback and whether all could be reclaimed or only the part that was excessive. Mr Burstow suggested that no further clawback invoices should be paid. I do not know if Mr and Mrs Feakins had stopped paying before this: but on 28 November 1991 Mrs Feakins had paid what was due up to 31 October 1991. On 14 April 1992 Mr Carnegy wrote to Mr Burstow saying that Mr and Mrs Feakins had paid a total of £622,532 on account of clawback.
17. On 13 July 1992 the Commission adopted Regulation 1992/22 to replace Regulation 1633/84. The success of the first Lomas case therefore only brought a financial benefit if the treatment under the 1992 Regulation was more favourable to the exporters. In the case of Mr and Mrs Feakins it was not. As will appear, a further amount was calculated by the Board to be due. If the 1992 Regulation had been struck down, as the exporters later sought but failed to achieve, it seems that it would in its turn have been replaced by a third attempt to meet the law. It thus seems to me, looking at the situation with hindsight, that the best the exporters could have hoped to achieve would have been some reduction in the amount of clawback claimable from them.
18. On 3 July 1992 there was a conference with Mr Conor Quigley, counsel instructed by Mr Burstow. The 1992 Regulation was available in draft. Mr and Mrs Feakins attended. Mr Quigley advised that, if the new Regulation was passed and was lawful, that would be a bar to recovering anything other than the difference. Mr Burstow then arranged a meeting on 31 July to take full instructions as to the impact of the clawback system and the amounts paid. Mr Feakins attended the meeting. This resulted in a joint statement which was given to Mr Quigley for use in drafting the European challenge. On 5 August Mr Burstow suggested to Mr Carnegy that he should act for Mr and Mrs Feakins.
19. In August 1992 the Board wrote to exporters about the impact of the new Regulation. The letter to Mr and Mrs Feakins was undated but is referred to as being sent on 27 August 1992 in a subsequent Board letter of 21 January 1993. The letter stated that under the new Regulation the exporter had an option of paying an amount equal to the actual premium paid on each animal (almost impossible to ascertain) or an amount based on the average rate of premium during a 4 week period. The letter stated that Mr and Mrs Feakins had outstanding clawback invoices of £234,017, which were cancelled by a credit note. That was because they were calculated under the former Regulation. The letter went on to say that the amount under the new Regulation taking the option of average rate would be £237,943 – an increase of £3,926. The original invoices were listed over three pages with invoices numbers, Customs dates and the original amounts and the new averaged amounts.
20. The letter next stated that there was a total clawback calculated on an average basis of £197,422, which had not been invoiced previously. Of that £194,708 was said to arise in respect of exports which had previously been 'incorrectly exempted for clawback'. It stated 'Exemption arose because the export declaration indicated goods were exempt from clawback but subsequently you did not supply the supporting CES form. If you are able to produce these exemption forms these charges will be deducted from the overall sum.' The form which supported exemption from clawback was the CES 3, the form which never came into the possession of the exporter. If it went missing – either because it was not sent on to the Board by Customs or because it was mislaid by the Board, the exporter could obtain a copy from the MLC. He could also produce the CES 4 which related to the shipment, which would give the number of the CES 3. The calculation of £194,708 was set out in annex 3 to the letter. The annex simply listed 78 items allocated with reference numbers from 1 to 78 with the clawback on an average basis set by each. There was nothing at all to identify which shipment each referred to. So it was impossible to respond to without further information. It is Mr Feakins' case that in each case the shipment was of exempt sheep. It is denied by Mr Burstow that Mr Feakins is, or would ever have been, able to establish that. This is a key issue in the case.
21. The Board's letter continued 'Details of all calculations will be shown on invoices to be despatched to you if you elect to have your clawback based on Option 2' – the average basis. The letter asked for a response by 25 September.
22. On 4 September 1992 Mr Carnegy wrote to Mr Burstow saying that Mr and Mrs Feakins wished him to act for them. He also enclosed a copy of the Board's letter sent on 27 August, which he must have been sent by Mrs Feakins. It appears that the annexes were not copied. Mr Carnegy's letter asked 'What is your recommendation on this, please?'. At about the same time Mr. Burstow also received copies of the Board's letters to his other exporter clients. Although notice of change in the English action was not filed until 20 January 1993, from this time Mr Burstow was acting for Mr and Mrs Feakins.
23. On 15 September 1992 Mr Burstow wrote to Mr and Mrs Feakins referring among other matters to the Board's letter sent on 27 August. He stated that there was no real option and they would have to take the average premium. He said that the Board could be asked to withdraw the letters for the time being in the light of the application to the European Court. On 24 September Mr Burstow wrote to the Board on behalf of all his clients stating that all liability for clawback was denied and that, without prejudice, his clients opted for option two – the average option. In neither letter did Mr Burstow refer to the annex 3 claim, and he gave Mr and Mrs Feakins no advice about it.
24. On 9 November 1992 Mr Burstow wrote to Mr and Mrs Feakins thanking them for letting him have copies of their latest statements from the Board. The most proximate statement in date which I have is that of 30 September 1992 showing £33,069 owing. It lists invoices between September 1991 and April 1992. It does not include any figures from the letter sent on 27 August 1992. Mr Burstow remarked that he did not understand how the amount could have dropped so substantially. I remark that the Board statements are indeed hard to follow and to relate to one another.
25. On 21 January 1993 the Board wrote to Mr and Mrs Feakins referring to their 'recent letter' notifying the Board of their decision to have clawback calculated on the basis of the average premium. This presumably refers to Mr Burstow's letter of 24 September 1992. The Board stated that the amount of clawback due was £435,366, as shown on the enclosed invoice. The manuscript invoice enclosed simply stated the figure. It gave no explanation at all. It is, however, the total of the figures in the August letter. That should have been apparent. The August letter had said that when the election for an average calculation was made details of all calculations would be despatched: but the letter of 21 January did not do that. Mr Burstow accepted in the evidence that he received a copy of the Board's letter of 21 January 1993 and the invoice, but it is not clear from the file when it was sent to him. On 25 January 1993 Mr Burstow wrote to Mr and Mrs Feakins suggesting a meeting to discuss the response to the Board's latest invoices. On 18 February Mr Burstow wrote confirming a meeting at his offices on 26 February to discuss the position and likely timetable. Mr Burstow prepared for the meeting a chronology of the litigation and the correspondence with the Board. There is no note of the meeting. On 31 March Mr Burstow wrote to Mr and Mrs Feakins stating that he had discussed with Mr Patel, the solicitor to the Board, whether the Board would seek to recover unpaid clawback by counterclaim in the English proceedings started against it or by way of separate proceedings. On 6 July the Board served defences in the English actions. There were no counterclaims, apparently on the ground as stated by Mr Patel that the figures were taking a great deal of sorting out. On 23 July there was a meeting with the exporters at Mr Burstow's offices. There are only some jotted notes of the meeting. On 3 August Mr Burstow wrote to Mr Carnegy reporting what was happening. He said that he knew of the concern of Mr and Mrs Feakins as to the sums the Board alleged they still owed. There is nothing in the papers to suggest that Mr Burstow had in mind that nearly half of that might be in respect of shipments which his clients alleged were exempt.
26. It was put to Mr Burstow in cross-examination that during this period, that is January to July 1993, in particular at the meetings on 26 February and 23 July, Mr and Mrs Feakins were asking Mr Burstow to obtain from the Board 'the documentation to support the Board's' claims. Mr Burstow's answer was that it was not said. He said that the exporters believed that the Board would be unable to substantiate its figures and that quantum, the amount of the Board's claims should be left over pending the resolution of the legal issues. He said that neither Mr and Mrs Feakins nor the exporters as a body were asking him to take up the exempt sheep point with the Board. He said that it was possible that exempt sheep was one point that was referred to but no more. In the absence of full notes of the meetings it is impossible now to decide with any certainty what was said at them. I find that the probability was that the exempt sheep point was referred to and it is more likely to have featured prominently at the February meeting. I am not, however, satisfied that Mr or Mrs Feakins went so far as to ask Mr Burstow to obtain the documentation from the Board.
27. On 13 October 1993 the Board wrote to Mr and Mrs Feakins saying a thorough examination of their account since 21 January had found further liabilities and the total was now £452,342. An attachment listed 14 claims, with reference numbers between 92/0003 and 92/0018, totalling £30,924. Credit was allowed for £13,948. There was no explanation of how this was calculated. The three enclosed credit notes, as they appear in the correspondence file C1, do not give that total: but it is clear from the arithmetic that there were two others which are found in file D3.4.130 and 136 – the five then give the correct total. Each stated that the reason for its issue was 'CAS form matched against claim [number]'. So it appears that in July and September 1993 the Board's clerks were matching CES 3s to C1120s in 1991 for which clawback had been claimed and were giving credits. Two of the three claim numbers, i.e. invoice numbers, appear in annex 2 to the Board's letter of August 1992. The amounts for which credit is given are not, however, the new 4 week average amounts claimed in the schedule but the amounts originally invoiced. There is a further curiosity, namely that the credit note at D3.4.136, number 67841 for £3,956.51 is dated 1 December 1993, which is after the letter of 13 October 1993. But the coincidence of the figures is so striking that I consider that its amount must have been included.
28. Mrs Feakins faxed the letter and the sheet setting out the totals to Mr Burstow and on 19 October 1993 they discussed it. He noted: 'Amount claimed is more than double previous figure. Any action to recover defended – whole amount is in dispute. Guarantee – would take a serious view, business in jeopardy, when liability is denied.' The reference to a guarantee is to the £50,000 guarantee which Mr and Mrs Feakins had provided to the Board. On the same day, perhaps following the conversation, Mrs Feakins faxed to Mr Burstow a letter covering the closing pages of the Board's statements for August and September 1992 showing £267,087 and £33,069 as respectively due. The difference is due to a large number of credits in the latter. These seem to me to reflect the original amounts debited in respect of the calculations made under the old regulation and listed in annex 2 to the Board's letter of 27 August 1992. It also seems to me that the new amounts calculated under the 1992 Regulation set out next to them in that annex are not debited in the statement, but I have not made a thorough check of that. On the same day, 19 October, Mr Burstow wrote to the Board saying that the sum now claimed was completely different to that disclosed previously and that Mr and Mrs Feakins had no idea how it was calculated. Mr Burstow did not ask for an explanation. The total claimed was in fact derived from the claims made on 27 August 1992 and 21 January 1993. It was not a wholly new figure. On 15 November Mr Burstow wrote to Mr and Mrs Feakins saying that he had informed the Board their figures were disputed. On 17 November Mr Feakins telephoned Mr Burstow to discuss his concern that the claims could break him and measures to protect the farm. Part of the note reads 'Disputes quantum of clawback anyway – but large sums claimed would bust them.' At this time proceedings to obtain an injunction to prevent the Board calling the exporters' guarantee were being considered. On 5 April 1994 Mr Burstow met with Mr and Mrs Feakins to discuss protecting the farm against the Board's claim (stated as 'about £400,000'). On 11 April the Board called the guarantee provided by the Feakins' bank. On 8 August Mr Burstow wrote again to Mr and Mrs Feakins about the protection of their assets.
29. I would have expected that during these discussions with Mr Burstow (October 1993 to August 1994) Mr and Mrs Feakins would have been saying that on any view they did not owe nearly half of what was claimed because it related to exempt sheep. There is no record that they did say that, but this is far from conclusive that they did not. Mrs Feakins was described by Mr Lomas (another exporter) as vociferous about the point at an exporters meeting with Mr Burstow. So it would have been odd if she had been silent.
30. On 7 December 1995, that is 16 months on, the Advocate General provided his opinion in the FMC case favouring the validity of the 1992 Regulation. On 11 January 1996 the Board served amended defences and counterclaims in the English proceedings. Time for defences to counterclaims was extended generally, terminable on 14 days' notice. The counterclaim against Mr and Mrs Feakins was £406,298 after credit for the £50,000 recovered under the guarantee. In his letter of 15 January 1996 enclosing it to Mr Feakins Mr Burstow stated 'You might like to see whether you can tie in the figures mentioned in the counterclaim with any invoices or statements in your possession.' On 2 February 1996 the European Court of Justice delivered its judgment in the FMC case upholding the 1992 Regulation. On 23 February Mr Burstow wrote to Mr Feakins enclosing copies of the judgment with an opinion by Mr Quigley as to its effect. He suggested a meeting on 11 March and 'thereafter individual meetings can be fixed where we need further information from each individual as to the figures involved, …'.
31. On 11 March 1996 a meeting was held at Mr Burstow's offices attended by the exporters. It was decided to instruct Mr David Vaughan Q.C. in connection with the second Lomas case. It was agreed that Mr Quigley should settle defences to the counterclaims. It was agreed that Mr Burstow and Mrs Barbara Wadeson Maude, an assistant solicitor, should take further instructions from the individual exporters to quantify the claims. Although it finds no mention in the minutes it is accepted by Mr Burstow that Mr Feakins did raise the question of claims by the Board in respect of exempt sheep. On 14 March Mrs Feakins wrote to Mr Burstow enclosing a copy of the Board's letter sent on 27 August 1992 together with two pages from the Board's regulations. It is clear that she was writing in the context of an earlier discussion of the Board's claim in respect of exempt sheep – probably at the meeting on 11 March. She said he would see that she would never have had the CES 3 forms. Secondly she said that no invoices were ever issued for the amount and she therefore had no way of knowing what shipments it related to. She ended: 'I do not think it a good idea that we should contact the Intervention Board direct regarding this matter, and yet feel the matter needs attending to. Any ideas?' On 15 March Mr Burstow wrote to Mr Feakins concluding 'Barbara and I will now be proceeding to contact the various experts and each of the Plaintiffs in order to ensure that we agree as far as possible the arithmetic of the claims and counterclaims'. Mr Feakins telephoned him on 25 March about clawback on exempt sheep. Mr Feakins had arranged for Mr Alan Revell, his shipping agent, to make an affidavit as to the practice. He explained that the sheep could not get out of the country without the necessary documents, which he would not himself have: no invoices were issued at the time. He said £197,000 was being claimed. Mr Burstow noted 'IBAP cannot prove this sum as they say they've lost the documentation'. On 26 March Mr Burstow was about to go on holiday. He dictated a note to Mrs Wadeson Maude. He provided her with Mrs Feakins' letter of 14 March and his note of 25 March. He said 'I am sure they have a very important point in respect of "clawback abatements", although this is a subject I do not yet entirely understand.' He continued that he thought it meant that the Board had invoiced for sheep which were exempt, and if so it should be expressly pleaded in the defence to counterclaim. He asked her to progress the point. She wrote him a note dated 9 April to update him on return from holiday. It was mainly about instructions to Mr Vaughan and Mr Quigley. She had arranged to see Mr Revell, but she had not taken further instructions from Mr Feakins about exempt sheep. 'Clawback abatement' was referred to in the instructions which she prepared and which were approved by Mr Burstow. It was included as a point which affected the live trade as opposed to the carcase trade – and so to be used in distinguishing the FMC case. It was not stated that Mr Feakins alleged that nearly half of what the Board were counterclaiming against him was not due because the shipments were exempt. I should record that Mrs Wadeson Maude did not give evidence.
32. On 17 April 1996 the solicitor to the Board, Mr Patel, wrote to Mr Burstow saying that under the FMC judgment the exporters were only able to recoup the difference between what they had paid and what they should have paid (a negative sum according to the Board in the case of Mr and Mrs Feakins). He asked for details of the sums that might be claimed on that basis. He also suggested that in accordance with the FMC judgment the Board was entitled to judgment for the amounts counterclaimed with interest.
33. The consultation with Mr Vaughan and Mr Quigley took place on 30 April 1996. It does not appear that the exempt sheep point was discussed at the consultation, at least in any detail. It was not mentioned in the note of the consultation. I am satisfied that neither counsel appreciated that it took the form it did – namely an alternative defence to half the sum claimed against Mr and Mrs Feakins. At some point, it is unclear when, a draft defence to counterclaim was settled by Mr Quigley in the Wood action.
34. On 4 June 1996 Mr Burstow replied to the Board's solicitor's letter of 17 April. He stated that the FMC decision did not properly apply to live exports. He said that it had been decided to seek a further reference through the High Court to test the validity of the 1992 Regulation. As to the counterclaims, he said that any application for judgment would be strenuously opposed. On 13 June 1996 Mr Quigley provided an opinion covering a draft of an amended statement of claim which put in issue the validity of the 1992 Regulation. On 4 July Mr Burstow wrote to the solicitor to the Board stating that it was now accepted that in the light of the FMC decision a total repayment of clawbacks was not appropriate. He said steps were being taken to calculate the extent of over-payments and the Statements of Claim would then be amended. He said that at that point he intended to open discussions with a view to settling the litigation. He proposed that no further action should be taken, particularly in relation to the counterclaims until the exercise was completed. This took no account of the fact that it was not possible for Mr and Mrs Feakins to advance any case as to exempt sheep, because they did not know which shipments were in dispute. On 16 August a meeting took place at Mr Vaughan's house in Wales to discuss the expert evidence. Mr Feakins attended. His evidence was that at the meeting he discussed exempt sheep with Mr Vaughan. Mr Burstow recalled it being mentioned as they were leaving as an example of how clawback calculations could be inaccurate. Mr Vaughan had no recollection of it being discussed. At a consultation with Mr Vaughan on 4 September there was discussion of, inter alia, the counterclaims. The point that they might be time-barred was raised. Mr Quigley provided an opinion dated 12 September, saying that it was highly arguable that they were. On 19 September a reply and defence to counterclaim settled by Mr Quigley was served by exporters, Barretts & Baird, in their action against the Board. The solicitors were Douglas Clarke Brookes & Co. It was specifically alleged that (1) the total claimed by the Board came to £583,348 and not £614,398, (2) £334,383 related to sheepmeat exported to Switzerland, in respect of which no clawback was due, and (3) £63,762 related to duplicate charges.
35. Following a hearing on 21 November 1996, on 9 July 1997 the European Court of First Instance delivered judgment rejecting the second Lomas action and ruling inadmissible the expert's report which had been submitted the distinguish the FMC case. Following this at a meeting of the exporters with Mr Burstow on 18 August 1997 it was decided to continue with the English proceedings and to introduce the arguments which had been ruled inadmissible by the Court of First Instance. It was thought that the decision of that court should be no bar to that.
36. On 20 January 1998 Mr Burstow discussed procedure with the solicitor to the Board, Mr Patel. He agreed to send him the amended statement of claim by 29 January. Mr Patel said that, if it was unacceptable, he would oppose the application for leave and apply for summary judgment on the counterclaims. On 2 February Mr Burstow wrote a without prejudice letter stating that he had received draft documents from counsel, which he expected to serve later in the month. He said that the present intention was not to pursue a claim for damages or for the repayment of all clawback but to claim the over-payment of clawback. He also said that the defences to counterclaims would be that the Board's figures were inaccurate and unreliable and that there would be a need for extensive discovery.
37. On 6 February 1998 Mr Burstow wrote to Mr Feakins enclosing a copy of a draft affidavit in the name of Hedley Lomas to support amended statements of claim and defences to counterclaim. The amendment to the latter was to take the limitation point. The letter explained the intended course and asked for his approval.
38. On 16 March 1998 Mr Burstow wrote to Mr Patel an open letter enclosing a draft re-amended statement of claim for Headley Lomas, a draft affidavit in support, and a draft reply and defence to counterclaim in the case of Wood. He stated he would apply for leave in default of agreement. He said that the claims were now only to recover over-paid clawback. He stated that four exporters were not pursuing their claims, leaving seven who were. On 6 June Mr Feakins wrote to Mr Burstow enclosing some notes he had made on clawback. They were directed to the working of the 1992 Regulation and there was no reference to exempt sheep. Mr Burstow replied on 11 June, saying that he had been told, off the record, that the Board was unlikely to agree to the proposed amendments.
39. It in fact took Mr Patel until 30 November 1998 to respond to them. He stated that he considered there was no valid basis of claim against the Board and that he would be applying to strike out the actions and for judgment on the counterclaims in the full amount sought with interest, alternatively orders for interim payments. It appears, in particular from a note dated 7 December 1998, that this caught Mr Burstow at a bad time. He was in his year as President of the Sussex Law Society and he was engaged in discussions relating to the merger of his firm – of which he was the senior partner. In that note he said he would need an assistant to conduct the next bit of the litigation. Mrs Wadeson Maude was not available. The note referred to the need to have full discovery on the Board's claim 'where we are fairly certain that they cannot prove the precise amount due'. On 7 January 1999 Mr Burstow wrote to Mr Patel stating the following. He would proceed with the applications to amend. It was ridiculous to suggest that the proposed amended statement of claim disclosed no cause of action. To proceed under Order 14 on the counterclaims was inappropriate as there had been no discovery of the Board's records and both the method of calculation and accuracy of the records had always been in dispute. On the same day he wrote to Mr Quigley seeking his advice as to how to proceed. On 27 January he wrote to Mr Feakins suggesting a meeting with the remaining exporter clients on 3 March. On 25 February he sent instructions to Mr Vaughan and Mr Quigley to advise on how to proceed and on the prospects of success. A consultation was took place on 2 March. Mr Burstow's manuscript note includes the following: 'Send to Connor Quigley the invoices that substantiate the counterclaims. They were attached to ? Defence & Counterclaim'; 'Discovery We will need to look at the underlying figures – not just shown on Statements'; 'New files to DV and CQ of all cases'; 'Write to Patel CQ to draft letter. Give notice of steps we propose to take now.'
40. The meeting with the exporters duly took place on 3 March 1999. A major part of the discussion was concerned with the further funding of the litigation. A note was made of the amounts claimed by each exporter and the counterclaim against him. The Feakins claim was put at £695,000 and the counterclaim at £406,000. The manuscript note – but significantly not the typescript version records the following by the Feakins figures 'S [Stephen Wood] what about 200k invoiced incorrectly T [Tony Burstow] A point re the accuracy of figures K [Kevin Feakins] A point of discovery'. The manuscript note also records Mr Burstow as saying that on Order 14 the exporters could say 'prove your figures', and Mr Feakins saying that he only had bills.
41. On 18 March 1999 Mr Burstow approved instructions to Mr Quigley to settle the amended statements of claim in the remaining seven actions and supporting affidavits. They contained no specific instructions as to the counterclaims. On 30 March the Board took the initiative by issuing its own summonses to strike out and for summary judgment. On 28 April Mr Burstow wrote to Mr Feakins telling him of that and asking for his comments on the draft affidavit which Mr Patel intended to swear and his own draft affidavit. Mr Patel's affidavit was mainly concerned with the points raised by the draft amended statement of claim he had received by letter of 16 March 1998 as grounds for attacking the 1992 Regulation. The counterclaims were dealt with quite shortly. It stated that the defences were (a) limitation, and (b) the attack on the Regulation. It said that there was nothing in these and asked for summary judgment. So far as the counterclaim is concerned Mr Burstow's draft affidavit seems not to have been materially different from that actually sworn. It stated his belief that the defence to counterclaim afforded a complete defence. So far as the amount claimed was concerned the defence merely put the Board to proof. No specific points were raised. On 6 May Mr Feakins replied enclosing notes on the affidavits dealing with points on the 1992 Regulation. His covering letter also stated 'We are working on the invoices from IBAP but you have all the clawback Exempt Certification for the £190K they added back on.' By the 'exempt certification' he meant the CES 4s relating to the shipments listed in Annex 3 to the Board's letter sent on 27 August 1992. I will revert to the whereabouts of that documentation. On 11 May Mrs Feakins faxed to Mr Burstow some notes as to the payments they had made together with the Board's statement for March 1992. On 14 May Mr Patel sent copies of his sworn affidavits with exhibits. On 14 May Mr Burstow also sent further instructions to Mr Quigley as to the draft affidavits. There was nothing about the amount of the counterclaims. At about this time a consent order was agreed between counsel providing for the Board's summonses to be heard by a judge with an estimate of 4 days. This was sent to Mr Feakins by Mr Burstow with a further draft of his affidavit on 21 May. The affidavits were sworn by Mr Burstow on 10 June. A list of issues to be decided was drawn up by Mr Quigley, and this led to a list of issues to be decided by the judge being agreed between counsel. There was no reference in it to the amount of the counterclaims. Mr Vaughan and Mr Quigley said in their evidence that they were instructed by Mr Burstow that he had agreed with Mr Patel that the amount of the counterclaims was a point in issue which was to be left over if the Board otherwise succeeded. There is nothing to suggest that any such agreement was made. It would have been surprising if Mr Patel had made such an agreement because the summonses he had issued were for the amount of the counterclaims, or, failing that, for interim payments.
42. The Board's summonses were heard on Ian Kennedy J on 15 and 16 December 1999 and 17 and 18 January 2000. The exporters were represented by Mr David Vaughan Q.C. , Mr Conor Quigley and Miss Margaret Gray. Their skeleton argument simply recorded in its first paragraph that summary judgment was sought on the counterclaims, alternatively an interim payment. The skeleton argument for the Board represented by Mr Gerald Barling Q.C. and Mr Kelyn Bacon was largely silent as to the amount of the counterclaims: but paragraph 3 made clear that the Board sought summary judgment. In the case of Barretts & Baird, where it was specifically pleaded that some of the clawback claimed related to exempt shipments to Switzerland, an interim payment was sought. During the hearing the Board circulated a schedule produced by Mr Mackley, the solicitor now having conduct of the litigation for the Board, which set out the amounts claimed. It appears that it was only in the Barretts & Baird case that any point was taken as to their accuracy. Ian Kennedy J delivered judgment on 14 April 2000: [2000] Eu LR 672. He upheld the submissions of the Board and concluded that the Board succeeded on its claims and counterclaims. He invited counsel to agree an order.
43. Mr Quigley stated in a note on the judgment dated 2 May 2005 that 'the judgment would appear to give IBAP an immediate right to recovery of the full amount claimed.' On 10 May 2000 Mr Burstow wrote to the Board's solicitor, Mr Mackley, saying that his clients would appeal. He also stated '… we should remind you that we have always made it clear … that the precise sums claimed by the Intervention Board are in dispute. ….. On a number of occasions we have made it clear in correspondence (including letters dated 10 October 1996, 2 February 1998, 16 March 1998 and 7 January 1999) that your clients are put to strict proof as to the precise sums due from our various clients. We would be grateful if you would confirm that … the assessment of quantum remains to be decided in further proceedings.' On 16 May Mr Mackley replied that the contention came as a surprise to him and to his counsel.
44. The outcome was that a further hearing was fixed before Ian Kennedy J on 23 June. On 16 June Mr Mackley wrote asking Mr Burstow to let him know the precise extent to which quantum was disputed and the basis. Mr Burstow replied on 20 June saying that it was not possible to indicate the extent of the dispute until there had been an opportunity to examine the Board's records. Mr Burstow wrote on the same day to Mr Feakins informing him of the further hearing, saying that the main issue was whether the Board was entitled to summary judgment, and that he had always made it clear to the Board that their figures were dispute. He was telephoned by Mr Feakins that day about the exempt sheep point. Mr Feakins told him he had delivered papers to him 6 or 7 years before in a carrier bag. Mr Burstow wrote to Mr Quigley saying that some of his clients had given him the example of ewes and rams which were exempt, though the Board later claimed that they did not have the relevant certificates. On 22 June Mr Feakins wrote Mr Burstow a letter dealing with the exempt sheep point, saying it accounted for nearly £200,000. This letter was handed to Mr Vaughan on the morning of the further hearing. Mr Burstow swore a further affidavit on 22 June. He referred to the correspondence in which he had said that the Board's figures were in dispute. He did not assert that there had been an agreement that quantum should be left over. He did not raise any specific grounds of dispute and the Feakins exempt sheep point was not referred to. Mr Mackley swore an affidavit the same day which concluded that the exporters were adopting delaying tactics. The skeleton argument on behalf of the exporters submitted by Mr Vaughan, Mr Quigley and Miss Gray did not put forward any factual basis for disputing the figures. It did not assert that there had been an agreement that quantum be left over. A strong skeleton argument was submitted on behalf of the Board.
45. There is a transcript of the hearing on 23 June 2000. Mr Barling addressed the judge on the basis that there was no basis for questioning the Board's figures. He said that Mr Vaughan had mentioned Mr Feakins' exempt sheep point to him, which was a new issue of fact without justification. Mr Vaughan produced to the judge Mr Feakins' letter to Mr Burstow of 22 June, the day before. He said that his clients had only the invoices from the Board, to which the judge replied that they must have the underlying documents as well, from the Customs. On the exempt sheep the judge asked whether there was any letter saying that Mr Feakins was being charged on exempt sheep, which Mr Vaughan had said was half his trade. Mr Vaughan said that all he had was the letter which he had read to the judge. After taking Mr Feakins' instructions, he said that it was four years before that the matter had been raised with Mr Burstow and a statement taken from Mr Revell. The judge said it might have been raised four years before but it was now too late. He delivered a judgment to that effect, hinting at the possibility of the present proceedings against Mr Burstow. The judge gave permission to appeal from his judgment of 14 April but not from that he had just given.
46. Mr Feakins wrote to Mr Burstow on 28 June 2000 saying that for 7 years he had been saying they had been overcharged by some £200,000. On 4 August he wrote to Mr Burstow saying that he taken Mr Burstow's advice and had consulted Parker Bullen. The person there was Mr Welsh. From about this time Mr Welsh played a part in the conduct of the litigation on Mr Feakins' behalf. On 6 September Mr Burstow sent Mr Welsh a copy of the one CES 4 which he said he had. He also sent a copy of a manuscript schedule which had been prepared by Mr and Mrs Feakins when he was first instructed in 1992. This schedule lists the Board's invoices between 1989 and early 1992 and purports to show what had been paid against them.
47. At a meeting on 19 September 2000 Mr Feakins said that he had given Mr Burstow a box full of exemption certificates – CES 4s, in 'the early '90s'. Mr Burstow said that he did not think that he had more than the one, but would look again. On 21 September Mr Burstow sent a letter to the Board drafted by Mr Welsh. It referred to (1) the Board's letter of August 1992 and the claim for £197,422, saying that the Board held all the necessary documents; (2) the shipments and credits referred to in the Board's letter of 13 October 1993, asking for an explanation; and (3) an inconsistency between the credits given by that letter and in the counterclaim. It seems that this was the first time that any lawyer had applied his mind to the claims which Mr and Mrs Feakins had received from the Board. The Board's solicitor replied on 10 October declining to deal with the points and relying on its judgment. On 3 October Mr Burstow responded to the suggestion that his office held the CES 4s. He said that Mr Feakins had told him they were in a plastic bag in a box and he had brought them to his office 6 or 7 years before. He had no recollection of seeing them, and they could not be found. Mr Feakins replied on 8 October that they had been delivered to him. 6 or 7 years before would have been 1994 or 1995.
48. On 26 September 2001 Mr Feakins made a witness statement for the appeal. He referred to the Board's letter of August 1992 and said he did not have the CES 3 forms in his possession. He said almost half the sheep he exported were exempt. He said that the Board must have the forms because they had been able to calculate the clawback. The last point was a false one because they would calculate the clawback from the C1220s.
49. The appeal was heard over 2 days, on 9 and 10 October 2001. Mr Nicholas Green Q.C. presented the appeal leading Mr Quigley. Permission had been obtained to appeal against the summary judgments but this was pursued only by Mr Feakins. Permission was sought from the court for the admission of additional evidence. Mr Green opened the point to the court and Mr Barling responded saying that the CES 3s had never been supplied. Mr Green explained that Mr Feakins had never had them. Simon Brown L.J. presiding asked where was his solicitor's outraged letter in 1992. Mr Green said it all went into abeyance. Members of the court repeated that it was extraordinary that nothing had been said at the time. Overnight Mr Feakins made a further statement saying that he had recently found a box of documents including CES 4s relating to 102 shipments of exempt sheep. The statement is unclear whether Mr Feakins thought that these CES 4s were complete, that is, were all he had ever had. He could not relate them to the annex 3 shipments because he had no means of identifying the latter. A statement was also made overnight by Mr Basham, an employee of the Board. Mr Basham stated that other exporters did put the CES 3 number onto the C1220s. As I have said that was incorrect: it was rarely if ever done because of the difficulty that the exporter did not have a copy of the CES 3. He said that a CES 4 did not prove that the sheep were exported (but, I point out, if it could be tied to a C1220, the latter would be proof of export). Mr Basham stated that no CES 3 forms were received by the Board. He said that, had the point been raised at the time, enquiries could have been made. The exempt sheep issue was considered briefly in submissions the next morning, Mr Barling saying that in each case two copies of a CES 3 had failed to reach the Board. Simon Brown L.J. terminated the matter saying 'I do not think we are going to go down this road. I think we have heard enough …. .' Later he said 'As I understand it, Mr Green recognised long since that the summit of his ambitions on that whole part of the case could be an invitation to you to treat Mr Feakins' case like Barretts & Baird … .', in other words, for the court to invite the Board to make a sympathetic examination of the point to see if there was anything in it.
50. Judgment dismissing the appeals was delivered by the Court of Appeal on 23 October 2001. Much of it was taken up with the points as to the 1992 Regulation and as to limitation. Simon Brown L.J. sated that Mr Feakins' appeal against summary judgment was 'quite hopeless'. He drew a contrast between the position in the Barretts & Baird case and that of Mr Feakins. He said that having considered the statements before the court he had no hesitation in dismissing the appeal and in refusing him leave to adduce further evidence. He stated in paragraph 41 of the judgment:

"Nothing could be plainer than that Mr Feakins did not reserve his position on the facts before the judge below and in any event he could and should have adduced all this material years ago if he wished to rely on it. It seems highly likely too that at this distance in time it will be quite impossible for Mr Feakins to satisfy the Board's conditions for establishing the exempt status of the relevant exports and impossible too for the Board to be sure that, in the absence of the missing paperwork, these exports did indeed qualify for exempt status."

He invited the Board to have a last look at Mr Feakins' material to consider whether it was prepared to afford him a degree of ex gratia concessionary relief. That was not taken up by the Board.

51. On 3 January 2002 Mr Welsh wrote to the Board's solicitor making a number of points about what the Court of Appeal had been told on behalf of the Board as to how the system worked. He also asked for copies of the C1220s which supported annex 3. These were provided under cover of a letter dated 22 January 2002, but Mr Welsh's points otherwise fell on deaf ears. Mr Welsh found that the annex 3 shipments had been listed in the annex in a random order with the first in time being number 58. This C1220 had been issued almost 3 years before the Board had claimed clawback in respect of it. Mr Welsh was able to find among the CES 4s held by Mr Feakins only three which related to annex 3 shipments. I accept that the three can be so related, though this was put in issue on behalf of Mr Burstow. Mr Welsh later obtained from the Board C1220s and CES 3s for 96 shipments on which no clawback had been charged. It emerged from those and later from the evidence of Mr David Revell (who was the son of Alan Revell and had acted as port agent for Mr and Mrs Feakins) that Mr Revell commonly inserted 'Live lambs' in box 31 of the C1220 regardless of the description of the sheep actually being shipped and inserted the 000 code in box 33 regardless of whether the sheep were exempt or not. That came about because Mr Revell prepared the form in advance of the transporter's arrival at the port when he did not know what it would be containing. He should have amended it if the sheep were in an exempt category, but commonly failed to do so. It is important that these errors did not in fact prevent the Board accepting a shipment as exempt if there was a CES 3 relating to it.
52. In June 2005 after having taken out an application for disclosure against the Board Mr Welsh inspected at the Board's offices 484 C1220s relating to shipments made by Mr Feakins between 1989 and 1991. He was told those relating to 1992 could not be found. Other than those included in annex 3 to the Board's August 1992 letter, the C1220s were held in treasury tags in date order in brown folders. The annex 3 C1220s were in a separate pile. There were 77 of them. There were 101 C1220s relating to shipments which were accepted as exempt. Of these there were:

45 with only the white Customs copy of the CES 3 and no CES 4

10 with the Customs copy of the CES 3 and a complete CES 4

17 with the Customs copy CES 3 and the front sheet of the CES 4

29 with the Customs copy CES 3 and also the green MLC copy CES 3

All of these were accepted by the Board as exempt despite the fact that the description inserted by Mr Revell in box 31 and the code inserted by him in box 33 indicated a shipment on which clawback was payable. So, if there was a CES 3 relating to the shipment, it was given effect despite those errors by Mr Revell. 14 of them had a CES 3 number inserted in box 44. That was not in Mr Revell's hand, and must have been done by Customs.

53. It is clear from the annex 3 documentation provided to Mr Welsh that the shipments listed in the annex were originally accepted as exempt from clawback and so no invoices were raised in respect of them. It seems that in July and August 1992 an exercise was carried out by the Board to check all the shipments made by Mr and Mrs Feakins and probably other exporters – for example, Barretts & Baird. In relation to the 77 shipments in annex 3 no CES 3s could then be found and so clawback was claimed on them although the C1220s in question were dated between 12 December 1989 and 31 May 1991. The Board's letter of August 1992 had stated that the shipments had been previously exempted because 'the export declaration indicated that the goods were exempt from clawback but subsequently you did not supply the supporting CES form' – the CES 3. That is now shown to be incorrect. In fact due to Mr Revell's errors the C1120s did not show that the shipments were exempt, but rather the contrary. In each case the description was 'live lambs' and the code was given as 000. All save 8 are stamped 'U.K Lines rejected'. That was the stamp used by the clerks in the Board's offices to designate a shipment as exempt. Why those particular words were used is a mystery, but there is no doubt that that was the Board's system. It is confirmed in a letter from the Board to Mr Welsh dated 2 September 2003. Three bear a manuscript 'R', which may be an abbreviation of 'Rejected', i.e. U.K. Lines Rejected. One has the manuscript word 'Rejected', and two have a manuscript 'Rej'. Two have no such stamps or annotations. It is Mr Feakins' case that in all save possibly the last two cases the CES 3s must have been available at the time the shipments were originally designated as exempt because otherwise there would have had no basis on which to do so.

The witness evidence as to discussion of the exempt sheep claim and as to supporting documents.

54. The previous section is substantially based upon the contents of the chronological files and those relating to the proceedings brought by the exporters. It is necessary to add to that the evidence of the witnesses relating to discussion of Mr Feakins' claim that he had been charged in respect of exempt sheep, and the evidence as to what happened to the documents which might have assisted that claim.
55. I will take first the evidence of the various exporters who were called on behalf of Mr Feakins, in the order in which they were called.
56. Mr Archibald Pugh was until 1993 finance director of Barretts & Baird, which was a sizeable company. It was not represented by Mr Burstow. It received a letter from the Board in August 1992, which was similar to the letter received by Mr and Mrs Feakins. It too had an annex 3 listing shipments which could not be identified. At the end of 1994 Mr Pugh asked the Board to send him copies of the C1220s for each of the annex 3 shipments, which the Board did by letter of 29 March 1995. It became apparent to him that the Swiss Border Control Certificates forwarded to the Board were missing and were likely to have become detached from the C1220s in the Board's Reading office – which had a strong reputation for inefficiency, 'abysmal' according to Mr Pugh. The company was able to provide copy certificates, but these were not acceptable to the Board. In the summary judgment proceedings this was all covered fully in the company's evidence. Ian Kennedy J asked whether the Board could not reach a settlement and agreement was reached giving the company credit for the total amount of their annex 3 shipments.
57. Mr Roger Mills was an exporter represented by Mr Burstow. He said that he brought all his documents to the meeting on 24 July 1992 as requested by Mr Burstow, and that at the meeting he explained the system to Mr Burstow. He said that he remembered Mr Feakins having a bundle of green CES 4s, which Mr Mills spread on the table with the other documents. This was before the Board's letter of August 1992 in which the claim was first made. He said the Board's accounting was thoroughly inefficient and he had had to speak to the Chief Executive about it.
58. Mr Stephen Wood had known Mr Burstow for many years prior to 1992. He said that the one exporter who had a clear complaint about the amount of clawback was Mr Feakins and he had raised the point with Mr Burstow and said that it should be raised with the Board. That is corroborated by the manuscript note of the meeting on 3 March 1999. On 26 February 2003 Mr Wood wrote to Mr Welsh that Mr and Mrs Feakins had produced bundles of papers, including CES 4s, proving that a vast amount of sheep had been shipped as exempt. He said that he remembered clawback exempt sheep being mentioned on many occasions. He was sure that from the early meetings Mr Burstow was aware of the point. He specifically remembered it being mentioned at Mr Vaughan's house on 16 August 1996. He appeared quite angry that Mr Burstow was saying that he had not been informed of the point until a late stage.
59. Mr Peter Ziolkowski said that he recalled the exempt sheep point being mentioned at more than one meeting. He said that the exporters felt that it was a way of establishing that the Board's accounting was inefficient.
60. Thomas Lomas had come from Romania to give evidence. He remembered two occasions in particular when Mr Feakins' exempt sheep claim had been discussed, once early on when Mrs Feakins had been vociferous about it, and at the meeting on 3 March 1999 (a memorable meeting because Mr Mills was ejected from it). He said that the other exporters were keen on the point because it would show the unreliability of the Board's figures. He recalled Mr Feakins waving a bundle of CES 4s at Mr Burstow's offices.
61. Mr Feakins said in his witness statement that at a meeting early in 1993 he had brought up the question of exempt sheep, and at a meeting with Mr Burstow had produced a bundle containing his CES 4s. In his evidence he said it was one of the early meetings, either in 1992 or 1993. He said that they were in a green or greenish brown carrier bag which was in a box with other documents. He said that what he had found shortly before the Court of Appeal hearing was a box, a box of documents, and 'in the box of documents was a bag of CES forms still in the same bag.' He said that they had been brought back from Mr Burstow's office by his son, Matthew, and put in the attic by Matthew, and that Matthew had not told him about it until recently. Matthew's evidence was that in 1997 or 1998 during the litigation against the Dover Harbour Board brought by the exporters to force the Board to accept their sheep despite protesters, in which Mr Burstow was acting, he had been asked by Mrs Wadeson Maude to take back much of the clawback documentation. She had, he said, three bankers boxes without lids. He took two back with him. In one box were pink international consignment notes and green documents which he later learnt were CES 4s. He said that they were stapled together with the costings for the shipment. He put the boxes in the office, which was then in the attic of the farm house. Mr Feakins said in his second witness statement that in February 2001 all his paperwork stored in an outbuilding had been destroyed as part of the foot-and-mouth clean-up. The 110 CES 4s which he had found in his attic represented the export of 26,000 exempt sheep, and he had exported considerably more exempt sheep than that. None of the basic records of Mr and Mrs Feakins' trading, which would have shown the shipments made, their dates and value, and whether they were exempt, are now available. Though this was not really examined during the trial, I understand that they were all lost in 2001.
62. So it now appears that the CES 4s which Mr Feakins says he found in his attic in the autumn of 2001 number 110 and relate to the export of about 26,000 exempt sheep. He said that he exported many more exempt sheep than that. The position is further complicated because during the foot–and-mouth disease clean-up of his farm in 2001 boxes of records were removed by DEFRA from an outbuilding which was used as the office from the mid 1990s. They have never been recovered. Mr Feakins was recalled at my request to try to clarify the position as to what had happened to the annex 3 CES 4s – if, contrary to Mr Burstow's case, they existed. He confirmed that what he had found in the attic was the same bag in which he believed the CES 4s were when he gave them to Mr Burstow and in which he took them to the Court of Appeal. He suggested that sometimes the CES 4s did not get back to him because the drivers who were given them by the MLC at the lairage would not deliver them. He stated that the majority of his records relating to exports of sheep in the clawback period were now missing.
63. The MLC no longer have any documents relating to Mr Feakins' exports, in particular CES 3s and CES 4s. It is unclear whether they would have been kept for 3 or 7 years, their letter to Parker Bullen of 11 May 2005 prefers 7 years. If that is right, their copies dating from 1990 and after would have been available in 1996.
64. In his third witness statement Mr Feakins also said that having been advised not to pay the Board's demands he was not concerned when he received the Board's August 1992 letter. He had also heard from Mr Mills that when Mr Mills had contacted the Board about the figures Mr Mills had been told the Board would not deal with him direct but through his solicitor. I have recorded that he had passed the letter to Parker Bullen, who had passed it to Mr Burstow asking for his recommendation.
65. I will mention Mr Basham's evidence here. He was called on behalf of Mr Burstow, and gave evidence about how the Board's system worked. He did not however have first hand experience of that being by reason of his position, held between 1991 and 1998, which was at one remove from it. He confirmed the impression I received from other witnesses as to the inefficiencies in the Board's processing of documents and accounting. Mr Basham stated in the witness box, and for the first time, that a letter had been written by the Board to Mr Feakins specifically about annex 3 to the letter of August 1992, and that Mr Feakins had written back saying in effect 'Thanks. What's this all about? This is not very helpful.' He said he saw the letter in 1998 and had some sympathy with Mr Feakins. Although I have what seems to be a complete collection of letters written by the Board, which has been supplied by Mr Feakins, it does not include any such letter from the Board nor any reply from Mr and Mrs Feakins. Mr Feakins' evidence was that he and Mrs Feakins had not written to the Board about annex 3. It is an oddity, but the probability is that there was no such correspondence. Neither counsel urged me to take any other view.

Was Mr Burstow negligent?

66. It was submitted in the defence opening written submissions that the issue of 'exempt sheep' did not fall within Mr Burstow's retainer. It was submitted that the retainer was limited to the conduct of the group litigation – which I understand to mean primarily the claims to recover clawback and the attack on the 1992 Regulation. It was said that it was a book keeping question for Mr and Mrs Feakins to deal with directly with the Board. In closing submissions the case was put more on the basis that Mr Burstow was never sufficiently instructed as to the point. I was cited the passage from the judgment of Oliver J in Midland Bank v Hett, Stubbs & Kemp [1979] Ch 384 at 402, 403 where it is emphasised that the standard is that of a reasonably competent practitioner having regard to the standards normally adopted in his profession: the solicitor is not obliged to pursue lines of enquiry which go beyond the limits of his instructions even if a particularly meticulous and conscientious practitioner might do so.
67. It is apparent from the documents that Mr Burstow did not simply have the conduct of the litigation on behalf of the exporters: he was involved in advising them more generally as to the route to be adopted and tactics generally. He specifically advised them that they should not make further payments to the Board pending the outcome of the litigation. Further, when the Board's letter of August 1992 was sent to Mr Burstow by Mr Carnegy, Mr Burstow was specifically asked for his recommendation. His letter of 15 September 1992 gave advice as to the two options but did not refer to the particular terms of the Board's letter to Mr and Mrs Feakins. In November he received copies of the Board's latest statements. He received a copy of the Board's letter of 21 January 1993 and the invoice that came with it. I do not think that Mr Burstow's retainer is to be limited in the way suggested at this early stage. The position became very clear once the counterclaim against Mr and Mrs Feakins was made. For the counterclaim was part of the litigation which Mr Burstow was conducting.
68. In my judgment it was the duty of Mr Burstow to consider the whole of the Board's letter to Mr and Mrs Feakins of August 1992 and to advise them on it. As I have stated, Mr Burstow wrote to Mr and Mrs Feakins on 15 September 1992 telling them that they had no choice but to adopt the average premium option, and he wrote to the Board on behalf of his clients making that choice on 24 September. There is nothing to suggest that he considered the content of the particular letter that the Board had sent to Mr and Mrs Feakins further, and I suspect that it in fact just went onto the file with the rest of the Board's letters to his clients. If Mr Burstow had considered the terms of the letter he would have seen that, in addition to asking about the options and giving figures for the average option, the Board was claiming a very large sum, which it had not previously claimed, and was inviting action from Mr and Mrs Feakins. He had advised that clawback should not be paid pending the outcome of the litigation. He knew that they were looking to him for advice as to what to do. He should have taken instructions from them so that he could understand better what it was about. He should then have advised them that this was not a matter that could be left but must be taken up with the Board either by him on their behalf or by them directly. It was not a matter that could safely be left because it related to transactions which were already some way in the past and it required the uncovering of documents, and a large sum was involved. It does not affect the position that Mr Burstow was not sent the annexes to the letter. If he had considered the contents of the letter, he should have seen the need for action. He could and should have asked for the annexes to be sent to him. I conclude that Mr Burstow was under a duty to give advice in relation to this aspect of the letter, and that he was in breach of that duty. If he had taken note of what was in the August letter and had noted that the invoice sent by the Board on 21 January 1993 was for the sums referred to in the letter – which he did not, he would have been in a position to advise Mr and Mr Feakins at the meeting on 26 February 1993, after having taken any further instructions necessary, that the exempt sheep point must be taken up with the Board.
69. In my judgment it is not an answer to that that Mr Burstow could safely assume that Mr and Mrs Feakins would take up the point with the Board themselves. He was acting for them and his retainer was wider than simply the conduct of the litigation. When a solicitor is acting, it is commonly he who has the sole conduct of correspondence, although the position is not so clear here because, as was to be expected in the circumstances, the Board had addressed its letter to his clients. It was he, however, who replied to it on 24 September 1992. Further, it was clear to Mr Burstow from the correspondence from August 1992 onwards, and from the meetings, that Mr and Mrs Feakins were not contacting the Board about the Board's claims against them.
70. I am not, however, satisfied that the exempt sheep point was raised prior to August 1992, in particular at the meeting on 31 July 1992. The Board had not then made its claim against Mr and Mrs Feakins arising from annex 3 to its August letter.
71. As the documents show, the point was raised by Mr and Mrs Feakins in 1996, and Mr Burstow accepts that this must have first occurred at the meeting on 11 March 1996. This was in the context that the Board had served counterclaims. Mr Burstow appreciated that the exempt sheep point was an important point which needed to be investigated and asked Mrs Wadeson Maude to look into it. Although she took a statement from Alan Revell, the father of David, she did not take further instructions from Mr and Mrs Feakins to ensure that the point and its problems were properly understood. It should have been appreciated that the question should have been pursued in 1992 following the Board's August letter. It should have been appreciated that the transactions were up to 7 years old, with the difficulties that this might entail. The Board should have been asked to identify the transactions referred to in Annex 3 to that letter. Mr Burstow realised that the point should be expressly raised in the defence to counterclaim, and instructed Mrs Wadeson Maude to that effect. The outcome was that it emerged in the instructions to counsel as a ground for distinguishing the live trade from the carcase trade: it was not stated, as it should have been, that there was a dispute between Mr and Mrs Feakins and the Board as to whether £197,000 of clawback related to exempt sheep. It may be that the correspondence with Mrs Feakins was included with the instructions, but that was not by itself sufficient. I do not accept Mr Burstow's suggestion that he would have mentioned the point to Mr Quigley in one of the conversations he was having with him at this time. The truth is that Mrs Wadeson Maude failed to take instructions and to understand the point, and Mr Burstow forgot that it was a point that needed specifically to be raised with the Board and to be pleaded. Both failed to realise that the Board should have been required to identify the transactions in question with a view to establishing the documentation. As the proceedings in the Court of Appeal show, it was not an option to leave a point like this to be raised in due course as part of an unparticularised challenge to the amounts claimed by the Board. I am satisfied that neither Mr Vaughan nor Mr Quigley had the nature of the point brought home to them. If they had, as they said in evidence, they would have advised that it must be specifically taken. The contrast with Barretts & Baird is throughout very apparent.
72. I should say that while I have no doubt in respect of my conclusion that Mr Burstow was negligent in the autumn of 1992 and the months following, I consider that the case as to 1996 is a very strong one.
73. I should refer to Mr Burstow's evidence about Mrs Feakins' letter of 14 March 1996. She enclosed a copy of the Board's August 1992 letter and said she felt that it needed attending to, but did not think it was 'a good idea that we contact the Board direct', and asked for his ideas. Mr Burstow said in his witness statement that he took this as instructions that he should not contact the Board. The use of 'we' in the letter seems to me far more likely to be intended to refer to Mr and Mrs Feakins, rather than to Mr and Mrs Feakins and Mr Burstow. In cross-examination Mr Burstow accepted that he might have misunderstood it. Although, as I have stated, Mr Burstow gave Mrs Wadeson Maude instructions about the exempt sheep claim, he made no response to the problem which the letter posed. He did not discuss it with Mrs Feakins or her husband, nor did Mrs Wadeson Maude. In short, however he understood the letter, he was asked to address the problem and did not do so. There was, of course, no reason at all why he should not have taken the matter up with the Board through its solicitor, and there was every reason for him to do so.
74. When the Board decided in November 1998 to apply for summary judgment on its counterclaims, it may not have been too late to raise the point with the Board, although it would have been the more difficult to do so over 6 years after it first arose. But it was not. It is documented that Mr Wood raised it with Mr Burstow on 3 March 1999. No action was taken. Mr Burstow's evidence was that he saw it as a point on quantum which was to be raised after the points of principle had been decided following discovery. That involved two misunderstandings, which should not have been made by a competent solicitor. One was that the point required raising with the Board and investigating as early as possible. The other was as to the nature of the summary judgment applications, namely that they were applications for judgment in the amounts of the liquidated sums which had counterclaimed. Mr Burstow claimed that he had agreed with Mr Patel that quantum should stand over: but there is nothing to support that and, as stated, it would have run contrary to the Board's applications.
75. Reliance on counsel was raised in Mr Moser's submissions as a defence to the claim. I do not consider that it arises. Part of the problem was that Mr Burstow failed to instruct counsel as to the point. If he had done so, both Mr Vaughan and Mr Quigley would have advised that the point had to be specifically taken.
76. For these reasons I find that Mr Burstow was negligent in his handling of the dispute between Mr and Mrs Feakins and the Board relating to clawback on exempt sheep. That negligence began in 1992. It was particularly serious in 1996 and that was repeated in 1999 and the run up to the hearing before Ian Kennedy J. I suspect that it came about partly because Mr Burstow had too much on his plate and insufficient competent support. His successful career shows that he is an able man.

What has Mr Feakins lost – the main claim.

77. The claim is formulated as one for the loss of a chance. The main claim is for the loss of the chance of establishing that the annex 3 shipments were of exempt sheep and so no clawback was payable on them. There are also a number of subsidiary claims which I will consider separately.
78. There was no disagreement between counsel as to the principles to be applied, save in one respect. Those principles have been most recently considered by the Court of Appeal in Browning v Brachers [2005] EWCA Civ 753. That was an appeal against my judgment assessing the damages in an action against solicitors for negligence in the conduct of litigation. The appeal was successful in relation to the amount I had awarded though not as to the principles to be applied. The task of the court is to assess the chances of the claimant's success at a notional trial if the solicitor had fulfilled his duty. To succeed the claimant must establish that he had a real and substantial rather than a negligible chance of success. If the chance was more than negligible, the court must assess it. If the likely outcome would have been by way of settlement, in my view the court should take account of that. In Mount v Baker Austin [1998] PNLR 493 Simon Brown L.J. stated:

"1. The legal burden lies on the plaintiff to prove that in losing the opportunity to pursue his claim (or defence to counter-claim) he has lost something of value i.e. that his claim (or defence) had a real and substantial rather merely a negligible prospect of success. (I say "negligible" rather than "speculative" – the word used in a somewhat different context in Allied Maples Group Limited v. Simmons & Simmons [1995] 1 WLR 1602 - lest "speculative" may be thought to include considerations of uncertainty of outcome, considerations which in my judgment ought not to weigh against the plaintiff in the present context, that of struck-out litigation.)

2. The evidential burden lies on the defendants to show that despite their having acted for the plaintiff in the litigation and charged for their services, that litigation was of no value to their client, so that he lost nothing by their negligence in causing it to be struck out. Plainly the burden is heavier in a case where the solicitors have failed to advise their client of the hopelessness of his position and heavier still where, as here, two firms of solicitors successively have failed to do so. If, of course, the solicitors have advised their client with regard to the merits of his claim (or defence) such advice is likely to be highly relevant.

3. If and insofar as the court may now have greater difficulty in discerning the strength of the plaintiff's original claim (or defence) than it would have had at the time of the original action, such difficulty should not count against him, but rather against his negligent solicitors. It is quite likely that the delay will have caused such difficulty and quite possible, indeed, that that is why the original action was struck out in the first place. That, however, is not inevitable: it will not be the case in particular (a) where the original claim (or defence) turned on questions of law or the interpretation of documents, or (b) where the only possible prejudice from the delay can have been to the other side's case.

4. If and when the court decides that the plaintiff's chances in the original action were more than merely negligible it will then have to evaluate them. That requires the court to make a realistic assessment of what would have been the plaintiff's prospect of success had the original litigation been fought out. Generally speaking one would expect the court to tend towards a generous assessment given that it was the defendants' negligence which lost the plaintiff the opportunity of succeeding in full or fuller measure. To my mind it is rather at this stage that the earlier stage that the principle established in Amory v. Delamirie (1772) 1 Stra. 505 comes into play."

79. In Browning Jonathan Parker L.J. considered the effect of the case of Amory v Delamirie in this area of law as established in previous decisions. He held in paragraph 210 of his judgment:

"I respectfully agree that the principle in Armory v. Delamirie is not directed at the legal burden of proof; rather it raises an evidential (i.e. rebuttable) presumption in favour of the claimant which gives him the benefit of any relevant doubt. The practical effect of that is to give the claimant a fair wind in establishing the value of what he has lost."

80. Mr Philip Moser submitted on behalf of Mr Burstow that this principle did not apply here because this was not a case where Mr Burstow had advised Mr Feakins that he had a strong case. Mr Burstow in fact gave Mr Feakins no advice on the point, whether as to its merits or otherwise. In my judgment it is not a condition of the application of the Armory principle that the solicitor advised that the claim had a good prospect of success. The reason for a level of generosity is simply that it is the defendant's negligence which has lost the claimant his opportunity. I refer to the quotation from Mount.
81. If Mr Burstow had acted as I have found that he should have done, either in 1992 or in 1996, the shipments which were listed in annex 3 would have been identified. Mr and Mrs Feakins would then have had the opportunity to establish that the CES 3s must have existed and had been lost by the Board. The fact that in the case of 75 out the 77 shipments the C1220s were stamped 'U.K. Lines Rejected' or marked with an equivalent means that the forms had been examined and found to relate to exempt sheep. As, contrary to the Board's letter of August 1992, the C1220 forms themselves were completed by Mr Revell to indicate the sheep were not exempt, there must have been something else to indicate to the Board's staff that, contrary to the forms, they were exempt. The obvious candidate is a CES3. Indeed, it is difficult to see what else it could have been. Mr Basham suggested that the staff might have misunderstood the code inserted by Mr Revell and thought that it designated exempt sheep. It is very hard to see how that error could have been made, particularly repeatedly. Further, if that error had been made, there would still have been no CES 3. The practice of the Board was to issue an invoice where a load was claimed as exempt if there was no CES 3 and later to issue a credit note if the CES 3 turned up. So all this provides a good start for Mr Feakins. It would then follow that this substantial number of CES 3s had not been attached to the C1220s following checking and had gone missing. There was ample evidence of the Board's inefficiency. Further, the examination of the exempted C1220s carried out by Mr Welsh shows that in practice there was substantial variance in what was attached to the C1220s. That is consistent with a failure in some cases to attach any CES 3, whether the Customs copy or the MLC copy. I have also mentioned in connection with the Board's letter of claim of 13 October 1993 that the Board was then finding CES 3s and matching them to C1220s relating to shipments made in 1991.
82. The foregoing, however, is only a starting point. Mr Feakins would have had to establish that the shipments were indeed exempt as he should have been able to do by the production of other documents. First, if the MLC had been asked in 1992 or 1993, they should have been able to produce their retained pink copies of the CES 3s – if they existed. It is likely but not certain that they could have done so in 1996. Secondly, Mr Feakins should have been able to produce the relevant CES 4s – if they existed. Copies of those should also have been retained by the MLC. The CES 4s proved that the sheep they covered were exempt from clawback. If a CES 4 could be linked to a C1220, the two together proved that the sheep were exempt and that they had been exported. If there was a CES 4, there must also have been a CES 3. If the Board did not have it, that was no fault of Mr and Mrs Feakins. It is the case of Mr Feakins that in 1992 or 1996 he could have produced the CES 4s. That is challenged on behalf of Mr Burstow. In 2001 Mr Feakins could only produce 3 of them.
83. I have referred to the issue as to whether Mr Feakins delivered all his CES 4s to Mr Burstow in 1992 or 1993. If he did so, then they should have been found in Mr Burstow's offices in 1996 if they had been looked for. Likewise, if Mr Burstow is right and he never had more than one of them, they should have been found in the farm office. Whoever had them, it should have been possible to find them.
84. I consider that there are, however, some problems with the evidence of Kevin and Matthew Feakins as to what documents there were. It was the evidence of Kevin that he and his wife provided the CES 4s for all his exports of sheep to Mr Burstow, and that they were in a plastic bag which was in a box. He said that when in 2001 he found the CES 4s which he now has they were in his attic in a box in the same bag. If that is right, Matthew brought back all the CES 4s and Mr Feakins recovered all of them. So what he has now is all he ever had. The evidence of Matthew was that Mrs Wadeson Maude showed him three boxes of documents relating to clawback and he took back two of them, which he put in the attic office. The boxes, he said were like the boxes used to contain the files at the trial. So three boxes could have contained a substantial volume of paper. He described the CES 4s as being attached to the other documents relating to the shipments. But he had only learnt close to the trial that they were CES 4s. He did not refer to any plastic bag. If there had been such a bag, he would not have known what was in it unless he had looked inside. Only one box was found in the attic office by Mr Feakins. The third box which Matthew said he left in Mr Burstow's offices, has never been found.
85. If Mr and Mrs Feakins never had any more CES 4s than he has now, it would mean that the great majority of the 77 annex 3 shipments were not exempt. I say the great majority because 3 CES 4s have been matched to the shipments and there may have been some other CES 4s which existed but did not reach him. It would mean that at least the greater part of his case against the Board in respect of exempt sheep was misconceived. Likewise his case against Mr Burstow. If that was so, it would follow that his conduct in pressing the claim was dishonest, and that the conduct of Sarah Feakins was likewise dishonest. I say that because they must have known from their records how many exempt shipments they believed they had made. If the Board had initially failed to charge them clawback amounting to £197,000 which should have been charged, they would have known. For they would have made an unexpected profit of that amount. Equally, when the letter of August 1992 arrived, they would have known even without the identification of the shipments whether there could have been that amount of clawback due or whether it must at least largely relate to exempt shipments. They would have to have been wholly ignorant of their trading for it to be otherwise. Such evidence as there is suggests that the inspections the Board made of exporters' books and documents required them to be well kept. Mr and Mrs Feakins' accounts were audited by Martin & Co, a reputable firm of accountants in Salisbury, to whom they provided the necessary papers which were then returned to them. The little I have seen in the surviving papers shows some confusion on Mrs Feakins' part, but that can be ascribed to the difficulties in making sense of what she received from the Board. I would have been greatly assisted by her evidence. I am, however, satisfied that Mr and Mrs Feakins must have had available to them in 1992 in some form or other a record of all their shipments of sheep with a record of which were exempt from clawback. That would only have required the most elementary book-keeping.
86. So, in my judgment, if Mr Feakins never had CES 4s relating to at least the great majority of the annex 3 shipments, that is only consistent with the advancing of a dishonest case, an invented case. But the case against him has not been advanced on the basis of such a fundamental dishonesty. Further, having heard Mr Feakins evidence and considered the documents, I am satisfied that he and his then wife had a genuine belief in their claim: they did not dishonestly seek to take advantage of initial mistakes by the Board's staff in checking the documentation in order to avoid a liability of £197,000.
87. There is a further aspect to this, which is what is shown by the documents which still exist. As I have stated there are three CES 4s which have been found by Mr Feakins and have been related to three annex 3 shipments. That is strong evidence that three CES 3s have been mislaid by the Board. Mr Welsh analysed the C1220s produced by the Board in support of annex 3. Six of them were noted by Customs to show that the seals had been checked and found intact. The loads would only be sealed by the MLC and the seals randomly checked by Customs if the sheep were being shipped as exempt sheep. I accept that a notation that the seals were intact is only consistent with the shipment being shipped as exempt from clawback under cover of a CES 3. This shows therefore that in those cases too the CES 3s have been lost. I have stated that the checking of seals by Customs was 'random'. So the absence of such a notation does not mean that a transporter had not been sealed. Some idea of how frequently the Customs did check the seals and make a notation can be gathered from Mr Welsh's analysis contained in file D3 of the 94 C1220s supplied by the Board to him in April 2003, which the Board had accepted as exempt. In 63 cases a notation that the seals were intact had been made. That is 67%. That contrasts with 6 out of the 77 annex 3 C1220s, which is only 8%. Mr Welsh also made an analysis of the CES 4s which Mr Feakins now has against C1220s received from the Board. I presume that this must overlap with the first analysis. 55 out of 97 C1220s were notated that seals were intact. That is 58%. In either case the contrast with the annex 3 C1220s is very substantial. Taken by itself it suggests that a large proportion of the annex 3 shipments were not sealed by MLC and so were not exempt. The comparison was not made in these terms by counsel, although Mr Moser naturally did rely on the small number of 'seals intact' notations.
88. My conclusion is that I should not be satisfied that Mr Feakins delivered his CES 4s to Mr Burstow. Equally I should not be satisfied that Mr Feakins never had more CES 4s than he has now. The probability is that a number went missing when the records from what had become the farm office were removed by DEFRA during the foot-and-mouth epidemic. The question is 'how many?'. This is a difficult and unsatisfactory part of the case. It is also a crucial part. It is relevant to have in mind paragraph 3 and also paragraph 4 of the extract from Mount, which I have quoted above. An investigation in, for example, 1996 should not have encountered these difficulties.
89. In my judgment it is impossible now to assess on any precise basis what documents Mr Feakins might have been able to produce in 1992 or in 1996, and what he might have been able to establish as to the shipments listed in annex 3 to the Board's letter of August 1992. I have to apply the principles stated in Mount and in Browning among other cases, and make the best assessment that I can taking account of the factors I have mentioned. In summary the main factors are: the difficulty of seeing how a member of the Board's staff could assess a shipment as exempt without a CES 3, however inefficient; the evidence as to the inefficiency of the Board's offices, which supports the possibility of lost CES 3s; the belief of Mr and Mrs Feakins in their claim as being consistent with their records; the problems over the evidence as to what happened to their copies of the CES 4s; the low proportion of the annex 3 C1220s marked by Customs to indicate that the seals were intact. If the point had been taken up by Mr Burstow and investigated and put to the Board as it should have been in 1992, or failing that 1996, in my judgment Mr Feakins would have had a more than negligible chance of establishing that part at least of the annex 3 shipments were exempt, but he would not have had any real chance of succeeding totally.
90. In my judgment it will reflect the various factors in favour and against Mr Feakins' claim in respect of the annex three shipments to value it at 60 per cent of the whole, or, putting it another way, the probability assessed in accordance with Mount and Browning principles is that he would have succeeded on approximately 60 per cent.

A collateral attack on the decision of the Court of Appeal.

91. It was submitted on behalf of Mr Burstow that the claim that Mr Feakins would have succeeded in establishing that the annex 3 shipments were exempt must fail because it was an abuse of the Court's process as an attempt to get round the decision of the Court of Appeal, alternatively that there was an issue estoppel that he had no such claim arising from the decision of the Court of Appeal.
92. The decision of the Court of Appeal was to dismiss the appeal from Ian Kennedy J and to refuse Mr Feakins' application to introduce evidence not before Ian Kennedy J. The latter's conclusion had been that it was too late then to raise the exempt sheep point. I have set out the decisive paragraph from the judgment of Simon Brown LJ in the Court of Appeal saying that Mr Feakins had not reserved his position before the judge and that the material should have been introduced years before. The judgment also stated that it was highly likely at that distance in time Mr Feakins would be unable to make out his case. In my judgment neither the decision of Ian Kennedy J nor that of the Court of Appeal make it an abuse of process to allege that, if Mr Burstow had raised the matter with the Board years before Mr Feakins might have established his case. Nor can it form any basis for an estoppel.
93. I was referred to a number of cases in this area of law. Those most helpful today are the decision of the Court of Appeal in Smith v Linskills [1996] 1 WLR 763 and that of the House of Lords in Hall & Co v Simons [2002] 1 AC 615. The former involved a claim by a convicted person against his solicitor alleging that his solicitor had been negligent in the conduct of his trial. The claim was struck out. In the course of his judgment Sir Thomas Bingham M.R. considered the ambit of the decision of the House of Lords in Hunter v Chief Constable of the West Midlands Police [1982] AC 529 where Lord Diplock gave the leading speech. He cited from that a passage quoted in his turn by Lord Diplock:

'the court ought to be slow to strike out a statement of claim or defence, and to dismiss an action as frivolous and vexatious, yet it ought to do so when, as here, it has been shown that the identical question has already been decided by a competent court.' - page 541.

Sir Thomas Bingham stated at page 769:

'It was not, as we understand, the intention of the House in the Hunter case to lay down an inflexible rule to be applied willy-nilly to all cases which might arguably be said to fall within it. Lord Diplock was at pains to emphasise the need for flexibility and the exercise of judgment. Ralph Gibson L.J. was, in our opinion, correct when he said in Walpole v. Partridge & Wilson [1994] Q.B. 106 at p. 116

"The decision of the Lordships in Hunter's case, however, was, in my judgment, not that the initiation of such proceedings is necessarily an abuse of process but that it may be. The question whether it is so clearly an abuse of process that the court must, or may, strike out the proceedings before trial must be answered having regard to the evidence before the court on the application to strike out. There are, in short, and at least, exceptions to the principle."

…………..

"In his statement of principle already quoted, Lord Diplock referred to the need for the intending plaintiff to have had a full opportunity of contesting the decision against him in the first court. This was an echo of the judgement of Goff L.J. in McIlkenny's case [1980] Q.B. 283, 330H. In this case, Mr. Nicol argued, Mr. Smith had not enjoyed a full opportunity to contest the decision in the Crown Court, because the negligence of the defendant had prevented him deploying the full case which he would wish to have deployed.

This argument is, in our judgment, founded on a misunderstanding of what Lord Diplock meant. It is plain from his speech (see [1982] AC 529, 542H and the authority relied on) that Lord Diplock was giving his ruling with reference to both civil and criminal cases. It is evident in civil cases particularly that a party my lack any opportunity to resist a hostile claim, as for example where judgment is entered against him on the ground of procedural default, or may lack a full opportunity, as when summary judgment is given against him. We understand Lord Diplock to have been intending to preserve a party's right to make a collateral attack on a decision made against him in such circumstances. ….."

94. In Hall & Co the primary issue before the House of Lords was whether advocates should be immune from suit in civil proceedings. It was argued that, if they were not, that would open the door to claims in negligence which were collateral attacks on the decisions of the first courts and so abuses of the court's process. Lords Steyn, Browne-Wilkinson and Millett stated their agreement with the speech of Lord Hoffmann. Lord Hoffmann stated at page 702:

'Hunter v Chief Constable of the West Midlands Police [1982] AC 529 shows that, superimposed upon the rules of issue estoppel and the Civil Evidence Act 1968, the courts have a power to strike out attempts to relitigate issues between different parties as an abuse of the process of the court. But the power is used only in cases in which justice and public policy demand it. Lord Diplock began his speech, at p 536, by saying that the case concerned:

"the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people. The circumstances in which abuse of process can arise are very varied; those which give rise to the instant appeal must surely be unique. It would, in my view, be most unwise if this House were to use this occasion to say anything that might be taken as limiting to fixed categories the kinds of circumstances in which the court has a duty (I disavow the word discretion) to exercise this salutary power."

I, too, would not wish to be taken as saying anything to confine the power within categories. But I agree with the principles upon which Lord Diplock said that the power should be exercised: in cases in which relitigation of an issue previously decided would be "manifestly unfair" to a party or would bring the administration of justice into disrepute. It is true that Lord Diplock said later in his speech, at p 541, that the abuse of process exemplified by the facts of the case was:

"the initiation of proceedings in a court of justice for the purpose of mounting a collateral attack upon a final decision against the intending plaintiff which has been made by another court of competent jurisdiction in previous proceedings in which the intending plaintiff had a full opportunity of contesting the decision in the court by which it was made."

But I do not think that he meant that every case falling within this description was an abuse of process or even that there was a presumption to this effect which required the plaintiff to bring himself within some exception. That would be to adopt a scheme of categorisation which Lord Diplock deplored. As I shall explain, I think it is possible to keep some generalisations about criminal proceedings. But each case depends upon an application of the fundamental principles. I think that Ralph Gibson LJ was right when, after quoting this passage, he said in Walpole v Partridge & Wilson [1994] QB 106, 116a that Hunter's case [1982] AC 529 decides "not that the initiation of such proceedings is necessarily an abuse of process but that it may be.'

And then at page 706:

'I do not think, however, that I can entirely agree with the Court of Appeal's view that the question of whether a collateral challenge is an abuse of process depends upon the "weight" to be given to the judgment and that there is a scale of weighting according to the amount of judicial input, with a consent order at one end and a judgment after hearing full evidence at the other. I agree that, as a practical matter, it is very difficult to prove that a case which was lost after a full hearing would have been won if it had been conducted differently. It may be easier to prove that, with better advice, a more favourable settlement would have been achieved. But this goes to the question of whether, in the words of CPR r 24.2 the plaintiff has "a real prospect of succeeding on the claim". The Hunter question, on the other hand, is whether allowing even a successful action to be brought would be manifestly unfair or bring the administration of justice into disrepute. In my view, there will be cases (such as conviction on a plea of guilty) in which the Hunter principle may be engaged although there has been virtually no judicial input at all. The Court of Appeal accepted this. On the other hand, I can see no objection on grounds of public interest to a claim that a civil case was lost because of the negligence of the advocate, merely because the case went to full trial. In such a case the plaintiff accepts that the decision is res judicata and binding upon him. He claims however that if the right arguments had been used or evidence called, it would have been decided differently, This may be extremely hard to prove in terms of both negligence and causation, but I see no reason why, if the plaintiff has a real prospect of success, he should not be allowed the attempt.

………….

On the other hand, in civil (including matrimonial) cases, it will seldom be possible to say that an action for negligence against a legal adviser or representative would bring the administration of justice into dispute. Whether the original decision was right or wrong is usually a matter of concern only to the parties and has no wider implications. There is no public interest objection to a subsequent finding that, but for the negligence of his lawyers, the losing party would have won. But here again there may be exceptions. The action for negligence may be an abuse of process on the ground that it is manifestly unfair to someone else. Take, for example, the case of a defendant who publishes a serious defamation which he attempts unsuccessfully to justify.'

95. Here Mr Feakins is claiming that, if his case concerning exempt sheep had been raised by Mr Burstow when it should have been, he would have been able to establish it. That is not an attack on the decision of Ian Kennedy J nor on that of the Court of Appeal. It is not something that either decided. Nor was it decided that he had no such claim. Given the very limited application which the House of Lords has now said should be given to the Hunter principle in relation to civil proceedings, it is, I think, very clear that this submission made on behalf of Mr Burstow cannot succeed.

Mr Feakins' further claims: (1) light lambs £31,327.

96. Mr Feakins first raised this claim in his third witness statement made on 19 May 2005. He said in paragraph 15 that he had recently analysed a bundle of invoices from David Revell to which Mrs Feakins had stapled the Board's invoice for clawback together with the Board's calculation of clawback. The Board's invoices were dated in February, March and April 1992. He said that he had analysed these for the first time and realised that 15 consignments were 'light lambs' and exempt from clawback. That is because the average weight of under 30 kilos was such that the lambs would not have been eligible for the premium and so should have been exempt from clawback on export. These shipments were included among those in annex 2 to the Board's letter of August 1992 and in the schedule sent in October 1993. It is clear from this that Mrs Feakins knew that clawback had been charged on the shipments and accepted it as correct. Her work on this would probably have been done in the second quarter of 1992, in any event well before the August 1992 letter. I must deduce that the lambs were shipped as lambs on which clawback was payable rather than exempt lambs covered by a CES 3 with there also being in existence a CES 4. Secondly, I do not see how this claim can be made against Mr Burstow. He received no instructions about it. Mrs Feakins did not need to be told to check that the Board's claims were properly made. In fact, as I say, it appears that she did do that and was satisfied in these cases. The position is quite different to the exempt sheep claim. For these reasons the claim fails.

Mr Feakins' further claims: (2) 17 invoices already paid £47,647.

97. In paragraph 31 of Mr Welsh's letter before action dated 17 October 2003 it was stated that Mr Feakins had analysed the items in annex 2 to the Board's letter of August 1992 and had found that the first 17 items had been paid. The total was given as £41,072. The submission was that pages 110, 116 and 120 of file D3 showed that these had been paid. These are pages which were among those sent to Mr Burstow. It is possible that the invoices were paid but I consider that this documentation falls a long way short of proving it. There is no clear statement as to what was paid and the figures do not tie up. But the real answer to this claim is that it was for Mr and Mrs Feakins to tell Mr Burstow if the Board was claiming sums which had already been paid. This was an elementary check which should have been done by Mrs Feakins. It is apparently submitted that because Mr Burstow advised that the Board's revised claims should not be paid, they were entitled to make no checks on what they had received at all and he is liable for whatever they might have found if they had checked. That cannot be right. I should say that the position is different in respect to the Board's claim for clawback on exempt sheep because the point was raised in the Board's letter of August 1992 and required action. Again the additional claim fails.

Mr Feakins' additional claims: (3) credit notes £13,948 and £29,113.

98. It is submitted that the judgment obtained by the Board did not take account of the credits referred to in the Board's letter of 13 October 1993. According to the schedule prepared by Mr Mackrell and circulated during the first hearing before Ian Kennedy J the sum for which judgment was later obtained, namely £406,298.61 was calculated as follows:

Invoice A39020 £375,373.79

Invoice A39100 30,924.82

406,298.61

Invoice A39020 was enclosed with the Board's letter of 21 January 1993 and was for £435,366.06, that is £59,992.27 more than stated in the Mackrell schedule. Invoice A39100 covered the additional claims notified in the Board's letter of 13 October 1993. Paragraph 13(e) of the counterclaim gives a clearer picture. The calculation is as follows:

Invoice A39020 £435,366.06

Less credits 9,992.27

Less recovered on guarantee 50,000.00

Plus invoice A39100 30,924.82

£406,298.61

The puzzle is the amount of the credits. One would think that these should be the total of the credits given by the letter of 13 October 1993, namely £13,948.77. The arithmetic shows that only 4 of those were taken into account. For if that numbered 67841 dated 1 December 1993 (i.e. after the letter of 13 October 1993) for £3,956.51 is excluded, a total of £9,992.26 is reached. The coincidence of figures is too great for there to be any other explanation. The complaint therefore come down to the wrongful exclusion of this credit.

99. I should mention that there was a further credit note enclosed with the letter for £29,113.30. No explanation has been clearly established for this, but it is very probable that it represents the credit due on the recalculated invoices totalling £30,924.82. So it is to be ignored.
100. When Mr Burstow first received the counterclaims he sent Mr Feakins a copy of that against him. He said 'You might like to see if you can tie in the figures mentioned in the counterclaim with any invoices or statements in your possession … .'. Neither Mr nor Mrs Feakins came back to him and said that the credits did not match.
101. When Mr Burstow was informed by Mr Patel at the end of 1998 that the Board was applying for summary judgment on the counterclaims, he should have ensured that the sums claimed at least accorded with the demands that had been previously made. This was noted at the consultation held on 2 March 1999. There was then a meeting with the exporters on 3 March at which the figures were considered. In my view it was for Mr Feakins to inform Mr Burstow that the credits allowed in the counterclaim were less than had been allowed in the letter of 13 October 1993. I do not think that Mr Burstow was at fault here. I should add that I have no basis on which to form a view whether the Board could have justified the reduction in the credits it was prepared to allow: it presumably had a reason, but there is no hint of what it may have been.

Mr Feakins' further claims: (4) claims for costs.

102. These are claims which Mr Feakins makes which are ancillary to, or dependent upon, his other claims. I have concluded that he would have succeeded as to 60 per cent of his claim in relation to exempt sheep and has no other claims. 60 per cent of £194,708 is £116,825. Deducting that from the judgment sum of £406,298 gives £289,473, to which interest would have been added. Total interest awarded by Ian Kennedy J was £244,347. The proportion of that attributable to £289,473 is £174,088, giving a total sum for which judgment might have been given of £463,561.
103. Mr Feakins sought to recover a proportion of three sets of costs as costs which it was alleged would not have been incurred but for Mr Burstow's negligence. They were (1) fees paid to Mr Burstow, (2) costs payable to the Board, and (3) costs paid to Robert Davies Partnership in proceedings brought by the Board to set aside a conveyance of the farm to his second wife. The latter proceedings were was part of the Board's attempts to enforce its judgment.
104. Mr Feakins has to establish that, if the judgment against him had been reduced as I have stated, the costs I have mentioned would have been less. In my view Mr Burstow's fees might have been reduced, and the costs of the Board would have been affected to the following extent. Those of the first hearing before Ian Kennedy J in December 1999 and January 2000 would have been unaffected. It is arguable that a proportion of the costs of the hearing on 23 June 2000 might have been avoided, and likewise a proportion of those of the appeal to the Court of Appeal. I heard no submissions as to this. I hope that an agreement may be reached: but, if it cannot, there will have to be a further hearing or an exchange of written submissions. I am satisfied that, if the judgment had been reduced as postulated, the subsequent events relating to the farm and the Board's further proceedings against Mr Feakins would have been unaffected.

Contributory Negligence.

105. It was alleged in Mr Moser's closing submissions on behalf of Mr Burstow that Mr Feakins had contributed to his loss by his own negligence, as follows:

(1) by failing to keep (or supply to Mr Burstow) records to show what clawback was due and which shipments were exempt;

(2) by filling in the C1220s incorrectly through his agent, Mr David Revell, and telling Mr Burstow that it had been done correctly;

(3) by failing to provide sufficient instructions on the basis of which a proper defence could be pleaded;

(4) by failing to contest the Board's figures himself.

106. I am satisfied that there is nothing in the first three. I have already set out my findings relating to the documents. They include a finding that Mr and Mrs Feakins did keep essential records although they have now been lost. Second, Mr Feakins did not know of Mr Revell's failures until recently. They can be said to have strengthened his position because they make it the harder to see how the Board's staff can have marked C1220s as exempt without a CES 3. But that would not have affected the outcome in the Court of Appeal. For the information that the C1220s had been wrongly completed to show that the shipments were not exempt would hardly have assisted at that point. Thirdly, in 1966 Mr and Mrs Feakins provided enough information for Mr Burstow to appreciate that there was a point which he needed to deal with and its nature. It was for him, or his staff, to take such further instructions as were necessary.
107. The fourth allegation has to be considered in relation to the period immediately following receipt of the Board's letter to Mr and Mrs Feakins of August 1992. I have held that Mr Burstow was negligent because he did not appreciate the contents of that letter and that it required immediate action. The question is whether Mr Feakins was himself negligent because that should have been apparent to him.
108. On this aspect of the case I was referred to paragraph 10-323 of the 5^th edition of Jackson & Powell on Professional Negligence under the heading 'Shared Responsibility'. A number of examples of cases are given where the claimant against a solicitor was held to have contributed to his own loss. But they are concerned with solicitors acting in commercial transactions rather than in litigation, and none are close to the present situation.
109. If a solicitor is acting in litigation, he has control of the proceedings on behalf of his client, and it seems to me that it will be rare that his client will be held in part responsible for any loss-causing failure that may occur in the conduct of the proceedings. Mr Burstow's negligence in 1992 did not however arise in the course of his conduct of the proceedings. It arose in connection with a monetary claim that was ancillary to the proceedings as they were then constituted.
110. In my judgment the answer here is that Mr and Mrs Feakins were relying on Mr Burstow for advice as to what to do in connection with the Board's claims. They supplied copies of the correspondence to him. They were in what was to them a novel situation. Mr Burstow knew that they had not taken anything up with the Board – and they knew that he knew. His fault arose because he had not properly considered the contents of the Board's August letter to them, which they did not know. In these circumstances I should not hold Mr Feakins at fault in failing himself to raise with the Board the issue of exempt sheep as invited in the Board's letter of August 1992.
111. I should make it clear that I do not consider that there can be any question of contributory negligence arising in connection with Mr Burstow's negligence in 1996. There Mr and Mrs Feakins gave Mr Burstow sufficient instructions on which to act, which could have been supplemented by further instructions as necessary.
112. Had I considered that Mr Feakins had contributed to the loss by his own fault by failing himself to pursue the exempt sheep point with the Board, I would have had to assess the percentage of his contribution in the context of Mr Burstow's negligence in 1992 and 1996. I would have put it at 20 per cent.

Mr Burstow's counterclaim

113. Mr Burstow counterclaimed unpaid fees of £3,671. Subject to Mr Feakins' claims in connection with costs, this was uncontested. I should include it in the matters relating to costs on which I will have to hear further submissions in default of agreement.

Conclusion

114. I hold that Mr Feakins has established his case in respect of 60 per cent of the Board's claim made in annex 3 to the Board's letter of August 1992. He is entitled to damages in that sum together with a proportionate part of the interest included in the Board's judgment against him. I will hear submissions as to what further interest should be awarded if it cannot be agreed. I have left over one aspect of Mr Feakins' claims in connection with the costs he has incurred.