Neutral Citation Number: [2008] EWHC 831 (QB)
Case No: HQ06X03461 
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 21/04/2008

Before :

HIS HONOUR JUDGE RICHARD SEYMOUR Q.C.
(Sitting as a Judge of the High Court)
- - - - - - - - - - - - - - - - - - - - -
Between :

	JEFFERY LYGOE trading as David Parry & Co, a firm (no longer practising)	         
         Claimant	
	- and -		
	IAN ILSLEY	       Defendant 

- - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - -

Adrian Davies (instructed by Walkers) for the Claimant
Stuart Cakebread (instructed by Scanlan & Co.) for the Defendant 

Hearing dates: 1, 2, 3 and 4 April 2008
- - - - - - - - - - - - - - - - - - - - -
Judgment

HIS HONOUR JUDGE RICHARD SEYMOUR Q.C.: 

Introduction
1.	The claimant, Mr. Jeffery Lygoe, was formerly a solicitor. He was struck off the Roll of Solicitors by order of the Solicitors Disciplinary Tribunal dated 26 May 2006. By that date he had retired from practice. Mr. Lygoe was admitted as a solicitor in 1971. At the times material to the issues in this action Mr. Lygoe was the sole principal in a firm called David Parry & Co. It is convenient, for the purposes of this judgment, to refer to the business of that firm as “the Practice”.
2.	The Practice was in fact carried on in three separate locations. The main office, at which Mr. Lygoe was based, was at 9, Palmers Avenue, Grays, Essex (“the Essex Office”). There was also an office at 1, New Square, Lincoln’s Inn, London WC2 (“the London Office”). The London Office was effectively run by Mr. Dennis Cooper, a litigation clerk. The third office of the Practice was in Caldecote, Cambridge, but that is not material to any issue in this action.
3.	Mr. Ian Ilsley, the defendant, is, by profession, an accountant. He is, and was for most of the period which is relevant to the issues in this action, at least, based in Monaco. Mr. Ilsley has, or had, interests of some kind in a number of different businesses. One of these is a company incorporated in Monaco called Bureau d’Administration, de Services et d’Etudes S.A.M., to which it is convenient to refer in this judgment as “BASE”. The exact nature of the interest of Mr. Ilsley in BASE and the exact nature of the business of that company did not emerge in evidence. However, it seemed that what BASE did included the management of the affairs of other entities. Another company with which Mr. Ilsley had some sort of association was a Bermuda registered company called Garnham and Co. Ltd. (“Garnham”). 
4.	In this action Mr. Lygoe claimed against Mr. Ilsley the sum of £59,052.50, which was said to be due to him in respect of the balance of the costs of the Practice for acting for Mr. Ilsley, and, on his instructions, for BASE, Garnham and other companies, in relation to various pieces of legal work, most, but not all, of which involving litigation. Mr. Lygoe’s case was that it had been specifically agreed between him and Mr. Ilsley at the commencement of the dealings between the Practice and Mr. Ilsley and the companies with which he was connected that Mr. Ilsley personally would be liable to pay Mr. Lygoe for all work done either for Mr. Ilsley personally or, on his instructions, for any of the companies with which he was associated. Mr. Ilsley resisted that contention. He accepted that he was liable in principle to pay Mr. Lygoe’s costs for the work of the Practice undertaken for him personally, but he contended that he had paid everything which was due from him in that capacity. Mr. Ilsley denied that he had agreed personally to pay the costs of Mr. Lygoe for acting for any company. Mr. Ilsley contended that Mr. Lygoe should look to the relevant company for payment of any costs due. In addition Mr. Ilsley contended that he had a claim against Mr. Lygoe in respect of the manner in which Mr. Lygoe had conducted the administration of the estate of Mr. Ilsley’s late mother, a task entrusted to Mr. Lygoe by the executors of the late mother, Mrs. Joan Ixer Ilsley, who were Mr. Ilsley himself and his sister, Mrs. Clifford. In this judgment I shall refer to the estate of Mrs. Ilsley as “the Estate” and to the funds held by Mr. Lygoe from time to time for the benefit of the Estate as “the Estate Funds”.
The detail of Mr. Lygoe’s claims and the answers to them
5.	The bills upon which Mr. Lygoe based his claims were identified in paragraph 6 of the Amended Particulars of Claim as being these:-

“Invoice#	Date	Matter	Amount	
6826	21- May-02	Red Sea Hotels	£11,900.00	
6993	06-Aug-02	Red Sea Hotels	£4,485.00	
7110	26-Aug-02	Red Sea Hotels	£6,523.13	
7279	26-Nov-02	Red Sea Hotels	£1,395.00	
8797	31-May-05	Yourself v. Abbey	£52,751.05	
8798	31-May-05	Trustees of A M Johnstone 1965 Settlement	£25,230.65	
8799	15-Jul-05	Hoodless Brennan & Partners v. Garnham & Co.	£24,924.84	
8800	31-May-05	BASE Sam & Bayfield Investments	£1,000.00	
8801	31-May-05	Hay & Robertson Plc	£555.00	
8802	31-May-05	HM Customs & Excise	£792.86	
8803	31-May-05	Libra Investments Ltd	£1,225.00	
8804	31-May-05	Your Space Limited	£475.00	
8805	31-May-05	VMR Trust & Management Ltd	£5,500.00	
8806	31-May-05	Netvest.com Plc v Yourself	£12,968.11	
8807	31-May-05	Underwriting and Subscription Plc and Prestige Publishing Plc	£385.00”	
6.	The total of these various amounts was £150,110.64. Mr. Lygoe in his claim allowed an amount of £91,058.14 as a deduction in respect of payments on account to reach the sum in fact claimed in the action. Mr. Ilsley alleged that various of the amounts said to have been made on account had in fact been taken by Mr. Lygoe without authority from the Estate Funds, and that was the basis of his counterclaim. The relief sought in the prayer to the Re-Re-Amended Defence and Counterclaim was:-
“1. An account of all moneys, securities and other assets removed from the client or other account of the Claimant originating from and belonging to the estate of the late Mrs. J. Ilsley.
2. Repayment of all sums wrongfully appropriated and converted by the Claimant.
3. Interest on any sum recovered herein as set out above.
4. Such further or other order as this Court shall consider appropriate [or] seem just.”
7.	Mr. Lygoe accepted that various of the sums credited as payments on account of costs had been taken by him from the Estate Funds, but he contended that that had been done with the consent, at the time, of Mr. Ilsley, and with the retrospective consent of his sister as well. The total sum debited to the estate of the late Mrs. Ilsley in respect of legal costs was, it was agreed, £75,921.56, including £23,500 in respect of the costs of administration of the estate claimed by the Practice. Mr. Ilsley considered that it had been agreed that the proper costs of the administration should be £10,000. Thus his counterclaim was for the payment of an amount of £65,921.56.
8.	In the Re-Re-Amended Defence and Counterclaim Mr. Ilsley admitted liability in principle in respect of the costs the subject of bills numbered 8797 and 8798, but he denied liability in respect of the work allegedly the subject of bills numbered 6826, 6993, 7110, 7279, 8799, 8800, 8801, 8802, 8803, 8804, 8805, 8806 and 8807.
9.	In addition to his denial of liability in respect of work done for companies in which he had an interest, Mr. Ilsley did not admit that any of the bills upon which Mr. Lygoe sought to rely was in a proper amount. He specifically denied that the bill numbered 8797 was capable of reflecting the amount of work justifiably and reasonably done or any proper or agreed basis of charging.
10.	The issues in this action in relation to what agreements had been made between Mr. Lygoe and Mr. Ilsley or his sister really depended upon the oral evidence of Mr. Lygoe, Mr. Ilsley and Mr. Cooper and such light as was shed on the those matters by the contemporaneous documentation put before the Court. It is to those questions that it is now convenient to turn.
The evidence
11.	It was common ground that Mr. Ilsley first approached the Practice by making contact with Mr. Cooper. In his second witness statement Mr. Ilsley explained his version of what had happened:-
“3. I first instructed David Parry and Co following a recommendation by a former colleague, Peter Abbey. I am ordinarily resident in Monaco and my former wife was also a resident in Monaco and issued proceedings against me in the Monesgasque Court. The issues required investigation into English law and in particular the law relating to trusts.
4. Following the recommendation of Mr. Abbey I spoke to Mr. Dennis Cooper and the Claimant’s practice confirmed that it would represent me in respect of those instructions. In due course they were completed and paid for by me.
BASE S.A.M.
5. The second set of instructions was in relation to a company known as BASE S.A.M. (“BASE”). This is a company registered in Monaco. I spoke to Mr. Cooper and informed him that BASE would be interested in instructing David Parry and Co in respect of a contentious matter arising out of a claim by VMR a German company in respect of an off shore entity managed by BASE. Those instructions were accepted from BASE. There was never any suggestion that I had any personal liability in respect of those instructions.
Garnham and Co Ltd
6. I also asked David Parry and Co if they wished to act in relation to a company known as Garnham and Co Ltd (“Garnham”). This company was registered in Bermuda [and] was involved in a substantial dispute with Mr. Peter Abbey. Again I asked if David Parry and Co wished to act for the company and they agreed they could because Mr. Abbey was no longer a client and there was no conflict in respect of those instructions. There was never any suggestion that I had personal liability. I recall one other set of instructions in relation to the dispute with American Express concerning certain debits they had made which I contested. These instructions were paid for.
Ilsley v. Abbey
7. There was a further set of instructions for which I was personally liable. This was a small County Court action out of the Central London County Court between Peter Abbey and me (I had claimed and obtained judgment for less than £10,000). These proceedings culminated in a Consent Order. The Claimants appear by Bill No. 8797 to be charging me £52,751.05 for this work. On any account that is excessive and in my opinion cannot possibly bear any relation to any work done for which as far as I was aware the Claimant had been paid. I strongly suspect that either the charges have been inflated or are for other cases. My suspicion is that very large charges have been added into this case which should properly be included under bill 8799 a substantial action in which Garnham was successful.
8. …
Other matters
9. There were various other matters in which David Parry and Co. were asked if they wanted to act and on each occasion it was clear beyond doubt that those instructions were from a separate juridical corporate identity. There was never any attempt by me to mislead David Parry and Co. and it was obvious from the nature of the instructions who their Client was. …”
12.	Mr. Cooper was called as a witness on behalf of Mr. Ilsley. In his witness statement Mr. Cooper essentially gave the same account as to the nature of the arrangements between the Practice and Mr. Ilsley as Mr. Ilsley had done in his second witness statement:-
“6. Some time after that meeting [one with Mr. Abbey], although I cannot recall exactly when, I was contacted by The [sic] Defendant. He explained he had been recommended by Peter Abbey and that he had worked with him. He asked whether the practice would represent him. I cannot recall whether the first matter was in relation to his personal instructions concerning a dispute with his former wife or in respect of BASE which was in dispute with a company called VMR which in turn was German based.
7. Following my conversation with the Defendant I went to see the Claimant and informed him that Peter Abbey had recommended a client to us. We were both pleased at this introduction. …
9. Returning to the position of the Defendant. The matter in relation to his first wife’s position was eventually concluded. There is no doubt in my mind the Defendant was the client in respect of those instructions and it was concluded successfully and as far as I am aware the fees were paid.
10. Regarding the matter of BASE and VMR instructions – these were not the Defendant’s personal instructions. He explained to me that these instructions were from a Monaco based company. I explained this to the Claimant and he was perfectly content to take their instructions as it was a good introduction. It generated fees and had come from an existing client, Peter Abbey. Both these instructions were completed successfully. We then as a practice received a series of instructions from different companies primarily based as I understand it in Monaco and offshore jurisdictions. These facts were known to me and to the Claimant because I discussed them with him. I recall an additional matter in which the Defendant was the client. This related to instructions from him relating to his American Express account. As far as I am aware these fees were paid.”
13.	The pleaded case of Mr. Lygoe as to the agreement between him and Mr. Ilsley was set out in paragraph 2 of the Amended Particulars of Claim:-
“In or about April 2000, the Firm was retained by the Defendant; the terms of the agreement between the parties are contained in client care letters one undated but sent with the Defendant’s letter of 11th April 2000 and the other dated 24th April 2002 …”
14.	Copies of both the undated letter sent with Mr. Ilsley’s letter dated 11 April 2000 and the letter dated 24 April 2002 were put in evidence. The undated letter, which was counter-signed by Mr. Ilsley, was unspecific as to that to which the instructions mentioned in it related. Essentially the letter simply set out the fact that Mr. Cooper would be the person having day to day conduct of the instructions and the rates of charge which would be levied. However, the covering letter dated 11 April 2000 under which the counter-signed version of the client care letter was returned to the Practice was on the printed stationery of BASE and was signed by Mr. Ilsley, describing himself as “Director”. The covering letter also bore a heading after the greeting, “Re: VMR Trust & Management Limited”. The client care letter dated 24 April 2002 was counter-signed by Mr. Ilsley beneath the words “I agree to the above terms and conditions.” The letter was addressed to “I. Ilsley, Esq., B.A.S.E.”  Paragraph 1 of the letter was in these terms:-
“1. The work we will undertake:
Instructions from you in relation to advise you in respect of enquiries from the Irish Takeover Panel.”
15.	 That work was in fact that which was identified in the list of invoices set out at paragraph 6 of the Amended Particulars of Claim as “Red Sea Hotels”.
16.	In his first witness statement, dated 14 June 2007, Mr. Lygoe dealt with the alleged agreement with Mr. Ilsley concerning him paying the Practice for all work done on his instructions, whether or not for him personally, in this way:-
“3. All the bills referred to in the Particulars of Claim relate to litigation matters and involved either the Defendant personally or a company in which he had an interest. In all cases the Defendant was the only person from whom my firm received instructions. In 2000 and prior to my agreeing to act for him, it was made clear to the Defendant that the firm would only act for him and his various offshore companies on the basis that he was personally responsible for the payment of all costs and disbursements and that he would at all times keep the litigation properly funded. Mr. Cooper, who was dealing with the matters, ensured that although different files for the various matters were set up, all the files were run through our accounts under one client ledger number, 3994 [sic – the correct number was in fact 3944] in the name of the Defendant. This made it clear that, for the purposes of recording the firm’s time and keeping a check on the funding situation, the Defendant was personally responsible. All interim bills were addressed and sent to the Defendant personally, irrespective of the particular matter.”
17.	In a second witness statement, dated 7 November 2007, Mr. Lygoe commented upon various points made by Mr. Ilsley in his first witness statement. In relation to the agreement for which he contended with Mr. Ilsley that Mr. Ilsley would be responsible for paying the Practice in respect of all work instructed by him, whether or not for himself or for a company, Mr. Lygoe added these observations:-
“4. In paragraph 6 he suggests that he never signed any client care letters that were addressed to him personally. Both client care letters were sent to Mr. Ilsley in his personal capacity since the matters to which they related concerned him personally and the undated letter signed by him was the basis for all matters in respect of which my firm was instructed by him thereafter until April 2002 when the fee level was increased and a fresh client care letter was issued.
5. …
6. Sometime in late 2000 after taking Mr. Ilsley and his then associate Mr. Abbey (with whom he subsequently conducted lengthy and vitriolic litigation which was the subject of my firm’s bill no 8797) to lunch, I made it clear to Mr. Cooper that I had grave concerns as to the bona fides of both of them and that he was to ensure that the firm was at all times covered for fees incurred by Mr. Ilsley and/or his associated companies. Mr. Cooper confirmed that it had been agreed with Mr. Ilsley that all instructions given by him on behalf of himself or any company which he controlled would be deemed to be given by him personally to the extent that he would underwrite the fees incurred on behalf of any of his companies, especially as they were all offshore companies.
7. To emphasise the point, when we received instructions from Mr. Ilsley – either in connection with himself personally or in connection with any company with which he was associated – the files were logged under one ledger in Mr. Ilsley’s name to ensure that at all times there was sufficient cover for fees. Accordingly, interim bills were always sent out addressed to Mr. Ilsley personally and copies of all such interim bills comprise pages 6 to 19 of “JPL2”.
8. There was always considerable delay in settlement of my firm’s bills by Mr. Ilsley and by late 2001 when he was engaged in a number of litigious matters, we had expended considerable time and incurred substantial counsel and other fees which Mr. Ilsley was either unable or unwilling to pay. Therefore on 22 November 2001 Mr. Cooper sent a fax to Mr. Ilsley, a copy of which appears at page 20 of “JPL2”, confirming a discussion he had had with him regarding the settlement of the fees, specifically that they should be paid from monies accruing to Mr. Illsley’s late mother’s estate.
9. I followed this up with a fax to Mr. Ilsley dated 26th November 2001 (page 21 of “JPL2”), confirming what I had understood from Mr. Cooper regarding the payment of litigation costs. I requested that Mr. Ilsley contact me if he had any problems with that arrangement – he did not do so. Indeed, subsequent to that fax whenever Mr. Ilsley and I met every three months or so to discuss the various litigation matters and the costs being incurred, he was made aware that the costs were being taken from the estate account and there was never any suggestion that this was not agreed. Had there been any such suggestion then I would have requested funds direct from Mr. Ilsley. This did not happen until late 2003 when funds from the probate ledger had been exhausted.
10. At page 22 of “JPL2” is a memorandum dated 3rd April 2002 from me to Dennis Cooper which confirms the agreement with Mr. Ilsley as to the use of the funds from the estate account for the payment of his various litigation matters. Regular meetings were held with Mr. Ilsley, who was in my offices weekly and the funding was discussed with Mr. Cooper who was responsible for preparation of the interim bills and submitting them to Mr. Ilsley.
11. Since the arrangement for the transfer of funds from the estate account for the payment of Mr. Ilsley’s various litigation matters was well established, I failed to press him for the return of a letter of authority sent to him sometime in late 2002 requesting that it be signed by him and his coexecutor confirming the arrangement. In a routine visit by the Law Society to my offices in early 2003, I was asked to obtain written confirmation from Mr. Ilsley of the agreement for the transfer of funds. In a meeting with Mr. Ilsley a few days before 11th April 2003, I reminded him that he had not dealt with my request to sign the letter of confirmation and he agreed that he would do so. Further to that meeting, I wrote on 11th April 2003, (page 23 of “JPL2”), reminding him that I had written previously requesting him to sign a letter confirming the arrangement. That request was not dealt with until September or October of that year when I prepared a further letter (page 24 of “JPL2”), which he took away and returned some days later signed by himself and his coexecutor.
…
14. Although bill No 8799 concerned a matter relating to Mr. Ilsley’s company Garnham & Co Ltd of which he was a director/shareholder, it was one where my firm was relying on Mr. Ilsley’s assurance that he would ensure payment of fees due to my firm. As further evidence of Mr. Ilsley personally guaranteeing the firm’s costs, I refer to page 25 of “JPL2” which is correspondence between my firm and Bowling & Co. It was agreed that my firm would retain certain share certificates in the name of Mr. Ilsley or a company under his control, as security for payment of fees and that Bowling & Co would preserve my firm’s lien in the papers. If Mr. Ilsley did not regard himself personally responsible for payment of fees incurred with regard to Garnham & Co Ltd, he would not have consented to my firm holding his share certificates.”
18.	Notwithstanding that in paragraph 6 of his second witness statement Mr. Lygoe spoke of Mr. Ilsley “underwrit[ing] the fees incurred on behalf of any of his companies”, and that in paragraph 14 he talked of Mr. Ilsley “guaranteeing the firm’s costs”, Mr. Lygoe emphasised in cross-examination that his claims against Mr. Ilsley were not based on any guarantee, but rather upon an agreement that Mr. Ilsley would be personally liable for payment of costs incurred as a result of instructions which he gave the Practice not only on his own behalf, but also on behalf of any company. As no written document containing a guarantee was put before me, any claim said to have been based on any guarantee was bound to fail by reason of failure to comply with the requirements of Statute of Frauds s. 4.
19.	The interim bills to which Mr. Lygoe referred in paragraph 7 of his second witness statement appeared to relate only to two matters. The first was litigation in Monaco in relation to the A.M. Johnstone 1965 Settlement (“the Settlement”). The second was a matter described in all of the relevant interim bills as “VMR Trust and Management/Netvest”. Only a limited amount of material in relation to the various instructions upon which Mr. Lygoe sought to sue was put before me. However, it appeared that it was common ground that the litigation in Monaco in relation to the Settlement was litigation between Mr. Ilsley and his former wife. In other words, in that litigation Mr. Ilsley was directly involved as an individual party to the action. He accepted that he was the client of the Practice in relation to that litigation and liable in principle to pay the fees of the Practice for services rendered. The interim bills addressed to him in respect of the work of the Practice in connection with the litigation in Monaco concerning the Settlement were those dated, respectively, 14 January 2001, 25 July 2001 and 22 July 2002. 
20.	In relation to “VMR Trust and Management/Netvest” Mr. Lygoe rendered interim bills dated, respectively, 5 November 2002, 29 November 2002, 9 December 2002, 30 April 2003 and 30 July 2003. The narrative in those interim bills gave no indication of what it was to which they related, save that whatever it was was “the above matter”, that is to say a single matter, rather than two separate ones. In this action Mr. Lygoe contended that separate bills in respect of VMR Trust & Management Ltd. (“VMRTM”) and Netvest.com Plc (“Netvest”), respectively numbered 8805 and 8806 were appropriate. What he said about those invoices in his first witness statement was:-
“16. Bill 8805, in the sum of £5,500, concerns advice given to the Defendant personally in relation to VMR Trust & Management Ltd. consequent upon his removal as a director of VMR.
17. Bill number 8806, in the sum of £12,968.11, concerned the Defendant personally in relation to a claim against the Defendant by Netvest.com Plc. Page 4 of the exhibit is a copy order made on 4 November 2002 where the Defendant was cited as defendant.”
21.	The document referred to was a Notice of Allocation to the Multi-track dated 7 November 2002 pursuant to a consideration by Master Tennant of the statements of case and allocation questionnaires in a case in this Division numbered HQ02X02644 (“the Netvest Action”) in which the claimant was Netvest and the defendant was Mr. Ilsley.
22.	In his second witness statement Mr. Lygoe expanded somewhat on what he had said in his previous witness statement concerning VMRTM and Netvest in commenting upon the first witness statement of Mr. Ilsley:-
“2. In paragraph 4 he suggests that the undated client care letter returned with his letter of 11th April 2000 shows that the client was VMR Trust & Management Ltd. This is disingenuous since although the letter of 11th April 2000 was headed “VMR Trust & Management Ltd”, my firm was not instructed to act on behalf of that company but rather regarding Mr. Ilsley’s position as a director of that company. In support thereof I exhibit:
(a) on page 3 of “JPL2”, a first interim bill dated 22nd May 2000 addressed to Mr. Ilsley personally which was paid on 13th February 2001.
(b) on page 1 of “JPL2”, a letter dated 2nd November 2000 from Zellermayer, Pelassof and Schiffer, lawyers acting for the shareholders of that company, confirming that Mr. Ilsley had been removed from the board;
(c) on page 2 of “JPL2”, a memorandum from the same firm dated 9th August 2000 which confirms the nature of the problem that the other directors had with Mr. Ilsley regarding the company’s affairs. We were asked by Mr. Ilsley to advise him personally on the problems arising consequent upon his conduct as a director of VMR.
…
17. Concerning bill No 8806, Mr. Ilsley was the defendant in proceedings brought against him by Netvest. My firm acted for him in his personal capacity as defendant. At pages 31 and 32 of “JPL2” is a letter from Evans Dodd dated 8th May 2002 setting out their position and that of Mr. Ilsley and at page 33, a fee note from counsel who represented Mr. Ilsley.”
23.	The interim bill dated 22 May 2000 was indeed addressed to Mr. Ilsley, without any reference in the address to any company. The narrative of the bill read:-
“17th March – 11th May 2000
To our professional charges in relation to your instructions regarding VMR Trust and Management Ltd, to [include] all necessary attendances upon you and third parties, to include care and attention to date:-”
24.	Chronologically the next document mentioned by Mr. Lygoe in paragraph 2 of his second witness statement was the memorandum dated 9 August 2000 written by Mr. Richard Schiffer of the firm of Zellermayer, Pelossof & Schiffer to the Board of Directors of VMRTM. All it said was:-
“Re: Minutes of the Board of Directors Meeting held on July 28, 2000
Please find enclosed for your records a copy of the Minutes of the above mentioned meeting with all attachments.
I note that Ian Ilsley is specially called upon (items 2 and 3) to provide certain outstanding information to other directors.
The original of these Minutes has been sent to AS&K in Bermuda.”
25.	Thus all that could be derived from that memorandum was that at the end of July 2000 Mr. Ilsley, apparently a director of VMRTM, had been called upon to provide unspecified information to the other directors of the company.
26.	Mr. Schiffer wrote a letter dated 2 November 2000 to Mr. Ilsley “C/o B.A.S.E.” in which he said:-
“Re; VMR Trust & Management Ltd. (“the Company”)
On September 29, 2000, I advised Dennis Cooper, as your solicitor, of the resolution which was taken at the Shareholders Meeting of the Company on the previous day concerning yourself.
Please be advised that the Directors have now confirmed the decision to remove you as a Director of the Company and all subsidiaries effective October 30, 2000.
By copy of this letter, I am formally requesting you to turn over to me on behalf of the Company all of the books, records, and other property of the Company, Anglo Swiss Asset Management Ltd. and Dalgest SA.”
27.	The letter dated 8 May 2002 written by Messrs. Evans Dodd, a firm of solicitors, was addressed to Mr. Cooper. It began in this way:-
“NETVEST.COM PLC – v – IAN ILSLEY 
We write to inform you that we have been instructed by Netvest.com Plc in connection with their claim against your client for £100,619.16 plus interest, details of which you are fully aware of. We have seen copies of the correspondence between you and your clients and would request that all future correspondence be sent to this firm.”
28.	From that letter it was plain that the claim of Netvest was a claim against Mr. Ilsley personally. The fee note of Counsel, Miss Juliette Levy, was dated 6 May 2004 and on its face related to the Netvest Action.
29.	Mr. Lygoe was cross-examined forcefully at the trial in relation to his contention that it had been agreed between him and Mr. Ilsley that Mr. Ilsley personally would discharge costs due to the Practice in respect of work done on the instructions of Mr. Ilsley, whether that work in fact related to his personal affairs or to the affairs of some company in which he had an interest. Understandably Mr. Lygoe was asked when and where the agreement alleged had been made. He told me that it was a difficult question when the agreement had been made. He accepted that he never sat down with Mr. Ilsley and agreed that Mr. Ilsley would settle all the costs incurred on his instructions, whether they related to his personal affairs or to the affairs of a company in which he had an interest. Mr. Lygoe told me that the agreement emerged from Mr. Ilsley paying interim bills sent to him and signing in his own name the first, undated, client care letter. A little later in his cross-examination Mr. Lygoe told me that Mr. Cooper had told him that Mr. Ilsley was going to be responsible for payment of all sums due to the Practice for work done pursuant to his instructions, whether in relation to his own affairs or the affairs of a company in which he had an interest.
30.	Mr. Lygoe was also pressed in cross-examination in relation to his contention that Mr. Ilsley had agreed that Mr. Lygoe could take sums from the Estate Funds in settlement of costs considered to be due from Mr. Ilsley to the Practice. Mr. Lygoe told me that he could not put his finger on when that agreement was made. He said that he had conversations with Mr. Ilsley and also kept writing to him about it. 
31.	In his first witness statement, at paragraph 4, Mr. Lygoe had dealt with the alleged agreement to take money from Estate Funds in this way:-
“In 2001, the Defendant requested me to act in connection with the administration of his late mother’s estate of which he was an executor and major beneficiary. It was therefore agreed that whenever any of the litigation matters, either personal or corporate, where the Defendant asked us to act, required funds for costs or disbursements, monies could be and were transferred from the estate account to keep the litigation alive. Any sums required for any of the litigation were therefore billed onto ledger number 3944 in the name of the Defendant and sums transferred onto that ledger from the estate account. Whenever cash accounts were required by him in respect of the litigation matters, they were produced showing all monies into and paid from the one ledger account number 3944 in the Defendant’s name. The one exception was a matter concerning a company referred to as “Red Sea” where a separate file was opened in the Defendant’s name and a new client care letter was signed by him. …”
32.	In his second witness statement Mr. Lygoe amplified upon that evidence in paragraphs 8 to 11 inclusive, which I have already quoted. However, it is necessary to consider the documents referred to in those paragraphs.
33.	The facsimile transmission dated 22 November 2001 written by Mr. Cooper to Mr. Ilsley included, so far as is presently material, this paragraph:-
“As mentioned at the telephone I anticipate it would be easier if we reached agreement that this firm’s proper fees in respect of the Monaco situation can largely be met from the monies you are entitled to receive from your mother’s Estate. I have suggested Jeff writes to you in this regard. ”
34.	Mr. Lygoe agreed in cross-examination that the reference to “the Monaco situation” was probably to the litigation in Monaco concerning the Settlement. He also agreed that what Mr. Cooper put to Mr. Ilsley was only a suggestion that costs could be met in respect of that matter from the Estate Funds, and did not evidence an agreement to that effect.
35.	Mr. Lygoe’s own facsimile transmission, dated 26 November 2001, to Mr. Ilsley dealt with the issue of taking costs from the Estate Funds in paragraph 4:-
“I understand from Dennis that you would like the fees being incurred by you to this firm on other personal matters to be dealt with from the proceeds from your mother’s estate. If that is correct I would be grateful if you would please confirm on the basis that we would apply interest on unpaid bills after 28 days. I would like if possible to pay Counsel’s fees of approximately £2,000 immediately as we are being pressed. Can you arrange a cheque for this within say 14 days?”
36.	In cross-examination Mr. Lygoe accepted that in that facsimile transmission also what was set out was a proposal, not a record of an agreement. He said that, by his reference to “other personal matters”, he actually intended to encompass all of the matters in respect of which Mr. Ilsley in fact gave instructions to the Practice, whether relating to his own private affairs or the affairs of companies with which he was connected. However, if the word “personal” in that expression was given its ordinary meaning in the English language, what Mr. Lygoe wrote was inconsistent with his assertion that Mr. Ilsley had agreed himself to settle the costs incurred by the Practice in relation to the affairs of companies which gave instructions to it through Mr. Ilsley, for it appeared that Mr. Lygoe was only looking to Mr. Ilsley to pay costs in relation to his own matters, and not also in relation to the affairs of companies which had conveyed instructions through him.
37.	The first sum received into the Estate was an amount of £38,939.77 paid by Allied Dunbar on 9 July 2002. The first sum paid out of the Estate was an amount of £12,000 on 10 July 2002 transferred to office account. The memorandum of 3 April 2002 written by Mr. Lygoe to Mr. Cooper, to which he referred at paragraph 10 of his second witness statement, was thus written before there was any money in the Estate. The material part of that memorandum was in these terms:-
“We have still not received a response from the above [Mr. Ilsley] to Tony Bundy’s letter of the 15 March a copy of which I believe was sent to you. We will chase Ian from this end but since we are assisting him on other matters in anticipation of being paid from the estate I do need to know that this is moving along.”
38.	As the memorandum was written by Mr. Lygoe to Mr. Cooper it hardly, as it seems to me, amounted to that which “confirms the agreement with Mr. Ilsley as to the use of the funds from the estate account for the payment of his various litigation matters.”, as Mr. Lygoe contended at paragraph 10 of his second witness statement. All it really did was to indicate the hope of Mr. Lygoe as to how he would ultimately be paid.
39.	The terms of the letter dated 11 April 2003 which Mr. Lygoe wrote to Mr. Ilsley and the reaction to it, eventually, of Mr. Ilsley, in my view were equivocal, when viewed against the material background, and not evidence of the agreement for which Mr. Lygoe contended. Mr. Lygoe’s letter of 11 April 2003 was in these terms:-
“YOUR LATE MOTHER’S ESTATE
You will recall that I sent to you some time ago a letter to be signed by yourself and your sister who is the co-executor of your mother’s estate confirming your previous instructions to me enabling me to transfer monies from your mother’s estate to your own account.
We met last week and again I mentioned the matter since I had not heard from you and you did say that you would arrange to see your sister as soon as possible when you would have that letter signed and returned to me together with various share transfers to enable us to conclude the administration of your mother’s estate.
I am afraid I am being pressed by The Law Society to produce confirmation of your instructions concerning the transfer of funds and I would be very grateful therefore if you could please expedite the return of this letter to me duly signed as soon as possible.
I shall be away from the office now until the 28 April but Pat Crean can deal with the matter in my absence.”
40.	What the Law Society had requested Mr. Lygoe to provide was written evidence that the transfer of monies from the Estate Funds to office account in settlement of bills of the Practice had been authorised by Mr. Ilsley and his sister, Mrs. Clifford, as co-executors of the estate. That that was what was required was certainly not made plain by Mr. Lygoe’s letter. The evidence of Mr. Ilsley was that he did not know, at the date he received that letter, or indeed until the last quarter of 2003, that there had been any such transfers. In cross-examination Mr. Lygoe seemed to accept that that was the case. However, Mr. Ilsley did know that there had, by April 2003, been three transfers from the Estate Funds to himself of sums totalling £24,000. Those transfers were an amount of £14,000 on 9 January 2003, an amount of £6,000 on 16 January 2003 and an amount of £4,000 on 17 March 2003. To someone who was aware of those transfers, but was ignorant of the transfers to office account, it was not obvious that the written authority required did not relate simply to the transfers to Mr. Ilsley himself. That is why the terms of Mr. Lygoe’s letter of 11 April 2003 and the eventual reaction to it of Mr. Ilsley and his sister were equivocal.
41.	In due course Mr. Ilsley and his sister signed an undated document prepared by Mr. Lygoe which read:-
“ESTATE OF THE LATE JOAN IXER ISLEY [sic]
We are writing to confirm as executors of the above estate that all transfers made from the estate account and monies held by you into the account of Mr. Ian Ilsley have been fully authorised by us.”
42.	Another matter upon which Mr. Lygoe relied in support of his case that Mr. Ilsley had agreed that he be responsible for paying the bills rendered by the Practice in respect of work done on the instructions of Mr. Ilsley for various companies was the fact that, in May 2004, in the context of transferring various matters from the successor to the Practice, DPL, a firm in which Mr. Lygoe himself had no interest, to a new firm of solicitors, Messrs. Bowling & Co. (“Bowling”),  DPL had sought to exercise a lien upon the papers which it held in respect of a number of matters, including those relating to the action numbered HQ03X00715 between (1) Hoodless Brennan & Partners Plc and (2) Garnham and Co. Ltd. and Mr. Abbey (“the Garnham Action”). DPL required, as a condition of transferring the relevant papers to Bowling, that it retain, as security, various share certificates in the name of Mr. Ilsley’s late mother, but apparently the subject of a trust in favour of Mr. Ilsley himself. Mr. Ilsley agreed to that condition. Consequently, contended Mr. Lygoe, Mr. Ilsley accepted that he personally was liable to pay the costs of the Practice for acting on behalf of Garnham in the Garnham Action, at very least, and his agreement to the retention of the share certificates was actually evidence that the agreement for which Mr. Lygoe contended had been made. Mr. Ilsley was asked about this in cross-examination. He told me that he felt that he had to agree to the condition because the papers in the Garnham Action were urgently required for the purposes of negotiating a settlement of that action.
43.	As I have already noted, Mr. Ilsley vigorously denied ever making an agreement with Mr. Lygoe that he would accept liability to settle the costs of the Practice for acting for companies which gave instructions through Mr. Ilsley, in addition to the costs of the Practice for acting in relation to his personal affairs. I have also already noted that in that denial he was supported by Mr. Cooper. It was not suggested to Mr. Cooper in cross-examination that he himself had made any agreement with Mr. Ilsley on behalf of Mr. Lygoe to the effect that Mr. Ilsley would accept liability to settle the costs of the Practice for acting on any instructions which he gave, whether on his own behalf or on behalf of a company.
44.	Moreover, Mr. Ilsley vigorously denied ever agreeing that Mr. Lygoe could resort to the Estate Funds as a source from which to settle costs considered by Mr. Lygoe to be due to him for services provided by him to Mr. Ilsley or to companies which had given instructions to the Practice through Mr. Ilsley. It was not suggested to Mr. Cooper in cross-examination that he was aware of any such agreement.
45.	I was impressed by both Mr. Ilsley and Mr. Cooper as witnesses. While, as I shall explain, it seemed to me that Mr. Ilsley laboured under a misapprehension in relation to one issue relevant to this action, he struck me as transparently honest and seeking to do his best to assist the Court by his evidence. Mr. Cooper seemed to me to be a cautious and careful individual who took trouble to give as accurate answers as he could to the questions which were put to him.
46.	On the other hand, I was troubled by much of Mr. Lygoe’s evidence on contentious issues. His assertion that he had agreed with Mr. Ilsley that Mr. Ilsley would accept liability not only for settlement of the costs of the Practice for acting in Mr. Ilsley’s own matters, but also liability for settlement of costs in relation to the Practice acting for companies which gave instructions through Mr. Ilsley was not obviously plausible. It was not the sort of agreement which one would expect a person in the position of Mr. Ilsley to have made. Ordinarily a person instructing a solicitor is, by virtue of the giving of such instructions, bound to pay the reasonable costs of the solicitor for the work done pursuant to the instructions. However, an individual who gives instructions to a solicitor to act on behalf of a company does not usually accept personal liability to discharge the costs of the solicitor for acting on those instructions. Generally the obligation to pay in such a situation is that of the company on whose behalf the solicitor is instructed. If a solicitor wished to be assured of being paid for work which he had done, the usual course was to require payment of sums on account of costs. The agreement for which Mr. Lygoe contended was thus an unusual one. One might have expected that, in those circumstances, especially as he was a solicitor and, one supposes, familiar with the ordinary principles of the law of contract and the law of evidence, Mr. Lygoe would have sought to ensure that the agreement which he said that he had made was either in writing, so that there could be no misunderstanding as to the effect of what had been agreed, or at least clearly evidenced in writing, either by some confirmatory letter to Mr. Ilsley or an attendance note. In fact, of course, there was no letter and no attendance note. The only written material relied upon by Mr. Lygoe was, at best, equivocal, and at worst – I have in mind in particular the facsimile transmission dated 26 November 2002 and its reference to “other personal matters” – adverse to Mr. Lygoe’s case. When one put into the equation the fact that Mr. Lygoe was unable to identify at what point in time the agreement for which he contended was made, it became clear, in my judgment, that the alleged agreement was just a figment of Mr. Lygoe’s imagination. It seemed to me that he was simply unable, in cross-examination, to deal at all satisfactorily with the many logical and factual difficulties in his case as to the agreement said to have been made with Mr. Ilsley that Mr. Ilsley would settle the fees due to the Practice not only in respect of matters in which the Practice had acted for him personally, but also in respect of matters in which the Practice had acted on his instructions for various companies. Consequently I reject his evidence on that point.
47.	I also reject his evidence that he agreed subsequently with Mr. Ilsley that the Practice could take sums which it considered to be due to it from the Estate Funds. Mr. Lygoe’s case on this agreement was in fact linked logically to his case on the other agreement, for the second agreement was said to extend to debiting to the Estate Funds costs considered to be due in relation to work done by the Practice on the instructions of Mr. Ilsley for companies with which he was associated, as well as costs considered to be due in respect of work done for Mr. Ilsley himself. The documents relied upon by Mr. Lygoe in support of his case in relation to this second alleged agreement did not support it. As I have already pointed out, what were said to be the critical documents in support of the case were at best equivocal. Again, I did not feel that Mr. Lygoe dealt at all satisfactorily in cross-examination with the difficulties in his case as to this second agreement. I reject his evidence as to this alleged second agreement.
48.	The consequence of rejecting Mr. Lygoe’s evidence as to the two agreements upon which he relied is that the only liability, in principle, of Mr. Ilsley to Mr. Lygoe was to pay sums properly due to Mr. Lygoe for work done by the Practice for Mr. Ilsley personally.
49.	There was some difference between Mr. Lygoe and Mr. Ilsley as to which of the matters the costs of which Mr. Lygoe sought to have brought into account were personal matters of Mr. Ilsley, and which were not. As I have said, Mr. Ilsley accepted that he personally was the client of the Practice, and liable to pay its proper costs, in the action commenced on his behalf against Mr. Abbey (“the Abbey Action”) and in relation to the Settlement. During cross-examination he also accepted that he personally was the client in the Netvest Action. Mr. Lygoe accepted that Mr. Ilsley personally was not the client in the Garnham Action or in relation to the work the subject of the bills respectively numbered 8800, 8801 or 8807. It was common ground that Mr. Ilsley personally, together with his sister, were the clients of the Practice in relation to the administration of the Estate, but Mr. Lygoe made no claim in this action in respect of any costs for that work. It was agreed that what had in fact happened in relation to the costs of the Practice for the administration of the Estate was that Mr. Lygoe had deducted an amount of £23,500 from the Estate Funds on account of costs, but that no final bill in respect of the administration of the Estate had ever been rendered. The significance of that, submitted Mr. Stuart Cakebread, who appeared on behalf of Mr. Ilsley, was that, in assessing the proper state of accounts between Mr. Lygoe and Mr. Ilsley, Mr. Ilsley should be credited with having paid £23,500, but did not stand to be debited with any amount in respect of the costs of the administration of the Estate, although a bill for the work of administration could now be rendered. I think that, in the end, that analysis was accepted by Mr. Adrian Davies, who appeared on behalf of Mr. Lygoe. At all events I am satisfied that Mr. Cakebread’s submission on this point is sound.
50.	It is therefore necessary to consider, so far as revealed by the evidence put before me, whether any of the work the subject of the bills numbered, respectively, 6826, 6993, 7110, 7279, 8802, 8803, 8804, and 8805 was in fact for the personal benefit of Mr. Ilsley. Mr. Ilsley’s case was that none of the relevant work was for him personally. 
51.	In his first witness statement Mr. Ilsley did not deal with the bills numbered, respectively, 6826, 6993, 7110 or 7279, which can conveniently be described collectively as “the Red Sea Bills”, because at the date of that witness statement the Red Sea Bills did not feature in the Particulars of Claim. The references to the Red Sea Bills were added by amendment. About the other bills which he contended had nothing to do with him personally Mr. Ilsley said:-
“18. I have no idea what bill 8802 relates to.
19. Your Space plc was contractually obligated to Vigan Securities S.A. who provided my services as a director of Your Space. Any instructions to the Claimant would have been from one of those two companies.
20. I was not removed from VMR. Any instructions would have been from BASE which provided management services to VMR including the provision of directors. ”
52.	Mr. Ilsley did not deal specifically with the matter of Libra Investments Ltd. (“Libra”) in either of his witness statements. However, he was asked about it in cross-examination. He told me that Libra was a client of BASE and a dispute had arisen as to whether he or Mr. Abbey was a director of Libra.
53.	In his second witness statement Mr. Ilsley explained his position in relation to the Red Sea Bills:-
“19. BASE held via its nominee companies shares in a listed Irish company. That company was subject to an investigation by the Irish Take-Over Panel as to whether or not a concert party existed. I contacted Mr. Cooper and asked whether they would like to act in this matter. I pointed out that whilst my name or BASE’s name may be the subject of instructions, it must be on the clear understanding that any fees incurred must not be the liability of myself or BASE.
20. I explained to Mr. Cooper that the fees would be paid by Marrache and Co. the Gibraltar solicitors retained by the beneficial owners of the shares in question. Mr. Cooper was already familiar with Marrache and Co. and I understand he spoke to the Claimant to satisfy himself as to the arrangement. Bills would be rendered to BASE Management. I would submit these to Marrache and Co. They would provide me with funds which I would then pass on to David Parry and Co. In the event I believe Marrache and Co. settled some invoices directly. There was never any misunderstanding as to the basis of those instructions and I have no personal liability in that regard.”
54.	That evidence of Mr. Ilsley was supported by the evidence of Mr. Cooper. At paragraph 27 of his witness statement he said:-
“I should also mention the matter known as Red Sea. The Defendant telephoned me to say there was an issue with clients of BASE concerning a potential investigation by the Irish Take-Over Panel. The Defendant was content to recommend that DPL [i.e. the Practice] be instructed. However it would have to be on the basis that any liability for fees did not rest with him personally or BASE and that liability would be met by Marrache and Co. who acted for the beneficiaries of the shareholding. This firm was known to me and to a lesser extent to the Claimant. I spoke to a partner of Marrache and Co. who confirmed they would be liable for the fees. There was a need for this matter to be dealt with expeditiously. I informed the Claimant and he was perfectly content for those instructions to proceed on the basis that no liability was attached to the Defendant or BASE. The arrangement was that Marrache and Co. would forward monies to BASE in Monaco who in turn would discharge DPL’s account or Marrache on some occasions sent monies direct to the Claimants. It is correct to say that during the period these instructions were coming to an end the Claimant and the accounts department sought to dispute that the liability for the fees in relation to Red Sea were accepted to be the responsibility of Marrache and Co. and neither the Defendant nor any of his companies. I recall a particularly contentious conversation with the Claimant about this when he denied any knowledge about the arrangement. This happened towards the end of my relationship with the Claimant and his practice.”
55.	Mr. Cooper was not asked in cross-examination any questions about this part of his evidence.
56.	It did appear from a document produced on behalf of Mr. Lygoe that in fact one payment, of £6,900, was received from Messrs. Marrache and Co. (“Marrache”) on 9 July 2002. That sum, when added to a previous payment of £5,000 apparently made by Your Space Plc (“Your Space”) on 17 May 2002, cleared the only one of the Red Sea Bills rendered by 9 July 2002, which was the bill in the sum of £11,900 numbered 6826 and dated 21 May 2002. Thus, rather surprisingly, a payment of £5,000 on account of that bill seems to have been made before the bill had even been rendered. The second Red Sea Bill, numbered 6993 and dated 6 August 2002, was in the sum of £4,485.00. That precise sum seems to have been paid from an unidentified source by cheque on 8 November 2002. The other sum actually paid in respect of the Red Sea Bills was an amount of £2,203.13 on 24 October 2002, again from an unidentified source. That sum was not obviously referable to any particular one of the Red Sea Bills.
57.	It was obvious from his evidence that Mr. Ilsley generally took the view that any instructions given by him to the Practice in relation to a matter which involved him as a director of a company did not involve him personally, but rather was a business matter in respect of which BASE or, if it related to him being a director of a company registered in England and Wales, Vigan Securities S.A. (“Vigan”), the company through which he provided his services as director of United Kingdom companies, was liable to pay any fees properly due. I have to say that in my judgment Mr. Ilsley was confused on the point, and in error. He acted as a director of whatever company as an individual. Matters concerning his performance as a director were prima facie matters personal to him. It may well be that, as between him and BASE or Vigan, or perhaps some other company, he was entitled to reimbursement of any sums expended by him in his capacity as a director, or to be indemnified in respect of liabilities. However, unless it was specifically agreed in relation to some particular instruction which involved him as a director of a company that someone other than he should be liable to pay the costs of the Practice for performing his instructions, it seems to me that the giving of the instructions in relation to his personal position as a director involved, when those instructions were accepted, an implied contract between Mr. Ilsley personally and Mr. Lygoe to pay the proper costs of the Practice of acting upon the instructions given.
58.	The instructions which led to the rendering of the Red Sea Bills came about because Mr. Ilsley received a letter dated 23 April 2002 from the Irish Takeover Panel (“ITP”). The letter was addressed to him personally. It included the following:-
“Re: Gresham Hotel Group plc
I attach a copy of an application from AIB Corporate Finance on behalf of Gresham Hotel Group plc (“the applicant”) requesting the Panel to investigate whether you are acting in concert with Red Sea Hotels Limited in respect of Gresham Hotel Group.
…
Bearing in mind the nature of the request from the applicant, it would assist the Panel greatly if you would set out fully the extent of the relationship between yourself and Red Sea Hotels and between yourself and Mr. Harvey Soning.”
59.	It seems plain from Mr. Ilsley’s evidence that he was identified by ITP as a person to contact because BASE, via a nominee, held shares in Gresham Hotel Group plc (“Gresham”). Those shares, according to what Mr. Ilsley told me in cross-examination, were held beneficially for a client of BASE. However, he accepted in cross-examination that ITP was seeking to find an individual who could be regarded as a decision maker, and had lit upon him. In my judgment, therefore, he was involved with ITP as an individual and gave instructions to the Practice in that capacity. However, I accept the evidence of Mr. Ilsley and that of Mr. Cooper that on this occasion it was specifically agreed that, notwithstanding the giving by Mr. Ilsley of instructions to the Practice to act on his own behalf, the Practice would look only to Marrache for payment of its fees. Thus I find that Mr. Ilsley in fact was not liable to pay to Mr. Lygoe any fees for acting on his behalf in relation to the enquiries of ITP.
60.	The nature of the instructions given by Mr. Ilsley in relation to the work the subject of the bill numbered 8802 emerged from a letter dated 9 May 2002 written by Mr. Cooper to Mr. David Wainwright of the National Investigations Branch of H.M. Customs and Excise (“HMCE”). The material part of the letter was to this effect:-
“Re: Ian Ilsley
I refer to our telephone conversation of earlier this week.
I act for the above who was the subject of an enquiry raised with your office when you attended upon Mr. Ilsley in Monaco in 1997.
Mr. Ilsley has received notification from the Monegast [sic] Government that they were concerned in part with regard to the investigations you were concerned with in that they have indicated that our client was guilty of associating with persons or engaging in activities which were considered not to be in keeping with those conducting business within Monaco.
Mr. Ilsley is therefore obliged to respond to that erroneous assumption.”
61.	It was thus plain that the matter related to Mr. Ilsley in his personal capacity. Indeed it was a matter at the time of the utmost concern to him personally because, by a decision dated 18 April 2001 made by the Minister of State in Monaco, Mr. Ilsley had been ordered to be expelled from Monaco on grounds which included his alleged involvement in the matter investigated by HMCE in 1997, and he had appealed to the Supreme Court of Monaco against that decision. The appeal was heard on 5 November 2002 and a statement of the position of HMCE was required for the purposes of that appeal. I have to say that it seems to me to be unsatisfactory that Mr. Ilsley said, in his first witness statement, that he had no idea to what bill numbered 8802 related. One might have thought, given the nature of the problem which he faced in Monaco as a result of the involvement of HMCE, he would have been likely to have recalled the issue. At all events I am satisfied that in respect of this matter he personally gave instructions to the Practice to act on his own behalf and was therefore liable to pay Mr. Lygoe a proper fee for the work done.
62.	Again, the documents put before me in relation to Libra confirmed the oral evidence of Mr. Ilsley that the matter in connection with which he sought advice from the Practice concerned whether he, in a personal capacity, or Mr. Abbey, was a director of Libra. DPL wrote a letter dated 11 March 2004 to a firm of solicitors called Atlantic Law about Libra. The letter included:-
“We shall assume [for] the purpose of this communication that Libra Investments Limited is the Company registered in St. Vincent and the Grenadines under Company number 5425 1BC 1999.
In the event that is correct, then according to information received, the registered directors of that Company are Mr. Ian Ilsley and Mr. Ian Scott.
We note in your communication you maintain that Mr. Abbey is the director of Libra Investments Limited. We would therefore ask to receive by return the evidence that is relied upon to show Mr. Abbey is a director as alleged.”
63.	There was also put before me a copy of a letter dated 17 March 2004 written by The Ramerson Trust Corporation Ltd. of St. Vincent and the Grenadines addressed “To Whom It May Concern” advising that at the date of the letter the directors of Libra were Mr. Ilsley and Mr. Scott.
64.	Consequently, in my judgment Mr. Ilsley personally was liable to pay to Mr. Lygoe his proper costs for acting for him in relation to Libra.
65.	In his cross-examination Mr. Ilsley told me that the Your Space matter the subject of bill numbered 8804 concerned a claim for some outstanding director’s fees. He said that his services as a director of Your Space had been provided pursuant to a service agreement between Vigan and Your Space and that the claim was under the terms of that agreement. The agreement itself was not put in evidence, but Mr. Davies accepted in his closing submissions that Mr. Ilsley’s account of this issue was correct. I think that Mr. Davies recognised that, on that basis, it was difficult for Mr. Lygoe to demonstrate that the instructions given by Mr. Ilsley had been given by him in a personal capacity. It seems to me that that was realistic. I find that Mr. Ilsley was not personally liable to pay Mr. Lygoe the proper costs of the work done in relation to the claim against Your Space.
66.	The last matter which required consideration in terms of whether Mr. Ilsley gave instructions to the Practice in a personal capacity was that referred to as “VMR Trust & Management Ltd.” 
67.	I have already set out the documents relied upon by Mr. Lygoe as showing the nature of the instructions given concerning VMRTM. From those it is plain that it concerned, amongst other things, Mr. Ilsley ceasing to be a director of VMRTM. In cross-examination Mr. Ilsley told me, and I accept, that VMRTM was a company established jointly by a German company, VMR A.G., and BASE with a view to obtaining a listing on the Alternative Investment Market. In order to facilitate the attempt to obtain a listing Mr. Ilsley became a director of VMRTM. The attempt failed. The question then arose whether Mr. Ilsley should continue as a director. He was not inclined to do so, but he considered that VMRTM was liable to pay various sums on his departure. The focus of the work of the Practice was the obtaining of those sums. As I have noted, Mr. Ilsley, in his first witness statement, said that the services of himself as a director of VMRTM were provided by BASE. Thus the case seemed to be similar to that of Your Space, with the substitution for Vigan of BASE. That analysis was confirmed by the evidence of Mr. Cooper at paragraph 10 of his witness statement.
68.	In the result I find that Mr. Ilsley was not personally liable to pay the costs of Mr. Lygoe for the work done by the Practice in respect of the claim against VMRTM.
Conclusions as to the work for which Mr.  Ilsley was personally liable
69.	For the reasons which I have given, I find that Mr. Ilsley was personally liable to pay Mr. Lygoe his proper costs for work done on the instructions of Mr. Ilsley in relation to the Abbey Action and the Netvest Action, the work in connection with the Settlement, and the work the subject of the bills numbered, respectively, 8802 and 8803, but none of the other matters claimed. In addition, it was common ground that Mr. Ilsley is personally liable to meet the proper costs of Mr. Lygoe for work done on the administration of the Estate, when a final bill of costs is produced.
The financial consequences of my conclusions as to the personal liability of Mr. Ilsley
70.	At the start of the trial Mr. Davies contended that the effect of Solicitors Act 1974 s.70 was that it was not open to Mr. Ilsley to challenge the amounts of any of the final bills which had been rendered to him. At the conclusion of the trial Mr. Davies accepted that, in making that submission, Homer had nodded and that the true position was as described by Sir Richard Scott V-C in the Court of Appeal in Thomas Watts & Co. v. Smith, unreported, 16 March 1998:-
“In my judgment, in a case such as this, where solicitors are applying for payment of their bill, the situation is analogous to one in which a plaintiff is applying for an unquantified sum which has to be quantified by a judicial process before judgment can be awarded for the appropriate amount. This is common in damages claims. Judgment for damages to be assessed is a very common form of order under an Order 14 application. Where a quantum meruit for work done, the benefit of which has been obtained under a contract but where the contract sum has not been agreed is claimed, there may be an order for judgment to be entered for the plaintiff with the quantum to be assessed. In my judgment that is the position of the plaintiff’s claim in the present case. It is no doubt too late, having regard to the terms of section 70 of the Solicitors Act 1974, for Dr. Smith to make an application for taxation. But if the Court is to be asked to make an order for payment by Dr. Smith, the client, of the amount claimed by the solicitors, a process of judicial assessment must, in my judgment, first take place. The judicial assessment should be carried out by a taxing master. It is the taxing masters that have the requisite expertise for that purpose.”
71.	It was thus common ground at the end of the trial that I should direct an assessment by a Costs Judge of those bills which I found were properly payable in principle by Mr. Ilsley.
72.	However, Mr. Cakebread submitted that, depending upon my findings, I might be able to go further and to dismiss the claim of Mr. Lygoe. That submission was founded upon the fact that I might find that the total of the amounts claimed by Mr. Lygoe in respect of the bills properly payable in principle by Mr. Ilsley was less than the amount which Mr. Lygoe accepted that he had already received. That is indeed the position. On the face of paragraph 6 of the Amended Particulars of Claim Mr. Lygoe accepted that he had received a total of £91,058.14. That sum did not include the amount of £23,500 which had been retained by Mr. Lygoe from the Estate Funds. When the sums of £91,058.14 and £23,500 are added they come to £114,558.14. The total of the sums which Mr. Lygoe claimed in bills which I have found were in principle the liability of Mr. Ilsley came to £92,967.67. On those figures the claim fails and is dismissed. In expressing that conclusion I do not overlook the fact that a final bill in respect of the administration of the Estate has yet to be delivered and that the proper amount of that bill is accepted to be a liability of Mr. Ilsley. However, I accept the submission of Mr. Cakebread that those matters cannot be dealt with in the present trial by reason of the fact that no sum in respect of the administration of the Estate is yet due because no bill has been delivered. What has to happen is the delivery by Mr. Lygoe of a final bill, which, if so advised, Mr. Ilsley can then have assessed as to its propriety in the usual way. All of that has to take place outside the context of the present action.
73.	The purpose of the assessment of the bills for which I have found Mr. Ilsley to be liable in principle will in fact be to enable the Court to calculate the sum which is due to Mr. Ilsley in respect of his counterclaim. Subject to the swearing by Mr. Ilsley’s sister of an affidavit to the effect that she will not hereafter seek to pursue any claim against Mr. Lygoe in respect of the administration of the Estate, it was accepted that Mr. Ilsley alone was a proper party to pursue the counterclaim which had been pleaded on his behalf. It was also accepted that, in practical terms, at least, the appropriate way in which to proceed in assessing the sum due to Mr. Ilsley on his counterclaim was to evaluate the sum which was properly due from him to Mr. Lygoe, and then to see by what amount sums paid to Mr. Lygoe, or taken by him from the Estate Funds, exceeded the amount due from Mr. Ilsley to Mr. Lygoe. Technically, of course, Mr. Lygoe should simply make good to the Estate the amounts taken without authority in respect of his own costs and the costs of Counsel, but that would just mean that, to the extent that that exercise meant that an amount was due to Mr. Lygoe, by reason of the reduction of the total of sums already received by him, Mr. Ilsley would have to pay back what he received.
The way forward
74.	I shall hear Counsel as to the precise form of order which is appropriate, but I am inclined to make a declaration as to the bills in respect of which I have found that Mr. Ilsley was liable in principle to pay the proper costs of Mr. Lygoe, to refer the assessment of those bills to a Costs Judge, to dismiss the claim of Mr. Lygoe, and to adjourn the assessment of the sums due to Mr. Ilsley on his counterclaim until after the assessments of the Costs Judge have been completed.