Edwin Coe LLP v Aidiniantz & Ors [2014] EWHC 3994 (QB)

[2014] EWHC 3994 (QB)

Case No HQ13X03619

IN THE HIGH COURT OF JUSTICE QUEEN'S BENCH DIVISION

Venue Royal Courts of Justice Strand, London, WC2A 2LL

Date 09/12/2014

B e f o r e :

HIS HONOUR JUDGE RICHARD SEYMOUR Q.C.(sitting as a Judge of the High Court)____________________

Between

EDWIN COE LLPClaimant

ROLLERTEAM LIMITEDDefendants

(4) SHERLOCK HOLMES LIMITEDPart 20 Claimants

EDWIN COE LLPPart 20 Defendant

____________________

Stewart Chirnside (instructed by Kennedys Law LLP) for claimant/Part 20 defendant William Flenley Q.C. (instructed by Gordon Dadds LLP) for the defendants and Part 20 claimants

Hearing Hearing dates: 7, 10, 12, 14, 17 and 24 November 2014____________________

HTML VERSION OF JUDGMENT____________________

His Honour Judge Richard Seymour Q.C. :

Introduction

[1]The claimant and Part 20 defendant, Edwin Coe LLP ("Coe"), is a limited liability partnership which practises as solicitors. In this action it claimed against the first defendant, Mr. John Aidiniantz, the sum of £103,300.17 and against the second defendant, a company called Rollerteam Ltd. ("Rollerteam"), the sum of £75,907.17, in each case together with interest. Coe acted as solicitors to both Mr. Aidiniantz and Rollerteam and the sums claimed, respectively, were said to be due in respect of the provision by Coe of legal services. Some of the fees claimed against Mr. Aidiniantz were said to be due in respect of Coe acting for him in a personal capacity. However, a significant amount of the total sum claimed against him in this action – that amount which was also claimed against Rollerteam – was claimed pursuant to an indemnity which he entered into with Coe in respect of the payment to Coe of sums falling due in respect of services provided to Rollerteam. That indemnity was in writing and contained in an undated letter produced on or about 5 January 2013 by Mr. Aidiniantz and addressed to Mr. Simeon Gilchrist, a member of Coe. The letter was in these terms:- "Rollerteam Ltd Company Reg: 01868761 I confirm as the sole shareholder in the above company to indemnify your company against any costs or liabilities howsoever arising from the instructions given to you by Rollerteam Ltd pursuant to the company resolution passed on 4th January 2013."

[2]It was accepted on behalf of Mr. Aidiniantz and Rollerteam in this action that Coe had acted for each, and, implicitly, but subject to the Part 20 Claim, that it was entitled to be paid reasonable fees for the work which it had done. However, it was contended that Mr. Aidiniantz and Rollerteam were entitled to have bills rendered by Coe assessed pursuant to the provisions of Solicitors Act 1974 s.70 or at common law. So far as presently material, Solicitors Act 1974 s.70 is in these terms:- "(1) Where before the expiration of one month from the delivery of a solicitor's bill an application is made by the party chargeable with the bill, the High Court shall, without requiring any sum to be paid into court, order that the bill be assessed and that no action be commenced on the bill until the assessment is completed. (2) Where no such application is made before the expiration of the period mentioned in subsection (1) then, on an application being made by the solicitor or, subject to subsections (3) and (4) by the party chargeable with the bill, the court may on such terms, if any, as it thinks fit (not being terms as to the costs of the assessment) order -(a) that the bill be assessed; and

(b) that no action be commenced on the bill, and that any action already commenced be stayed, until the assessment is completed. (3) Where an application under subsection (2) is made by the party chargeable with the bill – (a) after the expiration of 12 months from the delivery of the bill, or (b) after a judgment has been obtained for the recovery of the costs covered by the bill, or

(c) after the bill has been paid, but before the expiration of 12 months from the payment of the bill, no order shall be made except in special circumstances and, if an order is made, it may contain such terms as regards the costs of the assessment as the court may think fit."

[3]Neither Mr. Aidiniantz nor Rollerteam sought assessment of any of the bills forming the subject of the claims in this action within one month of delivery.

[4]The first batch of answers on behalf of Coe to the claim for assessment of the bills was that Mr. Aidiniantz and Rollerteam had agreed to pay the amounts claimed, or were estopped from contending that they were entitled to have the bills assessed, or had waived the right to assessment. Whether any of those contentions was sound depended upon the proper construction of exchanges between the parties to which I shall come. Separately it was contended on behalf of Coe that if, in principle (because the first batch of answers failed), Mr. Aidiniantz or Rollerteam could bring himself or itself within the provisions of Solicitors Act 1974 s.70(2) or (3), the court should not, in the exercise of its discretion, order assessment of any bill. Some of the bills which it was sought to have assessed, it was common ground, were bills which had been paid, and so fell, if the answers of Coe to which I have already referred failed, within Solicitors Act 1974 s.70(3). Coe contended that it had not been demonstrated that any "special circumstances" existed in relation to those bills such as would justify the court in ordering assessment. It was also contended that Mr. Aidiniantz and Rollerteam should not, in the exercise of the court's discretion, succeed in the claim for assessment of unpaid bills, and that they were not entitled to assessment of any bills at common law.

[5]However, the main thrust of the defence to the claims made in the action was that the amounts of the bills were extinguished by the damages to which Mr. Aidiniantz and Rollerteam were entitled by reason of the negligence of Coe in advising, or failing to advise, concerning the consequences of a freezing order which was granted without notice by Norris J in proceedings in the Chancery Division with the action number HC12E04866 ("the Main Action"). In the Main Action the claimant was a company called The Sherlock Holmes International Society Ltd. ("SHIS") and the defendants were Mr. Aidiniantz, Rollerteam, The Sherlock Holmes Museum Ltd. ("Museum Ltd.") and Sherlock Holmes Ltd. ("Holmes Ltd."). The amount of the damages claimed at the start of the trial totalled £142,674.70. Of that amount £117,674.70 represented part of the sums claimed by Coe in this action in respect of fees, specifically that part which related to an application to the court to discharge the freezing order to which I have referred, plus an element of Value Added Tax, totalling £8,812.44. The balance, £25,000, was the amount paid pursuant to an order for costs made against the unsuccessful defendants in the Main Action on the dismissal of the application to discharge the freezing order. It was accepted by Mr. William Flenley Q.C., who appeared on behalf of Mr. Aidiniantz, Rollerteam, Museum Ltd. and Holmes Ltd. at the trial, that the Value Added Tax element in the claim for £142,674.70 was recoverable by his clients, and so should not be taken into account in assessing damages, in the event that the claims of Mr. Aidiniantz, Rollerteam, Museum Ltd. and Holmes Ltd. in negligence against Coe succeeded. Thus in the event the damages claimed amounted to £133,862.26. That adjustment having been made, there was no dispute before me that the costs of the application to discharge the freezing order to which I have referred claimed by Coe amounted to £108,862.26, and that Mr. Aidiniantz and Rollerteam paid £25,000 pursuant to the order for costs which I have mentioned. The background and the negligence alleged

[6]It is convenient next in this judgment to explain the background to the commencement of the Main Action and the precise nature of the allegations of negligence against Coe.

[7]Coe acted on behalf of Mr. Aidiniantz in two actions, one of which was the Main Action. The other ("the Possession Action") was an action in which Linda Riley, who was in fact a half-sister of Mr. Aidiniantz, sought possession against Mr. Aidiniantz of the property known as and situate at [an address] ("the Mews House"). Coe acted on behalf of Rollerteam in three actions. Again one was the Main Action. The second was the Possession Action. The third was an action which had been commenced by a different firm of solicitors, WGS Solicitors ("WGS"), and of which Coe took over conduct. That action had the case number HQ12X04289. The only claimant in that action was Rollerteam and the defendants were all half-siblings of Mr. Aidiniantz, Linda Riley, her sister Jennifer Decoteau, and her brother Stephen Riley. It is convenient to refer to that action in this judgment as "the Riley Action". Coe only acted on behalf of Museum Ltd. and Holmes Ltd. in the Main Action and not in any other litigation. There was no claim on behalf of Coe against either Museum Ltd. or Holmes Ltd. in this action. Given the nature of the damages claimed as consequent upon the allegations of negligence on the part of Coe, it did not appear that, in any real sense, it was contended that either Museum Ltd. or Holmes Ltd. had suffered loss as a result of any alleged negligence of Coe. That notwithstanding, both Museum Ltd. and Holmes Ltd. were Part 20 Claimants in this action, along with Mr. Aidiniantz and Rollerteam.

[8]In about 1990 Mr. Aidiniantz founded, at premises ("the Museum Premises") correctly known as and situate at 239, Baker Street, London NW1, but for trading purposes described as 221B, Baker Street, a museum ("the Museum") devoted to the fictional detective Sherlock Holmes. The establishment of the Museum was financed, in part, by Mr. Aidiniantz's mother, Grace Aidiniantz, who is also the mother of Linda Riley, Jennifer Decoteau and Stephen Riley. The freehold interest in the Museum Premises was vested in Rollerteam. Mr. Aidiniantz was at all times material to this action a director of Rollerteam, as well as of Museum Ltd. and Holmes Ltd. However, in order to protect Rollerteam and its assets from potential claims against Mr. Aidiniantz, in about 1994 Mr. Aidiniantz transferred his shares in Rollerteam, which was a majority shareholding, to his mother. He contended that this transfer was only of the legal interest in the shares and that he remained beneficially entitled to them. That seemed to have been disputed by his mother and his half-siblings, and it appeared that that dispute fostered other disputes and led, ultimately, to the three actions in which, as I have already noted, Coe came, in due course, to be instructed on behalf of Mr. Aidiniantz, Rollerteam, Museum Ltd. or Holmes Ltd.

[9]In about 2004 Mr. Aidiniantz caused SHIS to be incorporated as a company limited by guarantee. The purpose of the incorporation appears to have been to take advantage of a Value Added Tax exemption in relation to the fees charged to the public for entrance to the Museum Premises. However, for this exemption to be applicable SHIS needed to be a not-for-profit company, and Mr. Aidiniantz could not be a director or have any direct or indirect financial interest in it. The original directors of SHIS were Mrs. Aidiniantz and Linda Riley. Jennifer Decoteau was subsequently appointed a director of SHIS in place of Linda Riley. Despite the formal structure of SHIS, it appeared that actually Mr. Aidiniantz was de facto in control of it.

[10]It seems that the Museum was successful and profitable. Some of the cash takings of the business were kept in a safe, called, in the jargon of the trial, "the Reserve Safe" at the Mews House.

[11]Disputes between Mr. Aidiniantz and his mother and half-siblings appear to have erupted in about August 2012. The first litigious step was taken by Rollerteam, at the instigation of Mr. Aidiniantz, against his half-siblings in the Riley Action. Mr. Aidiniantz instructed WGS to make, on 11 October 2012, an application without notice on behalf of Rollerteam to Openshaw J for a freezing injunction against Linda Riley. That application was successful. Openshaw J granted an injunction which included these provisions:- "5. Until the return date or further order of the court, the Respondent must not remove from England and Wales or in any way dispose of, deal with, charge or diminish her assets of any of her assets [sic] which are in England and Wales up to the value of £175,000 including the amount of any cheque drawn on such account which has not been cleared. … … (4) This order will cease to have effect as against the Respondent if the Respondent -(a) provides security by paying the sum of £175,000 into court, to be held to the order of the court; or

(b) makes provision for security in that sum by another method agreed with the Applicant's legal representatives."

[12]What actually happened was that Linda Riley caused the freezing order to be discharged by paying the amount of £175,000 on 18 October 2012 into the client account of WGS. That was recorded by Linda Riley's solicitors, Messrs. Bromptons, in a letter dated 22 October 2012 to WGS:- "Further to the payment of £175,000 by our client on 18th October 2012 into your firm's clients account, we would ask you to sign this letter and send it back to us in the place indicated at the bottom to demonstrate your agreement to the payment made by our client fulfilling the requirement of paragraph 11(4) of the order dated 11th October 2012. The sum of £175,000 is, of course, held subject to your undertaking not to remit the said funds to any party until either:(a) a written agreement is reached between a director of Rollerteam Ltd. and Linda Riley; or

(b) a court order. Accordingly it is agreed that the order dated 11th October 2012 has ceased to have effect.bctor dated 11th agreed that teh a director of Rollerteam Ltd.

(a) a wri"

[13]It appears that WGS did not sign a copy of the letter dated 22 October 2012 as requested, but it did reply to the letter in a letter dated 23 October 2012 in which it said, "We confirm that the Order has ceased to have effect".

[14]If Round One had gone in favour of Mr. Aidiniantz, the commencement of Round Two was not long delayed. On 13 December 2012 application was made to Norris J without notice for a freezing order in what became the Main Action. Norris J granted an injunction. The freezing order ("the Main Freezing Order") included these provisions:- "3.There will be a further hearing in respect of this order on 21 December 2012 ("the return date"). … 5. Until after the return date or further order of the court, the Respondent must not remove from England and Wales or in any way dispose of, deal with or diminish the value of any of his assets which are in England and Wales up to the value of:a. in the case of the First Respondent [Mr. Aidiniantz], £1,500,000;

b. in the case of the Second Respondent [Rollerteam], £225,000;

c. in the case of the Third Respondent [Museum Ltd.], £300,000;

d. in the case of the Fourth Respondent [Holmes Ltd.], £100,000. … 9.(1) Unless paragraph (2) applies, within 96 hours of service of this order and to the best of his ability: a. the Respondent must inform the Applicant's solicitors of all his assets in England and Wales exceeding £10,000 in value whether in his own name or not and whether solely or jointly owned, giving the value, location and details of all such assets; b. the Respondent must inform the Applicant's solicitors of all bank accounts in his name in existence during the period 1 August 2010 to date; c. the First Respondent must identify the entity that is receiving the proceeds of the entrance fees for the Sherlock Holmes Museum at 221B Baker Street, London, and give full details of the account into which it is being paid. … … (4) This order does not prohibit the Second, Third and Fourth Respondents from dealing with or disposing of any of their assets in the ordinary and proper course of business, but before doing so the relevant Respondent must tell the Applicant's legal representatives. … (6) The order will cease to have effect against the relevant Respondent if he or it: a. provides security by paying the sum of : i. in the case of the First Respondent, £1,500,000; ii. in the case of the Second Respondent, £225,000; iii. in the case of the Third Respondent, £300,000; iv. in the case of the Fourth Respondent, £100,000, into court to be held to the order of the court; or b. makes provision for security in that sum by another method agreed with the Applicant's legal representatives."

[15]On 17 December 2012 Mr. Aidiniantz, on his own behalf and on behalf of Rollerteam, Museum Ltd. and Holmes Ltd., consulted Coe concerning the Main Freezing Order. There were a number of e-mails on 17 and 18 December 2012 between Mr. Aidiniantz and representatives of Coe. An important exchange of e-mails took place in the early evening of 17 December 2012.

[16]At 18.38 hours Mr. Simeon Gilchrist, a member of Coe, wrote, inter alia, concerning the fees which Coe would charge for its services. The e-mail included this paragraph:- "I suggest that with my own time being chargeable at £390 per hour, my colleague at £290 per hour and staff at similar rates to £120 per hour for a junior trainee solicitor, the prospect is that an initial response to the freezing injunction will cost in the region of £20,000 plus VAT excluding the cost of counsel, Marcia Shekerdemian being your preferred choice. To appear on the injunction for any meaningful purpose, such as to vary the order, or to challenge the making of the order, is likely to be in the region of an additional £5,000 this week."

[17]Mr. Aidiniantz replied to that e-mail very soon afterwards, at 18.48 hours. About fees he said, "The fee seems reasonable and on a par with the usual standards."

[18]In an e-mail sent by Mr. Aidiniantz at 10.18 hours on 18 December 2012 to Mr. Gilchrist Mr. Aidiniantz said:- "I attach again the freezing order – I think the last file was too big for you to download. Just a quick tot up of our finances reveals the following: SHM Ltd (Lloyds) - £423,000 Rollerteam (Lloyds) - £18,000 SH Ltd (HSBC) - £ (say 30,000) Rollerteam HSBC - £ (say 20,000) Rollerteam (RBS) - £ (say £15,000) Reserve Safe (£535,000) Monies on account at WGS Solicitors £175,000 Cash in hand (museum) £30,000 Cash in personal bank account - £3,000 Cash for personal net salary for December: £30,000. That seems to me to be at least around £1 million cash which should be enough to get you going. We obviously have mortgage interest to meet at the end of the month and staff salaries which we were intending to pay out this week but have now had to postpone their payments and holiday pay until next week – none of our staff are happy I can tell you and of course we have not been able to tell them why. We can meet later but if in the meantime you can clear payment of our legal fees with the claimant's solicitors then I can put you in funds as soon as I hear back from you with a view to use [sic] meeting later today. We should ask for an extension of time to respond to all the financial requirements so that we can also liaise with our accountant, because 96 hours is a completely unreasonable period of time in which to prepare detailed and accurate responses to the injunction. I am also minded to resist giving any financial information anyway on the basis that SHIS should prosecute its claim in the normal way and that there is no likelihood of any dissipaation [sic] of funds."

[19]Although that e-mail did explain that there was £535,000 in the Reserve Safe, it did not indicate to whom that money belonged. Mr. Gilchrist enquired in an e-mail sent to Mr. Aidiniantz at 3.10 p.m. on 18 December 2012. Mr. Aidiniantz replied in an e-mail sent at 16.25 hours the same day:- "The cash of £535,000 in the reserve safe at [an address] was given to Rollerteam (the owner of the property and the party entitled to the income and profits from the premises less [sic] anyone needs reminding) by SHIS – specifically by and with the consent of my mother who is still the director of SHIS. So the £535,000 should be added to the assets of Rollerteam as well as the money in its bank account and the money would presumably be treated as such in the accounts year ending February 2013. … Rollerteam owns all monies until it decides how it is to be apportioned."

[20]It appears that Mr. Aidiniantz habitually communicated with Coe by e-mail during the period in which he and his companies instructed Coe. From e-mails which he sent to Coe on 18 December 2012 it was obvious that he was unhappy about the grant of the Main Freezing Order and had it in mind that it should be discharged. For example, in an e-mail sent at 11.30 hours Mr. Aidiniantz commented:- "I do think that the injunction has been issued rather precipitously and that we should concentrate on challenging it or varying it as soon as possible and claim our fees for having to dance a merry tune like rats in a sewer. There is no reasonable ground for saying that we have any of the claimant's funds still less that they are at risk of dissipation and the claim should be [sic] therefore proceed following the usual path."

[21]Slightly later, in an e-mail sent at 11.42 hours, Mr. Aidiniantz observed that:- "We have a cash holding in a safe of £535,000 but because we are up against a bunch of swindlers and thieves I am reluctant to disclose to the other side where the safe is located for obvious reasons. The balances in the company accounts can easily be disclosed but again I think it is wrong that simply on the strength of a freezing injunction granted without notice the defendant should have to reveal private information. I believe we should therefore stand our ground and argue for theinjunction to be lifted and request the claimant to pursue their claim in the normal way as there is no evidence whatsoever that we have attempted to dissipate assets."

[22]In an e-mail sent at 14.34 hours Mr. Aidiniantz asserted that:- "These "without notice" injunctions should not be dished out like confetti and judges need to be reminded of that fact and if they are going to be served late on Friday evening then considering that Sunday is meant to be a day of rest even for the wicked the 96 hours should not include weekends."

[23]In order to comply with the requirement in paragraph 9(1) of the Main Freezing Order Coe, on the instructions of Mr. Aidiniantz, wrote a letter dated 18 December 2012 to Smithfield Partners Ltd. ("Smithfield"), solicitors acting on behalf of SHIS in what was to become the Main Action. The letter included:- "In the short time available to us, we have not yet been able to take detailed instructions from our clients in compliance with Paragraph 9 of the Injunction. The present position is that we have arranged to meet our clients tomorrow in order that we might take further instructions. However, our clients are concerned to comply with their disclosure requirements to the best of their ability today and, in these circumstances, have instructed us to provide the following information on the basis that further details will be provided to you in early course: [There followed a list of the assets of Mr. Aidiniantz, of Museum Ltd., of Holmes Ltd. and of Rollerteam. Under the heading "Rollerteam" the letter included:-] We are further instructed that Rollerteam is the owner of a cash sum of £535,000 in a reserve safe. We are taking further instructions on this."

[24]A draft of that letter was sent to Mr. Aidiniantz as an attachment to an e-mail sent at 6.29 p.m. on 18 December 2012 by Mr. Pey Kan Su, an associate employed by Coe. The e-mail was in these terms:- "As discussed in the telephone conversation, please see attached revised letter and let me know asap if it is OK to go. I understand that you do not wish to disclose the whereabouts of the cash of £353,000 at this stage save to disclose that Rollerteam owns this cash."

[25]Mr. Aidiniantz responded in an e-mail sent at 18.53 hours the same day, "Revised and approved". It was the version as further revised by Mr. Aidiniantz which was sent and which included those passages which I have quoted.

[26]As an attachment to an e-mail sent to Mr. Aidiniantz at 16.25 hours on 18 December 2012 Coe sent a letter dated 18 December 2012 giving advice concerning the Main Freezing Order. The advice included:- "Paragraph 12 sets out the exceptions to the injunction. The following are excepted: 1. £500 per week living expenses for you as the first respondent; 2. Reasonable legal expenses for advice and representation (including in the case of Rollerteam Ltd., legal expenses in respect of the Riley proceedings) provided that the opponent's lawyers are told where the money is to come from before spending it; 3. the company respondents are not prohibited from dealing with or disposing of any assets in the ordinary and proper course of business, but the opponent's lawyers must be told before doing so; 4. the above spending limits may be increased or varied by agreement in writing with the opponent's lawyers. Paragraph 12(6) states that the order will ceased [sic] to have effect if you pay into the court the sum specified in that paragraph in respect of each of the respondents or agreed [sic] security with the Applicant's lawyers. It is important for you to consider this and for us to consider with you in further detail. In some cases, the applicant will accept the provision of security, as a freezing order itself is not a form of security over the frozen assets, which means that the applicant will only have an unsecured claim if a respondent becomes insolvent. Provision of bonds and guarantees may be of attraction to an applicant."

[27]Also on 18 December 2012 Coe sent letters of engagement to each of Mr. Aidiniantz, Rollerteam, Museum Ltd. and Holmes Ltd. The letters were, mutatis mutandis, in identical terms. Each included a "Record of Instruction" document. That document identified the matter in which Coe had been instructed as "The claim of The Sherlock Holmes International Society Limited ("SHISL")". Under the rubric, "Objectives, issues and steps to be taken" appeared this:- "In the first instance we will gather information from you concerning the proceedings and assist in your compliance with the terms of the injunction. We will advise on the prospects of variation and/or discharge and prepare for a first appearance at Court inter partes."

[28]Later in the "Record of Instruction" document were set out details of "Fee arrangements". They identified the rate of charge of the partner assigned to the matter, Mr. Gilchrist, as £390 per hour, and the rate of charge of his assistant solicitor, Mr. Su, as £270 per hour.

[29]In an e-mail sent to Mr. Aidiniantz at 15.47 hours on 19 December 2012 Mr. Su suggested that it might be useful for Mr. Aidiniantz to make a list of anticipated expenses of his businesses which could be notified to Smithfield. Mr. Aidiniantz was not impressed by that suggestion. In an e-mail in response sent at 16.05 hours on 19 December 2012 Mr. Aidiniantz commented:- "There is surely no need to do this – section 12(4) applies: we don't need consent but we should invite them with standard wording (so that you don't need to keep typing out the same wording) to say whether they have any objection and if they do then we will hold payment subject to their making an immediate application to court (payable at their own time and expense) where we can argue in front of a judge whether the payment falls within the definition of in "the ordinary and proper course of business". We are not going to be held to ransom. … You should work out an agreement with them on the question of payments."

[30]In an e-mail sent to Mr. Su at 23.15 hours on 19 December 2012 Mr. Aidiniantz rather complicated the position which he had described concerning the £535,000 in the Reserve Safe by observing, in the course of a long e-mail in which he sought to explain how he allocated income as between Rollerteam, Museum Ltd., Holmes Ltd. and SHIS:- "The overbanking of £39,000 and the £535,000 held in the reserve safe ought to be allocated to the Society's [that is, SHIS's] income as should the money in the company safe at Parkgate Road (which is of similar size). … However, before we jump to conclusions and assume that the £535,000 money in the reserve safe at [an address] belongs to the Society, we have to take into account that we only have figures for up to July 2012 – we do not have any income figures for the busiest month of the year which is August or the first 6 days of September 2012 – periods which have benefited from the influx of visitors to London attending the Olympics." [Mr. Aidiniantz went on to make a calculation suggesting that, in his view, £255,000 out of the £535,000 belonged to SHIS and £280,000 to Rollerteam.]

[31]In advance of the hearing on the return date fixed by the Main Freezing Order, 21 December 2012, a conference took place between Mr. Aidiniantz, his partner, Andrea von Ehrenstein, Mr. Gilchrist, Mr. Su and counsel, Miss Marcia Shekerdemian, on 20 December 2012. It was a long meeting. An attendance note made by Mr. Gilchrist of the conference immediately afterwards noted that it had lasted from 11.30 hours until 14.45 hours. An attendance note ("the First Su Note") made on 4 January 2013 by Mr. Su based on his manuscript notes of the conference recorded that the conference had lasted from 11.00 a.m. until 4.00 p.m. It was probable that the timings recorded by Mr. Gilchrist, as closer in point of time to the actual conference, were the more accurate. However, the precise duration of the conference was not material. What was material was that it was very long, but the typed attendance notes produced were relatively short. Certainly they were a long way from a complete record of every word which had been spoken at the conference. Subsequently, on 15 March 2013, the day after Mr. Aidiniantz withdrew his instructions, and those of Rollerteam, Museum Ltd. and Holmes Ltd., from Coe and transferred his instructions to Davenport Lyons LLP ("Davenport"), Mr. Su, having forgotten that he had already caused to be typed up an attendance note based on his manuscript notes of the conference on 20 December 2012, typed up a further attendance note ("the Second Su Note").

[32]The attendance note of the conference made by Mr. Gilchrist was focused on one matter, not material to any issue in this action, was relatively short, and was incomplete as a record of all that had been discussed at the conference. The fullest attendance note of which a copy was adduced at the trial was the First Su Note. That included the following passages:- "In September 2011 SHML [that is, Museum Ltd.] ceased trading whilst Sherlock Holmes Ltd was formed and the idea was for this company to take over from SHML. However, historically credit card machines still operated by SHML, it ended up with both companies running the shops. SH Limited employs staff and purchases stocks for the shop. Until 6 months ago, SHIS was not involved in purchase of stocks. The incomes from the royalties have been apportioned to the various companies (The Sherlock Holmes Museum Ltd, Sherlock Holmes Ltd, SHIS which is a company limited by guarantee) as directed by JA [Mr. Aidiniantz]. The reason why SHIS was set up was to take advantage of the VAT cultural exemption rules. This was the only reason why money went to SHIS. SHIS is non-profit. It receives admission income and book sales. It can pay out expenses but cannot make profits. JA said that as he founded the museum and Rollerteam owns the freehold, Rollerteam is entitled to all the profits and incomes for the building. SHIS occupies a part of the building, but there is no formal lease or rental agreement. JA put the income of the museum to Rollerteam and distribute them as he considers fit. … JA said that there are safes in each of the properties ([two addresses]). Each has about equal amount. There is some £535,000 in the safe at [an address] under JA's control. The one at Parkgate is Grace's [Mr. Aidiniantz's mother's] house, and that safe is guarded by the Rileys. JA does not know how much money there is at Parkgate. JA said that the money is [sic – probably "in" was meant] [an address] is not insured. The money was not put in the bank because he does not trust the bank. Counsel advised JA that failure to insure the money can be a breach of director's duty. SJG [Mr. Gilchrist] said that the court may impute [sic] keeping of such a large amount of cash in the safe as for odd purposes. Counsel advised that the money should be insured. SJG said the money may be pay [sic – "paid into" appears to have been meant] the court. … … Counsel said that in the short term JA is not in the position to do anything other than to agree continuation of the freezing order until whenever. JA said that he would agree if the running of the business is not affected by the injunction. …"

[33]The note that it was Mr. Gilchrist who advised the payment of the £535,000 into court was shown, by reference to Mr. Su's contemporary manuscript notes, to be inaccurate. It was actually Miss Shekerdemian who had given that advice. However, Mr. Gilchrist, who was called to give evidence at the trial, agreed in cross-examination that he did not dissent from her advice on that point at the conference.

[34]It was common ground between Mr. Aidiniantz and Mr. Gilchrist that there was no consideration at the conference with Miss Shekerdemian of the provisions of paragraph 12(6) of the Main Freezing Order. Mr. Aidiniantz and Mr. Gilchrist agreed that no one raised the possibility of all or part of the £535,000 in the Reserve Safe being used to discharge the Main Freezing Order as against one or more of the defendants in the Main Action. Mr. Su was also called to give evidence at the trial. In cross-examination, but not in his witness statement, Mr. Su suggested that actually he might have said something about paying money into court to discharge part of the Main Freezing Order. However, his evidence was very hesitant [Transcript, Day 2, page 172 line 14 – page 173 line 9 and page 174 line 8 to page 175 line 1]:- "Q. Yes. Before the £535,000 that was referred to was paid into court, there wasn't any further consideration of paragraph 12(vi) [sic] of the order, was there? A. Well, I cannot remember exactly. But I vaguely remember – and I believe this was the case – that at the day of the conference, at one point I did actually mention the fact that the sum in relation to all this – securing sum in relation to all these defendants were different. And I believe I have actually raised this point, saying that "Oh, the sum in relation to the company was a lot smaller", and I don't think that point was – led to any further discussion because I think that the parties at the time were very preoccupied with the question of ownership of the money, because it was at the first conference and Mr. Aidiniantz was explaining how the monies in the business were treated and how he dealt with it, and it was – personally I find it very difficult to know at that time and I think that maybe that was why the attention of the parties was mainly focused on that respect and also what to do when the matter come back to court on 21 December. … Q. Are you saying that what you have just explained was said actually with regard to payment of the £535,000? A. Not in relation to that. I just simply draw attention to the clause that there was this different amount and sum appears to be very smaller – in fact I think I might have even said that presumably if the sum of a small sum of company in relation to that particular company were paid, you know, that will – that will mean the end of the freezing order in relation to the company. But in my own mind – I mean, to be honest, in my own mind I wasn't quite sure how that particular provision operate in the situation where John Aidiniantz would still be under a freezing order, and also in the context of all this dispute about the ownership of the money. I just simply do not know how that provision in terms of practice going to operate. And that's the reason why I – I – I mean, I don't know what the position was. I didn't know how it would work out, you, know, in practice."

[35]At the conference Mr. Aidiniantz agreed with the suggestion that the defendants should offer, at the hearing on the return date the next day, to pay the £535,000 into court. That was done. It was again Norris J who dealt with the matter on the return date. He made an order ("the Return Day Order") by consent on 21 December 2012 which included these provisions:- "1. The sum referred to in paragraphs 5(c), 8(c), and 12(6)(a)(iii) of the Injunction be increased to £423,000 [The effect of this was to increase the amount frozen in relation to Museum Ltd. to £423,000, being the amount which it had been disclosed on behalf of Museum Ltd. was in its bank account]. 2. Subject to paragraph 3 below, until after the adjourned hearing referred to in paragraph 4 below, or further order of the Court, the Defendants must not dispose of, deal with or diminish the value of the sum of £535,000 held in cash in a safe at [an address] referred to in the sixth paragraph on page two of Edwin Coe LLP's second letter to Smithfield Partners Limited dated 18 December 2012. 3. By 4 pm on 4 January 2013, the Defendants procure that the said sum of £535,000:a. be paid into the Second Defendant's account at HSBC, sort code 40-01-06, account number 02602881;

b. and from that account be paid into Court pending the said adjourned return date. 4. The Claimant's application to continue the Injunction dated 18 December 2012 be adjourned to a hearing to be listed before a Judge with a time estimate of 1 day ("the Adjourned Hearing"), not before 28 January 2013, the said hearing to be listed for the convenience of the parties' respective counsel, and dates to avoid being provided accordingly. 5. The Injunction, as modified above and as varied by paragraph 10 below, be continued until after the Adjourned Hearing."

[36]By a resolution of the board of directors of Rollerteam passed on 4 January 2013 Coe was, "instructed to represent the company in the claim against L Riley et al and in any other legal matters pursuant to recovering any debts owed to the company or enforcing our legal rights howsoever arising". Counsel already instructed in the Riley Action was David Lewis. He was now instructed also in the Main Action in place of Miss Shekerdemian. A conference took place with Mr. Lewis on 7 January 2013 which was attended by Mr. Aidiniantz, Andrea von Ehrenstein, Mr. Gilchrist and Mr. Su. Mr. Su made an attendance note of the conference. In it he recorded Mr. Lewis as identifying ten possible grounds upon which the Main Freezing Order as continued by the Return Day Order might be discharged. Towards the end of the attendance note Mr. Su recorded this:- "Counsel noted that the opponents have not at the moment made a proprietary claim and that until the opponents raise it we can do what we like with the money. JA mentioned payment of his salary, counsel thought that should come within business expense. JA said that funding forward would need to draw from Rollerteam or one of the other companies. SJG said that at the moment there is over lapse [sic] of all issues. He does not see why Rollerteam cannot resolve to fund the action, the freezing order provides for notice of payment of legal costs to be given to the opponents. It was noted that Rollerteam was only frozen for up to £225,000. … JA said that we should just go and do the discharge."

[37]An application for the variation or discharge of the Main Freezing Order as continued by the Return Day Order was duly made on 16 January 2013. However, towards the end of January 2013 Mr. Aidiniantz decided to replace Mr. Lewis by leading counsel, Charles Samek Q.C.. A consultation with Mr. Samek took place on 5 February 2013. Yet once more those attending the consultation, other than counsel, were Mr. Aidiniantz, Andrea von Ehrenstein, Mr. Gilchrist and Mr. Su. Mr. Su again made an attendance note of the consultation. The case for Coe was that Mr. Samek raised the possibility of money being paid into court pursuant to paragraph 12(6) of the Main Freezing Order as continued by the Return Day Order as a means of discharging the order, at least in relation to some of the defendants. That was not recorded in Mr. Su's attendance note. That attendance note did, however, include this paragraph, almost at the end:- "Counsel advised that there is a risk to apply to set aside the freezing order. It is easier for a Judge to decide to agree with his fellow judge who made the order and there is in any event a discretion to continue. On the other hand, there are some points to be made here. JA said that in that case he would like to go for it."

[38]The discharge application was heard by Proudman J on 12 to 15 February 2013 and was dismissed by a judgment delivered on 26 February 2013. The learned judge ordered that the unsuccessful defendants pay SHIS's costs of the discharge application and pay £30,000 on account of those costs. In the event £25,000 was paid by way of costs. As I have already noted, the costs charged by Coe in respect of the discharge application amounted to £108,862.26 plus Value Added Tax of £8,812.44.

[39]After the first day of the hearing before Proudman J, when it had become clear that the hearing would last more than the one day originally anticipated, Mr. Gilchrist sent, at 8.00 p.m., an e-mail to Mr. Aidiniantz explaining the additional fee commitment and asking, "Please confirm in order that I can see what I can do about the refresher fee, although you will understand that the die is to a large extent cast." Mr. Aidiniantz replied, at 23.39 hours on 12 February 2013:- "That seems ok. … We are not unduly worried about fees – your fees are reasonable and we have sufficient income to meet them. I presume you are paying 40% tax so you will not be exactly swimming in money."

[40]After the conclusion of the hearing, but before the delivery of judgment, Mr. Aidiniantz wrote an e-mail to Mr. Gilchrist which was sent at 03.29 hours on 16 February 2013. In it Mr. Aidiniantz made, amongst others, this point:- "In regardto the paying into court of the sum of £535,000, this was made on behalf of Rollerteam and Sherlock Holmes Ltd who have therefore provided security in excess of that required under section 6 (ii) £225,000 and 6(iv) £100,000 and therefore the freezing injunction ought to be lifted in respect to Rollerteam and Sherlock Holmes Ltd in any case, even if our discharge application is not successful."

[41]The thoughts there expressed were Mr. Aidiniantz's own. They were not prompted by anything said to him immediately before he wrote his e-mail by anyone from Coe or by counsel. However, he returned to the theme in an e-mail to Mr. Gilchrist sent at 17.21 hours on 25 February 2013:- "We should also address if needed the question of the payment into court of the £535,000 and how it impacts on 12(6)(ii) and (iv) of the freezing order."

[42]In the event Mr. Samek did try, after the delivery of judgment by Proudman J, to persuade the learned judge that the Main Freezing Order had been discharged at least so far as Rollerteam was concerned by the payment into court of the £535,000. However, she was not having it. In the end she decided to reduce each of the amounts frozen in paragraph 5 of the Main Freezing Order, as varied by the Return Day Order, on a sort of pro rata basis.

[43]The allegations of negligence which were pursued at trial against Coe on behalf of Mr. Aidiniantz, Rollerteam, Museum Ltd. and Holmes Ltd. were those set out at paragraph 19 of the Re-Amended Defence and Part 20 Claim. Coe consented to the re-amendments included in that paragraph made between the first and second days of the trial, so I permitted the re-amendments to be made. The Re-Amended Defence and Part 20 Claim on their face still included allegations of negligence set out at paragraph 25 of the statement of case, although I had been told at the start of the trial that those allegations were not pursued. It might have been helpful if those allegations had been deleted as part of the re-amendment of the Defence and Part 20 Claim, but the fact of the matter was that those allegations were not pursued before me. The only allegations which were pursued were these, in paragraph 19, omitting underlining where it appeared in the original:- "The Part 20 Defendant(i) failed to give any or any sufficient or proper advice to the Part 20 Claimants about the terms and effect of the security provision [meaning paragraph 12(6) of the Main Freezing Order] and the steps to be taken whereby the order would cease to have effect against them as individual Respondents;

(ii) failed to give any or any sufficient or proper advice to the Second and Fourth Part 20 Claimants that it was available to them to make payments into court of £225,000 and £100,000 respectively whereby the order would cease to have effect against them.

a. Although the Part 20 Defendant gave some very limited advice about the effect of paragraph 12(6) of the freezing order in a letter dated 18 December 2012, it correctly stated in that letter that "it is important … for us to consider with you [the effect of paragraph 12(6) in the event of a payment into court] in further detail". The Part 20 Defendant failed to consider the effect of paragraph 12(6) of the freezing order with the Part 20 Claimants in any further detail prior to either 21 December 2012, when the Part 20 Claimants consented to an order that they pay £535,000 into court, or to 3 January 2013 when the Part 20 Defendant arranged that the said £535,000 be paid into court pursuant to the order of 21 December but without any statement to the Court Funds Office as to on whose behalf the said payment was made. The Part 20 Defendant did, however, ensure that payment to the Court Funds Office was made for the Sherlock Holmes International Society as beneficiary.

b. The Part 20 Claimants' decision to consent to the said payment of £535,000 into court was made at a conference with both the Part 20 Defendant and counsel, Ms Marcia Shekerdemian, on 20 December 2012. At that conference (1) either the Part 20 Defendant advised the Part 20 Claimants to pay the said £535,000 into court, or counsel advised them to pay the said £535,000 into court and the Part 20 Defendant did not demur from that advice; (2) when advising that the said payment into court be made, alternatively when counsel advised that the said payment into court be made, the part 20 Defendant failed to refer to paragraph 12(6) of the freezing order, or to advise that (A) in reliance upon paragraph 12(6) of the freezing order, the Second Part 20 Claimant should, alternatively could, pay into court £225,000, being the sum frozen in relation to the Second Part 20 Claimant, expressly on the basis that it was paid on behalf of the Second Part 20 Claimant, so that the freezing order would cease to have effect as against the Second Part 20 Claimant, and (B) in reliance upon paragraph 12(6) of the freezing order, the Second Part 20 Claimant should, alternatively could, give its subsidiary the Fourth Part 20 Claimant £100,000 to pay into court, expressly on the basis that it was paid on behalf of the Fourth Part 20 Claimant, so that the freezing order would cease to have effect in relation to the Fourth Part 20 Claimant; (C) in the alternative, in reliance upon paragraph 12(6) of the freezing order, the full sum of £535,000 should, alternatively could, be paid into court expressly on behalf [of] the Second Part 20 Claimant so that the freezing order would cease to have effect in relation to the Second Part 20 Claimant. (D) In any of the cases above, failing to point out that such payments would automatically mean that the freezing order ceased to have effect against the Second and Fourth, alternatively the Second, Part 20 Defendants, at minimal cost, and quickly, whereas, as to the alternative, of applying to discharge the freezing order, it was on 20 December 2012 impossible to say whether it would succeed, and if it failed it was likely to be very expensive in terms of legal costs; even if it succeeded the Part 20 Claimants were likely to incur substantial costs which would not be compensated, after assessment, by the claimant to the Main Proceedings. (E) In the circumstances just pleaded, failing to advise the Part 20 Claimants that, if any sum was to be paid into court, it should be done expressly on the basis that payments were made by the Second and Fourth, alternatively only the Second, Part 20 Claimants.

(iii) caused or permitted the Second Part 20 Claimant to volunteer the payment of its cash in hand, namely £535,000, into court and to consent to a continuation of the injunction by order made on 21 December 2012 which contained provision for (i) that sum to be paid into court; and (ii) the injunction to continue against the Second and Fourth Part 20 Claimants ("the continuation order");

(iv) failed to consider or to advise the Part 20 Claimants on the terms and effect of the continuation order, and more particularly the order directing payment of £535,000 into court, on the operation of the security provision and the steps then necessary to be taken whereby the order would cease to have effect against them as individual Respondents;

(v) following the continuation order; failed to give any or any sufficient or proper advice to the Second and Fourth Part 20 Claimants that it remained available to them to make payments into court whereby the order would cease to have effect against them."

[44]The loss which it is alleged that the Part 20 Claimants suffered in consequence of the negligence alleged was simply the costs paid by them to SHIS pursuant to the order of Proudman J and their own costs, otherwise payable to Coe, of the application for the discharge of the Main Freezing Order as continued by the Return Day Order. Thus, notwithstanding the various allegations in fact made in paragraph 19 of the Re-Amended Defence and Part 20 Claim, the critical allegation amounted to a contention that Coe should have advised Mr. Aidiniantz, Rollerteam, Museum Ltd. and Holmes Ltd. not to pursue the discharge application, but, instead, to use the £535,000, or part of it, to buy the way of one or more of the defendants to the Main Action out of the Main Freezing Order by the mechanism of exploiting paragraph 12(6). A cause of action in negligence is incomplete without proof of loss, and so the only allegations pleaded in the Re-Amended Defence and Part 20 Claim which merited further consideration as allegations in tort were those in paragraph 19(ii) and (v). The other allegations, if made out, only entitled the Part 20 Claimants to nominal damages for breach of contract, which are still £2, the modern equivalent of 40/-. In fact, those other allegations were little more than variations on the contentions set out in paragraph 19(ii).

[45]In his closing submissions Mr. Flenley concentrated, in relation to the case in negligence, upon the point that, if, as had been agreed by Mr. Aidiniantz, the £535,000 was to be paid into court, paying it as to £225,000 on behalf of Rollerteam under clause 12(6)ii of the Main Freezing Order, and as to £100,000 on behalf of Holmes Ltd. under clause 12(6)iv of the Main Freezing Order, or at least paying all of it on behalf of Rollerteam under clause 12(6)ii of the Main Freezing Order, produced the obvious benefit of releasing at least Rollerteam, and perhaps also Holmes Ltd., from the Main Freezing Order. Those submissions gave rise to a number of questions. One was whether, on the information available to Coe at the conference on 20 December 2012, it was, or should have been, obvious which of the respondents in the Main Action were those in whose favour discharge of the freezing order should be sought, there being insufficient funds to pay into court enough to secure the release of all. Another question was whether, actually, securing the discharge of any of the respondents in the Main Action from the Main Freezing Order, was a benefit, given the indication of Mr. Aidiniantz, as recorded in the First Su Note, that the respondents in the Main Action could live with the Main Freezing Order. A further question was, if any one of the respondents to the Main Action had secured release from the Main Freezing Order by a payment into court, whether that benefit, such as it was, would have been challenged on behalf of SHIS, for example by seeking to increase the amount frozen in respect of the particular respondent. And there remained the crucial question whether there was a link between what was alleged as the negligence of Coe and the damages sought to be recovered. There was only such a link if, as was contended on behalf of the Part 20 Claimants, but denied on behalf of Coe, if advised to seek the discharge of the Main Freezing Order against Rollerteam and Holmes Ltd. by making payment into court, Mr. Aidiniantz would not merely have accepted that advice, but also not pursued the discharge application which failed. The answers to the allegations of negligence

[46]The answers to the allegations of negligence set forth in paragraph 19 of the Re-Amended Defence and Part 20 Claim were pleaded at paragraph 16 of the Amended Reply and Defence to Counterclaim in these terms, omitting underlining where it appears in the original:- "As to paragraph 19:a. Paragraph 19(i) is denied; i. By a letter dated 18 December 2012 the Claimant advised the Part 20 Claimants about the terms and effect of the Security Provision. The letter expressly stated that the Freezing Order would cease to have effect if the sums specified in paragraph 12(6) in respect of each of the Part 20 Claimants were paid into court or if alternative security was agreed with SHIS Ltd.'s solicitors. ii. Further or alternatively, Mr. Aidiniantz was also advised by counsel, Charles Samek Q.C., in conference on 5 February 2013 that the Part 20 Claimants could provide security in order to be released from the effect of the Freezing Order and that if he and/or the other Part 20 Claimants had sufficient cash or assets to do so they should consider providing security. iii. Further or alternatively, Mr. Aidiniantz was well aware of the meaning and effect of the Security Provision having obtained a freezing order in substantially similar terms in the Riley Proceedings which was compromised by the payment of £175,000 into WGS's client account by Ms Riley pending the outcome of the proceedings. iv. In the circumstances, if (which is denied) Rollerteam and/or SH Ltd. had sufficient cash available to meet the Security Provision, it is averred that Mr. Aidiniantz, and through him the other Part 20 Claimants, were well aware of the terms of the Security Provision but chose not to provide security because they were determined to apply to discharge the Freezing Order on the grounds that it had been wrongly obtained.

b. Paragraph 19(ii) is denied. Paragraph 16(a) above is repeated. b(i) As to paragraph 19(ii)(a):

(a) (A) The Claimant notes the admission that it provided advice about the effect of paragraph 12(6) of the freezing order in its letter dated 18 December 2012. It is denied that such advice was "very limited". The Claimant will say that the advice contained in its letter dated 18 December 2012 was sufficient to discharge its obligations to the Part 20 Claimants in all the circumstances.

(b) (B) In support of the foregoing, the Claimant will rely (inter alia) on the fact that (i) as set out above, Mr. Aidiniantz was already well aware that it was possible to pay money into court or provide security in order to release the effect of a freezing order and (ii) Rollerteam and SH Ltd did not have sufficient cash in hand or in bank accounts available to meet the Security Provision for the reasons set out above.

"Paragraph 12(6) states that the order will ceased to have effect if you pay into court the sum specified in that paragraph in respect of each of the respondents or agreed security with the Applicant's lawyers. It is important for you to consider this and for us to consider with you in further detail." (D) In the premises, the Claimant will say the letter advised that Mr. Aidiniantz and the Part 20 Claimants should first consider whether they wished to pay the relevant sums into court or agree security with SHIS Ltd.'s solicitors to avoid the effects of the freezing order and then, if they did wish to do so, the Claimant would consider this option with them in further detail. (E) Mr. Aidiniantz made clear on behalf of himself and the other Part 20 Claimants by means of various emails to the Claimant on 18 and 19 December 2012 that he was determined to challenge the continuation of the freezing order and/or to apply to discharge it as soon as possible on the grounds that it should never have been granted in the first place. (F) Further, at the conference with counsel on 20 December 2012 Mr. Aidiniantz made clear at the outset to both counsel, Ms Shekerdemian, and Mr. Gilchrist and Mr. Su of the Claimant that he believed that the freezing order had been an abuse of process and needed to be discharged at the earliest opportunity. He also stated that the freezing order was not affecting the Part 20 Claimants' business. He thereby made clear that he did not wish to consider the possibility of paying money into court or providing security to release the freezing order further or at all. (G) In the premises, if (which is not admitted) the Claimant failed to consider that possibility further with the Part 20 Claimants at the conference on 20 December 2012: i. It is averred that the Claimant was under no obligation to do so for the reasons set out above. ii. The Claimant will rely on the fact that counsel, Ms Shekerdemian, also apparently did not seek to raise the matter further as evidence that it was not incumbent on a reasonably competent solicitor to have done so. (H) It is admitted that at the initial hearing of the return date on 21 December 2012 the Part 20 Claimants consented to an order that the £535,000 should be paid into court. The offer to pay the £535,000 into court was made following an application by SHIS Ltd. to vary the freezing order (inter alia) to include a proprietary freezing injunction in relation to the £535,000. Following the hearing and before the draft consent order was agreed, the terms and effect of the consent order were explained to Mr. Aidiniantz in detail by Mr. Su, including the provisions regarding payment of the £535,000 into court, and he approved its terms. (I) It is further admitted that the £535,000 was paid into court on 3 January 2013. However, it is denied that the Claimant was responsible for arranging such payment. Mr. Aidiniantz was responsible for authorising and arranging the transfer of the funds (which were in fact paid from an account in the name of SH Ltd., not Rollerteam, contrary to the terms of the consent order). (J) It is admitted that, in response to a query from HSBC regarding the payment references, the Claimant stated that the beneficiary should be SHIS Ltd. However, the relevance of this is denied. (K) Save as aforesaid, paragraph 19(ii)(a) is denied. b(ii) As to paragraph 19(ii)(b): (A) It is admitted that it was agreed to pay the £535,000 into court at the conference with counsel on 20 December 2012. (B) As to sub-paragraph (1), it is admitted and averred that the advice to pay the £535,000 into court was provided by counsel and that the Claimant did not demur from that advice. Mr. Aidiniantz also agreed with the advice on behalf of himself and the Part 20 Claimants. The Claimant and counsel were concerned that there was £535,000 in cash which was uninsured in the reserve safe which potentially represented a breach of fiduciary duty on the part of Mr. Aidiniantz and it was thought that paying the money into court would assist Mr. Aidiniantz's argument that the freezing order should not have been granted in the first place because there was no real risk of dissipation. (C) As to sub-paragraph (2), paragraph 16(b)(i) above is repeated in relation to the Claimant's obligation to consider further the possibility of paying money into court or providing security to release the effect of the freezing order at the conference on 20 December 2012. Without prejudice to the foregoing, it is not admitted that counsel and/or the Claimant failed to consider paragraph 12(6) of the freezing order when advising that the payment into court should be made. It is in any event denied that it was relevant to consider paragraph 12(6) in circumstances where the ownership of the £535,000 was entirely unclear and/or could not be determined and Mr. Aidiniantz had stated that all or part of it belonged beneficially to SHIS Ltd. Paragraph 15(b)(ii)(1) above is repeated. (D) As to sub-paragraph 2(A), it is denied that Rollerteam should or could have paid the sum of £225,000 into court so that the freezing order would cease to have effect against it. It is denied that Rollerteam had sufficient cash in hand or in bank accounts to do so for the reasons set out above. (E) As to sub-paragraph 2(B), it is denied that Rollerteam should or could have given the sum of £100,000 to SH Ltd. or paid such sum into court on behalf of SH Ltd. so that the freezing order would cease to have effect against SH Ltd. It is denied that Rollerteam had sufficient cash in hand or in bank accounts to do so for the reasons set out above. (F) as to sub-paragraph 2(C): i. It is denied that the £535,000 should or could have been paid into court on behalf of Rollerteam with the result that the freezing order would have ceased to have effect against it. The £535,000 did not belong to Rollerteam beneficially and/or the ownership of the £535,000 could not be determined and/or was disputed. ii. Further or alternatively, even if Rollerteam had attempted to pay the £535,000 into court to discharge the injunction against it, SHIS Ltd. would have objected and applied to vary and/or extend the freezing order to include the £535,000 and/or to reinstate the freezing order at the return date on 21 December 2012 and the judge would have frozen the £535,000 pending an adjourned return date when the matter could be properly argued. At the adjourned return date the same arguments would have been run on behalf of Rollerteam as were advanced on 26 February 2013 before Mrs. Justice Proudman in relation to the ownership of the £535,000 and the effect of its payment into court and would have failed for the same reasons. iii. Further or alternatively, even if the freezing order against Rollerteam had been discharged by the payment of the £535,000 into court, Mr. Aidiniantz would still have decided to make the discharge application in any event in respect of himself and the other Part 20 Claimants, which would have led to the same result in terms of the costs incurred. (G) As to sub-paragraph 2(D), it is denied that such payments were possible or would automatically have resulted in the freezing order ceasing to have effect against Rollerteam and/or SH Ltd. for the reasons set out above. In the circumstances, it is denied that the Claimant was negligent in failing to advise as alleged. Further and in any event, the risks of applying to discharge the freezing order and the potential costs consequences of losing such an application were fully explained to Mr. Aidiniantz and the Part 20 Claimants on numerous occasions. However, Mr. Aidiniantz decided to contest the continuation of the freezing order and to apply to discharge it on behalf of himself and the other Part 20 Claimants notwithstanding such advice and being fully aware of the potential costs consequences. (H) Sub-paragraph 2(E) is denied for the reasons set out above. Further or alternatively, the Claimant will say it reasonably relied on properly instructed counsel at the conference on 20 December 2012 (and subsequently at the conferences with counsel on 7 January 2013 and 5 February 2013 after the £535,000 had been paid into court) to provide the Part 20 Claimants with sufficient and proper advice in relation to the payment of money into court in relation to the freezing order and the effect of the payment of £535,000 pursuant to the consent order dated 21 December 2012. (I) Save as aforesaid, paragraph 19(ii)(b) is denied. c. As to paragraph 19(iii): i. It is denied that the Claimant knew or ought to have known that the sum of £535,000 held in the "reserve safe" at [an address] was beneficially owned by Rollerteam. As set out above, the Claimant asked Mr. Aidiniantz about the ownership of this money on several occasions but Mr. Aidiniantz was unable or unwilling to state who it belonged to beneficially. ii. As to the payment into court of the £535,000 and the Continuation Order dated 21 December 2012: 1. On 20 December 2012 Mr. Aidiniantz informed the Claimant that the cash in the "reserve safe" was not insured. As a result the Claimant advised Mr. Aidiniantz to pay the money into a bank account or to get it insured. Mr. Aidiniantz stated that he was reluctant to pay the money into a bank account because he distrusted banks. 2. Also on 20 December 2012 counsel for the Part 20 Claimants, Marcia Shekerdemian, advised Mr. Aidiniantz that the £535,000 should be paid into court because it was not insured and as evidence against any risk of dissipation. Ms Shekerdemian also advised that in the short term the Part 20 Claimants had little option but to adjourn the return date of the Freezing Order and consent to its continuation in the interim in order to allow sufficient time to file evidence for the return date and/or prepare an application to discharge the Freezing Order. 3. Mr. Aidiniantz agreed with this advice and as a result agreed to the Continuation Order on behalf of himself and the other Part 20 Claimants and the payment into court of the £535,000. 4. Save as aforesaid, paragraph 19(iii) is denied. d. Paragraph 19(iv) is denied. i. Prior to the Continuation Order being agreed on behalf of the Part 20 Claimants, the Claimant considered the terms of the draft order proposed by SHIS Ltd. carefully and advised Mr. Aidiniantz fully on its terms. ii. Further, by a telephone call on 21 December 2012 Mr. Su also advised Mr. Aidiniantz on behalf of all the Part 20 Claimants on the meaning and effect of the Continuation Order before it was agreed. Mr. Aidiniantz was content with the Continuation Order and agreed to its terms on behalf of himself and the other Part 20 Claimants. iii. Mr. Aidiniantz was specifically advised on the terms of the order directing payment into court of the £535,000. The court funds office would not accept payment in of the £535,000 in cash. Accordingly, it was necessary to pay the £535,000 first into Rollerteam's account with HSBC and then from there pay the money into court. However, in fact, as set out above the money was paid in from an account in the name of SH Ltd. iv. As set out above, Mr. Aidiniantz had previously been advised about and/or was fully aware of the terms of the Security Provision and the steps that could be taken to release the Part 20 Claimants from the effect of the Freezing Order. Paragraph 16(a) above is repeated. e. Paragraph 19(v) is denied. Paragraph 16(a) above is repeated."

Consideration of the allegations of negligence alleged to have caused loss

[47]At paragraph 14 of the Re-Amended Defence and Part 20 Claim what was pleaded as to the nature of the obligations owed by Coe to Mr. Aidiniantz, Rollerteam, Museum Ltd. and Holmes Ltd. was:- "The Part 20 Defendant owed duties to each of the Part 20 Claimants in contract and in tort to advise and represent them with reasonable care, skill and competence, more specifically, the reasonable skill and care to be expected of commercial litigation solicitors holding themselves out as competent to deal with freezing injunctions on behalf of respondents to such injunctions."

[48]Paragraph 14 of the Re-Amended Defence and Part 20 Claim was admitted at paragraph 11 of the Amended Reply and Defence to Counterclaim. However, what was pleaded does actually raise a long-outstanding question which is still unresolved at a level above first instance, namely whether a specialist solicitor owes his client a more extensive duty than the ordinary duty to advise and act for the client with the care and skill to be expected of a reasonably competent solicitor. The suggestion that a specialist solicitor might owe a higher duty was made in Duchess of Argyll v. Beuselinck

[1972] Lloyd's Rep 172

. There have been similar suggestions in other decisions since, but it does not appear that the decision in any particular case has depended upon a finding that the particular solicitor owed a higher duty by reason of his or her specialisation. I do not think that the question arises in this case either. As it seemed to me, if the complaints made against Coe were of substance, they should succeed against any solicitor professing reasonable competence, and did not depend upon Coe being commercial litigation solicitors.

[49]It is, I think, convenient to remind oneself of some observations of Donaldson LJ in Carradine Properties Ltd. v. D.J. Freeman, reported at [1999] Lloyd's Rep PN 483, but actually a case decided in 1982, which observations were approved by the Court of Appeal in Virgin Management Ltd. v. De Morgan Group Plc [1996] EGCS 16. At page 487 of the report Donaldson LJ said:- "A solicitor's duty to his client is to exercise all reasonable skill and care in and about his client's business. In deciding what he should do and what advice he should tender the scope of his retainer is undoubtedly important, but it is not decisive. If a solicitor is instructed to prepare all the documentation needed for the sale or purchase of a house, it is no part of his duty to pursue a claim by the client for unfair dismissal. But if he finds unusual covenants or planning restrictions, it may indeed be his duty to warn of the risks and dangers of buying the house at all, notwithstanding that the client has made up his mind and is not seeking advice about that. I say only that this may be his duty because the precise scope of that duty will depend inter alia upon the extent to which the client appears to need advice. An inexperienced client will need and will be entitled to expect the solicitor to take a much broader view of the scope of his retainer and of his duties than will be the case with an experienced client. "

[50]The corollary to that approach, which was important to the outcome in Virgin Management Ltd. v. De Morgan Group Plc, is that it is not necessary, in order to discharge the obligation to advise a client with the care and skill to be expected of a reasonably competent solicitor, to point out to the client that which he already knows, or which is blindingly obvious to anyone of reasonable intelligence. The judgment of the Court of Appeal in Virgin Management Ltd. v. De Morgan Group Plc was delivered by Leggatt LJ. So far as is presently relevant, the case concerned whether a solicitor instructed to draft a legal agreement owed a duty to his client to advise concerning the financial implications of the agreement which he was asked to draft. In the course of the judgment of the Court of Appeal Leggatt LJ observed:- "Virgin's real complaint is not that they were not advised that the financing payments to be made by Concita were inclusive of any VAT which might be payable in respect thereof, which was obvious, but rather that they were not warned of the possibility that they might be chargeable to VAT. … However the duty is pleaded, in the end it comes to an allegation that Mr. Lehrer was under a duty to advise experienced and sophisticated commercial clients with ready access to fiscal advice that the terms of the transaction which they had agreed and which he had been instructed to put into legal form might be fiscally imprudent. We entirely agree with the Official Referee that the allegation cannot be substantiated."

[51]What can be derived from the judgment of the Court of Appeal in Virgin Management Ltd. v. De Morgan Group Plc which is relevant to the circumstances of the present case is that, in the absence of evidence to the contrary, a solicitor is entitled to proceed on the basis that his client is of reasonable intelligence, and so does not require to have the obvious pointed out to him. In my judgment a solicitor is also entitled to proceed, in the absence of evidence to the contrary, on the basis that his client is fluent in the English language, and capable of reading and understanding clear words expressed in the English language. Moreover, a solicitor is entitled to proceed on the basis that a businessman client is familiar with his own business, how it operates, and how it is affected by matters like orders of the court. A businessman client is not entitled to be treated as if he were an illiterate child.

[52]In the present case it was important, as it seemed to me, that the businesses of Rollerteam, Museum Ltd. and Holmes Ltd. were businesses under the control of, and operated by, Mr. Aidiniantz. He knew those businesses. Coe did not, save to the extent that Mr. Aidiniantz chose to tell Coe about those businesses. That does not ignore the fact that, in particular circumstances, proper discharge by Coe of its duty to Mr. Aidiniantz and his companies might require Coe to enquire as to the nature of the businesses and their operation.

[53]As a result of what had happened in the Riley Action, in which Linda Riley had caused the freezing injunction to be discharged, Mr. Aidiniantz knew perfectly well, and his companies knew through him, that it was possible, at least in some circumstances, for a freezing order to cease to have effect because the amount frozen was paid into court or otherwise secured. Thus in fact it was not necessary for Coe to tell Mr. Aidiniantz or his companies of that possibility. However, it was unclear on the evidence before me when Coe became aware of what had happened in the Riley Action. Probably it was not until after Coe was instructed in that action on about 4 January 2013. Consequently, as it seemed to me, it was appropriate for Coe to advise Mr. Aidiniantz of the existence and effect of paragraph 12(6) of the Main Freezing Order once it was instructed. The terms of that sub-paragraph were not difficult to understand. Comprehension of the words used did not depend upon any specialist knowledge of commercial litigation solicitors. All it required, in order to understand the sub-paragraph, was reasonable fluency in the English language. Anyone of reasonable intelligence who read paragraph 12(6) should be able to understand it. However, with a long and detailed order, such as the Main Freezing Order, it was undoubtedly incumbent upon Coe to explain to Mr. Aidiniantz and his companies that sub-paragraph 12(6) was included in the order, and what the effect of it was. Coe performed those obligations in the letter of advice dated 18 December 2012 in the passage which I have quoted. It was, I think, a fair point, that the terms in which the advice was given was ambiguous as to whether it was necessary, in order to secure the discharge of the Main Freezing Order in respect of any particular respondent in the Main Action, to pay in all of the sums frozen in respect of any of the respondents, or only the sum frozen in respect of that particular respondent. Someone who had read and understood paragraph 12(6) of the Main Freezing Order would have been able to resolve that ambiguity. Someone who was confused as to any apparent inconsistency between the terms of paragraph 12(6) and the relevant passage in the letter dated 18 December 2012 could have sought clarification. When he came to give evidence at the trial, Mr. Aidiniantz, at any rate during part of his cross-examination, assented to the proposition that the terms of the Main Freezing Order were clear. Again, at times in his cross-examination he accepted that he had read the Main Freezing Order carefully when he received it, and that that was so was demonstrated by his e-mail to Mr. Su picking up the terms of paragraph 12(4).

[54]Mr. Flenley submitted that it was not enough, to perform its duty, for Coe to write in the terms which it had in the letter dated 18 December 2012. As the relevant passage seemed itself to contemplate, submitted Mr. Flenley, it was incumbent upon Coe to go further and, "for us to consider with you in further detail". I reject that submission. By what it did say in the letter Coe drew to the attention of Mr. Aidiniantz, subject to the ambiguity which I have identified, that the effect of the making of the Main Freezing Order could be avoided by paying into court the amount frozen in respect of any respondent, or by providing security for payment of that amount. It was then for him to decide whether that possibility was of interest to him. If so, he could pursue the matter with Coe. If not, then nothing further needed to be said about it. Mr. Aidiniantz did not go back to Coe seeking to pursue the possibility of having the Main Freezing Order discharged in respect of any particular respondent by paying into court the amount frozen in respect of that respondent. There was no reason for Coe, as reasonably competent solicitors, to seek itself to pursue the matter further at that stage, not least because the effect of buying one's way out of paragraph 12(6) would involve putting up money which could not, thereafter, be used for other purposes until after the trial of the Main Action, or providing security which likewise could not be used for other purposes. The attractiveness, or not, of this particular option was, as at 18 December 2012, entirely one for Mr. Aidiniantz to decide.

[55]In my view, matters changed somewhat by the time of the conference with Miss Shekerdemian on 20 December 2012. By that time Coe was aware of the existence of the sum of £535,000 in the Reserve Safe. However, the ownership of that money was unclear, not least because the instructions of Mr. Aidiniantz concerning it changed between 18 December 2012, when he said that the money was owned by Rollerteam, and 19 December 2012, when he said that the money, or at any rate getting on for half of it, should be allocated as the income of SHIS. Notwithstanding those changed instructions, the fact remained that, at that time, it was open to whoever had control of the money to apply it pursuant to the provisions of paragraph 12(6) of the Main Freezing Order.

[56]It was plain that the sum of £535,000 was insufficient to enable all of the defendants in the Main Action to have the freezing order against them discharged by payment into court. The information which Mr. Aidiniantz gave at the conference on 20 December 2012 was to the effect that both Museum Ltd. (because it operated the credit card machines) and Holmes Ltd. were operating companies, with both companies operating the shops. Rollerteam appeared not to be an operating company, from what Mr. Aidiniantz told the conference, because it was simply the entity which held the freehold of the Museum Premises, albeit that Mr. Aidiniantz considered the income generated by any of the companies which he controlled as basically that of Rollerteam. The effect of the Main Freezing Order as against Rollerteam was only to freeze £225,000. It could use whatever funds it had, or could generate, in excess of that amount. From what Mr. Aidiniantz said at the conference, the running of his businesses was not actually affected by the Main Freezing Order. That was not altogether surprising. Rollerteam seemed, from what Mr. Aidiniantz said, to have no business, other than to receive money. By paragraph 12(4) of the Main Freezing Order each of Rollerteam, Museum Ltd. and Holmes Ltd. was free to continue to deal with or dispose of its assets in the ordinary course of business. That Mr. Aidiniantz well understood, as he demonstrated in his e-mail to Coe sent at 16.05 hours on 19 December 2012 from which I have quoted. Thus in the circumstances, as it seems to me, it was far from obvious that any benefit was to be achieved by taking advantage of the provisions of paragraph 12(6) of the Main Freezing Order, as opposed to relying on paragraph 12(4). There seems to have been no point at all in seeking to have the Main Freezing Order discharged as against Rollerteam.

[57]In my judgment, it was for Mr. Aidiniantz to say, at the conference, if he wished to consider procuring a discharge of the Main Freezing Order in the case of any of the respondents by making a payment into court, because only he could determine whether he perceived any benefit in that course, and for which company or companies. For the reasons which I have given, it seems to me that an objective observer, given the information which Mr. Aidiniantz conveyed at the conference, would not have identified any benefit.

[58]That there was actually no benefit in seeking to have any of the defendants in the Main Action discharged from the Main Freezing Order by the making of a payment into court is rather demonstrated by the damages claimed in the Part 20 Claim. If a tangible benefit had been lost by not taking that course, one would imagine that that benefit would have had a value the loss of which could form an element in a claim for damages. However, as I have pointed out, nothing was claimed other than the costs of and associated with the discharge application. Those costs were incurred not because advice was not given to seek to free a defendant in the Main Action from the effects of the Main Freezing Order, but because the discharge application was made and failed. The nature of the damages claimed suggested that the only theoretical proper claim against Coe would be for not advising against the making of the discharge application, but no such allegation was made, other than linked to the allegation that Coe should have advised making payments pursuant to paragraph 12(6) of the Main Freezing Order instead of pursuing a discharge application.

[59]It is obviously true that the £535,000 which it was agreed at the conference on 20 December 2012 should be paid into court, might have been stated to have been paid in by Rollerteam. Indeed, it seems to me that the £535,000 could have been split, so that £100,000 was paid in by Holmes Ltd. and the balance paid in by Rollerteam. But what was the point of doing that? Mr. Flenley submitted that I should accept the evidence of Mr. Aidiniantz that, had Rollerteam and Holmes Ltd. been discharged from the Main Freezing Order, he would not have pursued the application to discharge the Main Freezing Order and the costs of that activity would not have been incurred. I shall come to the merits of that submission as put, but it was important, as it seemed to me, that, on the material put before Mr. Gilchrist and Mr. Su by Mr. Aidiniantz at and before the conference with Miss Shekerdemian, and put before her at the conference, it was not obvious, at least not to anyone other than Mr. Aidiniantz, which of Rollerteam, Museum Ltd. and Holmes Ltd. could usefully be discharged from the Main Freezing Order by making payment into court from the £535,000. The money was not sufficient to secure the discharge of Mr. Aidiniantz personally. It was not sufficient to secure the discharge of more than two out of Rollerteam, Museum Ltd. and Holmes Ltd. On the basis of what Mr. Aidiniantz said at the conference the obvious two to identify, if there was a duty to identify anyone, were Museum Ltd. and Holmes Ltd., the companies which appeared to be trading. Yet the case for the Part 20 Claimants was, in effect, that it was negligent of Coe not to advise that the £535,000 be paid into court in such a manner as to secure the discharge of Rollerteam and Holmes Ltd., or at least Rollerteam. That seemed to me to be an impossible submission, on the material put before Mr. Gilchrist and Mr. Su. It was simply not necessary for Coe to advise further than in the letter dated 18 December 2012 concerning the possibility of securing the discharge of a respondent to the Main Freezing Order by payment into court, without Mr. Aidiniantz indicating interest in securing discharge in that manner, and himself choosing who should be the beneficiary or beneficiaries of that approach.

[60]I am entirely satisfied on the evidence that Mr. Aidiniantz deliberately pursued the discharge application because he wanted to seek advantage over those behind SHIS in the Main Action. He wished to seek to negative the advantage which SHIS appeared to have achieved by the grant of the Main Freezing Order. It was only when he realised that there was a significant chance that the discharge of the Main Freezing Order might not be achieved that Mr. Aidiniantz decided, without any contribution from anyone else, that he might at least be able to salvage face, if not anything of any practical benefit, if the outcome of the discharge application was at least that Rollerteam, and, perhaps, another of the defendants in the Main Action, were discharged by virtue of the payment into court of £535,000.

[61]It should be borne in mind that, if the advice which it was contended it was negligent of Coe not to have given, that payment into court of the £535,000 should have been made on behalf of Rollerteam and, possibly, also Holmes Ltd., had been given and accepted, on any view the Main Freezing Order would have continued in force as against at least Mr. Aidiniantz personally and Museum Ltd., but possibly also Holmes Ltd. That needed to be remembered in evaluating the evidence of Mr. Aidiniantz at the trial that he would have accepted the continuation of the Main Freezing Order in his own case, and that of Museum Ltd., which he said was a dormant company, albeit a dormant company with over £423,000 in the bank, and possibly also Holmes Ltd., if only the Main Freezing Order had been discharged as against Rollerteam. In effect his siblings, on any view, would have landed a blow upon him to counter the blow which the freezing order in the Riley Action had landed upon Linda Riley, and he could not entirely escape that by the suggested payment into court.

[62]It seems to me that the advice which Miss Shekerdemian gave in conference that the £535,000 should be paid into court, from which advice Mr. Gilchrist did not demur, was sensible. Any judge told, on the hearing on a return date after the grant of a freezing order, that compliance with the disclosure obligations had revealed a large amount of cash kept in a safe in a private house, must inevitably have been at least inclined, in the absence of satisfactory explanation, to treat the circumstances as evidence of a real risk of dissipation. Seeking to negative such impression by paying the money into court was a sensible move. Allocating various elements of the money disclosed to payments for the purposes of paragraph 12(6) of the Main Freezing Order might itself attract suspicion. As I have said, it is possible that the payment of the sum of £535,000 into court could have been made expressly on behalf of Rollerteam, and that the benefit of paragraph 12(6) could have been claimed for Rollerteam on that basis. However, that would have achieved nothing of value, for the reasons which I have explained, unless, had that happened, Mr. Aidiniantz would have instructed that the discharge application not be pursued. I have already recorded my finding that that would not have happened. It was plain from the e-mails which Mr. Aidiniantz wrote on 18 and 19 December 2012, from which I have quoted, that he was convinced that it had not been appropriate for SHIS to have sought a freezing order without notice, and that he wanted to rectify the injustice which he considered had resulted from the grant of such injunction. His instructions as recorded at each of the conferences which he had with junior counsel were always clearly that an application for discharge of the Main Freezing Order should be made. Miss Shekerdemian, who was called to give evidence on behalf of Coe, told me that she could remember little in detail of the conference with her on 20 December 2012, but what she positively remembered was that, as it was put at paragraph 12 of her witness statement dated 25 July 2014 prepared for the purposes of this action, "Mr. Aidiniantz was insisting that the freezing order had been obtained improperly and that the Court had been misled". In her oral evidence Miss Shekerdemian expanded on that [Transcript, Day 3, page 54 lines 8 -12]:- "Mr. Aidiniantz, I should say – and I've mentioned this in my witness statement – was adamant that the freezing orders had been improperly obtained and they [sic] wanted to get them set aside. He felt very, very strongly about that."

[63]That evidence of Miss Shekerdemian was supported by the evidence of Mr. Gilchrist. At paragraph 44 of his witness statement dated 25 July 2014 prepared for the purposes of this action Mr. Gilchrist observed, inter alia:- "… Mr. Aidiniantz was, in a perfectly polite, and in a keenly engaged manner, entirely convinced that the Injunction had been an abuse of process and needed to be discharged at the earliest opportunity. Mr. Aidiniantz was clear that this was the avenue that he would pursue in the event that he had prospects of success. …"

[64]Mr. Su recalled a contribution of his own during the conference with Miss Shekerdemian. At paragraph 11 of his witness statement dated 25 July 2014 prepared for the purposes of this action Mr. Su said:- "I remember that during discussion about whether to apply for a discharge of the injunction, I expressed the view that it might save costs if John Aidiniantz simply lived with the injunction and concentrated his resources on fighting the substantive claim. I said that because from previous experience in other injunction cases I was involved in, it seemed that once a system of release of funds for business expenses is worked out a defendant could often live with the freezing order. However, I do not remember that my suggestion was taken up by John Aidiniantz. I do not recall whether there was any discussion or suggestion by John Aidiniantz that he would seek to discharge the injunction by providing security (even though I had mentioned this point in my letter of general advice dated 18 December 2012 to him about the terms of the injunction)."

[65]That evidence of Mr. Su was supported by the evidence of Mr. Gilchrist. At paragraph 51 of his witness statement Mr. Gilchrist said:- "This discussion led Mr. Su to comment that an alternative course of action would be to live with the injunction pending trial, and not to spend the time and money in making a discharge or variation application. Mr. Su voiced his opinion that such applications could be costly and that a party might otherwise focus on the substance of the proceedings."

[66]Mr. Aidiniantz denied that the recollection of Miss Shekerdemian of his attitude at the conference on 20 December 2012 was accurate, and, from his witness statement dated 25 July 2014 prepared for the purposes of this action, it appeared that he denied that Mr. Su had said anything about the possibility of living with the Main Freezing Order. At paragraph 50 of his witness statement he said, of the conference on 20 December 2012:- "Crucially, despite the disclosure of the cash position of the Museum Companies [meaning Rollerteam, Museum Ltd. and Holmes Ltd.] to EC [Coe] and contrary to EC's letter dated 18th December 2012, there was no consideration, or advice provided at the conference whatsoever, about the possibility of making payments of the amounts specified in the order to discharge the freezing order against any of the Museum Companies. …"

[67]Mr. Aidiniantz gave evidence at the trial on his own behalf and on behalf of the other Part 20 Claimants. He was the only witness called at the trial on behalf of the Part 20 Claimants. I am afraid to say that I was not impressed by Mr. Aidiniantz as a witness. He seemed to be astute to assess the implications of any question put to him in cross-examination before deciding how to answer it in terms which he considered most likely to favour his, and his companies', case. Almost at the outset of his cross-examination Mr. Aidiniantz rather danced around giving a clear and accurate account of the nature of the business of each of Rollerteam, Museum Ltd., Holmes Ltd. and SHIS. He denied that Rollerteam was a holding company when that was put to him. When he was shown the annual accounts of Rollerteam for the year ended 28 February 2012, in which Rollerteam was described as a holding company, he asserted that that was an error on the part of the accountants who had prepared the accounts, and was a reason for those accountants' retainer being terminated. However, later, in answer to me, he accepted that actually all Rollerteam did was to receive payments in the nature of rent from other companies which he controlled. Mr. Aidiniantz contended that Museum Ltd. was a dormant company, notwithstanding that, as at the date of the Main Freezing Order that company held a substantial amount of cash in the bank, some £423,106.46, and that he had himself described Museum Ltd. at the conference on 20 December 2012 as being one of the companies which ran the shops at the Museum Premises. He was very reluctant to be tied down as to the business of SHIS and how that operated. Eventually he accepted that he was de facto a director of that company, at least in one sense, and that he advised the directors of SHIS as to how the business of that company should be operated from year to year, as well as organising transfers from or to the bank account of SHIS. Mr. Aidiniantz was also noticeably cautious in dealing with questions as to whether, once it had been served on him, he had read and understood the Main Freezing Order. At one point he said that he could read the plain wording of the order, and it was clear, for example from his drawing to the attention of Mr. Su the terms of paragraph 12(4), that indeed he had read it and understood it. It was not difficult, in terms of the use of the English language employed in the Main Freezing Order, for someone of reasonable intelligence to understand it. However, Mr. Aidiniantz mostly sought to suggest that he had not read the Main Freezing Order carefully until about 16 February 2013, or possibly as late as 25 February 2013, and did not really comprehend before then exactly how the order worked. This self-serving evidence, contrary to what could be derived from contemporaneous documents produced by Mr. Aidiniantz, persuaded me that his evidence could not be relied upon where it conflicted with the evidence of other witnesses called to give evidence at the trial.

[68]All of this said, in cross-examination Mr. Aidiniantz did agree that Mr. Su had made the contribution at the conference on 20 December 2012 of which Mr. Su spoke in his evidence concerning whether Mr. Aidiniantz and his companies could live with the order. Indeed he agreed [Transcript, Day 3, page 132 lines 3 – 6]:- "…whereas on 20 December conference it seemed to be palatable. I could live with it, because I only needed to notify the other side of our business expenses, so I was told." and [Transcript, Day 3, page 136 lines 10 – 15] "I was given two options in December conference: you could either fight this or as Mr. Pey Kan Su more gently reminded me, "Can you live with it?" And I thought: well, we can live with it if all we have to do is to notify the other side of our expenses."

[69]In stark contrast to the evidence of Mr. Aidiniantz, I found that each of Mr. Gilchrist, Mr. Su, Mr. Samek and Miss Shekerdemian was engagingly frank in cross-examination, even on points which might have been thought to cast doubt on their professional competence. No such issue was raised in relation to Mr. Samek, but such questions did arise in relation to the evidence of the other witnesses called on behalf of Coe. I found Mr. Su, who was no longer employed by Coe, a particularly engaging character, but I am entirely satisfied that each of the witnesses called on behalf of Coe did his or her best to assist me so far as able to do so. Subject to one matter, I accept that evidence without reservation. I was not persuaded that Mr. Su's rather hesitant recollections of raising the possibility of payment into court under paragraph 12(6) of the Main Freezing Order at the conference on 20 December 2012 were accurate. I think that he was probably getting confused in that part of his evidence with what happened at the consultation with Mr. Samek. I am completely satisfied that at the conference on 20 December 2012 Mr. Aidiniantz's main concern was to secure the discharge of the Main Freezing Order.

[70]In addition to the reasons which I have already mentioned, a further reason why I find that Mr. Aidiniantz would not have decided not to pursue the discharge application, had it been brought to his attention (as he contended that it had not been) that he and his companies could either live with the Main Freezing Order, or sums could be paid to buy one or other of the defendants out of the Main Freezing Order, is what I am satisfied was said at the consultation with Mr. Samek on 5 February 2013.

[71]Mr. Samek was called as a witness at the trial. In July 2013, at a time by which it had become clear that Mr. Aidiniantz was dissatisfied with the advice which he had been given by Coe in relation to the Main Freezing Order, Mr. Gilchrist asked Mr. Samek to consider Mr. Su's attendance note of the consultation on 5 February 2013 and to comment upon its accuracy. Mr. Gilchrist also asked Mr. Samek for his recollection of Mr. Aidiniantz's "purposeful intent at the meeting", and whether Mr. Samek had any notes about that. Mr. Samek replied in an e-mail sent at 10.20 hours on 8 July 2013:- "I do not think I made any notes at the con, seeing that you/Pey Kan [Mr. Su] were. I have reviewed the attendance note and I agree with you. My recollection accords with yours. Certainly I recall that I strongly suggested that he could provide security so as to remove the freezing order, and I also asked whether he could, as you say, live with the injunction. In fact I asked him positively whether the freezing order was affecting him or his businesses. He did not in fact suggest that there were problems of any significance and hence my advice that he should consider living with it/or providing security if he had the cash/assets. It was obvious to me that this sort of approach was not of interest to him. He was very much embroiled in this family litigation and it seemed to me that his number one concern was to win – and that is what he wanted to do if he had a plausible (ie. not fanciful) chance to do so, which he did. The view which I expressed was that he was at real risk in not succeeding and much depended also on whether he would be able to advance a coherent case as to why/how he dealt with the businesses – hence my concentration at one point in con on evidence from Daniels. (You will also recall that ultimately the reason, I feel, we lost, was because of his failure to satisfy the judge on the facts about the charity issues.) The rest of the con proceeded on the basis that we would be able to serve such evidence, given John's insistence that he had done nothing wrong and it could all be explained. I also drew his attention to some of the more damaging emails for his explanation and his response was that he should not have expressed himself in the way he did; that also would need to be addressed in the evidence. There was considerable pressure in the con to press the application for discharge (don't forget the case came to me once John had already applied) and a large part of the con was, based on John's insistence that he wished to press ahead, concerned with identifying plus points to be made, particularly on risk of dissipation. It seemed to me, as I have said, that he had decided to fight, he wanted an advocate who would fight (hence his choice of me) and that was his focus. My concern, however, was to try and temper his desire to fight with making him aware of practical realities and problems (as per Pey Kan's note) and the other matters referred to above. If I can recall anything else I will."

[72]Mr. Samek told me, when he came to give evidence, that his recollection at the time of the trial remained as it had been when he wrote that e-mail. His evidence of what he had said was supported by both Mr. Gilchrist and Mr. Su.

[73]In his witness statement, at paragraph 102, Mr. Gilchrist said:- "Mr. Samek seemed to be concerned that there was a risk in making the application for discharge. Mr. Aidiniantz wanted to pursue the application and, even though we discussed at some length what seemed to be holes in the SHIS Ltd. evidence, Mr. Samek still focused on risk, explaining that the judge one drew on the day could have a bearing on the outcome. Given Mr. Aidiniantz's antecedents, the judge might feel that it is easier to agree with the earlier judgment. In short, Mr. Samek asked Mr. Aidiniantz directly whether Mr. Aidiniantz could secure or pay off the injunction to avoid its effects. I recall that Mr. Su mentioned again that an option was to live with the injunction, and that the application to discharge was costing or would cost a lot of money. Mr. Aidiniantz did not reply directly to this question from Mr. Samek but instead asked whether he had grounds for discharge and, although Mr. Samek said that there were difficulties, and risks, Mr. Samek advised that there were clearly points which could be made."

[74]At paragraph 18 of his witness statement Mr. Su said:- "I recall that eventually John Aidiniantz decided to have a leading counsel and Mr. Charles Samek was appointed. There was a conference with Mr. Samek to discuss whether to seek a discharge of the injunction. I recall that at that conference, Mr. Samek was less robust about a discharge than Mr. Lewis. I remember that John Aidiniantz referred to some email on a previous without prejudice settlement discussion initiated by a third party and Mr. Samek considered that those discussions and other email improved the prospect of a discharge application. I recall that at one stage towards the end of the conference when counsel was advising John Aidiniantz on the merits or risks for a discharge application, I warned about the risk of adverse costs in an application. I remember I mentioned that thinking John Aidiniantz might be persuaded to live with the freezing order and focus his resources in fighting the main battle. I remember Mr. Samek agreed with me about the costs risk and I recall he said to John Aidiniantz that there was the alternative to an application for discharge by paying the claimant although I do not remember exactly what he said. I made an attendance note of the conference. I have been shown a copy of my manuscript attendance note of the conference and my typed note. … The note is not a verbatim record of the conference. I did not record everything which was said as I was also busy looking for documents relevant to the settlement discussions and other emails referred to by John Aidiniantz during the conference. The note shows that there were considerable discussions about what income SHIS owned. The note also records Mr. Samek's advice on the risk of an application that given the backgrounds of the case, the Judge might feel safe to maintain the freezing order. However, Mr. Samek also said there were other points including the fact that this was a family business and the family members all knew very well how the business was run and that Grace by her own evidence seemed to suggest that the money in her safe were all banked and the fact that the £535,000 in John Aidiniantz's safe was still there (and paid into court, as John Aidiniantz said). It was on the basis on [sic] that advice that John Aidiniantz decided to "go for it"."

[75]Unsurprisingly Mr. Aidiniantz was asked in cross-examination about the evidence of Mr. Samek in his e-mail of 8 July 2013, and the evidence of Mr. Gilchrist and that of Mr. Su which supported Mr. Samek's account. The evidence of Mr. Aidiniantz on the point struck me as profoundly unsatisfactory – essentially, that he did not recall Mr. Samek saying what Mr. Samek had recorded in his e-mail, and he, Mr. Aidiniantz must be right that it was not said, because otherwise it would have been recorded in Mr. Su's attendance note. These answers give the flavour of Mr. Aidiniantz's evidence on the point:- "[Transcript, Day 3, page 138 line 16 – page 139 line 4] First of all he didn't say that. And it's backed up. And if he did say that in the attendance notes I wouldn't be here today. I would concede that Mr. Samek's recollection is accurate. In fairness to Mr. Samek, according to his own evidence, that's what he said. But my recollection is that that was never said. And when I got the attendance notes sent to me after this case began, there it is, my attendance note does mention about this advice of Mr. Samek in conference and if Mr. Samek had suggested that, there would be a – put it this way, there would be a lot of questions from me as to what then were we doing in that conference if I could be paying money in to discharge this injunction. [Transcript, Day 3, page 139 lines 11 – 21] Well, if you was here yesterday Mr. Su didn't exactly say that. Mr. Su said that he thinks that was said while he was fumbling through some folders. So Mr. Pey Kan Su has obviously got a very good memory as to exactly what he was doing when such advice was given. But very forceful advice. I understand it was given very forcibly and very bluntly, according to Mr. Gilchrist. So very blunt and forcible advice was given to me at that conference, supposedly, but obviously went in one ear and out the other of those experienced lawyers who were there taking notes. [Transcript, Day 3, page 140 lines 3 – 5] I put it more strongly than that: not only do I not recall but I recall that there was no advice given – such advice given. [Transcript, Day 3. page 140 lines 14 – 21] I accept that they seem to have very retentive memories, but when – at a distance. They seem to have very retentive memories of what took place several months before, but when it's being told to them in their presence, especially when it's being given to them forcibly and bluntly, they don't seem to have such a – they don't' seem to have a good memory for writing down things which are being told to them in their presence. [Transcript, Day 3, page 144 line 12 – page 145 line 9] I'm saying that their recollection does not accord with their own notes. If their notes refer to a discussion about paying in, then I wouldn't be here today. It would mean that my recollection is faulty. But my recollection – my emails to Mr. Gilchrist made it absolutely clear that the notion of paying money into court to discharge the order had never been given to me. Is no good Mr. Su saying to me in an email: well, with hindsight we could have done things differently. You know, hindsight is a wonderful thing but I wasn't paying for hindsight, as I told him, I was paying for advice. So that conversation which – that recollection of Mr. Samek, with great respect to Mr. Samek and great respect to Mr. Gilchrist, whilst their memories of what took place several months before may be unimpeachable from their point of view, they clearly have very short-term memory when it comes to things being told in front of them. And Mr. Su is an experienced notetaker of 30 years, so I understand, and wrote very frequent notes. And according to Ms Shekerdemian they were very accurate. And no one's disputed that they're not accurate. So it's really so much only what I say but what their own notes tell them."

[76]Mr. Flenley submitted that actually it was too late, by the date of the consultation with Mr. Samek, sensibly to have changed course, abandoned the application for discharge of the Main Freezing Order, and sought to rely upon payment in under paragraph 12(6) in order to secure release of Rollerteam and Holmes Ltd. from the Main Freezing Order. I do not accept that. The evidence indicated that in fact there was money, as at about 5 February 2013, which could have been added to the £535,000 already in court to secure discharge under paragraph 12(6) of Rollerteam and Holmes Ltd., had Mr. Aidiniantz so chosen. Mr. Aidiniantz said in his cross-examination [Transcript, Day 4, page 151 lines 1 – 9 and Transcript, Day 4, page 152 lines 18 - 25]:- "It's not too late to do anything about that. But it's not too late – if Mr. Samek had given advice about paying in, which I don't – which I wouldn't class as a health warning, in fact the very opposite, it's healthy for us. But if he had given that advice then it was certainly not too late no. Because our turnover, which we are making, the fact that we had half a million pounds in our bank account, certainly not too late. Why would it be too late? Too late in respect of the 535. … Well, not only did it have enough money, I was offering to pay in even another half a million pounds into court in my correspondence with Simeon Gilchrist. Not only half a million, but various banks – in various bank accounts, 20,000 here and there, and even chucking in the museum equity. The whole kit and caboodle I was willing to throw at the mercy of the court in order to shake off the freezing injunction."

[77]Despite what he said at the end of the quotation in the previous paragraph, actually Mr. Aidiniantz and his companies did not pay any further money into court, but I accept his evidence that they were in a position to do so. Had they done so, there was serious money to be saved. No doubt some costs had been incurred in connection with the application for discharge, and no doubt SHIS would have sought payment of its costs as at that time in connection with the discharge application. However, Mr. Samek's brief fee and refreshers, plus Coe's profit costs of the hearing before Proudman J, would not have been incurred, and the level of costs which was sought on behalf of SHIS must certainly have been much less than the £25,000 ultimately paid. That these savings were not made was because of Mr. Aidiniantz's determination to pursue the discharge application.

[78]In the result I am satisfied that there is no substance whatsoever in the allegations of negligence made against Coe in the Part 20 Claim. For the reasons which I have explained, it was not incumbent upon Coe to give the advice which it is alleged that it did not give as to the possibility of paying parts of the £535,000 into court in order to procure the discharge of the Main Freezing Order as against Rollerteam and Holmes Ltd., as Mr. Aidiniantz, being aware of the possibility of procuring discharge by payment into court, had expressed no interest in that option. The advice given in the letter dated 18 December 2012 as to the possibility of paying money into court to secure the discharge of the Main Freezing Order was sufficient. If more explicit advice had been given before the decision to pay the £535,000 into court had been made, it would have been ignored on the critical point of not pursuing a discharge application, because Mr. Aidiniantz was determined to seek to have the Main Freezing Order discharged in order to secure advantage over those behind SHIS. That is the course upon which he resolved to continue after the consultation with Mr. Samek when, on my findings, he was told in terms that money could be paid into court in order to secure the release of any particular defendant in the Main Action from the Main Freezing Order as continued by the Return Day Order. Whether Coe was entitled to judgment for the sums claimed in the action

[79]In the light of my conclusion that the Part 20 Claim failed in relation to allegations of negligence, the question whether Coe was entitled to judgment for the sums claimed in this action depended upon four classes of issue. The first class was whether the Part 20 Claimants were entitled to have assessed, pursuant to the provisions of Solicitors Act 1974 s.70, or at common law, those bills which they wished to have assessed. The answer depended on the second class of case and the third class of case. The second class was in the nature of one type of answer to such entitlement, whether, as was contended on behalf of Coe, by reason of exchanges between Mr. Aidiniantz and Coe after Mr. Aidiniantz had decided to instruct Davenport in place of Coe, Mr. Aidiniantz and Rollerteam had agreed not to challenge the bills outstanding unpaid, or were estopped from seeking assessment, or had waived any right to assessment. The different contentions in this class of case depended not on different facts, but upon the proper analysis in law of the same basic facts. The third class of case only arose if Coe failed on the second class of case. It was whether the Part 20 Claimants had demonstrated, in relation to bills sought to be assessed which were unpaid, that it was appropriate for the court to exercise its jurisdiction under Solicitors Act 1974 s.70(2), or at common law, to order assessment, or, in relation to bills which it was sought to have assessed which had been paid, whether there were "special circumstances" within the meaning of Solicitors Act 1974 s.70(3) which made it appropriate for me to order an assessment of the bills of which assessment was sought, or whether the Part 20 Claimants were entitled to assessment at common law. The final class of issue was whether, by his letter of 5 January 2013, on proper construction, Mr. Aidiniantz had in truth agreed to indemnify Coe in respect to sums falling due to Coe from Rollerteam. Whether Mr. Aidiniantz and Rollerteam had forgone any entitlement to assessment

[80]It is convenient to consider next the contentions of Coe that Mr. Aidiniantz and Rollerteam had forgone any entitlement to assessment of any bills.

[81]The matters to which this class of issue gave rise were pleaded in the Amended Reply and Defence to Counterclaim at paragraph 28:- "As to paragraph 28, it is denied that the Part 20 Claimants are entitled to seek an assessment of the Claimant's costs in the Main Proceedings and/or the Possession Proceedings pursuant to s.70 of the Solicitors Act 1974 or at common law; alternatively, it is denied that the Part 20 Claimants are entitled to challenge the amount and/or reasonableness of the Claimant's costs on such an assessment under the Act or at common law. The Claimant will contend as follows:a. By sending the email timed at 13.39 hrs on 15 March 2013 and the attached spreadsheet and/or the email timed at 13.54 hrs on 15 March 2013 and attached letter of instruction Mr. Aidiniantz agreed expressly or impliedly on behalf of himself and the other Part 20 Claimants to pay the Claimant's costs in the liquidated sum of £103,500.17. In consideration for the agreement the Claimant released the two boxes of papers to the Part 20 Claimants' new solicitors, Davenport Lyons, without exercising a lien over the papers.

b. Further or alternatively, the Part 20 Claimants are estopped from seeking an assessment of the Claimant's costs pursuant to s.70 of the Solicitors Act 1970, or alternatively from challenging the amount and/or reasonableness of the Claimant's costs on such an assessment. By sending the above emails and attachments Mr. Aidiniantz represented expressly or impliedly and/or by his conduct on behalf of himself and the other Part 20 Claimants that the Claimant's costs were reasonable and that the Part 20 Claimants would pay the Claimant's costs in the sum of £103,500.17. The Claimant relied upon the above representation to its detriment by releasing the two boxes of papers to the Part 20 Claimants' new solicitors, Davenport Lyons, without exercising a lien over the papers.

c. Further or alternatively, by sending the above emails and attachments Mr. Aidiniantz on behalf of himself and the other Part 20 Claimants waived the right to seek an assessment pursuant to s.70 of the Solicitors Act 1970 [sic] or alternatively the right to challenge the amount and/or reasonableness of the Claimant's costs on such an assessment."

[82]By an e-mail sent to Mr. Gilchrist and Mr. Su at 16.42 hours on 14 March 2013 Mr. Aidiniantz informed them that:- "I have decided to appoint another firm of solicitors to deal with all the current litigation which is in hand and any intended litigation. I recognise the efforts you have both put in to the work on my behalf but I feel it is time to get a different slant on matters. … I thank you once again for your assistance in dealing with the various matters in hand. Please kindly ensure that the changeover goes as smoothly as possible by informing Mr. Yapp of any outstanding or urgent matters which need addressing. Please also forward to ourselves in due course your financial statement …"

[83]Mr. Gilchrist replied at 21.07 hours on 14 March 2013. One of the points he made in that e-mail was that:- "As also discussed, the hand over exercise will require me to render final accounts including counsel's fee notes, final positions on which I have sought this evening from their clerks."

[84]He went on to explain the sums considered to be outstanding and asked for "a CHAPS transfer tomorrow of £73,211.39".

[85]In an e-mail sent at 9.31 hours on 15 March 2013 to Mr. Aidiniantz Mr. Gilchrist enquired, "Could you let me have confirmation that you've given appropriate instructions to your bank as soon as possible so that we can get on with the hand over to Nicholas [Yapp of Davenport]."

[86]The reaction of Mr. Aidiniantz to receipt of the e-mail sent at 21.07 hours on 14 March 2013 and that sent at 9.31 hours on 15 March 2013 was to send an e-mail to Mr. Gilchrist at 10.18 hours on 15 March 2013 which was in these terms, so far as presently material:- "It might assist if I append a summary of the invoices I have received from you and the payments we have made to you. If there is anything outstanding in the way of invoices/fee notes from Counsel, please provide them by email."

[87]The e-mail was fielded by Mr. Gilchrist's secretary, Amber Mahoney, who attached final accounts to an e-mail to Mr. Aidiniantz sent at 11.48 hours on 15 March 2013. Mr. Aidiniantz then telephoned Amber Mahoney, and following that telephone conversation she sent Mr. Aidiniantz revised figures in an e-mail despatched at 12.58 hours on 15 March 2013. That e-mail recorded as due a total sum of £103,489.67. Mr. Aidiniantz replied to that e-mail at 13.39 hours on 15 March 2013:- "The correct total of £103,500.17 is shown on the attached spreadsheet."

[88]That e-mail, as it seems to me, was an offer by Mr. Aidiniantz, on behalf of himself, Rollerteam, Museum Ltd. and Holmes Ltd. to agree the amount due to Coe in respect of fees outstanding as at 15 March 2013 in the sum of £103,500.17.

[89]At 13.54 hours on 15 March 2013 Mr. Aidiniantz sent to Mr. Su an e-mail in which he said, amongst other things:- "Please find attached payment list 12. Please process asap and I will go to the bank and make the necessary transfers as soon as I receive your confirmation that you have notified the bank."

[90]"Payment List 12" which was attached to the e-mail was a notification to HSBC Bank plc ("HSBC") of intention to make various payments out of accounts of Holmes Ltd. and Rollerteam with HSBC. A notified, intended payment out of an account of Rollerteam was of £103,500.17 to Coe. Strictly, in my judgment, that was an offer by Rollerteam, acting by Mr. Aidiniantz, to pay the agreed sum of £103,500.17 to Coe "as soon as I receive your confirmation" in consideration at least of Mr. Su notifying HSBC of the wish to make the payments in "Payment List 12". That is fairly insubstantial consideration, but the law is not concerned with the adequacy of consideration, merely with whether the person required to provide consideration did something in return for the promise of the promisor. Here the something was to notify HSBC. That Mr. Su did by an e-mail sent to Anne Hudson at HSBC at 14.56 hours on 15 March 2013, which was copied, as confirmation, to Mr. Aidiniantz.

[91]It was common ground that, following receipt of the e-mail sent at 13.54 hours on 15 March 2013 Coe did permit various papers to be collected from its offices by Davenport on 18 March 2013. It appeared that, at least as to the greater part, those papers were papers of which Mr. Aidiniantz already had copies. It was implicit in the cross-examination of Mr. Gilchrist by Mr. Flenley that somehow releasing a lien over papers of which a client already had copies was not sufficient to amount to providing consideration for an agreement on the part of the client to pay the solicitor's fees. I reject any such implicit submission. I have already observed that the law is not concerned with the adequacy of consideration. Coe might have declined to release any of the papers which it did release until its fees were paid. It did not.

[92]Rather, what seems to have happened is that Mr. Aidiniantz sent an e-mail at 15.22 hours on 15 March 2013 to a number of people, including Mr. Gilchrist and Mr. Su, in which he said, so far as is presently material:- "Can you please arrange a courier to send all the papers in the case – affidavits etc – to our new solicitor today so that he can work on the papers over the weekend or alternatively call him so that he can send a courier. Due to time constraints I would like this matter dealt with asap we have notified you of our intentions since yesterday. "

[93]There followed a further couple of e-mail exchanges between Mr. Su and Mr. Aidiniantz, as well as contact between Coe and Davenport, concerning the handing over of papers held by Coe. At 17.53 hours on 15 March 2013 Mr. Aidiniantz sent an e-mail to Mr. Su, copied to Mr. Gilchrist, in the following terms:- "Thank you – I did give three sets of each folder and do not have the September folder but let us see what Nicholas [Yapp] makes of the papers when he gets them. I intend to go into HSBC monday [sic] morning to settle your account by way of the transfer. This could have been done today but if you speak to Amber you will see that we spent some time in finalising the account and therefore there was no time to make the transfer. When you receive the money on Monday morning then Davenport Lyons can announce themselves as being on the record and they can notify their own payments direct to Smithfield."

[94]On the evidence of Mr. Gilchrist, at paragraph 132 of his witness statement, "… I decided that, because of the written promise I had fromMr. Aidiniantz to make payment on Monday and confirmation of the amount due of £103,500.17, I would release enough papers to allow Mr. Yapp to read in and to build on the conversations that he and I had had about the background."

[95]In those circumstances, it seems to me that actually Mr. Aidiniantz made three separate offers to Coe. One was to agree, on behalf of himself, Rollerteam, Museum Ltd. and Holmes Ltd., the costs of Coe in the sum of £103,500.17. That was the offer contained in the e-mail sent at 13.39 hours on 15 March 2013 by Mr. Aidiniantz. That offer had not been accepted by Coe by the time of the second offer, and the making of the second offer, in the e-mail sent at 13.54 hours on 15 March 2013, because it included a new provision – as to time of payment – amounted to a withdrawal of the first offer and the substitution of a new one. The second offer, as I have noted, was to pay the agreed sum of £103,500.17 "as soon as I receive your confirmation". That offer was accepted in the manner which I have already noted, Mr. Su doing that which was sought by Mr. Aidiniantz in making the offer. The third offer was that contained in Mr. Aidiniantz's e-mail sent at 17.53 hours on 15 March 2013 and was that Coe would be paid £103,500.17 by Rollerteam if the papers request of which was sought were released. However, the papers which Mr. Aidiniantz had requested were not, in the event, all released. Rather, because payment had still not been received when a courier came to collect the papers on 18 March 2013, Coe only released a limited number of papers. It was not contended that the offer contained in the e-mail sent at 17.54 hours on 15 March 2013 was accepted expressly. Indeed it was not pleaded that it constituted part of a contract at all. That, I think, was sensible. Absent an express acceptance, the only obvious way of accepting the offer was permitting collection of the papers requested. Releasing only some of the papers did not amount to acceptance of the offer.

[96]Thus where one got to, in my judgment, was an agreement on the part of Mr. Aidiniantz, Rollerteam, Museum Ltd. and Holmes Ltd. to pay Coe £103,500.17 in settlement of the fees outstanding of Coe as at 15 March 2013 on 15 March 2013, that being when Mr. Aidiniantz received the necessary confirmation.

[97]Mr. Flenley submitted that agreement on the part of a client to pay his solicitor's bill in a particular amount did not, of necessity, involve the client agreeing not to seek to have the bill assessed. I think that that must be correct. Were it not so, Solicitors Act 1974 s.70(3)(c) would not be in the terms in which it is. Prima facie payment of a bill rendered indicates agreement to the amount of it, yet Solicitors Act 1974 s.70(3)(c) in terms provides for assessment of a paid bill, if there are "special circumstances".

[98]My attention was drawn to a number of authorities concerning the assessment of solicitor's bills and the significance of "agreement" on the part of a client.

[99]In Turner & Co. v. O. Palomo SA

[2000] 1 WLR 37

the Court of Appeal was concerned with the common law jurisdiction of this court to order a solicitor's bill to be assessed. The judgment of the court was delivered by Evans LJ. At page 40 of his judgment he explained the relationship between the common law jurisdiction of the court to direct the assessment of a solicitor's bill and the provisions of Solicitors Act 1974 s.70:- "A number of issues are raised by the case, the one of most general importance being whether, after the lapse of the times for taxation provided for in section 70 of the Solicitors Act 1974, a solicitor is conclusively entitled to whatever amount he claims in his bill even though the client does not accept that the solicitor is so entitled. The position apart from the Act is broadly as follows. If the solicitor wishes to be paid and is not in funds he will need to sue and prove that his charges were either expressly agreed or are reasonable charges. If he is in funds and purports to deduct the amount of his bill but the client challenges the deduction the solicitor will still need to prove that the charges were either expressly agreed or were reasonable charges. The question is whether the client loses these rights to challenge the amount of the bill after the period for taxation has passed."

[100]At page 51 of the report Evans LJ expressed the conclusion of the Court of Appeal that:- "Nothing in the [Solicitors] Act [1843], or its successors, takes away the need for the solicitor to prove that his fees are reasonable, if they are challenged, absent any express agreement as to what they should be. … Nor do we consider that the solicitor is disadvantaged by the possibility that the client is entitled to have the reasonableness of the charges assessed by the court after the statutory periods for taxation have expired. He can himself claim an order for taxation under section 70(2), without any time limit, and obtain a form of summary judgment when the taxation certificate is issued: section 72(4). …"

[101]Thus the position at common law is that a client is entitled to have a solicitor's bill of costs assessed unless he has agreed the amount of the bill. If he has agreed the amount of the bill, at common law, the analysis is that the agreement of the bill is in the nature of a compromise. In place of the inchoate right of the solicitor to payment for work done on a quantum meruit, there is substituted an agreement by the solicitor to accept, and by the client to pay, the agreed sum. Consideration for that agreement is provided from both sides. The solicitor forgoes his right to a reasonable sum, to be determined by the court, and, the client forgoes his right to assessment in consideration of the solicitor agreeing to accept the agreed sum.

[102]In the light of my finding that Mr. Aidiniantz agreed, by his offer in his e-mail sent at 13.54 hours on 15 March 2013, on behalf of himself, Rollerteam, Museum Ltd. and Holmes Ltd., to pay £103,500.17 in settlement of Coe's fees outstanding as at that date, which offer was accepted by Coe, it was not open to Mr. Aidiniantz or Rollerteam or Museum Ltd. or Holmes Ltd. to seek, at common law, assessment of Coe's bills outstanding unpaid.

[103]The position under Solicitors Act 1974 s.70 was different. As I have pointed out, agreement of a solicitor's bill does not, of itself, and inevitably, amount to the client agreeing to forgo the statutory entitlement to an assessment, but, after the expiry of one month from the delivery of the bill, whether there should be an order for assessment is a matter for the discretion of the court. While I do not suggest that parties could not, by an appropriately worded agreement, agree not only that the client should pay the solicitor's bill in a particular amount, but also that the client would not thereafter seek to have the bill assessed, it would be wrong to consider that, without more, agreement to pay a particular amount, or payment of the amount of a bill, prevented the client from seeking an assessment. However, the fact of agreement of a particular sum as due to the solicitor is bound to be important to the consideration of the court as to whether, in the particular circumstances, assessment should be directed, in the exercise of the discretion of the court.

[104]Mr. Stewart Chirnside, who appeared on behalf of Coe, drew to my attention two decisions at first instance on the issue whether, in the bankruptcy jurisdiction, the agreed amount of a solicitor's bill could found, in the one case a bankruptcy petition, in the other a statutory demand. The earlier case in point of time was a decision of Proudman J, Truex v. Toll

[2009] 1 WLR 2121

. At paragraph 30 of her judgment, page 2128 of the report, Proudman J said:- "It seems to me that there is logic in Mr. Macpherson's submission that an agreement converting an unliquidated debt into a liquidated one must be a binding agreement. That would mean an agreement for consideration, that is to say an agreement as to a fixed amount, or an agreement as to hourly rates and time spent in consideration of future services, or a compromise agreement, or conduct giving rise to an estoppel according to established principles."

[105]The reference to compromise is, essentially, the analysis which I have already explained. It is interesting that the issue arose in Truex v. Toll whether it was possible to contract out of the provisions of Solicitors Act 1974 s.70. Proudman J did not finally decide the point, but it was suggested that one could not. I have already expressed my view on that point.

[106]The second of the cases at first instance was a decision of Morgan J, Wallace LLP v. Yates

[2010] EWHC 1098 (Ch)

. Morgan J summarised the views of Proudman J in Truex v. Toll, but did not comment upon those views, and it was submitted that, implicitly at any rate, thereby indicated his agreement. As the views of Proudman J which I have quoted were basically the same as my own on the relevant point, it is not necessary possibly to embarrass Morgan J by seeking to implicate him in similar views on the basis of what he actually said in Wallace LLP v. Yates, not least because, given her actual decision in the case, the paragraph which I have quoted from the judgment of Proudman J seems to have been obiter.

[107]In the result, although I have been persuaded that a contract was made between Mr. Aidiniantz, Rollerteam, Museum Ltd. and Holmes Ltd. and Coe that Mr. Aidiniantz, Rollerteam, Museum Ltd. and Holmes Ltd. would pay Coe £103,500.17 in respect of the professional services provided by Coe, and that, consequently, it was not open to Mr. Aidiniantz, Rollerteam, Museum Ltd. or Holmes Ltd. to seek assessment of the bills of Coe at common law, it was open to them at least to ask for assessment of the relevant bills under Solicitors Act 1974 s.70.

[108]Mr. Aidiniantz certainly represented to Coe that Coe would be paid £103,500.17, and I accept the evidence of Mr. Gilchrist that he relied upon that representation in agreeing to the release of the lien of Coe over some papers. The representation, on its face, was of an intention to make a payment in the future, but that representation involved a further representation, namely that at the time it was made it was actually the intention of Mr. Aidiniantz to arrange for the payment to be made. The evidence of Mr. Aidiniantz was that he changed his mind about making payment after genuinely having an intention to cause payment to be made. I do not accept that. I have already indicated my view of the evidence of Mr. Aidiniantz generally. However, in relation to Mr. Aidiniantz's professed desire actually to give instructions to HSBC to pay Coe on 15 March 2013, the most compelling evidence against acceptance of Mr. Aidiniantz's evidence was that he did not in fact give the relevant instructions. Although he contended that he had been frustrated in giving the instructions by lack of time because of the need to finalise the account, on Mr. Aidiniantz's own e-mail sent at 13.39 hours on 15 March 2013 he knew perfectly well that the sum due was £103.500.17, an amount £10.50 more than the total which Coe had reached by adding up the outstanding bills. There was no sensible reason for him not to give instructions to HSBC to pay Coe £103,500.17 if he genuinely intended that payment should be made.

[109]However, Mr. Flenley submitted that, whereas the law was not concerned, in the context of the making of a contract, with the value of consideration, but only with whether there was technically consideration to support the contract, that was not the position in relation to estoppel. He drew to my attention the decision of the Court of Appeal in Gillett v. Holt

[2001] Ch 210

. The only substantive judgment was that of Robert Walker LJ. At page 232 he said:- "The overwhelming weight of authority shows that detriment is required. But the authorities also show that it is not a narrow or technical concept. The detriment need not consist of the expenditure of money or other quantifiable financial detriment, so long as it is something substantial. The requirement must be approached as part of a broad inquiry as to whether repudiation of an assurance is or is not unconscionable in all the circumstances."

[110]Mr. Flenley emphasised that what Mr. Aidiniantz actually got out of Coe in the light of the assurance given was not much of value, because most of what was released was material already in the possession of Mr. Aidiniantz. Had that been an important point, I should have rejected it. However, the important point in the circumstances of the present case, as it seemed to me, was not whether it was unconscionable for Mr. Aidiniantz and Rollerteam to go back on the assurance given, but what the assurance was. It was an assurance to pay, not an assurance not thereafter to seek assessment of the bills of Coe. For that reason I reject the submissions of Mr. Chirnside that Mr. Aidiniantz, Rollerteam, Museum Ltd. and Holmes Ltd. should be treated as estopped from seeking assessment of Coe's bills.

[111]Each of the bills rendered to Mr. Aidiniantz or to another of the Part 20 Claimants was endorsed, on the front, "Please see notice on reverse", and, on the reverse:- "Notice Our aim is to deliver a high standard of service to our clients. If however you are unhappy with this bill, please raise your concerns in the first instance with the partner handling your matter. If this bill is for non contentious business, we are entitled, from the expiry of one month after delivery of the bill, to charge interest at the rate for the time being payable on judgment debts on any part of the bill remaining unpaid. Your attention is drawn to sections 70, 71 and 72 of the Solicitors Act 1974 relating to taxation of costs, which may give you the right to have our charges reviewed by the Court."

[112]Thus Mr. Aidiniantz, and the other addressees of bills rendered by Coe, had an option, if he or it chose, to have the bills assessed. They did not choose that option at the time of delivery of the relevant bills. The question was whether, by not having done so, they should be treated as having waived any entitlement thereafter to seek assessment. In my judgment that was an impossible submission, given the terms of Solicitors Act 1974 s. 70. By Solicitors Act 1974 s,70(2) Mr. Aidiniantz, Rollerteam, Museum Ltd. and Holmes Ltd. were entitled to apply to the court for a direction for assessment of unpaid bills delivered less than 12 months from the date of the application and which were unpaid. By Solicitors Act 1974 s.70(3) Mr. Aidiniantz, Rollerteam, Museum Ltd. and Holmes Ltd. were entitled to apply to the court for assessment of bills paid less than 12 months before assessment was sought. It would be very strange if a party with those statutory rights was considered to have waived them merely because it did not seek to exercise them immediately, yet that was the effect of Mr. Chirnside's submission. Assessment of the bills challenged in the Part 20 Claim

[113]Given that the Part 20 Claimants were not disentitled from applying to the court for an order for assessment of the bills sought to be challenged, it was necessary to consider whether the court should exercise its jurisdiction to order assessment of any of the bills.

[114]The case of the Part 20 Claimants pleaded in the Re-Amended Defence and Part 20 Claim in relation to the alleged entitlement to assessment of bills was this:- "28. The Part 20 Claimants lawfully and reasonably seek an assessment of the Part 20 Defendant's costs of the Main Proceedings and the Possession Proceedings pursuant to sec. 70 of the Solicitors Act 1974, alternatively at common law. 29. The Part 20 Claimants apply for an order for an assessment of the bills in the Second Schedule attached. 30. In so far as the Part 20 Claimants are required to prove an entitlement to an assessment pursuant to sec. 70 of the Solicitors Act 1974, they rely upon the following as being special circumstances within the meaning of s.70(3) of that Act(i) that the Part 20 Claimants have reasonably delayed making an application for an assessment until the conclusion of the retainers and of the Main Proceedings and the Possession Proceedings;

(ii) that the Part 20 Claimants raise a credible challenge to the entitlement of the Part 20 Defendant to much of the costs of the Main Proceedings;

(iii) that the costs which are claimed are unreasonably high."

[115]In fact Coe rendered seven bills to one or other of the Part 20 Claimants. For reasons which were obscure the bills listed in the Second Schedule to the Re-Amended Defence and Part 20 Claim only numbered five. Of those five, two, numbered, respectively, 2013-4619 and 2013-5092, had been paid in full. Assessment was sought of one bill paid in part, 2013-5325, in relation to which £9,034.79 out of £88,216.49 was outstanding. Bill numbered 2013-5325 was addressed to all of the Part 20 Claimants. The bills paid in full had been addressed to all of the Part 20 Claimants. Assessment was not sought of the bill numbered 2013-5693, in the sum of £4,429.60, addressed to Mr. Aidiniantz and Rollerteam, but relating to the Possession Action, or of the bill numbered 2013-5694, in the sum of £8,278.80, again addressed to Mr. Aidiniantz at Rollerteam, but relating to the Riley Action, to which only Rollerteam, and not also Mr. Aidiniantz personally, was a party. The total of the seven bills rendered, of which four related to the Main Action, two to the Possession Action and one to the Riley Action, came to £273,500.17. Of that sum, £237,628.37 related to the Main Action. The total amount of the two bills relating to the Possession Action was £27,593.

[116]Bearing in mind the absolute entitlement of a litigant to have his solicitor's costs assessed under Solicitors Act 1974 s.70(1), provided only that the application was made within one month of the delivery of the bill, it seems to me that it was not a "special circumstance" of the present case, justifying an order for assessment under Solicitors Act 1974 s.70(3), that the litigation to which the bills related was continuing, yet the effect of what was pleaded at paragraph 30(i) of the Re-Amended Defence and Part 20 Claim was to contend that such a circumstance was "special". All that was required, to be able to rely upon the provisions of Solicitors Act 1974 s.70(1) was an application for the assessment desired within the one month period. The actual assessment could take place thereafter at some convenient date. It was perhaps implicit in what was pleaded at paragraph 30(i) that parties to litigation could not reasonably be expected to divert effort to claiming an assessment of a solicitor's bill of costs whilst an action was continuing. However, that, in my judgment, was not a self-evident proposition, and no evidence was led before me which suggested that there were particular circumstances of the present case which demonstrated that it would have been unreasonable to seek assessment whilst the relevant litigation was continuing.

[117]The point pleaded at paragraph 30(i) of the Re-Amended Defence and Part 20 Claim did not seem to be relevant to a decision whether or not to direct assessment of unpaid bills under Solicitors Act 1974 s.70(2).

[118]What was pleaded at paragraph 30(ii) of the Re-Amended Defence and Part 20 Claim amounted to no more than a reprise of the negligence claim with which I have already dealt. It required no further consideration.

[119]The assertion at paragraph 30(iii) of the Re-Amended Defence and Part 20 Claim was not self-evident. Although the court has experience of making summary assessments of costs in freezing order proceedings, it does not have experience of making detailed assessments, such as are made by costs judges. Consequently, in my judgment, to make good the proposition that "the costs claimed are unreasonably high" it was necessary for evidence to be adduced from a costs draftsman, or similarly qualified individual, to the effect that some identifiable element or elements of the costs sought to be assessed was unreasonably high for a limited liability partnership of solicitors providing commercial litigation services and based in Lincoln's Inn. Without such evidence all the court was left with was its own experience, which was an inadequate foundation on which to reach a conclusion as to whether the particular costs sought to be challenged were "unreasonably high".

[120]The matter was further complicated by the bills of which assessment was not sought. The lack of a challenge to those bills indicated that they were considered reasonable for the work done. Those bills, in the instant case, seemed to have been based on hourly charging rates which were the same as those charged in the bills of which assessment was sought. Thus it seemed that there was no challenge to the reasonableness of the hourly charging rates in the bills of which assessment was sought. That was not surprising, given that it had been made clear to Mr. Aidiniantz and his companies from the outset, by the terms of Mr. Gilchrist's e-mail sent at 18.38 hours on 17 December 2012 to Mr. Aidiniantz, and the terms of each letter of engagement, what was the hourly rate of charge of Mr. Gilchrist and what was the hourly rate of charge of Mr. Su. Those rates were presumably considered by Mr. Aidiniantz and his companies to be reasonable at the time Coe was first instructed. Indeed, Mr. Aidiniantz described them as such in his e-mail to Mr. Gilchrist sent at 18.48 hours on 17 December 2012, and subsequently in e-mails to which I have referred. Moreover, even in cross-examination Mr. Aidiniantz accepted that the hourly rates were reasonable.

[121]Mr. Aidiniantz explained his position in relation to the costs of Coe in this passage of his cross-examination [Transcript, Day 4, page 169 line 25 to page 170 line 21 and page 171 line 16 to page 172 line 19]:- "Q. Is your complaint about Edwin Coe's fees alone? Or do you complain about everything, including counsel's fees and the other disbursements? A. The fees which Edwin Coe – I can't – I can't complain about any assessment or I can't complain about counsel's fees. I don't think I'm complaining about counsel's fees but on the other hand counsel's fees, I'm primarily concerned about the bills relating to what Edwin Coe did, on the freezing injunction. Q. So when you say the fees are reasonably high you mean Edwin Coe's fees, not counsel's fees or anything else? A. No, I think it's fair to say counsel's fees are reasonable for what's – what, you know, seem to be reasonable and I wouldn't say that they're unreasonable. Mr. Samek is a QC. I think Edwin Coe's fees are obviously, well, £270,000 and much of the work was on a freezing injunction, so that doesn't seem to be – Q. I think actually if you take off counsel's fees and VAT, Edwin Coe's fees are only about £135,000. A. Well, I can't beg to differ. … Q. So you're saying that the hourly rates set out in Mr. Gilchrist's email [of 17 December 2012] are reasonable? A. I have no quibble about the hourly rates, no. Q. So it's not the hourly rates, it's just the amount of time spent that you're concerned with? A. No, it's the fact that I wasn't properly advised or given any advice as I should have been. So I don't see why I should pay for that – I don't think I should pay for people's time if it's not in accordance with – if they're giving me proper advice then I wouldn't obviously be, as my whole case is about, to a certain extent, I wouldn't have incurred all those fees. Q. So you're saying that the hourly rates are reasonable? A. The hourly rate is perfectly reasonable. Q. And the amount of time spent is reasonable? A. The amount of time spent, from their point of view, is reasonable, yes. From their point of view. Q. So it's just the advice they gave you that you think is – A. Well, it's perfectly reasonable if the work was justified, and perfectly reasonable, I have had no quibble, but it's the fact that they're based upon work which they ought not to have been doing, which is what the whole basis of my complaint there is. I wouldn't have had to incur all those fees if they give me advice at the beginning that, look, I don't need to expend all that money. It stands to reason. I don't want to just pay solicitors to do work if I don't need to pay them to do work, if you see what I mean."

[122]Thus it appeared from those passages that Mr. Aidiniantz did not seek to challenge any disbursements of Coe, or Coe's hourly rates, or the time which Coe had devoted to carrying out his various instructions. Mr. Aidiniantz's grievance was not actually with the various bills as bills, but focused entirely on the allegations of negligence with which I have already dealt.

[123]It was also right to say that it was plain from the volume of paper included in the trial bundles that Mr. Aidiniantz, and through him, his companies, were demanding clients. The bundles contained numerous e-mails from Mr. Aidiniantz to Mr. Gilchrist or to Mr. Su, each of which had to be considered and replied to, and thus could properly be charged for. Mr. Gilchrist estimated that there had been something like 2000 e-mails during the period of the retainer of Coe, which lasted just about three months. Mr. Su also spoke, in his cross-examination, of numerous telephone calls from Mr. Aidiniantz, which again could properly be charged for.

[124]In his written closing submissions Mr. Flenley took account of the evidence of Mr. Aidiniantz as to what he was unhappy about in Coe's bills. At paragraph 21 of the submissions he wrote:- "In cross-examination it was suggested to Mr. Aidiniantz that the amounts of the bills were reasonable. It is not accepted that that was a relevant question. The relevant question is whether, if assessment is ordered, Edwin Coe will succeed in showing that the sums claimed comply with the relevant statutory or common law test on assessment. That will be a matter for costs lawyers to debate, and a costs judge to determine. It is not something which it is fair to ask a lay client about, because lay clients are not costs lawyers and thus, unless they have been advised by costs lawyers, cannot know the answer."

[125]So far as specifics were concerned, in his written closing submissions Mr. Flenley relied on two points. One was an admission by Mr. Gilchrist in cross-examination that one might expect Coe's bills to be reduced on assessment by 20%. The other was the difference between the charging rates of Mr. Gilchrist and Mr. Su and the guideline rates set out in Guide to the Summary Assessment of Costs 2005 edition, respectively £317 per hour for a Grade A fee earner, as at 2010, and £242 per hour for a Grade B fee earner, again as at 2010.

[126]What I had to decide, in relation to unpaid, or partially-paid, bills of which assessment was sought under Solicitors Act 1974 s.70(2), was whether, in the exercise of my discretion, I should direct assessment of those bills. In relation to the paid bills of which assessment was sought I had to decide whether there were special circumstances which justified directing assessment.

[127]So far as each of those decisions was concerned, an important question had to be whether, if assessment were directed, that would result in any benefit to those seeking assessment. I have already expressed my view that, in order to be satisfied on the question of possible benefit it was appropriate for a costs draftsman, or someone similarly qualified, to have been called to give expert evidence, but that that did not happen. Absent any expert evidence, the views of the client, or client's representative, Mr. Aidiniantz, as to what he was seeking to achieve and how, had to be relevant, pace Mr. Flenley. The guidelines in Guide to the Summary Assessment of Costs 2005 edition, were just that, guidelines. They were not said to have been current in 2013, but in 2010, and related to the summary assessment of costs, which was not the exercise which I was invited to direct. I notice that paragraph 42 of the Guide, in explaining the guidelines, stated:- "The guideline figures are not intended to replace figures used by those with accurate local knowledge. They are intended to provide a starting point for those faced with summary assessment who do not have that local knowledge."

[128]It seems to me appropriate for me to recognise that Coe operated at the date of the trial, and operated in 2012 and 2013, in a competitive legal market, and thus that its hourly rates were more likely to be competitive with other practices of a similar size and type of business in Lincoln's Inn and the surrounding areas, than not.

[129]I have already mentioned as relevant to the exercise of my discretion under Solicitors Act 1974 s.70(2) the fact that the client had agreed the amounts of the bills sought to be assessed. In those circumstances, as it seemed to me, in order to persuade me to exercise my discretion in favour of Mr. Aidiniantz, Rollerteam, Museum Ltd. and Holmes Ltd. it was incumbent upon those parties to explain why, having agreed the bills, it was sought to have them assessed. That involved not merely explaining why the bills had been agreed in the first place, but also why, that having been done, they now wished to have them assessed. Or, to put it another way, what did they expect to get out of an assessment, with reasons for any professed advantage, and why had they not chosen to seek that advantage within the time permitted by Solicitors Act 1974 s.70(1), but rather agreed the relevant bills? These questions were not addressed at the trial separately from the points which I have already rehearsed.

[130]Having eschewed as a useful yardstick in assessing the reasonableness of the costs of Coe which it was sought to have assessed the experience of the court, if compelled to express a view I would have said that it was not obvious to me, in the light of my experience in other cases, that the costs charged by Coe were excessive, given the hourly rates of Mr. Gilchrist and Mr. Su, which did not seem unreasonable, and the vast number of e-mails and telephone contacts between Mr. Aidiniantz and Mr. Gilchrist and/or Mr. Su revealed by the evidence.

[131]In the result I was not persuaded that it had been demonstrated that it was appropriate, in the exercise of my discretion under Solicitors Act 1974 s.70(2), to direct assessment of the unpaid, or partially paid, bills of which assessment was sought. The Part 20 Claimants were not entitled to an assessment under that provision simply for asking, yet the submissions of Mr. Flenley in closing came close to that contention. In the end I think that he sought to hold fast upon the rock of Mr. Gilchrist's acceptance in cross-examination that on assessment the proper amounts of the bills might be found to be something of the order of 20% less than the sums claimed. Although that might look an attractive basis upon which to order assessment, there was no evidence, from Mr. Gilchrist or anyone else, of what might be the justification for the reduction of 20% or so. The main elements of each of the bills unpaid, or partially paid, and sought to be assessed were profit costs, disbursements and Value Added Tax. The calculation of the latter was simply a function of calculating the two former elements and applying the rate of the tax, 20%. The proper profit costs were a function of what work was done, by whom, at what hourly rate, whether the hourly rate was appropriate for the work in question, and whether the number of hours expended on each item of work was reasonable. The disbursements were mostly counsel's fees. To which element, or elements, the 20% reduction might apply was obscure.

[132]So far as the paid bills were concerned, I was, in addition, not satisfied that it had been shown that there were "special circumstances" which justified an order for assessment.

[133]In his written closing submissions Mr. Flenley contended, at paragraph 24 that:- "… Edwin Coe must have deducted payment of these bills [the paid bills which it was sought to have assessed] from sums held for Ds, so the Court has jurisdiction to order assessment at common law: see Turner (above) at 40G-H and 50G-H."

[134]I have already quoted the passage from the judgment of Evans LJ in Turner & Co. v. O. Palomo SA at page 40 of the report. At page 50 he said, so far as is presently relevant, having referred to some observations of Lord Lowry:- "That would be the case where the client had paid the bill and more than 12 months had elapsed since payment. If he claimed money which was due to him from the solicitor, and the solicitor deducted his charges from it, then the client could put the solicitor to proof that the charges were not unreasonably high."

[135]It was, I think, important to notice that the mechanism at common law by which a client who wished to have the costs of his solicitor which the solicitor had deducted from money of the client which the solicitor was holding assessed was different from the mechanism to be adopted where the client sought to challenge the amounts of unpaid bills. In relation to unpaid bills the client simply resisted a claim for payment by the solicitor on the ground that the fees claimed were excessive, and that placed the burden on the solicitor, in order to prove his claim, of demonstrating that the fees were reasonable. However, where what was sought to be challenged at common law was the amount of a bill which the solicitor had paid himself out of money held for the client, what the client had to do was to claim from the solicitor the amount which the solicitor was holding for him, or so much thereof as he contended that the solicitor was not entitled to retain. The mechanism was not simply a claim for assessment. In the present case there was no claim by any of the Part 20 Claimants against Coe for repayment of any amount which Coe was said to be holding for that Claimant. On that ground alone, as it seemed to me, Mr. Flenley's submission was unsound.

[136]However, in a case, such as the present, in which monies had been paid on account to the solicitor, and, after that had happened, the solicitor claimed further sums from the client which the client agreed to pay, it seemed to me that, by agreeing to pay the further sums, the client also agreed that the sums paid on account had been properly allocated to costs otherwise due to the solicitor. In other words, the amounts of the paid bills were agreed as correct, and therefore not challengeable at common law. The indemnity

[137]I come, finally, to the indemnity relied upon on behalf of Coe.

[138]What was pleaded about it in the Re-Amended Defence and Part 20 Claim was obscure. It was:- "3. As to paragraph 5; it is denied (insofar as it may have been intended to allege) that an indemnity was given by the First Defendant in respect of any unpaid costs due to the Claimant from the Second Defendant."

[139]It did not appear that it was suggested that the letter relied upon had not been provided by Mr. Aidiniantz or had not been signed by him. The nature of the case relied upon at trial was explained by Mr. Flenley in his written skeleton argument at paragraphs 49 and 50:- "49. Edwin Coe rely upon an undated letter from Mr. Aidiniantz which is at … Mr. Aidiniantz agreed to indemnify Edwin Coe in respect of costs or liabilities of Rollerteam. It is not accepted that, by this letter, Mr. Aidiniantz or Rollerteam waived their rights to rely upon s.70(2) of the 1974 Act. Mr. Gilchrist deals with this at para. 138 of his witness statement … There is no suggestion that, before this document was signed, Edwin Coe did anything, other than the bare statutory minimum, to alert Mr. Aidiniantz or Rollerteam to the propositions that(i) either of them had rights pursuant to s.70 of the 1974 Act, or

(ii) by signing the indemnity Mr. Aidiniantz would be voluntarily abandoning those rights. It is submitted that Edwin Coe's contention, that by signing the indemnity Mr Aidiniantz unwittingly gave up those rights, is most unattractive and should be rejected. If Mr. Gilchrist had wished Mr. Aidiniantz to give up Rollerteam's rights to have Edwin Coe's bills subjected to assessment, in order to determine whether the costs incurred were reasonably incurred or reasonable in amount, then he should have expressly drawn Mr. Aidiniantz's attention to the relevant rights and explained that it was proposed that they be given up. 50. In the alternative, the letter of indemnity relates only to the Riley proceedings, and not to other bills. …"

[140]I think that it was clear at the trial that Mr. Flenley had misunderstood the nature of Coe's case concerning the indemnity. That case was, simply, that, by reason of having given the indemnity, Mr. Aidiniantz personally was liable jointly and severally with Rollerteam for payment of the fees which Rollerteam was bound to pay to Coe. It was not suggested that the effect of the indemnity was that Mr. Aidiniantz or Rollerteam had forgone any right to assessment under Solicitors Act 1974 s.70, if otherwise there was such a right. I have already considered the case of Coe that, actually, Mr. Aidiniantz, Rollerteam, Museum Ltd. and Holmes Ltd. had forgone any right to assessment, and that had nothing to do with the giving of the indemnity.

[141]From his skeleton argument it appeared that Mr. Flenley accepted that the indemnity had been given, and was effective as an indemnity. However, he raised a question of construction, namely whether the indemnity related only to work done in connection with the Riley Action, or was, as Coe contended, not limited to any particular action, and, importantly, also applied to the Main Action. The indemnity, in terms, related to "instructions given to you by Rollerteam Ltd pursuant to the company resolution passed on 4th January 2013". I have already quoted that resolution. On its face it applied to instructions "to represent the company in the claim against L Riley et al and in any other legal matters pursuant to recovering any debts owed to the company or enforcing our legal rights howsoever arising". That form of wording, in my judgment, was more than adequate to cover not only costs incurred in relation to the conduct of the Riley Action, but also costs incurred in relation to the Main Action. Conclusion

[142]In the result there will be judgment for Coe against Mr. Aidiniantz in the sum of £103,300.17, together with interest. In closing submissions there was agreement that interest should be awarded on any sum found to be due at 2 per cent per annum. It seems to me that interest should be calculated as from 15 March 2013 to the date upon which this judgment is handed down. I leave it to counsel to undertake the necessary calculation. In addition there will be judgment against Rollerteam in the sum of £75,907.17, again together with interest at 2 per cent per annum from 15 March 2013 until the date upon which this judgment is handed down. The Part 20 Claim fails and is dismissed.

Edwin Coe LLP v Aidiniantz & Ors [2014] EWHC 3994 (QB)

Introduction

(a) a wri"

Cited in 2 later judgments