SHARLIE REES-DAVIES v LORD MAYOR AND CITIZENS OF THE CITY OF WESTMINSTER LRA/18/1994

UPPER TRIBUNAL
LANDS CHAMBER
LRA/18/1994Case No LRA/18/1994
Between
SHARLIE REES-DAVIESApplicantLORD MAYOR AND CITIZENS OF THE CITY OF WESTMINSTERRespondent
Before
The PresidentMichael Kingsley for Appellantwith leave of the Tribunal for AppellantAdrian Pay (instructed by Westminster City Council Legal Services) for RespondentVenue 48/49 Chancery Lane, London WC2A 1JRDate 28 September 2001Hearing 26 September 2001Property: 5 Lord North Street, London SW1
[1]In a hearing on 26 September 2001 at which both parties appeared I refused the application of Mr Sharlie Rees-Davies which was treated as one to apply to me out of time to review a taxation of the Registrar, the certificate of which was issued on 15 September 1999. These are my reasons.[2]In the proceedings from which this matter stems, the personal representatives of the late William Rupert Rees-Davies QC, one of whom was his widow, the applicant, appealed against the decision of a leasehold valuation tribunal fixing the purchase price payable under the Leasehold Reform Act 1967 for a new lease of a house, 5 Lord North Street, Westminster, of which they were the tenants. In November 1994 the LVT had determined the enfranchisement price at £350,000. Notice of appeal to this Tribunal was given on 16 December 1994. On 12 February 1997 the Member, Mr P H Clarke FRICS, dismissed the appeal under rule 45(2) of the Lands Tribunal Rules 1996 on the grounds that the appellants had failed to pursue their appeal with due diligence and had failed to comply with the Rules. There had been delays on their part in serving a statement of case and in making an application for a hearing of preliminary issues; and at the time of the hearing before the Member, over two years after the appeal had been lodged, and three weeks before the date of the substantive hearing, no experts reports had been lodged, despite orders requiring this to be done and despite the council having lodged their expert reports over a year previously. Costs, to be taxed by the Registrar on the High Court scale, if not agreed, were awarded against the appellants. The appellants appealed against this decision to the Court of Appeal who, on 7 May 1998, dismissed the appeal with costs ((1998) 38 RVR 210).[3]The council applied to the Registrar for its costs to be taxed, and the Tribunal on 21 May 1999 sent notice to Franks Charlesley and Co, the solicitors who had acted for the appellants on the appeal, of a taxation to be held by the Registrar on 21 June 1999. The certificate of taxation, showing the costs to have been taxed in the sum of £40,872.50, was sent to Franks Charlesley & Co on 15 September 1999. Mrs Rees-Davies says that Franks Charlesley and Co had disbanded in 1998 and that she never received copies of these letters. She only became aware of the taxation on 25 July 2000 when the council served on her a statutory demand in respect of the taxed costs. Her brother, Mr Kingsley, wrote to the Tribunal on her behalf on 11 September 2000, and on 15 September 2000 the Tribunal faxed to him the letter of 4 June 1999 to Franks Charlesley and the certificate of taxation.[4]Mrs Rees-Davies had applied to set aside the statutory demand. The application was dismissed on 1 February 2001 by Mr Registrar Simmonds, who ordered that the council be authorised to present a bankruptcy petition on or after 5 March 2001. On 1 March 2001, Mrs Rees-Davies made application to this Tribunal to set aside the certificate of taxation. In the absence of any provision in the Rules for such an application, it has been treated as an application for me to review the taxation outside the time limit. The relevant provisions of the Lands Tribunal Rules 1996 are contained in rule 52:
“(4) If the Tribunal directs that the costs of a party to the proceedings be paid by another party it may settle the amount of costs by fixing a lump sum or direct that the costs be taxed by the registrar on such basis as the Tribunal thinks fit, being a 2 basis that would be applied on a taxation of the costs of High Court or county court proceedings. (5) A party dissatisfied with a taxation of costs under paragraph (4) may, within 7 days of the taxation, serve on any other interested party and on the registrar written objection specifying the items objected to and applying for the taxation to be reviewed in respect of those items. (6) Upon such application the registrar shall review the taxation of the items objected to and shall state in writing the reasons for his decision. (7) A person dissatisfied with the decision of the registrar under paragraph (6) may, within 10 days of the decision, apply to the President to review the taxation and the President may make such order as he thinks fit including an order as to payment of the costs of the review.”
[5]Witness statements for the purpose of the hearing before me were lodged by both parties. Mrs Rees-Davies made two statements, and there were two from the council. These disclosed certain disagreements on the facts. In particular the council relied on correspondence in April and May 1999 with solicitors acting for Mr Rees-Davies in associated leasehold valuation tribunal proceedings, Titmuss Sainer Dechert, as showing that she must have received a copy of the council’s bill of costs from those solicitors at about that time. Mrs Rees-Davies denied that she had. The council also relied on a letter dated 14 October 1999 from the Director of Legal Services to Mrs Rees-Davies enclosing a copy of the certificate of taxation and a default costs certificate from the Supreme Court Costs Office and requiring payment of the amounts to which these related. Mrs Rees-Davies said she did not receive this letter.[6]These matters were not pursued by cross-examination of the witnesses, because I concluded that the application must fail even if, as Mrs Rees-Davies contended, it was not until 25 July 2000 that she became aware of the taxation. Mr Pay submits, and I accept, that I should exercise my discretion on the application by considering whether there was good reason for the failure to apply within the time laid down by the Rules, whether there would be a real prospect of success in challenging the bill of costs; whether Mrs Rees-Davies has acted promptly in making her application; and whether the delay in applying has prejudiced the council.[7]Rule 53(1) provides - “Where a solicitor commences or responds to proceedings on behalf of a party to those proceedings he shall be noted on the record of the Tribunal as acting for that party.” Rule 53(3) provides - “A party who has previously been represented by a solicitor may change his solicitor at any time, or may decide to continue the proceedings in person but unless such change or decision is notified to the Tribunal the former solicitor 3 shall be considered the representative of the party until the conclusion of the proceedings.” Rule 54 provides - “(1) Every party to proceedings shall notify the registrar of an address for service of documents on him (2) Where a party to proceedings is represented by a person other than a solicitor he shall -(a) send to the registrar written authority for the representative to act on his behalf; and(b) notify the registrar if the representative ceases to act on his behalf and, if replaced, shall give the registrar details of the new representative together with the written authority for the new representative to act on his behalf. (3) Any document to be served on any person under these Rules shall be deemed to have been served if sent by pre-paid post to that person at his address for service.”[8]The Rules thus make clear that it was for Mrs Rees-Davies and her solicitors to ensure that the Tribunal had the correct address for service. Notice of the taxation hearing and the certificate of taxation were both sent to Franks Charlesley & Co (on 21 May 1999 and 15 September 1999 respectively) because they were on the record as Mrs Rees-Davies’s solicitors and no other address for service had been notified to the Tribunal. If, as for these purposes I assume, she received neither the notice nor the certificate, that was due to the failure on her part and on the part of her solicitors, before they were dissolved, in ensuring that the Tribunal had the correct address for service.[9]On the second question I have to consider, it does not appear to me that Mrs Rees- Davies would have a real prospect of success in challenging the bill of costs. In her first witness statement, she listed a number of issues which, she said, should properly have been dealt with on taxation. These were expressed in a series of question: “(a) What were the terms of the Solicitor/Client relationship? (b) Has the indemnity principle been complied with?” and so forth. The statement continues: “27 The Respondents have not provided copies of Counsel’s fee notes or copies of the Expert’s bills as required in the Taxation process and these will still have to be provided in order that a proper assessment thereof can be made. 28 Nevertheless, I have asked my brother, who has some experience of the Taxation process, to go through the Bill with a view to establishing what might be fair and reasonable in the particular circumstances. 4 29 Having done so, he confirms that after proper Taxation, the sum due should not exceed £10,000, broadly made up as follows:- Attendances say £1,200 Documents etc say £2,500 Experts say £4,000 Counsel say £2,000 £9,700 A sum of £10,000 on account of these Costs has already been paid.[30]Since the Taxation Certificate currently certifies a sum of £40,872.50 plus interest, it is apparent that the difference between the Parties is more than £30,000 and that a restored Taxation is necessary.”[10]Mr Kingsley said that these paragraphs were included at his suggestion. He had considerable experience of the taxation of costs, as a trustee of a number of trusts. He said that he had been on a number of taxations. He said that three-quarters of the bill was surveyors’ fees, and that these were far in excess of the surveyors’ fees incurred by Mrs Rees-Davies.[11]Mr Kingsley’s contentions do not suggest to me that there would be a real prospect of a successful challenge to the bill of costs. No indication of the costs incurred on Mrs Rees- Davies’s behalf has been given, which might have provided a useful comparison, and no detailed points have been raised on the bill of costs, despite the opportunity to do so. The only point of a specific nature raised relates to surveyor’s fees and this strikes me as wholly unpersuasive. The principal reason for the dismissal by the Member of Mrs Rees-Davies’s appeal was her failure to lodge reports from her experts. At the time of the hearing one expert, Ms Jennifer Ellis, had recently been retained but, it is to be inferred, had not yet prepared a report, while the other, Mr N Long, had not by then been instructed: see Mr Clarke’s decision at page 5 line 47 to page 6 line 6. By contrast the council’s two experts, each from leading firms of chartered surveyors, had prepared their reports, and had in fact lodged them almost exactly a year before the hearing. The case was listed for a 3-day hearing, and the amount in issue was evidently substantial. It does not seem to me in the least surprising that three-quarters of the bill of costs was surveyors’ fees and that these were far in excess of those that had been incurred by Mrs Rees-Davies.[12]The third matter to be considered is whether Mrs Rees-Davies acted promptly in seeking to challenge the taxation once she had become aware of it. Plainly she did not. She became aware of the taxation on 25 July 2000 but she did not make her application to set aside the taxation until 1 March 2001, over 7 months later. I was told by Mr Pay, and Mr Kingsley confirmed this, that at the hearing on 1 February 2001 the Bankruptcy Registrar, in dismissing Mrs Rees-Davies’s application to set aside the statutory demand, warned her that she should apply as a matter of urgency to set aside the certificate of taxation. It was this that prompted her to do so. However, she only did so a full month later, with only 4 days left before the day on which the council could present a bankruptcy petition. 5[13]Finally, on the issue of prejudice, the council has been kept out of its money by the failure of Mrs Rees-Davies to pursue her challenge to the taxation with necessary promptness. Given that interest will be payable on the amount, this may not be a matter of the greatest importance, but it is nevertheless another factor that must count against granting the application.[14]For all these reasons - that the failure to make application within the time limited by the Rules was Mrs Rees-Davies’s fault, that the evidence does not suggest that the challenge would have any reasonable prospect of success, that Mrs Rees-Davies failed to act promptly when she became aware of the taxation, and prejudice to the council if this application were to be granted - the application must be refused.[15]Mr Pay asked that the council should have their costs of the application, and Mr Kingsley did not oppose this. An order for costs will be made, such costs if not agreed to be the subject of a detailed assessment by the Registrar on the standard basis. Dated 28 September 2001 George Bartlett QC, President 6