Tiplady v Lloyds Bank Plc & Anor [2015] EW Misc B9 (CC) (6 February 2015) [2015] EW Misc B9 (CC)

EWMISC
Tiplady v Lloyds Bank Plc & Anor [2015] EW Misc B9 (CC) (6 February 2015)
[2015] EW Misc B9 (CC) · 2015-02-06
[1]THE JUDGE: This is an appeal by Mrs Margaret Tiplady,( the appellant), against a decision dated 13 th October 2014 by District Judge Hardy whereby he dismissed the appellant’s application dated 22 nd July 2014 ; and made no order as to costs of the substantive claim whilst ordering her to pay the respondents’ costs of the application.[2]The order sought by the appellant on this appeal is that the respondents should pay the appellant’s costs of the proceedings including the costs of the application.[3]I gave permission to appeal on paper, on the basis that ,on the face of it, (and without having had sight of the transcript of the district judge’s judgment or of the respondents’ skeleton argument in opposition to the appeal), the appeal appeared to have a realistic prospect of success. Background[4]The appellant entered into two credit agreements with the first respondent dated, respectively, 13 th December 2005 and 12 th October 2006, as well as one credit agreement with the second respondent dated 5 th May 2006. In relation to each of the credit agreements, the appellant was sold Payment Protection Insurance (“PPI”).[5]On a date unknown, the appellant submitted a complaint to the respondents about the sale of the PPI products. This complaint was rejected. On 8 th July 2010, the appellant’s solicitor, Miller Gardner, issued a claim against both respondents. In the re-amended Particulars of Claim, various causes of action were advanced including, inter alia , Common Law negligence. It was also averred that there was an unfair relationship between the parties entitling the appellant to relief under Section 140B of the Act. These proceedings were stayed as from July 2013 pending anticipated decisions of the Court of Appeal and, subsequently, the Supreme Court relating to issues of PPI commission and unfair relationships.[6]During the stay, on 27 th February 2013, a claims management company (“We Fight Any Claim”) complained to the second respondent on the appellant’s behalf in respect of the sale of PPI to her. A similar complaint was made by the same management company to the first respondent on 6 th March 2013. In each case, the appellant complained that the PPI was not explained to her, that she was not told it was optional, and that it was not, in any event, required.[7]On this occasion, both of the respondents upheld the appellant’s complaints. The Dispute Resolution: Complaint Rules (“DISP”) were invoked by the respondents. In relation to each sale of PPI, redress was offered in the form of financial settlements. In total, in respect of all three mis-sales, the appellant was offered a sum of just over £4,400.[8]In response to the two offers made by the first respondent, the appellant signed an acceptance in the following terms:
“I confirm my acceptance of the offer made in full and final settlement of my complaint regarding the payment protection insurance that has been added to my account.”
[9]The terms of the acceptance of the offer from the second respondent were expressed slightly differently in so far as it was merely recorded, “...in full and final settlement of my complaint.” It should be noted that under this DISP, a complaint is defined as being an expression of dissatisfaction about the provision of a financial service and which alleges that the complainant has suffered financial loss, material distress, or material inconvenience. These Proceedings[10]The application for an order that the respondents should pay the appellant’s costs was supported by a witness statement from Mr Rodney Gardner who had originally been instructed by the appellant. Having set out the history of the matter, Mr Gardner asserted that the:
“...court claim has not been comprised by her acceptance of the redress offers.”
[11]Specifically, he made the point that the complaints only related to some of the allegations made in the Particulars of Claim. He went on to say that the appellant would have been at liberty to continue with her court claim and to have those other causes of action determined at trial.[12]However, and of some significance, Mr Gardner said this:
“...it is recognised that there would be little purpose in Mrs Tiplady having her claim determined at trial, given that the relief that she might receive following the determination of the claim at trial has already been received. In particular, the reopening of the extortionate credit bargain, or the determination of an unfair relationship, would be likely (sic) to lead to the court to grant relief by way of ordering repayment of monies paid in respect of the PPI, which has already been repaid, and interest, which has also been paid...”
[13]The respondents, in their skeleton argument drafted by Ms Bala (who appeared before me), argued that whilst there is a procedural distinction between submitting a complaint under DISP and issuing court proceedings, in essence, the facts on which the complaint was based were the same facts as those constituting her cause of action in the court proceedings. Thus, it was contended, in reliance on Binns v Firstplus Financial Group PLC [2013] EWHC 2436 (QB) , that once the appellant had received full redress, there were no proper grounds for her to pursue her claim. To put it another way, had the appellant elected to proceed with her claim, the respondents would have been able successfully to apply for it to be dismissed as an abuse of the court process. In Binns , the creditor made an offer of full PPI redress prior to the issue of proceedings. However, the offer was rejected because it did not include provision for the borrower’s solicitors’ legal costs. Proceedings issued by the borrower’s solicitors were struck out on the basis that it could not be reasonable to bring a claim when full redress had been given by alternative dispute resolution.[14]In the instant case, the respondents argued that the compromise ended the dispute in full. Given the absence of any reference to costs, it was clear that the dispute was to be compromised with no order as to costs. This was not a case of the parties having failed to reach agreement on costs, but rather the agreement was finalised without reference to costs. The District Judge’s Judgment[15]At paragraph 4 of his judgment, the district judge specifically noted the distinction between ‘complaint’ on the one hand and ‘court proceedings’ on the other hand. He noted that there were other causes of action contained within the Particulars of Claim which were not specifically advanced in the complaints procedure, but, as conceded by both parties, he observed that the fact that there were other causes of action:
“...would not have justified a continuation of the court proceedings in themselves because they would not have attracted any additional relief.”
[16]In the offer and acceptance under the complaints procedure, the district judge noted the absence of reference to costs. He said that had there been an intention to deal with costs, that is something which would have been resolved at that time. After giving his judgment, Mr Clark, acting on behalf of the appellant, asked the question whether it was the judge’s view that, “...the settlement was intended to incorporate the question of costs.” His response was that when signing the document which said ‘in full and final settlement’:
“...she was signing off this whole process and that the question of costs was not necessarily to the forefront of her mind.”
[17]When, at the end of the hearing, the district judge was asked to give permission to appeal, he made it clear that his interpretation of the wording of the acceptance was that the wording encompassed any claim which the appellant might have including any claim for costs. Grounds of Appeal[18]In summary, it was submitted by Mr Clark that there was inherent inconsistency in the district judge, on the one hand, recognising that there were other causes of action extant, but, on the other hand, concluding that the contract of comprise included all of the costs of the proceedings. In short, it is said that the district judge erred in finding that the appellant’s claim for costs had been compromised. In the alternative, it is submitted that in exercising his discretion, the district judge, in having regard to all the circumstances of the case, should have granted the appellant her costs of the proceedings. It was also said that it was perverse to award the respondents the costs of the current proceedings because the appellant was, in fact, the successful party.[19]These grounds of appeal were expanded upon in the appellant’s skeleton argument and in oral submissions. In particular, it was argued that it was irrelevant as to what was (subjectively) in the minds of the parties when the complaints were resolved; rather, the matter should be looked at objectively. If the district judge had looked at the matter objectively, he ought to have come to the conclusion that the issue of the costs arising from the court proceedings had not been compromised. Further, it was said that the district judge failed properly to draw the distinction between a complaint and legal proceedings and that, had he done so, he would have appreciated that the full and final settlement related only to the complaint.[20]Mr Clark went on to submit that if the district judge had properly interpreted the terms of settlement, and appreciated that costs remained a ‘live’ issue, then following the principles in Boxall v Waltham Forest London BC [2000] All ER (D) 245, unquestionably, the order should have been that the respondents pay the appellant’s costs. This was on the basis that it was evident that the appellant had won on the substantive issues giving rise to an entitlement to costs. My Decision[21]At the outset, I remind myself that an appellate court should only interfere with an order as to costs where it is plainly wrong. It is sufficient to quote from the judgment of Jackson LJ in the case of Medway LPCT & Ors v Marcus [2011] EWCA Civ 750 , where he said:
“Awards of costs in litigation are peculiarly fact sensitive, and this court will not disturb a trial judge’s costs decision unless it was wrong in principle or otherwise plainly erroneous.”
There is therefore a high threshold to cross for this appeal to succeed.[22]As to the first point made on behalf of the appellant to the effect that there was an inconsistency in the judge’s approach, I confess that, at first blush, I was attracted by this argument. However, on closer analysis, it became plain to me that there was no substance in this ground of appeal. The district judge did no more than observe that, in the court proceedings, there were other causes of action which were not specifically relied upon in the complaints procedure. When his judgment is looked at as a whole, it is clear that he was not suggesting that there were disputes which still remained to be litigated. To the contrary, it seems to me that what the district judge was saying was that ‘in full and final and settlement’ meant precisely what the words were intended to covey, namely a full and complete resolution of the dispute between the parties. Accordingly, I reject the contention that there was any inconsistency in the reasoning of the district judge.[23]As to the submission that the district judge erred in concluding that ‘in full and final settlement’ encompassed the costs of the legal proceedings, as it seems to me, he was fully entitled to come to that view. There is no suggestion in his judgment that he looked at the matter other than objectively and, in doing so, in my judgment, he was entitled to reach the view which he did. Indeed, I go a step further and make it clear that such accords precisely with my own analysis and interpretation of the words used to settle the complaints procedure. The legal causes of action in the court proceedings were founded on precisely the same facts as the dispute which was compromised and, accordingly, it seems to me, they could not survive the compromise. In reality, there was nothing left to litigate. That being so, it is difficult, if not impossible, to see how a party could then be entitled to litigate in relation to costs.[24]In my judgment, Ms Bala is correct when she says that once it is accepted that the settlement compromised the legal claim, it must follow that there should be no order as to the costs of the proceedings. Whilst it is unnecessary for me to cite the passage in this judgment, such an approach is entirely consistent with the analysis in Foskett, “The Law and Practice of Compromise,” 7 th edition.[25]Where I do agree with Mr Clark is that if costs had fallen for determination, it would have been appropriate to award the appellant her costs. Applying the principles in Boxall , she had won her claim and in accordance with the principle that costs follow the event, she should have recovered her costs.[26]In relation to the final matter, namely the award of costs against the appellant, it seems to me that any complaint is misconceived. The discrete application was for an order for costs in the appellant’s favour. That application was unsuccessful and therefore the district judge cannot be criticised for ordering that costs should follow the event.[27]This appeal is therefore dismissed.