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

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
CARLISLE DISTRICT REGISTRY
WILDRIGGS RENDERING SITE GROUP LITIGATION

		Royal Courts of Justice Strand, London, WC2A 2LL
		13/09/2013

 


Mr Justice Holroyde:

1. On the 17^th and 18^th July 2013 I heard submissions on the issues raised by two Part 23 application notices which the Claimants ("Cs") had issued against the Defendants ("Ds") on the 19^th December 2012 and the 25^th June 2013. On 31^st July 2013 I gave judgment. I ordered written submissions as to the costs of those applications and of an amendment, and indicated that I would give my ruling as to costs in writing. This I now do.
2. I am grateful to both counsel for their very helpful written submissions.
3. Cs allege a long-standing and continuing nuisance by odour caused by rendering operations at the Wildriggs site in Penrith. The three defendants have successively been the operators of that site.
4. Proceedings were initially commenced against D2 alone. Subsequently, D1 and D3 were added as defendants, but without prejudice to the issue of limitation which D1 had indicated it would raise. D1 pleaded in its defence that any claims against it which are said to have accrued before 14^th November 2006 are statute-barred. Cs by their application notices argued (1) that D2 was estopped from denying that it had operated the site throughout the period since 1^st January 2005; (2) that section 32(1)(b) of the Limitation Act 1980 applied, on the basis that D2 had deliberately concealed a fact relevant to Cs' right of action; and (3) that the court should exercise its discretion under CPR 19.5 to permit the addition of D1 as a defendant. As I indicated in paragraphs 63 and 69 of my judgment of 31^st July, all three arguments were based on a common factual foundation.
5. In the result, I dismissed Cs' submissions based on estoppel but found in Cs' favour on the other two issues. I therefore ordered that none of Cs' causes of action against D1 which accrued on or after 1^st January 2005 is statute-barred.
6. On behalf of Cs, Mr Wignall accepts that Cs cannot recover the costs of issuing the application of the 25^th June 2013, in which the issue of estoppel was raised, but argues that with that exception Cs should be awarded all their costs. He relies on the close inter-connection of the three arguments which he advanced, criticises the conduct of Ds before and during these proceedings and contends that it was reasonable in all the circumstances for Cs to advance the estoppel argument even though it failed. In the alternative, he submits that the court should award Cs a proportion of their overall costs, but argues that the estoppel issue added little to those overall costs and so invites the court to conclude that 95% would be an appropriate proportion.
7. On behalf of Ds, Mr Johns realistically accepts that Cs succeeded in their objective overall, but argues that the estoppel issue was a discrete issue which gave rise to a substantial amount of discrete costs. He points to the fact that the estoppel issue was raised very late in the day but became the primary argument advanced by Cs, with the result that Ds had to devote a substantial amount of time and effort to the preparation and presentation of their successful opposition to that argument. He criticises the second witness statement of Miss Evans as being either the consequence of a change of mind or a second bite at the cherry, and contends that Ds should not have to pay for it. He too submits that it would be appropriate for the court to award Cs a proportion of their overall costs, but argues that that proportion should not exceed 50%. In support of his argument he rightly reminds me that Ds will have to bear their own costs, a factor which I keep in mind in deciding what order as to costs is fair and just in all the circumstances.
8. The relevant provisions of the Civil Procedure Rules are to be found in the new rule 44. By rule 44.2, the court has a discretion as to whether costs are payable by one party to another and as to the amount of those costs. By 44.2(2), the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party, but the court may make a different order. By 44.2(4) the court is required to have regard to all the circumstances, including the conduct of the parties (as further explained in 44.2(5)) and whether it was reasonable for a party to raise or pursue a particular issue. The various forms of order which the court may make are summarised in 44.2(6), which states amongst other things that before making an order for costs relating only to a distinct part of the proceedings, the court should consider whether it is practicable to make instead an order for the payment by one party of a proportion of the other party's costs.
9. In my judgment, the following considerations are relevant in this case.
10. Cs have succeeded overall. The three arguments to which I have referred were three different legal approaches to the common factual foundation: three possible routes by which Cs invited the court to reach the result of enabling Cs to claim compensation for the alleged nuisance during the early part of the relevant period. As was clear from the evidence of Miss Evans on which Cs relied, the central contention of Cs was that they had commenced proceedings against D2 alone because they had been positively led to believe that D2 was the appropriate defendant in relation to the whole of the period of their claim. I found in Cs' favour on that factual basis, and in doing so I was critical of Ds' conduct at various stages before and during these proceedings: see in particular paragraphs 84-92 of my judgment.
11. Ds are all part of the same group of companies, and the parent company has been aware from an early stage of the correspondence that Cs alleged a nuisance continuing over a long period of time, and sought compensation from the relevant operator of the site. Ds were all represented by the same solicitors and counsel.
12. I accept Mr Wignall's submission that in correspondence and in the early stages of these proceedings, none of Ds ever made a clear statement as to who had been responsible for the operation of the site at different stages of the relevant period. I found at paragraph 85 of my judgment that D2 was guilty of deliberate concealment and active misrepresentation. I also found (at paragraphs 95-96) that D2 had acted for the benefit, and as the agent, of D1. At paragraphs 45-47, and 91, I referred to features of the correspondence and of the disclosure process which gave rise to an inference of close collaboration between the three Ds as companies in the same group. At the hearing in July, all three Ds were represented and all resisted Cs' submissions. In my judgment, these are features of the conduct of Ds "before, as well as during, the proceedings" (see CPR 44.2(5)(a)) to which I should give particular weight.
13. Pursuant to CPR 44.2(5)(b), I have considered carefully whether it was reasonable for Cs to raise in their second application notice, and to pursue, their unsuccessful argument based on estoppel. Mr Wignall was able to point to authority which he contended provided support for his submissions in that regard, and I do not regard it as unreasonable for Cs to have argued the point even though it failed.
14. Moreover, because the factual and evidential foundation of Cs' three arguments was the same, the raising of the estoppel issue did not add greatly to the volume of evidence.
15. The hearing before me in July was listed for one day, but continued into a second day. I have considered carefully whether that was a consequence of the late raising of the estoppel issue. I conclude that it was not. Much of the hearing was taken up with an analysis of the chronological sequence of correspondence, pleadings and earlier hearings. So too, indeed, was much of my judgment. The estoppel issue did not result in what would otherwise have been a one-day hearing extending into a second day.
16. However, I accept Mr Johns' submissions to the effect that the estoppel issue did add significantly to the length of the hearing, and did put Ds to significant additional work in preparing and presenting their submissions.
17. That additional burden was increased by the fact that the precise way in which Cs would put their case was not made clear until their skeleton argument was served about a week before the hearing. The late addition of the estoppel issue, and the even later clarification of the way the case would be put, are aspects of Cs' conduct of the proceedings which in my judgment ought properly to be taken into account in deciding what order is just.
18. Balancing those considerations, I conclude that I cannot accept Mr Wignall's submissions to the effect that Cs should recover all of their costs. Although Cs succeeded overall, the estoppel issue added significantly to the costs incurred on both sides. It will of course often be the case that a party who has been successful overall is found to be entitled to recover all of his costs, notwithstanding that he has failed on one or more specific points. In this case however such an outcome would in my view not be just. I am satisfied that Cs should not recover all of their costs, and that it is appropriate for the court to order that Ds pay only an appropriate proportion of Cs' costs.
19. However, that proportion must in my view be a substantial one, and Cs should recover most of their costs. The order as to costs must recognise that the unsuccessful estoppel issue did add to the costs, but must also reflect the overall nature of the issues between the parties and the conduct of Ds.
20. Ds have understandably not sought to put a precise monetary value on the additional costs incurred by the estoppel issue. It would be impracticable to do so. I am however able to rely on my own broad-brush assessment of the extent to which the arguments on that issue added to the length and complexity of the proceedings, and to balance Cs' pursuit of that issue against the overall conduct of Ds.
21. Doing the best I can to achieve a fair and just result, I conclude that Cs should recover 90% of their costs, other than the costs of issuing the later application. Those costs should be assessed on the standard basis.
22. It is accepted by Ds that they should pay the costs occasioned by the need for Cs to amend their Amended Group Particulars of Claim as a result of an error made by Ds as to the date when D2 became the operator of the plant. It is regrettable that that error was not corrected until the final sentence of Ds' skeleton argument in July, but I am not persuaded that it is appropriate for these costs to be paid on an indemnity basis.
23. A question then arises as to which of Ds should be ordered to pay the costs which I have awarded. Mr Johns submits that it should be D1 alone, since only D1 was made the subject of an order. I reject that submission. The applications were issued against, and strenuously resisted by, all three Ds, who were represented by the same solicitors and counsel. As I have indicated in paragraph 12 above, they are all part of the same group of companies, and I have drawn an inference of close collaboration between them. In my judgment, all three Ds are jointly and severally liable to pay the costs which I have awarded.
24. Finally, I am asked by Cs to order a payment on account of the costs, which will have to be the subject of a detailed assessment if they cannot be agreed. Cs' schedule of costs amounts to £38,114.23. However, Ds submit that the schedule has been based on hourly rates well in excess of the guideline rates, and argue that an interim payment should not exceed 50% of the relevant proportion of the costs claimed. I bear in mind that the court should adopt a conservative approach in considering the amount of costs which Cs can be expected to be awarded on detailed assessment, and should only order a payment on account in a reasonable sum. The effect of my order is that Cs will recover 90% of their costs, which as presently claimed amounts to £34,302.81. In my judgment, it is reasonable for Ds to make a payment on account of about two-thirds of that sum. I therefore order a payment on account of £23,000.
25. In the light of the above, my order is as follows:

i) The Defendants are to pay 90% of the Claimants' costs of and occasioned by the Claimants' applications dated 19^th December 2012 and 25^th June 2013, save that the fee for the application notice dated the 25^th June 2013, and the cost of preparing that notice and the associated draft order, shall not be recoverable. In default of agreement the amount of those costs shall be the subject of a detailed assessment on the standard basis.

ii) The Defendants are to pay £23,000 on account of the Claimants' costs, such payment to be made by 4pm on Friday 4^th October 2013.

iii) The Defendants are to pay the costs of the amendment permitted by paragraph 4 of the order herein dated 31^st July 2013, such costs to be assessed on the standard basis if not agreed.