Corney v Scotia Gas Networks Ltd & Ors [2010] EWHC 90167 (Costs)

Case No PH 0905173

[2010] EWHC 90167 (Costs)

IN THE HIGH COURT OF JUSTICE

SENIOR COURTS COSTS OFFICE

Venue Clifford’s Inn, Fetter Lane

Date 10th May 2010

London, EC4A 1DQ

Before

MASTER HAWORTH, COSTS JUDGE

Between

NORMA CORNEYClaimant

(Widow and Administratrix of the Estate ofClaimant

Charles Albert Corney Deceased)Claimant

(1) SCOTIA GAS NETWORKS LTDDefendants

(2) SOUTHERN GAS NETWORKS PLCDefendant

(2) WARNER HOLIDAYS LTDDefendant

Mr Simon P. Browne Counsel (instructed by Payne Marsh Stillwell) for Claimant

Mr Simon J. Brown Counsel (instructed by Berrymans Lace Mawer) for Defendants

Hearing Hearing date: 10 March 2010

Approved Judgment

.............................

Master Haworth:

[1]I have been invited by the parties to determine a preliminary issue relating to “entitlement and liability” identified in the Points of Dispute as follows: i) Whether the costs of the Claimant in proceeding against the Third Defendant are recoverable from the First and Second Defendant. ii) Whether the reasonably incurred common costs should be limited to a recovery of two thirds against the First and Second Defendant.

[2]A third preliminary issue, relating to disclosure of the Claimant’s CFA and documents evidencing other funding arrangements relied upon was resolved during the course of the hearing, and therefore forms no part of this judgment.

[3]The Claimant is the widow and administratrix of the estate of her late husband Charles Corney, who brought a claim under the Fatal Accidents Act 1976, following the death of her husband on 28 March 2006 from plural mesothelioma.

[4]The First and Second Defendants are successors in title to the Southern Gas Board. It is alleged that between 1955 and 1959 Mr Corney served an apprenticeship with the Southern Gas Board as a gas fitter involved in the fitting and removal of gas fires, cookers, boilers and other domestic appliances. The backs and flues of the gas appliances were largely made of sheet asbestos, and it was Mr Corney’s task to cut the asbestos to size using a handsaw. He was provided with a uniform but no mask or other equipment to protect him from the asbestos dust that was given off by the cutting and shaping of the asbestos materials.

[5]Bit is alleged that between 1960 and 1984 Mr Corney was employed by the Third Defendant as a plumber and general maintenance man at the company’s holiday camp at Puckpool Sands near Ryde on the Isle of Wight. During his employment Mr Corney was exposed to asbestos dust on a regular basis when taking part in the maintenance and repair of buildings and plant at the Puckpool Holiday Camp. The Third Defendant failed to provide Mr Corney with any protective clothing or respiratory device to prevent him from inhaling the dust.

[6]On 19 March 2009 proceedings were issued and served on 20 March 2009. The First and Second Defendants made a Part 36 offer of £120,000. The Claimant responded with a Part 36 counter-offer of £155,000, with the Claimant finally accepted damages of £141,979. A Tomlin Order was agreed between the parties and sealed by the Court on 7 July 2009. It is the extent of the costs provisions within that Order which fall to be determined by me as a preliminary issue in these detailed assessment proceedings.

FACTS

[7]The Tomlin Order dated 7 July 2009 recites the following:

“Upon the Claimant and Defendants having agreed to the terms set out in the schedule annexed and by consent. IT IS HEREBY ORDERED that: 1. All further proceedings in this action be stayed except for the purpose of carrying such terms into effect and for that purpose there be liberty to apply. 2. The First and Second Defendants do pay the Claimant’s reasonable costs to be assessed on a standard basis failing agreement. 3. The Claimant do pay the Third Defendant’s costs in the sum of £2,500 within 28 days.”

The Order is signed by solicitors acting on behalf of all the parties, and was approved by Master Eastman on 9 July 2009.

IT IS HEREBY ORDERED that:

[8]A request for detailed assessment was made on 22 October 2009. The bill of costs states:

“The Third Defendants Solicitors invited the Claimant to discontinue the claim against the Third Defendant and suggested that the claim should be redirected to Rank. There followed lengthy correspondence and disclosure of complex documentation relating to the transfer of ownership of Puckpool Holiday Camp. Eventually on 15 June 2009 the Claimant and Third Defendant agreed that the claim against the Third Defendant be discontinued on the basis that the Claimant pay the Third Defendant’s costs which were later agreed in the sum of £2,829.”

[9]The Points of Dispute state the following:

“Preliminary Issue Entitlement and Liability The Claimant proceeded against three Defendants. Late in the proceedings the Claimant discontinued against the Third Defendant and agreed to pay the Third Defendant’s costs. Terms of settlement reached between the Claimant and Third Defendant were included in the final order, and it is explicit that the Claimant pays the costs of proceedings against the Third Defendant and does not recover such costs. It was accepted by the Claimant that the proceedings had been brought against the wrong Defendant and the basis upon which terms were agreed between the Claimant and First and Second Defendant and the intention of the final Order was that the Claimant would pay the proportion of costs of proceeding against the Third Defendant and recover the proportion of costs of proceeding against the First and Second Defendants. It is the First and Second Defendant’s position that specific costs attributable to the Claimant proceeding against the party other than the First and Second Defendants are irrecoverable and that common costs where it is deemed that they have been reasonable incurred and are reasonable in amount is limited to a recovery of two thirds. The First and Second Defendants rely on the following case Abdul Kadir Nassif v Augusta Offshore Spa & Ors [2009] EWHC 90143 (Costs).”

[10]The Reply comments as follows:

“The Defendants argument is rejected. The Order for costs includes the Claimant’s costs incurred pursuing claims against the First, Second and Third Defendants. There can be no other interpretation of the Order. The First and Second Defendants could have sought to exclude the costs of the Claimant against the Third Defendant but did not do so. This case is distinguished from Abdul Kadir Nassif v Augusta Offshore Spa & Ors. In Nassif the decision of Deputy Master Williams was heavily influenced by the fact that the claims against the Second Defendant and Third Defendant had been discontinued a significant time before the final consent order. In contrast in this case there never was an order for discontinuance against the Third Defendant and no notice of discontinuance was ever served on the Third Defendant. At the time the final consent order was made the Third Defendant was and still is a party to the proceedings. There is no authority which says because a claim discontinues against one of several defendants he cannot recover the costs of pursuing the outgoing defendant from the remaining defendants. Neither is there an authority which says when a claimant discontinues his claim against one of three defendants, the claimant’s costs should be limited to two thirds. If that is what the Defendants intended they should have agreed that at the time they negotiated the final consent order. It is not uncommon in these types of claim for a great deal of investigation to be done before the Claimant is able to identify the correct Defendant(s). There is no authority which says that such work is not recoverable. The issue is one of reasonableness. It is the Claimant’s case that it was entirely reasonable to pursue and join the Third Defendants into these proceedings who, after all, admitted liability, albeit mistakenly so, before proceedings were issued.”

[11]The witness statement of Jennifer Elaine Johnson dated 5 January 2010 the solicitor who dealt with this matter on behalf of the First and Second Defendant, states at paragraph 4:

“When the matter was settled in June 2009 the Claimant’s damages were settled in full by the First/Second Defendant. The Third Defendant was not willing to settle the claim as it contended that it no longer held that the liabilities arising from the deceased’s employment. My understanding is that whilst the Third Defendant was the legal entity that had probably employed Mr Corney, the part of the business he had worked in had been sold out of the company. A complicated series of transfers of employment had taken place against a complex corporate background and it is not really clear where those liabilities ended up. No employers liability insurance could be traced for the period of employment that the Third Defendant was pursued for which necessitated tracing the transfer of liabilities. My impression from the Claimants Solicitors was that they spent quite some time trying to trace who the correct successor in title were for the Third Defendants period of employment and as the end of the limitation period approached they simply decided to issue against the Third Defendant in the hope that this would prompt the correct party to come forward and indemnity the claim against the Third Defendant. As it happens this did not occur.”

[12]At paragraph 7 of her witness statement she states:

“I made it clear to the Claimants Solicitors that my clients would not be contributing to any costs incurred by the Third Defendant if the Claimant was to discontinue against them. It was the Claimant’s decision to include the Third Defendant in the proceedings, a company that in my view they realised was not responsible for the claim. If a claimant discontinues against a defendant then costs should follow the event, ie, the claimant pay the defendant’s costs. Following on from that, and implicitly it was not my understanding that the Claimant would then pursue the First/Second Defendants for the costs they incurred in trying to pursue the Third Defendants and I do not believe they should have to pay these.”

[13]Also at paragraph 8 of her witness statement she said:

“This is a mesothelioma and under the 2006 Compensation Act the Claimant has the option of pursing just one tortfeasor and obtaining 100% damages from that tortfeasor who must then seek contributions from any other negligent employers. It is not clear to me therefore why the Third Defendant needed to be included in the proceedings especially when they were clearly not the right party.”

[14]An attendance note was exhibited to the witness statement dated 24 June 2009, which read as follows:

“She [the Claimant’s solicitor] has agreed to discontinue against the other Defendant and pay £2,500 towards their costs. She will draft a consent order and send it to us today for approval and then I will send it on to the other Defendants and we can file this at court and ask for the CMC on 2 July to be vacated. She will also send me an authority for the damages cheque to be payable to the Claimants Solicitors firm.”

[15]I was referred to other correspondence between the parties. In an email from the Claimant’s Solicitor to the First and Second Defendants’ Solicitor dated 11 June 2009 she said:

“Hill Dickinson are taking their client’s instructions upon us discontinuing with no order for costs against our client. They are taking the view however that their clients may not agree to that. If they will not then our client will be seeking an order that their costs be paid by your client on the basis that we asked you specifically before issue of proceedings whether or not you wished us to add Warner Holidays Ltd in the proceedings and you confirmed that you did.”

[16]In reply the First and Second Defendants’ Solicitors email the Claimant’s Solicitors on 12 June 2009 stated:

“I have no recollection of requesting specifically that Warner Holidays be added to the proceedings. Looking at my attendance note we spoke on 17 March 2009 shortly before you issued and this was the first time you informed me that you intended to add Warner Holidays to the proceedings. I believe your words were along the lines of you might as well add them in the proceedings as this would get things moving. It was your client’s decision to include a company that was clearly not responsible for the claim and as a result your client must meet their costs. If a contribution is found later on from Rank/Renound etc then you may be able to recover then. I will advise my client to strongly resist any claim for Warner Holidays costs by your client or Hill Dickinson. This is a claim to be dealt with under the Compensation Act. Whilst my client has not been prepared to settle this claim unilaterally until now your client has always had the option to go against my clients alone – you could have done this nearly three years ago.”

[17]On 2 June 2009 the Claimant’s Solicitors wrote to the Solicitors acting for the Third Defendant and stated:

“Berrymans Solicitors on behalf of the First and Second Defendants have written to Rank advising them they intend to issue contribution proceedings. In the circumstances it is appropriate to discontinue against your clients but we would ask whether or not agreement could be reached that there be no order for costs made against the Claimant.”

THE LAW

[18]The relevant CPR provisions regarding discontinuance are:

“Procedure for discontinuing 38.3(1) to discontinue a claim or part of a claim a claimant must – (a) file a notice of discontinuance; and (b) serve a copy of it on every other party to the proceedings. (2) The claimant must state in the notice of discontinuance which he files that he has served notice of discontinuance on every other party to the proceedings. Liability for costs 38.6(1) Unless the court orders otherwise a claimant who discontinues is liable for the costs which a defendant against whom the claimant discontinues incurred on or before the date on which notice of discontinuance was served on the defendant.”

Liability for costs

SUBMISSIONS: ENTITLEMENT

[19]For the Claimant, it was submitted that at the First and Second Defendants had encouraged the Claimant to join in the Third Defendant in the first place. The First and Second Defendants were then able to commence Part 20 proceedings against the Third Defendant. In relation to the Tomlin Order, Mr Browne for the Claimant submitted that the draft order had been in circulation for a couple of weeks. Looking at the Tomlin Order itself, it is clear that all three Defendants are named as Defendants in the Order. Furthermore, paragraph 1 refers to “this action”, and in paragraph 2, the Order recites that the First and Second Defendant pay the Claimant’s cost of the action. There is no mention, of discontinuance by for example the use of the phrase “upon the Claimant discontinuing against the Third Defendant”.

[20]In relation to the witness statement of Jennifer Johnson, it was submitted that it was based upon a supposition that the Claimant had discontinued against the Third Defendant. For example, at paragraph 5 of the witness statement, Ms Johnson refers to “it is my understanding” that the Claimant discontinued her claim against the Third Defendant, whereas the Order with regard to both the First, Second and Third Defendants is for a stay in the proceedings against all the Defendants. In addition her witness statement fails to distinguish between the costs paid by the Third Defendant and the costs to be paid by the First and Second Defendants. In paragraph 7 of her witness statement, she suggests that it is “her understanding” that it is “implicit” that the latter does not occur. Mr Browne for the Claimant submitted that the First and Second Defendants had brought this preliminary objection in error on the mistaken ground that the Claimant formally discontinued against the Third Defendant. In doing so, no regard has been paid by the paying party to the Tomlin Order, to which they subscribed on 7 July 2009.

[21]Mr Browne sought to distinguish at the case of Nassif –v- Augusta Offshore Spa & Others [2009] EWHC90143(Costs) on the following bases: a) No notice of discontinuance, pursuant to CPR part 38.3 was served by the Claimant upon the Third Defendant. Accordingly, the provisions of CPR 38.6 have never been engaged. b) Even if there was a discontinuance, it took place as part of the settlement, whilst the First, Second and Third Defendants were still parties to the action. c) In the present case, the heading of the Tomlin Order includes not only the First and Second Defendants, but also the Third Defendant. Accordingly, the Third Defendant was a party at the time of making the Order. The claim to which the costs order related was the claim for damages for personal injuries, which was made against all three Defendants. d) Apportionment of liability between the Defendants remained a live issue between the parties, albeit the claim was settled with the Claimant. e) For convenience reasons, the First and Second Defendants encouraged the Claimant to join the Third Defendant. f) On 11 June 2009, the First and Second Defendants were placed on notice that there would be costs repercussions for them, as they had specifically confirmed they wished that the Claimant to join the Third Defendant.

[22]Mr Browne sought to argue that once the case of Nassif is distinguished, the correct principles must be applied to this case. Those principles go to whether the relevant costs incurred by the Claimant were “costs of the action”. If so, they are recoverable. In relation to the question of whether or not pre-issue investigative costs and costs incurred in the proceedings are costs of the proceeding, I was referred to the relevant case law, namely: Sociéte Anonyme Pecheries Ostendaise –v- Merchant Marine Insurance Company

[1928] 1KB750

. Frankenburg –v- Famous Laskey Film ServiceLtd

[1931] CH428

ReGibson Settlement Trust

[1981] CH179

Admiral Management Services -v- A Paragraph-Protect Europe [2003] 2OER Rental Ltd & Others –v- D S Wilcock Ltd & Others (SCCO decision no 8 of 1997). National Westminster Bank –v- Kotonou [2010] EWHC3309 Frankenburg –v- Famous Laskey Film ServiceLtd

[1931] CH428

ReGibson Settlement Trust

[1981] CH179

Admiral Management Services -v- A Paragraph-Protect Europe [2003] 2OER

National Westminster Bank –v- Kotonou [2010] EWHC3309

[23]In relation to the Claimant’s investigative costs against the Third Defendant and the common costs incurred, it was argued that these were costs of the action, fulfilling all the criteria referred to in the cases referred to in paragraph 22. Accordingly, the costs incurred by the Claimant were costs of the action and as such it was only right that the First and Second Defendant pay the Claimant’s costs of the action, which include the costs of pursuing the Third Defendant, until the final order together with the full amount of the common costs of the action.

[24]The First and Second Defendants case, was that the claim against the Third Defendant had been discontinued. The parties proceeded to enter into the Tomlin Order on the basis of a discontinuance. Whilst it was common ground that no Notice of Discontinuance was in fact served by the Claimant, the fact that the Claimant led the Defendants to believe that the discontinuance of the action against the Third Defendant had taken place, could not improve their position. It was submitted that formality requirements cannot be decisive and the real basis upon which I must decide this issue was the agreement between the parties.

[25]In particular the First and Second Defendants point to the fact that the Claimant was to pay the Third Defendant’s costs of the claim. The necessary implication of such an order in the absence of any express agreement to the contrary, was that the costs of pursuing the Third Defendant are not recoverable against the other parties. In so doing, the First and Second Defendants sought to rely on Medway Oil Dyson –v- Strutt [2007] EWHC175. Mr Brown for the Defendants contended that the principles identified by the Court in the case of Abdul KadirNassif –v- Augusta [2009] EWHC also applied in this case.

[26]The First and Second Defendants relied on the attendance note exhibited to Ms Johnson’s witness statement, which indicated that discontinuance had occurred prior to the First and Second Defendants’ agreement with the Claimant, and not as part of the settlement of the claim. The timing of the discontinuance, if relevant, was not indicative of any material distinction with the case of Nassif. Accordingly, the provisions of CPR38.6 did apply, or were taken to apply, when the settlement agreement was entered into. Further, the fact of the stay, and the timing of the discontinuance, did not displace the implication that arises from a discontinuance.

[27]It was submitted for the First and Second Defendants that the drafting of the Tomlin Order was not an adequate basis for inferences to be made as to liability for costs, and that there was nothing in the terms of the Tomlin Order, properly read, which would disturb the natural implication of the discontinuance. Furthermore, the issue as to whether there may have been an apportionment between the Defendants with regard to the personal injury claim is wholly irrelevant, given the terms of the Compensation Act 2006, and as such, cannot be a material ground for any distinction.

[28]In relation to the Claimant’s contention that the costs incurred by the Claimant in pursuing the Third Defendant can be likened to pre-issue costs, the reality of the position was that mistakenly joining the Third Defendants was of no use to the Claimant’s claim, given the terms of Section 3 of the Compensation Act 2006. In any event, whether they were reasonably incurred is not relevant to the issue, as to whether the terms of the costs order precluded their recovery.

DECISION ON ENTITLEMENT

[29]On the facts, I find that the First and Second Defendants did not encourage the Claimant to join the Third Defendant in the proceedings. This is made clear from the email response of the First and Second Defendants solicitor to the Claimant’s solicitors on 12 June 2009 when she said: “It was your client’s decision to include a company that was clearly not responsible for the claim, and as a result your client must meet their costs. If a contribution is found later on from Rank/Renound, etc, then you may be able to recover then. I will advise my client to strongly resist any claim for Warner Holidays cost by your client, or Hill Dickinson.

[30]This statement is backed up by her attendance note, annexed to her witness statement, which is dated 24 June 2009 and states: “She [the Claimant’s solicitor] has agreed to discontinue against the other Defendant and pay £2,500 towards their costs. In my judgment, the correspondence confirms that prior to settlement with the Claimant, the First and Second Defendant would not accept the costs of the joining of the Third Defendant in this action. From the attendance note to which I have just referred, that the Claimant entered into the compromise agreement on the basis of a discontinuance. The fact that no Notice of Discontinuance was served, is in my judgment not conclusive in determining the real agreement between the parties in relation to the wording of the Tomlin Order””.

[31]In my judgment, bearing in mind that the Claimant has agreed to pay the Third Defendant’s cost in the sum of £2,500, it cannot be right that the Claimant recovers her costs of investigating the claim against the Third Defendant and/or at common costs, down to the date that the Order was entered into. The necessary implication of the Order, in the absence of express agreement to the contrary, was that the costs of pursuing the Third Defendant were not recoverable against the First and Second Defendant.

[32]In the case of Abdul Kadir Nassif –v- Augusta Offshore Spa & Ors [2009] EWHC90143 (Costs), Deputy Master Williams stated, as follows: “30 – In my judgment the Claimant is not entitled to recover his own costs of his claims against D2 and D3, since the starting point is the rules at which applied at the times of the two discontinuances. On each discontinuance, CPR38.6(1) applied thus: “38.6(1) Unless the Court orders otherwise, a Claimant who discontinues is liable for the costs which a Defendant against whom the Claimant discontinues incurred on or before the date on which Notice of Discontinuance is served on the Defendant.” 31 – That goes no further than to establish that C was liable for D2 and D3’s costs, but matters do not stop there because the manner on which that liability is given effect, is specifically by a deemed costs order. CPR44.12 states: “44.12(1) Where a right to costs arises under: (D) Rule 38.6 (Defendant’s right to costs where a Claimant discontinues) a costs order would be deemed to have been made on the standard basis”. 32 – Under CPR in my judgment, an order for (say) “Second Defendant’s costs” (as was in effect the deemed costs order upon discontinuance against D2) implies no order for the Claimant’s costs for the part of the proceedings to which the order relates (the claim against D2 in this example). 33 – It seems to me that the decision by those drafting the CPR to make express provision that a deemed costs order arises upon discontinuance for payment of the relevant Defendant’s costs, brings with it the implication that the usual interpretation of costs orders is also applied. The Court can order otherwise as provided by CPR38.6(1) that the Court did not so order in this case and was not asked to do so at the time C discontinued. It follows that the deemed costs order is …. as to C’s cost of his claim against D2 and D3 and the implication I draw from that is that C’s claims against D2 and D3 ended with no order for C’s costs of those claims.” “38.6(1) Unless the Court orders otherwise, a Claimant who discontinues is liable for the costs which a Defendant against whom the Claimant discontinues incurred on or before the date on which Notice of Discontinuance is served on the Defendant.” “44.12(1) Where a right to costs arises under: (D) Rule 38.6 (Defendant’s right to costs where a Claimant discontinues) a costs order would be deemed to have been made on the standard basis”.

[33]In my judgment the principles identified in Nassif apply in this case. In that regard I prefer the submissions of the First and Second Defendant to those of the Claimant, who sought to distinguish the Nassif case on grounds which are more apparent than real.

[34]Following Deputy Master Williams, in the Nassif case at paragraph 36, I am not persuaded that the mere fact that the heading of the Tomlin Order includes not only the First and Second Defendant, both also the Third Defendant and is signed by the Third Defendant’s solicitors, is not persuasive evidence that the Nassif case should be distinguished. Neither am I persuaded that the timing of the discontinuance, which in the Nassif case was considerably earlier in the proceedings, is indicative of any material distinction. As such, in my judgment, the provisions of CPR38.6 did apply, or were taken to apply, and the timing of the discontinuance did not displace the implication that arises from a discontinuance.

[35]Reference was made in the course of argument to paragraph 41 of Nassif in which the Deputy Master stated: “41 – Albeit that I do not base my decision on the following point, the extract from Blackstone’s Civil Practice, to which I was taken and the arguments as to Bullock and Sanderson Orders suggest that an order for costs follow the event – absent a Bullock and Sanderson Order in that situation would imply that a Claimant could not normally recover his costs of unsuccessful claims against other Defendants from an unsuccessful Defendant, and my decision here has the advantage of being broadly consistent with that approach”.

[36]That is an approach with which I agree. In those circumstances and, for those reasons, I find that the Claimant is not entitled as a matter of principle to recover her costs of pursuing the Third Defendant from the First and Second Defendant. I now turn to the question of whether and to what extent common costs are to be apportioned or divided.

SUBMISSIONS ON APPORTIONMENT

[37]For the Claimant, I was referred by Mr Browne to the case of Nassif and he submitted that the correct approach was to divide the common costs with some element of apportionment. Furthermore, he argued that the matter should not be determined by a reference to the indemnity principle, on the basis that this was a claim for damages pursued under a CFA first taken out by the client himself, and then by his estate on his death. Accordingly, he argued that the indemnity principle should not apply in this case.

[38]For the Defendant, Mr Brown submitted that common items, such as medical reports, issue fees and the like, would have been incurred anyway, and are not attributable to the existence of a particular defendant or issue. The matter should be determined by reference to the indemnity principle. As between the Claimant and her solicitors the costs should be apportioned.

DECISION ON APPORTIONMENT

[39]In Nassif, Deputy Master Williams at paragraph 2, said:

“The parties have, I understand, agreed that if I am against the Claimant on this issue, then the Claimant will not be entitled to recover his costs to the extent to which they exclusively relate to the claims against the Second and Third Defendants, that unitary individual items (the example of a medical report was given) will in principle be allowed in full, subject to the usual criteria, reasonableness and proportionality, and single but divisible items would be allowable, save to the extent to which they relate only to the claims against the Second and Third Defendants. On the other hand, if I am against the First Defendant on this issue, the agreed approach is that costs would be allowed, in principle irrespective of whether (or to the extent to which) they relate to the Second or Third Defendants, but subject to scope for argument in any given incidence as to whether it was reasonable or proportionate to incur any given item against any given Defendant.”

[40]In M & M Savant Ltd –v- Rajah

[2009] EWHC 90149 (Costs)

, Master Campbell said at paragraph 28: “Under Medway Oil (see speech of Viscount Haldane, page 95 and page 100) where the claim and the counter-claim are dismissed with costs, the amount that the Claimant will recover in defeating the counter-claim are the costs that arose solely defending the counter-claim (for example, Counsel’s fees for settling the defence to counter-claim) together with costs that were common to both claim and counter-claim. In working out what to allow for the common costs, the Cost Judge does not apportion them throughout the bill, that is to say by attributing a fixed percentage to all items, such as 50% to the claim and 50% to the counter-claim, since on the contrary, there can be no apportionment in the absence of a special direction of the Court to vary the principle in Medway Oil and the common costs must be divided, that is to say, split up by the Cost Judge, so that the Claimant receives only those costs that he has had to bear because of the existence of the counter-claim. Accordingly: “he [the Cost Judge] takes an item, a single fee on the Plaintiff’s brief, for example, and splits it into two notional fees, the one attributable to the claim, and the other to the counter-claim. This is not apportioning in which the payment is treated as a single item, and the question is to what it is attributable. It is in reality a notional division of what on the face of it, is one item””. “he [the Cost Judge] takes an item, a single fee on the Plaintiff’s brief, for example, and splits it into two notional fees, the one attributable to the claim, and the other to the counter-claim. This is not apportioning in which the payment is treated as a single item, and the question is to what it is attributable. It is in reality a notional division of what on the face of it, is one item””.

[41]At paragraph 35, he stated: “It follows that where common costs are claimed on the detailed assessment of an issue based bill, it is the task of the Cost Judge to divide those costs that are specific, where it is possible to identify the different purposes involved and then to share the costs between those purposes, for example, the fee on a brief. But division is not required for non-specific common costs which a receiving party would have had to pay anyway, such as the Court fee paid on issuing the proceedings, it being of no consequence that the case may concern two claims (as here) or to involve more than one Defendant (the case in Lavery). What the Cost Judge cannot do where there are items which on their face, are single, but in reality are double (in that they relate in part to the claim and in part to the counter-claim, or in part to one issue, and in part to another issue) to apportion the costs on a percentage split throughout the bill such as 50/50; “in such cases he [Viscount Haldane in Medway Oil] says that there must be a division”.

[42]Cost Judge Rogers in Pacey -v- Ministry of Defence [2009] EWHC9013 (Costs) took a slightly different approach, and said at paragraph 40: “On behalf of the Defendant, Mr Simon Brown, in his revised skeleton, said this: “9. Further the costs claimed in respect of works carried out at which was common to both claims and/or in respect of all the costs should be apportioned, since there is a presumption which has not been rebutted that the costs incurred in these circumstances are to be split between the parties instructing solicitors, but in accordance with the principle in Beaumont –v- Senior

[1903] 1KB282

; see also Russell Young –v- Brown [2007] 4 Costs LR, and discussed in Maretz –v- ACP Ltd and Others [2008] 1 Costs LR; [2007] EWHC CH2635 (para 25-34). Those costs, which following application of the indemnity principle, earn an appropriate apportionment of the common costs, are found to be attributable to the FFA claim and/or the instruction by Mrs Borrill (ie her costs) should be disallowed”. “9. Further the costs claimed in respect of works carried out at which was common to both claims and/or in respect of all the costs should be apportioned, since there is a presumption which has not been rebutted that the costs incurred in these circumstances are to be split between the parties instructing solicitors, but in accordance with the principle in Beaumont –v- Senior

[1903] 1KB282

[43]Master Rogers concluded at paragraph 50 of his judgment: “I’ve come to the conclusion that the Defendant’s submissions are to be preferred. This is clearly a case where work was done in respect of both claims that under the Fatal Accidents Act, and that under the Law Reform Act, and in those circumstances, the authorities cited clearly to support Mr McPherson’s argument that there has to be an apportionment.

[44]On appeal, Sharp J in Pacey an unreported decision on 20 July 2009, concluded that costs would need to be divided, applying Cinema Press Ltd –v- Pictures and PleasuresLtd [1945] 1 LR 440, and Dyson Technology –v- Strutt [2007] EWHC1756 (CH)). That is to say, looked at item by item so that the costs relating solely to the 1976 claim, were separated out and disallowed.

[45]Mr Justice Patton in Dyson Technology Ltd –v- Strutt [2007] EWHC1756 (CH)), at paragraph 50 of the judgment, said this: “The decision in Medway applied in Cinema Press, establishes that on a taxation of common costs of the kind that the Master described as specific common costs, it is appropriate to attribute part of a composite fee to the items of work at which the fee was intended to cover. In the present case, that exercise can be carried out to isolate the proportion of the brief fees paid on both sides to cover work done solely on the cl.18 claim. The same goes for time spent on preparing parts of witness statements which deal separately and exclusively with that issue. But what the decision in Medway does not do is to authorise the taxing Master in a case like the present, to apportion the cost of work, all of which is relevant to both claims”.

[46]The First and Second Defendants’ position, in their Points of Dispute, are: “Common costs, where it is deemed that they have been reasonably incurred, and are reasonable in amount, is limited to a recovery of two thirds”.

[47]The Claimant in its Replies state:

“Neither is there an authority which says when a Claimant discontinues his claim against one of three Defendants, the Claimant’s cost should be limited at two thirds. If that is what the Defendants intended, they should have agreed that at the time they negotiated the final consent order.”

[48]I have already given judgment with regard to the specific costs attributable to the Claimant proceeding against the Third Defendant, which I have deemed irrecoverable. So far as the common costs are concerned, I intend to adopt the approach, taken by Master Campbell in Savant –v- Rajah, namely that where common costs are claimed at detailed assessment, I will divide those costs that are specific, where it is possible to identify the different purposes involved, and then to share the costs between those parties. For example, a brief fee. However, division is not required for non-specific common costs which the receiving party would have had to pay anyway, such as the Court fee paid on issuing proceedings. I agree with the decision of Sharp J in Pacey and with Patton J in Dyson Technology Ltd, that the issue is one of division, and not apportionment. This would appear to be the approach taken by Deputy Master Williams in Nassif. This approach requires an item by item assessment of the Claimant’s costs which will be subject to the twin tests of reasonableness and (if appropriate) proportionality.

CONCLUSION

[49]I have found for the First and Second Defendants in relation to the principle of recovery of costs by the Claimant, for pursuing the Third Defendant in accordance with the Tomlin Order. I have found for the Claimant on the issue of apportionment. I have not heard argument from either party with regard to the incidence of costs of the application, and I propose to reserve that issue to be determined at the detailed assessment of this matter.

[50]The parties shall within 14 days of the handing down of this judgment, seek any further directions as to the determination of the detailed assessment.