A3/00/0599

Neutral Citation Number: [2001] EWCA Civ 1788
IN THE SUPREME COURT OF JUDICATURE 
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(Mr P W Smith sitting as a Deputy High Court Judge))
 
                           Royal Courts of Justice
                          Monday, 15th October 2001
 
B e f o r e :

LORD JUSTICE BUXTON
LADY JUSTICE ARDEN
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EDWARD WALTON
Appellant

- v -

(1) ALAN GARDNER
(2) MOUNTRAIL LIMITED
Respondent

AND BETWEEN

ALAN GARDNER
Respondent

-v-

(1) EDWARD WALTON
(2) ERIC WALTON
(3) STEVEN GREENE
Appellants
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(Computer Aided Transcript of the Stenograph Notes
of Smith Bernal Reporting Limited
190 Fleet Street, London EC4A 2AG
Telephone No: 0171-421 4040
Fax No: 0171-831 8838
Official Shorthand Writers to the Court)
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MR. C. JOSEPH (instructed by Messrs Ralph Davis, London, EC1) appeared on behalf of the Appellants.

MR. GARDNER appeared in Person.
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J U D G M E N T
1.	LADY JUSTICE ARDEN: This is an appeal, with the permission of Robert Walker LJ, from the order of Peter Smith QC, sitting as a deputy judge of the Chancery Division dated 6th March 2000. The appeal is in respect of the order as to the costs of the trial of this action and of the counterclaim. The appellants are respectively Mr Edward Walton, claimant and first defendant by counterclaim, and Mr Eric Walton and Mr Stephen Greene, the second and third defendants by counterclaim. I will call the appellants Edward, Eric and Mr Greene respectively.
2.	This action was begun and tried before the Civil Procedure Rules came into force. Edward, the son of Eric, sought to impugn certain transactions in the shares of a company called Mountrail Limited (“the company”). These transactions were said to have taken place on 6th April 1998. On that date Mr Greene held 54,002 issued shares in the company and the company was effectively controlled by Eric. Edward alleged that Mr Greene held those shares as bare trustee for him. Edward alleged that at the request of Eric Mr Greene had signed undated documents appointing him, Edward, a director, and resigning as a director himself, and, it would appear, an undated transfer of the shares in Edward's favour. Edward further alleged that on 26th March 1998 it was agreed that these various documents should be brought into effect and that Mr Greene should also appoint Eric to be a director.
3.	However, in early April 1998 Mr Gardner instead prevailed on Mr Greene to transfer all but two of the shares to him. Mr Greene said that Mr Gardner had used threats of violence. Edward also said that. Although it was said that he had resigned as a director, Mr Greene also purported to resolve to allot 45,998 new shares to Mr. Gardner and Edward, and Edward sought to set aside this allotment. He also alleged that the appointment of Mr Gardner as a director on the same date was void. There were numerous other allegations in the proceedings but these were Edward's main complaints.
4.	In his defence Mr Gardner claimed that he had made a loan of £100,000 to Eric and that this had been used to enable the company to a pay a deposit of £110,000 on a property known as Thames House, Hackney, in 1996. He claimed that Mr Greene had agreed, on or about 30th March 1998, that the shares in the company should be transferred to him, Mr Gardner. It was said that the new shares were allotted in consideration of a payment on allotment of £9,998 to be followed by two instalments later, and that the share transfer of 50,000 shares had been registered on 6th April 1998. Mr Gardner said that the transfer had been in consideration of the sum of £9,000 which he had paid to Mr Greene, together with the allotment moneys payable on subscription.
5.	In his counterclaim Mr Gardner alleged that, in the alternative, Mr Greene was liable to repay him the sum of £18,998, that he had a property interest in Thames House and that Eric was liable to repay to Mr Gardner the sum of £110,000 with interest at 8 per cent. Specifically he sought a declaration that he had a beneficial interest in Thames House. He also denied that the shares were to be transferred to him by way of security. He sought declarations that he was the beneficial owner of 95,448 Mountrail shares and that he and Greene were the directors of Mountrail.
6.	I turn to the judgment of Mr Peter Smith QC. At paragraph 1.4 Mr. Smith said this:
“The views I formed as to the witnesses' credibility was seriously hampered by the fact that all of those lay witnesses decided that their case could be advanced better by lies and exaggerations. I am quite satisfied, having seen all of the witnesses and seen them cross-examined in relation to the documents which came into being at the time of the disputes and before, that all of them, one way or another, and to a lesser or greater extent, lied on oath in front of me. As I have said, this has hampered my assessment of the witnesses and I have to say quite candidly that I was, and remain, reluctant to accept the testimony of any of these witnesses, unless it is corroborated independently and I have certainly not accepted any testimony of these witnesses where it contradicts the contemporary documentation in this case.”
7.	The judge made criticisms of several witnesses. He said this of Mr Gardner at page 6:
“I am unimpressed with former armed bank robbers who appear to break down into tears in the witness-box when they are asked an inconvenient question (see paragraph 6).” 
8.	The position was that Mr Gardner had a very old conviction for armed robbery. It appears that he may have had other convictions and that these were referred to in the course of the trial. I will have to return to that point later but for the moment I put it on one side. The point that I am making is that the judge was critical of all the oral evidence which he heard and refused to accept it unless backed up by written documentation. The judge found that Eric was at all material times the true controller of the company. He rejected a claim by Eric that some other company of his had borrowed £100,000 from Mr Gardner. The judge rejected Eric's evidence on this point as incredible. He said that this story was a complete invention (see the bundle at page 38). As regards the events alleged to have taken place on 26th March, the judge made detailed findings, but he rejected the allegation that Mr Greene had ceased to be a director on 26th March 1998. The judge found that Mr Greene was an unreliable witness. He rejected his assertion that he had been compelled to enter into the transaction of 6th April 1998 under duress from Mr Gardner. The judge held that that Mr Gardner had become concerned about his loan and that Eric was still indebted to him. He held that the purpose of the share transfer and the allotment of the new shares was to give Mr Gardner security for this loan. He held that Mr Gardner had only paid £9,000, not £18,998, and in addition that he had taken back the £9,000 that he had handed over as consideration for the share transfer as soon as he had handed it over. In short, he had not paid any part of the sum of £18,998 that he had alleged he had paid to Mr Greene. The judge held that Eric was the beneficial owner of the shares in issue and that Edward was merely to be a new nominee for him. He also held that Mr Greene had ostensible authority to enter into security arrangements with Mr Gardner. He held that the documents said to have been executed on 26th March had not in fact been executed until a later date and that the appointment of Edward and Eric as new directors could not take effect because, by that time, Mr Gardner had become a director and he had not been asked to consent to their appointment. By his order the judge declared that Mr Gardner was the sole director so long as he held the shares by way of security. His order declared that the appointment of Edward and Eric as directors were of no effect. He held that the issued share capital of the company was 54,002 shares held as 50,000 shares by way of equitable charge as security for the £100,000 lent by Mr Gardner to Eric and, by implication, as to the balance, by Mr. Green as nominee for Eric, that Eric was to have 28 days in which to pay the £100,000 and that interest was to run on the £100,000 at 8 per cent. There was some argument about this but we are not concerned with that. He ordered rectification of the company's register and as to costs he ordered Edward to pay the costs of Mr Gardner's claim and he ordered the defendants by counterclaim to pay 75 per cent of Mr Gardner's costs of the counterclaim. The permission to appeal granted by Robert Walker LJ was limited to the question of costs.
9.	The judge gave a separate reasoned judgment on costs. He held that Edward had failed on his claim and therefore should be liable for the costs. On the counterclaim he took the position of Mr. Green. He held in Mr. Green's favour that Mr Gardner had paid nothing over but, as against that, the transfers had not been set aside, and the claim for £18,998 had been a mere analogue of the claims made against Mr Gardner. As regards Eric, the judge found that Mr Gardner had won on the loan issue, and as regards Edward and Eric the judge found that, notwithstanding that Mr Gardner had claimed beneficial ownership of the shares and that he had lost his claim to beneficial ownership of Thames House, that he, Mr Gardner, had substantially succeeded with respect to the security and the appointment of directors. He further found that the Waltons had made serious allegations again him, duress, denial of their indebtedness, and they had exploited the fact that Mr Gardner had had a serious criminal conviction. He rejected an argument that Eric had by letter of 12th June 1998 made a suitable offer to him. I will have to turn to this letter in a moment, but the judge held, among other things, that this letter would be a breach of the Companies Act. In any event, the Waltons did not maintain the offer. The offer was abandoned when Edward began proceedings. He, the judge, accepted that Mr Gardner had failed to establish that he was the beneficial owner of the shares or of Thames House. He referred to the fact that an extreme stance had been taken on both sides. At the end of the day, the judge considered that the true substantial victor was Mr Gardner and the judge held that it was appropriate that he should recover all of his costs of the claim, and that on the counterclaim the appropriate apportionment was 75 per cent.
10.	When the matter came before Robert Walker LJ, in giving permission Robert Walker LJ observed that it was a fairly striking order to make in a case in which both parties had tried to deceive the court and in which Mr Gardner had failed to prove the claim to beneficial ownership as opposed to security over the 54,000 shares. He achieved virtually everything that was offered in the open letter.
11.	I now turn to the parties' submissions. The appellant appears by Mr Joseph of counsel. In his skeleton argument Mr Joseph has split the various arguments on costs into separate parts: first, the costs of the action, then the costs of the counterclaim and then the costs of certain tapes and transcripts which were disclosed at a late stage. I will take the submissions in these categories as Mr Joseph has submitted. Mr. Gardner has appeared before us in person. We have been assisted by his written argument in a two page letter to the court together with annexures and by his further oral representations to us today.
12.	The first point made by Mr Joseph is that Mr Gardner has claimed beneficial ownership of the shares and that this was inconsistent with the security which the judge ultimately held that he was entitled to. Mr Joseph appeared at the trial and was able to tell the court the proposition that what Mr Gardner was entitled to as security only came into being on the fourth day when the judge put certain questions to Mr Gardner in the witness-box. It was not part of either party's case. Mr Joseph also seeks to challenge the judge's order with regard to the costs of the action on the ground that an offer had been made on 12th June 1998. This was the offer to which I referred a moment ago. The letter is from Mr. Millman, solicitor for Mr Eric Walton, to T.V. Edwards & Co, the solicitors then instructed by Mr Gardner. The material part of the letter is on the fourth page. I will read it:
“We understand that Mr Eric Walton met with you approximately two weeks ago at which meeting it was agreed that in return for the repayment of the loan or the grant of adequate security your client would agree to the rectification of the register and thus resolve matters amicably. We must say at this stage that whatever the arrangement between Mr Eric Walton and your client might be, as a matter of law we cannot see that there is any defence by Mr Gardner to an action for rectification as the £100,000 does not appear to touch and concern Mountrail Ltd, or indeed Edward Walton.
Whilst being under no obligation to do so, we are given to understand (and this must be taken to be subject to contract and without prejudice) that Mr Edward Walton, being the beneficial owner of the whole of the issued share capital in Mountrail Limited, is prepared to procure the grant of a second legal charge over Thames House, the property of Mountrail Limited, to your client for £100,000 by way of security for this sum owed by Mr Eric Walton. Obviously, Mr Edward Walton before consenting to such a charge would require all matters with regard to the company to be resolved.
Please may we hear from you with regard to these matters and we shall then prepare the appropriate documents for an application to the court for rectification.
Yours faithfully.”
13.	It is then signed. At the end of the letter a postscript appears:
“We understand that in fact Mr Eric Walton will be in a position to repay the whole of the £100,000 by way of banker's draft upon due execution in front of ourselves of the relevant documentation, and indeed a sworn affidavit by your client supporting the application for rectification.” 
14.	The part of the letter on which counsel relies is the postscript, which Mr Joseph submits was an offer to repay £100,000, and this offer was never taken up. The judge in his judgment referred to the offer to grant security. It was an offer to procure Mountrail Limited to grant security. He held that that would be an illegal act under section 330 of the Companies Act 1985. There may also be other sections in the Companies Act which one would have to consider if that matter was proceeding. He did not in terms refer to the postscript, though counsel submits that what he did was run the two offers together by saying that the offer was either to repay the £100,000 or to provide security. Mr Joseph's submission is that, while the judge referred to Part 36 and refused to take account of the offer for, among other reasons, that the offer was not under Part 36, the judge failed to refer to CPR 44.4, where it is provided that in deciding what order, if any, to make about costs, the court must have regard to all the circumstances, including any payment into court or admissible offer to settle made by a party which is drawn to the court's attention, whether or not made in accordance with Part 36. The way that Mr Joseph puts it is that, even though the offer was not made under Part 36, the judge should still have taken this offer into account. It was an offer to pay the £100,000 which the judge ultimately held that Mr Eric Walton was liable to pay. We are told that what happened was that on 19th June the solicitors for Mr Gardner wrote back, saying that the offer of security was acceptable. At that stage Mr. Gardner was seeking a larger sum than £100,000. Mr. Joseph submits that the Waltons and Mr Gardner were both disbelieved by the judge and that parties should not be rewarded for putting forward a lying case, and therefore the judge should not have made an order awarding all the costs in favour of Mr. Gardner on the claim, and that in this way his exercise of discretion was either plainly wrong or he failed to take into consideration factors which he ought to have taken into consideration. Mr Joseph submits that either each side should bear its own costs or that Mr Gardner should pay a proportion of the costs of the action. He has not put forward a specific proportion.
15.	I turn to the second category of costs, the costs of the counterclaim. First, Mr Joseph takes the costs of Mr Greene in the counterclaim. He submits that Mr Greene defeated all Mr Gardner's claims against him. As respects the remainder of the costs on the counterclaim, the same points as Mr Joseph made in respect of the action apply, namely there was an offer, and the fact that each side had put forward cases on which there had been untruths on either side.
16.	That brings me to the last matter on which Mr Joseph relied, the costs of late disclosure of tapes and transcripts. On 6th December certain transcripts of tapes of conversations which took place principally between Mr Gardner and Mr Walton were produced, without prior warning it seems, by Mr Gardner's solicitors, and the trial was to take place on 17th January. The tapes themselves were not produced until an earlier date. What Mr Joseph says is that this late disclosure caused a great deal of extra work. The solicitors for the Waltons and Mr Greene asked the solicitors for Mr. Gardner to assist them by identifying the relevant parts of the transcripts. It is clear that not all the tapes were going to be relevant and so the matter went on. The solicitors for the Waltons took the view that the tapes were irrelevant. Nonetheless, as a matter of prudence, they had to listen to them and to consider the transcripts in case they were to be deployed at the trial.
17.	On this matter Mr Joseph invited the court to award in favour of the Waltons and Mr Greene their costs of dealing with the tapes and transcripts. Disclosure was very late. Alternatively, Mr Joseph invites the court to disallow the costs of the tapes and the transcripts.
18.	I turn to the submissions which Mr Gardner has made by letter and by his oral representations to the court. He first deals with the offer of £100,000. He says that this was all talk. There never was any offer of £100,000. He also says that he was prepared to accept an offer of a charge over the property. As I have pointed out, that, the judge held, in my view correctly, could not lawfully have been given. In any event, Mr Gardner's claim at that stage was to a sum exceeding £100,000. He also says that the payments of interest were stopped while he was away on holiday, I think in about August 1998. He complains of that as well. He says that Mr. Green's conduct ought to be taken into account. He has made very serious charges against Mr Gardner. There had been a threat to deploy the conviction against Mr Gardner in the litigation, and it is said that Mr Greene had no such conviction. We were read a letter to that effect. Mr Gardner points out that Mr Greene did not have an unblemished reputation before the judge. He also referred to the fact that there had been a Carecraft order made against Mr Greene in respect of his management of certain companies and that that order was for 10 years, denoting that it was a serious case. That, too, should be taken into account. Mr. Gardner put forward that it must have been Mr. Green who back dated the documentation which was alleged to have been completed on 26th March. There is no finding to that effect. On the other hand, it must be said that Mr Gardner's submission is supported by a number of findings by the judge, not only paragraph 1.4 which I have already read, but also by a number of other passages. For instance, at the top of page 30 the judge said:
“[Mr Green] allowed his stance to be flexible according to the particular needs of the Walton family as shall be shown when the subsequent correspondence is considered later in this judgment.” 
19.	At page 31:
“Mr Greene's conduct at the meeting [of 6th April 1998] is utterly inconsistent with his having resigned as a director on 26th March and transferred his shares to Edward.” 
20.	At page 41 the judge said:
“Mr. Green, in my view, lied when he said he was put under duress by Mr Gardner and when he denied setting the meeting up with Mr Millman.” 
21.	That was the meeting on 6th April 1998. The important finding of the judge against Mr Greene was that finding, namely that he rejected the allegation of duress. That can be seen, for instance, on page 38 of the judgment, paragraph 31.
22.	As respects the transcript, Mr Gardner's submission is that the transcripts were used in the trial, contrary to Mr Joseph's submission, and that they led to the important discovery of two matters. The position, as has been explained by Mr Gardner, is that Mr Gardner's counsel, Mr Jonathan Crystal, put about ten lines of one of the transcripts of one of the tapes to Mr. Eric Walton in cross-examination. This led the judge to ask certain questions, as a result of which Mr Eric Walton had made certain admissions. One of those admissions is referred to in the judgment, namely that Mr Eric Walton did not go on holiday on 26th March, as he had alleged, but only on 28th March. That is a factor that played a part in the judge's reasoning, that the documents alleged to have been dated on 26th March were not then so dated.
23.	I now turn to my conclusions. First, with respect to any matter of costs with which the judge dealt, it is of course well established that the order which a judge makes as to the incidence of costs is an order which he makes in his discretion and with which the Court of Appeal should not interfere unless it is clear that the judge was wrong in principle or took into account some irrelevant matter or was otherwise plainly wrong. This is a high hurdle which the appellant has to meet.
24.	I take first the action. The judge ordered that Edward should pay all the costs of the action to Mr Gardner. The appellant relies on the offer which I have already read. For my own part, while it can be seen that an offer was being made in the body of the letter, I think that it is difficult to read the postscript as necessarily amounting to an offer to repay the whole of the £100,000. It is simply a statement that the solicitors understand that Mr Eric Walton will be in a position to repay the whole of £100,000. The real offer is the offer in the letter by Edward to procure a second legal charge over Thames House to secure the £100,000 by way of security. As I have already said, I do not myself consider that this is an offer which could lawfully have been implemented. Thus it does not seem to me that that offer could be taken into account even if the appellant was asking us to do so. In my judgment, the judge was right about that. As regards the postscript, if it is read as an offer, the appellant says that it should have been taken into account under CPR 44.3(4) and that the judge therefore omitted to take into account a relevant consideration such as to entitle this court to interfere with his exercise of discretion. The difficulty is, firstly, that it does not seem to me to be expressed as an offer. Thus, it would be difficult to say that much weight should be attached to this at the end of the day on the question of costs, but, secondly, when the proceedings were commenced, the proceedings were proceedings by Edward claiming full beneficial ownership in the shares. Mr Eric Walton was joined by way of counterclaim and he then defended the claim against him for the repayment of the loan on the basis that he did not owe it. Mr Joseph submits that the court should take the view that what is claimed in litigation does not always accord with offers that the parties are making. But unless Mr Eric Walton had clearly said so, it seems to me that his conduct of the proceedings and Mr Edward Walton's too can only be seen as a rejection of the offer. The offer was a short-lived one and came to an end when the proceedings started. For all those reasons, in my judgment the judge could not be criticised for failing to take this offer into account in deciding the incidence of the costs in the action. The proceedings were begun on 26th October 1998.
25.	It is said by Mr Joseph also that the judge failed to take into account that in the action Mr Gardner in fact was denying that the shares were vested in him by way of security. In fact, he himself was claiming full beneficial ownership of the shares. Mr Joseph also made the point that the proposition that the shares were vested by way of security only came on the fourth day of the trial and formed no part of either party's case. In those circumstances, it seems to me that the judge was in error in not making an allowance for those points as they were relevant to deciding the amount of costs which should be ordered to be paid. Mr Joseph also makes the point that the judge failed to take into account the conduct of Mr Gardner. I have already referred to the criticisms which the judge made of Mr Gardner. This was a matter relating to the conduct of the parties which ought also to have been taken into account. In my judgment, the exercise of the judge's judgment in respect of the costs of the action should therefore be set aside and this court should exercise the discretion afresh. Obviously, the judge was in a much better position to decide what the appropriate proportion of costs should be that should be paid by Edward to Mr Gardner. It seems to me that the judge was correct in principle in saying that Mr Gardner had got something out of the proceedings, even if it was not what he had been looking for. In the circumstances, it seems to me, bearing in mind the fact that Mr Gardner had denied the security interest, that it would be appropriate that he should only recover 50 per cent of his costs of the action.
26.	I now turn to the counterclaim. I take first the matter of Mr Greene's costs. In my judgment, Mr Joseph is correct in saying that Mr Greene was the winner here and that the judge failed to separate out the fact that Mr Greene had claims made against him separately in respect of the return of the £18,998, and that he had won on those points. Thus it seems to me that in relation to Mr Greene the court should exercise its discretion afresh. In doing so, the court should take into account not just that Mr Greene is the victor of it, that is the counterclaim, but also, as it seems to me, that Mr Greene's conduct had not been wholly unblemished. The judge did make a number of findings against him. He specifically rejected the allegation of duress. In those circumstances, it seems to me that it would not be just to give Mr Greene all the costs of that part of the counterclaim which was brought against him. It is difficult, for the reasons I have already explained, to perform that exercise now. Nonetheless, it seems to me right that the court should do it rather than remit the matter to the trial judge. In the circumstances, the fair result would be to award only 50 per cent of Mr Greene's costs of the counterclaim in favour of Mr Greene and not any further costs.
27.	That brings me to the costs of the counterclaim. It will be recalled that what the judge said was that 75 per cent of the costs of the counterclaim should be awarded in favour of Mr Gardner and should be paid by Eric and Edward. In reaching that decision the judge took into account a large number of matters. I have referred to those above. They included the fact that the Waltons had made serious allegations against Mr Gardner, duress and so on, and that they had exploited his serious criminal conviction. In other words, he took into account the fact that they had put forward a claim on which they had lost. He had rejected the argument that there had been an offer before trial. I have already dealt with that point and concluded that the judge could not be criticised for the way in which he dealt with that matter. The judge referred to the extreme stance on both sides. In coming to his view that 75 per cent of the costs of the counterclaim would be the appropriate proportion, in my judgment the judge took into account all the relevant factors. In those circumstances, bearing in mind that what the court is dealing with is an exercise by the judge of his discretion, I, for my part, would not interfere with that apportionment of costs. I would leave it as it stands.
28.	That brings me to the last matter, the tapes and the transcripts. This was a matter which was put to the judge, but for one reason or another he did not give reasons or rule upon it. It falls to this court to deal with it. I will endeavour to do so briefly. The fact of the matter is that there was late disclosure of documents which Mr Gardner's solicitors said were relevant. In the event, it appears that only a small part of the documents were relevant or employed at the trial. What is clear from reading the correspondence is that not only was the disclosure late but there was a certain failure on the part of Mr Gardner's solicitors to co-operate in the way that the Civil Procedure Rules would now require. This was particularly so having regard to the fact that the disclosure was late and to the fact that the disclosure was made just before Christmas, for a trial date shortly after the commencement of the next sittings. In those circumstances, it seems to me that the right order would be to order that Mr Gardner's costs, insofar as they include any costs which he has incurred in relation to the tapes and transcripts, should be disallowed, to denote the court's disapproval of the way the matter was handled. On the other hand, I would reject Mr Joseph's proposition that the costs of these matters should be paid by Mr Gardner to the defendants. I appreciate that the costs associated with the tapes, which were difficult to interpret, including the costs of checking the transcripts against the tapes, are likely to have been substantial. Mr Joseph says that it was several thousand pounds. But the fact of the matter is that, if they had been produced at the proper time, some costs would still have been costs incurred. However, they would have been more limited costs because there would have been less of a rush and the solicitors would have had time to co-operate and time to deal with the matter. Those matters are reflected by the order that I would make, disallowing the costs that Mr Gardner incurred in relation to those matters. In those circumstances I would vary the order as to costs which the learned judge made. In respect of the costs of the action I would order Mr Edward Walton to pay 50 per cent of Mr Gardner's costs. In relation to the costs of the counterclaim I would order Mr Gardner to pay 50 per cent of Mr Greene's costs. I would not disturb the judge's order that Edward and Eric should pay 75 per cent of the costs of the counterclaim to Mr Gardner, and I would disallow any costs incurred by Mr Gardner in relation to the transcripts of the tapes.
29.	MR. JUSTICE BODEY: I agree. There is nothing I can usefully add.
30.	LORD JUSTICE BUXTON: I also agree that this appeal should be disposed of in the terms indicated by my Lady. As we are differing from the judge below in certain respects, I venture to add a few words of my own, though I fear that they do no more than repeat, in possibly slightly different but not better words, what has fallen from my Lady.
31.	So far as the complaint based upon the alleged offer is concerned, I entirely agree that it would not be right to impose any handicap in respect of costs upon Mr Gardner for not accepting that offer. There are two reasons for that. The first is that the offer in its terms was too vague and, in the complicated situation that the parties were facing, was far from sufficiently specific as to exactly what was being offered and what the conditions were for accepting it. It is not the best place to put such an offer in a postscript to a letter dealing with many other matters. Secondly, the offer that was made, insofar as it could be construed, was significantly different from the case that was actually put by the claimant at the trial. I quite take Mr Joseph's point that offers and what is claimed in a case are by no means necessarily the same thing, and one often claims more than one is prepared to offer. But in this case the case put at the trial was really structurally and in kind different from the alleged terms of the offer; even though, by the chance of litigation, the judge's verdict was in the end, perhaps adventitiously, substantially, though not identically, what Mr Gardner recovered. The judge was therefore right on that point. I do not accept Mr Joseph's submissions on it.
32.	However, when he came to consider, without reference to the offer, what the costs order should be, I do think, with respect, that the judge did not give proper weight to the fact that Mr Gardner had made and sought to support a positive case which had failed, and that the success that he had achieved had been in the face of a specific denial on his part that that is what he was seeking. It was therefore inappropriate to look at the matter as if it were a simple case of the defendant being entirely successful. The judge not having properly directed himself to that point, the court must review it as best it can. I agree that the matter should be dealt with in the terms that my Lady proposes, which I think give proper weight to the conduct of the case on both sides, and, more particularly, to the claims that were originally made on both sides and to the way in which the matter was eventually resolved.
33.	So far as the counterclaim is concerned, I entirely agree that we should not disturb the judge's order, save in respect of the position of Mr Greene. The judge did not sufficiently concentrate on the different position of Mr Greene with regard to the counterclaim from that of the Waltons. Mr Greene was implicated in the litigation only as a defendant to counterclaim. Two separate claims were made against him in the counterclaim which failed, as the judge found in paragraph 35 of his judgment. In those circumstances, the order was inappropriate in his case, and again I would agree with my Lady's revised order, which gives weight to Mr Greene's success on that point, but at the same time takes account of the critical view that the judge formed of Mr Greene in certain significant respects.
34.	So far as the tapes are concerned, it is right that late disclosure of these tapes should be noted in terms of a costs order. They were disclosed far too late. Mr Gardner said that they had been in the hands of his solicitors for a long time. That is as may be, but I fear that in the conduct of the litigation he is governed by what his solicitors chose to do. They put the tapes forward far too late. The tapes would, however, have had to be dealt with in any event. For that reason I would not think it appropriate to make any positive costs order in favour of the Waltons in respect of the tapes, but it is right that, because of the late disclosure and the failure thereafter fully to co-operate, Mr Gardner should not get any costs relative to the production of those tapes. For those reasons, which are merely a footnote to those given by my Lady, I would allow the appeal to the extent that she has proposed.
Order: Appeal allowed as per judgment; agreed minute of the orders of the court to be agreed and submitted by counsel.