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| Scene of yesterday's action |
It is important to note that is a redacted transcript. It does not have any of the rulings made by the judge on day 13, of which there are a number.
This is because the rulings have to be properly written up and signed off by the judge before they can be made public. I am advised this will not happen today, but when it does, I'll link to or upload them.
The hearing as transcribed below can be divided into three parts:
Dr Worden Acts Unilaterally
Application to appeal the common issues judgment
Costs wrangling
I've reported all three elements here for your easy reading convenience, but of course you can follow it all in real time below.
Finally, forgive the spoilers but I think this is worth pointing out. The Post Office has spent at least £18.3m on this litigation so far. This is what it has got for its money:
Attempt to have evidence struck out of the common issues trial - lost
Common issues trial - lost
Application to recuse the judge - lost
Application to appeal the recusal decision at the High Court - lost
Application to appeal the recusal decision at the Court of Appeal - lost
As of yesterday, we can now add:
Application to appeal the common issues trial judgment - lost
Application to pay 70% of claimants common issues costs - lost (they will pay 90%)
Attempt to delay paying any costs to claimants re common issues trial - lost
Application to appeal common issues costs order - lost
If the litigation continues in this manner, there might not be much Post Office left by the end of it.
As they did with the recusal application, the Post Office can ask the Court of Appeal for permission to appeal the timing of the payment of the costs order and the common issues trial judgment.
Transcript follows:
Thursday, 23 May 2019
(10.30 am)
Discussion re housekeeping
MR JUSTICE FRASER: The agenda has slightly changed. I'm
sorry, Mr de Garr Robinson, if I appear to do a double
take; I can't see Mr Cavender.
MR DE GARR ROBINSON: My Lord, he is hiding.
MR JUSTICE FRASER: I can see Mr Cavender.
I assume you are here as a result of the emails
I sent yesterday.
MR DE GARR ROBINSON: My Lord, yes.
MR JUSTICE FRASER: What I just want to do then, we will
start with that first because I imagine that's the only
point upon which you are going to be present.
MR DE GARR ROBINSON: Yes.
MR JUSTICE FRASER: Just in the interests of transparency,
at 15.22 yesterday the court received an email direct
from Dr Worden sending me a document which was attached
which was called the "Third Expert Report" and three
annexes or appendices thereto. That email was not
copied to anybody from the claimants but it was copied
to one of the Post Office's solicitors.
As the parties know, I sent two emails in pretty
short succession after receiving that: the first was
making the point that witnesses, even expert witnesses,
are not to directly communicate with the court or send
documents directly; and the second is that all
communications to the court have to be copied to the
other side, and that email went both to the claimants
and also to counsel for the Post Office.
It then occurred to me a few minutes later that
I also ought to make it clear, because the status of
that document was unclear to me and I haven't read that
document, that there may be privilege issues, which is
why I issued a direction to the claimants that they
should neither read it nor deal with it nor distribute
it, pending explanation of the situation this morning.
MR DE GARR ROBINSON: My Lord, yes.
MR JUSTICE FRASER: Which I imagine is why you are here to
explain the situation.
MR DE GARR ROBINSON: I'm here at your Lordship's
invitation, if I may say so.
My Lord, can I just briefly address on you the two
points which your Lordship made at the beginning. First
of all, the communication should have been copied to the
claimants' solicitors. My Lord, actually what happened
is that Dr Worden sent it to your Lordship's clerk and
immediately forwarded it to Freeths. So it is in fact
the case that the document was provided immediately.
MR JUSTICE FRASER: Was that being served on behalf of the
Post Office to the claimants?
MR DE GARR ROBINSON: My Lord, no. Your Lordship may recall
from the hearing on 11 April, this comes from Dr Worden.
Dr Worden, as your Lordship is more than aware, as
an independent expert, considers it to be his duty to
assist the court, irrespective of his instructions.
Pursuant to that duty, which is enshrined in CPR 35.3
I think, and also pursuant to his duty provided for in
paragraph 2.5 of the practice direction to CPR 35, he
conceives it to be his duty, in my submission on proper
grounds, to inform your Lordship that he has had
material changes of view. It is also his view that
those views, the views that are set out in the report,
are helpful to your Lordship in resolving the Horizons
issues, and in my submission there is more than
an arguable basis for justifying that view. But those
are his views.
My Lord, given that he owes your Lordship a direct
duty to assist you, given that he is under an obligation
to inform the parties and the court of a change of view,
as your Lordship will recall I said on 11 April, this
puts my client in a difficult position. None of this
has been instigated or requested by my client; it is
what Dr Worden conceives it to be his duty to do.
My Lord, to deal with your Lordship's second point,
in my respectful submission it is entirely proper for
an independent expert to communicate directly with the
judge. That underpins CPR 35.14, which your Lordship
will also be well aware of, the provision which allows
experts to seek the directions of the court.
MR JUSTICE FRASER: Well, whether that's correct or not, in
the circumstances of this case, the way in which it was
done and the time at which it was done -- and I went
back and reread what you had said to me on 11 April --
two points arise. I'm not in any way finding or stating
that it was improper for him to have done that.
MR DE GARR ROBINSON: I'm grateful for your Lordship to say
that.
MR JUSTICE FRASER: However, it is highly unusual for
an expert to do that without some sort of prior
notification that that's happening; and secondly, it was
not clear on the face of his email whether the claimants
knew that was happening.
MR DE GARR ROBINSON: My Lord, there was prior notification.
MR JUSTICE FRASER: Right.
MR DE GARR ROBINSON: If I can go back to the chronology,
I'll deal with this very quickly; I hope we don't have
to go into the correspondence, but there is
correspondence dealing.
On 10 April, this is the day before I addressed
your Lordship, my instructing solicitors wrote a letter
to Freeths indicating that Dr Worden had these changes
of views and he wished to produce a short supplemental
report.
On the 11th, at the hearing, I then told you about
the awkward position my client found itself in, on the
basis of the two provisions I have just adverted
your Lordship to and also the ICI v Merrell case that
your Lordship decided. I indicated that Dr Worden would
be seeking to collaborate with Mr Coyne with a view to
seeing whether it's possible to have any agreed or
disagreed position.
In response to that, your Lordship directed that the
experts should meet by 3 May, making it clear you
weren't giving any directions as to what they should
talk about.
MR JUSTICE FRASER: Well, I was going to order them to meet
anyway. That direction for a meeting was not as
a result of the 11th; it was in order usefully to use
the time that had been created in the trial timetable.
MR DE GARR ROBINSON: I see. I wasn't aware of that.
MR JUSTICE FRASER: But that doesn't matter.
MR DE GARR ROBINSON: In any event, your Lordship gave that
direction.
The same day, after the hearing, Dr Worden provided
his workings -- that's the raw data -- to Mr Coyne.
My Lord, on 16 April there was a relatively brief
discussion between Dr Worden and Mr Coyne about that raw
data and Dr Worden's approach. It's a without-prejudice
discussion; I don't want to say any more than that.
MR JUSTICE FRASER: But the short point is there is
a detailed chronology which leads, I imagine, at some
point to notification by your solicitors to Freeths that
another expert's report is coming. Is that right?
MR DE GARR ROBINSON: Yes. If I could give you the
chronology, just to be clear.
On 25 April, so this is a month ago, a draft of the
report was provided without prejudice to Mr Coyne, and
on 29 April I'm instructed the appendices to the draft
were provided. The purpose of providing those documents
was to facilitate a meeting, but a meeting didn't happen
by 3 May, or indeed a meeting hasn't happened at all,
although they have had conversations over the telephone.
My Lord, what then happened was that on 16 May
Dr Worden provided that report your Lordship has
received to Mr Coyne on an open basis, the final
version. The earlier version was a draft; this was the
final version. He provided it to Mr Coyne saying that
he hoped that they could meet to discuss it, but
pursuant to his duties to the court, he was intending to
provide it to your Lordship next Wednesday, which was
yesterday.
MR JUSTICE FRASER: That date being chosen for what reason?
MR DE GARR ROBINSON: That was chosen by Dr Worden, as
I understand it. Oh, that's right, I'm so sorry, it was
because Mr Coyne was going on holiday on that Wednesday.
MR JUSTICE FRASER: As in yesterday?
MR DE GARR ROBINSON: As in yesterday, but he was not on
holiday on Monday or Tuesday. What Dr Worden was hoping
was that they would be able to have a discussion in
those early two days. When that proved not possible, he
then sent it to your Lordship.
MR JUSTICE FRASER: I'm not sure that necessarily explains
why Wednesday was chosen, but let's leave it at that.
Is there anything else that you would like to
explain?
MR DE GARR ROBINSON: My Lord, if you have any questions
you'd like me to --
MR JUSTICE FRASER: My major concern, Mr de Garr Robinson,
was that yesterday this arrived with me out of the blue,
not on its face obviously sent to the claimants, and
obviously I didn't have any of the --
MR DE GARR ROBINSON: Yes. That was a --
MR JUSTICE FRASER: -- I hesitate to use the word
"backstory", but any of the detailed background. You
have explained sufficient to me to make me realise that
there are no concerns in terms of the claimants now
having received a document from the court which they
ought not to have had, because you have explained they
had it anyway.
MR DE GARR ROBINSON: I see. I now understand your second
email.
MR JUSTICE FRASER: If you look at it from the court's point
of view, the court received a quantity of material
yesterday unilaterally which it had to provide to the
other side in the litigation, but which wasn't clear
either what the status of it was or whether or not the
Post Office even knew that that was being provided to
the court --
MR DE GARR ROBINSON: I understand.
MR JUSTICE FRASER: -- which was what led to the direction
3 minutes after the first email telling the claimants
that they were not either to open it or look at it or
anything until the situation had been cleared up.
Now the situation has been cleared up, obviously
that concern doesn't apply and that direction no longer
applies, in the sense that it had any teeth anyway
because they had it already. But I think what I am
going to ask you to do, and you will please just tell me
how long you would like to do it, is I think a short
witness statement setting out that chronology from the
10 April to now, please, would greatly assist me.
MR DE GARR ROBINSON: Very good, my Lord.
MR JUSTICE FRASER: I'm not suggesting it is something that
has to be done in the next day or the next couple of
days, but I think just a short witness statement from
whichever of your solicitors is the right person, just
to explain that background that you've just taken me
through, please.
MR DE GARR ROBINSON: Very good. My Lord, can I just take
instructions?
MR JUSTICE FRASER: Just take instructions as to when you
would like that to be.
MR DE GARR ROBINSON: My Lord, my instructing solicitors
suggest the end of next week.
MR JUSTICE FRASER: Which would be I think the 31st; is that
right? Friday the 31st.
MR DE GARR ROBINSON: Yes, it would be.
MR JUSTICE FRASER: Noon on Friday the 31st.
MR DE GARR ROBINSON: My Lord, yes.
MR JUSTICE FRASER: All right. Thank you very much indeed.
Unless there is anything else on that particular
point or dealing with the experts -- I don't know if,
Mr Green, there's anything that you would like to make
by way of submissions or not. I'm not inviting you
expressly to.
MR GREEN: My Lord, there are only two points which I just
very briefly make.
One is that just in relation to your Lordship's
observation about correspondence directly with the
court, we don't agree with my learned friend's analysis
at all. The point is extremely short. 35.14 expressly
carves out an unusual and separate channel, which is for
experts to ask the court for directions.
MR JUSTICE FRASER: Yes.
MR GREEN: It does not provide or allow experts to do what
happened yesterday.
MR JUSTICE FRASER: Yes.
MR GREEN: It is just not right. So that is the short point
on that.
The other matter, I don't know to what extent, how
far back the chronology is going to go, but the short
point underpinning our concerns about how this has
arisen is that Mr Coyne made a request for information
in July 2018 for the OCPs, the OCRs and the MSCs, and
the Post Office list has responded, I think it was
6th August from memory, saying that those were
irrelevant, and the new report arising after what should
have been the conclusion of the Horizon Issues trial is
based on an analysis, which we're trying to understand,
of those documents said to be irrelevant in the summer
of last year.
So those are the only two points I wanted your
Lordship to have.
MR JUSTICE FRASER: All right. Insofar as you want to
explore, examine or pursue any of those points in
cross-examination, we will cross that bridge when we
come to it. I have ordered a witness statement.
Nothing that I say should be taken as coming to
a concluded view on whether or not it was correct or
incorrect for him to have sent his third report direct
to the court. However, for today's purposes I think we
have gone as far as we need to.
Mr de Garr Robinson, thank you for coming at very
short notice, and I imagine you are not going to want to
stay for the rest of the morning.
MR DE GARR ROBINSON: I'm going to want not to stay.
MR JUSTICE FRASER: All right. Thank you very much.
Please --
MR DE GARR ROBINSON: I'm grateful to your Lordship.
MR JUSTICE FRASER: So turning to the main business of the
day. Can I firstly tell you what I think is on the
agenda and remind you that we are going to need a break
for the shorthand writers at some point.
I have read all of the material that everybody has
submitted. There are the following issues and
sub-issues that we have to deal with. There is
an application by the Post Office for permission to
appeal. There are costs to be dealt with,
an application in respect of the necessary costs order
for the Common Issues trial. It appeared at one point
as though there were also an application for the release
of the security, but as I understand it, that's no
longer live business for today. Is that correct?
MR GREEN: My Lord, yes, not for today; to be reserved.
MR JUSTICE FRASER: Not for today. It also at one point
appeared to be on today's agenda the proper costs order
consequent upon the recusal application, but as
I understand it, that's now gone away as well. Is that
right?
MR GREEN: My Lord, yes. The only point on that is that the
order is for payment of a fixed sum of £300,000 up to
20 April, but with costs occasioned by the making of the
application, thereafter to be claimants' costs reserved.
MR JUSTICE FRASER: Right.
MR GREEN: So in a sense the immediacy of dealing with it
has gone, because the first part of it has been agreed,
but how it all arose is not something that your Lordship
can put out of your mind, in a sense, because that might
need to be revisited in due course.
MR JUSTICE FRASER: But so far as today -- there was
a slight difference in wording, and it might be me
looking at matters in overly technical detail. But in
Mr Cavender's skeleton for today, at his paragraphs 3(a)
and 3(b), there was an extent of agreement in relation
to the relevant costs order on the recusal application.
Has that now all been swept up into the consent order?
Because the wording wasn't necessarily exactly the same.
MR GREEN: My Lord, yes. So it is now just as in the
concept. We have a hard copy here signed, if
your Lordship wants a hard copy.
MR JUSTICE FRASER: No, I have that. That was lodged
yesterday.
MR GREEN: My Lord, yes.
MR JUSTICE FRASER: So apart from the word "draft" in the
heading, neither party needs me to do anything with that
except approve it?
MR GREEN: My Lord, that's right.
MR JUSTICE FRASER: All right. And you are going to be paid
£300,000 by 4 o'clock on 7 June, as per paragraph 1, and
then paragraph 2 is to reserve the claimants' costs from
that date onwards.
MR GREEN: My Lord, yes.
MR JUSTICE FRASER: All right. I approve that order.
MR GREEN: I'm most grateful.
MR JUSTICE FRASER: So that removes both the potential
summary assessment of that order and any argument or
disagreement about how the costs of adjourning the
Horizon Issues trial was going to be dealt with.
MR GREEN: Precisely.
MR JUSTICE FRASER: So we are now, therefore, at permission
to appeal and then costs of Common Issues.
MR GREEN: My Lord, that's right.
MR JUSTICE FRASER: Right. Unless either of you would like
me to deal with it in a separate order, I will deal with
the permission to appeal first.
MR GREEN: I'm most grateful.
MR JUSTICE FRASER: Mr Cavender.
Application by MR CAVENDER
MR CAVENDER: My Lord, I'm obliged. You will have seen we
have put in draft grounds of appeal, which are quite
extensive.
MR JUSTICE FRASER: Yes.
MR CAVENDER: We have also put a skeleton argument in
in support of those grounds of appeal.
The grounds, as you will see, are grouped really in
three areas: one, appeals on points of law arising out
of the Common Issues; secondly, some limited appeals on
fact; and thirdly, an appeal based on procedure. We say
there is a real prospect of success on each of those
areas, and we apply on that basis, but also on the
alternative basis that this is a case where there are
other compelling reasons why permission should be given.
Your Lordship is obviously very familiar with the
test and it's not normal on such applications to go into
such huge amounts of detail, particularly when you've
had in advance a skeleton and the grounds of appeal.
I don't intend to do so.
The first point really, and we sort of flagged this
in the skeleton, the underlying criticism we have of the
whole structure of the court's approach to this of
course starts with good faith and the implication of
that term and the relational contract debate. Of course
you know well the views in my submissions I have put
forward; I'm not going to put them all again.
This area is clearly a developing area of law; it is
clearly a relatively controversial area of law.
I wouldn't say lawyers fall into two camps, those that
are quite keen on the continental views and good faith
coming in, and those on the other hand who are much
keener on certainty of law and freedom of contract,
although you could identify groups of lawyers in those
relative camps.
What Mr Justice Leggatt, as he then was, did in
Yam Seng was to start the firing gun really on debate in
English law. You can see the views of Chitty trying to
make sense of Yam Seng, and making sense of it by
saying: well, this can only be honesty really. You can
only have good faith, the honesty part of that, which
you can imply in this way.
But your Lordship has taken a radically different
view. In my submission, there must at least be a real
prospect of success if your Lordship is wrong about
that, or the Court of Appeal might want to have a look
at it, because it is a striking development if it is
right.
To be clear here, this isn't a point based on the
facts of this case. It's not a factual matter, it's
a question of law, for a couple of reasons. One is
because on analysis of the court's judgment, you have in
fact implied the good faith requirement as a matter of
law, which in my submission is wrong, as opposed to on
the basis in Geas(?) that it's implied in fact based on
the circumstances of the contract.
Secondly, and this is really the crucial point and
where your Lordship has gone very much further than
anyone has ever gone, and is truly radical, is the
extent to which you then go on and use that implication
of good faith to inject itself into each and every major
term in the contract. No one has ever done that before,
there's no authority or warrant to do it, and in my
submission it is wrong and at least there is a real
prospect that it is wrong.
Let me give you an example. In relation to the
termination provisions is where it finds its most
obvious grounding. The terms of these contracts said
that they are terminable on not less than three and six
months respectively.
Leaving aside the point that "not less than" is
a well-known, tried and tested commercial formula for
many years and doesn't reflect in any way good faith, to
inject good faith into those provisions, and to do so
contrary to their express terms, is truly radical. It
has never been done before. It is also contrary to
a decision of the Court of Appeal in Ilkerler Otomotiv
where Lord Justice Longmore, with whom
Lord Justice Briggs, as he then was, agreed, said that
whatever else you think about Yam Seng, it is talking
about the performance of the contract, not its
termination.
MR JUSTICE FRASER: Can you just take me to that part of the
Common Issues judgment. I have just been trying to find
it on Opus and I can't.
MR CAVENDER: The part where you deal with ...
MR JUSTICE FRASER: The part that you are just using as
an example.
MR CAVENDER: The termination provisions, my Lord, start at
865. It is paragraph 865 and following {B7/29/252}.
MR JUSTICE FRASER: Yes, I would like to call it up on the
screen if I could, but I can't seem to find where it is.
I don't mean within the judgment, I mean where the
judgment is.
MR CAVENDER: Where the judgment is? I'm sorry, I have
a hard copy. I don't know if my learned friend can help
me or not.
MR GREEN: It is {B7/29/1}. My Lord, there is one in J,
because the hard-copy bundles mirror the Opus bundles,
and then there is the original one we had in the trial
in B.
MR JUSTICE FRASER: I don't mind where it is. All I can say
is I can't find it on my separate screen. I can see it
on the common screen.
MR CAVENDER: The reference in the J bundle is {J3.1/7/352}.
MR GREEN: Does your Lordship have the Horizon Issues
environment or the Common Issues?
MR JUSTICE FRASER: Well, I had both, but one of them has
just disappeared, and now it says "no internet". The
other one appears to be -- well, it doesn't say whether
it is Horizon or Common Issues, to be honest, but it
doesn't have a J. Just bear with me a minute. (Pause)
So the B7 reference, is that the Common Issues trial
bundle?
MR GREEN: It is the Common Issues trial bundle, my Lord.
(Pause)
MR JUSTICE FRASER: I think part of my Opus appears just to
have crashed. Just bear with me one second. (Pause)
I think, Mr Cavender, what I'm going to do is --
I seem to have lost everything now -- I will just rise
for five minutes, just so as not to put anyone under
undue pressure. I'm sorry about this. I would have
brought my hard copy down; I do have one upstairs. But
now that everything seems to have gone down, I will just
rise for five minutes and then I will come back in.
(11.02 am)
(A short break)
(11.08 am)
MR CAVENDER: My Lord, I think you're connected again. If
you are, I am not sure what page they have put you on.
The reference is {B7/29/256}; it should be, hopefully,
paragraph 888 of the judgment.
MR JUSTICE FRASER: Thank you very much. Which page, sorry,
of the judgment?
MR CAVENDER: So it is paragraph 888.
MR JUSTICE FRASER: Yes, which is page 256.
MR CAVENDER: Indeed.
MR JUSTICE FRASER: Thank you very much.
MR CAVENDER: So that's where you start dealing with
termination.
MR JUSTICE FRASER: Yes.
MR CAVENDER: There are two points. One is the "not less
than" point, and you deal with that at paragraphs 893
and 894.
Dealing with that first, in my submission that's
simply wrong. That is a well-worn formula you find in
a wide range of commercial contracts. Why? To avoid
the need where you get notice having to be given on
a date certain, people taking points on whether the day
of giving the notice or receiving it are included. So
that provision is put in, and of course you give more
notice than the three or six months, and that is
a standard commercial provision. It is not intended to
inject any kind of discretion. So that's the first
point.
The second point, and if you go over to 899
{B7/29/258} --
MR JUSTICE FRASER: So you're saying on this application
that your case is that there was no discretion in
respect of how the notice provision is exercised by the
Post Office?
MR CAVENDER: Correct.
MR JUSTICE FRASER: Is that how you argued it before me at
the trial?
MR CAVENDER: Yes, that the "not less" meant -- the point
your Lordship made is we took it as if it said three
months'/six months' notice.
MR JUSTICE FRASER: No, that's not the point I made. I just
asked you if you were saying there was no discretion in
the clause at all in the way you argued it before me.
MR CAVENDER: Yes.
MR JUSTICE FRASER: You're saying you argued there was no
discretion?
MR CAVENDER: Correct, and we do so now.
MR JUSTICE FRASER: No, I know you say that now.
MR CAVENDER: It's as if it is three months' or six months'
notice.
So then you go on to paragraph 899 {B7/29/258},
where you draw your conclusions. You say:
"I consider that in both instances -- termination
without notice, and termination summarily -- the Post
Office must take the decision in accordance with the
obligation of good faith."
Does your Lordship see that at the top of 899?
MR JUSTICE FRASER: Yes.
MR CAVENDER: So you tie the two together. So there are two
points: the "not less than"; and furthermore, good faith
is injected. That's injected not just to termination on
notice, but also on the right to terminate for
repudiatory breach or material breach.
MR JUSTICE FRASER: Yes.
MR CAVENDER: That has never been done before, in my
submission it is wrong in principle, and there is real
prospect with the Court of Appeal agreeing with that.
Let me take you to the case of Ilkerler Otomotiv,
which --
MR JUSTICE FRASER: Can you just remind me: what common
issue was termination? It was 15 and 16, wasn't it?
MR CAVENDER: Termination for cause was 15.
MR JUSTICE FRASER: I think termination on notice was 16.
MR CAVENDER: Correct.
Can I refer your Lordship to the authorities bundle
number 2, tab 24 {J7/24/1}, the decision of the
Court of Appeal in Ilkerler Otomotiv.
MR JUSTICE FRASER: Tab 24?
MR CAVENDER: Tab 24, my Lord, yes.
This was a case involving the termination of the
distribution agreement. The first thing you will
notice, just by way of passing, if you go to paragraph 4
of that {J7/24/2}, you will see the terms of the
agreement are not dissimilar to our one: they use the
words "at least six months' prior written notice" in
paragraph 2.3.
MR JUSTICE FRASER: Yes.
MR CAVENDER: What was argued here was based on Yam Seng and
good faith. It failed. What was argued was something
a little bit similar to what my learned friends tried to
do, and successfully tried to do, here.
The point I should refer your Lordship to is
paragraph 29 {J7/24/6}. Having quoted Yam Seng, this is
the Court of Appeal saying:
"Interesting and informative as these comments are
they do not support the terms proposed by Mr Sutcliffe
... [and] as ... Charles Hollander QC ... pointed out,
Leggatt J is expressly talking ... [about the]
requirements in the contract for communication and
co-operation 'in its performance'. Requirements for
communication and co-operation in relation to
termination would take one into a different realm
altogether."
So that was the response of the Court of Appeal to
the notion that in some way the provision for
termination could be visited or altered by Yam Seng or
the good faith, and it's saying: no, it's a different
thing. What Yam Seng is talking about is performance,
not termination.
So in my submission there must at least be
a realistic prospect that the Court of Appeal would want
to look at that, and there is a realistic prospect of
success on it.
The same point applies to the repudiatory breach or
material breach argument.
MR JUSTICE FRASER: Just before you move on to that though,
I've just had a look at your closing submissions on
Common Issues between paragraphs 447 to 457 {J2/4/160}.
I don't think you cite this case.
MR CAVENDER: My Lord, no, it wasn't cited before you. We
came across it subsequently.
MR JUSTICE FRASER: That's germane, isn't it, whether you
should get permission to appeal on a point which wasn't
argued before me?
MR CAVENDER: My Lord, we are not sure it is. The point was
argued before you; we just hadn't found this authority
at that point. The point that supports our point is
that good faith does not have anything to say about
termination and "not less than" does not invoke any kind
of discretion.
MR JUSTICE FRASER: All right. If you say the authority
wasn't cited before me, I think we're agreed about that.
If you have a look at 447 to 457 {J2/4/160}, I'm not
sure that the point was argued, but it might be that you
say it was.
But regardless of that, you're saying that error of
law on this point, as set out in your grounds, which
shows there is a reasonable prospect that the
Court of Appeal will overturn it.
MR CAVENDER: There is a real prospect of that, my Lord.
MR JUSTICE FRASER: Yes, all right.
MR CAVENDER: Also my learned friend has shown no authority
that good faith has ever been used to curtail rights of
termination, whether express rights or for termination
on notice or termination for repudiatory breach. The
same point applies there.
What your Lordship has said is: you can't accept
a repudiatory breach unless you do so in good faith, nor
can you do so where you're in breach in relation to the
matters for which you are seeking to accept repudiatory
breach. Good faith has never been used in that way
before, to alter what is normally an objective standard,
namely either side can accept a repudiatory breach to
some degree of subjectivity. No authority has been
shown to you for that proposition, and in my submission
there must be a real prospect --
MR JUSTICE FRASER: Where in the judgment, please, can you
show me that I have said you can't accept repudiatory
breach unless you do so in good faith?
MR CAVENDER: Give me one moment, my Lord.
MR JUSTICE FRASER: Yes.
MR CAVENDER: Paragraph 899 {B7/29/258}:
"... in both instances -- termination without
notice, and termination summarily ..."
Which it's talking about in context, termination
because of repudiatory breach:
"... must [be] take[n] in accordance with the
obligation of good faith."
MR JUSTICE FRASER: How does that say: accepting
a repudiatory breach?
MR CAVENDER: Because that is what termination summarily
involves. There's no other way you can terminate
summarily, my Lord. You can terminate a contract
summarily because one side is in repudiatory breach or
termination on notice. That's what this portion of the
judgment is dealing with. Again, I say we have a real
prospect on that point.
So, my Lord, going back to my skeleton argument, if
I may. I'm dealing here with common issue 1 largely, at
paragraph 9 {J6/2/3}. Our case was and is that the
relational contract idea is useful as assistance in
identifying types of contracts.
The other complaint we make and made is that at
(ii), the "long term" point. Of course at this stage,
before you're deciding whether it's a relational
contract and whether to imply a term of good faith,
you're looking at the express terms at that stage. And
the express terms are three months' notice or six
months' notice. Whether parties expect or do not expect
to exercise those rights doesn't turn what is not
a long-term contract into a long-term contract.
The third point we make there is about the agreed
implied terms. Again, my learned friend, in his
skeleton for today, seeks to move away from those. In
my submission this is a very serious point and really
wasn't grappled with by the court at all really, apart
from a single paragraph.
But these implied terms of "necessary co-operation"
and Stirling v Maitland, we have submitted and do
submit, have real power and force, are taken alongside
the express terms and they need to have meaning and
effect given to them. Until they have meaning and
effect given to them, one doesn't know whether or not
other terms are necessary.
So we say there is a reasonable prospect on that
that the Court of Appeal will take a different view
about the way the court dealt with those implied terms,
which was effectively that they had no real effect and
was essentially a pleading point in the case, when in
fact it was the cornerstone of the Post Office's case
that they were akin to express terms once they had been
accepted by both sides.
The other major feature here is your Lordship
implied 17 implied terms or incidents based on the
imposition of a good faith term. In my submission one
can only do that to the extent that the terms that you
imply or the instants you apply are parasitic upon and
have good faith at their core, namely that they can be
breached, and only breached, in the event of bad faith.
So they are true sons or daughters of the good faith
term.
When you look at the implied terms your Lordship
implied, the 17, virtually none of them have that
characteristic. They all represent binary, one-way,
free-standing obligations that can be breached in bad
faith or in good faith.
That is contrary, in my submission, to Yam Seng,
contrary to what Mr Justice Leggatt did in that case.
You remember I took you through very carefully the two
terms he implied in that case and how he rejected
Mr Salter QC's drafting of the terms in that case, and
he did so because the terms that counsel had put forward
could be breached without bad faith, without knowledge.
What Mr Justice Leggatt said: no, it is essential that
the terms has at its heart an obligation to act in good
faith in the relevant particular. That unfortunately
has not, in this case, been done in relation to these 17
terms.
We deal with this point, my Lord, at paragraph 14
and following of the skeleton argument {J6/2/5}.
So good faith is very much at the heart of all those
submissions, of all those points on both issue 1 and
common issue 2. In my submission, if the court is going
to give permission, they should give permission on both
issues, not try and cherrypick and say, "Well, this one,
not that one", because when it gets to the Court of
Appeal they would be, in my submission, helped by having
the whole of those issues before them so they could form
their own view as to the appropriate treatment.
Going to my skeleton, I don't want to spend too long
going through all of those. You will see common
issues -- this is paragraph 19 of the skeleton {J6/2/7},
the "agents"/branch trading statement point and the
agency point.
The thing about that, we say at paragraph 20, is
effectively your holding amounted to: the only reason
the express term in the contract said they were "agents"
was to distinguish them from employees. The trouble
with that is it doesn't give any purpose or content to
the express appointment as "agents", and it doesn't
begin to explain on what basis, therefore, postmasters
hold stock and cash on behalf of the Post Office or
explain the basis on which they contract with members of
the public on behalf of Post Office and they are
fiduciaries.
So a finding that says, "Well, the express
appointment as 'agent' merely distinguishes them from
employees", doesn't give any meaning or effect to the
reality of what everyone accepts the postmasters were in
fact doing. So, again we say there must be a real
prospect of success, the Court of Appeal wanting to look
at that.
Then if we move on in the skeleton, paragraph 25
{J6/2/8}, section 12, clause 12, this is the whole
burden of proof point.
Paragraph 30 of the skeleton {J6/2/9}, your
understanding is at paragraphs 669 to 675 of the
judgment {B7/29/209}, where you understood the Post
Office's case to be that postmasters would be liable for
losses or deficiencies caused by a bug, when in fact
that wasn't our case.
Indeed, when you were dealing with the same point --
we deal with this at paragraph 31 -- in relation to the
NTC in clause 4.1, you seem to accept the point that
such losses wouldn't come within the clause. So in my
submission there's no rational reason to treat the two
clauses in relation to that same loss differently, and
again that must give a real prospect of success on that
point as well.
We have dealt with common issue 16, going to the
skeleton at 33 {J6/2/10}, termination on notice; common
issue 15, termination for cause {J6/2/11}.
Then we have suspension {J6/2/13}; onerous and
unusual terms {J6/2/16}. We do seek permission to
appeal the holding you made in relation to the Bates
type of contract, and that's paragraph 54 of the
skeleton.
We outlined at paragraph 54 the two elements of the
conditions of appointment and the declaration, which we
say in a case such as Mr Bates would result in
incorporation by reference. We say that applies whether
or not the documents are attached or not. It's
incorporated by reference, identifies the existence of
some standard-term document and that it is incorporated.
Then we have common issues 7, 19 and 20, Unfair
Contract Terms Act, at paragraph 57 {J6/2/18};
responsibility to train assistants, 23 {J6/2/19}.
We then have the question of inadmissible evidence,
what we say as a matter of law, evidence of
post-contractual matters either expressly or implicitly
being taken into account on points of construction. We
summarise that at paragraphs 67 and following {J6/2/20}.
That includes, at paragraph 68, the matters you
expressly as part of the relevant factual matrix to
construction incorporated, and we set them out at
paragraph 68, the various paragraphs.
MR JUSTICE FRASER: Where are we now, sorry?
MR CAVENDER: Paragraph 68 of the skeleton, my Lord
{J6/2/20}. It cross-refers to paragraph 569 of the
Common Issues judgment {B7/29/178} and the subparagraphs
of that paragraph. It's paragraph 68 of the skeleton,
my Lord.
MR JUSTICE FRASER: No, I have that. I'm looking in the
grounds.
MR CAVENDER: Where that point is raised in the grounds?
MR JUSTICE FRASER: Yes, I'm trying to follow your
submissions through by reference to the grounds.
MR CAVENDER: Oh, I see.
MR JUSTICE FRASER: As well as the skeleton.
MR CAVENDER: This point in relation to factual matrix is
paragraph 23 of the grounds {J6/1/7}.
MR JUSTICE FRASER: But that's in your introductory section,
isn't it? I thought it was parts C, D and E that were
your actual grounds.
MR CAVENDER: My Lord, no. Common issue 1 is "Relational
contract", if you are looking at the grounds now.
MR JUSTICE FRASER: Yes.
MR CAVENDER: What happens at the end of the first ground,
paragraph 23 {J6/1/7} is the factual matrix point is
taken, and then where it applies, it is repeated each
time in each ground.
MR JUSTICE FRASER: I did understand that.
MR CAVENDER: So that's the point: that it has been or looks
as if it's been taken into account in terms of
interpretation or factual matrix.
Then the separate point in point D {J6/1/35},
your Lordship points out quite rightly, is an additional
point that that information has been introduced into the
trial process unfairly. That's a distinct and separate
point.
MR JUSTICE FRASER: This is part D, your procedural
unfairness grounds, isn't it, that second point that you
made?
MR CAVENDER: When you say "it", I was referring to the
admissibility point when we were having this debate.
MR JUSTICE FRASER: All right. Just to help me let's
slightly rewind it just a little bit.
How many total grounds do you have altogether that
are errors of law, separate grounds?
MR CAVENDER: They are set out in the grounds, my Lord,
starting at 14 {J6/1/4}.
MR JUSTICE FRASER: I know they are, Mr Cavender, but they
are not numbered. I am just trying to make sure I don't
miss any. How many are there altogether? Are they the
different ones at paragraph 14?
MR CAVENDER: My Lord, yes.
MR JUSTICE FRASER: Each of those is a separate ground?
MR CAVENDER: They are separate common issues, as you can
see, and within them there are obviously -- it depends
what you call a "ground". But there are separate
grounds of appeal dealing each of those issues listed at
paragraph 14.
MR JUSTICE FRASER: Right. So how many separate grounds of
appeal are there on errors of law? Because I had
thought there were 12, because I counted through, but
I'm not sure that I necessarily have them all, which is
why I'm asking you how many different grounds there are
which are said to be errors of law.
MR CAVENDER: We can count them up, my Lord.
MR JUSTICE FRASER: If you can tell me how many there are.
MR CAVENDER: That can be done, my Lord.
MR JUSTICE FRASER: As I understand it, we are still within
part C of your grounds of appeal, dealing with errors of
law?
MR CAVENDER: We are, my Lord, yes.
MR JUSTICE FRASER: We are, right.
MR CAVENDER: The skeleton was meant to be a more cursory
run-through of those points. In the skeleton I was at
paragraph 67 {J6/2/20} and was dealing with reliance on
inadmissible evidence. I have pointed to you in the
grounds where that comes in first of all, which is
paragraph 23 {J6/1/7}. This is on admissibility. That
is an error in law, we say.
So those are the grounds of appeal on law. Then if
we look at the skeleton, paragraph 73 {J6/2/24},
"Grounds of Appeal -- Error in fact".
MR JUSTICE FRASER: How many of those are there?
MR CAVENDER: If we go to the -- do you have the grounds of
appeal there?
MR JUSTICE FRASER: I do.
MR CAVENDER: The errors of fact start at paragraph 147
{J6/1/42}. The first is about Mr Bates' receipt of the
contract and then there are a number of findings about
the Post Office's behaviour and comments on its
witnesses.
MR JUSTICE FRASER: So are there two or are there eight
altogether, in terms of separate grounds?
MR CAVENDER: I think there are eight. There is the Bates
one, and then there is (a) to (g) under the second head.
MR JUSTICE FRASER: Right.
MR CAVENDER: So there are eight.
MR JUSTICE FRASER: There are eight, all right.
MR CAVENDER: You will see them set out in the grounds of
appeal and I wasn't intending to go through them.
There are no appeals on the facts, the main facts he
found, about who said what to who in the interviews and
things of that kind.
We then have ground D, procedural unfairness. This
links with the inadmissibility point because it's the
same material.
MR JUSTICE FRASER: How many different grounds are there
under procedural unfairness?
MR CAVENDER: That starts at paragraph 128 of the grounds
{J6/1/35}.
MR JUSTICE FRASER: It does.
MR CAVENDER: It depends on bit on what you call a "ground",
because there are obviously subgrounds within them.
MR JUSTICE FRASER: Let's put it this way: you are advancing
in your grounds of appeal grounds that are said to be
correctly categorised as procedural unfairness. How
many different grounds are there? I had understood
there to be possibly three, but I might be wrong.
MR CAVENDER: My Lord, yes, there are three broad grounds.
MR JUSTICE FRASER: Are there three?
MR CAVENDER: If you want to take grounds at a high level,
there are three separate grounds with subgrounds within
them, is probably the right way to look at it.
MR JUSTICE FRASER: All right. Let's deal with those
separately, if we may, because I'm interested on what
the procedural unfairness to said to be. What was the
procedural unfairness in respect of the first of those
three grounds?
MR CAVENDER: It is as it's set out in the grounds there:
that the Common Issues trial that the Post Office
prepared for and the court gave orders for was limited
to the effectively preliminary issues on the meaning of
the NTC and the SPMC and deciding the scope and extent
of the agency relationship.
Disclosure and evidence was given on that basis if
you look at ground 132 {J6/1/36}. There were contested
disclosure applications decided expressly on that basis:
things like helpline, training, things of that kind.
Disclosure was not given on them and in fact was refused
by your Lordship on the basis that this was a common
issues trial that essentially was a preliminary issues
trial.
To therefore go on in such circumstances and make
comments and/or findings relating to those matters --
MR JUSTICE FRASER: But that's the effect of the unfairness.
I want to know what you say the procedural unfairness
was. What was the unfairness in the procedure?
MR CAVENDER: To have a trial that went wider than that
which was ordered and that which the parties reasonably
expected was going to take place; and moreover, to do so
in circumstances where there hadn't been disclosure in
relation to the matters in relation to the extended
trial, nor had the Post Office put forward witness
evidence on it because they weren't expecting it.
MR JUSTICE FRASER: So what matters did the Post Office not
put forward witness evidence on which they otherwise
would have done absent the alleged procedural
unfairness?
MR CAVENDER: They would have given disclosure --
MR JUSTICE FRASER: No, I'm asking about the evidence. You
just made a submission that said the Post Office hadn't
put forward witness evidence on matters because they
were not expecting it. So what were those matters?
MR CAVENDER: Training.
MR JUSTICE FRASER: Yes, all right.
MR CAVENDER: Helpline.
MR JUSTICE FRASER: Yes.
MR CAVENDER: The accounting relationship --
MR JUSTICE FRASER: Yes.
MR CAVENDER: -- how it worked in fact. How TCs were dealt
with. The intimate accounting relationship between the
parties. Suspension and termination, how they were in
fact operated, those two mechanisms.
MR JUSTICE FRASER: Yes.thank you very much.
MR CAVENDER: So that's the first head. Connected to it is
the second, which is findings on post-contractual and/or
irrelevant issues. Those are set out at 137(a) to (g)
{J6/1/38}.
The point about this of course is that the court is
not in the business of making irrelevant findings along
the way. It makes findings and decides what the matrix
of contracts is because it is relevant to the matters it
is engaged with; at least one can infer that.
So what one infers from this is that there are these
findings or comments and they are being made as part of
the trial process, as relevant to it, and therefore
necessarily, given the nature of the exercise in
a preliminary issues trial, as part and parcel of it.
That's why this connects back to the error of law about
taking into account irrelevant evidence, which brings me
on neatly to the next ground, which is just that. So
although these are three grounds, they are obviously
intimately connected.
You will see the same points at 143 {J6/1/39},
extracted from the matrix your Lordship decided was part
of the matrix of the trial, not just along the way but
on a contested matter. Where there was a contest about
what matrix your Lordship could take into account, you
ruled that these matters were relevant factual matrix.
We say that is an error of law, or at least there is
a real prospect that it is.
My Lord, those are the grounds of appeal and all
I wish to say about them.
So we ask for permission on two bases. One is that
there is a real prospect, and that in reality you ought
to look at this on a high-level basis: that if you think
there is a real prospect on the good faith elements,
relational contract elements, that infects or applies to
large parts of your findings. In my submission the
right thing to do in such circumstances is to give
permission across the board.
Moreover, we ask for permission on the separate,
distinct ground that here there are other compelling
reasons. Why? Because we're dealing here with
11,000-odd contracts, not just the 500-odd claimants in
this litigation; we're talking about a huge amount of
money in issue; we're talking about the running and how
a public service is run, not just in the past but in the
future, in which there is a real public interest. So in
my submission, for those reasons as well, this is a case
where the court should give permission on that
alternative ground.
Moreover, if your Lordship accepts my point that, at
least arguably, what your Lordship has done is to move
the common law quite dramatically on good faith in
a particular direction, that also is another compelling
reason why that view, my submission about that, should
be tested in the Court of Appeal.
So, my Lord, unless you have any questions, those
are my submissions.
MR JUSTICE FRASER: The only question is one which I think
you or your juniors are endeavouring to answer: I would
like to know how many different grounds of appeal there
are on law, please.
MR CAVENDER: I'm obliged. I will ...
MR JUSTICE FRASER: Is someone going to give me the number?
MR CAVENDER: My Lord, yes. Can I come back to you in
a moment about that?
MR JUSTICE FRASER: You can, yes. I would like to know
before I decide whether I'm going to give you permission
to appeal or not.
MR CAVENDER: No, of course.
MR JUSTICE FRASER: What I will do is I will rise for five
minutes then. I will rise for ten minutes, because
yesterday I received an email from the transcribers
asking if they could always have a ten-minute break
rather than a five-minute break.
So I will come back in at 11.50 and then,
Mr Cavender, I would just like you to tell me how many
different grounds of appeal you have saying that there
are errors of law.
MR CAVENDER: Of course.
MR GREEN: My Lord, can I just ask if your Lordship is
anticipating a very brief response from me?
MR JUSTICE FRASER: No, I'm not going to be calling on you.
MR GREEN: I'm most grateful.
(11.44 am)
(A short break)
(11.54 am)
MR CAVENDER: The answer to the question is 37, my Lord.
MR JUSTICE FRASER: 37 on law. So it's 37 on law, 3 on
procedural unfairness and 8 on fact?
MR CAVENDER: My Lord, yes. On the law ones obviously it is
very difficult because often the point is repeated in
relation to, say, "onerous", "unusual", and there are
lots of different terms. So it depends how you -- but
that's a fair review of that.
MR JUSTICE FRASER: Thank you very much.
(11.54 am)
(Ruling awaiting the judge's approval)
(12.04 pm)
MR JUSTICE FRASER: Next item on the agenda?
Application by MR GREEN
MR GREEN: My Lord, I think it is me: the costs of the
resolution of Common Issues.
MR JUSTICE FRASER: Yes.
MR GREEN: Your Lordship has mentioned that you've had our
written cost submissions and our skeleton arguments.
MR JUSTICE FRASER: I think there were two rounds, weren't
there?
MR GREEN: Exactly. Against the background of that, and the
fact that much of the content of what arises in relation
to this application and the issues arising in it has
been traversed numerous times now, in terms of what
your Lordship decided in the Common Issues Judgment on
the various issues and so forth, I'm going to try and
slim down what I say. But there are a number of points
which I need to make and they come under four headings.
The fact that there should be an order for costs in
the claimants' favour is number 1 and can be shortly
disposed of. The contrary is unarguable and it is
implicitly recognised by the defendant, by the Post
Office, in its skeleton argument at paragraph 21 on
{J1/4/7}.
MR CAVENDER: My Lord, I hate to interrupt my friend, but
that isn't the case. In my submission it is probably
best to deal with that point first because if we're
right about reserving costs, then the other matters
don't arise. If we're wrong about that, then the
question of basis of assessment, timing of assessment,
interim payment arise. But if we're right and the costs
should be reserved, those points don't arise, subject to
your Lordship. But I just make that observation.
MR JUSTICE FRASER: As I understand your position,
Mr Cavender -- do correct me if I'm wrong -- your
primary position is costs should be reserved.
MR CAVENDER: Correct.
MR JUSTICE FRASER: If I'm against you on that and I decide
to deal with the Common Issues costs today, you accept
I think that there has been broad success, but taking
into account the other factors you're suggesting a 30%
reduction?
MR CAVENDER: That's absolutely right.
MR GREEN: My Lord, I will turn therefore to the making of
the order now, which is going to be point 2.
MR JUSTICE FRASER: What was your point 1, I'm sorry?
MR GREEN: Point 1 was that if an order were to be made --
MR JUSTICE FRASER: There has to be an order for costs in
one way or another, even if it's just costs reserved.
MR GREEN: Precisely. Let me take it in a different order:
shall I deal with whether your Lordship should make
a costs order now, rather than reserve it?
MR JUSTICE FRASER: No, no. This isn't mere technicalities.
If I were to order costs reserved, that would be making
a costs order.
MR GREEN: Indeed, my Lord. I am conflating the two.
MR JUSTICE FRASER: What you mean is: deal with the costs
now, rather than reserve them.
MR GREEN: My Lord, yes, exactly.
MR JUSTICE FRASER: I understand that.
MR GREEN: There are essentially --
MR JUSTICE FRASER: You are saying: do it now?
MR GREEN: Precisely.
MR JUSTICE FRASER: I have that point.
MR GREEN: There's one document in the bundle on Opus at
{J5.2/1/1}, which is the letter of 14 September 2018
from Post Office solicitors to my instructing solicitors
and that is the letter to which the claimants' skeleton
at paragraph 10 on {J5.2/1/5} refers.
The context of it, my Lord, was this. Your Lordship
will remember that there was a difference in the budgets
and both for the purposes of assessing security and for
the purpose of cost budgeting, it was said by the
claimants to be important that the stages of the
litigation were identified and worked out. This is, in
that context, a reference to the litigation being
conducted in stages with the real possibility of interim
costs awards.
MR JUSTICE FRASER: Where are you looking?
MR GREEN: The quote is set out in paragraph 10 of our
skeleton argument {J1/3/5} and it is at paragraph 4(a)
{J5.2/1/1}. If your Lordship looks just below, it's
paragraph 4. It's in relation to the QBE deed for
security. The complaint was that the deed should
provide --
MR JUSTICE FRASER: I wonder if we could go back, please.
MR GREEN: Just go back to the letter, if we can. You were
on the right spot.
The complaint was that it was unsatisfactory from
the Post Office's perspective as at 14 September 2018
for the deed being provided by way of security only to
provide for the resolution of costs "following the
conclusion of the High Court Number XXXX". The reason
they give at 4(a), second line, right-hand side:
"This litigation is being conducted in stages with
the real possibility of interim costs awards."
So before they'd lost, this not only would be
potentially right in principle for the court to make
such an order, but it was a direct concern. Then what
happens is they lose the Common Issues trial and in
correspondence then say their position is going to be
that the costs should be reserved.
MR JUSTICE FRASER: I understand. You're relying on this
letter though, it seems to me -- and if I'm wrong, do
tell me -- as showing that there was at least, at some
stage in 2018, a realisation on the part of those
advising the Post Office that there might be interim
costs orders?
MR GREEN: They were positively asserting that as a real
possibility and wanting our deed of their cost to be
altered, so that if they did get such an order in their
favour, it would be recoverable.
MR JUSTICE FRASER: Understood. That's effectively
a separate stand-alone point.
MR GREEN: That's stand-alone point 1.
Stand-alone point 2 is: the Post Office's
submissions appear to overlook the fact that in the
bundle at {B3/1/62}, in the amended particulars of
claim, the very first item of final relief sought by the
claimants was a declaration in relation to the legal
relationship between them and the Post Office.
MR JUSTICE FRASER: Are we going to call that up on the
screen?
MR GREEN: That is hopefully coming up. It is {B3/1/62}.
There we are.
MR JUSTICE FRASER: Yes. So it is a separate stand-alone --
MR GREEN: Free-standing final relief sought, which in
substance has been achieved for the claimants.
MR JUSTICE FRASER: Understood.
MR GREEN: The point about that, my Lord, is that that would
have had to have been determined whoever was in the
group. It's a free-standing point; it doesn't depend on
who is in the group action at all. And there's no
recognition of that at all. That's the second point.
The third point is a point I will just make in one
line and come back to for its significance in the
authorities, which is that these were absolutely central
generic issues, properly called "common issues" by
your Lordship. This is not a peripheral skirmish in --
MR JUSTICE FRASER: I don't think anyone is suggesting it
was a peripheral skirmish, are they?
MR GREEN: I'm most grateful.
MR JUSTICE FRASER: I don't know, and I'm not obviously
speaking for how the Post Office might put it. But at
whatever point in this litigation, these issues were
going to have to be dealt with.
MR GREEN: Precisely, and they were foreshadowed actually in
the pre-action correspondence from July 2016 onwards.
MR JUSTICE FRASER: All right. I have that point.
MR GREEN: The Post Office's submissions at paragraphs 5 to
20, on {J1/2/3} to {J1/2/6} of the defendant's skeleton
argument, begin on {J1/2/3} of the skeleton argument
rather than the outline submissions. Paragraph 6 says:
"The authorities demonstrate that it may be
appropriate to reserve the costs of a trial of
preliminary issues, where the outcome ... does not
determine ultimate success in the litigation or where,
even though one party may be said to have succeeded in
that trial, subsequent events could be relevant to the
incidence of the costs of the earlier trial."
The short point, my Lord, is that the way this is
put forward is essentially swimming against the tide of
the proper approach in litigation of this type when
issues of this importance are resolved. I will make the
point good by reference to the cases in fact relied upon
by the Post Office themselves.
If I can start by taking your Lordship to the
authorities bundle, tab 18 and looking at Beiber
v Teather and Greenwood {J7/18/1}.
MR JUSTICE FRASER: Tab 18?
MR GREEN: It's tab 18 in the authorities bundle.
MR JUSTICE FRASER: Do you want me to go to paragraph 27
{J7/18/6}?
MR GREEN: Yes.
If one looks above, it's actually pretty instructive
to see how this first-instance decision cites from the
de Jongh Weill case against Mean Fiddler at 26. So the
premise of this first-instance decision is what the
Court of Appeal decided in de Jongh Well, as recited at
paragraph 26, and that is:
"'There is much to be said for the view that the
incidence of costs should be the same whether or not for
case management reasons there has been an order for
a split trial and whether or not the order for a split
trial was made on the initiative of the claimant or the
defendant'."
It's pretty important, because these are the two
principal cases advanced at paragraphs 7 and 8 of the
skeleton {J1/4/3}, to go back to de Jongh Weill, which
is cited at paragraph 7, and see what is actually said
in that case. That's at tab 7 of the authorities bundle
{J7/7/1}.
I don't know if I could respectfully ask
your Lordship to have handy the hard copy of the
skeleton alongside --
MR JUSTICE FRASER: Hard copy of whose skeleton?
MR GREEN: Of my learned friend's skeleton -- and then look
at the penultimate page of de Jongh Weill {J7/7/10}.
Your Lordship will see that the quotation in the
skeleton goes from the beginning of paragraph 33 --
MR JUSTICE FRASER: Yes.
MR GREEN: -- and it goes down to:
"... whether justice to the defendant requires him
to postpone any decision on costs until the final
outcome of the action is known."
MR JUSTICE FRASER: Yes.
MR GREEN: Pausing there, your Lordship will already have in
mind these are unitary claims that are relied on by the
Post Office. That's a side point which I will come back
to in a moment. But even on the basis of what is quoted
in the skeleton, the question is whether justice to the
defendant requires the judge to postpone think decision
on costs until the final outcome is known.
Pausing there, when your Lordship goes to the
judgment itself on the screen in the authority
{J7/7/10}, at paragraph 32 it gives pretty important
context to the test the Court of Appeal was applying and
what the Court of Appeal's own view was, because four
lines down on the right-hand side:
"Whilst in the exercise of his discretion the Judge
could have made, and indeed might well have been
expected to make, an immediate order for the payment to
the Claimant of the costs of the trial of the issue of
liability or at least a proportion of those costs ...
with some hesitation I reach the conclusion that on this
appeal it is not possible to say that the Judge's
decision was clearly one which he was not entitled to
reach."
So the artifice --
MR JUSTICE FRASER: So you're saying the part of
paragraph 32 that's quoted in the skeleton is taken out
of context.
MR GREEN: Paragraph 33 in the skeleton.
MR JUSTICE FRASER: Paragraph 33 is taken out of context and
if you read paragraph 32, actually it looks very
different.
MR GREEN: The out of context --
MR JUSTICE FRASER: Is that the short point?
MR GREEN: It is. It goes the other way directly, we
respectfully say.
MR JUSTICE FRASER: I have that point.
MR GREEN: I'm most grateful. That of course unravels to
some extent --
MR JUSTICE FRASER: The case wasn't group litigation anyway.
MR GREEN: It wasn't group litigation anyway, which is why
it is more instructive, if I may respectfully say so, to
look at -- if we can go to Giambrone next, which is at
tab 6 {J7/6/1}, which again is a case against the
Post Office but which the Post Office cites as if it
supports it.
The very paragraph that's relied on at {J7/6/4} --
MR JUSTICE FRASER: Just give me the paragraph number of the
skeleton.
MR GREEN: The paragraph number of the skeleton is at
paragraph 40 on {J1/4/13}.
MR JUSTICE FRASER: It says, "generally ... inappropriate in
group litigation".
MR GREEN: Yes.
MR JUSTICE FRASER: Yes.
MR GREEN: Before going into the detail that follows from 11
onwards, it's pretty important for your Lordship to see
what 10 actually says {J7/6/4}, because true it is that
the first sentence says:
"In my judgment in almost all group litigation cases
there should be no need for any detailed assessment of
costs until the conclusion of the group litigation.
Solicitors engaged in group litigation will be
specialists and experienced in the field."
Then pausing there:
"Solicitors for claimants ..."
This is very important, and reflects the approach in
Corby:
"Solicitors for claimants are fully entitled to
an adequate cash flow from the defendants once the
general issue of liability has been admitted or
determined in the claimants' favour, similarly on
determination of generic issues in the claimants[']
favour and on the assessment or settlement of awards of
damages to individual or batches of claimants."
So in either of those cases, this is positively
authority in favour of that point. And the cash flow
point faced by claimants has been recognised in a number
of decisions, as your Lordship knows.
So --
MR JUSTICE FRASER: So you're saying that's in your favour.
MR GREEN: Your Lordship has the point.
MR JUSTICE FRASER: Right. Yes.
MR GREEN: Can I take your Lordship just briefly to Corby,
which is at tab 11, simply because it is referred to.
A slightly different situation. But {J7/11/4} of the
Opus reference, tab 11 physically of the authorities
bundle, "Should the Court make a costs order at all at
this stage?"
MR JUSTICE FRASER: Which paragraph are you looking at?
MR GREEN: Paragraph 9, my Lord, I'm sorry, under that
heading, "Should the Court make a costs order at all at
this stage?":
"There is no good reason not to make a costs order
at this stage. The Group Litigation is now effectively
over."
Which was the situation in this case.
MR JUSTICE FRASER: Well, the situation in that case, not
the situation in this case.
MR GREEN: No, in Corby. So it is a fair distinction that
can be said to be made there.
"The Claimants have effectively and substantially
won on the Group Litigation issues. It was always open
to CBC to make admissions on those issues but it decided
that the issues merited contesting. There are no
Part 36 offers or payments into Court ... to complicate
matters."
And there is nothing of that sort here. Indeed,
my Lord, the approach the claimants took in this
litigation on the Common Issues, particularly in
relation to the implied terms, was openly, not without
prejudice save as to costs, openly to send a table of
implied terms and say, "Please tell us what you say the
implied terms or their incidence are and we will
sympathetically consider them because it could
substantially narrow everything".
Your Lordship had submissions on that and I'm not
going to go over them again. They were foreshadowed in
our opening under the heading of "Utility", and that
throws your Lordship forward in our --
MR JUSTICE FRASER: I understand.
MR GREEN: That's all.
Paragraph 10 {J7/11/4}:
"The only argument of any force ... for CBC was that
until one knows what the final outcome of all the
Claimants' claims is it would be premature and
inappropriate to award costs now. There is at least
a hypothetical possibility that all the Claimants will
fail to recover damages."
I mention that, my Lord, because basically the big
fight was over but it wasn't clear whether they would
all actually recover damages. So that's the sense in
which one has to read paragraph 9.
This paragraph is instructive, as your Lordship has
probably seen already. This is six lines down:
"The scale and breadth of the Group Litigation
issues would inevitably lead to a major litigation
exercise with a large number of witnesses, experts and
documents and a very large costs risk. It was open to
CBC to protect its position on the Group issues by
admitting the duty ..."
All the other issues they had there. {J7/11/5}:
"Put another way, these issues and the additional
25 associated issues (largely agreed to be resolved)
have been fought because CBC contested them. It would
be wrong for the Claimants to be out of pocket as
a result."
We respectfully say that that and the reference at
paragraph 12 to the Colour Quest case, your Lordship
will see just above the bottom hole punch, the fact that
the trial judge is well placed to make a relevant
assessment of the criteria is correctly in issue.
If we go over the --
MR JUSTICE FRASER: Which authority are we in now?
MR GREEN: It's just on paragraph 12 {J7/11/5}, my Lord, in
the same --
MR JUSTICE FRASER: Still in Corby?
MR GREEN: Yes. There is just a reference there to
Colour Quest dealing with indemnity costs, but I will
come to indemnity costs separately. The short point is:
by parity of reasoning, just as the judge is well placed
to assess indemnity costs, the trial judge is extremely
well placed to assess the context of this.
MR JUSTICE FRASER: Your short point I think, or short
points, is, or are, depending on how many there are, is
that these were a group of self-contained issues that
had to be resolved one way or the other. They were in
a separate trial. They are part of group litigation.
You have won on the majority of those issues and you
shouldn't be out of pocket until the end.
MR GREEN: Precisely.
MR JUSTICE FRASER: It is as simple as that, isn't it?
MR GREEN: Plus they are determinative of final relief
claimed, declaration --
MR JUSTICE FRASER: Understood.
MR GREEN: -- plus --
MR JUSTICE FRASER: But even if they weren't, they would
still have to be determined in order to move on to the
next step.
MR GREEN: Precisely.
MR JUSTICE FRASER: You're saying even though some of the
claimants might in due course not recover substantial or
indeed any damages -- and Mr Cavender makes a perfectly
fair point, which is quite a lot of the claimants might
be time-barred -- you're saying in the group litigation
it had to be resolved anyway.
MR GREEN: Precisely. My Lord, the only final point in
relation to that is that the points made by the
Post Office in relation to no evidence of injustice are
wrong, and demonstrably wrong, for three reasons.
The first reason is: there is obviously injustice to
funded claimants of the cash flow point and the multiple
point, because your Lordship is entitled to take
judicial notice that funders aren't doing it for free.
Even very --
MR JUSTICE FRASER: Sorry, what's the multiple point? You
mean multiple of the costs?
MR GREEN: Yes. So there's an acute difference in the
impact of those cash flow considerations for claimants
when they're funded, and the ordinary cash flow point
underlying it even without funders has been recognised,
as I have just shown your Lordship. So that's wrong,
that there isn't any injustice.
The second point they make is: there's no evidence
of injustice, which is wrong because Mr Hartley's third
witness statement, which is at {J3.4/10/13}, spelt out
the consequence -- the multiple point, if I can put it
that way. So there is evidence of it, even if
your Lordship didn't take judicial notice.
The third point is --
MR JUSTICE FRASER: Hold on, before you go there. We
haven't got to Mr Hartley yet. We're now in
Mr Hartley's third statement. Which paragraph?
MR GREEN: It's on page 13 {J3.4/10/13}. It's under the
costs and security point. At paragraph 42, second line:
"The Claimants are reliant on funders continuing to
invest further money and the greater the level of
investment, the greater the sum required to be repaid to
the funders from the sums recovered on success."
MR JUSTICE FRASER: Understood.
MR GREEN: And:
"The net effect is to magnify ..."
MR JUSTICE FRASER: Right. Can you just remind me of the
date of that statement? I know it's September 2018.
MR GREEN: It is ...
MR JUSTICE FRASER: If we just go back to the first page,
please {J3.4/10/1}.
MR GREEN: Yes. 12 September 2018.
MR JUSTICE FRASER: Thank you very much. Right, so that's
your second point.
MR GREEN: And the third point is that the Post Office
really ought to know that there is injustice and there
is evidence of it because that very witness statement,
that very point, was referred to in our written
submissions for this application in March at
paragraph 39, which is on {J1/1/9}. So it's a bad
point.
MR JUSTICE FRASER: All right.
MR GREEN: So those are the points in relation to now.
MR JUSTICE FRASER: In relation to whether they're now or
they're reserved.
MR GREEN: Precisely.
MR JUSTICE FRASER: Yes, all right.
MR GREEN: My Lord, is it convenient, do you want to hear --
MR JUSTICE FRASER: I will hear from Mr Cavender because he
perfectly sensibly says: if he's right on this, then we
don't need to go on to the next point.
MR GREEN: Precisely.
MR JUSTICE FRASER: Mr Cavender.
Submissions by MR CAVENDER
MR CAVENDER: My Lord, in my submission the normal order in
a case like this, following the termination of
preliminary issues, would be to reserve the costs.
MR JUSTICE FRASER: They are not preliminary issues, is the
first point, are they?
MR CAVENDER: My Lord, in my respectful submission they are
akin to preliminary issues. True it is that it's being
done in the context of group litigation, but for the
purpose of costs, in my submission the analogy is a good
one.
The time-honoured formula has been and still
remains, to decide who has won or lost the case and has
to pay the costs, who writes the cheque at the end of
the day. As your Lordship rightly pointed out in the
recusal judgment, no one yet has won or lost.
What the court has done is to determine the rules
that will apply, the contract, so to speak, and I think
I used, not flippantly but by way of analogy, the rules
of the game, so to speak, have been determined by the
contract and the agency relationship. But the "game"
so-called, ie who wins or loses, has yet to take place.
That is, on the authorities I'm going to go through,
in my submission a classic case where relying on the
various -- we have seen a little bit of the authority --
snippets of authority, the court can't be sure that
things will happen in the future that will affect and
alter its view about incidence of costs. It simply
cannot do so. If it does so now, in my submission as
a matter of principle, that would evidence
a predetermination or would go towards suggesting the
court has reached a view about matters as to how things
are going to pan out in the future.
In the future whether any of these claimants win or
lose will be dependent on questions of breach, questions
of causation, questions of limitation and settlement.
All this is in the skeleton. So simply to have declared
the contract and its incidence in a way that the
claimants wanted doesn't mean to say they are going to
be successful in the action. Indeed, I think we said
that in our cost submissions and your Lordship was kind
enough in your recusal judgment to say you thought that
reflected the position.
MR JUSTICE FRASER: Can you show me in your skeleton where
you say it would suggest a predetermination that the
court has reached a view on matters yet to be dealt with
in the future?
MR CAVENDER: My Lord, it doesn't say it in my skeleton.
I'm saying that now, as a --
MR JUSTICE FRASER: I thought you said -- you just said,
"All this is in the skeleton".
MR CAVENDER: Not that part, my Lord, no.
MR JUSTICE FRASER: All right. But your express submission
today is that if I were to decide costs now in any way
other than reserving them, that would provide evidence
that there had been a predetermination by the court
suggesting how the trial, the group litigation as
a whole, would pan out?
MR CAVENDER: Well, it would award success to one party at
a preliminary stage; it is no most or less than that.
If we could go to the Mean Fiddler case again. It's
a Court of Appeal authority. That's in bundle 1, tab 7.
My learned friend was looking at paragraphs 32 and 33
{J7/7/10}. He is right to say that 33 has to be read in
light of 32, no problem about that. And I do rely upon
the point that:
"There is much to be said ..."
This is in 33:
"... for the view that the incidence of costs should
be the same whether or not for case management reasons
there has been an order for a split trial ..."
Pausing there, that's an important point. You can
imagine a different court at an earlier stage saying
there would be an omnibus trial deciding all the issues,
deciding issues of construction, breach, causation,
limitation and settlement and loss. In that world, the
result may have been very different.
If that's right -- in my submission it must be --
then why should there, as a matter of principle, be
a different result because for case management reasons
the court decides to have an earlier trial, a Common
Issues trial, which I say is akin to preliminary issues?
Why, as a matter of principle, should that alter the
incidence of costs? In my submission it should not;
neither should the fact it is wrapped up in the envelope
of group litigation, as a matter of principle, make any
difference either.
Taking my learned friend's point on Mean Fiddler, he
is right to say that the Court of Appeal in this extract
was deciding whether or not to interfere with the
discretion of the judge. But look at paragraph 31
{J7/7/9}, which he hasn't taken you to, which is the
important point here as to what the outstanding issues
that the defendants were saying were at large and which
prevented the award of costs:
"In this case the Defendant sought ..."
This is in the third line down in 31:
"... to establish the existence of special
circumstances requiring or justifying a different
course. These special circumstances were that: (a) the
Defendants would at the subsequent hearings seek to
establish (though no hint of this suggestion was given
in the Defence) that the warrants were valueless ...
[and the] damages ... would be nominal ...
So what the defendant in Mean Fiddler was doing was
saying, "Well, whatever was argued or pleaded, we have
these other great points we're going to bring, and
therefore there are still matters to be determined".
That is a million miles from our case, where there are
on the pleadings issues of causation or breach of
causation, of settlement, of limitation and of damage.
So it's not: we're coming along and saying, "Oh, well,
we may have lost on the first set of issues, but there
are all these other issues that we haven't even pleaded
or hint", in 31. So it's a very different case. In
that context, the submission based on 33 in my
submission is a good one.
If we can go to the Beiber decision, authorities
bundle 2, tab 18, the decision of Mr Justice Norris. It
is paragraph 27 {J7/18/6}, I think as your Lordship
said, obviously having pre-read this, which in my
submission encapsulates the correct principle, namely
that:
"... the ultimate outcome of costs should not be
determined by the case management directions that have
been given. I consider that the court should be
confident (before making a major and final costs order
partway through a staged trial) ..."
We're talking about such a case here, millions of
pounds:
"... that nothing will occur in the remainder of the
case that will render such an immediate order
substantially unjust."
And he refers to the de Jongh Weill case.
Then he says, over at 28 {J7/18/7}:
"In my judgment, there is a real possibility that
the outcome of any trial will affect the merits of the
parties' entitlement in respect of the settlement of
earlier determined issues. I think that justice to the
claimants requires me to postpone any decision on costs
until the final outcome of the action is known."
So, my Lord, that is the principle I urge you to
follow and adopt, and that's based on the prior Court of
Appeal authority.
Can I then take you to Perriam v Wayne, bundle 2,
tab 16 {J7/16/1}, the decision of Mr Justice Coulson, as
he then was. This was an appeal he heard against
a judgment of his Honour Judge Cockcroft in the Leeds
County Count.
In terms of the liability for costs, because he
allowed an appeal on the point of construction, but the
costs bit is paragraph 50 and following {J7/16/13}. So
at 51:
"In the present case, I have allowed the appeal
against Judge Cockcroft's order as to the interpretation
of clause 4.2. In my judgment, clause 4.2 does provide
the appellants with a complete defence to the
dilapidations claim ...
"... [the court has] no basis on which the
appellants should pay the claimant's costs of the
preliminary issues."
He talks about the "driving seat". Then 53 is
really the point:
"I do not make an order that the claimant should pay
the appellants' costs of the preliminary issues, despite
their success on the preliminary issues. It seems to me
that those costs should always have been costs in the
case."
So there are a couple of points one gets from that.
One is that failure or success of preliminary issues at
an earlier stage is not an event, so far as
Mr Justice Coulson is concerned in that case, that they
be costs in case. There is nothing in the rules, in my
submission, that simply says because something is part
of group litigation that some other rule should apply.
If we go to Corby, for instance. My learned friend
relies on that. You have to be careful about Corby
because there the group litigation had ended.
MR JUSTICE FRASER: No. Duty breach and causation had been
resolved, but the group litigation hadn't.
MR CAVENDER: I may have misunderstood it then. Let's go to
it. If we go to tab 11 {J7/11/1}.
MR JUSTICE FRASER: Maybe it had de facto ended. I don't
think damages had been quantified, but I might be wrong.
MR CAVENDER: Let's go to it. It is bundle 1, tab 11
{J7/11/2}. At paragraph 2 he says:
"Following my judgment on the Group Litigation
issues, and subject to questions of costs and
applications for leave to appeal ... as the judge
allocated ... [I] have completed all that I have been
required to do."
MR JUSTICE FRASER: Yes, that's right. That's because what
happens in group litigation, we haven't yet reached this
stage in this case, but the managing judge is in charge
of effectively such issues as the managing judge feels
he or she ought or wants to resolve themselves, but, for
example, damages consequent on those findings can be
tried by other courts elsewhere.
MR CAVENDER: Indeed. No, I understand that.
Then paragraph 9 {J7/11/4}. So that's the
background to paragraph 9. It says:
"There is no good reason not to make a costs order
at this stage. The Group Litigation is now effectively
over."
Often what happens in group litigation, I think as
you're hinting at, very often the case is then released
to county courts and other courts across the land --
MR JUSTICE FRASER: Yes.
MR CAVENDER: -- to then implement the determinations by the
group litigation order and the managing judge.
MR JUSTICE FRASER: Correct.
MR CAVENDER: So as far as he's concerned, his jurisdiction
is over really, so he has nothing else to say. And
there has been cost-sharing and all the rest of it by
the group litigation people on the register at that
date, so it's not surprising that in such a case he
decides to deal with the costs in the way he does, even
though there may be issues hypothetical.
That's the other point, my Lord, paragraph 10
{J7/11/4}:
"There is at least a hypothetical possibility that
all the Claimants will fail to recover damages."
So he's saying, "Well, okay, that's theoretical.
But as far as I'm concerned, as managing judge, my role
is over", and therefore it's not surprising in such --
MR JUSTICE FRASER: Right, because the group litigation
issues had all been resolved by then.
MR CAVENDER: Exactly. So in my submission that doesn't
really assist my learned friend very much at all, when
looked at in context.
Then if we can goes to Mr Justice Foskett in
AB & Others v The Ministry of Defence. This is trial
bundle 1, tab 12 {J7/12/1}. This was group litigation.
There were a series of preliminary issues. The debate
was whether costs should be reserved or not.
One of the points that the judge made is at
paragraph 14 {J7/12/5}, that doesn't apply here. Does
my Lord have paragraph 14 of this case?
MR JUSTICE FRASER: Remind me of the tab number?
MR CAVENDER: This is tab 12 in bundle --
MR JUSTICE FRASER: In the authorities.
MR CAVENDER: In the authorities at bundle 1. Bundle 1,
tab 12 {J7/12/5}.
MR JUSTICE FRASER: Yes.
MR CAVENDER: The submission made by Mr Browne there was
that:
"... since the Defendant elected to take the
limitation point and has substantially failed on that
issue, it should meet the costs of that issue."
That isn't the case here. This is the case where
the court, divested of its management role, has decided
to decide the issues for case management reasons in
a particular order.
MR JUSTICE FRASER: Yes.
MR GREEN: In my submission, as a matter of principle, that
should not affect the incidence of costs.
So those are the two cases my learned friend relies
upon, Corby and AB. They don't, in my submission,
really get very far and don't really say much about the
general principle that Mr Justice Norris, in the case
I referred you to, thought he got from the Court of
Appeal case, and in my submission he's right: that the
court can't at an early stage, in preliminary issues,
determine who is going to be the eventual winner.
By "winner", I mean winner in the action, not just
the winner of deciding what the rules of the game are,
if I may put it that way. The winner is the winner of
the game, not the person that at the first stage gets
its rules adopted and approved by the court.
There can't be, in my submission, a different rule
based on whether the claimants have commercial offshore
funders. It cannot be the law, as a matter of
principle, that if you have commercial offshore funders
that fund litigation of this type for commercial reward,
that somehow that should be taken into account in making
an order at this stage of costs which otherwise you
would not make.
So the injustice point -- did your Lordship want to
carry on reading that, and I can sit down and then carry
on?
MR JUSTICE FRASER: No.
MR CAVENDER: No.
MR JUSTICE FRASER: I'm paying attention.
MR CAVENDER: All right.
MR JUSTICE FRASER: I'm actually looking at the part of the
White Book that deals with specific costs orders in
group litigation, which you told me didn't exist. I am
paying attention to what you are saying.
MR CAVENDER: My Lord, of course there is a part in the
White Book dealing with costs in group litigation. I'm
saying as matter of principle though --
MR JUSTICE FRASER: No, I understand. You're saying the
situation where there are commercial offshore funders
doesn't put this into its own separate category, and if
I wouldn't ordinarily make an order in the claimants'
favour, the fact that they have funders means I should
not make an order in reliance on that feature --
MR CAVENDER: Exactly.
MR JUSTICE FRASER: -- I think.
MR CAVENDER: Exactly right.
MR JUSTICE FRASER: And I, for what it's worth, happen to
agree with you.
MR CAVENDER: My Lord, that's the so-called "injustice"
point.
So in terms of fairness -- and of course you
exercise your discretion here, but obviously you must do
so judicially and fairly. In terms of "fairly",
reserving the costs holds the ring. One doesn't know
what the future will hold in complex litigation of this
type. It is a long road, and if the court does make
costs orders, and significant, millions of pounds, then
that does look as if it has formed a view that based on
that, those claims are eventually going to win, because
only the people that win get costs.
MR JUSTICE FRASER: But that's the point at which the part
of the White Book I'm looking at is rather important,
which is special cases for costs, which isn't in part 44
at all; it's in part 46.
MR CAVENDER: Which page is your Lordship looking at?
MR JUSTICE FRASER: Why don't we look at 46.6 on page 1512:
"There is a difference in group litigation between
costs that are common costs and costs that are
individual costs."
MR CAVENDER: Indeed. At the moment these, as I understand
it, are all common costs.
MR JUSTICE FRASER: Well, one of the things I have to do
today, because I will be making an order about costs in
relation to what are effectively GLO issues, one of the
things I have to do -- I'm not necessarily sure it's in
either party's draft order but I might have missed it --
is an order under 46.6(5) that all the costs are common
costs, because there is no debate between you that they
are. But MR CAVENDER: Correct.
MR JUSTICE FRASER: But those would be individual costs,
they wouldn't be common costs, would they?
MR CAVENDER: I think that's probably right.
MR JUSTICE FRASER: So judging it in terms of potential
overall success for a group of, or some, or even many
individuals approaches it more on the basis that I would
be making an individual costs order today, whereas
I will be making Common Issues costs orders.
MR CAVENDER: In my submission it is a distinction without
a difference for these purposes.
MR JUSTICE FRASER: Right.
MR CAVENDER: It makes no difference at all because in order
to win, to fund, if you like, your claim which is
individual costs, you have to have won or lost on the
common issues. It's parasitic, obviously, a bit like in
the AB case. You've found a contract or a breach and
causation, and perhaps causation and damage is left to
the individual to bring in their local county court or
whatever. That's obviously the individual costs.
Here we're agreed this is common costs, but in my
submission this distinction doesn't bear upon whether or
not the common costs should be reserved or not. It's
a distinction, but not a material one, in my submission,
for this debate.
MR JUSTICE FRASER: But you accept that I'm correct I should
be making an order under 46.6(5)?
MR CAVENDER: My Lord, yes. I haven't had my attention
drawn to this previously, but yes, it looks as if that
is a --
MR JUSTICE FRASER: I'm specifically required to do that
I think, with 100% of the costs being common costs.
MR CAVENDER: Yes, the other point I'm reminded of, of
course, is at the end of the day, were a claimant to
win, right at the end of the day, they would obviously
get their individual costs but they'd also get
a proportion of the common costs, it would be allocated
to them, whether they'd won or lost.
MR JUSTICE FRASER: That's by no means automatic.
MR CAVENDER: It's not automatic but that's my understanding
of what would normally happen. Let's assume it's
a single trial, to make it simple --
MR JUSTICE FRASER: Yes, but that's why -- it's different.
This is group litigation though, Mr Cavender.
MR CAVENDER: I'm saying group litigation, where you have 50
or 500, it's our case, and you win or lose at the end:
in that case all the costs of the trial wouldn't have
been common costs because you would be investigating
individual cases as well, on my premise. So you would
have individual costs and common costs.
MR JUSTICE FRASER: It would be a rare group litigation case
that had a single trial though, wouldn't it? The whole
purpose of group litigation is that you don't have
a single trial.
MR CAVENDER: No, but you could have a small group of, say,
15 and try all the cases out, and the common issues
would be those of law and the individual things of
damage would be tried.
MR JUSTICE FRASER: All right.
MR CAVENDER: I have just been passed something here.
(Pause)
If you look at 46.6(5)(a) and (b) --
MR JUSTICE FRASER: That is the part I draw your attention
to, I think.
MR CAVENDER: Indeed. And (4) is relevant as well.
MR JUSTICE FRASER: Well, at the moment -- (4) deals with
a group litigant who is a paying party. The Post Office
isn't a group litigant. You are not seeking your costs
from the claimants. Your suggestion for today's costs
order I don't think would lead to any group litigants
being a paying party, but I might be wrong.
MR CAVENDER: No, but the point I make is (4)(b):
"... an equal proportion, together with all the
other group litigants, of the common costs."
So what that does do is reflect what I was saying,
that there are two elements --
MR JUSTICE FRASER: I think whoever has passed you that note
might be jumping rather ahead. I don't understand any
of the orders being sought by either party today to lead
to a situation where a group litigant would be a paying
party, because your primary position today is: reserve
the costs, which I understand. If I'm not prepared to
do that, you resist Mr Green's application on other
bases.
I think your skeleton also accepts that the
claimants were -- let me use your exact phrase, because
it was quite well put, I thought, in terms of the degree
of who had won.
MR CAVENDER: It was obviously more successful on the --
MR JUSTICE FRASER: Yes, so you're not seeking any group
litigant today to be a paying party, and that's the only
position in which 46.6(4) comes into operation.
MR CAVENDER: But (5) is the one you drew my attention to.
MR JUSTICE FRASER: Yes.
MR CAVENDER: The second part of (5), after (a) and (b),
says:
"... the court will direct the proportion of the
costs that is to relate to common costs and the
proportion that is to relate to individual costs."
MR JUSTICE FRASER: Correct. That's entirely correct.
MR CAVENDER: Yes. But, my Lord, the reason we went down
this rabbit hole, which is whether or not this special
cases provision says anything or has any influence on
whether the costs should be reserved or not -- that's
how we got here. In my submission you might have to
make another order today to make sure we comply with
this, once we agree what it says and what we need to do.
But in my submission that doesn't impact in any way upon
whether or not costs should be reserved --
MR JUSTICE FRASER: Which is your primary position.
MR CAVENDER: -- which is my primary position.
MR JUSTICE FRASER: I understand that. Right.
Is there anything you'd like to add?
MR CAVENDER: What's being pointed out to me, 44.6(5),
apparently we're not in that because that anticipates
a case where there is:
"... one or more GLO issues; and
"... issues relevant only to individual claims ..."
That suggests a situation that your Lordship thought
would be unlikely: it's where you have both together.
Whereas here, as I understand it, it's common ground we
only have common issues.
MR JUSTICE FRASER: That's why I wanted to check. That's
the point I wanted to check.
MR CAVENDER: Yes. So I think we don't even get down the
rabbit hole.
MR JUSTICE FRASER: Well, (a) it's not a rabbit hole; and
(b) I'm pretty sure that whether you're confident that
we do or not, the simplest thing is to include in
today's draft order that all of the Common Issues costs,
or the costs of the Common Issues trial, are, for the
purposes of 46.6, GLO issues.
MR CAVENDER: My Lord, yes. We have no objection to that.
MR JUSTICE FRASER: Yes, all right. Okay. But we're not
getting on to the drafting of the order at the moment.
You just need a decision from me as to whether I'm going
to reserve the costs or not.
MR CAVENDER: Indeed. The point I make -- and again we have
gone into that, very helpful -- there is nothing, in my
submission, at all to do or impact upon whether to
reserve costs or not.
MR JUSTICE FRASER: That might be right, Mr Cavender. But
you said there were no special orders for costs in
relation of group litigation, and there are.
MR CAVENDER: There are no provisions that are relevant to
this point about reserving or not. There is nothing
that says, as I understand it -- my learned friend
hasn't shown you -- that because it is group litigation,
the costs should be paid at every stage and all
revisited later, whether preliminary issues or not.
That's the point I was making. I think I'm right about
that.
MR JUSTICE FRASER: I don't need you to answer at all. I'm
just going to tell you whether I'm going to reserve or
not.
MR GREEN: I'm most grateful.
MR JUSTICE FRASER: All right. Because there's a passage
which I'm going to start. I'm just going to give you
an brief ruling about it, so that you know why.
(1.00 pm)
(Ruling awaiting the judge's approval)
(1.10 pm)
MR JUSTICE FRASER: For the purposes of today's draft order,
whoever is drafting it, it will need to include
a 46.6(5) passage in it at the beginning.
I'm going to rise now. I will come back at 2.10.
Can you, between you, just remind me what is on today's
agenda then remaining?
MR GREEN: My Lord, it is the remaining points --
MR JUSTICE FRASER: It is what the costs order should be --
MR GREEN: It's what the costs order should be.
MR JUSTICE FRASER: -- basis of assessment --
MR GREEN: Basis of assessment.
MR JUSTICE FRASER: -- any payment on account --
MR GREEN: Payment on account.
MR JUSTICE FRASER: Actually what the costs order should be
includes within it any percentage reduction to reflect
the fact that there has been less than 100%.
MR GREEN: Precisely. There is one distinction, my Lord, in
relation to indemnity costs: there is the budgeted
costs --
MR JUSTICE FRASER: I understand that point.
MR GREEN: We just say --
MR JUSTICE FRASER: That's rolled up within --
MR GREEN: -- standard certainty, standard basis. Sorry.
MR JUSTICE FRASER: That point is rolled into basis of
assessment because you are, as I understand it, seeking
a different assessment up to a date in April 2018 and
then -- I think you are looking for indemnity costs up
to a date in 2018 and thereafter standard costs?
MR GREEN: My Lord, yes.
MR JUSTICE FRASER: Right.
MR CAVENDER: The other point is the timing of the
assessment. My learned friend wants a detailed
assessment now; we are saying that shouldn't happen.
That is another item.
MR JUSTICE FRASER: I understand that. Is that, however,
though -- and I will just ask you that question now. If
I'm making a payment on account, does that really make
any difference?
MR CAVENDER: It's for my learned friend to answer that. It
is something he's seeking, and I'm saying it's not
normal. It makes less of a difference, for the reason
your Lordship has intimated.
MR JUSTICE FRASER: Yes.
MR CAVENDER: But it is for him to decide whether he wants
to maintain that or not.
MR JUSTICE FRASER: All right. Mr Green, we will deal with
that further this afternoon.
MR GREEN: I'm grateful.
MR JUSTICE FRASER: So it is what the costs order should be,
including any percentage reduction; basis of assessment,
including the curiosity we have identified; when the
assessment should start; and any payment on account.
MR GREEN: My Lord, yes.
MR JUSTICE FRASER: Those are the matters this afternoon.
MR GREEN: Those are the four points.
MR JUSTICE FRASER: All right. 2.10. Thank you very much.
(1.12 pm)
(The short adjournment)
(2.10 pm)
MR JUSTICE FRASER: Just before we start, I gave
an incorrect reference when I was giving the ruling on
the Post Office's application for permission to appeal.
It is a case called Wheeldon v Millennium. I think
I said it was [2019] EWCA; in fact it is [2018]
EWCA Civ 2403.
Then I just want to add one passage to the ruling
I gave just before 1 o'clock about reserving the costs.
What I am going to do is I am going to produce somewhat
more detailed written reasons both for that and for any
other rulings I make this afternoon.
(2.14 pm)
(Ruling awaiting the judge's approval)
(2.15 pm)
MR JUSTICE FRASER: So, Mr Green.
Submissions by MR GREEN
MR GREEN: My Lord, yes. The first point of the four is the
principle of costs and any reduction.
MR JUSTICE FRASER: Yes.
MR GREEN: Your Lordship has seen that the Post Office
contends, at paragraph 27 {J1/4/8}, for a 30% reduction.
MR JUSTICE FRASER: To reflect their success on the issues
they succeeded on.
MR GREEN: Exactly. We respectfully say our primary
submission is there should be no reduction at all, for
reasons I'll explain.
MR JUSTICE FRASER: Yes.
MR GREEN: And our secondary submission is that were there
to be any reduction, it should be minimal, very small,
possibly 5 --
MR JUSTICE FRASER: Thank you for clarifying what "minimal"
means.
MR GREEN: Sorry. I was about to say: possibly of the order
of 5%.
MR JUSTICE FRASER: Yes.
MR GREEN: The reasons for that are some of principle and
some based on the judgment itself and some based on
their submissions.
The point of principle I would like to invite
your Lordship to consider first is in the Kastor case,
which is at {J7/8/1}. That is tab 8 in the authorities
bundle. My Lord, I don't think these are particularly
controversial points, but I think it is right to just
identify any points of principle very briefly.
The first point, it is paragraph 151 {J7/8/44}.
I can't see what page that is, but it's the
penultimate --
MR JUSTICE FRASER: We're at tab 7, are we?
MR GREEN: I'm so sorry, tab 8. {J7/8/44}. It is the
penultimate page.
MR JUSTICE FRASER: Yes.
MR GREEN: My Lord, bottom of the page, paragraph 153.
I don't think it's in any sense controversial, it's
probably absolutely trite, but it's obviously not
a simple mathematical calculation.
MR JUSTICE FRASER: That is effectively accepted by the
Post Office. They have very sensibly said they're not
seeking a mechanistic issue by issue and it should be
done by means of a percentage.
MR GREEN: Exactly.
MR JUSTICE FRASER: That is the modern way, isn't it?
MR GREEN: That's exactly right. But what we would go on to
say, with respect, is: when one is looking at
an percentage it is not a mechanistic approach either
arithmetically. It is not meant to be controversial.
The reason I'm taking your Lordship to the authority
is paragraph 151 {J7/8/44}, which is the alternative
case point, and it's quite an important point because
the principle is that where a party advances two
alternative arguments directed at the same outcome, they
are not to be penalised if they succeed on one and not
the other. This is the distinction being made, to show
you exactly what's said and then relate it across to our
case. It says:
"This is not a case where the issue on which the
successful party lost was a separate head of claim: it
was a separate basis for putting the successful party's
only claim. Accordingly, unlike in many cases involving
issue based orders for costs, this was a case where the
issue on which the successful party lost would not have
been litigated if the unsuccessful party had conceded
the issue on which the successful party won."
Just to give a practical example from
your Lordship's judgment, supply of goods and services:
the Post Office claims to have won on the act. We
respectfully say, on the correct principle, your
Lordship doesn't just tick a box whether they won or
lost, but looks at the fact that your Lordship
effectively found similar obligations otherwise implied,
but not by statute.
MR JUSTICE FRASER: But there were issues which don't fall
into that category.
MR GREEN: My Lord, I agree. I'm just trying to identify --
MR JUSTICE FRASER: The Post Office as SPM agent, for one.
MR GREEN: Indeed. My Lord, the point I was coming to in my
order -- I will take that point now -- the short point
on that was essentially that was I think about two
questions to Mrs Van Den Bogard, "You've said in your
witness statement this is a service you supply to
subpostmasters", and a couple of paragraphs in our
submissions. So it's a minimal point. But
your Lordship is quite right, we lost on it, and that's
fair enough.
The obligations which the claimants were seeking to
establish by virtue of that relationship, the substance
of those obligations are reflected in the finding of
relational contract. So for two reasons we say there
that on a proper analysis, it's more in the appearance
than in the reality of a win, but it's fair to say they
did win that issue.
MR JUSTICE FRASER: Yes.
MR GREEN: So, my Lord, that was the first point of
principle.
Then the court obviously has in mind --
MR JUSTICE FRASER: What exactly is the point of principle
though? You're saying: not mathematical?
MR GREEN: No, the point is that one should carefully have
regard to whether one has arrived at substantially the
same route by an alternative --
MR JUSTICE FRASER: Understood.
MR GREEN: The second point, my Lord, is to have regard --
and this picks up I think on their NTC not incorporated
point. They say: it would have been fantastic if we had
taken notice of the binding Court of Appeal authority.
There are two points in relation to that.
MR JUSTICE FRASER: On it being signed?
MR GREEN: It being signed.
MR JUSTICE FRASER: Yes.
MR GREEN: The first point is that there is an enormous
overlap between the unfair contract terms arguments and
the argument that they were onerous terms in relation to
NTC. And secondly, as to the principles, those had to
be argued in any event for the SPMC.
MR JUSTICE FRASER: Yes.
MR GREEN: It is completely artificial to regard those
matters of evidence as the Post Office seeks to
characterise them where the same substantive material
would have been deployed in any event, both the legal
arguments on the SPMC and consideration of the actual
effect of the terms for our purposes.
There is authority for that, my Lord, which is at
{J7/17/8} at paragraph 28, which picks up the point that
I have already made by reference to Kastor but also adds
the same material point. 28:
"However, on analysis, it seems to me that that
approach would not be appropriate in this case. It is
right that the defendant lost on its statutory authority
defence. However, all of the detailed legislation that
was considered by reference to that unsuccessful defence
was directly relevant to the alternative defence of
reasonable user, on which the defendant was entirely
successful."
So you can have situations where --
MR JUSTICE FRASER: That doesn't really add anything to your
submissions you've already made, does it?
MR GREEN: Well, my Lord, I think ...
MR JUSTICE FRASER: You're saying you can't look at it, for
example, as 7 -- well, let's use different numbers --
10 issues out of 20, so therefore it's automatically
a half, because some of the issues may have been either
overlapping issues or different ways to get to the
ultimate same answer.
MR GREEN: Yes.
MR JUSTICE FRASER: I have that point.
MR GREEN: Then the second point is that some of the issues
were interdependent in a different sense, in that a term
may be less onerous if its exercise is governed by
implied duties of good faith. And as heralded for two
years by the claimants repeatedly, we could not possibly
win on every issue. That was made absolutely clear for
two years.
MR JUSTICE FRASER: Yes.
MR GREEN: Then there is the point about how the issues were
in fact resolved. We would just invite some caution,
my Lord, in accepting the characterisation of those
issues in the lengthy footnote by which they are said to
have been recited as having been determined in their
favour. I will take an example. Just to take
an example, true agreement, my Lord, at 925 {B7/29/264}.
MR JUSTICE FRASER: Just give me a second to find the
lengthy footnote.
MR GREEN: There is actually a very similar one in two
different places. One is a footnote in their permission
to appeal skeleton and the other is a footnote at page 7
of their skeleton argument, footnote --
MR JUSTICE FRASER: Let's go to page 7.
MR GREEN: Defendant's skeleton argument on page 7, which is
{J1/4/7}. It has come up. Your Lordship will see at
the bottom --
MR JUSTICE FRASER: Just bear with me, just for a second.
I'm just chasing up a hard copy.
So this is the note at number 1?
MR GREEN: It is the footnote at number 1, which is very
long, and recites the issues on which the Post Office
won.
MR JUSTICE FRASER: Yes.
MR GREEN: I have already mentioned supply of goods and
services, my Lord, but can I mention, for example, true
agreement, where they say they won. Your Lordship will
well know from your Lordship's own decision that what
you actually found was that this common issue didn't
fall to be determined, but you would otherwise have
followed the approach argued in the alternative by the
claimants.
MR JUSTICE FRASER: Yes.
MR GREEN: That's at 925 on page 264 of the judgment
{B7/29/264}.
MR JUSTICE FRASER: 295?
MR GREEN: It is paragraph 925.
MR JUSTICE FRASER: Sorry, the mouse was hovering over the
paragraph number. You're talking about Judgment No 3
now, not what I've said in Judgment No 4?
MR GREEN: No, my Lord, what you said in Judgment No 3 --
MR JUSTICE FRASER: Yes.
MR GREEN: -- in terms of what -- your Lordship was
absolutely right in Judgment No 4 to say you were
invited to decide some issues, and some of them you
found in the Post Office's favour, and that's absolutely
correct. But we say, when you come to costs, the
context is: how were they determined in fact?
MR JUSTICE FRASER: Yes.
MR GREEN: And we look at paragraph 925, which is the very
paragraph to which reference is made, about six lines
down --
MR JUSTICE FRASER: But you're saying I think, on the basis
that your opening submission this afternoon was that
there should be no reduction, you're effectively saying
the degree of success on the Post Office's point of view
on all of the common issues was such that it does not
warrant a reduction.
MR GREEN: Precisely.
MR JUSTICE FRASER: That's pretty optimistic, if not failing
to pay attention to paragraphs 295 and 296 of Judgment
No 4 {B11.2/3/74}, is it not? Because I've already
dealt with this point in Judgment No 4. I've given the
global summary. What I said in Judgment No 4 was: the
Post Office's solicitors' submissions of 29 March
correctly reflected the success or otherwise of both of
the parties in Common Issues Judgment No 3.
MR GREEN: My Lord, I think that is completely right.
MR JUSTICE FRASER: But aren't you trying to reinvent the
wheel by persuading me that actually they didn't; or if
they did, it shouldn't affect the costs at all?
MR GREEN: I think, my Lord, I can't say that they didn't,
because (a) they did, and your Lordship said they did.
That's --
MR JUSTICE FRASER: If one accepts they did, is not the
modern consequence of that that consideration is given
to a percentage reduction?
MR GREEN: Yes. But, my Lord, the modern consequence is
consideration is given. I'm now addressing
your Lordship on whether --
MR JUSTICE FRASER: But you're saying the reduction should
be zero.
MR GREEN: Yes, that's our primary submission because --
I will give your Lordship all the points together.
MR JUSTICE FRASER: I'm acutely aware of what the common
issues were, what my answers were on all of them, how
they interrelated between one another and whether, and
if so, how many of them were more or less important than
the others.
MR GREEN: Precisely. I won't labour the point.
MR JUSTICE FRASER: I mean, you can labour it as much as you
want, but I don't think you're going to add to the sum
of human knowledge, to be honest.
MR GREEN: I'm most grateful, my Lord. I will move on.
Your Lordship has the point though. 925 is a good
example of being a bit careful about what they've said
they won on and what the substance of the finding is.
In relation to the NTC signature point, if we just
go back to that, your Lordship already has my
submissions on the UCTA and the principles being
deployed on SPMC. There is a further reason for that
though.
Your Lordship essentially got to the point of being
prepared to consider finding for the claimants on the
evidence, but was barred from doing so by a Court of
Appeal authority. If --
MR JUSTICE FRASER: I then went on to deal with it in case
I was wrong. You could have appealed that point.
MR GREEN: My Lord, yes.
MR JUSTICE FRASER: That doesn't mean the Post Office
haven't won on it.
MR GREEN: No, they have won on it. But in terms of doing
that in parallel and the reasonableness of taking the
point at all, which is one of the express factors that
Mr Justice Neuberger, as he then was, identified, it is
not available to us in the Court of Appeal if we don't
have your Lordship's treatment of it in this judgment,
if we seek to cross-appeal.
MR JUSTICE FRASER: No, that's correct. But that doesn't
mean you haven't not lost on it.
MR GREEN: No, it doesn't at all. But it goes to the --
MR JUSTICE FRASER: Sorry, that doesn't mean you haven't
lost on it.
MR GREEN: Yes, and your Lordship is right. But just on the
background factor of whether it was reasonable to take
the point in the first place, we respectfully say that
that is a fact, although a small one, but it's
a material one.
MR JUSTICE FRASER: Understood.
MR GREEN: The central point, which your Lordship is well
aware of, basically relational contract -- which my
learned friend said suffused everything else -- and the
implied terms, those issues, your Lordship will
remember, particularly in relation to the implied terms,
which I just briefly mentioned this morning, go back to
requests for further information in 2017 of what the
Post Office's case actually meant for specific points.
There were two of those in 2017 and the failure to
answer them resulted in the Post Office agreeing to
an order from your Lordship on 2 February 2018, the
second CMC order, ordering them to provide the
information. They didn't do so: they didn't actually
provide the information itself.
As your Lordship knows from the extensive recital of
that in our opening and reference back to it in our
closing, that rumbled all the way along, in a way which
we respectfully submit was extremely unsatisfactory,
through the provision of the table that we can just call
up briefly at {H/19.1/1} in a final attempt to get some
specificity from the Post Office as to what the terms or
their incidence were.
I actually prepared this and typed it myself, put it
in myself. This was the table offering the Post Office
the chance to say what they actually agree in respect of
each of the terms. I typed it all out, so they all
needed to do was type in what they said, and I even gave
examples, "E.G.", of what I thought their case might be,
to --
MR JUSTICE FRASER: No, but as I understand it, apart from
two of the terms that were agreed, that invitation
wasn't taken up.
MR GREEN: What they did was they responded in a very
lengthy document that didn't condescend to any clarity.
MR JUSTICE FRASER: Well, it may or may not have done. And
the Common Issues dealing with implied terms or
incidence of implied terms was, to a certain extent,
entwined within a consequential upon the finding on
common issue 1.
MR GREEN: Indeed.
MR JUSTICE FRASER: But ...?
MR GREEN: My Lord, the short point is -- "but" quite a lot,
we respectfully say, because if they had in 2017, when
they pleaded these two general terms and we said, "Hold
on a second, what does that mean for the specific areas
we're actually concerned with?", and they said:
actually, we agree there were the sorts of obligations
your Lordship has found, there may not even have had to
be a trial about all that.
MR JUSTICE FRASER: Okay. I have that point.
MR GREEN: So it was completely unnecessary. We say that
that unreasonable conduct goes all the way back --
MR JUSTICE FRASER: You're moving on to a different point?
MR GREEN: I am. I say it's relevant to how the trial and
the entire litigation was run for the general point
about no discount, but I also say it goes to the
question of the basis of assessment.
Because your Lordship has seen we've set out the
conduct which we rely on in our skeleton argument, and
your Lordship is very familiar with it all because much
of it comes from your Lordship's own judgment. That's
at {J1/1/14} and {J1/1/15} in particular of our written
submissions, all the way through to {J1/1/16}. But we
respectfully say that it was completely unreasonable to
agree to provide information and agree to an order to
that effect and then not provide it, with the
consequence that those matters could not be agreed.
All of those offers for them to clarify the
incidence or the implied terms were made openly, not
even without prejudice save as to costs. And that goes
all the way back to 2017. My Lord, that feeds in to
the -- I think your Lordship described it as a "curious
point" in relation to basis of assessment. I'm not
going to go through all these points --
MR JUSTICE FRASER: "Curious point"?
MR GREEN: About budgeted costs and pre-budgeted costs.
MR JUSTICE FRASER: Well, as I understand the situation,
it's as follows, and if I'm wrong, correct me. You want
indemnity costs up to a particular date --
MR GREEN: My Lord, yes.
MR JUSTICE FRASER: -- and detailed assessments, subject to
assessment on the standard basis --
MR GREEN: Indeed.
MR JUSTICE FRASER: -- after a particular date.
MR GREEN: Yes.
MR JUSTICE FRASER: Now, I am well used to and parties often
do ask for indemnity costs for a different period. It
is highly unusual to have the period for indemnity costs
pre-dating a period for standard assessment because it's
normally because something has happened --
MR GREEN: Indeed.
MR JUSTICE FRASER: -- where the conduct after a particular
date falls to be looked at from a different point of
view --
MR GREEN: Indeed.
MR JUSTICE FRASER: -- or of a different character.
MR GREEN: Indeed.
MR JUSTICE FRASER: Very unusual to have it the other way
round.
MR GREEN: Yes.
MR JUSTICE FRASER: It might be, I suppose, said that
conduct was exceptionally unreasonable and out of the
norm up to a particular date and then there was
a Damascene conversion and everything changed, but
I don't understand this to be --
MR GREEN: No, we're not saying that.
MR JUSTICE FRASER: No, that's rather why I'm asking the
question.
MR GREEN: That's the curious point, quite.
The short point is this: that the claimants'
submission is that looked at throughout the overall
period as a whole, the Post Office's conduct was out of
the norm in the lack of co-operation which the court
would expect from a party in a case like this, in
a number of material respects which we've sought to
identify, and from an early stage, and I've given
your Lordship the example of the repeated requests for
further information in relation to those implied terms
and their incidence.
MR JUSTICE FRASER: Yes, but none of that really jumps out
at one as all occurring at or near a watershed date.
MR GREEN: No, my Lord, we're coming to that.
So the primary submission is that when you look at
the conduct of the case across the whole piece, you see
factors justifying an award of indemnity costs across
the whole piece. Another example of that is where the
defendant does an apparent volte-face at trial, the
seeds of that volte-face are sown not at trial but when
they take the point originally. So our submission is
it's the assessment across the whole period that
justifies an award of indemnity costs, not that the
period starts or stops.
But what we have respectfully said is that we don't
invite the court to exercise its discretion in the light
of that conclusion in relation to the period for which
costs were budgeted, because of the certainty that
budgeting is supposed to bring to those costs and to
avoid the need for disputes on detailed assessment
ab initio, just to take the benefit of the certainty of
the budgeted costs.
So, my Lord, we don't say it all happens before and
then it stops. What we say is: looked across the piece,
it should be indemnity costs. But notwithstanding the
justification for an order at that time, we say: given
that costs were budgeted from April 2018 onwards, and
the certainty that that affords, on balance, it is not
just and convenient to make a different order because
your Lordship has already approved a costs budget, which
we came underneath. The cost budget was £3.4 million
and we were £3.1 million. So it doesn't help anyone.
So it's not withdrawing from the submission.
MR JUSTICE FRASER: When you say it doesn't help anyone, you
mean the cost management order doesn't help anyone?
MR GREEN: No, no, no, no. If we were to seek to invite
your Lordship to make an indemnity costs order, it's not
going to make a material difference --
MR JUSTICE FRASER: Because you can still --
MR GREEN: -- such as to justify the waste of everyone's
time.
MR JUSTICE FRASER: Understood.
MR GREEN: So that's the basis on which that is put.
MR JUSTICE FRASER: You have, I think, dealt both with costs
in principle, percentage reduction and basis of
assessment.
MR GREEN: Indeed. My Lord, I have. Then --
MR JUSTICE FRASER: Is that right?
MR GREEN: I have, exactly.
MR JUSTICE FRASER: Right. Well, I would like to hear from
Mr Cavender about that first.
Submissions by MR CAVENDER
MR CAVENDER: My Lord on the question of percentage
assessment, this is of course is meant to be
an impressionistic and to an extent broad brush, but
educated broad brush; educated particularly by the trial
judge of course who has just decided the case and who is
intimately knowledgeable about the various issues.
We had grouped at footnote 1, page 7 of my skeleton
{J1/4/7}, below 23, those items where the Post Office
did win. That is an accurate summary.
My learned friend, when he talks about the true
agreement point, when you look at the reference, we're
just talking here about that argument in relation to
termination for breach, not in a situation where it is
terminated other than for breach. So that's a bad point
he makes about that.
Again, he goes into certain of these things, but
when he does so, he does so inaccurately. Take the
agent point, that the Post Office was somehow the agent
of the postmasters: it is obviously a ridiculous
suggestion. But what's inaccurate is he says it's
a couple of paragraphs. If you look just in his
closing, it's six pages: it's {A/6/205} to {A/6/210} in
his closing. In my closing, I don't know, it's probably
a similar amount; in the opening similarly.
So I don't invite you to go through page by page;
it's impressionistic. But my learned friend isn't being
quite straight when he says it's a couple of paragraphs;
it's rather more. So you ought to bear that in mind.
It is true that if obviously a parallel point is won
then it's not mechanistic; I accept that, obviously.
But my learned friend says in relation to, for instance,
the onerous and unusual, it's all is the same. Well, of
course it's not the same because the terms under the NTC
are very different to the terms under the SPMC. You
have to consider each of the terms separately. You
can't begin to say, as my learned friend does, "Well,
it's all the same". Clearly it isn't.
Similarly, although there is some overlap between
the material one looks at for UCTA and onerous and
unusual, of course, as your Lordship rightly points out,
it is a very different test.
So the points he makes don't really get him
anywhere. One is then left back to the impressionistic
approach that in my submission you should be doing
anyway, and doing the best that we can.
If you look at our skeleton at paragraph 23 and
following {J1/4/7}, we put some skin on the bones of
what I have just said. For instance, paragraph 26
{J1/4/8}, in relation to signature and incorporation,
all the evidence that related to the two NTC lead
claimants that went to the interview, what they were
told, what they knew, Mrs Dar and Mrs Stockdale, was
only related to that.
So I don't overemphasise it, but one has to do it
fairly. We have sought to do that and we've come up
with a round figure of 30%. You may think that's too
high or too low. Certainly the idea that it's zero,
it's difficult to understand that submission having been
made. Equally, 5%: it's obviously much more than that.
But whether it's 25%, 30% or 35%, right-minded people
could disagree. I don't pretend that there's a right
answer. This is costs, a discretion. That's really
what I wanted to say on that.
My Lord, then going to the basis of assessment,
I have to say I'm very surprised that an experienced
party or team like this would seek indemnity costs in
this case. I say that because the test is a very high
one. If you look in our skeleton at paragraph 28 and
following {J1/4/9} Lord Justice Coulson reminded us of
that in a case called Hislop. It's authorities
bundle 2, tab 26 {J7/26/1}.
MR JUSTICE FRASER: 26?
MR CAVENDER: My Lord, yes.
MR JUSTICE FRASER: Yes.
MR CAVENDER: This is a decision of Hislop v The Board of
Leicester.
MR JUSTICE FRASER: Paragraph 36; is that right?
MR CAVENDER: Indeed, yes. He gives all the relevant
authority in 35. {J7/26/14}:
"Indemnity costs are appropriate only where the
conduct of a paying party is unreasonable 'to a high
degree'."
So that is the test.
We then cite also at paragraph 35 {J1/4/10}
Arcadia Group, which is in the bundle at tab 20
{J7/20/20}. I don't think I need to take you to it, but
we extract it at paragraph 35 of the skeleton, where he
says the "weakness of a legal argument" could not
justify indemnity costs unless the argument was
"motivated by some ulterior commercial or personal
purpose".
And what was said also in Hosking by Hildyard J
{J7/28/16}:
"The merits of the case are relevant in determining
the incidence of costs: but, outside the context of
an entirely hopeless case, they are of much less, if
any, relevance in determining the basis of assessment."
Then over the page {J1/4/11}, Digicel. So this is
paragraph 36(b), the decision of Mr Justice Morgan
{J7/14/11}, where he makes the point that:
"... further refinements of the legal or factual
analysis as the parties deepen their understanding of
the issues and the adoption of new positions in the
light of indications, direct or indirect, actual or
guessed at, of how the judge appears to be approaching
the matter ... are not particularly unusual in long and
complex cases."
That's aimed at the volte-face point.
MR JUSTICE FRASER: It is without doubt sensible -- or
rather I will put it the other way round. It is not
sensible for judges to penalise parties who concede
points during litigation by saying, "Well, that
justifies indemnity costs", depending upon the nature of
the point, because otherwise one would hamstring
advisers in terms of making sensible concessions.
MR CAVENDER: Indeed. Also I think the point
Mr Justice Morgan was saying is that the way you put the
point may alter slightly because things develop, and if
you look at the whole part of this judgment, witnesses
have given evidence, the judge has a certain view: often
judges will offer -- it has been done to me before --
different implied terms: "How about this one?" You buy
it or you don't, effectively. No one suggests that's
wrong or should result in indemnity costs.
Then at paragraph 36(e) {J1/4/12} we cite Williams
v Jervis {J7/13/3}:
"... important to bear in mind, firstly, that an
order for indemnity costs should not be made simply
because the paying party has been found to be wrong or
his evidence has been rejected in preference to that of
the receiving party."
So that is the tenor of the law. It has to be
something significantly out of the ordinary.
What is said against the Post Office here? My
learned friend says: well, for the whole time, the whole
period of the litigation, he says very boldly, the
Post Office behaved in the way he suggests. He gives
very few particulars on his feet. The ones he does give
are bad ones.
So he says, for instance, in relation to the implied
term debate -- the implied terms were pleaded by us in
our original defence: they were necessary co-operation
and Stirling v Maitland. The claimant admitted those
implied terms were part of the contract. If they had
wanted to, at any stage they could have pleaded what
they meant, how those implied terms interacted with the
express terms and what the incidence of those implied
terms were. Had they have done so, we would have had to
plead to that. At no stage did they do so.
They say that we didn't answer their request. We
did. Look at {B4/3/1}. The fact they don't like the
answer doesn't make it not an answer.
So that's the main one. My learned friend says the
whole costs, the millions of pounds of costs in this
action going on for a number of years, because he says
we didn't answer an RFI in the way he would like, in
circumstances where he could have pleaded terms he
admitted no incidence, the court should award indemnity
costs throughout. It is, in my submission, nonsensical
as a submission.
We then go to his costs submission at {J1/1/16},
where he goes from (a) to (h) and lists what he says are
grounds for giving indemnity costs. Just look at (d)
and (e) by way of example:
"(e) Its treatment of the Lead Claimants ..."
I assume he's talking about that when they were
employed, the way they dealt with them. Nothing at all
to do with the costs of the action in which the parties'
disputes are -- it is really very surprising to see that
written down.
"(b) Post Office's approach to agreeing facts, and
the relevance of evidence."
Well, we did agree a lot of facts. You'll remember
there were schedules of facts agreed as to whether they
were true, admissible, or one of two. So a lot of work
was done and there was good co-operation in relation to
that.
Yes, we didn't agree about the relevance of certain
evidence, we applied to strike it out, and your Lordship
said: well, it may be; you couldn't say it was all
inadmissible, some of it may be. You awarded costs on
that application. You can't then say: well, therefore
that then passes into the costs of the action and
somehow infects that. That would be unprincipled.
The volte-face point, in relation to paragraph (a)
of this: all your Lordship was doing was saying you
understood -- in one place you said you thought it was
a volte-face; in another place you said: on reflection,
it is the same point. And maybe I didn't put it very
clearly; maybe I can be criticised for that. But this
is a complex case, we had our written submissions. To
say that, "There should be awarded indemnity costs
against you for the whole action", is fanciful really.
I've never heard it in any other case I've been in,
I have to say.
And then we have -- all of this, none of these,
alone or together, begin to pass muster as being able to
satisfy tests for indemnity costs. That's all I want to
say about it.
MR JUSTICE FRASER: Can I just check one thing with you.
The date that Mr Green is taking as a watershed date,
I think -- is it April 2018?
MR GREEN: Yes.
MR JUSTICE FRASER: It is April 2018. Is it 11 April 2018?
MR CAVENDER: It is, and that --
MR GREEN: It's the 13th. It's the date up to which the
cost budget went. We're just saying the ones in the
budget.
MR JUSTICE FRASER: No, I understand the basis on which
you've chosen the date.
MR CAVENDER: Then if you look at the basis of assessment in
our skeleton, we outline why they've done this: it's
a tactical reason, to try and avoid their costs being
looked at more carefully.
MR JUSTICE FRASER: Well, it depends, doesn't it, on -- not
that it depends on this case. On a different case
though, whatever their reasons for it in this particular
case, to award indemnity costs for one period of time
and standard assessment for another period of time, one
would ordinarily look for something that has occurred at
or about that date that would relate to the conduct of
the paying party, rather just than the date of
a costs --
MR CAVENDER: My Lord, of course, and that happens. Certain
points are taken, or expert evidence, or some particular
point that played badly, that can be disallowed or you
can't recover your costs on it.
But here we have a blanket for the whole period, all
the costs of the action to date, we're talking about
here, from the very start of the pleading all the way
through, subject to a device -- and it is a device, as
we explain in paragraphs 28 and following {J1/4/9} --
not to have the budgeted costs area looked at because
they think they will do better if indemnity costs aren't
ordered over that period.
MR JUSTICE FRASER: Presumably because they don't have to
have a detailed assessment, as I understand it.
MR CAVENDER: Indeed. In my submission it is in principle
wrong and is -- well, it's obvious what's going on.
I need say no more.
MR JUSTICE FRASER: I don't think you need to say anything
more about that. Thank you very much.
Right. Mr Green, anything in reply?
Reply submissions by MR GREEN
MR GREEN: Two quick points.
Firstly in the MacInnes case at {J7/23/8}. So it's
tab 23 in the bundle of authorities. This is
Mr Justice Coulson in MacInnes v Gross. At 26, the
first four lines; he obviously goes on to talk about
relevance to interim payments thereafter. But the first
four lines:
"One of the main benefits to be gained from the
increased work for the parties (and the court) in
undertaking the detailed costs management exercise at
the outset of the case is the fact that, at its
conclusion, there will be a large amount of certainty as
to what the likely costs recovery will be."
MR JUSTICE FRASER: But this is on interim payments though.
MR GREEN: Well, yes, he goes on to deal with interim
payments, you're absolutely right. But the central
point, the rationale underpinning the budgeting
exercise, we respectfully rely on --
MR JUSTICE FRASER: That's undoubtedly correct, but it is --
well, I've explored the point with you already.
MR GREEN: Yes. It's unusual in that respect.
MR JUSTICE FRASER: All right.
MR GREEN: The other point I wish to address very briefly is
in relation to the implied terms point which my learned
friend has responded to. There are three points to make
on that.
The first point is: this is not a criticism that we
are making of the Post Office having made a concession.
The criticism is that they didn't make any concession
or, rather more particularly, did not actually say what
the incidents were for the material purposes of the
case.
The second point my learned friend made was that we
could have pleaded what we said the incidents of those
were, and we never did. He's wrong about that, because
our case was that our implied terms were either
free-standing implied terms or incidents of the terms
that the defendant had pleaded. So we had set them out
in our generic particulars of claim and they chose to
plead to them in the defence as they did. So he's wrong
about that.
The third point is just to invite your Lordship to
actually look at what we did say in the reply, because
it's not what you have been told. It's at {B3/3/32}.
I'm obviously aware that the pleading point didn't find
favour with your Lordship anyway in the judgment. But
actually looking at it carefully, if we start under
"Implied Terms" at B.4. If you look at paragraph 58,
that's pleading back to 106 in their defence. And at
58.2:
"As to the Defendant's averment, at
paragraph 106(2), that 'many' of the implied terms
pleaded by the Claimants 'address matters that are
already governed by the [thereto] terms ...' the
Claimant notes the Defendant's refusal to specify which
of those terms are 'already governed' by the Defendant's
accepted implied terms."
So that's the first point. It's not that they're
denying them. They're saying, "They are governed by
Stirling v Maitland and the other term, but we're not
going to tell you how".
58.3 was the reference to the only example
identified in the RFI. Then over the page {B3/3/33},
58.4, they are called out expressly for being evasive
this respect. And then 58.5:
"The Claimants aver that to the extent that their
pleaded implied terms are 'already governed' by the
Stirling v Maitland Term and/or the Necessary
Co-operation Term, these are in substance admitted by
the Defendant, contrary to Response 61A."
So it was specifically saying, "If you're saying
there are these overarching terms which already govern
the very things we've set out, this is ridiculous".
My Lord, I'm sorry, we do say that is unreasonable,
as was the pleaded case on special knowledge
subpostmasters. The seeds were planted when they did
the pleading; the harvest was taken in the Common Issues
trial.
Those are my submissions.
Reply submissions by MR CAVENDER
MR CAVENDER: My Lord, in connection to that, do you want to
look at {B7/7/13}, where the claimants admitted these
implied terms unconditionally. So it's {B7/7/13}. It's
number (2), in brackets:
"(For the avoidance of doubt, the implied terms
admitted at Defence para 105 are agreed)"
MR JUSTICE FRASER: Thank you very much. Right.
(3.00 pm)
(Ruling awaiting the judge's approval)
(3.08 pm)
MR JUSTICE FRASER: I will put this in writing, but is that
sufficiently clear for today's purposes and for drawing
up the order?
MR GREEN: Yes.
MR JUSTICE FRASER: Right.
What is there now? Payment on account and whether
a detailed assessment should commence now or not?
Submissions by MR GREEN
MR GREEN: My Lord, yes. The short point is: those two
points are interrelated. Payment on account would
ordinarily be ordered. As your Lordship observed to me
when I referred to the judgment of Lord Justice Coulson
in --
MR JUSTICE FRASER: Which one?
MR GREEN: The one about the benefit of cost budgeting.
MR JUSTICE FRASER: Remind me of the name.
MR GREEN: That was in tab 23, it's MacInnes v Gross, and it
was Mr Justice Coulson, as he then was. It's {J7/23/8}.
MR JUSTICE FRASER: Yes, you were taking me to paragraphs --
I think it's 26 and 27 together, isn't it?
MR GREEN: Precisely.
So the two points are that in terms of budgeted
costs, your Lordship effectively knows what they are
already, and my learned friend Mr Warwick is going to
deal with numbers and calculations, if he may, if that's
helpful.
MR JUSTICE FRASER: Yes. So in terms of principle then, you
would like a payment on account; the amount is going to
have changed slightly, one imagines.
MR GREEN: My Lord, yes. My learned friend will --
MR JUSTICE FRASER: But you want a payment on account. You
also want an order that the detailed assessment be
commenced straightaway.
MR GREEN: My Lord, yes. And there is a balance to be
struck, because if the payment on account is a very
substantial proportion of the costs, the interest in
having a detailed assessment -- the balance to be struck
by your Lordship is different.
MR JUSTICE FRASER: Right. So when I observed just before
the short adjournment, in a point to Mr Cavender, simply
because he was on his feet, "Is there really any
difference?", and he understandably said it's really
a point for you --
MR GREEN: Yes.
MR JUSTICE FRASER: -- if you get a payment on account, is
there really any difference?
MR GREEN: My Lord, normally if the payment on account is at
or about the budgeted costs plus a substantial
proportion of the other costs, there may be no
justifiable reason to go through the expense of detailed
assessment now rather than later.
MR JUSTICE FRASER: Right. But Mr Warwick is going to deal
with the figures?
MR GREEN: He will deal with the -- exactly.
MR JUSTICE FRASER: All right. So is there anything else
you want to add?
MR GREEN: My Lord, not unless I can help you further.
MR JUSTICE FRASER: Right. I will hear from Mr Warwick on
the figures and then, Mr Cavender, I will come to you
about both whether there should be a payment on account
and, if so, how much.
MR GREEN: I haven't really addressed what it should be,
because it's for my learned friend to --
MR JUSTICE FRASER: When you say "what it should be" ...?
MR GREEN: Sorry, the issue of principle beyond just saying
it's normally made, because of course the burden is on
my learned friend.
MR JUSTICE FRASER: Yes, understood.
Mr Warwick.
Submissions by MR WARWICK
MR WARWICK: Yes, my Lord.
MR JUSTICE FRASER: Am I right to look at paragraph 74 of
your costs submissions {J1/1/17}?
MR WARWICK: My Lord, yes, which is in terms the same as
paragraph 5(a) {J1/3/3}, which I've been working from.
MR JUSTICE FRASER: 5(a)?
MR WARWICK: Yes.
MR JUSTICE FRASER: I think I might have a different version
of the document.
MR WARWICK: It's found at {J1/3/3}, my Lord, under
heading A.1.
MR JUSTICE FRASER: No, I have it on the screen; I'm just
looking in my hard copy document. Just give me one
second.
All right, yes.
MR WARWICK: My Lord, if you'll forgive me, the figures have
changed by reason of the deduction that you have
applied --
MR JUSTICE FRASER: I guessed that they would have done,
because your figures I don't think had any adjustment.
That's not to criticise you: you didn't know if there
was going to be one and, if there was, what it was going
to be.
MR WARWICK: Indeed, my Lord.
MR JUSTICE FRASER: So what are the figures now then?
MR WARWICK: In the time available --
MR JUSTICE FRASER: Incurred figures haven't changed?
MR WARWICK: The incurred figures haven't changed, no.
I beg your pardon, sorry. The budgeted costs, from
which this is taken, were budgeted at £3,480,382.50.
MR JUSTICE FRASER: And 3.1 had been incurred.
MR WARWICK: And 3.1 has been incurred. Actually, on
instruction, a little over that has been incurred: about
£90,000 more. It has been rounded down for simplicity.
MR JUSTICE FRASER: All right.
MR WARWICK: I mention that, my Lord, because there is
obviously a danger in this process in adding rounding
downs upon rounding downs.
MR JUSTICE FRASER: Well, there might be, but I'm afraid
that's the best that anyone can do.
MR WARWICK: Pausing there for a moment, my Lord, I do also
wish to add that of course there's no difference of
principle between us about your approach to this, my
Lord, save only that Lord Justice Christopher Clarke
observed in Excalibur {J7/22/1}, quite rightly, that you
shouldn't be looking to find the irreducible minimum;
it's rather based on --
MR JUSTICE FRASER: No, I understand that.
MR WARWICK: Indeed, my Lord.
So that figure would fall to £2,790,000 with the
application of a 10% discount.
MR JUSTICE FRASER: Well, hold on one second. At the moment
we're looking at costs from the costs management order
date onwards.
MR WARWICK: Yes.
MR JUSTICE FRASER: So that can purely have a percentage
reduction applied to it --
MR WARWICK: Absolutely.
MR JUSTICE FRASER: -- because I haven't given an indemnity
costs assessment, so there's no detailed assessment.
MR WARWICK: Quite. Quite.
MR JUSTICE FRASER: So what does 3.1 go to?
MR WARWICK: £2,790,000 my Lord. Correspondingly, VAT down
to £558,000.
MR JUSTICE FRASER: VAT to what? £558,000?
MR WARWICK: Correct, my Lord, yes.
MR JUSTICE FRASER: Yes.
MR WARWICK: And the allowance for budgeting costs is
reduced to £27,900 from £31,000.
MR JUSTICE FRASER: That's just a 1%.
MR WARWICK: It's just a 1%, yes. My Lord, you may recall
there is a split approach to that. The initial
preparation of budgets is subject to a cap of 1%.
MR JUSTICE FRASER: Yes.
MR WARWICK: Further cost management costs, which are not
insignificant in a case like this -- there have been
several hearings since April; although I should add,
my Lord, you have made one costs order in respect of one
of those hearings. But nevertheless, they are a large
sum. And just for ease of rounding --
MR JUSTICE FRASER: Can I just check though: this does not
include any of the £300,000 in respect of the consent
order for the recusal?
MR WARWICK: Not at all. That's correct, yes, my Lord.
MR JUSTICE FRASER: Understood.
MR WARWICK: But just making that point good, my Lord, just
1% has been applied as a blanket for the purposes of
estimation, rather than breaking it down.
MR JUSTICE FRASER: Understood.
MR WARWICK: If I may have a moment to reach a total for
that, now that your adjustment has been added. (Pause)
I make that, my Lord, £3,375,900 on the budgeted
costs element.
MR JUSTICE FRASER: Well, all of those figures can be
checked afterwards. But it is incurred costs --
MR WARWICK: Yes.
MR JUSTICE FRASER: -- up to 13 April 2018, which requires
a little bit more analysis, doesn't it?
MR WARWICK: It does, yes. Subject of course, my Lord, to
not applying an approach that would look to find
an irreducible minimum.
MR JUSTICE FRASER: Yes.
MR WARWICK: And those have been taken --
MR JUSTICE FRASER: But your total, or the balance, is what?
It was originally 3.284 and you were looking for
an interim payment of 60% of that --
MR WARWICK: That's right, my Lord.
MR JUSTICE FRASER: -- to reflect your recovery on
a detailed assessment --
MR WARWICK: That's right, my Lord.
MR JUSTICE FRASER: -- and the fact it's not a full
indemnity.
MR WARWICK: That's correct, my Lord, yes.
MR JUSTICE FRASER: Yes.
MR WARWICK: Built into it though, I have to say, my Lord,
was an element of rounding down, because how that figure
has been reached, if I may explain very briefly, is to
take the total incurred costs from the costs budget,
which was £6,142,540.08, and strip out some things that
the costs --
MR JUSTICE FRASER: Well, however it was reached,
Mr Warwick, that's the figures that you've ended up
with --
MR WARWICK: That's right, my Lord, yes.
MR JUSTICE FRASER: -- where you explain what the balance
is, having removed the costs management order budgeted
costs --
MR WARWICK: Yes.
MR JUSTICE FRASER: -- and applying 60% to that.
MR WARWICK: That's right.
MR JUSTICE FRASER: But your 2.384 takes no account, so far
as I can tell, of any percentage reduction for your
recovery, but you say it does take account of the fact
you're not going to recover everything on a detailed
assessment.
MR WARWICK: That's right, my Lord. Yes, it does.
MR JUSTICE FRASER: It does.
MR WARWICK: That proposition is correct.
MR JUSTICE FRASER: But your 2.384 includes VAT on the 1%?
MR WARWICK: It does, my Lord, yes.
MR JUSTICE FRASER: Is there any reason why you have not
given me those figures separately? I'm not saying
I need them separately; I'm just curious.
MR WARWICK: In the skeleton argument, for simplicity, they
are there as just figures; but in the correspondence to
which it refers, they are set out in a little more
detail.
MR JUSTICE FRASER: Yes, all right. Okay.
Is there anything you would like to add on the
figures?
MR WARWICK: My Lord, if I could say: in support of the sum
claimed for incurred costs, as if to stress-test the
figure, one could also look at the period of time that
elapsed since the first CMC. For very obvious reasons,
what is sought here would go back beyond the first CMC
to the time when, for example, the Common Issues were
negotiated and agreed and put into an order and so
forth. They have been in issue since a very early
stages of these proceedings.
But what is interesting to note is that under
your Lordship's costs reporting requirements, first
imposed in fact by the Senior Master under the GLO and
latterly by your Lordship, there have been letters
informing of costs updates along the way, and the
increase between the first CMC before you in
October 2017 and for 13 April 2018 was roughly
£2 million, and that broadly aligns with the underlying
figure that's being claimed here.
Wo whichever way one looks at it, there is support
for that figure in round terms, my Lord.
MR JUSTICE FRASER: So far as your stress test is concerned,
doesn't there have to be some application to your
current paragraph 74(b) in the costs submission
{J1/1/17}, the version that I'm using, to reflect the
90% point?
MR WARWICK: On budgeted costs, my Lord.
MR JUSTICE FRASER: No, no, I'm not --
MR WARWICK: Your 90% that you've just applied in making the
costs order you have, my Lord.
MR JUSTICE FRASER: Right. At the moment, Mr Warwick, your
costs, for understandable reasons, have been dealt with
post-13 April 2018 because they're subject to the costs
management order.
MR WARWICK: Yes.
MR JUSTICE FRASER: And I entirely understand the way you've
taken me through the figures. You applied a reduction
of 90% to the £3.1 million to get to 2.79; yes?
MR WARWICK: Yes, my Lord. Yes.
MR JUSTICE FRASER: Costs incurred up to 13 April, you had
taken a balance and you had applied 60%, but there had
been no 90% analysis because you didn't know I was going
to make a 10% reduction.
MR WARWICK: That's right, my Lord, yes.
MR JUSTICE FRASER: Did you want to tell me what the figures
are with the 10% reduction?
MR WARWICK: Yes. So the figures --
MR JUSTICE FRASER: Because even the most optimistic counsel
I don't think would be maintaining recovery of
an interim payment on account in the same amount as
before they had their costs reduced by 10%.
MR WARWICK: That's well understood, my Lord. Yes, of
course.
So the total of incurred costs that would be said to
be recoverable, but to which I will apply your 10%
reduction, was to be £3,284,835, would now be
£2,956,351.50, to which the 60% is applied, leading to
£1,773,810.90, meaning that the total sought is ...
MR JUSTICE FRASER: Can you just give me the product when
you apply the 60% again, because I didn't note it down.
MR WARWICK: Yes, it is £1,773,810.90.
MR JUSTICE FRASER: Yes.
MR WARWICK: So taken together with the reduced budgeted
costs, that would come to just over £5 million, so 5 --
MR JUSTICE FRASER: No we haven't got there yet. At the
moment we're at £1,773,810, which I think --
MR WARWICK: Yes, my Lord.
MR JUSTICE FRASER: -- doesn't have VAT, does it?
MR WARWICK: I'm so sorry. I beg your pardon. I will just
add that in.
MR JUSTICE FRASER: I want to know what the figures are like
with like. I can only compare them if you do them on
the same basis.
MR WARWICK: Indeed. So the VAT would be reduced to
£354,762.18. And the 1% budgeting figure --
MR JUSTICE FRASER: That's going to be £17,738, isn't it?
MR WARWICK: Indeed, my Lord, yes. £17,738.10.
MR JUSTICE FRASER: I don't think you need to worry about
the 10 pence.
So the total of those three is, please?
MR WARWICK: The total of the VAT and the 1%, or all
underneath that line?
MR JUSTICE FRASER: The £1.773 million plus the VAT plus the
1%.
MR WARWICK: Is £2,146,311.
MR JUSTICE FRASER: All right. Thank you very much.
So your submissions seeking payments on account have
changed, as a result of my 90% ruling, to be £3,379,500
for budgeted costs and £2,146,311 for incurred costs up
to 13 April?
MR WARWICK: That's correct. So the budgeted cost is in
fact £3,375,900.
MR JUSTICE FRASER: £3,375,900? I'm sorry.
MR WARWICK: Correct.
MR JUSTICE FRASER: All right. That's very useful. Thank
you very much. I'm now going to hear from Mr Cavender.
Mr Cavender, I wanted to do that in detail first so
you could see what figures are that are being claimed
against you now, as opposed to the ones claimed against
you in the skeleton.
Submissions by MR CAVENDER
MR CAVENDER: Indeed. Can we go to my skeleton though,
because that outlines what we understood was going on
here and why there are difficulties particularly with
the approach and the incurred costs.
So we outline at 42(a) and (b) {J1/4/14} what we
understood the position to be. This is before the 10%
reductions. But they wanted 100% of budgeted costs and
60% of pre-budget costs.
Then we outline the approach at paragraphs 45 and 46
{J1/4/15} and we rely particularly, where a costs
management order was in place for the budgeted costs,
that 90% of budgeted costs has been awarded in a couple
of cases.
MR JUSTICE FRASER: Yes.
MR CAVENDER: So that is the basis on which we are
proceeding.
Let's take budgeted costs first. 90% of the
£3.1 million-odd plus VAT gives you the 3.3348 figure.
You then have to reduce that by 10% to reflect the
discount of the success.
MR JUSTICE FRASER: The order I've made this afternoon, not
the 90%.
MR CAVENDER: Correct.
MR JUSTICE FRASER: Yes.
MR CAVENDER: So you need to take 90% of --
MR JUSTICE FRASER: The 90%.
MR CAVENDER: Correct. So 90% of the £3,348,000, which
comes to £3,013,200.
MR JUSTICE FRASER: So in other words, the figures that
Mr Warwick has given me don't take account of the 10%
Cleveland Bridge/MacInnes reduction.
MR CAVENDER: Correct.
MR JUSTICE FRASER: And it has to be done as well.
MR CAVENDER: Indeed.
MR JUSTICE FRASER: And if it is, budget costs go to
£3.013 million.
MR CAVENDER: Correct.
MR JUSTICE FRASER: And that extra 90% doesn't really apply
to incurred costs up to April 2018 because they're done
in the old-fashioned way, which Mr Warwick has explained
was a 60% reduction.
MR CAVENDER: My Lord, he does. But the trouble is, and the
trouble with incurred costs, if you look at
paragraphs 49 and 50 of our skeleton {J1/4/16} -- this
is a point we raised in our submissions, served some
weeks ago, but unfortunately it has not been dealt with,
so there's a hole in the information. If you go to
{J1/2/8}, which is our costs submissions, paragraphs 22
and 23, if you could read those.
MR JUSTICE FRASER: Is this the original submissions on
29 March?
MR CAVENDER: Exactly.
MR JUSTICE FRASER: Yes, I have those. Just give me one
second.
MR CAVENDER: So paragraphs 22 and 23 outline that there
can't be any costs of the Common Issues in advance of
the Common Issues being ordered. That was ordered on
25 October 2017. There were quite a lot of costs before
that.
MR JUSTICE FRASER: They were ordered in October which year?
MR CAVENDER: 2017. But all the stuff before that are
general costs of the action that are not generally
currently in play. We asked: if they want to seek
these, they ought to produce us with a figure.
MR JUSTICE FRASER: Yes.
MR CAVENDER: Without a figure, we can't do it. But that
was months ago. We still don't have that figure. We
record that at paragraphs 49 and 50 --
MR JUSTICE FRASER: Of your skeleton?
MR CAVENDER: -- of our skeleton {J1/4/16}.
So quite what to do, it's very difficult to know
whether to put anything in here, because we don't want
to guess. But you're going to have to, in my
submission, if you want to do it on a rough and ready
basis, apply some kind of discount to reflect that lack
of knowledge, that those costs can't be Common Issues
costs.
MR JUSTICE FRASER: And you'd be happy for me to do that in
an impressionistic rather than
a mathematical/arithmetical way, would you?
MR CAVENDER: Well, I'm not very happy about it.
MR JUSTICE FRASER: No, no.
MR CAVENDER: I'd rather get the information. I've ask my
costs junior, who knows about these things, "Come on,
can't we have a stab at it?", but he's very reluctant.
So that's where we --
MR JUSTICE FRASER: Some account will have to be taken of
that.
MR CAVENDER: Or whether you say: well, they've put nothing
in to allow you to do it, so you have no real judicial
basis to do it. It might seem somewhat harsh, on one
view: there must be some costs. But I think you should
be super-cautious about it. If you are going to go down
the route and say, "Well, there must be some costs", you
should reduce it by a margin to ensure that you cover
this degree of uncertainty.
MR JUSTICE FRASER: But remember, this would be a payment on
account of a detailed assessment for costs in that
period, wouldn't it?
MR CAVENDER: Yes, I think that's true. There would be
a detailed assessment in that period.
MR JUSTICE FRASER: Yes. So it doesn't necessarily have
potentially unfair consequences, but it has to be taken
into account in fixing what's a payment on account of
a detailed assessment.
MR CAVENDER: Indeed.
MR JUSTICE FRASER: Understood. All right.
MR CAVENDER: The danger is an overpayment that we might
struggle to get back. This is always the problem.
They have had a fair chance to do this; they haven't
done it. I'm not being unrealistic about it. But I'm
not sure that they haven't done that should be visited
on my client, the uncertainty.
MR JUSTICE FRASER: Understood. All right.
MR CAVENDER: So I hazard to give you a figure that would
encompass that.
MR JUSTICE FRASER: No, I understand that.
MR CAVENDER: My Lord, I have asked to leave it to you
to ...
MR JUSTICE FRASER: Thank you very much.
Anything else?
MR CAVENDER: I think that was all that was in issue,
wasn't it?
MR JUSTICE FRASER: Yes, it was just to -- all right. Thank
you very much.
MR WARWICK: My Lord, might I say one thing as a point of
principle that has arisen out of that?
MR JUSTICE FRASER: Of course you can. I was going to come
back to you on that anyway.
MR WARWICK: I'm very grateful, my Lord.
Reply submissions by MR WARWICK
MR WARWICK: There are just two points here: the Cleveland
90% if I can call it that, and then the pre-first CMC
issue.
The Cleveland 90% has not been applied. But
I should point out, if it hasn't been seen already from
when my learned leader took your Lordship to the case on
which it's based, which was the judgment of
Mr Justice Coulson in MacInnes, at paragraph 28 in that
judgment, which is found at {J7/23/8} --
MR JUSTICE FRASER: Yes, I have that judgment open.
MR WARWICK: It's important to bear in mind in this
analysis, my Lord, that the 90% applied by then
Mr Justice Coulson is regarded as the maximum deduction
that's appropriate in a case where there is an approved
costs budget.
The same reasoning was applied in the later case to
which you have been referred in writing and orally, the
Cleveland Bridge case {J7/27/1}, where Ms Joanna Smith
QC, sitting under section 9, followed then
Mr Justice Coulson's approach pretty much verbatim in
her judgment. I needn't trouble your Lordship by taking
you through that.
MR JUSTICE FRASER: No, I don't think you need to.
MR WARWICK: The point to make here, my Lord, is that my
clients have come in under. So they have come in
significantly -- indeed, more than 10% -- under the sum
that this court has already found to be reasonable and
proportionate for the purposes of costs budgeting. In
my submission, my Lord, there is no basis to apply
a Cleveland 90% reduction in this situation. It would
be for little, if anything.
MR JUSTICE FRASER: I think the real answer is in
paragraph 25 of that case {J7/23/8}, where it said:
"In my view, the ... approved costs budget is the
appropriate starting point for the calculation of any
interim payment on account of costs. CPR 3.18 ... [if]
there is an approved or agreed costs budget, when costs
are assessed on a standard basis at the end of the case,
'the court will … not depart from such approved or
agreed budget unless satisfied that there is good reason
to do so.' The significance of this rule cannot be
understated."
MR WARWICK: Indeed.
MR JUSTICE FRASER: However, in this case the "good reason"
is the fact that I've only award you 90%.
MR WARWICK: Yes, in a sense the reasoning here is the idea
that somehow the seal has been broken. But the point is
that my clients have come in at 10% below --
MR JUSTICE FRASER: No, no, I understand that. I do
understand that.
MR WARWICK: Yes.
MR JUSTICE FRASER: That is a point -- I'm not sure,
Mr Green, that Mr Warwick is necessarily going to find
it useful to listen to you when he's supposed to be
listening to me, but I might be wrong. You can have
a moment in a second.
But the essential point is, isn't it, that in the
case of MacInnes the judge was dealing with what the
correct interim order should be on account of costs,
taking into account the costs budgeted figure, where
there had been an order for costs?
MR WARWICK: Yes.
MR JUSTICE FRASER: In this case there is an order you get
90% of the Common Issues costs, so there has to be
an adjustment. That's the "good reason", isn't it?
MR WARWICK: My Lord, that's certainly the "good reason" to
apply the adjustment that your Lordship has ordered
should be applied. There is no good reason, in my
respectful submission, to apply a further 10% discount
or deduction I should properly say on the
MacInnes/Cleveland basis, my Lord.
MR JUSTICE FRASER: I think what you are saying is that the
figures you have given me achieve it because you have
done the 90% analysis that I took you through 15 minutes
ago.
MR WARWICK: They do my Lord, yes, and for the further
reason that my clients anyway came in 10% under budget.
MR JUSTICE FRASER: I understand. All right. So you are
under budget.
What about Mr Cavender's point? What I will do is I
will just hear from you on this point, then I'm going to
give the shorthand writers a break and then I'm going to
come back in.
MR WARWICK: Very grateful. The pre first CMC point
my Lord. It is true that at the first CMC before you in
October 17 --
MR JUSTICE FRASER: There were no common issues.
MR WARWICK: The common issues were ordered at that point,
but they have an extremely long history my Lord. They
go right back to pre-action correspondence. If it
assists the court I can take you to where that is found
in the defendant's letter of response.
MR JUSTICE FRASER: It doesn't assist me, but I think your
answer to the point is what?
MR WARWICK: My answer to the point is that on detailed
assessment, as my learned friends rightly identified in
their skeleton, this would be something argued at
detailed assessment, but it would be argued very
strongly by the claimants too that the Common Issues
were a core feature of this litigation, always have
been, and that a substantial proportion of pre-October
2017 costs are entirely referable to that element of the
case.
But if it assists your Lordship's decision-making on
this, as I have already pointed out when I made
reference to a stress-testing process, the increasing
costs which the claimants have incurred between
October 2017 and the cut-off date for these incurred
costs, namely 13 April 2018, was a whisker over
£2 million and that £2 million now roughly aligns and
now exceeds the figure that I gave your Lordship of
£1,773,810, which was the 60% discounted figure.
Therefore, looked at either way, that figure should
properly be regarded as reasonable and proportionate as
an estimate of Common Issues costs that were incurred as
at 13 April. The final point to make my Lord is just to
repeat again that we are not looking to strip everything
out and achieve an irreducible minimum which appears to
be the gravamen of my learned friend Mr Cavender's
submission that we should have nothing for this period
since there are doubts.
Inevitably, my Lord, there are doubts because we are
not at detailed assessment and the production of a
detailed bill of costs in this will be a lengthy
exercise and we are working only with estimated figures.
I have one further point if I may.
MR JUSTICE FRASER: Yes.
MR WARWICK: My learned leader is right to point out that
under first the Senior Master's cost reporting regime
and latterly your cost reporting regime, information
about the level of costs has been reported throughout.
I understand on both sides there has been some wobbles
about that over the last few months --
MR JUSTICE FRASER: What do you mean by wobbles?
MR WARWICK: I'm afraid I don't have full instructions but
I do understand there have been some periods of time
when the parties have not written strictly to the
letter --
MR JUSTICE FRASER: Originally they were supposed to notify
me every time their costs went up by £250,000. Then
they were writing so often that that was changed to half
a million. The most recent letter I received was one
from the Post Office which told me that their costs were
£12.8 million. That was earlier this month but it
didn't include, so far as I know, the £300,000 that was
agreed and the consent order for today about the recusal
costs.
So I'm anticipating another letter very soon about
that and it won't reflect any orders I make today. They
won't be taken into account.
MR WARWICK: I'm grateful my Lord. If I can come good on
that submission by injecting a little more precision --
not -- than your Lordship's summary, I mean in the
submission I made so far. Under the GLO the regime
required a statement of costs to be produced shortly
before the first CMC. That was produced identifying the
claimants' costs at just over £4 million, 4.15 in round
numbers.
MR JUSTICE FRASER: Yes.
MR WARWICK: Through costs reporting letters in the
intervening period running up to 13 April 2018 ongoing
costs were reported first at £250,000 increments and
I think at the very end, perhaps on the first of the
£500,000 increments, I'm afraid I'm not sure but I do
not think anything turns on it.
MR JUSTICE FRASER: I don't think either, I only mentioned
it because you mentioned it.
MR WARWICK: Indeed my Lord. Then when one looked at the
cost budget, one sees the £6.15 million total incurred
cost figure. The difference between the two is
£2 million. In short, my Lord, the claimants had to go
through £2 million during that period in any case and
that is the figure that in fact exceeds the figure that
your Lordship has been given as part of my calculation
after the various deductions today. If your Lordship
forgives the convoluted way of explaining that, that is
my point on it.
MR JUSTICE FRASER: Insofar as I understand that, thank you
very much.
I'm going to rise for ten minutes purely for the
shorthand writers because they are entitled to a break.
I will come back in and give you the brief ruling on
figures on amount, of payments on account, and then we
will deal with the one final outstanding matter which is
whether there should be a detailed assessment ordered to
take place straight away or whether it should wait. So
I will come back in at 3.45.
(3.39 pm)
(A short break)
(3.51 pm)
MR CAVENDER: My Lord, before you rule on that, can I raise
one point. We can check the transcript to make sure
I am right. I was a bit confused about my learned
friend's submissions as to the costs for the incurred
period.
On the transcript at page 143, line 9, it is
recorded as my learned friend saying that their incurred
costs at the date of the first CMC was £4.1 million.
I ask: is that right, because if so, that's a much
bigger problem than I anticipated for that uncertain
period.
MR JUSTICE FRASER: That would be the first CMC in front of
me which was October --
MR CAVENDER: 17.
MR JUSTICE FRASER: Okay.
MR CAVENDER: I don't know if he misspoke. I thought the
amount would be very much smaller and so I was being
quite relaxed about it. If it was £4.1 million of the
6-odd and we have no detail about it, that becomes a bit
more of a serious problem.
MR JUSTICE FRASER: I understand. That can't possibly be
right.
MR CAVENDER: I would not have thought so.
MR JUSTICE FRASER: What was the page of the transcript,
Mr Cavender?
MR CAVENDER: Page 143, line 9. It is not a perfect bit of
the transcript because they have yet to complete it.
MR JUSTICE FRASER: All right. Thank you very much.
MR CAVENDER: I am sure my learned friend must know what the
costs were at the first CMC because he told us.
MR WARWICK: Yes, my Lord, I do. I'm looking at a copy
here. It is not in your bundle my Lord but a copy of
the statement or cost summary that was produced pursuant
to paragraph 35 of the GLO and it was sent to the
defendant, I believe, shortly after 2 October 2017 when
it was prepared and the grand total is £4,180,803.35 --
MR JUSTICE FRASER: 4-point ...? We are talking millions?
MR WARWICK: Yes, my Lord. £4,180,803.35.
MR JUSTICE FRASER: As at October 2017?
MR WARWICK: It included estimated costs for the first CMC
as well that was then just about to happen. The major
point that I'm asked to point out which is absolutely
right is that it includes a significant sum for
preparation of the statements of core information which
your Lordship will remember were prepared for each of
the 550, perhaps 560 at that stage, claimants in
considerable detail and at considerable length. That is
a figure that's been mentioned in court previously --
MR JUSTICE FRASER: Therefore, it may not make any
difference but I am going to go back to Mr Cavender in
a moment, if I look in paragraph 74 of your skeleton,
74(a) and (b) reading together has a total figure of
£6.384 million. Now, obviously, there will be some
costs prior to the first CMC that aren't Common Issues
costs.
MR WARWICK: Yes, my Lord.
MR JUSTICE FRASER: But the costs information that you have
already provided to WBD is that 4.1 of the total, which
obviously is going to be bigger than the 3.2 and the
3.1, 4.1 of that had been incurred as at the date of the
first CMC on 2 October?
MR WARWICK: Yes, my Lord, although of course including the
then estimated costs of the first CMC itself.
MR JUSTICE FRASER: I understand that, some of those will be
Common Issues costs and some won't.
MR WARWICK: That is right, my Lord.
MR JUSTICE FRASER: I understand.
There you go, Mr Cavender.
MR CAVENDER: My Lord, I just reiterate the point about the
uncertainty. We have pointed this out and now we are
talking about £4 million-odd. Maybe some of it is
related partly to Common Issues. Even if you take
£1 million of that, you have £3 million. In my
submission you should be a lot more careful about that
element rather than waiving it through on the basis of
the other amounts we have information about.
MR JUSTICE FRASER: When you say waiving it through?
MR CAVENDER: Making an interim payment in relation to it.
MR JUSTICE FRASER: But it is an interim payment -- the
interesting thing or -- I don't know maybe the
Post Office will decide they would like to start
a detailed assessment sooner rather than later -- but
for this period it is a payment on account of a detailed
assessment.
MR CAVENDER: Correct.
MR JUSTICE FRASER: Which on the figures that Mr Warwick has
taken me through takes what they say are their common
issues costs up to that date, multiplied by 60% because
of his -- let me think of a neutral way of putting it --
"we are never going to recover everything it's a
taxation point"; to which I then asked him to apply
a further 10% deduction. But you are saying I think
that you don't know how much of those could be
potentially not Common Issues costs.
MR CAVENDER: Correct.
MR JUSTICE FRASER: Up to the date of the first CMC, is that
right?
MR CAVENDER: It is. I have no idea and I shouldn't have
an idea frankly given what we said in our costs
submissions.
MR JUSTICE FRASER: You don't know the precise figure but on
the basis that there is to be a detailed assessment at
some point, which I haven't yet decided, that will all
come out in the detailed assessment.
MR CAVENDER: Of course. It is a timing point but it is
also a cash flow point and trying to get the money back
and those kinds of issues.
MR JUSTICE FRASER: Understood.
MR CAVENDER: If we just sort of -- back of a fag packet
approach -- unfortunately we are in here for reasons
that are not due to my client -- even if you did a --
say 1 million odd of them were definitely related to
Common Issues because they are drafting the statements
of individual particulars etc, you still have a chunk of
costs there whose -- the generation of which is at best
unclear and may not be recoverable at all in this
process.
MR JUSTICE FRASER: Just for precision terms, I don't think
this is back of a fag packet.
MR CAVENDER: It is in the absence of information I mean.
MR JUSTICE FRASER: Well, the information available is,
I think, based on what they have submitted, is that the
total of their Common Issues costs up to 13 April 2018
is £3.2 million. That is the extent of the information,
isn't it? You are saying there should be a delineation
within that of costs as at the first CMC because they
can't possible be Common Issues costs?
MR CAVENDER: Correct.
MR JUSTICE FRASER: I understand.
MR CAVENDER: That's the point and it is a better point when
you realise at that date there is a 4.1 incurred they
say. So it becomes a bigger point. I thought it would
be a little local difficulty. It turns out it is quite
a sizeable point. in my submission you should reflect
that in reducing the interim payment in relation to the
incurred costs to reflect that.
MR JUSTICE FRASER: I understand.
MR CAVENDER: I'm obliged.
MR JUSTICE FRASER: Thank you very much.
MR WARWICK: My Lord, I appreciate you won't want
submissions tennis on this. But with the greatest
respect to my learned friend, it is a better point by
reason of that £4 million figure because between that
figure and the date on which incurred costs ended on
13 April was almost entirely Common Issues work in the
case. Your Lordship will remember that some directions
have been given for Horizon issues matters --
MR JUSTICE FRASER: That's what you say costs £2 million.
MR WARWICK: Indeed, my Lord. In fact very little Horizon
Issues work had been done. There had been limited
disclosure. My learned leader and my learned friend
Mr Cavender had been ordered to meet to agree some
issues. There had some limited disclosure of dimensions
documents --
MR JUSTICE FRASER: What you say is, on the basis of that
information you have read out, one, in broad brush
terms, would take £2 million off the 3.2 and that shows
about 1.2 of the 4.1 had been incurred at the first CMC.
MR WARWICK: Indeed my Lord.
MR JUSTICE FRASER: But whatever it is, this is only
a payment on account.
(3.58 pm)
(Ruling awaiting the judge's approval)
(4.06 pm)
MR JUSTICE FRASER: So is the only outstanding point
therefore whether there should be a detailed assessment
now?
MR GREEN: My Lord, I'm not going to invite you to do that
in light of the interim payment ordered.
MR JUSTICE FRASER: Let me ask Mr Cavender.
Mr Cavender, do you want one to be ordered now
because unless I order one I do not think the claimant
is obliged to agree.
MR CAVENDER: We don't want one now, my Lord.
MR JUSTICE FRASER: Therefore it is unnecessary in this
order to say anything about the time for a detailed
assessment. Is there anything else?
MR GREEN: My Lord, the only thing is the costs of today.
I don't know how your Lordship would like to dispose of
those. I was going to venture to suggest that they
should be claimants' costs in the case.
MR JUSTICE FRASER: Well you have not succeeded on
everything.
MR GREEN: Not on everything, no.
MR JUSTICE FRASER: So why should they be the claimants'
costs in the case?
MR GREEN: Because half the hearing was the permission --
MR JUSTICE FRASER: Some of them would be costs in an appeal
if an appeal happened, wouldn't they?
MR GREEN: I'm in your Lordship's hands.
MR JUSTICE FRASER: Well what costs order are you
suggesting?
MR GREEN: I was suggesting claimants' costs in the case but
if your Lordship orders costs in the case --
MR JUSTICE FRASER: Let me hear from Mr Cavender.
Mr Cavender, what do you want to do about costs today,
what are you asking me?
MR CAVENDER: I rather thought they would be costs in case,
that's what I would expect.
MR JUSTICE FRASER: I think the sensible and fairest thing
is to make them costs in case.
MR CAVENDER: The other thing is the date of payment of the
interim payment. Is it normally 28 days?
MR JUSTICE FRASER: No, it is normally 14.
MR GREEN: My Lord, that is what was agreed with recusal as
well.
MR CAVENDER: Can we ask for 28? I have been asked to seek
28 days, so an extra 14 days. I'm not sure that there's
any real prejudice to the claimants. It is a question
of arranging the funds I suppose and talking to our
shareholder about it.
It is only going to sit in the -- this is another
point I should raise, it is only going to sit in because
they have undertaken to keep it in the solicitor's
client account. So there's that point.
Allied to that, in my learned friend's order, so we
are clear, which is attached to his skeleton, in
relation to that he has a recital that the claimants
agree to hold and not disperse. I spoke to my learned
friend about this, he is happy that that be the
solicitors --
MR JUSTICE FRASER: A fair copy of the order is going to
have to be drawn up by both of you reflecting everything
I have done and I was not necessarily going to, unless
it was agreed, make recitals in the form sought by
either party to be honest because I am going to look at
the recitals in detail, but you would rather that be the
claimants' solicitors?
MR CAVENDER: Yes, it has to be --
MR GREEN: My Lord, the claimants were going to hold it by
their solicitors retaining it.
MR JUSTICE FRASER: So that is a non-point. Time for
payment you want 28 days?
MR CAVENDER: My Lord, yes.
MR JUSTICE FRASER: Mr Green?
MR GREEN: My Lord, I'm not going to quibble --
MR JUSTICE FRASER: You are either going to agree 28 days or
you would like to stick with 14 and then I will decide.
MR GREEN: I would like to stick with 14.
MR JUSTICE FRASER: All right. You can have 21 days
Mr Cavender.
MR CAVENDER: I'm obliged.
Finally I'm instructed to ask for permission to
appeal against the ruling that costs not be reserved;
just that element. I do so on the basis, really two
bases, one is your Lordship identified a distinction
that applied to group litigation --
MR JUSTICE FRASER: Just before you do this, can I just make
an observation?
MR CAVENDER: Yes.
MR JUSTICE FRASER: You haven't had my detailed reasons. If
you make this application now your time will start
running to make the application to the Court of Appeal.
I'm very happy to hear you now.
If you wait until you have had the detailed reasons,
then you would be able to make the application in view
of the detailed reasons and your time would then run
from whenever you make that application. But if you
would like to make the application now I will hear you
now.
MR CAVENDER: It is just a question whether your Lordship is
right about that because you have given reasons. You
are going to give --
MR JUSTICE FRASER: All right. If you want to make it now
that's fine.
MR CAVENDER: I'm instructed to carry on with it. Two
bases, one was the group litigation was different in
some way and my analogy of preliminary issue was not
apposite and was not appropriate. In my submission
there is a real prospect the Court of Appeal may
disagree with that.
Whilst group litigation is a great thing and it gets
Common Issues together and it is a great vehicle and
there are special rules about it, they don't apply to
whether the incidents of costs should go one way or the
other in advance when that would appear to be dependent
on how you group the issues.
What it will do, if it is right, is it will put
enormous premium in the future on agreeing particular
issues being hived off because parties won't want to
agree say just deciding the question of interpretation
if they think well they might lose on that but they win
on breach.
There will be an unhelpful tension in group
litigation and in people agreeing sensible things if
there is a massive cost consequence depending how you
parcel them. That's point 1.
Point 2 is that your Lordship relied on the Court of
Appeal in the David de Jongh Weill case and relied upon
that. If we can return to that which is in bundle 1,
tab 7, paragraph 33. The thing about that that
your Lordship certainly emphasised but is important is
that that principle applied, if you look at 33:
"The fact that only nominal damages are awarded
after a single trial of the issues of liability... "
{J7/7/10}. It is envisaging a case where liability
has been determined. There has been no liability
determined in this case at all, any liability. There
has just been a determination of the contract. So to
therefore elide the two and say that's authority for the
situation is, in my submission -- is a real prospect on
that and so for those reasons in my submission this is
a case where there is a real prospect.
Group litigation seems to be on the increase. There
is a point of principle there about group litigation
costs and whether they in fact -- the way in which
issues are parcelled can affect incidents of costs and
the policy is: that's tough because group litigation is
there, it is all about cashflow and funding and that
should take precedence over absolute fairness. That's
the competition. In my submission that is
an interesting point and we should have permission on
it.
MR JUSTICE FRASER: Thank you very much. I'm not going to
give you permission. So the order for today will also
say permission to appeal -- I think Mr Cavender you were
just seeking it in respect of that part of the costs
order that declined to reserve the costs, is that right?
MR CAVENDER: That is my Lord but of course the other points
are parasitic on that but we don't specifically say you
got anything wrong assuming you haven't reserved costs.
MR JUSTICE FRASER: The order will have to make reference to
the paragraph higher up the order where I declined to
reserve costs.
Anything else?
MR GREEN: My Lord, one point of finesse --
MR JUSTICE FRASER: Would you like permission to appeal in
respect of anything, is that what you are asking?
MR GREEN: My Lord, no, that's my learned friend's --
MR JUSTICE FRASER: You are not winning everything Mr Green.
Are you asking me -- what are you asking me for?
MR GREEN: I was just trying to clarify one point on
drafting the order.
MR JUSTICE FRASER: Go on.
MR GREEN: In relation to, our draft of the order envisages
the claimants, by their solicitors, holding the money on
account pending determination of the application for
permission to appeal to the Court of Appeal. That's the
issue. It is not in perpetuity, obviously, and that is
reflected in our order. I wanted to say that clearly
this open court.
MR CAVENDER: My Lord that's absolutely right.
MR GREEN: I just want that clear. It is not a solicitor's
undertaking by them, it is solicitors agreeing to
perform that function at the claimants' behest.
MR JUSTICE FRASER: If there's any wrinkles on the actual
wording of those important parts of the order that you
can't sort out between yourselves, you can of course
come back and ask me.
MR CAVENDER: My Lord, the final thing, could I ask for
an extension of time for 21 days from when we get your
written reasons to go to the Court of Appeal so we can
marry up. I have made my submissions based on your
summary reasons. They are probably better if I could --
for the purposes of the Court of Appeal deciding it and
the skeleton, because if the skeleton is at the same
time as the grounds now, if we have a extension of time
for 21 days, when we get your full reasons then that
will be procedurally more sensible.
MR JUSTICE FRASER: Just remind me of the rule?
MR CAVENDER: You can give permission --
MR JUSTICE FRASER: I know I can extend time I would just
rather do it by reference to the specific rule. It is
the same rule that I gave you an extension of time on
the --
MR CAVENDER: It is. It is 52.
MR JUSTICE FRASER: The easiest thing might be to look at
the order where I gave you the extension of time in the
Common Issues.
MR CAVENDER: 52.12.2, my Lord.
MR JUSTICE FRASER: Let me have a look.52.12.2 (a).
MR CAVENDER: Indeed.
MR JUSTICE FRASER: All right.
MR CAVENDER: We ask for 21 days from the date we receive
the written reasons.
MR JUSTICE FRASER: Extension of time to the Post Office to
make an application to the Court of Appeal to 21 days,
starting with the date upon which the managing judge
hands down his written reasons for his costs orders
today.
MR CAVENDER: It is on the reservation. I don't know if you
intend to extend beyond that.
MR JUSTICE FRASER: Hands down written reasons on his order
declining to reserve the costs on an issues trial. So
that needs to go into today's order, yes? Everywhere is
nodding enthusiastically and between you I am sure that
you can produce a composite order that reflects
everything. Mr Warwick are you about to ask me
something?
MR WARWICK: No, my Lord, just to say yes --
MR JUSTICE FRASER: All right.
MR CAVENDER: I'm being asked very enthusiastically --
MR JUSTICE FRASER: Yes, and I think perhaps wrongly but
I will let you tell me what you are wanting to ask me.
MR CAVENDER: Whether we ought to try -- and I am not sure
we can do this actually --
MR JUSTICE FRASER: Whether we ought to try?
MR CAVENDER: And extend because you are going to produce as
I understand it some written reasons as to why you are
turning down permission on the main appeal.
MR JUSTICE FRASER: Correct.
MR CAVENDER: The question is -- because at the moment we
are under 21 days starting today for the main appeal.
MR JUSTICE FRASER: You are.
MR CAVENDER: The question is whether we can it is possible
to or whether the court should give us 21 days from the
date when you give your written reasons for refusal or
not.
MR JUSTICE FRASER: I have already extended you time.
MR CAVENDER: No, exactly. I'm not sure you can actually --
MR JUSTICE FRASER: Go on.
MR CAVENDER: Whether you can only do it at the time of
the --
MR JUSTICE FRASER: I can do it but I can only do it within
the period prior to expiry. Rather than getting into
extended tendencious and overly technical debate about
whether it's expired already or not, I would not be
minded given the two months extension you have already
had to further extend time.
MR CAVENDER: No. The only reason to do it in terms of
procedure is in terms of trying to marry what you say
and make sure --
MR JUSTICE FRASER: I understand.
MR CAVENDER: But nothing is perfect.
MR JUSTICE FRASER: The written reasons for refusing you
permission to appeal have got to go in the form that
I referred to this morning N460.
MR CAVENDER: Quite, which are quite brief anyway.
MR JUSTICE FRASER: Exactly. All right. Anything else?
MR CAVENDER: I do not think so, my Lord, no.
MR JUSTICE FRASER: Anything else?
Thank you all very much. Until 4 June, although
I imagine not all of you will be here then, but that's
when this case will next sit. It is 4 June, isn't it?
MR GREEN: My Lord, yes.
MR JUSTICE FRASER: Thank you all very much.
(4.19 pm)
(The court adjourned until Tuesday, 4 June 2019)
(10.30 am)
Discussion re housekeeping
MR JUSTICE FRASER: The agenda has slightly changed. I'm
sorry, Mr de Garr Robinson, if I appear to do a double
take; I can't see Mr Cavender.
MR DE GARR ROBINSON: My Lord, he is hiding.
MR JUSTICE FRASER: I can see Mr Cavender.
I assume you are here as a result of the emails
I sent yesterday.
MR DE GARR ROBINSON: My Lord, yes.
MR JUSTICE FRASER: What I just want to do then, we will
start with that first because I imagine that's the only
point upon which you are going to be present.
MR DE GARR ROBINSON: Yes.
MR JUSTICE FRASER: Just in the interests of transparency,
at 15.22 yesterday the court received an email direct
from Dr Worden sending me a document which was attached
which was called the "Third Expert Report" and three
annexes or appendices thereto. That email was not
copied to anybody from the claimants but it was copied
to one of the Post Office's solicitors.
As the parties know, I sent two emails in pretty
short succession after receiving that: the first was
making the point that witnesses, even expert witnesses,
are not to directly communicate with the court or send
documents directly; and the second is that all
communications to the court have to be copied to the
other side, and that email went both to the claimants
and also to counsel for the Post Office.
It then occurred to me a few minutes later that
I also ought to make it clear, because the status of
that document was unclear to me and I haven't read that
document, that there may be privilege issues, which is
why I issued a direction to the claimants that they
should neither read it nor deal with it nor distribute
it, pending explanation of the situation this morning.
MR DE GARR ROBINSON: My Lord, yes.
MR JUSTICE FRASER: Which I imagine is why you are here to
explain the situation.
MR DE GARR ROBINSON: I'm here at your Lordship's
invitation, if I may say so.
My Lord, can I just briefly address on you the two
points which your Lordship made at the beginning. First
of all, the communication should have been copied to the
claimants' solicitors. My Lord, actually what happened
is that Dr Worden sent it to your Lordship's clerk and
immediately forwarded it to Freeths. So it is in fact
the case that the document was provided immediately.
MR JUSTICE FRASER: Was that being served on behalf of the
Post Office to the claimants?
MR DE GARR ROBINSON: My Lord, no. Your Lordship may recall
from the hearing on 11 April, this comes from Dr Worden.
Dr Worden, as your Lordship is more than aware, as
an independent expert, considers it to be his duty to
assist the court, irrespective of his instructions.
Pursuant to that duty, which is enshrined in CPR 35.3
I think, and also pursuant to his duty provided for in
paragraph 2.5 of the practice direction to CPR 35, he
conceives it to be his duty, in my submission on proper
grounds, to inform your Lordship that he has had
material changes of view. It is also his view that
those views, the views that are set out in the report,
are helpful to your Lordship in resolving the Horizons
issues, and in my submission there is more than
an arguable basis for justifying that view. But those
are his views.
My Lord, given that he owes your Lordship a direct
duty to assist you, given that he is under an obligation
to inform the parties and the court of a change of view,
as your Lordship will recall I said on 11 April, this
puts my client in a difficult position. None of this
has been instigated or requested by my client; it is
what Dr Worden conceives it to be his duty to do.
My Lord, to deal with your Lordship's second point,
in my respectful submission it is entirely proper for
an independent expert to communicate directly with the
judge. That underpins CPR 35.14, which your Lordship
will also be well aware of, the provision which allows
experts to seek the directions of the court.
MR JUSTICE FRASER: Well, whether that's correct or not, in
the circumstances of this case, the way in which it was
done and the time at which it was done -- and I went
back and reread what you had said to me on 11 April --
two points arise. I'm not in any way finding or stating
that it was improper for him to have done that.
MR DE GARR ROBINSON: I'm grateful for your Lordship to say
that.
MR JUSTICE FRASER: However, it is highly unusual for
an expert to do that without some sort of prior
notification that that's happening; and secondly, it was
not clear on the face of his email whether the claimants
knew that was happening.
MR DE GARR ROBINSON: My Lord, there was prior notification.
MR JUSTICE FRASER: Right.
MR DE GARR ROBINSON: If I can go back to the chronology,
I'll deal with this very quickly; I hope we don't have
to go into the correspondence, but there is
correspondence dealing.
On 10 April, this is the day before I addressed
your Lordship, my instructing solicitors wrote a letter
to Freeths indicating that Dr Worden had these changes
of views and he wished to produce a short supplemental
report.
On the 11th, at the hearing, I then told you about
the awkward position my client found itself in, on the
basis of the two provisions I have just adverted
your Lordship to and also the ICI v Merrell case that
your Lordship decided. I indicated that Dr Worden would
be seeking to collaborate with Mr Coyne with a view to
seeing whether it's possible to have any agreed or
disagreed position.
In response to that, your Lordship directed that the
experts should meet by 3 May, making it clear you
weren't giving any directions as to what they should
talk about.
MR JUSTICE FRASER: Well, I was going to order them to meet
anyway. That direction for a meeting was not as
a result of the 11th; it was in order usefully to use
the time that had been created in the trial timetable.
MR DE GARR ROBINSON: I see. I wasn't aware of that.
MR JUSTICE FRASER: But that doesn't matter.
MR DE GARR ROBINSON: In any event, your Lordship gave that
direction.
The same day, after the hearing, Dr Worden provided
his workings -- that's the raw data -- to Mr Coyne.
My Lord, on 16 April there was a relatively brief
discussion between Dr Worden and Mr Coyne about that raw
data and Dr Worden's approach. It's a without-prejudice
discussion; I don't want to say any more than that.
MR JUSTICE FRASER: But the short point is there is
a detailed chronology which leads, I imagine, at some
point to notification by your solicitors to Freeths that
another expert's report is coming. Is that right?
MR DE GARR ROBINSON: Yes. If I could give you the
chronology, just to be clear.
On 25 April, so this is a month ago, a draft of the
report was provided without prejudice to Mr Coyne, and
on 29 April I'm instructed the appendices to the draft
were provided. The purpose of providing those documents
was to facilitate a meeting, but a meeting didn't happen
by 3 May, or indeed a meeting hasn't happened at all,
although they have had conversations over the telephone.
My Lord, what then happened was that on 16 May
Dr Worden provided that report your Lordship has
received to Mr Coyne on an open basis, the final
version. The earlier version was a draft; this was the
final version. He provided it to Mr Coyne saying that
he hoped that they could meet to discuss it, but
pursuant to his duties to the court, he was intending to
provide it to your Lordship next Wednesday, which was
yesterday.
MR JUSTICE FRASER: That date being chosen for what reason?
MR DE GARR ROBINSON: That was chosen by Dr Worden, as
I understand it. Oh, that's right, I'm so sorry, it was
because Mr Coyne was going on holiday on that Wednesday.
MR JUSTICE FRASER: As in yesterday?
MR DE GARR ROBINSON: As in yesterday, but he was not on
holiday on Monday or Tuesday. What Dr Worden was hoping
was that they would be able to have a discussion in
those early two days. When that proved not possible, he
then sent it to your Lordship.
MR JUSTICE FRASER: I'm not sure that necessarily explains
why Wednesday was chosen, but let's leave it at that.
Is there anything else that you would like to
explain?
MR DE GARR ROBINSON: My Lord, if you have any questions
you'd like me to --
MR JUSTICE FRASER: My major concern, Mr de Garr Robinson,
was that yesterday this arrived with me out of the blue,
not on its face obviously sent to the claimants, and
obviously I didn't have any of the --
MR DE GARR ROBINSON: Yes. That was a --
MR JUSTICE FRASER: -- I hesitate to use the word
"backstory", but any of the detailed background. You
have explained sufficient to me to make me realise that
there are no concerns in terms of the claimants now
having received a document from the court which they
ought not to have had, because you have explained they
had it anyway.
MR DE GARR ROBINSON: I see. I now understand your second
email.
MR JUSTICE FRASER: If you look at it from the court's point
of view, the court received a quantity of material
yesterday unilaterally which it had to provide to the
other side in the litigation, but which wasn't clear
either what the status of it was or whether or not the
Post Office even knew that that was being provided to
the court --
MR DE GARR ROBINSON: I understand.
MR JUSTICE FRASER: -- which was what led to the direction
3 minutes after the first email telling the claimants
that they were not either to open it or look at it or
anything until the situation had been cleared up.
Now the situation has been cleared up, obviously
that concern doesn't apply and that direction no longer
applies, in the sense that it had any teeth anyway
because they had it already. But I think what I am
going to ask you to do, and you will please just tell me
how long you would like to do it, is I think a short
witness statement setting out that chronology from the
10 April to now, please, would greatly assist me.
MR DE GARR ROBINSON: Very good, my Lord.
MR JUSTICE FRASER: I'm not suggesting it is something that
has to be done in the next day or the next couple of
days, but I think just a short witness statement from
whichever of your solicitors is the right person, just
to explain that background that you've just taken me
through, please.
MR DE GARR ROBINSON: Very good. My Lord, can I just take
instructions?
MR JUSTICE FRASER: Just take instructions as to when you
would like that to be.
MR DE GARR ROBINSON: My Lord, my instructing solicitors
suggest the end of next week.
MR JUSTICE FRASER: Which would be I think the 31st; is that
right? Friday the 31st.
MR DE GARR ROBINSON: Yes, it would be.
MR JUSTICE FRASER: Noon on Friday the 31st.
MR DE GARR ROBINSON: My Lord, yes.
MR JUSTICE FRASER: All right. Thank you very much indeed.
Unless there is anything else on that particular
point or dealing with the experts -- I don't know if,
Mr Green, there's anything that you would like to make
by way of submissions or not. I'm not inviting you
expressly to.
MR GREEN: My Lord, there are only two points which I just
very briefly make.
One is that just in relation to your Lordship's
observation about correspondence directly with the
court, we don't agree with my learned friend's analysis
at all. The point is extremely short. 35.14 expressly
carves out an unusual and separate channel, which is for
experts to ask the court for directions.
MR JUSTICE FRASER: Yes.
MR GREEN: It does not provide or allow experts to do what
happened yesterday.
MR JUSTICE FRASER: Yes.
MR GREEN: It is just not right. So that is the short point
on that.
The other matter, I don't know to what extent, how
far back the chronology is going to go, but the short
point underpinning our concerns about how this has
arisen is that Mr Coyne made a request for information
in July 2018 for the OCPs, the OCRs and the MSCs, and
the Post Office list has responded, I think it was
6th August from memory, saying that those were
irrelevant, and the new report arising after what should
have been the conclusion of the Horizon Issues trial is
based on an analysis, which we're trying to understand,
of those documents said to be irrelevant in the summer
of last year.
So those are the only two points I wanted your
Lordship to have.
MR JUSTICE FRASER: All right. Insofar as you want to
explore, examine or pursue any of those points in
cross-examination, we will cross that bridge when we
come to it. I have ordered a witness statement.
Nothing that I say should be taken as coming to
a concluded view on whether or not it was correct or
incorrect for him to have sent his third report direct
to the court. However, for today's purposes I think we
have gone as far as we need to.
Mr de Garr Robinson, thank you for coming at very
short notice, and I imagine you are not going to want to
stay for the rest of the morning.
MR DE GARR ROBINSON: I'm going to want not to stay.
MR JUSTICE FRASER: All right. Thank you very much.
Please --
MR DE GARR ROBINSON: I'm grateful to your Lordship.
MR JUSTICE FRASER: So turning to the main business of the
day. Can I firstly tell you what I think is on the
agenda and remind you that we are going to need a break
for the shorthand writers at some point.
I have read all of the material that everybody has
submitted. There are the following issues and
sub-issues that we have to deal with. There is
an application by the Post Office for permission to
appeal. There are costs to be dealt with,
an application in respect of the necessary costs order
for the Common Issues trial. It appeared at one point
as though there were also an application for the release
of the security, but as I understand it, that's no
longer live business for today. Is that correct?
MR GREEN: My Lord, yes, not for today; to be reserved.
MR JUSTICE FRASER: Not for today. It also at one point
appeared to be on today's agenda the proper costs order
consequent upon the recusal application, but as
I understand it, that's now gone away as well. Is that
right?
MR GREEN: My Lord, yes. The only point on that is that the
order is for payment of a fixed sum of £300,000 up to
20 April, but with costs occasioned by the making of the
application, thereafter to be claimants' costs reserved.
MR JUSTICE FRASER: Right.
MR GREEN: So in a sense the immediacy of dealing with it
has gone, because the first part of it has been agreed,
but how it all arose is not something that your Lordship
can put out of your mind, in a sense, because that might
need to be revisited in due course.
MR JUSTICE FRASER: But so far as today -- there was
a slight difference in wording, and it might be me
looking at matters in overly technical detail. But in
Mr Cavender's skeleton for today, at his paragraphs 3(a)
and 3(b), there was an extent of agreement in relation
to the relevant costs order on the recusal application.
Has that now all been swept up into the consent order?
Because the wording wasn't necessarily exactly the same.
MR GREEN: My Lord, yes. So it is now just as in the
concept. We have a hard copy here signed, if
your Lordship wants a hard copy.
MR JUSTICE FRASER: No, I have that. That was lodged
yesterday.
MR GREEN: My Lord, yes.
MR JUSTICE FRASER: So apart from the word "draft" in the
heading, neither party needs me to do anything with that
except approve it?
MR GREEN: My Lord, that's right.
MR JUSTICE FRASER: All right. And you are going to be paid
£300,000 by 4 o'clock on 7 June, as per paragraph 1, and
then paragraph 2 is to reserve the claimants' costs from
that date onwards.
MR GREEN: My Lord, yes.
MR JUSTICE FRASER: All right. I approve that order.
MR GREEN: I'm most grateful.
MR JUSTICE FRASER: So that removes both the potential
summary assessment of that order and any argument or
disagreement about how the costs of adjourning the
Horizon Issues trial was going to be dealt with.
MR GREEN: Precisely.
MR JUSTICE FRASER: So we are now, therefore, at permission
to appeal and then costs of Common Issues.
MR GREEN: My Lord, that's right.
MR JUSTICE FRASER: Right. Unless either of you would like
me to deal with it in a separate order, I will deal with
the permission to appeal first.
MR GREEN: I'm most grateful.
MR JUSTICE FRASER: Mr Cavender.
Application by MR CAVENDER
MR CAVENDER: My Lord, I'm obliged. You will have seen we
have put in draft grounds of appeal, which are quite
extensive.
MR JUSTICE FRASER: Yes.
MR CAVENDER: We have also put a skeleton argument in
in support of those grounds of appeal.
The grounds, as you will see, are grouped really in
three areas: one, appeals on points of law arising out
of the Common Issues; secondly, some limited appeals on
fact; and thirdly, an appeal based on procedure. We say
there is a real prospect of success on each of those
areas, and we apply on that basis, but also on the
alternative basis that this is a case where there are
other compelling reasons why permission should be given.
Your Lordship is obviously very familiar with the
test and it's not normal on such applications to go into
such huge amounts of detail, particularly when you've
had in advance a skeleton and the grounds of appeal.
I don't intend to do so.
The first point really, and we sort of flagged this
in the skeleton, the underlying criticism we have of the
whole structure of the court's approach to this of
course starts with good faith and the implication of
that term and the relational contract debate. Of course
you know well the views in my submissions I have put
forward; I'm not going to put them all again.
This area is clearly a developing area of law; it is
clearly a relatively controversial area of law.
I wouldn't say lawyers fall into two camps, those that
are quite keen on the continental views and good faith
coming in, and those on the other hand who are much
keener on certainty of law and freedom of contract,
although you could identify groups of lawyers in those
relative camps.
What Mr Justice Leggatt, as he then was, did in
Yam Seng was to start the firing gun really on debate in
English law. You can see the views of Chitty trying to
make sense of Yam Seng, and making sense of it by
saying: well, this can only be honesty really. You can
only have good faith, the honesty part of that, which
you can imply in this way.
But your Lordship has taken a radically different
view. In my submission, there must at least be a real
prospect of success if your Lordship is wrong about
that, or the Court of Appeal might want to have a look
at it, because it is a striking development if it is
right.
To be clear here, this isn't a point based on the
facts of this case. It's not a factual matter, it's
a question of law, for a couple of reasons. One is
because on analysis of the court's judgment, you have in
fact implied the good faith requirement as a matter of
law, which in my submission is wrong, as opposed to on
the basis in Geas(?) that it's implied in fact based on
the circumstances of the contract.
Secondly, and this is really the crucial point and
where your Lordship has gone very much further than
anyone has ever gone, and is truly radical, is the
extent to which you then go on and use that implication
of good faith to inject itself into each and every major
term in the contract. No one has ever done that before,
there's no authority or warrant to do it, and in my
submission it is wrong and at least there is a real
prospect that it is wrong.
Let me give you an example. In relation to the
termination provisions is where it finds its most
obvious grounding. The terms of these contracts said
that they are terminable on not less than three and six
months respectively.
Leaving aside the point that "not less than" is
a well-known, tried and tested commercial formula for
many years and doesn't reflect in any way good faith, to
inject good faith into those provisions, and to do so
contrary to their express terms, is truly radical. It
has never been done before. It is also contrary to
a decision of the Court of Appeal in Ilkerler Otomotiv
where Lord Justice Longmore, with whom
Lord Justice Briggs, as he then was, agreed, said that
whatever else you think about Yam Seng, it is talking
about the performance of the contract, not its
termination.
MR JUSTICE FRASER: Can you just take me to that part of the
Common Issues judgment. I have just been trying to find
it on Opus and I can't.
MR CAVENDER: The part where you deal with ...
MR JUSTICE FRASER: The part that you are just using as
an example.
MR CAVENDER: The termination provisions, my Lord, start at
865. It is paragraph 865 and following {B7/29/252}.
MR JUSTICE FRASER: Yes, I would like to call it up on the
screen if I could, but I can't seem to find where it is.
I don't mean within the judgment, I mean where the
judgment is.
MR CAVENDER: Where the judgment is? I'm sorry, I have
a hard copy. I don't know if my learned friend can help
me or not.
MR GREEN: It is {B7/29/1}. My Lord, there is one in J,
because the hard-copy bundles mirror the Opus bundles,
and then there is the original one we had in the trial
in B.
MR JUSTICE FRASER: I don't mind where it is. All I can say
is I can't find it on my separate screen. I can see it
on the common screen.
MR CAVENDER: The reference in the J bundle is {J3.1/7/352}.
MR GREEN: Does your Lordship have the Horizon Issues
environment or the Common Issues?
MR JUSTICE FRASER: Well, I had both, but one of them has
just disappeared, and now it says "no internet". The
other one appears to be -- well, it doesn't say whether
it is Horizon or Common Issues, to be honest, but it
doesn't have a J. Just bear with me a minute. (Pause)
So the B7 reference, is that the Common Issues trial
bundle?
MR GREEN: It is the Common Issues trial bundle, my Lord.
(Pause)
MR JUSTICE FRASER: I think part of my Opus appears just to
have crashed. Just bear with me one second. (Pause)
I think, Mr Cavender, what I'm going to do is --
I seem to have lost everything now -- I will just rise
for five minutes, just so as not to put anyone under
undue pressure. I'm sorry about this. I would have
brought my hard copy down; I do have one upstairs. But
now that everything seems to have gone down, I will just
rise for five minutes and then I will come back in.
(11.02 am)
(A short break)
(11.08 am)
MR CAVENDER: My Lord, I think you're connected again. If
you are, I am not sure what page they have put you on.
The reference is {B7/29/256}; it should be, hopefully,
paragraph 888 of the judgment.
MR JUSTICE FRASER: Thank you very much. Which page, sorry,
of the judgment?
MR CAVENDER: So it is paragraph 888.
MR JUSTICE FRASER: Yes, which is page 256.
MR CAVENDER: Indeed.
MR JUSTICE FRASER: Thank you very much.
MR CAVENDER: So that's where you start dealing with
termination.
MR JUSTICE FRASER: Yes.
MR CAVENDER: There are two points. One is the "not less
than" point, and you deal with that at paragraphs 893
and 894.
Dealing with that first, in my submission that's
simply wrong. That is a well-worn formula you find in
a wide range of commercial contracts. Why? To avoid
the need where you get notice having to be given on
a date certain, people taking points on whether the day
of giving the notice or receiving it are included. So
that provision is put in, and of course you give more
notice than the three or six months, and that is
a standard commercial provision. It is not intended to
inject any kind of discretion. So that's the first
point.
The second point, and if you go over to 899
{B7/29/258} --
MR JUSTICE FRASER: So you're saying on this application
that your case is that there was no discretion in
respect of how the notice provision is exercised by the
Post Office?
MR CAVENDER: Correct.
MR JUSTICE FRASER: Is that how you argued it before me at
the trial?
MR CAVENDER: Yes, that the "not less" meant -- the point
your Lordship made is we took it as if it said three
months'/six months' notice.
MR JUSTICE FRASER: No, that's not the point I made. I just
asked you if you were saying there was no discretion in
the clause at all in the way you argued it before me.
MR CAVENDER: Yes.
MR JUSTICE FRASER: You're saying you argued there was no
discretion?
MR CAVENDER: Correct, and we do so now.
MR JUSTICE FRASER: No, I know you say that now.
MR CAVENDER: It's as if it is three months' or six months'
notice.
So then you go on to paragraph 899 {B7/29/258},
where you draw your conclusions. You say:
"I consider that in both instances -- termination
without notice, and termination summarily -- the Post
Office must take the decision in accordance with the
obligation of good faith."
Does your Lordship see that at the top of 899?
MR JUSTICE FRASER: Yes.
MR CAVENDER: So you tie the two together. So there are two
points: the "not less than"; and furthermore, good faith
is injected. That's injected not just to termination on
notice, but also on the right to terminate for
repudiatory breach or material breach.
MR JUSTICE FRASER: Yes.
MR CAVENDER: That has never been done before, in my
submission it is wrong in principle, and there is real
prospect with the Court of Appeal agreeing with that.
Let me take you to the case of Ilkerler Otomotiv,
which --
MR JUSTICE FRASER: Can you just remind me: what common
issue was termination? It was 15 and 16, wasn't it?
MR CAVENDER: Termination for cause was 15.
MR JUSTICE FRASER: I think termination on notice was 16.
MR CAVENDER: Correct.
Can I refer your Lordship to the authorities bundle
number 2, tab 24 {J7/24/1}, the decision of the
Court of Appeal in Ilkerler Otomotiv.
MR JUSTICE FRASER: Tab 24?
MR CAVENDER: Tab 24, my Lord, yes.
This was a case involving the termination of the
distribution agreement. The first thing you will
notice, just by way of passing, if you go to paragraph 4
of that {J7/24/2}, you will see the terms of the
agreement are not dissimilar to our one: they use the
words "at least six months' prior written notice" in
paragraph 2.3.
MR JUSTICE FRASER: Yes.
MR CAVENDER: What was argued here was based on Yam Seng and
good faith. It failed. What was argued was something
a little bit similar to what my learned friends tried to
do, and successfully tried to do, here.
The point I should refer your Lordship to is
paragraph 29 {J7/24/6}. Having quoted Yam Seng, this is
the Court of Appeal saying:
"Interesting and informative as these comments are
they do not support the terms proposed by Mr Sutcliffe
... [and] as ... Charles Hollander QC ... pointed out,
Leggatt J is expressly talking ... [about the]
requirements in the contract for communication and
co-operation 'in its performance'. Requirements for
communication and co-operation in relation to
termination would take one into a different realm
altogether."
So that was the response of the Court of Appeal to
the notion that in some way the provision for
termination could be visited or altered by Yam Seng or
the good faith, and it's saying: no, it's a different
thing. What Yam Seng is talking about is performance,
not termination.
So in my submission there must at least be
a realistic prospect that the Court of Appeal would want
to look at that, and there is a realistic prospect of
success on it.
The same point applies to the repudiatory breach or
material breach argument.
MR JUSTICE FRASER: Just before you move on to that though,
I've just had a look at your closing submissions on
Common Issues between paragraphs 447 to 457 {J2/4/160}.
I don't think you cite this case.
MR CAVENDER: My Lord, no, it wasn't cited before you. We
came across it subsequently.
MR JUSTICE FRASER: That's germane, isn't it, whether you
should get permission to appeal on a point which wasn't
argued before me?
MR CAVENDER: My Lord, we are not sure it is. The point was
argued before you; we just hadn't found this authority
at that point. The point that supports our point is
that good faith does not have anything to say about
termination and "not less than" does not invoke any kind
of discretion.
MR JUSTICE FRASER: All right. If you say the authority
wasn't cited before me, I think we're agreed about that.
If you have a look at 447 to 457 {J2/4/160}, I'm not
sure that the point was argued, but it might be that you
say it was.
But regardless of that, you're saying that error of
law on this point, as set out in your grounds, which
shows there is a reasonable prospect that the
Court of Appeal will overturn it.
MR CAVENDER: There is a real prospect of that, my Lord.
MR JUSTICE FRASER: Yes, all right.
MR CAVENDER: Also my learned friend has shown no authority
that good faith has ever been used to curtail rights of
termination, whether express rights or for termination
on notice or termination for repudiatory breach. The
same point applies there.
What your Lordship has said is: you can't accept
a repudiatory breach unless you do so in good faith, nor
can you do so where you're in breach in relation to the
matters for which you are seeking to accept repudiatory
breach. Good faith has never been used in that way
before, to alter what is normally an objective standard,
namely either side can accept a repudiatory breach to
some degree of subjectivity. No authority has been
shown to you for that proposition, and in my submission
there must be a real prospect --
MR JUSTICE FRASER: Where in the judgment, please, can you
show me that I have said you can't accept repudiatory
breach unless you do so in good faith?
MR CAVENDER: Give me one moment, my Lord.
MR JUSTICE FRASER: Yes.
MR CAVENDER: Paragraph 899 {B7/29/258}:
"... in both instances -- termination without
notice, and termination summarily ..."
Which it's talking about in context, termination
because of repudiatory breach:
"... must [be] take[n] in accordance with the
obligation of good faith."
MR JUSTICE FRASER: How does that say: accepting
a repudiatory breach?
MR CAVENDER: Because that is what termination summarily
involves. There's no other way you can terminate
summarily, my Lord. You can terminate a contract
summarily because one side is in repudiatory breach or
termination on notice. That's what this portion of the
judgment is dealing with. Again, I say we have a real
prospect on that point.
So, my Lord, going back to my skeleton argument, if
I may. I'm dealing here with common issue 1 largely, at
paragraph 9 {J6/2/3}. Our case was and is that the
relational contract idea is useful as assistance in
identifying types of contracts.
The other complaint we make and made is that at
(ii), the "long term" point. Of course at this stage,
before you're deciding whether it's a relational
contract and whether to imply a term of good faith,
you're looking at the express terms at that stage. And
the express terms are three months' notice or six
months' notice. Whether parties expect or do not expect
to exercise those rights doesn't turn what is not
a long-term contract into a long-term contract.
The third point we make there is about the agreed
implied terms. Again, my learned friend, in his
skeleton for today, seeks to move away from those. In
my submission this is a very serious point and really
wasn't grappled with by the court at all really, apart
from a single paragraph.
But these implied terms of "necessary co-operation"
and Stirling v Maitland, we have submitted and do
submit, have real power and force, are taken alongside
the express terms and they need to have meaning and
effect given to them. Until they have meaning and
effect given to them, one doesn't know whether or not
other terms are necessary.
So we say there is a reasonable prospect on that
that the Court of Appeal will take a different view
about the way the court dealt with those implied terms,
which was effectively that they had no real effect and
was essentially a pleading point in the case, when in
fact it was the cornerstone of the Post Office's case
that they were akin to express terms once they had been
accepted by both sides.
The other major feature here is your Lordship
implied 17 implied terms or incidents based on the
imposition of a good faith term. In my submission one
can only do that to the extent that the terms that you
imply or the instants you apply are parasitic upon and
have good faith at their core, namely that they can be
breached, and only breached, in the event of bad faith.
So they are true sons or daughters of the good faith
term.
When you look at the implied terms your Lordship
implied, the 17, virtually none of them have that
characteristic. They all represent binary, one-way,
free-standing obligations that can be breached in bad
faith or in good faith.
That is contrary, in my submission, to Yam Seng,
contrary to what Mr Justice Leggatt did in that case.
You remember I took you through very carefully the two
terms he implied in that case and how he rejected
Mr Salter QC's drafting of the terms in that case, and
he did so because the terms that counsel had put forward
could be breached without bad faith, without knowledge.
What Mr Justice Leggatt said: no, it is essential that
the terms has at its heart an obligation to act in good
faith in the relevant particular. That unfortunately
has not, in this case, been done in relation to these 17
terms.
We deal with this point, my Lord, at paragraph 14
and following of the skeleton argument {J6/2/5}.
So good faith is very much at the heart of all those
submissions, of all those points on both issue 1 and
common issue 2. In my submission, if the court is going
to give permission, they should give permission on both
issues, not try and cherrypick and say, "Well, this one,
not that one", because when it gets to the Court of
Appeal they would be, in my submission, helped by having
the whole of those issues before them so they could form
their own view as to the appropriate treatment.
Going to my skeleton, I don't want to spend too long
going through all of those. You will see common
issues -- this is paragraph 19 of the skeleton {J6/2/7},
the "agents"/branch trading statement point and the
agency point.
The thing about that, we say at paragraph 20, is
effectively your holding amounted to: the only reason
the express term in the contract said they were "agents"
was to distinguish them from employees. The trouble
with that is it doesn't give any purpose or content to
the express appointment as "agents", and it doesn't
begin to explain on what basis, therefore, postmasters
hold stock and cash on behalf of the Post Office or
explain the basis on which they contract with members of
the public on behalf of Post Office and they are
fiduciaries.
So a finding that says, "Well, the express
appointment as 'agent' merely distinguishes them from
employees", doesn't give any meaning or effect to the
reality of what everyone accepts the postmasters were in
fact doing. So, again we say there must be a real
prospect of success, the Court of Appeal wanting to look
at that.
Then if we move on in the skeleton, paragraph 25
{J6/2/8}, section 12, clause 12, this is the whole
burden of proof point.
Paragraph 30 of the skeleton {J6/2/9}, your
understanding is at paragraphs 669 to 675 of the
judgment {B7/29/209}, where you understood the Post
Office's case to be that postmasters would be liable for
losses or deficiencies caused by a bug, when in fact
that wasn't our case.
Indeed, when you were dealing with the same point --
we deal with this at paragraph 31 -- in relation to the
NTC in clause 4.1, you seem to accept the point that
such losses wouldn't come within the clause. So in my
submission there's no rational reason to treat the two
clauses in relation to that same loss differently, and
again that must give a real prospect of success on that
point as well.
We have dealt with common issue 16, going to the
skeleton at 33 {J6/2/10}, termination on notice; common
issue 15, termination for cause {J6/2/11}.
Then we have suspension {J6/2/13}; onerous and
unusual terms {J6/2/16}. We do seek permission to
appeal the holding you made in relation to the Bates
type of contract, and that's paragraph 54 of the
skeleton.
We outlined at paragraph 54 the two elements of the
conditions of appointment and the declaration, which we
say in a case such as Mr Bates would result in
incorporation by reference. We say that applies whether
or not the documents are attached or not. It's
incorporated by reference, identifies the existence of
some standard-term document and that it is incorporated.
Then we have common issues 7, 19 and 20, Unfair
Contract Terms Act, at paragraph 57 {J6/2/18};
responsibility to train assistants, 23 {J6/2/19}.
We then have the question of inadmissible evidence,
what we say as a matter of law, evidence of
post-contractual matters either expressly or implicitly
being taken into account on points of construction. We
summarise that at paragraphs 67 and following {J6/2/20}.
That includes, at paragraph 68, the matters you
expressly as part of the relevant factual matrix to
construction incorporated, and we set them out at
paragraph 68, the various paragraphs.
MR JUSTICE FRASER: Where are we now, sorry?
MR CAVENDER: Paragraph 68 of the skeleton, my Lord
{J6/2/20}. It cross-refers to paragraph 569 of the
Common Issues judgment {B7/29/178} and the subparagraphs
of that paragraph. It's paragraph 68 of the skeleton,
my Lord.
MR JUSTICE FRASER: No, I have that. I'm looking in the
grounds.
MR CAVENDER: Where that point is raised in the grounds?
MR JUSTICE FRASER: Yes, I'm trying to follow your
submissions through by reference to the grounds.
MR CAVENDER: Oh, I see.
MR JUSTICE FRASER: As well as the skeleton.
MR CAVENDER: This point in relation to factual matrix is
paragraph 23 of the grounds {J6/1/7}.
MR JUSTICE FRASER: But that's in your introductory section,
isn't it? I thought it was parts C, D and E that were
your actual grounds.
MR CAVENDER: My Lord, no. Common issue 1 is "Relational
contract", if you are looking at the grounds now.
MR JUSTICE FRASER: Yes.
MR CAVENDER: What happens at the end of the first ground,
paragraph 23 {J6/1/7} is the factual matrix point is
taken, and then where it applies, it is repeated each
time in each ground.
MR JUSTICE FRASER: I did understand that.
MR CAVENDER: So that's the point: that it has been or looks
as if it's been taken into account in terms of
interpretation or factual matrix.
Then the separate point in point D {J6/1/35},
your Lordship points out quite rightly, is an additional
point that that information has been introduced into the
trial process unfairly. That's a distinct and separate
point.
MR JUSTICE FRASER: This is part D, your procedural
unfairness grounds, isn't it, that second point that you
made?
MR CAVENDER: When you say "it", I was referring to the
admissibility point when we were having this debate.
MR JUSTICE FRASER: All right. Just to help me let's
slightly rewind it just a little bit.
How many total grounds do you have altogether that
are errors of law, separate grounds?
MR CAVENDER: They are set out in the grounds, my Lord,
starting at 14 {J6/1/4}.
MR JUSTICE FRASER: I know they are, Mr Cavender, but they
are not numbered. I am just trying to make sure I don't
miss any. How many are there altogether? Are they the
different ones at paragraph 14?
MR CAVENDER: My Lord, yes.
MR JUSTICE FRASER: Each of those is a separate ground?
MR CAVENDER: They are separate common issues, as you can
see, and within them there are obviously -- it depends
what you call a "ground". But there are separate
grounds of appeal dealing each of those issues listed at
paragraph 14.
MR JUSTICE FRASER: Right. So how many separate grounds of
appeal are there on errors of law? Because I had
thought there were 12, because I counted through, but
I'm not sure that I necessarily have them all, which is
why I'm asking you how many different grounds there are
which are said to be errors of law.
MR CAVENDER: We can count them up, my Lord.
MR JUSTICE FRASER: If you can tell me how many there are.
MR CAVENDER: That can be done, my Lord.
MR JUSTICE FRASER: As I understand it, we are still within
part C of your grounds of appeal, dealing with errors of
law?
MR CAVENDER: We are, my Lord, yes.
MR JUSTICE FRASER: We are, right.
MR CAVENDER: The skeleton was meant to be a more cursory
run-through of those points. In the skeleton I was at
paragraph 67 {J6/2/20} and was dealing with reliance on
inadmissible evidence. I have pointed to you in the
grounds where that comes in first of all, which is
paragraph 23 {J6/1/7}. This is on admissibility. That
is an error in law, we say.
So those are the grounds of appeal on law. Then if
we look at the skeleton, paragraph 73 {J6/2/24},
"Grounds of Appeal -- Error in fact".
MR JUSTICE FRASER: How many of those are there?
MR CAVENDER: If we go to the -- do you have the grounds of
appeal there?
MR JUSTICE FRASER: I do.
MR CAVENDER: The errors of fact start at paragraph 147
{J6/1/42}. The first is about Mr Bates' receipt of the
contract and then there are a number of findings about
the Post Office's behaviour and comments on its
witnesses.
MR JUSTICE FRASER: So are there two or are there eight
altogether, in terms of separate grounds?
MR CAVENDER: I think there are eight. There is the Bates
one, and then there is (a) to (g) under the second head.
MR JUSTICE FRASER: Right.
MR CAVENDER: So there are eight.
MR JUSTICE FRASER: There are eight, all right.
MR CAVENDER: You will see them set out in the grounds of
appeal and I wasn't intending to go through them.
There are no appeals on the facts, the main facts he
found, about who said what to who in the interviews and
things of that kind.
We then have ground D, procedural unfairness. This
links with the inadmissibility point because it's the
same material.
MR JUSTICE FRASER: How many different grounds are there
under procedural unfairness?
MR CAVENDER: That starts at paragraph 128 of the grounds
{J6/1/35}.
MR JUSTICE FRASER: It does.
MR CAVENDER: It depends on bit on what you call a "ground",
because there are obviously subgrounds within them.
MR JUSTICE FRASER: Let's put it this way: you are advancing
in your grounds of appeal grounds that are said to be
correctly categorised as procedural unfairness. How
many different grounds are there? I had understood
there to be possibly three, but I might be wrong.
MR CAVENDER: My Lord, yes, there are three broad grounds.
MR JUSTICE FRASER: Are there three?
MR CAVENDER: If you want to take grounds at a high level,
there are three separate grounds with subgrounds within
them, is probably the right way to look at it.
MR JUSTICE FRASER: All right. Let's deal with those
separately, if we may, because I'm interested on what
the procedural unfairness to said to be. What was the
procedural unfairness in respect of the first of those
three grounds?
MR CAVENDER: It is as it's set out in the grounds there:
that the Common Issues trial that the Post Office
prepared for and the court gave orders for was limited
to the effectively preliminary issues on the meaning of
the NTC and the SPMC and deciding the scope and extent
of the agency relationship.
Disclosure and evidence was given on that basis if
you look at ground 132 {J6/1/36}. There were contested
disclosure applications decided expressly on that basis:
things like helpline, training, things of that kind.
Disclosure was not given on them and in fact was refused
by your Lordship on the basis that this was a common
issues trial that essentially was a preliminary issues
trial.
To therefore go on in such circumstances and make
comments and/or findings relating to those matters --
MR JUSTICE FRASER: But that's the effect of the unfairness.
I want to know what you say the procedural unfairness
was. What was the unfairness in the procedure?
MR CAVENDER: To have a trial that went wider than that
which was ordered and that which the parties reasonably
expected was going to take place; and moreover, to do so
in circumstances where there hadn't been disclosure in
relation to the matters in relation to the extended
trial, nor had the Post Office put forward witness
evidence on it because they weren't expecting it.
MR JUSTICE FRASER: So what matters did the Post Office not
put forward witness evidence on which they otherwise
would have done absent the alleged procedural
unfairness?
MR CAVENDER: They would have given disclosure --
MR JUSTICE FRASER: No, I'm asking about the evidence. You
just made a submission that said the Post Office hadn't
put forward witness evidence on matters because they
were not expecting it. So what were those matters?
MR CAVENDER: Training.
MR JUSTICE FRASER: Yes, all right.
MR CAVENDER: Helpline.
MR JUSTICE FRASER: Yes.
MR CAVENDER: The accounting relationship --
MR JUSTICE FRASER: Yes.
MR CAVENDER: -- how it worked in fact. How TCs were dealt
with. The intimate accounting relationship between the
parties. Suspension and termination, how they were in
fact operated, those two mechanisms.
MR JUSTICE FRASER: Yes.thank you very much.
MR CAVENDER: So that's the first head. Connected to it is
the second, which is findings on post-contractual and/or
irrelevant issues. Those are set out at 137(a) to (g)
{J6/1/38}.
The point about this of course is that the court is
not in the business of making irrelevant findings along
the way. It makes findings and decides what the matrix
of contracts is because it is relevant to the matters it
is engaged with; at least one can infer that.
So what one infers from this is that there are these
findings or comments and they are being made as part of
the trial process, as relevant to it, and therefore
necessarily, given the nature of the exercise in
a preliminary issues trial, as part and parcel of it.
That's why this connects back to the error of law about
taking into account irrelevant evidence, which brings me
on neatly to the next ground, which is just that. So
although these are three grounds, they are obviously
intimately connected.
You will see the same points at 143 {J6/1/39},
extracted from the matrix your Lordship decided was part
of the matrix of the trial, not just along the way but
on a contested matter. Where there was a contest about
what matrix your Lordship could take into account, you
ruled that these matters were relevant factual matrix.
We say that is an error of law, or at least there is
a real prospect that it is.
My Lord, those are the grounds of appeal and all
I wish to say about them.
So we ask for permission on two bases. One is that
there is a real prospect, and that in reality you ought
to look at this on a high-level basis: that if you think
there is a real prospect on the good faith elements,
relational contract elements, that infects or applies to
large parts of your findings. In my submission the
right thing to do in such circumstances is to give
permission across the board.
Moreover, we ask for permission on the separate,
distinct ground that here there are other compelling
reasons. Why? Because we're dealing here with
11,000-odd contracts, not just the 500-odd claimants in
this litigation; we're talking about a huge amount of
money in issue; we're talking about the running and how
a public service is run, not just in the past but in the
future, in which there is a real public interest. So in
my submission, for those reasons as well, this is a case
where the court should give permission on that
alternative ground.
Moreover, if your Lordship accepts my point that, at
least arguably, what your Lordship has done is to move
the common law quite dramatically on good faith in
a particular direction, that also is another compelling
reason why that view, my submission about that, should
be tested in the Court of Appeal.
So, my Lord, unless you have any questions, those
are my submissions.
MR JUSTICE FRASER: The only question is one which I think
you or your juniors are endeavouring to answer: I would
like to know how many different grounds of appeal there
are on law, please.
MR CAVENDER: I'm obliged. I will ...
MR JUSTICE FRASER: Is someone going to give me the number?
MR CAVENDER: My Lord, yes. Can I come back to you in
a moment about that?
MR JUSTICE FRASER: You can, yes. I would like to know
before I decide whether I'm going to give you permission
to appeal or not.
MR CAVENDER: No, of course.
MR JUSTICE FRASER: What I will do is I will rise for five
minutes then. I will rise for ten minutes, because
yesterday I received an email from the transcribers
asking if they could always have a ten-minute break
rather than a five-minute break.
So I will come back in at 11.50 and then,
Mr Cavender, I would just like you to tell me how many
different grounds of appeal you have saying that there
are errors of law.
MR CAVENDER: Of course.
MR GREEN: My Lord, can I just ask if your Lordship is
anticipating a very brief response from me?
MR JUSTICE FRASER: No, I'm not going to be calling on you.
MR GREEN: I'm most grateful.
(11.44 am)
(A short break)
(11.54 am)
MR CAVENDER: The answer to the question is 37, my Lord.
MR JUSTICE FRASER: 37 on law. So it's 37 on law, 3 on
procedural unfairness and 8 on fact?
MR CAVENDER: My Lord, yes. On the law ones obviously it is
very difficult because often the point is repeated in
relation to, say, "onerous", "unusual", and there are
lots of different terms. So it depends how you -- but
that's a fair review of that.
MR JUSTICE FRASER: Thank you very much.
(11.54 am)
(Ruling awaiting the judge's approval)
(12.04 pm)
MR JUSTICE FRASER: Next item on the agenda?
Application by MR GREEN
MR GREEN: My Lord, I think it is me: the costs of the
resolution of Common Issues.
MR JUSTICE FRASER: Yes.
MR GREEN: Your Lordship has mentioned that you've had our
written cost submissions and our skeleton arguments.
MR JUSTICE FRASER: I think there were two rounds, weren't
there?
MR GREEN: Exactly. Against the background of that, and the
fact that much of the content of what arises in relation
to this application and the issues arising in it has
been traversed numerous times now, in terms of what
your Lordship decided in the Common Issues Judgment on
the various issues and so forth, I'm going to try and
slim down what I say. But there are a number of points
which I need to make and they come under four headings.
The fact that there should be an order for costs in
the claimants' favour is number 1 and can be shortly
disposed of. The contrary is unarguable and it is
implicitly recognised by the defendant, by the Post
Office, in its skeleton argument at paragraph 21 on
{J1/4/7}.
MR CAVENDER: My Lord, I hate to interrupt my friend, but
that isn't the case. In my submission it is probably
best to deal with that point first because if we're
right about reserving costs, then the other matters
don't arise. If we're wrong about that, then the
question of basis of assessment, timing of assessment,
interim payment arise. But if we're right and the costs
should be reserved, those points don't arise, subject to
your Lordship. But I just make that observation.
MR JUSTICE FRASER: As I understand your position,
Mr Cavender -- do correct me if I'm wrong -- your
primary position is costs should be reserved.
MR CAVENDER: Correct.
MR JUSTICE FRASER: If I'm against you on that and I decide
to deal with the Common Issues costs today, you accept
I think that there has been broad success, but taking
into account the other factors you're suggesting a 30%
reduction?
MR CAVENDER: That's absolutely right.
MR GREEN: My Lord, I will turn therefore to the making of
the order now, which is going to be point 2.
MR JUSTICE FRASER: What was your point 1, I'm sorry?
MR GREEN: Point 1 was that if an order were to be made --
MR JUSTICE FRASER: There has to be an order for costs in
one way or another, even if it's just costs reserved.
MR GREEN: Precisely. Let me take it in a different order:
shall I deal with whether your Lordship should make
a costs order now, rather than reserve it?
MR JUSTICE FRASER: No, no. This isn't mere technicalities.
If I were to order costs reserved, that would be making
a costs order.
MR GREEN: Indeed, my Lord. I am conflating the two.
MR JUSTICE FRASER: What you mean is: deal with the costs
now, rather than reserve them.
MR GREEN: My Lord, yes, exactly.
MR JUSTICE FRASER: I understand that.
MR GREEN: There are essentially --
MR JUSTICE FRASER: You are saying: do it now?
MR GREEN: Precisely.
MR JUSTICE FRASER: I have that point.
MR GREEN: There's one document in the bundle on Opus at
{J5.2/1/1}, which is the letter of 14 September 2018
from Post Office solicitors to my instructing solicitors
and that is the letter to which the claimants' skeleton
at paragraph 10 on {J5.2/1/5} refers.
The context of it, my Lord, was this. Your Lordship
will remember that there was a difference in the budgets
and both for the purposes of assessing security and for
the purpose of cost budgeting, it was said by the
claimants to be important that the stages of the
litigation were identified and worked out. This is, in
that context, a reference to the litigation being
conducted in stages with the real possibility of interim
costs awards.
MR JUSTICE FRASER: Where are you looking?
MR GREEN: The quote is set out in paragraph 10 of our
skeleton argument {J1/3/5} and it is at paragraph 4(a)
{J5.2/1/1}. If your Lordship looks just below, it's
paragraph 4. It's in relation to the QBE deed for
security. The complaint was that the deed should
provide --
MR JUSTICE FRASER: I wonder if we could go back, please.
MR GREEN: Just go back to the letter, if we can. You were
on the right spot.
The complaint was that it was unsatisfactory from
the Post Office's perspective as at 14 September 2018
for the deed being provided by way of security only to
provide for the resolution of costs "following the
conclusion of the High Court Number XXXX". The reason
they give at 4(a), second line, right-hand side:
"This litigation is being conducted in stages with
the real possibility of interim costs awards."
So before they'd lost, this not only would be
potentially right in principle for the court to make
such an order, but it was a direct concern. Then what
happens is they lose the Common Issues trial and in
correspondence then say their position is going to be
that the costs should be reserved.
MR JUSTICE FRASER: I understand. You're relying on this
letter though, it seems to me -- and if I'm wrong, do
tell me -- as showing that there was at least, at some
stage in 2018, a realisation on the part of those
advising the Post Office that there might be interim
costs orders?
MR GREEN: They were positively asserting that as a real
possibility and wanting our deed of their cost to be
altered, so that if they did get such an order in their
favour, it would be recoverable.
MR JUSTICE FRASER: Understood. That's effectively
a separate stand-alone point.
MR GREEN: That's stand-alone point 1.
Stand-alone point 2 is: the Post Office's
submissions appear to overlook the fact that in the
bundle at {B3/1/62}, in the amended particulars of
claim, the very first item of final relief sought by the
claimants was a declaration in relation to the legal
relationship between them and the Post Office.
MR JUSTICE FRASER: Are we going to call that up on the
screen?
MR GREEN: That is hopefully coming up. It is {B3/1/62}.
There we are.
MR JUSTICE FRASER: Yes. So it is a separate stand-alone --
MR GREEN: Free-standing final relief sought, which in
substance has been achieved for the claimants.
MR JUSTICE FRASER: Understood.
MR GREEN: The point about that, my Lord, is that that would
have had to have been determined whoever was in the
group. It's a free-standing point; it doesn't depend on
who is in the group action at all. And there's no
recognition of that at all. That's the second point.
The third point is a point I will just make in one
line and come back to for its significance in the
authorities, which is that these were absolutely central
generic issues, properly called "common issues" by
your Lordship. This is not a peripheral skirmish in --
MR JUSTICE FRASER: I don't think anyone is suggesting it
was a peripheral skirmish, are they?
MR GREEN: I'm most grateful.
MR JUSTICE FRASER: I don't know, and I'm not obviously
speaking for how the Post Office might put it. But at
whatever point in this litigation, these issues were
going to have to be dealt with.
MR GREEN: Precisely, and they were foreshadowed actually in
the pre-action correspondence from July 2016 onwards.
MR JUSTICE FRASER: All right. I have that point.
MR GREEN: The Post Office's submissions at paragraphs 5 to
20, on {J1/2/3} to {J1/2/6} of the defendant's skeleton
argument, begin on {J1/2/3} of the skeleton argument
rather than the outline submissions. Paragraph 6 says:
"The authorities demonstrate that it may be
appropriate to reserve the costs of a trial of
preliminary issues, where the outcome ... does not
determine ultimate success in the litigation or where,
even though one party may be said to have succeeded in
that trial, subsequent events could be relevant to the
incidence of the costs of the earlier trial."
The short point, my Lord, is that the way this is
put forward is essentially swimming against the tide of
the proper approach in litigation of this type when
issues of this importance are resolved. I will make the
point good by reference to the cases in fact relied upon
by the Post Office themselves.
If I can start by taking your Lordship to the
authorities bundle, tab 18 and looking at Beiber
v Teather and Greenwood {J7/18/1}.
MR JUSTICE FRASER: Tab 18?
MR GREEN: It's tab 18 in the authorities bundle.
MR JUSTICE FRASER: Do you want me to go to paragraph 27
{J7/18/6}?
MR GREEN: Yes.
If one looks above, it's actually pretty instructive
to see how this first-instance decision cites from the
de Jongh Weill case against Mean Fiddler at 26. So the
premise of this first-instance decision is what the
Court of Appeal decided in de Jongh Well, as recited at
paragraph 26, and that is:
"'There is much to be said for the view that the
incidence of costs should be the same whether or not for
case management reasons there has been an order for
a split trial and whether or not the order for a split
trial was made on the initiative of the claimant or the
defendant'."
It's pretty important, because these are the two
principal cases advanced at paragraphs 7 and 8 of the
skeleton {J1/4/3}, to go back to de Jongh Weill, which
is cited at paragraph 7, and see what is actually said
in that case. That's at tab 7 of the authorities bundle
{J7/7/1}.
I don't know if I could respectfully ask
your Lordship to have handy the hard copy of the
skeleton alongside --
MR JUSTICE FRASER: Hard copy of whose skeleton?
MR GREEN: Of my learned friend's skeleton -- and then look
at the penultimate page of de Jongh Weill {J7/7/10}.
Your Lordship will see that the quotation in the
skeleton goes from the beginning of paragraph 33 --
MR JUSTICE FRASER: Yes.
MR GREEN: -- and it goes down to:
"... whether justice to the defendant requires him
to postpone any decision on costs until the final
outcome of the action is known."
MR JUSTICE FRASER: Yes.
MR GREEN: Pausing there, your Lordship will already have in
mind these are unitary claims that are relied on by the
Post Office. That's a side point which I will come back
to in a moment. But even on the basis of what is quoted
in the skeleton, the question is whether justice to the
defendant requires the judge to postpone think decision
on costs until the final outcome is known.
Pausing there, when your Lordship goes to the
judgment itself on the screen in the authority
{J7/7/10}, at paragraph 32 it gives pretty important
context to the test the Court of Appeal was applying and
what the Court of Appeal's own view was, because four
lines down on the right-hand side:
"Whilst in the exercise of his discretion the Judge
could have made, and indeed might well have been
expected to make, an immediate order for the payment to
the Claimant of the costs of the trial of the issue of
liability or at least a proportion of those costs ...
with some hesitation I reach the conclusion that on this
appeal it is not possible to say that the Judge's
decision was clearly one which he was not entitled to
reach."
So the artifice --
MR JUSTICE FRASER: So you're saying the part of
paragraph 32 that's quoted in the skeleton is taken out
of context.
MR GREEN: Paragraph 33 in the skeleton.
MR JUSTICE FRASER: Paragraph 33 is taken out of context and
if you read paragraph 32, actually it looks very
different.
MR GREEN: The out of context --
MR JUSTICE FRASER: Is that the short point?
MR GREEN: It is. It goes the other way directly, we
respectfully say.
MR JUSTICE FRASER: I have that point.
MR GREEN: I'm most grateful. That of course unravels to
some extent --
MR JUSTICE FRASER: The case wasn't group litigation anyway.
MR GREEN: It wasn't group litigation anyway, which is why
it is more instructive, if I may respectfully say so, to
look at -- if we can go to Giambrone next, which is at
tab 6 {J7/6/1}, which again is a case against the
Post Office but which the Post Office cites as if it
supports it.
The very paragraph that's relied on at {J7/6/4} --
MR JUSTICE FRASER: Just give me the paragraph number of the
skeleton.
MR GREEN: The paragraph number of the skeleton is at
paragraph 40 on {J1/4/13}.
MR JUSTICE FRASER: It says, "generally ... inappropriate in
group litigation".
MR GREEN: Yes.
MR JUSTICE FRASER: Yes.
MR GREEN: Before going into the detail that follows from 11
onwards, it's pretty important for your Lordship to see
what 10 actually says {J7/6/4}, because true it is that
the first sentence says:
"In my judgment in almost all group litigation cases
there should be no need for any detailed assessment of
costs until the conclusion of the group litigation.
Solicitors engaged in group litigation will be
specialists and experienced in the field."
Then pausing there:
"Solicitors for claimants ..."
This is very important, and reflects the approach in
Corby:
"Solicitors for claimants are fully entitled to
an adequate cash flow from the defendants once the
general issue of liability has been admitted or
determined in the claimants' favour, similarly on
determination of generic issues in the claimants[']
favour and on the assessment or settlement of awards of
damages to individual or batches of claimants."
So in either of those cases, this is positively
authority in favour of that point. And the cash flow
point faced by claimants has been recognised in a number
of decisions, as your Lordship knows.
So --
MR JUSTICE FRASER: So you're saying that's in your favour.
MR GREEN: Your Lordship has the point.
MR JUSTICE FRASER: Right. Yes.
MR GREEN: Can I take your Lordship just briefly to Corby,
which is at tab 11, simply because it is referred to.
A slightly different situation. But {J7/11/4} of the
Opus reference, tab 11 physically of the authorities
bundle, "Should the Court make a costs order at all at
this stage?"
MR JUSTICE FRASER: Which paragraph are you looking at?
MR GREEN: Paragraph 9, my Lord, I'm sorry, under that
heading, "Should the Court make a costs order at all at
this stage?":
"There is no good reason not to make a costs order
at this stage. The Group Litigation is now effectively
over."
Which was the situation in this case.
MR JUSTICE FRASER: Well, the situation in that case, not
the situation in this case.
MR GREEN: No, in Corby. So it is a fair distinction that
can be said to be made there.
"The Claimants have effectively and substantially
won on the Group Litigation issues. It was always open
to CBC to make admissions on those issues but it decided
that the issues merited contesting. There are no
Part 36 offers or payments into Court ... to complicate
matters."
And there is nothing of that sort here. Indeed,
my Lord, the approach the claimants took in this
litigation on the Common Issues, particularly in
relation to the implied terms, was openly, not without
prejudice save as to costs, openly to send a table of
implied terms and say, "Please tell us what you say the
implied terms or their incidence are and we will
sympathetically consider them because it could
substantially narrow everything".
Your Lordship had submissions on that and I'm not
going to go over them again. They were foreshadowed in
our opening under the heading of "Utility", and that
throws your Lordship forward in our --
MR JUSTICE FRASER: I understand.
MR GREEN: That's all.
Paragraph 10 {J7/11/4}:
"The only argument of any force ... for CBC was that
until one knows what the final outcome of all the
Claimants' claims is it would be premature and
inappropriate to award costs now. There is at least
a hypothetical possibility that all the Claimants will
fail to recover damages."
I mention that, my Lord, because basically the big
fight was over but it wasn't clear whether they would
all actually recover damages. So that's the sense in
which one has to read paragraph 9.
This paragraph is instructive, as your Lordship has
probably seen already. This is six lines down:
"The scale and breadth of the Group Litigation
issues would inevitably lead to a major litigation
exercise with a large number of witnesses, experts and
documents and a very large costs risk. It was open to
CBC to protect its position on the Group issues by
admitting the duty ..."
All the other issues they had there. {J7/11/5}:
"Put another way, these issues and the additional
25 associated issues (largely agreed to be resolved)
have been fought because CBC contested them. It would
be wrong for the Claimants to be out of pocket as
a result."
We respectfully say that that and the reference at
paragraph 12 to the Colour Quest case, your Lordship
will see just above the bottom hole punch, the fact that
the trial judge is well placed to make a relevant
assessment of the criteria is correctly in issue.
If we go over the --
MR JUSTICE FRASER: Which authority are we in now?
MR GREEN: It's just on paragraph 12 {J7/11/5}, my Lord, in
the same --
MR JUSTICE FRASER: Still in Corby?
MR GREEN: Yes. There is just a reference there to
Colour Quest dealing with indemnity costs, but I will
come to indemnity costs separately. The short point is:
by parity of reasoning, just as the judge is well placed
to assess indemnity costs, the trial judge is extremely
well placed to assess the context of this.
MR JUSTICE FRASER: Your short point I think, or short
points, is, or are, depending on how many there are, is
that these were a group of self-contained issues that
had to be resolved one way or the other. They were in
a separate trial. They are part of group litigation.
You have won on the majority of those issues and you
shouldn't be out of pocket until the end.
MR GREEN: Precisely.
MR JUSTICE FRASER: It is as simple as that, isn't it?
MR GREEN: Plus they are determinative of final relief
claimed, declaration --
MR JUSTICE FRASER: Understood.
MR GREEN: -- plus --
MR JUSTICE FRASER: But even if they weren't, they would
still have to be determined in order to move on to the
next step.
MR GREEN: Precisely.
MR JUSTICE FRASER: You're saying even though some of the
claimants might in due course not recover substantial or
indeed any damages -- and Mr Cavender makes a perfectly
fair point, which is quite a lot of the claimants might
be time-barred -- you're saying in the group litigation
it had to be resolved anyway.
MR GREEN: Precisely. My Lord, the only final point in
relation to that is that the points made by the
Post Office in relation to no evidence of injustice are
wrong, and demonstrably wrong, for three reasons.
The first reason is: there is obviously injustice to
funded claimants of the cash flow point and the multiple
point, because your Lordship is entitled to take
judicial notice that funders aren't doing it for free.
Even very --
MR JUSTICE FRASER: Sorry, what's the multiple point? You
mean multiple of the costs?
MR GREEN: Yes. So there's an acute difference in the
impact of those cash flow considerations for claimants
when they're funded, and the ordinary cash flow point
underlying it even without funders has been recognised,
as I have just shown your Lordship. So that's wrong,
that there isn't any injustice.
The second point they make is: there's no evidence
of injustice, which is wrong because Mr Hartley's third
witness statement, which is at {J3.4/10/13}, spelt out
the consequence -- the multiple point, if I can put it
that way. So there is evidence of it, even if
your Lordship didn't take judicial notice.
The third point is --
MR JUSTICE FRASER: Hold on, before you go there. We
haven't got to Mr Hartley yet. We're now in
Mr Hartley's third statement. Which paragraph?
MR GREEN: It's on page 13 {J3.4/10/13}. It's under the
costs and security point. At paragraph 42, second line:
"The Claimants are reliant on funders continuing to
invest further money and the greater the level of
investment, the greater the sum required to be repaid to
the funders from the sums recovered on success."
MR JUSTICE FRASER: Understood.
MR GREEN: And:
"The net effect is to magnify ..."
MR JUSTICE FRASER: Right. Can you just remind me of the
date of that statement? I know it's September 2018.
MR GREEN: It is ...
MR JUSTICE FRASER: If we just go back to the first page,
please {J3.4/10/1}.
MR GREEN: Yes. 12 September 2018.
MR JUSTICE FRASER: Thank you very much. Right, so that's
your second point.
MR GREEN: And the third point is that the Post Office
really ought to know that there is injustice and there
is evidence of it because that very witness statement,
that very point, was referred to in our written
submissions for this application in March at
paragraph 39, which is on {J1/1/9}. So it's a bad
point.
MR JUSTICE FRASER: All right.
MR GREEN: So those are the points in relation to now.
MR JUSTICE FRASER: In relation to whether they're now or
they're reserved.
MR GREEN: Precisely.
MR JUSTICE FRASER: Yes, all right.
MR GREEN: My Lord, is it convenient, do you want to hear --
MR JUSTICE FRASER: I will hear from Mr Cavender because he
perfectly sensibly says: if he's right on this, then we
don't need to go on to the next point.
MR GREEN: Precisely.
MR JUSTICE FRASER: Mr Cavender.
Submissions by MR CAVENDER
MR CAVENDER: My Lord, in my submission the normal order in
a case like this, following the termination of
preliminary issues, would be to reserve the costs.
MR JUSTICE FRASER: They are not preliminary issues, is the
first point, are they?
MR CAVENDER: My Lord, in my respectful submission they are
akin to preliminary issues. True it is that it's being
done in the context of group litigation, but for the
purpose of costs, in my submission the analogy is a good
one.
The time-honoured formula has been and still
remains, to decide who has won or lost the case and has
to pay the costs, who writes the cheque at the end of
the day. As your Lordship rightly pointed out in the
recusal judgment, no one yet has won or lost.
What the court has done is to determine the rules
that will apply, the contract, so to speak, and I think
I used, not flippantly but by way of analogy, the rules
of the game, so to speak, have been determined by the
contract and the agency relationship. But the "game"
so-called, ie who wins or loses, has yet to take place.
That is, on the authorities I'm going to go through,
in my submission a classic case where relying on the
various -- we have seen a little bit of the authority --
snippets of authority, the court can't be sure that
things will happen in the future that will affect and
alter its view about incidence of costs. It simply
cannot do so. If it does so now, in my submission as
a matter of principle, that would evidence
a predetermination or would go towards suggesting the
court has reached a view about matters as to how things
are going to pan out in the future.
In the future whether any of these claimants win or
lose will be dependent on questions of breach, questions
of causation, questions of limitation and settlement.
All this is in the skeleton. So simply to have declared
the contract and its incidence in a way that the
claimants wanted doesn't mean to say they are going to
be successful in the action. Indeed, I think we said
that in our cost submissions and your Lordship was kind
enough in your recusal judgment to say you thought that
reflected the position.
MR JUSTICE FRASER: Can you show me in your skeleton where
you say it would suggest a predetermination that the
court has reached a view on matters yet to be dealt with
in the future?
MR CAVENDER: My Lord, it doesn't say it in my skeleton.
I'm saying that now, as a --
MR JUSTICE FRASER: I thought you said -- you just said,
"All this is in the skeleton".
MR CAVENDER: Not that part, my Lord, no.
MR JUSTICE FRASER: All right. But your express submission
today is that if I were to decide costs now in any way
other than reserving them, that would provide evidence
that there had been a predetermination by the court
suggesting how the trial, the group litigation as
a whole, would pan out?
MR CAVENDER: Well, it would award success to one party at
a preliminary stage; it is no most or less than that.
If we could go to the Mean Fiddler case again. It's
a Court of Appeal authority. That's in bundle 1, tab 7.
My learned friend was looking at paragraphs 32 and 33
{J7/7/10}. He is right to say that 33 has to be read in
light of 32, no problem about that. And I do rely upon
the point that:
"There is much to be said ..."
This is in 33:
"... for the view that the incidence of costs should
be the same whether or not for case management reasons
there has been an order for a split trial ..."
Pausing there, that's an important point. You can
imagine a different court at an earlier stage saying
there would be an omnibus trial deciding all the issues,
deciding issues of construction, breach, causation,
limitation and settlement and loss. In that world, the
result may have been very different.
If that's right -- in my submission it must be --
then why should there, as a matter of principle, be
a different result because for case management reasons
the court decides to have an earlier trial, a Common
Issues trial, which I say is akin to preliminary issues?
Why, as a matter of principle, should that alter the
incidence of costs? In my submission it should not;
neither should the fact it is wrapped up in the envelope
of group litigation, as a matter of principle, make any
difference either.
Taking my learned friend's point on Mean Fiddler, he
is right to say that the Court of Appeal in this extract
was deciding whether or not to interfere with the
discretion of the judge. But look at paragraph 31
{J7/7/9}, which he hasn't taken you to, which is the
important point here as to what the outstanding issues
that the defendants were saying were at large and which
prevented the award of costs:
"In this case the Defendant sought ..."
This is in the third line down in 31:
"... to establish the existence of special
circumstances requiring or justifying a different
course. These special circumstances were that: (a) the
Defendants would at the subsequent hearings seek to
establish (though no hint of this suggestion was given
in the Defence) that the warrants were valueless ...
[and the] damages ... would be nominal ...
So what the defendant in Mean Fiddler was doing was
saying, "Well, whatever was argued or pleaded, we have
these other great points we're going to bring, and
therefore there are still matters to be determined".
That is a million miles from our case, where there are
on the pleadings issues of causation or breach of
causation, of settlement, of limitation and of damage.
So it's not: we're coming along and saying, "Oh, well,
we may have lost on the first set of issues, but there
are all these other issues that we haven't even pleaded
or hint", in 31. So it's a very different case. In
that context, the submission based on 33 in my
submission is a good one.
If we can go to the Beiber decision, authorities
bundle 2, tab 18, the decision of Mr Justice Norris. It
is paragraph 27 {J7/18/6}, I think as your Lordship
said, obviously having pre-read this, which in my
submission encapsulates the correct principle, namely
that:
"... the ultimate outcome of costs should not be
determined by the case management directions that have
been given. I consider that the court should be
confident (before making a major and final costs order
partway through a staged trial) ..."
We're talking about such a case here, millions of
pounds:
"... that nothing will occur in the remainder of the
case that will render such an immediate order
substantially unjust."
And he refers to the de Jongh Weill case.
Then he says, over at 28 {J7/18/7}:
"In my judgment, there is a real possibility that
the outcome of any trial will affect the merits of the
parties' entitlement in respect of the settlement of
earlier determined issues. I think that justice to the
claimants requires me to postpone any decision on costs
until the final outcome of the action is known."
So, my Lord, that is the principle I urge you to
follow and adopt, and that's based on the prior Court of
Appeal authority.
Can I then take you to Perriam v Wayne, bundle 2,
tab 16 {J7/16/1}, the decision of Mr Justice Coulson, as
he then was. This was an appeal he heard against
a judgment of his Honour Judge Cockcroft in the Leeds
County Count.
In terms of the liability for costs, because he
allowed an appeal on the point of construction, but the
costs bit is paragraph 50 and following {J7/16/13}. So
at 51:
"In the present case, I have allowed the appeal
against Judge Cockcroft's order as to the interpretation
of clause 4.2. In my judgment, clause 4.2 does provide
the appellants with a complete defence to the
dilapidations claim ...
"... [the court has] no basis on which the
appellants should pay the claimant's costs of the
preliminary issues."
He talks about the "driving seat". Then 53 is
really the point:
"I do not make an order that the claimant should pay
the appellants' costs of the preliminary issues, despite
their success on the preliminary issues. It seems to me
that those costs should always have been costs in the
case."
So there are a couple of points one gets from that.
One is that failure or success of preliminary issues at
an earlier stage is not an event, so far as
Mr Justice Coulson is concerned in that case, that they
be costs in case. There is nothing in the rules, in my
submission, that simply says because something is part
of group litigation that some other rule should apply.
If we go to Corby, for instance. My learned friend
relies on that. You have to be careful about Corby
because there the group litigation had ended.
MR JUSTICE FRASER: No. Duty breach and causation had been
resolved, but the group litigation hadn't.
MR CAVENDER: I may have misunderstood it then. Let's go to
it. If we go to tab 11 {J7/11/1}.
MR JUSTICE FRASER: Maybe it had de facto ended. I don't
think damages had been quantified, but I might be wrong.
MR CAVENDER: Let's go to it. It is bundle 1, tab 11
{J7/11/2}. At paragraph 2 he says:
"Following my judgment on the Group Litigation
issues, and subject to questions of costs and
applications for leave to appeal ... as the judge
allocated ... [I] have completed all that I have been
required to do."
MR JUSTICE FRASER: Yes, that's right. That's because what
happens in group litigation, we haven't yet reached this
stage in this case, but the managing judge is in charge
of effectively such issues as the managing judge feels
he or she ought or wants to resolve themselves, but, for
example, damages consequent on those findings can be
tried by other courts elsewhere.
MR CAVENDER: Indeed. No, I understand that.
Then paragraph 9 {J7/11/4}. So that's the
background to paragraph 9. It says:
"There is no good reason not to make a costs order
at this stage. The Group Litigation is now effectively
over."
Often what happens in group litigation, I think as
you're hinting at, very often the case is then released
to county courts and other courts across the land --
MR JUSTICE FRASER: Yes.
MR CAVENDER: -- to then implement the determinations by the
group litigation order and the managing judge.
MR JUSTICE FRASER: Correct.
MR CAVENDER: So as far as he's concerned, his jurisdiction
is over really, so he has nothing else to say. And
there has been cost-sharing and all the rest of it by
the group litigation people on the register at that
date, so it's not surprising that in such a case he
decides to deal with the costs in the way he does, even
though there may be issues hypothetical.
That's the other point, my Lord, paragraph 10
{J7/11/4}:
"There is at least a hypothetical possibility that
all the Claimants will fail to recover damages."
So he's saying, "Well, okay, that's theoretical.
But as far as I'm concerned, as managing judge, my role
is over", and therefore it's not surprising in such --
MR JUSTICE FRASER: Right, because the group litigation
issues had all been resolved by then.
MR CAVENDER: Exactly. So in my submission that doesn't
really assist my learned friend very much at all, when
looked at in context.
Then if we can goes to Mr Justice Foskett in
AB & Others v The Ministry of Defence. This is trial
bundle 1, tab 12 {J7/12/1}. This was group litigation.
There were a series of preliminary issues. The debate
was whether costs should be reserved or not.
One of the points that the judge made is at
paragraph 14 {J7/12/5}, that doesn't apply here. Does
my Lord have paragraph 14 of this case?
MR JUSTICE FRASER: Remind me of the tab number?
MR CAVENDER: This is tab 12 in bundle --
MR JUSTICE FRASER: In the authorities.
MR CAVENDER: In the authorities at bundle 1. Bundle 1,
tab 12 {J7/12/5}.
MR JUSTICE FRASER: Yes.
MR CAVENDER: The submission made by Mr Browne there was
that:
"... since the Defendant elected to take the
limitation point and has substantially failed on that
issue, it should meet the costs of that issue."
That isn't the case here. This is the case where
the court, divested of its management role, has decided
to decide the issues for case management reasons in
a particular order.
MR JUSTICE FRASER: Yes.
MR GREEN: In my submission, as a matter of principle, that
should not affect the incidence of costs.
So those are the two cases my learned friend relies
upon, Corby and AB. They don't, in my submission,
really get very far and don't really say much about the
general principle that Mr Justice Norris, in the case
I referred you to, thought he got from the Court of
Appeal case, and in my submission he's right: that the
court can't at an early stage, in preliminary issues,
determine who is going to be the eventual winner.
By "winner", I mean winner in the action, not just
the winner of deciding what the rules of the game are,
if I may put it that way. The winner is the winner of
the game, not the person that at the first stage gets
its rules adopted and approved by the court.
There can't be, in my submission, a different rule
based on whether the claimants have commercial offshore
funders. It cannot be the law, as a matter of
principle, that if you have commercial offshore funders
that fund litigation of this type for commercial reward,
that somehow that should be taken into account in making
an order at this stage of costs which otherwise you
would not make.
So the injustice point -- did your Lordship want to
carry on reading that, and I can sit down and then carry
on?
MR JUSTICE FRASER: No.
MR CAVENDER: No.
MR JUSTICE FRASER: I'm paying attention.
MR CAVENDER: All right.
MR JUSTICE FRASER: I'm actually looking at the part of the
White Book that deals with specific costs orders in
group litigation, which you told me didn't exist. I am
paying attention to what you are saying.
MR CAVENDER: My Lord, of course there is a part in the
White Book dealing with costs in group litigation. I'm
saying as matter of principle though --
MR JUSTICE FRASER: No, I understand. You're saying the
situation where there are commercial offshore funders
doesn't put this into its own separate category, and if
I wouldn't ordinarily make an order in the claimants'
favour, the fact that they have funders means I should
not make an order in reliance on that feature --
MR CAVENDER: Exactly.
MR JUSTICE FRASER: -- I think.
MR CAVENDER: Exactly right.
MR JUSTICE FRASER: And I, for what it's worth, happen to
agree with you.
MR CAVENDER: My Lord, that's the so-called "injustice"
point.
So in terms of fairness -- and of course you
exercise your discretion here, but obviously you must do
so judicially and fairly. In terms of "fairly",
reserving the costs holds the ring. One doesn't know
what the future will hold in complex litigation of this
type. It is a long road, and if the court does make
costs orders, and significant, millions of pounds, then
that does look as if it has formed a view that based on
that, those claims are eventually going to win, because
only the people that win get costs.
MR JUSTICE FRASER: But that's the point at which the part
of the White Book I'm looking at is rather important,
which is special cases for costs, which isn't in part 44
at all; it's in part 46.
MR CAVENDER: Which page is your Lordship looking at?
MR JUSTICE FRASER: Why don't we look at 46.6 on page 1512:
"There is a difference in group litigation between
costs that are common costs and costs that are
individual costs."
MR CAVENDER: Indeed. At the moment these, as I understand
it, are all common costs.
MR JUSTICE FRASER: Well, one of the things I have to do
today, because I will be making an order about costs in
relation to what are effectively GLO issues, one of the
things I have to do -- I'm not necessarily sure it's in
either party's draft order but I might have missed it --
is an order under 46.6(5) that all the costs are common
costs, because there is no debate between you that they
are. But MR CAVENDER: Correct.
MR JUSTICE FRASER: But those would be individual costs,
they wouldn't be common costs, would they?
MR CAVENDER: I think that's probably right.
MR JUSTICE FRASER: So judging it in terms of potential
overall success for a group of, or some, or even many
individuals approaches it more on the basis that I would
be making an individual costs order today, whereas
I will be making Common Issues costs orders.
MR CAVENDER: In my submission it is a distinction without
a difference for these purposes.
MR JUSTICE FRASER: Right.
MR CAVENDER: It makes no difference at all because in order
to win, to fund, if you like, your claim which is
individual costs, you have to have won or lost on the
common issues. It's parasitic, obviously, a bit like in
the AB case. You've found a contract or a breach and
causation, and perhaps causation and damage is left to
the individual to bring in their local county court or
whatever. That's obviously the individual costs.
Here we're agreed this is common costs, but in my
submission this distinction doesn't bear upon whether or
not the common costs should be reserved or not. It's
a distinction, but not a material one, in my submission,
for this debate.
MR JUSTICE FRASER: But you accept that I'm correct I should
be making an order under 46.6(5)?
MR CAVENDER: My Lord, yes. I haven't had my attention
drawn to this previously, but yes, it looks as if that
is a --
MR JUSTICE FRASER: I'm specifically required to do that
I think, with 100% of the costs being common costs.
MR CAVENDER: Yes, the other point I'm reminded of, of
course, is at the end of the day, were a claimant to
win, right at the end of the day, they would obviously
get their individual costs but they'd also get
a proportion of the common costs, it would be allocated
to them, whether they'd won or lost.
MR JUSTICE FRASER: That's by no means automatic.
MR CAVENDER: It's not automatic but that's my understanding
of what would normally happen. Let's assume it's
a single trial, to make it simple --
MR JUSTICE FRASER: Yes, but that's why -- it's different.
This is group litigation though, Mr Cavender.
MR CAVENDER: I'm saying group litigation, where you have 50
or 500, it's our case, and you win or lose at the end:
in that case all the costs of the trial wouldn't have
been common costs because you would be investigating
individual cases as well, on my premise. So you would
have individual costs and common costs.
MR JUSTICE FRASER: It would be a rare group litigation case
that had a single trial though, wouldn't it? The whole
purpose of group litigation is that you don't have
a single trial.
MR CAVENDER: No, but you could have a small group of, say,
15 and try all the cases out, and the common issues
would be those of law and the individual things of
damage would be tried.
MR JUSTICE FRASER: All right.
MR CAVENDER: I have just been passed something here.
(Pause)
If you look at 46.6(5)(a) and (b) --
MR JUSTICE FRASER: That is the part I draw your attention
to, I think.
MR CAVENDER: Indeed. And (4) is relevant as well.
MR JUSTICE FRASER: Well, at the moment -- (4) deals with
a group litigant who is a paying party. The Post Office
isn't a group litigant. You are not seeking your costs
from the claimants. Your suggestion for today's costs
order I don't think would lead to any group litigants
being a paying party, but I might be wrong.
MR CAVENDER: No, but the point I make is (4)(b):
"... an equal proportion, together with all the
other group litigants, of the common costs."
So what that does do is reflect what I was saying,
that there are two elements --
MR JUSTICE FRASER: I think whoever has passed you that note
might be jumping rather ahead. I don't understand any
of the orders being sought by either party today to lead
to a situation where a group litigant would be a paying
party, because your primary position today is: reserve
the costs, which I understand. If I'm not prepared to
do that, you resist Mr Green's application on other
bases.
I think your skeleton also accepts that the
claimants were -- let me use your exact phrase, because
it was quite well put, I thought, in terms of the degree
of who had won.
MR CAVENDER: It was obviously more successful on the --
MR JUSTICE FRASER: Yes, so you're not seeking any group
litigant today to be a paying party, and that's the only
position in which 46.6(4) comes into operation.
MR CAVENDER: But (5) is the one you drew my attention to.
MR JUSTICE FRASER: Yes.
MR CAVENDER: The second part of (5), after (a) and (b),
says:
"... the court will direct the proportion of the
costs that is to relate to common costs and the
proportion that is to relate to individual costs."
MR JUSTICE FRASER: Correct. That's entirely correct.
MR CAVENDER: Yes. But, my Lord, the reason we went down
this rabbit hole, which is whether or not this special
cases provision says anything or has any influence on
whether the costs should be reserved or not -- that's
how we got here. In my submission you might have to
make another order today to make sure we comply with
this, once we agree what it says and what we need to do.
But in my submission that doesn't impact in any way upon
whether or not costs should be reserved --
MR JUSTICE FRASER: Which is your primary position.
MR CAVENDER: -- which is my primary position.
MR JUSTICE FRASER: I understand that. Right.
Is there anything you'd like to add?
MR CAVENDER: What's being pointed out to me, 44.6(5),
apparently we're not in that because that anticipates
a case where there is:
"... one or more GLO issues; and
"... issues relevant only to individual claims ..."
That suggests a situation that your Lordship thought
would be unlikely: it's where you have both together.
Whereas here, as I understand it, it's common ground we
only have common issues.
MR JUSTICE FRASER: That's why I wanted to check. That's
the point I wanted to check.
MR CAVENDER: Yes. So I think we don't even get down the
rabbit hole.
MR JUSTICE FRASER: Well, (a) it's not a rabbit hole; and
(b) I'm pretty sure that whether you're confident that
we do or not, the simplest thing is to include in
today's draft order that all of the Common Issues costs,
or the costs of the Common Issues trial, are, for the
purposes of 46.6, GLO issues.
MR CAVENDER: My Lord, yes. We have no objection to that.
MR JUSTICE FRASER: Yes, all right. Okay. But we're not
getting on to the drafting of the order at the moment.
You just need a decision from me as to whether I'm going
to reserve the costs or not.
MR CAVENDER: Indeed. The point I make -- and again we have
gone into that, very helpful -- there is nothing, in my
submission, at all to do or impact upon whether to
reserve costs or not.
MR JUSTICE FRASER: That might be right, Mr Cavender. But
you said there were no special orders for costs in
relation of group litigation, and there are.
MR CAVENDER: There are no provisions that are relevant to
this point about reserving or not. There is nothing
that says, as I understand it -- my learned friend
hasn't shown you -- that because it is group litigation,
the costs should be paid at every stage and all
revisited later, whether preliminary issues or not.
That's the point I was making. I think I'm right about
that.
MR JUSTICE FRASER: I don't need you to answer at all. I'm
just going to tell you whether I'm going to reserve or
not.
MR GREEN: I'm most grateful.
MR JUSTICE FRASER: All right. Because there's a passage
which I'm going to start. I'm just going to give you
an brief ruling about it, so that you know why.
(1.00 pm)
(Ruling awaiting the judge's approval)
(1.10 pm)
MR JUSTICE FRASER: For the purposes of today's draft order,
whoever is drafting it, it will need to include
a 46.6(5) passage in it at the beginning.
I'm going to rise now. I will come back at 2.10.
Can you, between you, just remind me what is on today's
agenda then remaining?
MR GREEN: My Lord, it is the remaining points --
MR JUSTICE FRASER: It is what the costs order should be --
MR GREEN: It's what the costs order should be.
MR JUSTICE FRASER: -- basis of assessment --
MR GREEN: Basis of assessment.
MR JUSTICE FRASER: -- any payment on account --
MR GREEN: Payment on account.
MR JUSTICE FRASER: Actually what the costs order should be
includes within it any percentage reduction to reflect
the fact that there has been less than 100%.
MR GREEN: Precisely. There is one distinction, my Lord, in
relation to indemnity costs: there is the budgeted
costs --
MR JUSTICE FRASER: I understand that point.
MR GREEN: We just say --
MR JUSTICE FRASER: That's rolled up within --
MR GREEN: -- standard certainty, standard basis. Sorry.
MR JUSTICE FRASER: That point is rolled into basis of
assessment because you are, as I understand it, seeking
a different assessment up to a date in April 2018 and
then -- I think you are looking for indemnity costs up
to a date in 2018 and thereafter standard costs?
MR GREEN: My Lord, yes.
MR JUSTICE FRASER: Right.
MR CAVENDER: The other point is the timing of the
assessment. My learned friend wants a detailed
assessment now; we are saying that shouldn't happen.
That is another item.
MR JUSTICE FRASER: I understand that. Is that, however,
though -- and I will just ask you that question now. If
I'm making a payment on account, does that really make
any difference?
MR CAVENDER: It's for my learned friend to answer that. It
is something he's seeking, and I'm saying it's not
normal. It makes less of a difference, for the reason
your Lordship has intimated.
MR JUSTICE FRASER: Yes.
MR CAVENDER: But it is for him to decide whether he wants
to maintain that or not.
MR JUSTICE FRASER: All right. Mr Green, we will deal with
that further this afternoon.
MR GREEN: I'm grateful.
MR JUSTICE FRASER: So it is what the costs order should be,
including any percentage reduction; basis of assessment,
including the curiosity we have identified; when the
assessment should start; and any payment on account.
MR GREEN: My Lord, yes.
MR JUSTICE FRASER: Those are the matters this afternoon.
MR GREEN: Those are the four points.
MR JUSTICE FRASER: All right. 2.10. Thank you very much.
(1.12 pm)
(The short adjournment)
(2.10 pm)
MR JUSTICE FRASER: Just before we start, I gave
an incorrect reference when I was giving the ruling on
the Post Office's application for permission to appeal.
It is a case called Wheeldon v Millennium. I think
I said it was [2019] EWCA; in fact it is [2018]
EWCA Civ 2403.
Then I just want to add one passage to the ruling
I gave just before 1 o'clock about reserving the costs.
What I am going to do is I am going to produce somewhat
more detailed written reasons both for that and for any
other rulings I make this afternoon.
(2.14 pm)
(Ruling awaiting the judge's approval)
(2.15 pm)
MR JUSTICE FRASER: So, Mr Green.
Submissions by MR GREEN
MR GREEN: My Lord, yes. The first point of the four is the
principle of costs and any reduction.
MR JUSTICE FRASER: Yes.
MR GREEN: Your Lordship has seen that the Post Office
contends, at paragraph 27 {J1/4/8}, for a 30% reduction.
MR JUSTICE FRASER: To reflect their success on the issues
they succeeded on.
MR GREEN: Exactly. We respectfully say our primary
submission is there should be no reduction at all, for
reasons I'll explain.
MR JUSTICE FRASER: Yes.
MR GREEN: And our secondary submission is that were there
to be any reduction, it should be minimal, very small,
possibly 5 --
MR JUSTICE FRASER: Thank you for clarifying what "minimal"
means.
MR GREEN: Sorry. I was about to say: possibly of the order
of 5%.
MR JUSTICE FRASER: Yes.
MR GREEN: The reasons for that are some of principle and
some based on the judgment itself and some based on
their submissions.
The point of principle I would like to invite
your Lordship to consider first is in the Kastor case,
which is at {J7/8/1}. That is tab 8 in the authorities
bundle. My Lord, I don't think these are particularly
controversial points, but I think it is right to just
identify any points of principle very briefly.
The first point, it is paragraph 151 {J7/8/44}.
I can't see what page that is, but it's the
penultimate --
MR JUSTICE FRASER: We're at tab 7, are we?
MR GREEN: I'm so sorry, tab 8. {J7/8/44}. It is the
penultimate page.
MR JUSTICE FRASER: Yes.
MR GREEN: My Lord, bottom of the page, paragraph 153.
I don't think it's in any sense controversial, it's
probably absolutely trite, but it's obviously not
a simple mathematical calculation.
MR JUSTICE FRASER: That is effectively accepted by the
Post Office. They have very sensibly said they're not
seeking a mechanistic issue by issue and it should be
done by means of a percentage.
MR GREEN: Exactly.
MR JUSTICE FRASER: That is the modern way, isn't it?
MR GREEN: That's exactly right. But what we would go on to
say, with respect, is: when one is looking at
an percentage it is not a mechanistic approach either
arithmetically. It is not meant to be controversial.
The reason I'm taking your Lordship to the authority
is paragraph 151 {J7/8/44}, which is the alternative
case point, and it's quite an important point because
the principle is that where a party advances two
alternative arguments directed at the same outcome, they
are not to be penalised if they succeed on one and not
the other. This is the distinction being made, to show
you exactly what's said and then relate it across to our
case. It says:
"This is not a case where the issue on which the
successful party lost was a separate head of claim: it
was a separate basis for putting the successful party's
only claim. Accordingly, unlike in many cases involving
issue based orders for costs, this was a case where the
issue on which the successful party lost would not have
been litigated if the unsuccessful party had conceded
the issue on which the successful party won."
Just to give a practical example from
your Lordship's judgment, supply of goods and services:
the Post Office claims to have won on the act. We
respectfully say, on the correct principle, your
Lordship doesn't just tick a box whether they won or
lost, but looks at the fact that your Lordship
effectively found similar obligations otherwise implied,
but not by statute.
MR JUSTICE FRASER: But there were issues which don't fall
into that category.
MR GREEN: My Lord, I agree. I'm just trying to identify --
MR JUSTICE FRASER: The Post Office as SPM agent, for one.
MR GREEN: Indeed. My Lord, the point I was coming to in my
order -- I will take that point now -- the short point
on that was essentially that was I think about two
questions to Mrs Van Den Bogard, "You've said in your
witness statement this is a service you supply to
subpostmasters", and a couple of paragraphs in our
submissions. So it's a minimal point. But
your Lordship is quite right, we lost on it, and that's
fair enough.
The obligations which the claimants were seeking to
establish by virtue of that relationship, the substance
of those obligations are reflected in the finding of
relational contract. So for two reasons we say there
that on a proper analysis, it's more in the appearance
than in the reality of a win, but it's fair to say they
did win that issue.
MR JUSTICE FRASER: Yes.
MR GREEN: So, my Lord, that was the first point of
principle.
Then the court obviously has in mind --
MR JUSTICE FRASER: What exactly is the point of principle
though? You're saying: not mathematical?
MR GREEN: No, the point is that one should carefully have
regard to whether one has arrived at substantially the
same route by an alternative --
MR JUSTICE FRASER: Understood.
MR GREEN: The second point, my Lord, is to have regard --
and this picks up I think on their NTC not incorporated
point. They say: it would have been fantastic if we had
taken notice of the binding Court of Appeal authority.
There are two points in relation to that.
MR JUSTICE FRASER: On it being signed?
MR GREEN: It being signed.
MR JUSTICE FRASER: Yes.
MR GREEN: The first point is that there is an enormous
overlap between the unfair contract terms arguments and
the argument that they were onerous terms in relation to
NTC. And secondly, as to the principles, those had to
be argued in any event for the SPMC.
MR JUSTICE FRASER: Yes.
MR GREEN: It is completely artificial to regard those
matters of evidence as the Post Office seeks to
characterise them where the same substantive material
would have been deployed in any event, both the legal
arguments on the SPMC and consideration of the actual
effect of the terms for our purposes.
There is authority for that, my Lord, which is at
{J7/17/8} at paragraph 28, which picks up the point that
I have already made by reference to Kastor but also adds
the same material point. 28:
"However, on analysis, it seems to me that that
approach would not be appropriate in this case. It is
right that the defendant lost on its statutory authority
defence. However, all of the detailed legislation that
was considered by reference to that unsuccessful defence
was directly relevant to the alternative defence of
reasonable user, on which the defendant was entirely
successful."
So you can have situations where --
MR JUSTICE FRASER: That doesn't really add anything to your
submissions you've already made, does it?
MR GREEN: Well, my Lord, I think ...
MR JUSTICE FRASER: You're saying you can't look at it, for
example, as 7 -- well, let's use different numbers --
10 issues out of 20, so therefore it's automatically
a half, because some of the issues may have been either
overlapping issues or different ways to get to the
ultimate same answer.
MR GREEN: Yes.
MR JUSTICE FRASER: I have that point.
MR GREEN: Then the second point is that some of the issues
were interdependent in a different sense, in that a term
may be less onerous if its exercise is governed by
implied duties of good faith. And as heralded for two
years by the claimants repeatedly, we could not possibly
win on every issue. That was made absolutely clear for
two years.
MR JUSTICE FRASER: Yes.
MR GREEN: Then there is the point about how the issues were
in fact resolved. We would just invite some caution,
my Lord, in accepting the characterisation of those
issues in the lengthy footnote by which they are said to
have been recited as having been determined in their
favour. I will take an example. Just to take
an example, true agreement, my Lord, at 925 {B7/29/264}.
MR JUSTICE FRASER: Just give me a second to find the
lengthy footnote.
MR GREEN: There is actually a very similar one in two
different places. One is a footnote in their permission
to appeal skeleton and the other is a footnote at page 7
of their skeleton argument, footnote --
MR JUSTICE FRASER: Let's go to page 7.
MR GREEN: Defendant's skeleton argument on page 7, which is
{J1/4/7}. It has come up. Your Lordship will see at
the bottom --
MR JUSTICE FRASER: Just bear with me, just for a second.
I'm just chasing up a hard copy.
So this is the note at number 1?
MR GREEN: It is the footnote at number 1, which is very
long, and recites the issues on which the Post Office
won.
MR JUSTICE FRASER: Yes.
MR GREEN: I have already mentioned supply of goods and
services, my Lord, but can I mention, for example, true
agreement, where they say they won. Your Lordship will
well know from your Lordship's own decision that what
you actually found was that this common issue didn't
fall to be determined, but you would otherwise have
followed the approach argued in the alternative by the
claimants.
MR JUSTICE FRASER: Yes.
MR GREEN: That's at 925 on page 264 of the judgment
{B7/29/264}.
MR JUSTICE FRASER: 295?
MR GREEN: It is paragraph 925.
MR JUSTICE FRASER: Sorry, the mouse was hovering over the
paragraph number. You're talking about Judgment No 3
now, not what I've said in Judgment No 4?
MR GREEN: No, my Lord, what you said in Judgment No 3 --
MR JUSTICE FRASER: Yes.
MR GREEN: -- in terms of what -- your Lordship was
absolutely right in Judgment No 4 to say you were
invited to decide some issues, and some of them you
found in the Post Office's favour, and that's absolutely
correct. But we say, when you come to costs, the
context is: how were they determined in fact?
MR JUSTICE FRASER: Yes.
MR GREEN: And we look at paragraph 925, which is the very
paragraph to which reference is made, about six lines
down --
MR JUSTICE FRASER: But you're saying I think, on the basis
that your opening submission this afternoon was that
there should be no reduction, you're effectively saying
the degree of success on the Post Office's point of view
on all of the common issues was such that it does not
warrant a reduction.
MR GREEN: Precisely.
MR JUSTICE FRASER: That's pretty optimistic, if not failing
to pay attention to paragraphs 295 and 296 of Judgment
No 4 {B11.2/3/74}, is it not? Because I've already
dealt with this point in Judgment No 4. I've given the
global summary. What I said in Judgment No 4 was: the
Post Office's solicitors' submissions of 29 March
correctly reflected the success or otherwise of both of
the parties in Common Issues Judgment No 3.
MR GREEN: My Lord, I think that is completely right.
MR JUSTICE FRASER: But aren't you trying to reinvent the
wheel by persuading me that actually they didn't; or if
they did, it shouldn't affect the costs at all?
MR GREEN: I think, my Lord, I can't say that they didn't,
because (a) they did, and your Lordship said they did.
That's --
MR JUSTICE FRASER: If one accepts they did, is not the
modern consequence of that that consideration is given
to a percentage reduction?
MR GREEN: Yes. But, my Lord, the modern consequence is
consideration is given. I'm now addressing
your Lordship on whether --
MR JUSTICE FRASER: But you're saying the reduction should
be zero.
MR GREEN: Yes, that's our primary submission because --
I will give your Lordship all the points together.
MR JUSTICE FRASER: I'm acutely aware of what the common
issues were, what my answers were on all of them, how
they interrelated between one another and whether, and
if so, how many of them were more or less important than
the others.
MR GREEN: Precisely. I won't labour the point.
MR JUSTICE FRASER: I mean, you can labour it as much as you
want, but I don't think you're going to add to the sum
of human knowledge, to be honest.
MR GREEN: I'm most grateful, my Lord. I will move on.
Your Lordship has the point though. 925 is a good
example of being a bit careful about what they've said
they won on and what the substance of the finding is.
In relation to the NTC signature point, if we just
go back to that, your Lordship already has my
submissions on the UCTA and the principles being
deployed on SPMC. There is a further reason for that
though.
Your Lordship essentially got to the point of being
prepared to consider finding for the claimants on the
evidence, but was barred from doing so by a Court of
Appeal authority. If --
MR JUSTICE FRASER: I then went on to deal with it in case
I was wrong. You could have appealed that point.
MR GREEN: My Lord, yes.
MR JUSTICE FRASER: That doesn't mean the Post Office
haven't won on it.
MR GREEN: No, they have won on it. But in terms of doing
that in parallel and the reasonableness of taking the
point at all, which is one of the express factors that
Mr Justice Neuberger, as he then was, identified, it is
not available to us in the Court of Appeal if we don't
have your Lordship's treatment of it in this judgment,
if we seek to cross-appeal.
MR JUSTICE FRASER: No, that's correct. But that doesn't
mean you haven't not lost on it.
MR GREEN: No, it doesn't at all. But it goes to the --
MR JUSTICE FRASER: Sorry, that doesn't mean you haven't
lost on it.
MR GREEN: Yes, and your Lordship is right. But just on the
background factor of whether it was reasonable to take
the point in the first place, we respectfully say that
that is a fact, although a small one, but it's
a material one.
MR JUSTICE FRASER: Understood.
MR GREEN: The central point, which your Lordship is well
aware of, basically relational contract -- which my
learned friend said suffused everything else -- and the
implied terms, those issues, your Lordship will
remember, particularly in relation to the implied terms,
which I just briefly mentioned this morning, go back to
requests for further information in 2017 of what the
Post Office's case actually meant for specific points.
There were two of those in 2017 and the failure to
answer them resulted in the Post Office agreeing to
an order from your Lordship on 2 February 2018, the
second CMC order, ordering them to provide the
information. They didn't do so: they didn't actually
provide the information itself.
As your Lordship knows from the extensive recital of
that in our opening and reference back to it in our
closing, that rumbled all the way along, in a way which
we respectfully submit was extremely unsatisfactory,
through the provision of the table that we can just call
up briefly at {H/19.1/1} in a final attempt to get some
specificity from the Post Office as to what the terms or
their incidence were.
I actually prepared this and typed it myself, put it
in myself. This was the table offering the Post Office
the chance to say what they actually agree in respect of
each of the terms. I typed it all out, so they all
needed to do was type in what they said, and I even gave
examples, "E.G.", of what I thought their case might be,
to --
MR JUSTICE FRASER: No, but as I understand it, apart from
two of the terms that were agreed, that invitation
wasn't taken up.
MR GREEN: What they did was they responded in a very
lengthy document that didn't condescend to any clarity.
MR JUSTICE FRASER: Well, it may or may not have done. And
the Common Issues dealing with implied terms or
incidence of implied terms was, to a certain extent,
entwined within a consequential upon the finding on
common issue 1.
MR GREEN: Indeed.
MR JUSTICE FRASER: But ...?
MR GREEN: My Lord, the short point is -- "but" quite a lot,
we respectfully say, because if they had in 2017, when
they pleaded these two general terms and we said, "Hold
on a second, what does that mean for the specific areas
we're actually concerned with?", and they said:
actually, we agree there were the sorts of obligations
your Lordship has found, there may not even have had to
be a trial about all that.
MR JUSTICE FRASER: Okay. I have that point.
MR GREEN: So it was completely unnecessary. We say that
that unreasonable conduct goes all the way back --
MR JUSTICE FRASER: You're moving on to a different point?
MR GREEN: I am. I say it's relevant to how the trial and
the entire litigation was run for the general point
about no discount, but I also say it goes to the
question of the basis of assessment.
Because your Lordship has seen we've set out the
conduct which we rely on in our skeleton argument, and
your Lordship is very familiar with it all because much
of it comes from your Lordship's own judgment. That's
at {J1/1/14} and {J1/1/15} in particular of our written
submissions, all the way through to {J1/1/16}. But we
respectfully say that it was completely unreasonable to
agree to provide information and agree to an order to
that effect and then not provide it, with the
consequence that those matters could not be agreed.
All of those offers for them to clarify the
incidence or the implied terms were made openly, not
even without prejudice save as to costs. And that goes
all the way back to 2017. My Lord, that feeds in to
the -- I think your Lordship described it as a "curious
point" in relation to basis of assessment. I'm not
going to go through all these points --
MR JUSTICE FRASER: "Curious point"?
MR GREEN: About budgeted costs and pre-budgeted costs.
MR JUSTICE FRASER: Well, as I understand the situation,
it's as follows, and if I'm wrong, correct me. You want
indemnity costs up to a particular date --
MR GREEN: My Lord, yes.
MR JUSTICE FRASER: -- and detailed assessments, subject to
assessment on the standard basis --
MR GREEN: Indeed.
MR JUSTICE FRASER: -- after a particular date.
MR GREEN: Yes.
MR JUSTICE FRASER: Now, I am well used to and parties often
do ask for indemnity costs for a different period. It
is highly unusual to have the period for indemnity costs
pre-dating a period for standard assessment because it's
normally because something has happened --
MR GREEN: Indeed.
MR JUSTICE FRASER: -- where the conduct after a particular
date falls to be looked at from a different point of
view --
MR GREEN: Indeed.
MR JUSTICE FRASER: -- or of a different character.
MR GREEN: Indeed.
MR JUSTICE FRASER: Very unusual to have it the other way
round.
MR GREEN: Yes.
MR JUSTICE FRASER: It might be, I suppose, said that
conduct was exceptionally unreasonable and out of the
norm up to a particular date and then there was
a Damascene conversion and everything changed, but
I don't understand this to be --
MR GREEN: No, we're not saying that.
MR JUSTICE FRASER: No, that's rather why I'm asking the
question.
MR GREEN: That's the curious point, quite.
The short point is this: that the claimants'
submission is that looked at throughout the overall
period as a whole, the Post Office's conduct was out of
the norm in the lack of co-operation which the court
would expect from a party in a case like this, in
a number of material respects which we've sought to
identify, and from an early stage, and I've given
your Lordship the example of the repeated requests for
further information in relation to those implied terms
and their incidence.
MR JUSTICE FRASER: Yes, but none of that really jumps out
at one as all occurring at or near a watershed date.
MR GREEN: No, my Lord, we're coming to that.
So the primary submission is that when you look at
the conduct of the case across the whole piece, you see
factors justifying an award of indemnity costs across
the whole piece. Another example of that is where the
defendant does an apparent volte-face at trial, the
seeds of that volte-face are sown not at trial but when
they take the point originally. So our submission is
it's the assessment across the whole period that
justifies an award of indemnity costs, not that the
period starts or stops.
But what we have respectfully said is that we don't
invite the court to exercise its discretion in the light
of that conclusion in relation to the period for which
costs were budgeted, because of the certainty that
budgeting is supposed to bring to those costs and to
avoid the need for disputes on detailed assessment
ab initio, just to take the benefit of the certainty of
the budgeted costs.
So, my Lord, we don't say it all happens before and
then it stops. What we say is: looked across the piece,
it should be indemnity costs. But notwithstanding the
justification for an order at that time, we say: given
that costs were budgeted from April 2018 onwards, and
the certainty that that affords, on balance, it is not
just and convenient to make a different order because
your Lordship has already approved a costs budget, which
we came underneath. The cost budget was £3.4 million
and we were £3.1 million. So it doesn't help anyone.
So it's not withdrawing from the submission.
MR JUSTICE FRASER: When you say it doesn't help anyone, you
mean the cost management order doesn't help anyone?
MR GREEN: No, no, no, no. If we were to seek to invite
your Lordship to make an indemnity costs order, it's not
going to make a material difference --
MR JUSTICE FRASER: Because you can still --
MR GREEN: -- such as to justify the waste of everyone's
time.
MR JUSTICE FRASER: Understood.
MR GREEN: So that's the basis on which that is put.
MR JUSTICE FRASER: You have, I think, dealt both with costs
in principle, percentage reduction and basis of
assessment.
MR GREEN: Indeed. My Lord, I have. Then --
MR JUSTICE FRASER: Is that right?
MR GREEN: I have, exactly.
MR JUSTICE FRASER: Right. Well, I would like to hear from
Mr Cavender about that first.
Submissions by MR CAVENDER
MR CAVENDER: My Lord on the question of percentage
assessment, this is of course is meant to be
an impressionistic and to an extent broad brush, but
educated broad brush; educated particularly by the trial
judge of course who has just decided the case and who is
intimately knowledgeable about the various issues.
We had grouped at footnote 1, page 7 of my skeleton
{J1/4/7}, below 23, those items where the Post Office
did win. That is an accurate summary.
My learned friend, when he talks about the true
agreement point, when you look at the reference, we're
just talking here about that argument in relation to
termination for breach, not in a situation where it is
terminated other than for breach. So that's a bad point
he makes about that.
Again, he goes into certain of these things, but
when he does so, he does so inaccurately. Take the
agent point, that the Post Office was somehow the agent
of the postmasters: it is obviously a ridiculous
suggestion. But what's inaccurate is he says it's
a couple of paragraphs. If you look just in his
closing, it's six pages: it's {A/6/205} to {A/6/210} in
his closing. In my closing, I don't know, it's probably
a similar amount; in the opening similarly.
So I don't invite you to go through page by page;
it's impressionistic. But my learned friend isn't being
quite straight when he says it's a couple of paragraphs;
it's rather more. So you ought to bear that in mind.
It is true that if obviously a parallel point is won
then it's not mechanistic; I accept that, obviously.
But my learned friend says in relation to, for instance,
the onerous and unusual, it's all is the same. Well, of
course it's not the same because the terms under the NTC
are very different to the terms under the SPMC. You
have to consider each of the terms separately. You
can't begin to say, as my learned friend does, "Well,
it's all the same". Clearly it isn't.
Similarly, although there is some overlap between
the material one looks at for UCTA and onerous and
unusual, of course, as your Lordship rightly points out,
it is a very different test.
So the points he makes don't really get him
anywhere. One is then left back to the impressionistic
approach that in my submission you should be doing
anyway, and doing the best that we can.
If you look at our skeleton at paragraph 23 and
following {J1/4/7}, we put some skin on the bones of
what I have just said. For instance, paragraph 26
{J1/4/8}, in relation to signature and incorporation,
all the evidence that related to the two NTC lead
claimants that went to the interview, what they were
told, what they knew, Mrs Dar and Mrs Stockdale, was
only related to that.
So I don't overemphasise it, but one has to do it
fairly. We have sought to do that and we've come up
with a round figure of 30%. You may think that's too
high or too low. Certainly the idea that it's zero,
it's difficult to understand that submission having been
made. Equally, 5%: it's obviously much more than that.
But whether it's 25%, 30% or 35%, right-minded people
could disagree. I don't pretend that there's a right
answer. This is costs, a discretion. That's really
what I wanted to say on that.
My Lord, then going to the basis of assessment,
I have to say I'm very surprised that an experienced
party or team like this would seek indemnity costs in
this case. I say that because the test is a very high
one. If you look in our skeleton at paragraph 28 and
following {J1/4/9} Lord Justice Coulson reminded us of
that in a case called Hislop. It's authorities
bundle 2, tab 26 {J7/26/1}.
MR JUSTICE FRASER: 26?
MR CAVENDER: My Lord, yes.
MR JUSTICE FRASER: Yes.
MR CAVENDER: This is a decision of Hislop v The Board of
Leicester.
MR JUSTICE FRASER: Paragraph 36; is that right?
MR CAVENDER: Indeed, yes. He gives all the relevant
authority in 35. {J7/26/14}:
"Indemnity costs are appropriate only where the
conduct of a paying party is unreasonable 'to a high
degree'."
So that is the test.
We then cite also at paragraph 35 {J1/4/10}
Arcadia Group, which is in the bundle at tab 20
{J7/20/20}. I don't think I need to take you to it, but
we extract it at paragraph 35 of the skeleton, where he
says the "weakness of a legal argument" could not
justify indemnity costs unless the argument was
"motivated by some ulterior commercial or personal
purpose".
And what was said also in Hosking by Hildyard J
{J7/28/16}:
"The merits of the case are relevant in determining
the incidence of costs: but, outside the context of
an entirely hopeless case, they are of much less, if
any, relevance in determining the basis of assessment."
Then over the page {J1/4/11}, Digicel. So this is
paragraph 36(b), the decision of Mr Justice Morgan
{J7/14/11}, where he makes the point that:
"... further refinements of the legal or factual
analysis as the parties deepen their understanding of
the issues and the adoption of new positions in the
light of indications, direct or indirect, actual or
guessed at, of how the judge appears to be approaching
the matter ... are not particularly unusual in long and
complex cases."
That's aimed at the volte-face point.
MR JUSTICE FRASER: It is without doubt sensible -- or
rather I will put it the other way round. It is not
sensible for judges to penalise parties who concede
points during litigation by saying, "Well, that
justifies indemnity costs", depending upon the nature of
the point, because otherwise one would hamstring
advisers in terms of making sensible concessions.
MR CAVENDER: Indeed. Also I think the point
Mr Justice Morgan was saying is that the way you put the
point may alter slightly because things develop, and if
you look at the whole part of this judgment, witnesses
have given evidence, the judge has a certain view: often
judges will offer -- it has been done to me before --
different implied terms: "How about this one?" You buy
it or you don't, effectively. No one suggests that's
wrong or should result in indemnity costs.
Then at paragraph 36(e) {J1/4/12} we cite Williams
v Jervis {J7/13/3}:
"... important to bear in mind, firstly, that an
order for indemnity costs should not be made simply
because the paying party has been found to be wrong or
his evidence has been rejected in preference to that of
the receiving party."
So that is the tenor of the law. It has to be
something significantly out of the ordinary.
What is said against the Post Office here? My
learned friend says: well, for the whole time, the whole
period of the litigation, he says very boldly, the
Post Office behaved in the way he suggests. He gives
very few particulars on his feet. The ones he does give
are bad ones.
So he says, for instance, in relation to the implied
term debate -- the implied terms were pleaded by us in
our original defence: they were necessary co-operation
and Stirling v Maitland. The claimant admitted those
implied terms were part of the contract. If they had
wanted to, at any stage they could have pleaded what
they meant, how those implied terms interacted with the
express terms and what the incidence of those implied
terms were. Had they have done so, we would have had to
plead to that. At no stage did they do so.
They say that we didn't answer their request. We
did. Look at {B4/3/1}. The fact they don't like the
answer doesn't make it not an answer.
So that's the main one. My learned friend says the
whole costs, the millions of pounds of costs in this
action going on for a number of years, because he says
we didn't answer an RFI in the way he would like, in
circumstances where he could have pleaded terms he
admitted no incidence, the court should award indemnity
costs throughout. It is, in my submission, nonsensical
as a submission.
We then go to his costs submission at {J1/1/16},
where he goes from (a) to (h) and lists what he says are
grounds for giving indemnity costs. Just look at (d)
and (e) by way of example:
"(e) Its treatment of the Lead Claimants ..."
I assume he's talking about that when they were
employed, the way they dealt with them. Nothing at all
to do with the costs of the action in which the parties'
disputes are -- it is really very surprising to see that
written down.
"(b) Post Office's approach to agreeing facts, and
the relevance of evidence."
Well, we did agree a lot of facts. You'll remember
there were schedules of facts agreed as to whether they
were true, admissible, or one of two. So a lot of work
was done and there was good co-operation in relation to
that.
Yes, we didn't agree about the relevance of certain
evidence, we applied to strike it out, and your Lordship
said: well, it may be; you couldn't say it was all
inadmissible, some of it may be. You awarded costs on
that application. You can't then say: well, therefore
that then passes into the costs of the action and
somehow infects that. That would be unprincipled.
The volte-face point, in relation to paragraph (a)
of this: all your Lordship was doing was saying you
understood -- in one place you said you thought it was
a volte-face; in another place you said: on reflection,
it is the same point. And maybe I didn't put it very
clearly; maybe I can be criticised for that. But this
is a complex case, we had our written submissions. To
say that, "There should be awarded indemnity costs
against you for the whole action", is fanciful really.
I've never heard it in any other case I've been in,
I have to say.
And then we have -- all of this, none of these,
alone or together, begin to pass muster as being able to
satisfy tests for indemnity costs. That's all I want to
say about it.
MR JUSTICE FRASER: Can I just check one thing with you.
The date that Mr Green is taking as a watershed date,
I think -- is it April 2018?
MR GREEN: Yes.
MR JUSTICE FRASER: It is April 2018. Is it 11 April 2018?
MR CAVENDER: It is, and that --
MR GREEN: It's the 13th. It's the date up to which the
cost budget went. We're just saying the ones in the
budget.
MR JUSTICE FRASER: No, I understand the basis on which
you've chosen the date.
MR CAVENDER: Then if you look at the basis of assessment in
our skeleton, we outline why they've done this: it's
a tactical reason, to try and avoid their costs being
looked at more carefully.
MR JUSTICE FRASER: Well, it depends, doesn't it, on -- not
that it depends on this case. On a different case
though, whatever their reasons for it in this particular
case, to award indemnity costs for one period of time
and standard assessment for another period of time, one
would ordinarily look for something that has occurred at
or about that date that would relate to the conduct of
the paying party, rather just than the date of
a costs --
MR CAVENDER: My Lord, of course, and that happens. Certain
points are taken, or expert evidence, or some particular
point that played badly, that can be disallowed or you
can't recover your costs on it.
But here we have a blanket for the whole period, all
the costs of the action to date, we're talking about
here, from the very start of the pleading all the way
through, subject to a device -- and it is a device, as
we explain in paragraphs 28 and following {J1/4/9} --
not to have the budgeted costs area looked at because
they think they will do better if indemnity costs aren't
ordered over that period.
MR JUSTICE FRASER: Presumably because they don't have to
have a detailed assessment, as I understand it.
MR CAVENDER: Indeed. In my submission it is in principle
wrong and is -- well, it's obvious what's going on.
I need say no more.
MR JUSTICE FRASER: I don't think you need to say anything
more about that. Thank you very much.
Right. Mr Green, anything in reply?
Reply submissions by MR GREEN
MR GREEN: Two quick points.
Firstly in the MacInnes case at {J7/23/8}. So it's
tab 23 in the bundle of authorities. This is
Mr Justice Coulson in MacInnes v Gross. At 26, the
first four lines; he obviously goes on to talk about
relevance to interim payments thereafter. But the first
four lines:
"One of the main benefits to be gained from the
increased work for the parties (and the court) in
undertaking the detailed costs management exercise at
the outset of the case is the fact that, at its
conclusion, there will be a large amount of certainty as
to what the likely costs recovery will be."
MR JUSTICE FRASER: But this is on interim payments though.
MR GREEN: Well, yes, he goes on to deal with interim
payments, you're absolutely right. But the central
point, the rationale underpinning the budgeting
exercise, we respectfully rely on --
MR JUSTICE FRASER: That's undoubtedly correct, but it is --
well, I've explored the point with you already.
MR GREEN: Yes. It's unusual in that respect.
MR JUSTICE FRASER: All right.
MR GREEN: The other point I wish to address very briefly is
in relation to the implied terms point which my learned
friend has responded to. There are three points to make
on that.
The first point is: this is not a criticism that we
are making of the Post Office having made a concession.
The criticism is that they didn't make any concession
or, rather more particularly, did not actually say what
the incidents were for the material purposes of the
case.
The second point my learned friend made was that we
could have pleaded what we said the incidents of those
were, and we never did. He's wrong about that, because
our case was that our implied terms were either
free-standing implied terms or incidents of the terms
that the defendant had pleaded. So we had set them out
in our generic particulars of claim and they chose to
plead to them in the defence as they did. So he's wrong
about that.
The third point is just to invite your Lordship to
actually look at what we did say in the reply, because
it's not what you have been told. It's at {B3/3/32}.
I'm obviously aware that the pleading point didn't find
favour with your Lordship anyway in the judgment. But
actually looking at it carefully, if we start under
"Implied Terms" at B.4. If you look at paragraph 58,
that's pleading back to 106 in their defence. And at
58.2:
"As to the Defendant's averment, at
paragraph 106(2), that 'many' of the implied terms
pleaded by the Claimants 'address matters that are
already governed by the [thereto] terms ...' the
Claimant notes the Defendant's refusal to specify which
of those terms are 'already governed' by the Defendant's
accepted implied terms."
So that's the first point. It's not that they're
denying them. They're saying, "They are governed by
Stirling v Maitland and the other term, but we're not
going to tell you how".
58.3 was the reference to the only example
identified in the RFI. Then over the page {B3/3/33},
58.4, they are called out expressly for being evasive
this respect. And then 58.5:
"The Claimants aver that to the extent that their
pleaded implied terms are 'already governed' by the
Stirling v Maitland Term and/or the Necessary
Co-operation Term, these are in substance admitted by
the Defendant, contrary to Response 61A."
So it was specifically saying, "If you're saying
there are these overarching terms which already govern
the very things we've set out, this is ridiculous".
My Lord, I'm sorry, we do say that is unreasonable,
as was the pleaded case on special knowledge
subpostmasters. The seeds were planted when they did
the pleading; the harvest was taken in the Common Issues
trial.
Those are my submissions.
Reply submissions by MR CAVENDER
MR CAVENDER: My Lord, in connection to that, do you want to
look at {B7/7/13}, where the claimants admitted these
implied terms unconditionally. So it's {B7/7/13}. It's
number (2), in brackets:
"(For the avoidance of doubt, the implied terms
admitted at Defence para 105 are agreed)"
MR JUSTICE FRASER: Thank you very much. Right.
(3.00 pm)
(Ruling awaiting the judge's approval)
(3.08 pm)
MR JUSTICE FRASER: I will put this in writing, but is that
sufficiently clear for today's purposes and for drawing
up the order?
MR GREEN: Yes.
MR JUSTICE FRASER: Right.
What is there now? Payment on account and whether
a detailed assessment should commence now or not?
Submissions by MR GREEN
MR GREEN: My Lord, yes. The short point is: those two
points are interrelated. Payment on account would
ordinarily be ordered. As your Lordship observed to me
when I referred to the judgment of Lord Justice Coulson
in --
MR JUSTICE FRASER: Which one?
MR GREEN: The one about the benefit of cost budgeting.
MR JUSTICE FRASER: Remind me of the name.
MR GREEN: That was in tab 23, it's MacInnes v Gross, and it
was Mr Justice Coulson, as he then was. It's {J7/23/8}.
MR JUSTICE FRASER: Yes, you were taking me to paragraphs --
I think it's 26 and 27 together, isn't it?
MR GREEN: Precisely.
So the two points are that in terms of budgeted
costs, your Lordship effectively knows what they are
already, and my learned friend Mr Warwick is going to
deal with numbers and calculations, if he may, if that's
helpful.
MR JUSTICE FRASER: Yes. So in terms of principle then, you
would like a payment on account; the amount is going to
have changed slightly, one imagines.
MR GREEN: My Lord, yes. My learned friend will --
MR JUSTICE FRASER: But you want a payment on account. You
also want an order that the detailed assessment be
commenced straightaway.
MR GREEN: My Lord, yes. And there is a balance to be
struck, because if the payment on account is a very
substantial proportion of the costs, the interest in
having a detailed assessment -- the balance to be struck
by your Lordship is different.
MR JUSTICE FRASER: Right. So when I observed just before
the short adjournment, in a point to Mr Cavender, simply
because he was on his feet, "Is there really any
difference?", and he understandably said it's really
a point for you --
MR GREEN: Yes.
MR JUSTICE FRASER: -- if you get a payment on account, is
there really any difference?
MR GREEN: My Lord, normally if the payment on account is at
or about the budgeted costs plus a substantial
proportion of the other costs, there may be no
justifiable reason to go through the expense of detailed
assessment now rather than later.
MR JUSTICE FRASER: Right. But Mr Warwick is going to deal
with the figures?
MR GREEN: He will deal with the -- exactly.
MR JUSTICE FRASER: All right. So is there anything else
you want to add?
MR GREEN: My Lord, not unless I can help you further.
MR JUSTICE FRASER: Right. I will hear from Mr Warwick on
the figures and then, Mr Cavender, I will come to you
about both whether there should be a payment on account
and, if so, how much.
MR GREEN: I haven't really addressed what it should be,
because it's for my learned friend to --
MR JUSTICE FRASER: When you say "what it should be" ...?
MR GREEN: Sorry, the issue of principle beyond just saying
it's normally made, because of course the burden is on
my learned friend.
MR JUSTICE FRASER: Yes, understood.
Mr Warwick.
Submissions by MR WARWICK
MR WARWICK: Yes, my Lord.
MR JUSTICE FRASER: Am I right to look at paragraph 74 of
your costs submissions {J1/1/17}?
MR WARWICK: My Lord, yes, which is in terms the same as
paragraph 5(a) {J1/3/3}, which I've been working from.
MR JUSTICE FRASER: 5(a)?
MR WARWICK: Yes.
MR JUSTICE FRASER: I think I might have a different version
of the document.
MR WARWICK: It's found at {J1/3/3}, my Lord, under
heading A.1.
MR JUSTICE FRASER: No, I have it on the screen; I'm just
looking in my hard copy document. Just give me one
second.
All right, yes.
MR WARWICK: My Lord, if you'll forgive me, the figures have
changed by reason of the deduction that you have
applied --
MR JUSTICE FRASER: I guessed that they would have done,
because your figures I don't think had any adjustment.
That's not to criticise you: you didn't know if there
was going to be one and, if there was, what it was going
to be.
MR WARWICK: Indeed, my Lord.
MR JUSTICE FRASER: So what are the figures now then?
MR WARWICK: In the time available --
MR JUSTICE FRASER: Incurred figures haven't changed?
MR WARWICK: The incurred figures haven't changed, no.
I beg your pardon, sorry. The budgeted costs, from
which this is taken, were budgeted at £3,480,382.50.
MR JUSTICE FRASER: And 3.1 had been incurred.
MR WARWICK: And 3.1 has been incurred. Actually, on
instruction, a little over that has been incurred: about
£90,000 more. It has been rounded down for simplicity.
MR JUSTICE FRASER: All right.
MR WARWICK: I mention that, my Lord, because there is
obviously a danger in this process in adding rounding
downs upon rounding downs.
MR JUSTICE FRASER: Well, there might be, but I'm afraid
that's the best that anyone can do.
MR WARWICK: Pausing there for a moment, my Lord, I do also
wish to add that of course there's no difference of
principle between us about your approach to this, my
Lord, save only that Lord Justice Christopher Clarke
observed in Excalibur {J7/22/1}, quite rightly, that you
shouldn't be looking to find the irreducible minimum;
it's rather based on --
MR JUSTICE FRASER: No, I understand that.
MR WARWICK: Indeed, my Lord.
So that figure would fall to £2,790,000 with the
application of a 10% discount.
MR JUSTICE FRASER: Well, hold on one second. At the moment
we're looking at costs from the costs management order
date onwards.
MR WARWICK: Yes.
MR JUSTICE FRASER: So that can purely have a percentage
reduction applied to it --
MR WARWICK: Absolutely.
MR JUSTICE FRASER: -- because I haven't given an indemnity
costs assessment, so there's no detailed assessment.
MR WARWICK: Quite. Quite.
MR JUSTICE FRASER: So what does 3.1 go to?
MR WARWICK: £2,790,000 my Lord. Correspondingly, VAT down
to £558,000.
MR JUSTICE FRASER: VAT to what? £558,000?
MR WARWICK: Correct, my Lord, yes.
MR JUSTICE FRASER: Yes.
MR WARWICK: And the allowance for budgeting costs is
reduced to £27,900 from £31,000.
MR JUSTICE FRASER: That's just a 1%.
MR WARWICK: It's just a 1%, yes. My Lord, you may recall
there is a split approach to that. The initial
preparation of budgets is subject to a cap of 1%.
MR JUSTICE FRASER: Yes.
MR WARWICK: Further cost management costs, which are not
insignificant in a case like this -- there have been
several hearings since April; although I should add,
my Lord, you have made one costs order in respect of one
of those hearings. But nevertheless, they are a large
sum. And just for ease of rounding --
MR JUSTICE FRASER: Can I just check though: this does not
include any of the £300,000 in respect of the consent
order for the recusal?
MR WARWICK: Not at all. That's correct, yes, my Lord.
MR JUSTICE FRASER: Understood.
MR WARWICK: But just making that point good, my Lord, just
1% has been applied as a blanket for the purposes of
estimation, rather than breaking it down.
MR JUSTICE FRASER: Understood.
MR WARWICK: If I may have a moment to reach a total for
that, now that your adjustment has been added. (Pause)
I make that, my Lord, £3,375,900 on the budgeted
costs element.
MR JUSTICE FRASER: Well, all of those figures can be
checked afterwards. But it is incurred costs --
MR WARWICK: Yes.
MR JUSTICE FRASER: -- up to 13 April 2018, which requires
a little bit more analysis, doesn't it?
MR WARWICK: It does, yes. Subject of course, my Lord, to
not applying an approach that would look to find
an irreducible minimum.
MR JUSTICE FRASER: Yes.
MR WARWICK: And those have been taken --
MR JUSTICE FRASER: But your total, or the balance, is what?
It was originally 3.284 and you were looking for
an interim payment of 60% of that --
MR WARWICK: That's right, my Lord.
MR JUSTICE FRASER: -- to reflect your recovery on
a detailed assessment --
MR WARWICK: That's right, my Lord.
MR JUSTICE FRASER: -- and the fact it's not a full
indemnity.
MR WARWICK: That's correct, my Lord, yes.
MR JUSTICE FRASER: Yes.
MR WARWICK: Built into it though, I have to say, my Lord,
was an element of rounding down, because how that figure
has been reached, if I may explain very briefly, is to
take the total incurred costs from the costs budget,
which was £6,142,540.08, and strip out some things that
the costs --
MR JUSTICE FRASER: Well, however it was reached,
Mr Warwick, that's the figures that you've ended up
with --
MR WARWICK: That's right, my Lord, yes.
MR JUSTICE FRASER: -- where you explain what the balance
is, having removed the costs management order budgeted
costs --
MR WARWICK: Yes.
MR JUSTICE FRASER: -- and applying 60% to that.
MR WARWICK: That's right.
MR JUSTICE FRASER: But your 2.384 takes no account, so far
as I can tell, of any percentage reduction for your
recovery, but you say it does take account of the fact
you're not going to recover everything on a detailed
assessment.
MR WARWICK: That's right, my Lord. Yes, it does.
MR JUSTICE FRASER: It does.
MR WARWICK: That proposition is correct.
MR JUSTICE FRASER: But your 2.384 includes VAT on the 1%?
MR WARWICK: It does, my Lord, yes.
MR JUSTICE FRASER: Is there any reason why you have not
given me those figures separately? I'm not saying
I need them separately; I'm just curious.
MR WARWICK: In the skeleton argument, for simplicity, they
are there as just figures; but in the correspondence to
which it refers, they are set out in a little more
detail.
MR JUSTICE FRASER: Yes, all right. Okay.
Is there anything you would like to add on the
figures?
MR WARWICK: My Lord, if I could say: in support of the sum
claimed for incurred costs, as if to stress-test the
figure, one could also look at the period of time that
elapsed since the first CMC. For very obvious reasons,
what is sought here would go back beyond the first CMC
to the time when, for example, the Common Issues were
negotiated and agreed and put into an order and so
forth. They have been in issue since a very early
stages of these proceedings.
But what is interesting to note is that under
your Lordship's costs reporting requirements, first
imposed in fact by the Senior Master under the GLO and
latterly by your Lordship, there have been letters
informing of costs updates along the way, and the
increase between the first CMC before you in
October 2017 and for 13 April 2018 was roughly
£2 million, and that broadly aligns with the underlying
figure that's being claimed here.
Wo whichever way one looks at it, there is support
for that figure in round terms, my Lord.
MR JUSTICE FRASER: So far as your stress test is concerned,
doesn't there have to be some application to your
current paragraph 74(b) in the costs submission
{J1/1/17}, the version that I'm using, to reflect the
90% point?
MR WARWICK: On budgeted costs, my Lord.
MR JUSTICE FRASER: No, no, I'm not --
MR WARWICK: Your 90% that you've just applied in making the
costs order you have, my Lord.
MR JUSTICE FRASER: Right. At the moment, Mr Warwick, your
costs, for understandable reasons, have been dealt with
post-13 April 2018 because they're subject to the costs
management order.
MR WARWICK: Yes.
MR JUSTICE FRASER: And I entirely understand the way you've
taken me through the figures. You applied a reduction
of 90% to the £3.1 million to get to 2.79; yes?
MR WARWICK: Yes, my Lord. Yes.
MR JUSTICE FRASER: Costs incurred up to 13 April, you had
taken a balance and you had applied 60%, but there had
been no 90% analysis because you didn't know I was going
to make a 10% reduction.
MR WARWICK: That's right, my Lord, yes.
MR JUSTICE FRASER: Did you want to tell me what the figures
are with the 10% reduction?
MR WARWICK: Yes. So the figures --
MR JUSTICE FRASER: Because even the most optimistic counsel
I don't think would be maintaining recovery of
an interim payment on account in the same amount as
before they had their costs reduced by 10%.
MR WARWICK: That's well understood, my Lord. Yes, of
course.
So the total of incurred costs that would be said to
be recoverable, but to which I will apply your 10%
reduction, was to be £3,284,835, would now be
£2,956,351.50, to which the 60% is applied, leading to
£1,773,810.90, meaning that the total sought is ...
MR JUSTICE FRASER: Can you just give me the product when
you apply the 60% again, because I didn't note it down.
MR WARWICK: Yes, it is £1,773,810.90.
MR JUSTICE FRASER: Yes.
MR WARWICK: So taken together with the reduced budgeted
costs, that would come to just over £5 million, so 5 --
MR JUSTICE FRASER: No we haven't got there yet. At the
moment we're at £1,773,810, which I think --
MR WARWICK: Yes, my Lord.
MR JUSTICE FRASER: -- doesn't have VAT, does it?
MR WARWICK: I'm so sorry. I beg your pardon. I will just
add that in.
MR JUSTICE FRASER: I want to know what the figures are like
with like. I can only compare them if you do them on
the same basis.
MR WARWICK: Indeed. So the VAT would be reduced to
£354,762.18. And the 1% budgeting figure --
MR JUSTICE FRASER: That's going to be £17,738, isn't it?
MR WARWICK: Indeed, my Lord, yes. £17,738.10.
MR JUSTICE FRASER: I don't think you need to worry about
the 10 pence.
So the total of those three is, please?
MR WARWICK: The total of the VAT and the 1%, or all
underneath that line?
MR JUSTICE FRASER: The £1.773 million plus the VAT plus the
1%.
MR WARWICK: Is £2,146,311.
MR JUSTICE FRASER: All right. Thank you very much.
So your submissions seeking payments on account have
changed, as a result of my 90% ruling, to be £3,379,500
for budgeted costs and £2,146,311 for incurred costs up
to 13 April?
MR WARWICK: That's correct. So the budgeted cost is in
fact £3,375,900.
MR JUSTICE FRASER: £3,375,900? I'm sorry.
MR WARWICK: Correct.
MR JUSTICE FRASER: All right. That's very useful. Thank
you very much. I'm now going to hear from Mr Cavender.
Mr Cavender, I wanted to do that in detail first so
you could see what figures are that are being claimed
against you now, as opposed to the ones claimed against
you in the skeleton.
Submissions by MR CAVENDER
MR CAVENDER: Indeed. Can we go to my skeleton though,
because that outlines what we understood was going on
here and why there are difficulties particularly with
the approach and the incurred costs.
So we outline at 42(a) and (b) {J1/4/14} what we
understood the position to be. This is before the 10%
reductions. But they wanted 100% of budgeted costs and
60% of pre-budget costs.
Then we outline the approach at paragraphs 45 and 46
{J1/4/15} and we rely particularly, where a costs
management order was in place for the budgeted costs,
that 90% of budgeted costs has been awarded in a couple
of cases.
MR JUSTICE FRASER: Yes.
MR CAVENDER: So that is the basis on which we are
proceeding.
Let's take budgeted costs first. 90% of the
£3.1 million-odd plus VAT gives you the 3.3348 figure.
You then have to reduce that by 10% to reflect the
discount of the success.
MR JUSTICE FRASER: The order I've made this afternoon, not
the 90%.
MR CAVENDER: Correct.
MR JUSTICE FRASER: Yes.
MR CAVENDER: So you need to take 90% of --
MR JUSTICE FRASER: The 90%.
MR CAVENDER: Correct. So 90% of the £3,348,000, which
comes to £3,013,200.
MR JUSTICE FRASER: So in other words, the figures that
Mr Warwick has given me don't take account of the 10%
Cleveland Bridge/MacInnes reduction.
MR CAVENDER: Correct.
MR JUSTICE FRASER: And it has to be done as well.
MR CAVENDER: Indeed.
MR JUSTICE FRASER: And if it is, budget costs go to
£3.013 million.
MR CAVENDER: Correct.
MR JUSTICE FRASER: And that extra 90% doesn't really apply
to incurred costs up to April 2018 because they're done
in the old-fashioned way, which Mr Warwick has explained
was a 60% reduction.
MR CAVENDER: My Lord, he does. But the trouble is, and the
trouble with incurred costs, if you look at
paragraphs 49 and 50 of our skeleton {J1/4/16} -- this
is a point we raised in our submissions, served some
weeks ago, but unfortunately it has not been dealt with,
so there's a hole in the information. If you go to
{J1/2/8}, which is our costs submissions, paragraphs 22
and 23, if you could read those.
MR JUSTICE FRASER: Is this the original submissions on
29 March?
MR CAVENDER: Exactly.
MR JUSTICE FRASER: Yes, I have those. Just give me one
second.
MR CAVENDER: So paragraphs 22 and 23 outline that there
can't be any costs of the Common Issues in advance of
the Common Issues being ordered. That was ordered on
25 October 2017. There were quite a lot of costs before
that.
MR JUSTICE FRASER: They were ordered in October which year?
MR CAVENDER: 2017. But all the stuff before that are
general costs of the action that are not generally
currently in play. We asked: if they want to seek
these, they ought to produce us with a figure.
MR JUSTICE FRASER: Yes.
MR CAVENDER: Without a figure, we can't do it. But that
was months ago. We still don't have that figure. We
record that at paragraphs 49 and 50 --
MR JUSTICE FRASER: Of your skeleton?
MR CAVENDER: -- of our skeleton {J1/4/16}.
So quite what to do, it's very difficult to know
whether to put anything in here, because we don't want
to guess. But you're going to have to, in my
submission, if you want to do it on a rough and ready
basis, apply some kind of discount to reflect that lack
of knowledge, that those costs can't be Common Issues
costs.
MR JUSTICE FRASER: And you'd be happy for me to do that in
an impressionistic rather than
a mathematical/arithmetical way, would you?
MR CAVENDER: Well, I'm not very happy about it.
MR JUSTICE FRASER: No, no.
MR CAVENDER: I'd rather get the information. I've ask my
costs junior, who knows about these things, "Come on,
can't we have a stab at it?", but he's very reluctant.
So that's where we --
MR JUSTICE FRASER: Some account will have to be taken of
that.
MR CAVENDER: Or whether you say: well, they've put nothing
in to allow you to do it, so you have no real judicial
basis to do it. It might seem somewhat harsh, on one
view: there must be some costs. But I think you should
be super-cautious about it. If you are going to go down
the route and say, "Well, there must be some costs", you
should reduce it by a margin to ensure that you cover
this degree of uncertainty.
MR JUSTICE FRASER: But remember, this would be a payment on
account of a detailed assessment for costs in that
period, wouldn't it?
MR CAVENDER: Yes, I think that's true. There would be
a detailed assessment in that period.
MR JUSTICE FRASER: Yes. So it doesn't necessarily have
potentially unfair consequences, but it has to be taken
into account in fixing what's a payment on account of
a detailed assessment.
MR CAVENDER: Indeed.
MR JUSTICE FRASER: Understood. All right.
MR CAVENDER: The danger is an overpayment that we might
struggle to get back. This is always the problem.
They have had a fair chance to do this; they haven't
done it. I'm not being unrealistic about it. But I'm
not sure that they haven't done that should be visited
on my client, the uncertainty.
MR JUSTICE FRASER: Understood. All right.
MR CAVENDER: So I hazard to give you a figure that would
encompass that.
MR JUSTICE FRASER: No, I understand that.
MR CAVENDER: My Lord, I have asked to leave it to you
to ...
MR JUSTICE FRASER: Thank you very much.
Anything else?
MR CAVENDER: I think that was all that was in issue,
wasn't it?
MR JUSTICE FRASER: Yes, it was just to -- all right. Thank
you very much.
MR WARWICK: My Lord, might I say one thing as a point of
principle that has arisen out of that?
MR JUSTICE FRASER: Of course you can. I was going to come
back to you on that anyway.
MR WARWICK: I'm very grateful, my Lord.
Reply submissions by MR WARWICK
MR WARWICK: There are just two points here: the Cleveland
90% if I can call it that, and then the pre-first CMC
issue.
The Cleveland 90% has not been applied. But
I should point out, if it hasn't been seen already from
when my learned leader took your Lordship to the case on
which it's based, which was the judgment of
Mr Justice Coulson in MacInnes, at paragraph 28 in that
judgment, which is found at {J7/23/8} --
MR JUSTICE FRASER: Yes, I have that judgment open.
MR WARWICK: It's important to bear in mind in this
analysis, my Lord, that the 90% applied by then
Mr Justice Coulson is regarded as the maximum deduction
that's appropriate in a case where there is an approved
costs budget.
The same reasoning was applied in the later case to
which you have been referred in writing and orally, the
Cleveland Bridge case {J7/27/1}, where Ms Joanna Smith
QC, sitting under section 9, followed then
Mr Justice Coulson's approach pretty much verbatim in
her judgment. I needn't trouble your Lordship by taking
you through that.
MR JUSTICE FRASER: No, I don't think you need to.
MR WARWICK: The point to make here, my Lord, is that my
clients have come in under. So they have come in
significantly -- indeed, more than 10% -- under the sum
that this court has already found to be reasonable and
proportionate for the purposes of costs budgeting. In
my submission, my Lord, there is no basis to apply
a Cleveland 90% reduction in this situation. It would
be for little, if anything.
MR JUSTICE FRASER: I think the real answer is in
paragraph 25 of that case {J7/23/8}, where it said:
"In my view, the ... approved costs budget is the
appropriate starting point for the calculation of any
interim payment on account of costs. CPR 3.18 ... [if]
there is an approved or agreed costs budget, when costs
are assessed on a standard basis at the end of the case,
'the court will … not depart from such approved or
agreed budget unless satisfied that there is good reason
to do so.' The significance of this rule cannot be
understated."
MR WARWICK: Indeed.
MR JUSTICE FRASER: However, in this case the "good reason"
is the fact that I've only award you 90%.
MR WARWICK: Yes, in a sense the reasoning here is the idea
that somehow the seal has been broken. But the point is
that my clients have come in at 10% below --
MR JUSTICE FRASER: No, no, I understand that. I do
understand that.
MR WARWICK: Yes.
MR JUSTICE FRASER: That is a point -- I'm not sure,
Mr Green, that Mr Warwick is necessarily going to find
it useful to listen to you when he's supposed to be
listening to me, but I might be wrong. You can have
a moment in a second.
But the essential point is, isn't it, that in the
case of MacInnes the judge was dealing with what the
correct interim order should be on account of costs,
taking into account the costs budgeted figure, where
there had been an order for costs?
MR WARWICK: Yes.
MR JUSTICE FRASER: In this case there is an order you get
90% of the Common Issues costs, so there has to be
an adjustment. That's the "good reason", isn't it?
MR WARWICK: My Lord, that's certainly the "good reason" to
apply the adjustment that your Lordship has ordered
should be applied. There is no good reason, in my
respectful submission, to apply a further 10% discount
or deduction I should properly say on the
MacInnes/Cleveland basis, my Lord.
MR JUSTICE FRASER: I think what you are saying is that the
figures you have given me achieve it because you have
done the 90% analysis that I took you through 15 minutes
ago.
MR WARWICK: They do my Lord, yes, and for the further
reason that my clients anyway came in 10% under budget.
MR JUSTICE FRASER: I understand. All right. So you are
under budget.
What about Mr Cavender's point? What I will do is I
will just hear from you on this point, then I'm going to
give the shorthand writers a break and then I'm going to
come back in.
MR WARWICK: Very grateful. The pre first CMC point
my Lord. It is true that at the first CMC before you in
October 17 --
MR JUSTICE FRASER: There were no common issues.
MR WARWICK: The common issues were ordered at that point,
but they have an extremely long history my Lord. They
go right back to pre-action correspondence. If it
assists the court I can take you to where that is found
in the defendant's letter of response.
MR JUSTICE FRASER: It doesn't assist me, but I think your
answer to the point is what?
MR WARWICK: My answer to the point is that on detailed
assessment, as my learned friends rightly identified in
their skeleton, this would be something argued at
detailed assessment, but it would be argued very
strongly by the claimants too that the Common Issues
were a core feature of this litigation, always have
been, and that a substantial proportion of pre-October
2017 costs are entirely referable to that element of the
case.
But if it assists your Lordship's decision-making on
this, as I have already pointed out when I made
reference to a stress-testing process, the increasing
costs which the claimants have incurred between
October 2017 and the cut-off date for these incurred
costs, namely 13 April 2018, was a whisker over
£2 million and that £2 million now roughly aligns and
now exceeds the figure that I gave your Lordship of
£1,773,810, which was the 60% discounted figure.
Therefore, looked at either way, that figure should
properly be regarded as reasonable and proportionate as
an estimate of Common Issues costs that were incurred as
at 13 April. The final point to make my Lord is just to
repeat again that we are not looking to strip everything
out and achieve an irreducible minimum which appears to
be the gravamen of my learned friend Mr Cavender's
submission that we should have nothing for this period
since there are doubts.
Inevitably, my Lord, there are doubts because we are
not at detailed assessment and the production of a
detailed bill of costs in this will be a lengthy
exercise and we are working only with estimated figures.
I have one further point if I may.
MR JUSTICE FRASER: Yes.
MR WARWICK: My learned leader is right to point out that
under first the Senior Master's cost reporting regime
and latterly your cost reporting regime, information
about the level of costs has been reported throughout.
I understand on both sides there has been some wobbles
about that over the last few months --
MR JUSTICE FRASER: What do you mean by wobbles?
MR WARWICK: I'm afraid I don't have full instructions but
I do understand there have been some periods of time
when the parties have not written strictly to the
letter --
MR JUSTICE FRASER: Originally they were supposed to notify
me every time their costs went up by £250,000. Then
they were writing so often that that was changed to half
a million. The most recent letter I received was one
from the Post Office which told me that their costs were
£12.8 million. That was earlier this month but it
didn't include, so far as I know, the £300,000 that was
agreed and the consent order for today about the recusal
costs.
So I'm anticipating another letter very soon about
that and it won't reflect any orders I make today. They
won't be taken into account.
MR WARWICK: I'm grateful my Lord. If I can come good on
that submission by injecting a little more precision --
not -- than your Lordship's summary, I mean in the
submission I made so far. Under the GLO the regime
required a statement of costs to be produced shortly
before the first CMC. That was produced identifying the
claimants' costs at just over £4 million, 4.15 in round
numbers.
MR JUSTICE FRASER: Yes.
MR WARWICK: Through costs reporting letters in the
intervening period running up to 13 April 2018 ongoing
costs were reported first at £250,000 increments and
I think at the very end, perhaps on the first of the
£500,000 increments, I'm afraid I'm not sure but I do
not think anything turns on it.
MR JUSTICE FRASER: I don't think either, I only mentioned
it because you mentioned it.
MR WARWICK: Indeed my Lord. Then when one looked at the
cost budget, one sees the £6.15 million total incurred
cost figure. The difference between the two is
£2 million. In short, my Lord, the claimants had to go
through £2 million during that period in any case and
that is the figure that in fact exceeds the figure that
your Lordship has been given as part of my calculation
after the various deductions today. If your Lordship
forgives the convoluted way of explaining that, that is
my point on it.
MR JUSTICE FRASER: Insofar as I understand that, thank you
very much.
I'm going to rise for ten minutes purely for the
shorthand writers because they are entitled to a break.
I will come back in and give you the brief ruling on
figures on amount, of payments on account, and then we
will deal with the one final outstanding matter which is
whether there should be a detailed assessment ordered to
take place straight away or whether it should wait. So
I will come back in at 3.45.
(3.39 pm)
(A short break)
(3.51 pm)
MR CAVENDER: My Lord, before you rule on that, can I raise
one point. We can check the transcript to make sure
I am right. I was a bit confused about my learned
friend's submissions as to the costs for the incurred
period.
On the transcript at page 143, line 9, it is
recorded as my learned friend saying that their incurred
costs at the date of the first CMC was £4.1 million.
I ask: is that right, because if so, that's a much
bigger problem than I anticipated for that uncertain
period.
MR JUSTICE FRASER: That would be the first CMC in front of
me which was October --
MR CAVENDER: 17.
MR JUSTICE FRASER: Okay.
MR CAVENDER: I don't know if he misspoke. I thought the
amount would be very much smaller and so I was being
quite relaxed about it. If it was £4.1 million of the
6-odd and we have no detail about it, that becomes a bit
more of a serious problem.
MR JUSTICE FRASER: I understand. That can't possibly be
right.
MR CAVENDER: I would not have thought so.
MR JUSTICE FRASER: What was the page of the transcript,
Mr Cavender?
MR CAVENDER: Page 143, line 9. It is not a perfect bit of
the transcript because they have yet to complete it.
MR JUSTICE FRASER: All right. Thank you very much.
MR CAVENDER: I am sure my learned friend must know what the
costs were at the first CMC because he told us.
MR WARWICK: Yes, my Lord, I do. I'm looking at a copy
here. It is not in your bundle my Lord but a copy of
the statement or cost summary that was produced pursuant
to paragraph 35 of the GLO and it was sent to the
defendant, I believe, shortly after 2 October 2017 when
it was prepared and the grand total is £4,180,803.35 --
MR JUSTICE FRASER: 4-point ...? We are talking millions?
MR WARWICK: Yes, my Lord. £4,180,803.35.
MR JUSTICE FRASER: As at October 2017?
MR WARWICK: It included estimated costs for the first CMC
as well that was then just about to happen. The major
point that I'm asked to point out which is absolutely
right is that it includes a significant sum for
preparation of the statements of core information which
your Lordship will remember were prepared for each of
the 550, perhaps 560 at that stage, claimants in
considerable detail and at considerable length. That is
a figure that's been mentioned in court previously --
MR JUSTICE FRASER: Therefore, it may not make any
difference but I am going to go back to Mr Cavender in
a moment, if I look in paragraph 74 of your skeleton,
74(a) and (b) reading together has a total figure of
£6.384 million. Now, obviously, there will be some
costs prior to the first CMC that aren't Common Issues
costs.
MR WARWICK: Yes, my Lord.
MR JUSTICE FRASER: But the costs information that you have
already provided to WBD is that 4.1 of the total, which
obviously is going to be bigger than the 3.2 and the
3.1, 4.1 of that had been incurred as at the date of the
first CMC on 2 October?
MR WARWICK: Yes, my Lord, although of course including the
then estimated costs of the first CMC itself.
MR JUSTICE FRASER: I understand that, some of those will be
Common Issues costs and some won't.
MR WARWICK: That is right, my Lord.
MR JUSTICE FRASER: I understand.
There you go, Mr Cavender.
MR CAVENDER: My Lord, I just reiterate the point about the
uncertainty. We have pointed this out and now we are
talking about £4 million-odd. Maybe some of it is
related partly to Common Issues. Even if you take
£1 million of that, you have £3 million. In my
submission you should be a lot more careful about that
element rather than waiving it through on the basis of
the other amounts we have information about.
MR JUSTICE FRASER: When you say waiving it through?
MR CAVENDER: Making an interim payment in relation to it.
MR JUSTICE FRASER: But it is an interim payment -- the
interesting thing or -- I don't know maybe the
Post Office will decide they would like to start
a detailed assessment sooner rather than later -- but
for this period it is a payment on account of a detailed
assessment.
MR CAVENDER: Correct.
MR JUSTICE FRASER: Which on the figures that Mr Warwick has
taken me through takes what they say are their common
issues costs up to that date, multiplied by 60% because
of his -- let me think of a neutral way of putting it --
"we are never going to recover everything it's a
taxation point"; to which I then asked him to apply
a further 10% deduction. But you are saying I think
that you don't know how much of those could be
potentially not Common Issues costs.
MR CAVENDER: Correct.
MR JUSTICE FRASER: Up to the date of the first CMC, is that
right?
MR CAVENDER: It is. I have no idea and I shouldn't have
an idea frankly given what we said in our costs
submissions.
MR JUSTICE FRASER: You don't know the precise figure but on
the basis that there is to be a detailed assessment at
some point, which I haven't yet decided, that will all
come out in the detailed assessment.
MR CAVENDER: Of course. It is a timing point but it is
also a cash flow point and trying to get the money back
and those kinds of issues.
MR JUSTICE FRASER: Understood.
MR CAVENDER: If we just sort of -- back of a fag packet
approach -- unfortunately we are in here for reasons
that are not due to my client -- even if you did a --
say 1 million odd of them were definitely related to
Common Issues because they are drafting the statements
of individual particulars etc, you still have a chunk of
costs there whose -- the generation of which is at best
unclear and may not be recoverable at all in this
process.
MR JUSTICE FRASER: Just for precision terms, I don't think
this is back of a fag packet.
MR CAVENDER: It is in the absence of information I mean.
MR JUSTICE FRASER: Well, the information available is,
I think, based on what they have submitted, is that the
total of their Common Issues costs up to 13 April 2018
is £3.2 million. That is the extent of the information,
isn't it? You are saying there should be a delineation
within that of costs as at the first CMC because they
can't possible be Common Issues costs?
MR CAVENDER: Correct.
MR JUSTICE FRASER: I understand.
MR CAVENDER: That's the point and it is a better point when
you realise at that date there is a 4.1 incurred they
say. So it becomes a bigger point. I thought it would
be a little local difficulty. It turns out it is quite
a sizeable point. in my submission you should reflect
that in reducing the interim payment in relation to the
incurred costs to reflect that.
MR JUSTICE FRASER: I understand.
MR CAVENDER: I'm obliged.
MR JUSTICE FRASER: Thank you very much.
MR WARWICK: My Lord, I appreciate you won't want
submissions tennis on this. But with the greatest
respect to my learned friend, it is a better point by
reason of that £4 million figure because between that
figure and the date on which incurred costs ended on
13 April was almost entirely Common Issues work in the
case. Your Lordship will remember that some directions
have been given for Horizon issues matters --
MR JUSTICE FRASER: That's what you say costs £2 million.
MR WARWICK: Indeed, my Lord. In fact very little Horizon
Issues work had been done. There had been limited
disclosure. My learned leader and my learned friend
Mr Cavender had been ordered to meet to agree some
issues. There had some limited disclosure of dimensions
documents --
MR JUSTICE FRASER: What you say is, on the basis of that
information you have read out, one, in broad brush
terms, would take £2 million off the 3.2 and that shows
about 1.2 of the 4.1 had been incurred at the first CMC.
MR WARWICK: Indeed my Lord.
MR JUSTICE FRASER: But whatever it is, this is only
a payment on account.
(3.58 pm)
(Ruling awaiting the judge's approval)
(4.06 pm)
MR JUSTICE FRASER: So is the only outstanding point
therefore whether there should be a detailed assessment
now?
MR GREEN: My Lord, I'm not going to invite you to do that
in light of the interim payment ordered.
MR JUSTICE FRASER: Let me ask Mr Cavender.
Mr Cavender, do you want one to be ordered now
because unless I order one I do not think the claimant
is obliged to agree.
MR CAVENDER: We don't want one now, my Lord.
MR JUSTICE FRASER: Therefore it is unnecessary in this
order to say anything about the time for a detailed
assessment. Is there anything else?
MR GREEN: My Lord, the only thing is the costs of today.
I don't know how your Lordship would like to dispose of
those. I was going to venture to suggest that they
should be claimants' costs in the case.
MR JUSTICE FRASER: Well you have not succeeded on
everything.
MR GREEN: Not on everything, no.
MR JUSTICE FRASER: So why should they be the claimants'
costs in the case?
MR GREEN: Because half the hearing was the permission --
MR JUSTICE FRASER: Some of them would be costs in an appeal
if an appeal happened, wouldn't they?
MR GREEN: I'm in your Lordship's hands.
MR JUSTICE FRASER: Well what costs order are you
suggesting?
MR GREEN: I was suggesting claimants' costs in the case but
if your Lordship orders costs in the case --
MR JUSTICE FRASER: Let me hear from Mr Cavender.
Mr Cavender, what do you want to do about costs today,
what are you asking me?
MR CAVENDER: I rather thought they would be costs in case,
that's what I would expect.
MR JUSTICE FRASER: I think the sensible and fairest thing
is to make them costs in case.
MR CAVENDER: The other thing is the date of payment of the
interim payment. Is it normally 28 days?
MR JUSTICE FRASER: No, it is normally 14.
MR GREEN: My Lord, that is what was agreed with recusal as
well.
MR CAVENDER: Can we ask for 28? I have been asked to seek
28 days, so an extra 14 days. I'm not sure that there's
any real prejudice to the claimants. It is a question
of arranging the funds I suppose and talking to our
shareholder about it.
It is only going to sit in the -- this is another
point I should raise, it is only going to sit in because
they have undertaken to keep it in the solicitor's
client account. So there's that point.
Allied to that, in my learned friend's order, so we
are clear, which is attached to his skeleton, in
relation to that he has a recital that the claimants
agree to hold and not disperse. I spoke to my learned
friend about this, he is happy that that be the
solicitors --
MR JUSTICE FRASER: A fair copy of the order is going to
have to be drawn up by both of you reflecting everything
I have done and I was not necessarily going to, unless
it was agreed, make recitals in the form sought by
either party to be honest because I am going to look at
the recitals in detail, but you would rather that be the
claimants' solicitors?
MR CAVENDER: Yes, it has to be --
MR GREEN: My Lord, the claimants were going to hold it by
their solicitors retaining it.
MR JUSTICE FRASER: So that is a non-point. Time for
payment you want 28 days?
MR CAVENDER: My Lord, yes.
MR JUSTICE FRASER: Mr Green?
MR GREEN: My Lord, I'm not going to quibble --
MR JUSTICE FRASER: You are either going to agree 28 days or
you would like to stick with 14 and then I will decide.
MR GREEN: I would like to stick with 14.
MR JUSTICE FRASER: All right. You can have 21 days
Mr Cavender.
MR CAVENDER: I'm obliged.
Finally I'm instructed to ask for permission to
appeal against the ruling that costs not be reserved;
just that element. I do so on the basis, really two
bases, one is your Lordship identified a distinction
that applied to group litigation --
MR JUSTICE FRASER: Just before you do this, can I just make
an observation?
MR CAVENDER: Yes.
MR JUSTICE FRASER: You haven't had my detailed reasons. If
you make this application now your time will start
running to make the application to the Court of Appeal.
I'm very happy to hear you now.
If you wait until you have had the detailed reasons,
then you would be able to make the application in view
of the detailed reasons and your time would then run
from whenever you make that application. But if you
would like to make the application now I will hear you
now.
MR CAVENDER: It is just a question whether your Lordship is
right about that because you have given reasons. You
are going to give --
MR JUSTICE FRASER: All right. If you want to make it now
that's fine.
MR CAVENDER: I'm instructed to carry on with it. Two
bases, one was the group litigation was different in
some way and my analogy of preliminary issue was not
apposite and was not appropriate. In my submission
there is a real prospect the Court of Appeal may
disagree with that.
Whilst group litigation is a great thing and it gets
Common Issues together and it is a great vehicle and
there are special rules about it, they don't apply to
whether the incidents of costs should go one way or the
other in advance when that would appear to be dependent
on how you group the issues.
What it will do, if it is right, is it will put
enormous premium in the future on agreeing particular
issues being hived off because parties won't want to
agree say just deciding the question of interpretation
if they think well they might lose on that but they win
on breach.
There will be an unhelpful tension in group
litigation and in people agreeing sensible things if
there is a massive cost consequence depending how you
parcel them. That's point 1.
Point 2 is that your Lordship relied on the Court of
Appeal in the David de Jongh Weill case and relied upon
that. If we can return to that which is in bundle 1,
tab 7, paragraph 33. The thing about that that
your Lordship certainly emphasised but is important is
that that principle applied, if you look at 33:
"The fact that only nominal damages are awarded
after a single trial of the issues of liability... "
{J7/7/10}. It is envisaging a case where liability
has been determined. There has been no liability
determined in this case at all, any liability. There
has just been a determination of the contract. So to
therefore elide the two and say that's authority for the
situation is, in my submission -- is a real prospect on
that and so for those reasons in my submission this is
a case where there is a real prospect.
Group litigation seems to be on the increase. There
is a point of principle there about group litigation
costs and whether they in fact -- the way in which
issues are parcelled can affect incidents of costs and
the policy is: that's tough because group litigation is
there, it is all about cashflow and funding and that
should take precedence over absolute fairness. That's
the competition. In my submission that is
an interesting point and we should have permission on
it.
MR JUSTICE FRASER: Thank you very much. I'm not going to
give you permission. So the order for today will also
say permission to appeal -- I think Mr Cavender you were
just seeking it in respect of that part of the costs
order that declined to reserve the costs, is that right?
MR CAVENDER: That is my Lord but of course the other points
are parasitic on that but we don't specifically say you
got anything wrong assuming you haven't reserved costs.
MR JUSTICE FRASER: The order will have to make reference to
the paragraph higher up the order where I declined to
reserve costs.
Anything else?
MR GREEN: My Lord, one point of finesse --
MR JUSTICE FRASER: Would you like permission to appeal in
respect of anything, is that what you are asking?
MR GREEN: My Lord, no, that's my learned friend's --
MR JUSTICE FRASER: You are not winning everything Mr Green.
Are you asking me -- what are you asking me for?
MR GREEN: I was just trying to clarify one point on
drafting the order.
MR JUSTICE FRASER: Go on.
MR GREEN: In relation to, our draft of the order envisages
the claimants, by their solicitors, holding the money on
account pending determination of the application for
permission to appeal to the Court of Appeal. That's the
issue. It is not in perpetuity, obviously, and that is
reflected in our order. I wanted to say that clearly
this open court.
MR CAVENDER: My Lord that's absolutely right.
MR GREEN: I just want that clear. It is not a solicitor's
undertaking by them, it is solicitors agreeing to
perform that function at the claimants' behest.
MR JUSTICE FRASER: If there's any wrinkles on the actual
wording of those important parts of the order that you
can't sort out between yourselves, you can of course
come back and ask me.
MR CAVENDER: My Lord, the final thing, could I ask for
an extension of time for 21 days from when we get your
written reasons to go to the Court of Appeal so we can
marry up. I have made my submissions based on your
summary reasons. They are probably better if I could --
for the purposes of the Court of Appeal deciding it and
the skeleton, because if the skeleton is at the same
time as the grounds now, if we have a extension of time
for 21 days, when we get your full reasons then that
will be procedurally more sensible.
MR JUSTICE FRASER: Just remind me of the rule?
MR CAVENDER: You can give permission --
MR JUSTICE FRASER: I know I can extend time I would just
rather do it by reference to the specific rule. It is
the same rule that I gave you an extension of time on
the --
MR CAVENDER: It is. It is 52.
MR JUSTICE FRASER: The easiest thing might be to look at
the order where I gave you the extension of time in the
Common Issues.
MR CAVENDER: 52.12.2, my Lord.
MR JUSTICE FRASER: Let me have a look.52.12.2 (a).
MR CAVENDER: Indeed.
MR JUSTICE FRASER: All right.
MR CAVENDER: We ask for 21 days from the date we receive
the written reasons.
MR JUSTICE FRASER: Extension of time to the Post Office to
make an application to the Court of Appeal to 21 days,
starting with the date upon which the managing judge
hands down his written reasons for his costs orders
today.
MR CAVENDER: It is on the reservation. I don't know if you
intend to extend beyond that.
MR JUSTICE FRASER: Hands down written reasons on his order
declining to reserve the costs on an issues trial. So
that needs to go into today's order, yes? Everywhere is
nodding enthusiastically and between you I am sure that
you can produce a composite order that reflects
everything. Mr Warwick are you about to ask me
something?
MR WARWICK: No, my Lord, just to say yes --
MR JUSTICE FRASER: All right.
MR CAVENDER: I'm being asked very enthusiastically --
MR JUSTICE FRASER: Yes, and I think perhaps wrongly but
I will let you tell me what you are wanting to ask me.
MR CAVENDER: Whether we ought to try -- and I am not sure
we can do this actually --
MR JUSTICE FRASER: Whether we ought to try?
MR CAVENDER: And extend because you are going to produce as
I understand it some written reasons as to why you are
turning down permission on the main appeal.
MR JUSTICE FRASER: Correct.
MR CAVENDER: The question is -- because at the moment we
are under 21 days starting today for the main appeal.
MR JUSTICE FRASER: You are.
MR CAVENDER: The question is whether we can it is possible
to or whether the court should give us 21 days from the
date when you give your written reasons for refusal or
not.
MR JUSTICE FRASER: I have already extended you time.
MR CAVENDER: No, exactly. I'm not sure you can actually --
MR JUSTICE FRASER: Go on.
MR CAVENDER: Whether you can only do it at the time of
the --
MR JUSTICE FRASER: I can do it but I can only do it within
the period prior to expiry. Rather than getting into
extended tendencious and overly technical debate about
whether it's expired already or not, I would not be
minded given the two months extension you have already
had to further extend time.
MR CAVENDER: No. The only reason to do it in terms of
procedure is in terms of trying to marry what you say
and make sure --
MR JUSTICE FRASER: I understand.
MR CAVENDER: But nothing is perfect.
MR JUSTICE FRASER: The written reasons for refusing you
permission to appeal have got to go in the form that
I referred to this morning N460.
MR CAVENDER: Quite, which are quite brief anyway.
MR JUSTICE FRASER: Exactly. All right. Anything else?
MR CAVENDER: I do not think so, my Lord, no.
MR JUSTICE FRASER: Anything else?
Thank you all very much. Until 4 June, although
I imagine not all of you will be here then, but that's
when this case will next sit. It is 4 June, isn't it?
MR GREEN: My Lord, yes.
MR JUSTICE FRASER: Thank you all very much.
(4.19 pm)
(The court adjourned until Tuesday, 4 June 2019)
*******************
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