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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Belfairs Management Ltd v Sutherland & Anor [2013] EWCA Civ 236 (26 March 2013) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2013/236.html Cite as: [2013] EWCA Civ 236

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IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Mr Justice Norris
[2010] EWHC (Ch) 2276

		Royal Courts of Justice Strand, London, WC2A 2LL
		26/03/2013

Lord Justice Rimer:

1. The court delivered its reserved judgments in this appeal on 15 March 2013 (see [2013] EWCA Civ 185). It explained in them why it was allowing the appeal of Belfairs Management Limited ('BML'). This is the court's judgment on the form of the order and costs. It is the judgment of Lord Justice Rix and myself, the parties having agreed, in the circumstances explained to them by the court, that these issues should be decided by a court of two. We shall take our judgments on the appeal as read.
2. Norris J's order of 22 June 2011 provided for the holding before him of a trial as to quantum in respect of the breaches of warranty that he had found proved, and paragraph 5 of his order gave directions for such trial. The time limits for compliance with those directions were fixed to run from (in the events that have happened) the final determination of BML's appeal.
3. We have received submissions from counsel as to (i) the giving of further directions for the determination by Norris J of the matters identified in paragraph 54 of my judgment and (ii) costs. Mr Booth, for BML, points out, correctly, that whereas paragraph 5 of the judge's order proceeded on the basis that the further trial would be confined to questions of quantum, the consequence of our judgments is that there must now also be a further trial on a question of liability, namely whether the respondents breached the paragraph 16.1.5 warranty. If the answer is yes, there will then need to be an inquiry as to the quantum of the damages (if any) recoverable by reason of such breach. Mr Booth submits that the further trial on liability and quantum has to be factored into the timetable prescribed by the judge.
4. Mr Booth submits that either we should give the directions as to what is to happen; alternatively, that Norris J should do so, in which event this court should stay the operation of paragraph 5 of Norris J's order pending the hearing of a directions application before him at which he can give revised directions for the disposal not just of the issues of quantum currently dealt with by paragraph 5, but also of the additional issues that are to be remitted to him for trial.
5. Mr Clarke, for the respondents, recognises that paragraph 5 needs to be amended to accommodate the remitted issues. His proposal is that the case should be remitted to a Master of the Chancery Division (on an application to be issued by BML) for a one hour appointment at which revised directions should be given. He agrees that, pending such appointment, the paragraph 5 directions should be stayed.
6. We agree that the paragraph 5 directions will have to be reconsidered. In particular, if the outcome of the further liability issue requires an inquiry as to damages, the latter inquiry ought to be conducted at the same time as the quantum trial that Norris J directed. We do not propose to make revised directions ourselves. In our view, it is appropriate that Norris J should do so: he has a comprehensive understanding of this litigation (or will anyway easily be able to read himself back into such understanding) and has reserved to himself the quantum inquiries directed in his order.
7. We therefore direct that the determination of the issues as to whether the paragraph 16.1.5 warranty was breached and, if so, what (if any) damages are recoverable by reason of such breach is to be remitted to Norris J for trial by him. We further direct that an application be issued before Norris J for the giving by him of revised directions covering both the trial as to quantum that he directed in his order and the further issues that we are remitting to be tried by him. Pending the giving by him of such directions, we shall stay the operation of paragraph 5 of his order.
8. As regards costs, Mr Booth submits that as BML succeeded in its appeal, it should have its costs, which should either be summarily assessed or, if the court considered it more appropriate, referred for a detailed assessment. He recognises that BML cannot recover its costs of pursuing grounds of appeal for which permission was refused, and suggests that a fair apportionment would be to allow BML either 50% of its costs down to the giving of permission, or at least a third of them. He has explained that BML changed its solicitors during the currency of the appeal process, and its present solicitors, Follett Stock LLP, conducted the appeal under a conditional fee agreement, with a 100% success fee. BML has produced a costs schedule totalling £141,702.24, although it is accepted that that figure must be reduced at least to deprive BML of its costs incurred in seeking permission to appeal on grounds that were refused. BML also seeks a payment on account.
9. Mr Clarke's submission is that, whilst he recognises that a successful appeal ordinarily carries with it the costs, in this case the court should reserve the costs of the appeal to the trial judge for determination by him when he has tried out the remitted matters. He points out that Norris J, by paragraph 3 of his order and after a 21-day liability trial, reserved the costs of that trial to the trial on quantum. He says we should apply a like approach. He reminds us that the SPA imposes a cap of £2m on any damages for breach of its warranties. The quantum trial that Norris J directed was in respect of warranty breaches that he found proved. This court has now directed a trial as to whether another warranty was breached but Mr Clarke submits that, even if it turns out that it was, it is by no means clear that such breach will entitle BML to more damages than it will recover under the breaches that Norris J found proved. If it does not do so, he says it would be unjust that BML should have its costs of an appeal that proved to be of academic significance. That would be to visit an injustice upon the respondents.
10. We agree with Mr Clarke to this extent; we consider that the just order is to reserve the costs of the appeal to Norris J for decision by him following the determination of the remitted matters and other inquiries that he is to conduct. That is the costs order that we shall make.
11. We would ask counsel to agree, sign and lodge with the Civil Appeals Office a minute of order reflecting what we have said in this judgment.