Bethell Construction Ltd & Anor v Deloitte and Touche [2011] EWCA Civ 1321

Case No A3/2011/0304/CHANF[2011] EWCA Civ 1321
IN THE COURT OF APPEAL (CIVIL DIVISION)
Venue ON APPEAL FROM Manchester District Registry
His Honour Judge Hodge QC
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 18/11/2011
Before
THE CHANCELLOR OF THE HIGH COURTLORD JUSTICE HOOPERLADY JUSTICE RAFFERTY
Between
(1)BETHELL CONSTRUCTION LIMITEDAppellants(2)BETHELL GROUP PLCAppellantDELOITTE AND TOUCHERespondent
(Transcript of the Handed Down Judgment ofWordWave International LimitedA Merrill Communications Company165 Fleet Street, London EC4A 2DYTel No: 020 7404 1400, Fax No: 020 7404 1424Official Shorthand Writers to the Court)
JOHN DAGNALL (instructed by HEATONS LLP) for AppellantsTHOMAS PLEWMAN (instructed by REYNOLDS PORTER CHAMBERLAIN LLP) for RespondentHearing Hearing date : 27 October 2011
JudgmentThe Chancellor:Introduction
[1]At all material times down to March 2001 the second claimant was the holding company of, amongst others, the first claimant and Bethell Fleet Services Ltd (“BFS”). The first claimant is the assignee of any causes of action BFS may have had against the defendant (“Deloittes”). Deloittes provided auditing, accountancy, tax and corporate services to all the companies in the Bethell group from July 2000 to late 2002 or early 2003. Deloittes signed off the financial statements of BFS for the years ended 30th September 2000 and 2001 on 23rd February 2001 and 29th January 2002, in each case without qualification. On 17th May 2005 the solicitors then acting for BFS, Halliwells LLP, wrote to Deloittes claiming that the advice of the latter and its audit of the group’s accounts for both the years 2000 and 2001 had been negligent. Substantial correspondence and discussion then ensued but did not satisfy the claimants (“Bethells”). On 9th March 2007 Halliwells, on behalf of Bethells, wrote what they considered to be a professional negligence pre-action protocol letter of claim with which they enclosed a copy of a claim form issued on 22nd February 2007 seeking damages for negligence in and about the advice to and audit of the financial statements of BFS for the years 2000 and 2001. The letter included the following statement:
“In view of the lapse of time... our clients have had to issue a protective Claim Form (“the 2007 Claim”), a copy of which (in its present amended form) we enclose (but not by way of service). In principle we would wish to have a proper Pre-action Protocol process, and therefore suggest an agreement with regards to extending time for service of the Claim Form and/or Particulars of Claim.”
[2]Thereafter, commencing in March, there were a number of agreements for extensions of time. The final one, with which this appeal is concerned, was concluded in an exchange of emails between the parties’ solicitors on 18th June 2007. The solicitors for Deloittes had sought a further extension of time of a month for their letter of response. In the first of the two emails of 18th June 2007 the solicitors for Bethells complained that no reason had been advanced for so long an extension. The email continued:
“We are therefore prepared to agree a 2 week extension of time (to 4pm on 3 July) on condition that you agree extensions of time for service of the claim form and particulars of claim to 2nd August or 14 days after written notice is given by one party to the other (such notice to be given after 2nd August) whichever is the later.”
By their email in response the solicitors for Deloittes accepted that condition. Thereafter two mediations took place between the parties but without success.[3]On 16th July 2010 the solicitors for Deloittes, Reynolds Porter Chamberlain LLP, wrote a without prejudice letter to the solicitors for Bethells. After the privileged parts, which have been redacted, they continued:
“As far as the termination of the stay agreed back in March 2007 is concerned, our clients have no objection to your request for more time, a request that would not have been needed had you simply prepared the Particulars of Claim and lifted the stay when you were ready to proceed. We do not propose imposing a particular time limit on you for service of the Claim Form and Particulars of Claim but would simply ask that our clients be given a minimum of 56 days from the service of the Particulars of Claim in which to serve their defence.”
On 28th July 2010 the present solicitors for Bethells, having succeeded Halliwells LLP when that firm went out of business, replied:
“With regard to service of the Particulars of Claim, we would be content to convene a case management conference and thereafter set out the timetable for the progression of the claim. With regard to security for costs our clients are satisfied that they can meet any costs orders.”
[4]There followed in October 2010 the two letters on which this appeal largely turns. The first dated 14th October is from the solicitors for Bethells to the solicitors for Deloittes. It reads:
“We now enclose by way of service upon you our client’s Particulars of Claim. Previously you indicated that you would prefer a case management conference to be fixed to progress the claim. May we suggest that you serve your defence, say, within the next 21 days and thereafter the case management conference is arranged. Perhaps you would let us have your thoughts on our proposal.”
The reply of the solicitors for Deloittes dated 22nd October was as follows:
“Thank you for your letter of 14th October 2010. It is not clear whether that letter or your without prejudice letter of 7 July were intended to constitute notice of determination of the stay agreement previously concluded between our clients as you did not accept the proposals made in our letter of 16th July 2010. In the circumstances, we hereby give the requisite 14 days formal notice of determination of the stay but would be agreeable to treating your letter of 14 October as a form of implied notice if you would prefer.”
On 3rd November 2010 the individual dealing with the claim of Bethells (who had done so previously with Halliwells) telephoned his counterpart, but she was unavailable. She returned his call the same day but missed him.[5]There was no other contact between them until, on 16th November 2010, the solicitors for Deloittes wrote to those for Bethells:
“We refer to your letter of 14 October and our letter of 22 October. In your letter of 14 October you did not specifically address the extant agreement to suspend the time for service of the Claim Form and the Particulars of Claim. You purported to attach Particulars of Claim by way of service, but not a Claim Form. As you know, our client had only ever been given the old February 2007 Claim Form expressly “not by way of service” and the suspension agreement specifically extended the time for both. In our letter we gave the requisite 14 days notice to bring to an end the agreed suspension of the time for service of the Claim Form and Particulars of Claim. That period has now expired but to our surprise, no claim form has been served. The period permitted for service of the 2007 Claim Form has expired. In the circumstances, our view (and advice) is that the claims are now irreparably time barred under the Limitation Act.”
[6]The solicitors for Bethells replied in indignant terms on 16th November. On 17th November they sought to serve a resealed version of the original claim form and on 19th November 2010 issued and served a further claim form in the like terms. The solicitors for Deloittes objected to the service of the former and conditionally acknowledged service of the latter. The applications giving rise to these appeals were issued by Bethells on 17th November and by Deloittes on 6th December 2010. By their application Bethells sought orders that:(1) the original claim form had been validly served and/or that Deloittes had waived such service or were estopped from contending otherwise;(2) an order under CPR Rule 16.5 to the effect that delivery of a copy of the claim form to Deloittes on 9th March 2007 together with the letter from Bethells dated 14th October 2010 deeming the same to constitute due service;(3) an order under CPR Rule 16.6 dispensing with service of the claim form. Deloittes sought declarations that the 2007 claim form had not been served in the period of its validity and the resealed version did not disclose a cause of action because the claims were all statute-barred.[7]These applications came before HH Judge Hodge QC, sitting as a deputy judge of the Chancery Division on 16th December 2010. For the reasons given in his judgment he dismissed Bethells’ application, declared that the court had no jurisdiction to hear the claim and refused permission to appeal. In addition to ordering Bethells to pay the costs of both applications he also ordered them to pay Deloittes’ other costs of the claim incurred after 19th September 2007. By their appellants’ notice issued on 8th February 2011 Bethells sought permission to appeal on 6 grounds. They may be summarised as follows:(1) Did the letter dated 14th October 2010 from Bethells’ solicitors constitute ‘constructive’ service of the claim form sent to and possessed by Deloittes since 9th March 2007 ‘not by way of service’?(2) Was the letter from the solicitors for Deloittes dated 22nd October 2010 effective to determine the extension of time agreed by the emails dated 18th June 2007 so that service in the week commencing 16th November was out of time?(3) Did Deloittes waive their entitlement to proper service of the claim form and/or were they estopped from insisting on it?(4) The judge was wrong to have refused to make an order under CPR Rule 6.15 deeming due service of the claim form from its original delivery to Deloittes’ solicitors on 9th March 2007 and the letter from Bethells solicitors dated 14th October 2010.(5) The judge was wrong not to dispense with service of the claim form under CPR Rule 6.16.(6) Given his conclusions on the foregoing issues the judge had no jurisdiction to order Bethells to pay Deloittes’ costs of the claim in addition to their costs of the applications. Etherton LJ gave permission to appeal on ground 1 on 9th March 2011. On Bethells’ renewed application at an oral hearing for permission to appeal on grounds 2 to 6 permission was granted by Rix LJ on 13th May 2011. I will deal with those six grounds in the order in which I have set them out.

Constructive service

[8]Counsel for Bethells submits that there is implicit in or there must be implied into the letter from their solicitors dated 14th October 2010 some statement to the effect that the copy of the claim form sent to the solicitors for Deloittes on 9th March 2007 “not by way of service” should now be treated as served. This submission is based on the fact that particulars of claim cannot be validly served unless and until the claim form has been served, see CPR Rule 7.4. Further, time for a defence does not begin to run until the particulars of claim have been validly served, see CPR Rule 15.4. In their letter of 14th October 2010 Bethells appeared to have assumed that the claim form had been duly served. Otherwise they could not have validly served the particulars of claim or required service of the defence within any particular time or at all. Accordingly, so counsel submits, service should be implied.[9]The judge rejected this submission and so would I. CPR Part 6 deals with service of the claim form. Leaving aside the terms of Rules 6.15 and 6.16, to which I shall come under grounds 4 and 5, service of the claim form must be effected in the manner for which the rules provide. Compliance with those provisions may be waived and a defendant may be estopped from relying on a failure to comply but that depends on the actions of the defendant. Those issues arise under ground 3. Ground 1 involves the proposition that a claimant may unilaterally determine on a method of service of the claim form not authorised by the rules. The short answer is that he is not so entitled. The rules are there to be complied with. They are capable of amendment in accordance with the Civil Procedure Act 1997 but not by the unilateral act of the claimant.

Did Deloittes’ letter of 22nd October 2010 terminate the agreed extension of time?

[10]This submission is based on the difference between a stay and an extension of time. In that respect we were referred to the Glossary applicable to the CPR. The glossary refers to a ‘stay’ as something which prevents litigation being advanced unless and until lifted. Counsel submits that an extension of time cannot be lifted only determined. He claims that in those circumstances the letter of 22nd October 2010 did not comply with the test for clarity recognised in Mannai v Eagle Star [1997] AC 749, 767. In that event, so counsel submits, the letter was ineffective to terminate the extension of time agreed on 18th June 2007 and service in the week commencing 16th November 2010 was not too late.[11]The judge rejected this submission also and so would I. Whilst there may be a technical difference between a stay and an extension of time the issue here is what, on an objective view, was Deloittes referring to in its letter dated 22nd October 2010. It is plain beyond doubt that “the stay agreement previously concluded between our clients” referred to the extension of time first agreed in March 2007 and finally repeated in the emails of 18th June 2007. The evidence does not disclose any other agreement which could have been described as a ‘stay’. In addition that is the specific agreement described in the letter of 16th July to which the letter of 22nd October refers. In the former letter also it is referred to as a stay. The fact that the solicitors for Bethells did not so understand it and did not react to it by serving the claim form within the succeeding 14 days does not make the notice any less clear. I can see no sufficient reason to deny to the letter from Deloittes dated 22nd October 2010 the legal effect it was clearly intended to have.

Waiver and Estoppel

[12]The evidence before the judge included a witness statement of Jane Howard, a member of Reynolds Porter Chamberlain LLP, the solicitors for Deloittes. She was not cross-examined. In paragraphs 25 and 26, having referred to the letter dated 14th October she says: “....I was surprised by this development for the following reasons:• The letter flew in the face of the proposals we had made on 16 July and did not even refer to the material part of that letter.• The letter did not refer to the extension agreement.• No claim form was attached (or otherwise served, nor even referred to).• The attached Particulars of Claim were at odds with the old unserved Claim Form and contained no allegation of negligence in relation to BFS’ audit for the year ended 30 September 2000 (indeed, they asserted that the Financial Statements for that year were correct), which had been the primary case that my clients had been defending for more than 5 years. 26. I was unsure what to make of all that. I determined that the best way forward was to deal with the claim formally and properly. The first step was obviously that the extension agreement had to be brought to an end. Accordingly, on 22nd October 2010 we wrote....”• The letter flew in the face of the proposals we had made on 16 July and did not even refer to the material part of that letter.• The letter did not refer to the extension agreement.• No claim form was attached (or otherwise served, nor even referred to).• The attached Particulars of Claim were at odds with the old unserved Claim Form and contained no allegation of negligence in relation to BFS’ audit for the year ended 30 September 2000 (indeed, they asserted that the Financial Statements for that year were correct), which had been the primary case that my clients had been defending for more than 5 years.[13]In relation to that letter

the judge commented [32]:

“I acquit RPC of any deliberate intention to mislead. Having said that, and absent any explanation as to how the letter came to be phrased in what seems to me to be the very careful and calculated way in which it was, it does seem to me that considerable attention had been given to the way in which the letter should be expressed: it made no reference to the particulars of claim; it made no reference to the need for service of the claim form in express terms. I have little doubt that RPC were seeking to set a trap for Heatons; but, equally, it seems to me that the fact that a trap was being set is clearly apparent from the face of the letter itself, if any reasonable solicitor looks at it with any degree of care. The overriding feature of it is that it gives the requisite 14 days’ formal notice of determination of the stay.”
[14]Unfortunately, Mr Austin, the individual dealing with the claim on behalf of Bethells who had transferred from Halliwells to Heatons, did not appreciate it. In paragraph 8.4 of his witness statement made on 19th November 2010 he said:
“There was [in the letter of 22nd October] no mention of a need further to serve the Claim Form, and to which I was therefore not alive; and nothing to suggest that the Defendants did not accept the service of the Particulars of Claim as being valid, which I therefore assumed that they did.”
Mr Austin was not cross-examined either.[15]Before the judge the emphasis of the argument of counsel for Bethells was on estoppel by convention. This argument was rejected by the judge [36] for these reasons:
“Equally, it does not seem to me that there can be any estoppel, either of a promissory nature or by way of an estoppel by convention. I acknowledge that the observations, technically and strictly obiter (because he was in a minority on the issue), of Lord Goff of Chieveley in the case of Kenneth Allison Ltd. v AE Limehouse & Co. [1992] 2 AC 105 indicate that proceedings can be treated as served pursuant to some form of estoppel by convention. In that case itself, Lord Goff acknowledged that there had been no representation capable of giving rise to a promissory estoppel – and that seems to be the case here – and I cannot see any basis for the assertion that there was anything giving rise to an estoppel by convention. There was simply no reference in the letter of 14th October to service of the claim form not being required, and nothing in the letter of 22nd October 2010 from RPC to suggest that they were proceeding on the footing that the claim form had indeed been served. Indeed, that would be entirely inconsistent with the final paragraph of that letter, “We hereby give the requisite 14 days’ formal notice of determination of the stay.”
I can discern no estoppel by convention.”[16]Before us greater emphasis was put on the question of waiver and an authority not put before the judge. Counsel for Bethells submitted that a recipient of the letter from Bethells’ solicitors dated 14th October 2010 with knowledge of all that had passed between the parties since February 2007 would realise that the writer had assumed that the claim form had been duly served (or was to be treated as duly served) such as to impose on the recipient the obligation to correct what must have been a mistake. He relied on the judgment of Clarke J, as he then was, in The Stolt Loyalty [1993] 2 Ll.L.R. 281. The judge had not been referred to it.[17]In The Stolt Loyalty [1993] 2 Ll.L.R. 281 the issue was whether the claimants had been granted an extension of time by both the owners and the demise charterers. That depended on the effect of an exchange of telexes between the solicitors for the claimants and the insurers of the defendants. As the judge explained at page 284 it depended on the context whether a reference to ‘owners’ included demise charterers. On 3rd and 21st March 1988 the solicitors for the claimants asked the insurers acting for the defendants for an extension of time for the claims up to and including 26th September 1988. The judge concluded that the references to ‘owners’ (p.287) and Shipowners (p.288) did include demise charterers. The response sent on 21st March gave the requisite extension on behalf of ‘the Shipowners’. Clarke J concluded (p.288) that that did include demise charterers. Though not necessary to his decision, he then considered the alternative claim to the effect that the defendants were precluded by estoppel from contending otherwise. Clarke J accepted (p.290) that there is no general duty owed by one party to litigation to correct the mistakes of the other but each case depended on its facts. He concluded that the defendants were under a duty to inform the claimants of the true position if they were going to reply to the telex seeking an extension of time. He said:
“In my judgment if they were going to send a reply they owed a duty to send a full reply. Instead they deliberately allowed [the claimants] to continue in their mistaken belief that they had asked for all relevant extensions of time. They encouraged them to make the same mistake…. As a result of the stance deliberately adopted by [the defendants] the claimants did not take the step they feared and their strategy on the face of it worked. In these circumstances it would in my judgment be unconscionable to allow the demise charterers to rely on the time bar.”
[18]Counsel for Bethells relies strongly on this case. He contends that the terms of the letter of 14th October show that Bethells’ solicitors considered that the claim form had been duly served otherwise they could not send the particulars of claim alone “by way of service”. He relies on the passage from the witness statement of Jane Howard I have quoted to show that she appreciated that there was some mistake in a number of areas including the fact that the claim form had not been served. The witness statement of Mr Austin indicates that he assumed from the response of 22nd October that Deloittes accepted that the claim form had been duly served. It is clear that had that defect been pointed out to him he would have served the claim form in the time.[19]The response of counsel for Deloittes is to point out that the letter of 22nd October cannot be read as an acceptance by Deloittes that the claim form had been duly served because it went on to give fourteen day’s notice to determine the agreed extension of time. What, he asked rhetorically, was the fourteen days for if it was not for service of the claim form? He submitted that this case fell within the normal proposition stated by Clarke J in The Stolt Loyalty to the effect that one party to litigation is not bound to correct mistakes made by the other. He supported the decision of the judge to the effect that there was nothing in the letter from Deloittes’ solicitors dated 22nd October to indicate that they accepted that the claim form had been duly served.[20]It is well established that whether or not a party is bound by an estoppel of any description depends on his own acts. Generally silence will not ground an estoppel. But if there is a duty to act or speak then a failure to do so may give rise to an estoppel. A duty to speak may arise from the circumstance that a failure to do so may render false an express statement which may be literally true, see Chitty on Contracts 30th Ed. Para 6-017. The judge was not addressed on these lines. We have been.[21]The letter from Mr Austin dated 14th October enclosed the particulars of claim by way of service. It was apparent from that statement that the writer must have assumed that the claim form had been served. Ms Howard appreciated that the writer must have been labouring under some such mistake. She did not have to reply at all; but if she did then it had to be a full reply. Merely to thank Mr Austin for his letter and then to continue by way of a trap, as the judge found, could have given rise to the inference that she accepted that the claim form had been duly served or was waiving proper service.[22]But she did not leave it at that; she added the subsequent passages. It is clear from them that she was giving the fourteen days notice to terminate the extension of time agreement made on 18th June which it required. It is equally clear from that agreement that the notice she gave would trigger time for service of the claim form and particulars of claim because it could not apply to anything else. Accordingly, read as a whole, the letter of 22nd October does not constitute a positive representation that Deloittes accepted that the claim form had been duly served or waived their entitlement to require it’s proper service. It was, in my view, a sufficiently full reply to an experienced solicitor to satisfy the test exemplified in The Stolt Loyalty. Accordingly, I reach the same conclusion as the judge on this ground too.

CPR Rule 6.15

[23]This rule, which was added with effect from 1st October 2008, provides:
“(1) Where it appears to the court that there is a good reason to authorise service by a method or at a place not otherwise permitted by this Part, the court may make an order permitting service by an alternative method or at an alternative place. (2) On an application under this rule, the court may order that steps already taken to bring the claim form to the attention of the defendant by an alternative method or at an alternative place is good service. [(3)… (4)…] ”
The order Bethells seek is that the possession of the copy of the claim form by Deloittes since 2007 and the sending of the letter dated 14th October by Bethells’ solicitors should be treated as an alternative method of service. It was suggested that the facts relied on for the establishment of a waiver or an estopppel, if not sufficient for that purpose, constitute good reason for the purposes of this rule to justify the order sought.[24]This was rejected by the judge. He held (paragraphs 40 and 41):
“40. I do not accept those submissions. I do so principally because it seems to me that it would subvert the whole basis of the agreement reached between the parties as to the extension of time for service of the claim form and particulars of claim. It seems to me that it is in the interest of the overriding objective for parties to be able to reach agreement for an extension of time for service of the claim form if this enables them to achieve a resolution of litigation without over-extensive resort to the courts, with a consequent expenditure of legal costs and use of court time. However, for the parties to proceed in this way, it is also important that the court is seen to be upholding the basis upon which they have agreed that they will proceed. Mr Dagnall’s approach, it seems to me, would operate to subvert the parties’ contractual autonomy, and it would fail to give effect to the important principle of freedom of contract… 41. Adopting the language employed by Lord Justice Neuberger in the case of Kuenyehia and others v International Hospitals Group Ltd. [2006] EWCA Civ 21at paragraph 36, this was not a case of “a minor departure from a permitted method of service or an ineffective attempt to serve by a permitted method within the time limit”
. This was not a case of mis-service but one of non-service. The claim form had been delivered in 2007 expressly “not by way of service”. The defendants agreed to that; and the parties agreed that either party could determine what was effectively the standstill agreement by giving 14 days’ notice for service of the claim form. That is what the defendants’ solicitors did by their letter of 22nd October. The Heatons letter of 14th October had said absolutely nothing about service of the claim form. It seems to me that the parties should be held to what they had agreed; and, after all, it was the claimants’ solicitors who had originally proposed it back in 2007. For those reasons, to hold that there was good service would be to subvert the express agreement between the parties, and fail to give effect to the important principle of freedom of contract and the contractual autonomy of the parties. It would be a wholly inappropriate exercise of the court’s discretion to effectively allow the claimants to rewrite the agreement between the parties. It does not seem to me here that there is any good reason to authorise service contrary to what the parties had agreed.” Counsel for Bethells submits that there are two issues (a) whether there is good reason shown sufficient engage the rule, and if so (b) whether the judicial discretion which then arises should be exercised in favour of making the order Bethells seek. He submits that the judge was wrong on both points.[25]I accept that that is the correct approach to the rule in that they are cumulative conditions. I also accept, as counsel submitted, that ‘the good reason’ needed is something less than the exceptional circumstances required by CPR Rule 6.16. For my part I do not accept that either condition was satisfied. In the events which happened and in the light of my conclusions so far Deloittes is entitled to rely on the Limitation Act as a bar to all further proceedings. Given that, as I would hold, they have not waived the requirement for service of the claim form and are not estopped from requiring it I cannot see any reason, whether good or not, why the court should exercise any discretion it might have so as to deny Deloittes their accrued right.[26]The judge relied on the sanctity of the extension of time agreement. In addition I can see nothing in the correspondence of 2010 to justify penalising Deloittes. Even accepting, as the judge found, that they had set a trap, the cause of Bethells’ problem was that Mr Austin fell into it. I do not understand why or how the mistake of one party can justify denying so substantial a lawful consequence to the other. I would reject this ground too.

CPR 6.16

[27]This rule also introduced with effect from 1st October 2008 provides:
“(1) The court may dispense with service of a claim form in exceptional circumstances. (2) An application for an order to dispense with service may be made at any time and – (a) must be supported by evidence; and (b) may be made without notice.”
Bethells sought to persuade the judge that he should make an order in this case dispensing with service of the claim form. The judge refused. He said (paragraph 42):
“..this is not a case where the claim form was delivered to the defendants within the period for service by a method of service which the claimants and their solicitors thought was a reasonable method of service. The claim form had been delivered expressly not by way of service, and was never delivered to the defendants again; nor was any statement made that by serving the particulars of claim the claimants were treating the claim form as having, by that act, been served. There was nothing to suggest that the claimants were regarding the not-by-way-of-service condition attached to the previous delivery of the claim form as in any way having been extinguished. Again, it seems to me that it would be an impermissible exercise of the power under the rule to dispense with service of the claim form in those circumstances.” (a) must be supported by evidence; and (b) may be made without notice.”
[28]Counsel for Bethells submitted that the judge was wrong. I can only say that I reject that submission. If the facts of this case do not reveal a ‘good reason’ to make the order regarding service of the claim form sought under CPR Rule 6.15 they cannot possibly disclose ‘exceptional circumstances’ sufficient to justify dispensing with service altogether. Nor could they provide any sufficient reason to make the order sought. And, for good measure, Bethells have entirely failed to show any ground on which this court could interfere with the discretion of the judge.

Jurisdiction in relation to costs

[29]It is accepted that the judge was entitled to order Bethells to pay Deloittes their costs of the two applications; but they dispute his jurisdiction to order Bethells to pay Deloittes any additional costs of the action. In paragraph 44 of his judgment the judge concluded that he had such jurisdiction and for the reasons given in paragraphs 45 to 47 should exercise it in favour of Deloittes. Counsel for Bethells seeks to revisit those conclusions.[30]With regard to jurisdiction, the claim form had been issued. Therefore there were “proceedings” in the form of an action or claim. Under s.51 Senior Courts Act 1981 the court possessed jurisdiction to order whether and if so by whom the costs should be paid. That jurisdiction and the wide discretion it confers is regulated by CPR Parts 43 and 44. There is nothing in any of those provisions to exclude the costs of proceedings in cases where the claim form has not been served. Accordingly the submission in relation to jurisdiction is without merit. The decision on who should pay them was a matter for the exercise of the judge’s discretion. He exercised it in favour of Deloittes. No ground has been shown for interfering with his exercise of that discretion. Nor could there be. Deloittes were entitled to have the claim dismissed because it was statute-barred. It would require a strong case to deprive a successful defendant of his costs of the action, absent a payment into court, a Calderbank letter or some reprehensible conduct. There were none. I would dismiss this ground too.

Conclusion

[31]For all these reasons I would dismiss this appeal. To my mind there was only ever one point, namely ground 3. It is unfortunate that this case should have been so overlaid with other points together with largely unnecessary but copious citation of authority. In the result it has generated lengthy hearings in both this court and the court below together, no doubt, with consequentially large bills of costs. Lord Justice Hooper[32]I agree. Lady Justice Rafferty[33]I also agree.

Cited in 15 later judgments

and 6 more of the most senior