![]() |
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] | |
England and Wales High Court (Technology and Construction Court) Decisions |
||
You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> NUA Facades Ltd & Ors v Brady (t/a Terry Brady Developments Ltd [2019] EWHC 3526 (TCC) (19 December 2019) URL: http://www.bailii.org/ew/cases/EWHC/TCC/2019/3526.html Cite as: [2019] EWHC 3526 (TCC) |
[New search] [Printable PDF version] [Help]
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Strand, London, WC2A 2LL |
||
B e f o r e :
____________________
(1) NUA FACADES LIMITED (2) NUA INTERIORS LIMITED (3) SILK PROPERTY DEVELOPMENTS LIMITED |
Claimants |
|
- and - |
||
TERRY BRADY t/a TERRY BRADY DEVELOPMENTS LIMITED |
Defendant |
____________________
Anthony Speaight QC (instructed by Goodman Derrick LLP) for the Defendant
Hearing dates: 8 November 2019
____________________
Crown Copyright ©
MRS JUSTICE JEFFORD:
Introduction
Background to the application for indemnity costs
Legal principles
"(5) The conduct of the parties includes –
(a) conduct before, as well as during, the proceedings ….
(b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;
(c) the manner in which a party has pursued or defended its case or a particular allegation or issue; and ….."
"(iv) Every point that could be taken was taken by Springwell. In many areas of the case ….. unsubstantiated allegations were made. Chase, of necessity, had to deal with such claims in laborious detail. …. But, in my judgment, if a party chooses to litigate a commercial case of this sort on such a wide and extravagant canvass, he must take the risk that, ultimately, if unsuccessful, he may have to pay the costs of the exercise on an indemnity basis. Such a sanction, if nothing else, is a salutary means of encouraging focus, restraint and proportionality in heavy commercial disputes.
(v) Springwell raised, and pursued, various serious allegations of dishonesty, impropriety and deceit against Chase, in respect of both the pre-default and default claims. …. certain of the allegations of dishonesty and deceit against JA were dropped very shortly before trial. But others were persisted in, although effectively dropped after cross-examination of Chase witnesses.
(vi) Further serious allegations of impropriety were made in respect of Chase's conduct in respect of the post-default period ….. These allegations were rejected by me. The fact that a party chooses to raise and pursue allegations of fraud and impropriety and then abandons them shortly before trial, or alternatively, seeks to make them good, are well-established reasons for an award of indemnity costs."
(i) In Three Rivers v BCCI SA [2006] EWHC 816 at [25], Tomlinson J summarised the principles to be derived from the authorities as follows:
"(1) The court should have regard to all the circumstances of the case and the discretion to award indemnity costs is extremely wide.
(2) A critical requirement before an indemnity costs order can be made in the successful defendant's favour is that there must be some conduct or some circumstance which takes the case out of the norm.
(3) In so far as the conduct of the unsuccessful claimant is relied on as a ground for ordering indemnity costs, the test is not conduct attracting moral condemnation, which is an a fortiori ground, but rather unreasonableness.
(4) The court can and should have regard to the conduct of the unsuccessful claimant during the proceedings, both before and during the trial, as well as whether it was reasonable for the claimant to raise and pursue particular allegations and the manner in which the claimant pursued its case and its allegations.
(5) Where a claim is speculative, weak, opportunistic or thin, a claimant who chooses to pursue it is taking a high risk and can expect to pay indemnity costs if it fails.
(6) A fortiori, where the claim includes allegations of dishonesty, … and those allegations are pursued aggressively inter alia by hostile cross-exanimation …."
(ii) In Balmoral Group Ltd. v Borealis (UK) Ltd. [2006] EWHC 2531 (Comm), Christopher Clarke J adopted Tomlinson J's summary and added (at [1]):
"The discretion is a wide one to be determined in the light of all the circumstances of the case. To award costs against an unsuccessful party on an indemnity scale is a departure from the norm. There must, therefore, be something – whether it be the conduct of the claimant or the circumstances of the case – which takes the case outside the norm. It is not necessary that the claimant should be guilty of dishonesty or moral blame. Unreasonableness in the conduct of the proceedings and the raising of particular allegations, or in the manner of raising them may suffice. So may the pursuit of a speculative claim involving a high risk of failure or the making of allegations of dishonesty that turn out to be misconceived, ….. "
(iii) Tomlinson J's summary was also adopted by Colman J in National Westminster Bank plc v Rabobank Nederland (No. 2) [2007] EWHC 1742 (Comm). The judge emphasised that Tomlinson J's paragraphs (4) to (8) identified specific patterns of conduct capable of rendering a party's overall conduct relevantly unreasonable or inappropriate and which, taken alone, or in combination, might in all the surrounding circumstances often be capable of giving rise to a conclusion that the losing party's conduct has been so unreasonable and inappropriate overall as to justify an indemnity costs order. It was, he said, "important not to lose sight of the essential requirement of unreasonable or inappropriate conduct overall and not to treat examples of such which may amount to such conduct as necessarily constituting it".
The parties' contentions
The claimants' case
"It is well established that fraud or dishonesty …. must be distinctly alleged and as distinctly proved; that it must be sufficiently particularised …. This means that a plaintiff who alleges dishonesty must plead the facts, matters and circumstances relied on to show that the defendant was dishonest.
It is important to appreciate that there are two principles in play. The first is a matter of pleading. The function of pleadings is to give the party opposite sufficient notice of the case that is being made against him. …. This is only partly a matter of pleading. It is also a matter of substance. As I have said, the defendant is entitled to know the case he has to meet. But since dishonesty is usually a matter of inference from primary facts, this involves knowing not only that he is alleged to have acted dishonestly. but also the primary facts which will be relied upon at trial to justify the inference. At trial the court will not normally allow proof of primary facts which have not been pleaded, and will not do so in a case of fraud. ….. There must be some fact which tilts the balance and justifies an inference of dishonesty, and this fact must be both pleaded and proved."
The defendant's case
The balancing exercise