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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> In Plus Group Ltd & Ors v Pyke [2002] EWCA Civ 1055 (5 July 2002) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2002/1055.html Cite as: [2002] EWCA Civ 1055

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IN THE SUPREME COURT OF JUDICATURE
CIVIL DIVISION
ON APPEAL FROM THE HIGH COURT
CENTRAL LONDON COUNTY COURT
(His Honour Judge Levy QC)

		The Royal Courts of Justice The Strand London Friday 5 July 2002

Friday 5 July 2002

1. LORD JUSTICE BROOKE: The parties are, of course, aware of the situation, so there is no need to go into any great detail in this judgment on costs. In short, all four claimants claimed damages against Mr Pyke for breach of fiduciary duty. They lost before Judge Levy QC and in this court. There was a letter written on 1 December 1998 by Mr Pyke's solicitors, offering to pay £50,000 on that claim, inclusive of interest, with costs to date. That had the protective effect of a Calderbank letter under the pre-CPR regime.
2. Mr Pyke counterclaimed a total sum of just over £115,000, together with interest. He was awarded that sum against all four claimants before the judge. In this court that order was adjusted with the effect that he received the same total sum, but the first claimant had to pay just over £26,000 of it by way of principal, and the second claimant the balance. Both had to pay interest. The counterclaim was dismissed against the other two claimants, but Mr Yell and his solicitors have continued to hold themselves out as acting for the fourth appellant company, even though it was dissolved before the appeal.
3. The claimants sought to set off two different amounts, of £9,800 and £25,000 respectively, against the sum due on the counterclaim. They failed before the judge; they failed in this court. As part of their appeal against the judge's findings, the claimants challenged his findings of fact as to the veracity of the two protagonists and also the adequacy of his reasons. Both challenges failed. Mr Vineall's point to us today is that if at any rate one of those challenges succeeded there was a danger of a new trial.
4. We have been shown not only the offer of 1 December 1998 but also an offer made by the claimants' solicitors on 27 November 2000, between the main part of the hearing in front of the judge and the final part in the following January, when the claimants offered to settle the matter on the basis of both claim and counterclaim being withdrawn with no order as to costs, with the interim judgment being left intact in so far as not already satisfied. That offer had no effect at all in the subsequent events.
5. We have heard submissions as to the way in which costs should fall both here and below. Mr Vineall submitted that at least 80 per cent of the costs of the appeal were expended on the first issue, the breach of fiduciary duty issue, on which his client was protected by the letter of 1 December 1998; and as to the balance, he says the claimants scored only a partial victory on the counterclaim, in that the third claimant was let out of liability and the amounts that the other two claimants had to pay were adjusted.
6. Mr Yell's argument is that his clients should have their costs of the appeal because the claimants have succeeded in dispelling their joint and several liability for the whole of the counterclaim, and Mr Vineall's client could have protected himself by an appropriate Part 36 offer. He invited us to take a robust view that, although the third appellant (which was in effect Mr Plank's trading arm since his relationship with Mr Pyke broke down) showed a profit of nearly £600,000 for the year ended 31 March 2000, being the last year for which its accounts have been filed, it should be disregarded as a claimant on the basis that the claim was really being made by the first two appellants.
7. We find it impossible to take that course. The third claimant went into the appeal with its eyes open. It was hoping to recover judgment in its favour for up to £250,000 plus interest, to change the order for costs in the court below and to have an order for costs in its favour in this court. Although Mr Yell made submissions based on the fact that Mr Plank has so arranged his company's affairs that there is no money in the first two claimants and the third claimant is in administration (although there is money available to creditors there), we take the view that we are bound to disregard the pecuniosity of any particular claimant.
8. We bear in mind the provisions of CPR 44.3. In our judgment the appropriate course is to make a broad-brush order, not distinguishing between the claimants either in this court or in the court below. Taking into account CPR 44.3(4)(b), 44.3(6)(a) and 44.3(7), we take the view that the appropriate order is that the claimants should pay the defendant 80 per cent of his costs on the substantive appeal. We take into account the adjustments which are suggested for the solicitors' attendance and the number of hours of solicitors' attendance. On the other hand, we also take into account today's hearing and we take the view that there should be a grand total of £25,000, inclusive of VAT, and we assess the total costs in the Court of Appeal in that sum, of which the defendant should recover 80 per cent.
9. So far as the costs in the court below are concerned, we are bound to revisit that order for costs. We take seriously the effect of the letter written on 1 December 1998, protecting the defendant for the costs of the claim. Mr Yell submitted that the judge might well have taken into account against the defendant the fact that he gave dishonest answers and gave dishonest evidence to the court in the plight in which he found himself as a result of the way Mr Plank had treated him; that he had behaved in an evasive way in relation to the extent to which his new company was carrying on business. He also said that the judge would have been able to take into account the extent to which the costs had been made higher than they otherwise need have been by the expensive way in which Mr Pyke carried on the litigation. He submitted that we should therefore start at a figure of 85 per cent (the figure awarded by the judge) and adjust it downwards. Mr Yell also submitted that in the case of the third claimant, who is now let off liability on the counterclaim as a result of our order, we should reduce the figure downwards to the amount of 50 per cent.
10. In our judgment, the appropriate course for us to take is to give full weight to the offer of 1 December 1998 and the view that this court, as well as the judge below, have formed as to Mr Plank's conduct in this matter. It is unrealistic for us to seek to distinguish between the claimants. We should take again a broad-brush approach to costs, which will have the effect of leaving the judge's order as it stands, so that each of the claimants should pay the defendant 85 per cent of his costs below, to be subject to detailed assessment.
11. LORD JUSTICE SEDLEY: I agree.
12. LORD JUSTICE JONATHAN PARKER: I also agree.
ORDER: Appeal refused. The respondent to have 80 per cent of his costs of the appeal, summarily assessed at £25,000, inclusive of VAT. The judge's order on costs below to stand, those costs to be subject to detailed assessment. The £5,000 previously paid into court to be paid out forthwith in partial satisfaction of that sum. (Order not part of approved judgment)