Amber Construction Services Limited v London Interspace HG Limited
Case reference:
[2007] EWHC 3042 (TCC)
Tuesday, 18 December 2007
Key terms: Summary Judgment – Fixed costs - Jurisdiction of the Court to order fuller costs
The Defendant, London Interspace HG Ltd, engaged Amber Construction Services Limited in September 2003 to demolish existing structures and build six residential units in London. Various issues had arisen between the parties, and in August 2007, the Claimant served a Notice of Adjudication, claiming some £241,172 plus VAT and interest.
Following a challenge to his jurisdiction by the Defendant, the adjudicator awarded the Claimant a net sum of £63, 912 plus VAT and interest. When the Defendant failed to make the payment, the Claimant’s solicitors notified the Defendant that if the funds were not received, legal proceedings for enforcement by Summary Judgment would be commenced in the High Court and the associated legal costs would be claimed. They subsequently issued proceedings on 01 November 2007. On 09 November 2007, the Defendant filed their Acknowledgment of Service which admitted the full amount claimed.
The issue in this case relates to whether only fixed costs should be payable if the Defendant admits or pays the sum claimed within a few days of the issue on or before the Acknowledgement of Service. The Defendant argued that the Claimant’s costs should be limited to £100 as per CPR Part 45 as liability in full is admitted. The Claimant argued that the rules regarding fixed costs do not apply in this case and the Court has the jurisdiction to order fuller costs.
Mr Justice Akenhead held that, as per Rules 45.1 and 45.3 of the CPR, the Court clearly retains its discretion to order such costs as are appropriate. The fixed cost regime would apply if the Court does not order otherwise. In this case, he held that it was appropriate for the Court to exercise its discretion. His reasoning included that:
Following a challenge to his jurisdiction by the Defendant, the adjudicator awarded the Claimant a net sum of £63, 912 plus VAT and interest. When the Defendant failed to make the payment, the Claimant’s solicitors notified the Defendant that if the funds were not received, legal proceedings for enforcement by Summary Judgment would be commenced in the High Court and the associated legal costs would be claimed. They subsequently issued proceedings on 01 November 2007. On 09 November 2007, the Defendant filed their Acknowledgment of Service which admitted the full amount claimed.
The issue in this case relates to whether only fixed costs should be payable if the Defendant admits or pays the sum claimed within a few days of the issue on or before the Acknowledgement of Service. The Defendant argued that the Claimant’s costs should be limited to £100 as per CPR Part 45 as liability in full is admitted. The Claimant argued that the rules regarding fixed costs do not apply in this case and the Court has the jurisdiction to order fuller costs.
Mr Justice Akenhead held that, as per Rules 45.1 and 45.3 of the CPR, the Court clearly retains its discretion to order such costs as are appropriate. The fixed cost regime would apply if the Court does not order otherwise. In this case, he held that it was appropriate for the Court to exercise its discretion. His reasoning included that:
1 the Court recognised the importance of a prompt procedure to secure enforcement of adjudicators’ decisions;
2 the Claimant’s solicitors gave a very clear warning that proceedings would be commenced;
3 a ‘without prejudice save as to costs’ letter made it clear that the Defendant did not recognise the sum determined by the adjudicator; and
4 as the Claimants substantially followed the TCC procedure for enforcement of adjudication proceedings, it should come as no surprise that the costs will inevitably exceed the amount called for in CPR 45.
He held that:
“It would not be fair to limit a successful claimant which complied with the steps called for in the Rules and the Guide. The Claimant was justified in issuing proceedings and a Part 24 application following a threatened defence and an unqualified admission on the part of the Defendant after issue.”