Mosley v Popley [2012] EWHC 3905 (Ch)

Case No CH/2012/0288[2012] EWHC 3905 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Rolls Building, Royal Courts of Justice, Fetter Lane, London, EC4A 1NLDate Friday, 2nd November 2012
B e f o r e:
MR BRINDLE QC
(Sitting as a Deputy Judge of the Chancery Division)
Between
ALAN MOSLEYAppellantv
Between
ANDREW POPLEYRespondent
Digital Audio Transcript ofWordWave International LimitedA Merrill Communications Company165 Fleet Street London EC4A 2AGTel No: 020 7404 1400 Fax No: 020 7831 8838(Official Shorthand Writers to the Court)
Mr M Hubbard appeared for AppellantMr T Evans appeared for Respondent
[1]THE DEPUTY JUDGE: This appeal is brought by Alan Mosley, the second defendant, against a judgment and order of Deputy Master Bartlett on 9th May. The appeal is brought with the permission of the Master. The Master dismissed the application by Mr Mosley, the second defendant, to strike out the claim against him brought by Andrew Popley, the claimant.[2]The essential basis for the application both here and below has been that the claimant has no reasonable cause of action against Mr Mosley for the relief claimed.[3]The background to this matter is highly complex and indeed procedurally it is complex: there are proceedings not only here but in St Vincent and The Grenadines. These are fully summarised in counsels' skeleton arguments and the position has been updated orally to me in one respect which I deal with further below.[4]The essential facts relied upon by the claimant in this action are however reasonably straightforward and they are assumed in his favour, as the second defendant accepts and as would be normal on any application to strike out such as this.[5]The essential facts, which I assume, are as follows. There was a settlement known as the Blue Ridge Trust governed by the law of St Vincent and The Grenadines, the settlor being either the claimant's father or, more correctly I think, a nominee for him, although nothing I think turns on that.[6]The third defendant in this action, St Vincent Trust Company Ltd, was, as I understand it, the trustee under the Trust and one important asset of the Trust were the shares in the first defendant company, Atem Ltd, itself a company governed by and corporated under the law of St Vincent and The Grenadines.[7]What happened is that Atem Ltd purchased a property - I call it "the Property" - White Owl Barn, Reading Street, Tenterden in Kent. That purchase took place on 8th October 2000. Atem Ltd remained legal and beneficial owner of the Property until 2011. Indeed, that fact was confirmed in an important judgment given by Charles Aldous QC, sitting as a judge of this court, on 7th April 2004, where he specifically decided, and this is of importance to this application and this appeal, that the property was owned not by the Trust but legally and beneficially by the company, Atem Ltd.[8]More controversial events took place in or about May 2011. The trustee appears to have resolved to wind up Atem Ltd, being the owner of all the shares in Atem. On the following day Atem's liquidator completed or purported to complete a sale of the property to Mr Mosley, the second defendant. Thereafter Mr Mosley took possession but the Popley family fought back, not only with proceedings in the courts or St Vincent and The Grenadines but also with these proceedings. Mr Mosley undertook , at least as an interlocutory matter, to allow the Popleys to resume possession and they did indeed resume possession of the property. Those are the background facts at least in outline.[9]What the claimant alleges in this action is what in the common law courts would be covered by the tort of conspiracy but in these courts is covered by breach of trust and/or fiduciary duty by the trustees, in respect of which Atem and Mr Mosley are liable as having provided dishonest assistance .[10]It is alleged that the sale took place at a significant undervalue and relief is sought, but it is important to note that this is based upon not what is sometimes called "knowing receipt" but knowing or dishonest assistance by Atem and Mr Mosley in the breach of Trust committed by the third defendant, St Vincent Trust Company Ltd.[11]It is important to look at the relief which is claimed in this action. It is essentially relief seeking an order setting aside the sale by Atem to Mr Mosley and indeed an accompanying charge and rectification of the register accordingly. There is a claim for further or other relief but I do not think anything very much turns on that. There is no doubt that the order specifically sought is an order setting aside the sale and rectifying the register.[12]Mr Timothy Evans, who appears for the claimant, denies that that the claim brought is of a proprietary nature but seeks to justify it as a form of equitable relief, based upon the personal claims which I have outlined. It is a little difficult to understand how it cannot be proprietary, particularly since rectification of the register is sought in relation to specific property, but I have in mind the way in which the matter is put and will look at it both on a proprietary and personal basis. It is however common ground that the roperty in Kent is not itself the property of the rust and that is a fact which has been the foundation, I think, of the submissions made before me by Mr Mark Hubbard, on behalf of Mr Mosley.[13]I will summarise those submissions. It is said that the claim is unarguable in law and cannot succeed because, as a foundation, the Property never was Trust property. The Trust property was relevantly the shares in Atem. That Trust property is still there, those shares are still there, albeit on the claimant's case they have been diminished in value.[14]It is submitted that Atem is not obliged to have regard to the Trusts of the shares. It is submitted that no derivative claims are brought or could be brought either in the context of the Trust or in the context of Atem Ltd as a company. Indeed the Master in his judgment reaffirmed that no derivative claims were available.[15]Mr Hubbard submits that the claimant is a third party to the transaction between Atem and Mr Mosley and cannot bring any claim in respect of it. This is, it is said, a proprietary claim, but a proprietary claim without the fundamental necessity of the proprietary ever having been part of the Trust.[16]The Property cannot be returned, it is submitted, to the Trust, since the Trust never had it. Some authority has been cited in support of these submissions at this stage. Perhaps importantly the decision of Brightman LJ in Bartlett v Barclays Bank (No 2) (1980) 1 Ch 515, a case which did have some similarities to the present ( because it considered the possibility of a remedy in a case such as this where a breach of trust has caused loss to a company owned by the trust) where Brightman LJ said this at page 545:
"Restitution to the company is never and never could have been an appropriate remedy. The defendant trustee could never properly have been ordered to make good to the company the losses suffered by the company. Indeed, the defendant who was a shareholder in and not a director of the company did not owe any duty to the company."
Mr Hubbard also relies on the recent and important decision of the Court of Appeal in Sinclair Investments v Versailles Trade Finance Ltd [2011] 4 All ER 335. The judgment of the court was given by Lord Neuberger MR and a number of passages in the judgment are relied upon. I start with the description of proprietary claims in paragraphs 37 to 39 of that judgment. In particular Lord Neuberger stated at paragraph 37 that:
"...the courts of England and Wales do not recognise a remedial constructive trust as opposed to an institutional constructive trust."
In this respect English law may differ from such legal systems as that in Australia, but as a matter of English law that position, which had probably been the case in any event, was clearly reaffirmed by Lord Neuberger in that judgment. It may be for this reason that Mr Evans has been at pains to submit that he is not bringing a proprietary claim and he does not seek to justify his claim on that basis.[17]Mr Hubbard continues by distinguishing between the form of liability that arises whereby it is alleged that the defendant has dishonestly assisted in a breach of trust, and that of knowing receipt. Both of these kinds of liability traditionally have been subsumed under the general heading of "constructive trust" but as Lord Millett and others have pointed out, there is potential confusion here. The two are in fact very different and the only one of the two which we are concerned with in this case is dishonest assistance in a breach of trust.[18]This does not give rise, it is submitted, to proprietary claims but personal claims, for what is properly called "equitable compensation", which is in many respects similar to but not identical to common law damages.[19]In his judgment in the Sinclair case Lord Neuberger in paragraphs 40 - 47 very clearly sets out what the nature is of claims such as that which we have here, and I will not repeat all of that. I think however it is worth quoting paragraphs 45 and 46 for present purposes:
"Equitable compensation. 45. As this suggested reformulation implies, the traditional way in which a non-proprietary claim is assessed in equity is through the medium of an equitable account, which in turn leads to equitable compensation. The right to an account is dependent on the existence of a fiduciary relationship, so that it can be sought, for instance, by a principal against his agent, or even by a claimant in a passing off claim. 46. The right to equitable compensation through an equitable account will often produce the same answer, in terms of the ultimate value to the claimant, as a proprietary interest, but it has the disadvantage of being a personal claim, so it would rank pari passu with the defaulting fiduciary's other unsecured creditors' claims, in the event of his bankruptcy. Mr Miles argued that it also has the disadvantage of preventing the claimant from benefitting fully from a following or tracing claim. Thus, if the defaulting fiduciary invests the money he has misappropriated, and for which he would be liable to account, in an asset which appreciates, a claimant with a proprietary claim can trace into that asset and recover its full value because he can effectively claim to own the asset beneficially, whereas, if he is limited to a personal claim, he cannot."
[20]Mr Hubbard concludes by submitting that the personal remedy described there by Lord Neuberger cannot extend to ordering Mr Mosley to return non-trust proprietary to Atem Ltd, a company which itself does not owe the relevant fiduciary duties but is simply a company whose shares are owned by the Trust, even if Atem itself may have been guilty of dishonest assistance. I will return later to the relevance of the potential claim that Atem might have for the relief here sought.[21]In my judgment, the submissions of Mr Hubbard are well-founded. Before I turn to consider Mr Evans' answer to them, and I will consider those carefully, I think it is right that I should say something about the judgment of the Master on these issues. He gave a considered and detailed judgment and it seems to me that the central paragraph is his paragraph 47, to which I would like to devote a little attention. He made reference in the previous paragraphs to the speech of Lord Browne-Wilkinson in the leading case of Target Holdings v Redferns and also to the Sinclair case and he stated in paragraph 47:
"The question is then in the present case whether the Trust estate would be restored by the payment by the alleged wrongdoers of such amount as the court finds to be diminution in value of the shares in Atem as a result of the sale of White Owl Barn to the second defendants."
He says that is the question because of what Lord Browne-Wilkinson had said in Target v Redferns [1995] 3 All ER 785 at 794, where it is said the basic rule:
"That a trustee in breach of trust must restore or pay to the Trust estate either the assets which have been lost to the estate by reason of the breach or compensation for such loss. The course of equity did not award damages but acting in personam ordered the defaulting trustee to restore the Trust estate. If specific restitution of the Trust property is not possible, then the liability of the trustee is to pay sufficient compensation to the Trust estate to put it back to where it would have been had the breach not been committed."
[22]Returning to the Master's judgment, it seems to me therefore that he was right to ask whether or not the Trust estate would be restored in the manner he describes. The whole question here is as to the Trust estate: what has happened to it? Has it been alienated and can it be returned? It is very difficult, in my judgment, to see how this principle can be applied so as to cause property in the hands of someone such as the second defendant to be restored not to the Trust but to a company owned by the Trust. The learned Master then continues as follows:
"It seems to me there is at least a strong argument for saying that it would not [ie the Trust estate would not be restored]. To say that the Trust would then be in the same position as it was before the breach of Trust strikes me as inaccurate and unrealistic. If a specific asset has been wrongfully removed from the control of a Trust, there may be very good reasons why the beneficiaries require the return of the asset rather than monetary compensation for its loss. As Lord Browne- Wilkinson said, monetary compensation is at least normally for cases where specific restitution is impossible."
It seems to me, with respect, that this is a confusion. The learned Master does not seem, in my respectful judgment, to have adequately considered what exactly was Trust property and what was not and to have misinterpreted what Lord Browne-Wilkinson was saying as indicating that where beneficiaries have a desire for the return of something which is not in their view adequately remedied by a monetary compensation, they can have a remedy over things which never were trust property at all. I do not believe that Lord Browne-Wilkinson was ever intending to say that.[23]I think the last sentence of the Master's paragraph 47 is indicative of how he saw the matter. He said:
"Equitable remedies are flexible and I see no reason in principle why it should be an insuperable bar to such relief that the asset in question is held by the Trust under its control, through a limited company, rather than being actually owned by the Trust."
[24]It seems to me that if it were right to say that the position of property owned by the Trust should be equated with property owned by a company owned by the Trust, that would be sound. However, it seems to me that is clearly not the position here and not a possible position here. The only way one could equate the two would be if one were to pierce or lift the corporate veil. I have discussed that possibility with Mr Evans, who quite rightly, in my judgment, did not take that up as being the way in which he wanted to put the case. It is quite impossible in the present case, if only because of the judgment of Mr Aldous QC, who has already held that the Property was held by the company and not by the Trust. It is also, as pointed out by Mr Hubbard, not a case where the court would consider piercing the corporate veil because Atem Ltd, when it was set up, was not set up as an engine for fraud, indeed that was many years before the alleged fraudulent activity occurred, which was in 2011. So in my judgment Mr Evans was quite right not to try to justify his client's position on the basis of some fudging of the difference between the company and the Trust. In my judgment, no such fudging is possible and, with respect, the Master was wrong, in my judgment, in that last sentence at paragraph 47.[25]I turn to the particular points which Mr Evans has urged upon me. Firstly, as I have already said, he did not seek to say he could have a proprietary remedy, no doubt realising that that way of putting the matter was hopeless. He also recognised that he was not seeking to lift the corporate veil. Yet he did recognise that the Trust did not have ownership of the Property. So what he says is, latching onto the equitable remedies available for wrongs of this kind, that equity’s arsenal of remedies is effectively large enough to extend to requiring a dishonest assister in a breach of trust to return property, not to the rust but to the transferor (Atem here) which is itself owned by the Trust. He submitted that equity’s grasp was wide enough to include that. He had no particular authority to support that and, in my submission, there is no authority to support it.[26]Secondly, he says that to restore the position to what it was before the wrong, it is necessary to retransfer the Property.. That may be true in one sense, but it does not seem to me to solve the problem that Mr Hubbard's submissions, which I propose to accept, demonstrates. What is sought here is simply beyond, in my judgment, the remedies which the law allows. There is no basis for saying that equity’s remedies, broad though they are, extend to allowing property which was never the property of the Trust to be returned because the trustee may have some form of control over the party to whom the return is to be made, namely Atem. This is not like a case, in my judgment, where a wrongdoer is required to restore property to the trust. The situations which Lord Brown-Wilkinson had in mind, in the passage I have quoted, do not form any basis for this claim.[27]I suggested to Mr Evans: why can the claimant’s rights not be dealt with by the quantum of the equitable compensation or quasi damages? He said to that, and I suspect this is probably his best point, that he relied on the personal nature of the rights: we are talking about the Popley family for whom this was somewhere they wanted to live and it is not just a question of money.[28]I understand that point but it does not seem to me to get him anywhere. The first reason is that for better or worse, the Popley family decided to set up these arrangements by firstly a Trust and then, at one legal remove from that, a company owned by the Trust, which itself was to own the property . Therefore I think that to talk about it in these personal terms is not entirely convincing. More importantly, it simply does not get over the fact that personal or not the Trust in which Mr Andrew Popley has an interest simply does not own the property and the major hurdle which has been clearly identified is not overcome by this argument. Mr Evans supports the Master's judgment. I have dealt with that and I think it is wrong to say that the interposition of a company between the Trust and the proprietary does not make any difference.[29]Mr Evans made interesting submissions to me about the relevance of Atem's claim. He updated me, as I mentioned earlier, on the proceedings in St Vincent and The Grenadines where it appears that on Wednesday the judge in that court gave a judgment which may very well have had the effect of rescinding the liquidation of Atem and restoring the position of the Popley family and their agents to control over Atem. The detail of that is not entirely clear but I am quite happy to proceed on the basis that Mr Evans has explained it to me and he tells me that in the light of this, it may very well be that Atem will be sought to be joined - it is already here as a defendant - to this action to make the claims which are the subject matter of this appeal, ie theclaims for return of the Property and rectification of the register etc. I anticipate that may very well happen, although one cannot be certain.[30]How then might this affect matters? It seems to me that it does not help and it indeed very much reinforces my view that the present claimant, Mr Popley, has no claim, because it seems to me that if anybody does have a claim it is Atem - I am not saying it does have a claim but the obvious potential claimant for this relief is Atem. If Atem is going to sue here, so be it. That is no reason to retain on the file a claim by what I regard as the wrong claimant for this relief, and it seems to me that if there is a claim here, it is Atem's claim. Mr Andrew Popley has no good claim in law and that is the relevance in my judgment of the Atem position.[31]Mr Evans concluded with this proposition, which I recorded. He submitted that the court has always had the power to require the wrongdoer to reverse a transaction when(a) that transaction is the problem; and(b) it can be reversed. There is no issue here about it being reversed, so we can ignore that. So the proposition really is that the court has always had the power to require a wrongdoer to reverse the transaction.[32]In my judgment, as I think must already be clear, that is an oversimplification. The wrongdoer can be required to reverse a transaction but cannot be required to rescind or repay to a party who is not the Trust or anyone representing the Trust at all.[33]For these reasons, in my judgment, this claim has no prospect of success and discloses no reasonable cause of action. I will hear counsel as to what other orders, if any, I should make consequent upon that decision.[34]MR HUBBARD: My Lord on that issue, as to the order to be made, I have produced a short minute of order. I think it follows from your Lordship's judgment that firstly the order made below be set aside.[35]THE DEPUTY JUDGE: It is the (ii) I am not sure about because what about the position of the other defendants, that is what I really want to know about?[36]MR HUBBARD: My Lord, the only relief claimed against any of them is the relief which you have said is not open to the claimant to proceed with as a matter of law. It must follow that there are no claims disclosed by the particulars of claim against any defendant, then the right thing to do is to strike the claim out.[37]THE DEPUTY JUDGE: What do you say about that? Properly represent that or not...[38]MR EVANS: Represent who my Lord?[39]THE DEPUTY JUDGE: The other defendants.[40]MR EVANS: I certainly do not represent --[41]THE DEPUTY JUDGE: You might represent depending on if somebody --[42]MR EVANS: I think I properly do represent Atem at the moment.[43]THE DEPUTY JUDGE: You certainly do not represent the third defendant.[44]MR HUBBARD: It is not an issue for me but there might well be an issue as to who if anyone is currently able to give instructions.[45]THE DEPUTY JUDGE: I am not going to miss that. I would like to know what Mr Evans thinks about your proposition a moment ago.[46]MR EVANS: I think it is right in terms (i) or (ii) ... the declaratory relief. Well, Atem has a resident charge. One is really the reversal which you said is not a cause of action. Two, goes with it. Three, really does also go with it because it does not get White Owl Barn back into its hands.[47]THE DEPUTY JUDGE: It seeks further other relief.[48]MR EVANS: My Lord, what your Lordship has said, I do not know if it is right for me to make these points now, you said that the facts disclose that there are no reasonable cause of action. As I understand your Lordship's judgment that is not actually right.[49]THE DEPUTY JUDGE: No cause of action, reasonable cause of action for the relief claimed. That is how I meant to put it at the outset, I would like to correct --[50]MR EVANS: The claimant disclose cause of action for equitable compensation. In August 2011 what mattered of course was the retention of the house. But what troubles me is how one should deal with this, what your Lordship has said is that there is a cause of action when in fact there is not, or equitable damages as well. I am a bit ...[51]THE DEPUTY JUDGE: You have not claimed that. I do not think further relief can be.[52]MR EVANS: I have not claimed that. I am not sure it really matters at this stage ... I am not going to say anything further about that. It does not cover 1, 2 and 3.[53]MR HUBBARD: My Lord, it does follow the claim as brought should be dismissed. There is a submission of cost. One other point on the order, which is not in this minute and that relates to the undertakings given to the court according to the order of Arnold J which is at page 69 of the bundle, as your Lordship has it.[54]THE DEPUTY JUDGE: Yes.[55]MR HUBBARD: This order was made at a time when the Popleys had been temporarily displaced from occupation, so the first undertaking is spent. Mr Mosley did vacate. The second one partly depends upon the relief sought by the claimant which has been dismissed. I am sure my client would say that he would not obtain possession except by due process of law, possession proceedings are on foot at a stage pending this appeal. So, in my submission, there is no need for the second undertaking either. The third undertaking, again appears to be dependent upon there being a proprietary or quasi proprietary claim of the kind brought but the proceedings which have been struck out.[56]THE DEPUTY JUDGE: You should be released from these undertakings.[57]MR HUBBARD: All undertakings ought now to be released.[58]THE DEPUTY JUDGE: Mr Evans?[59]MR EVANS: My Lord, I am going to ask your Lordship for permission to appeal.[60]THE DEPUTY JUDGE: Subject to that.[61]MR EVANS: Subject to that the protection afforded by the two of them should in my submission continue because that was then and the circumstances which arose on 23rd August: there was effectively an invasion of the house by Mr Mosley, on the particular by (inaudible) by a trick we say. Mr Mosley managed to gain occupation of the house.[62]THE DEPUTY JUDGE: I am not saying that should be regarded as destroyed abinitio, just that it should not continue any further. Why should he be required now not to interfere with it by occupation. Because this was pending the determination of this action, this claim? Are you suggesting it should be rescinded abinitio?[63]MR EVANS: No my Lord. I understand that. It afforded a protection against Mr Mosley taking possession of the house otherwise than due process of law rather than by invasion which is what actually happened on 23rd August and that is why it is there.[64]He is perfectly entitled to take (inaudible) possession of proceedings (inaudible) made out.[65]THE DEPUTY JUDGE: It should be rephrased, should be simply to require him not to interfere other than through possession proceedings.[66]MR EVANS: My Lord I am happy with that, yes.[67]MR HUBBARD: My submission is that these undertakings should continue. It would be better for Mr Mosley.[68]THE DEPUTY JUDGE: You clearly have no intention of barging in without having taken possession proceedings before.[69]MR HUBBARD: We have taken possession proceedings and now subject to my learned friend goes on to say about permission to appeal. Now we can seek them we will. If there is a legal way of stopping that is matter for my learned friend.[70]THE DEPUTY JUDGE: As I understand him, what he is saying is you should at least continue to undertake not to take possession other than pursuant to proceedings.[71]MR EVANS: My Lord, we have no intention of doing so. It would in my submission be better these undertakings be given as it were to hold the position while the redaction was afoot. Should none of them continue now that this action is no longer afoot and particularly when your Lordship has told him, and my learned friend agrees, that my client is proceeding via possession proceedings. There is no reason for the court to believe, now, that my client would take any step contrary to the law.[72]THE DEPUTY JUDGE: Would your client undertake now that he would not seek to take possession or occupation other than pursuant to possession proceedings?[73]MR EVANS: I would not be able to take instructions to give a fresh undertaking but if your Lordship in those circumstances be able to regard --[74]THE DEPUTY JUDGE: I would regard it as a bit surprising if he was not.[75]MR EVANS: Indeed. I have no reason to believe that he would not be. So, as I say, I cannot tell you if the court have those instructions to give a further undertaking. In the circumstances your Lordship was with my learned friend and did not discharge or a modified version of (ii), that would have the same effect. But my Lord, my submission is that it is not necessary.[76]THE DEPUTY JUDGE: I understand your point but I think (ii) should continue in a modified form.[77]MR EVANS: So be it my Lord.[78]THE DEPUTY JUDGE: That can be done by crossing out part of it; it is quite easily done.[79]MR HUBBARD: My Lord, I am obliged. That can be done.[80]I think the next item on the agenda is costs. My Lord, I would ask for my costs here and below. There is a composite costs schedule.[81]THE DEPUTY JUDGE: Which I have got. I confess I have not looked at it. I have them in a prescribed form.[82]MR HUBBARD: The composite one is --[83]THE DEPUTY JUDGE: Have you seen this Mr Evans?[84]MR EVANS: No I have not my Lord but I do not know whether that is a fault on our side.[85]MR HUBBARD: I do not think so. What those on the other side have concerns with are the costs schedule as it was before the Master and the costs schedule for this appeal.[86]THE DEPUTY JUDGE: The one I have got is the appeal only I think.[87]MR HUBBARD: In the bundle there is the earlier costs schedule so that the Master which in fact is not entirely clear from its face, does include all the costs in the action.[88]THE DEPUTY JUDGE: You probably do have both of them separately Mr Evans, I expect have you not, if you have not had this composite document?[89]MR EVANS: My Lord, yes, I think... (Pause). My Lord, I have not seen the composite statement before, there are other --[90]THE DEPUTY JUDGE: Let us do it the other way. Let us do it the other way, do it from documents you are familiar with.[91]MR HUBBARD: My Lord, I am obliged.[92]THE DEPUTY JUDGE: Let us look at the Master's....[93]MR HUBBARD: The first cost schedule is that before the Master which is some £27,000-odd and that is in the costs bundle, that is section 5, page 92. So sorry the first point, I apologise.[94]THE DEPUTY JUDGE: This is what you were seeking you would have asked for had you won?[95]MR HUBBARD: Had we won.[96]THE DEPUTY JUDGE: Right. That is £12,455, is it?[97]MR HUBBARD: My Lord, no, unfortunately not. That is the subtotal. It goes on £27,074.10.[98]THE DEPUTY JUDGE: Presumably the other side won and they got their costs.[99]MR HUBBARD: Yes.[100]THE DEPUTY JUDGE: How much did they get?[101]MR EVANS: You have the order.[102]MR HUBBARD: My Lord, their costs were the costs of the application not the cost of the action; we have done all our costs of the action.[103]THE DEPUTY JUDGE: Let us see what they got as a matter of interest. (Pause) While that is being looked for, you carry on. This was costs of the whole action, so that is everything except the appeal costs?[104]MR HUBBARD: Everything down to that, beyond that day since the appeal costs.[105]THE DEPUTY JUDGE: Let us --[106]MR HUBBARD: The solicitors involved are the partner, Mr Horton, very, very little involved. Most of the solicitors type of costs: Mr Steggles, £240 per hour and the assistance, at the rates indicated. All the solicitor's time comes to £12,455 which in the context of such certification, in my submission, is my Lord entirely reasonable.[107]Further items are counsel's fees (inaudible) from mine.[108]THE DEPUTY JUDGE: £5,000 advising the hearing. Is there any problem about that Mr Evans. Do you have any submission about these costs?[109]MR EVANS: First of all: what is the exercise we are doing? What I would suggest is that there should be a detailed assessment. That will be the ordinary order.[110]THE DEPUTY JUDGE: Right.[111]MR EVANS: That is the first point.[112]THE DEPUTY JUDGE: Let us hear Mr Hubbard on that. Why should there not be a detailed assessment?[113]MR HUBBARD: My Lord, it is two quite simple straightforward cost schedules, it is not a huge amount of money. It would not be proportionate for this all to go off for detailed assessment.[114]THE DEPUTY JUDGE: I do not have to send it to detailed assessment, do I? No. I am not going to send it for detailed assessment. It is very, very straightforward.[115]MR HUBBARD: There are a number of problems. First, we do not know what these costs actually relate to. We do know that the other issues have arisen. In particular, there is a possession proceedings and there has been a debate with the Land Registry , over a considerable amount of time, about the placing of the notice on the register. We do not know how much that relates to those other items. Secondly, ... I have now lost the costs schedule form. The fees charged for or asked for in relation to the hearing in front of the Master. I do not think I can say anything in particular about those charged by the solicitors but if I may say so, the fee charged for counsel's appearance at that hearing, which was a half-day hearing in front of the Master, is excessive.[116]I then turn to the schedule for today (Pause). For some reason I do not have or cannot place my hands on the statement of costs for this appeal. This is a document that I have not had an opportunity to look at before and again I do not know whether that is a fault on my side or not.[117]THE DEPUTY JUDGE: £15,908; is that right?[118]MR EVANS: £15,908 is the bottom line.[119]MR HUBBARD: The general point in that of course in the appeal my side did the running. We got to do the bundle, the skeleton, everything done for the appeal and my learned friend decided to produce a skeleton argument and to turn up.[120]MR EVANS: My Lord, I accept that Mr Steggles has done most of the work for organising the appeal but that is a matter of photocopying, it is not a substantial matter. In the ordinary way, none of the documents which are in the appeal bundles are documents in front of the Master. The only additional documents are the two witness statements which you saw yesterday. That on Mr Mosleys side was very short and could not have taken any great time or skill to have produced. We see attendance on others, "attendance on party three-and-a-half hours".[121]MR HUBBARD: My Lord, it may be relevant to your Lordship's note, that my learned friend's costs for this appeal were put in at £12,180 by way of comparison.[122]MR EVANS: My Lord, I think the two items on those which attract most concern are 6 hours and (inaudible), that is 6.1 hours attendance on others, which is no explanation. In effect it is 7.8 hours attendance on others which has no explanation. I do not know what "others" Mr Steggles has in mind. The fee for documents as counsel's fees ... I suppose that is the appellant's notice, is it? So it is really that and then work done on documents we see seven-and-a-half hours work done on documents. There was no work on documents except for photocopying. A small measure of organisation. I do not know what "other work", just under 3 hours is supposed to relate to. I do not know what that is. Then one goes to the composite statement.[123]MR HUBBARD: I have not got that. (Pause).[124]MR EVANS: My Lord the primary difficulty we are having here, we are covering not merely these two hearings but all their costs in relation to the actions.[125]MR HUBBARD: We do not (inaudible) the other point.[126]MR EVANS: We do not know, we cannot know without looking at the documents and having an explanation, a relatively detailed explanation of how they justify these figures, to what extent they are reasonable. The right answer, in my submission, is that there should be a detailed assessment.[127]THE DEPUTY JUDGE: You should make an interim payment.[128]MR EVANS: We should make an interim payment.[129]THE DEPUTY JUDGE: Can I ask you to deal with first of all the appeal costs which I think is fairly straightforward. Some comments are made about that. What is the 6 hours?[130]MR HUBBARD: My Lord, a combination of attendance on the court, and counsel having some contact with those involved in the instant proceedings which have been rumbling along, which are relied upon on by the other side as being relevant. So a combination of that.[131]My Lord, that is where that time comes from. Obviously the purpose of summary assessment is there is not too much detailed breakdown and the court has to take a view as to what is reasonable. Broadly my side's costs of this appeal are put at £15,000; my learned friend's cost of this appeal are £12,000.[132]THE DEPUTY JUDGE: I propose to reduce the pre-VAT figure of £13,257, I propose to reduce that to £12,000. I think that is the figure I should ... and the VAT is whatever it is. That is the appeal.[133]Now going back to the other. You had to deal with why there should not be a detailed assessment -- if there is a detailed assessment of course, I will obviously order an interim payment which will be substantial.[134]MR HUBBARD: My Lord, practically everything done on our side in relation to this claim is the application to strike out, that is the way we have dealt with it. From the first it has been a question of: can this claim be ruled against us?[135]THE DEPUTY JUDGE: Dealings with the registry.[136]MR EVANS: These are completely different things and you have the certificate of the solicitor that these do relate to the action and not to those. I am instructed there are different costs schedules in relation to both of those matters. There is no reason to think that a figure for the solicitor's time of £12,000, £15,000 or £12,500 odd because of the all work done in the claim from the service of proceedings down to the hearing in front of the Master, suggests that costs are lurking in there that should not be.[137]All my learned friend can say: there have been other matters between the parties.[138]THE DEPUTY JUDGE: All I would say to you is that I understand all that but if we are going to do it on a summary basis, I would obviously have to take a bigger discount than I have on the appeal costs, just in case there are some things there which a detailed assessment would uncover.[139]MR EVANS: My Lord, we would still prefer your Lordship do that.[140]THE DEPUTY JUDGE: I reduce the £22,575 to £15,000. That is the pre-VAT figure.[141]MR HUBBARD: Thank you my Lord.[142]THE DEPUTY JUDGE: There is just permission to appeal.[143]MR EVANS: My Lord, I do ask for permission to appeal. The issue is purely one of law. Obviously, our case is that the point of law is arguable and it is also of considerable importance to the client. I am sure your Lordship has decided that the point of law is not arguable, so that I simply ask for permission pursue it further in the Court of Appeal.[144]THE DEPUTY JUDGE: Permission is refused. It is a very clear point in my view.[145]MR HUBBARD: My Lord, yes, we will produce a minute.[146]MR EVANS: My Lord, I do have one further point. I will seek permission to appeal from the Court of Appeal. I think I have 21 days in which to do that. What I would ask your Lordship to do is to continue the undertakings that were given by Mr Mosley not to pursue, not to interfere such a otherwise combined order for possession in the usual way or until the -- continue those undertakings during the continuance of our opportunity to --[147]THE DEPUTY JUDGE: No, I am not going to do that. What I have extracted from him is that he has got to continue to undertake the cause of the problem, only to proceed by possession proceedings. I do not think he should be in any way be held up to continue with those proceeding because you will be in the Court of Appeal. I think that is one of the reasons I do want at least it to be clear that you can only go by possession proceedings, nothing else.[148]MR EVANS: Yes my Lord.[149]THE DEPUTY JUDGE: If you can go with those, go with those and let us see what the Court of Appeal do.[150]Thank you.