QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
B e f o r e :
| WATES CONSTRUCTION LIMITED
||Part 20 Claimant
|HGP GREENTREE ALLCHURCH EVANS LIMITED
||Part 20 Defendant
MS JOANNE SMITH (instructed by Squire & Co) appeared for the Part 20 Defendant
Crown Copyright ©
"If costs are awarded on an indemnity basis in many cases there will be some implicit expression of disapproval of the way in which the litigation has been conducted, but I do not think that this will necessarily be so in every case. What is, however, relevant, at the present appeal, is that litigation can readily be conducted in a way which is unreasonable and which justifies an award of costs on an indemnity basis, where the conduct could not properly be regarded as lacking moral probity, or deserving moral condemnation…
There will be many cases in which, although the defendant asserts a strong case throughout and eventually wins, the Court will not regard the claimant's conduct of the litigation as unreasonable and will not be persuaded to award the defendant indemnity costs. There may be others where the conduct of a losing claimant will be regarded, in all the circumstances, as meriting an order in favour of the defendant of indemnity costs. Offers to settle and their terms will be relevant, and if they come within Part 36 may, subject to the Court's discretion, be determinative."
"I for my part understand the Court there [in Reid Minty] to have been deciding no more than that conduct, albeit falling short of misconduct deserving a moral condemnation, can be so unreasonable as to justify an order for indemnity costs. With that I respectfully agree. To my mind, however, such conduct would need to be unreasonable to a high degree. Unreasonable in this context certainly does not mean merely wrong or misguided in hindsight. An indemnity costs order made under Part 44, unlike one made under Part 36, does, I think, carry at least some stigma. It is, of its nature, penal rather than exhortatory."
"I should say that one of the striking features of this case, having regard to the claim for an injunction which has been made throughout by the claimant against the third defendant, is that at no stage was any attempt made to obtain from the Court any interim injunction. The result of that, of course, has been inevitably that by the time the trial of this action started at the beginning of this week the defendant's business had been up and running for nearly a year, certainly nearly 11 months, and Mr Dowding, on behalf of the claimant, realistically accepted that, as a result, any claim he might otherwise have had for an injunction was seriously undermined, given that there had been no attempt by his client, in the meantime, to seek interim injunctive relief from the Court.
I do not find this an easy question but, on balance, I think the claimant should have to pay the third defendant's costs on an indemnity basis. I am concerned by the way in which this litigation has been conducted on the part of the claimant against the third defendant, culminating in the notice of discontinuance today."
History up to Early August 2005
(a) Wates' failure to comply with the pre-action protocol;
(b) Wates' failure to deal with disclosure properly, which necessitated an order from the Court;
(c) Wates' failure to plead a proper case which led to amendments and requests for further information which, themselves, were not properly answered and which, again, led to further orders of the Court;
(d) Wates' failure to address the fact that they had deviated from HGP's design;
(e) Wates' failure to pay the costs ordered on at least one occasion by the Judge who was case-managing the Part 20 claim.
History from Early August 2005
"In the circumstances we invite you to discontinue your claim against HGP and to pay our costs on the standard basis if not agreed. In the event that you fail to do so, we will be inviting the Court to award us our costs of the trial on the indemnity basis."