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UPPER TRIBUNAL
(LANDS CHAMBER)
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UT Neutral citation number: [2013] UKUT 142 (LC)
UTLC
Case Number: ACQ/144/2012
TRIBUNALS,
COURTS AND ENFORCEMENT ACT 2007
COMPENSATION
– Compulsory purchase – surveyor’s fees in respect of negotiating compensation
– hourly rates – time spent – Fees determined at £3,840 plus VAT and
disbursements
IN
THE MATTER OF A NOTICE OF REFERENCE
BETWEEN STEPHEN
DOWNSWORTH
TAMMY
DOWNSWORTH Claimants
and
MANCHESTER CITY COUNCIL Acquiring Authority
re:
64 Stopford Street, Higher Openshaw
Manchester M11 1FG
Determination
on written representations
by
P
R Francis FRICS
The following cases are referred to in this decision:
Poole v South West Water Ltd [2011] RVR 286
Matthews v Environment Agency [2002] 3 EGLR 168
Newman v Cambridgeshire County Council [2011] RVR 283
DECISION
Introduction
1.
This is a reference solely to determine the surveyor’s charges incurred
by the claimants, Mr & Mrs Downsworth, in respect of the compulsory
acquisition of their property, 64 Stopford Street, Manchester M11 1FG by Manchester City Council (the council) under the City of Manchester (Toxteth Street) Compulsory Purchase Order 2007. All other items of claim have been agreed.
The claimants’ property was one of 551 houses and flats included within the order
which was confirmed by the Secretary of State on 21 January 2009. A General
Vesting Declaration was executed on 6 May 2009, and the property formally
vested in the council on 11 June 2009.
2.
The surveyor is Mr Dominic Thompson FRICS FCIArb MAE, sole principal of
Hockenhulls’ Chartered Surveyors, Chester, who was appointed by the claimants
in October 2009 for the purposes of agreeing compensation with the council for
the value of their property and other disturbance items. His fees were agreed with
the claimants at £175 per hour plus VAT and disbursements on 25 November 2009
and the council was advised (by copy of Hockenhulls Terms of Business signed by
both parties) on 3 December 2009. Compensation under rule (2) of section 5 of
the Land Compensation Act 1961 was agreed by negotiation between Mr Thompson
and the council’s agent on 4 December 2009 at £59,750 with disturbance issues
(rule (6)) subsequently being agreed £4,500 on 9 December 2010.
3.
Having subsequently failed to agree his fees invoice with the council, the
notice of reference to this Tribunal was submitted by Mr Thompson on the
claimants’ behalf on 30 July 2012 together with an appendix (reproduced below) setting
out his claim for an alleged outstanding sum of £5,790.12 including VAT and
interest, and allowing for payments already received.
Appendix 1 – Statement of
Claim Hours Claim
1. Time spent on
Substantive Case (Narrative 1) 28.00
2. Time
spent on amount of surveyor’s charges
(Narrative
2) 17.5
45.5
@£175 £7,962.50
Expenses
£208.59 but say £
207.50
£8,170.00
Less
already paid £2,280.00
(Check
24 hrs @ £160) £1,560.00
£3,840.00
Outstanding balance/claim £4,330.00
VAT @ 20% £
866.00
£5,196.00
And the claimants’ claim costs
including:
(i) Surveyor
advocate’s time spent on third
Party
reference [reference to Tribunal]
(Narrative
3)
(ii) Surveyor
advocate’s time on generic discussions
with
Manchester City Council (Appendix 5)
(iii) Interest
£5,196 @ 8.5% for 491 days (17/2/11-22/6/12) £ 594.12
Plus £1.21
interest per day thereafter
4.
Mr Thompson also provided a Statement of Case accompanied by copy
correspondence and a “Schedule of Documentary Evidence” amounting to some 194
pages. The council (in the name of Margaret Foley, Solicitor, Legal Services,
Manchester City Council) submitted a response and a summary of contentions in
connection with the reference to the effect that the £3,840 already paid to Mr
Thompson was a discretionary payment made in an attempt to reach a negotiated
settlement in this matter, and was already significantly in excess of fees paid
to other surveyors who acted for other residential homeowners affected by the
scheme. Thus, it was contended, the fees claimed were wholly unreasonable and disproportionate
as were those additionally claimed in connection with the fees dispute and the
preparation of this reference.
5.
This initial response was followed by the council’s Statement of Case against
which counter representations were made by Mr Thompson on 7 December 2012.
Also, on that date, the council filed and served the witness statement of
Gillian Boyle BA (Hons) MRICS MRTPI together with appendices. She is the
commercial manager in the council’s Corporate Property Department, responsible
for a team of 8 Chartered Surveyors and contract manager for the council’s
external property advisers. Mr Thompson submitted a response to this on 14
December 2012. The Tribunal then advised the parties that no further
representations or argument would be considered.
Claimants’ case
6.
Setting out the background and details in the Statement of Case relating
to his disputed fees, Mr Thompson said that he had initially been approached by
the claimants on 6 October 2009 and received instructions to proceed about 1
week later. An inspection of the claimants’ house was undertaken on 25
November 2009 and on 26 November Mr Thompson made contact with Mr John Hargan
MRICS of Jacobs Engineering UK, the council’s agents, commencing negotiations.
The claimants’ instructions, and the fees basis, were formally confirmed in
writing on 3 December 2009. On 4 December 2009, agreement was reached as to the
value of the house and the claimants, taking advantage of a council scheme to
assist with occupiers relocations, purchased and moved into 21 Silverlace
Avenue, Openshaw on 29 January 2010. Negotiations relating to various
items of disturbance (claimed in the total sum of £8,032.78) continued between
Mr Thompson and Mr Hargan from August 2010 with the rule (6) compensation being
compromised in the sum of £4,500 on 9 December 2010.
7.
Mr Thompson said that he had formally advised the council’s Housing
Renewal Team by letter of 1 December 2009 (with a copy to Mr Hargan) of his appointment
by the claimants and, by copy of the signed Terms of Business, of his fee
basis. He said that the claimants were, and are, therefore bound to pay “£175
per hour for the time that Hockenhulls reasonably worked” together with
reasonable expenses, and that they had agreed the narrative that had been
provided setting out details of the total of 28 hours work (10.75 hours between
6 October and 4 December 2009 – the date by which the house value was agreed,
and 17.25 hours for negotiating the disturbance items) as reasonable.
8.
There was, he said, a matter of principle involved, and as he was acting
in 9 or 10 other cases under the same scheme, the outcome of this reference could
impact upon each of those. Correspondence and other documentation relating to
the discussions with the council in connection with his fees in those cases was
also enclosed, although it was acknowledged that they were not directly
relevant to this claim. In each case his fee had been agreed with clients at
£175 per hour. Mr Thompson said that he had also been involved with around 20
compensation claims in the broad area of east Manchester covered by three
councils (including Manchester City Council) over the last 6 or 7 years (every case
but this one relating to commercial premises), and his contractual hourly rate
was almost always £175 plus VAT. He said that Oldham MBC had agreed a fee
basis of £175 ph and Tameside had agreed fees based upon £170 ph. The rate
agreed with the claimants in this case was his normal one and Mr Thompson said
he could see no reason why his firm should have to accept a lesser rate.
9.
He referred to, and said that the claimants relied upon, the Tribunal’s
decision in Poole v South West Water Ltd [2011] RVR 286 (which
cited Matthews v Environment Agency [2002] 3 EGLR 168) together with Newman
v Cambridgeshire County Council [2011] RVR 283. Mr Thompson said that the
Tribunal had held that any lesser amount paid to the claimants as compensation
[than the fee that had been agreed with them] would result in them receiving
less compensation than that to which they were entitled. Those cases clearly
demonstrated that fees based upon an hourly rate were permissible and so long
as the time spent was reasonable in the circumstances of the particular case,
they should be paid without deduction. They had also confirmed that fees
incurred in arguing professional fees were recoverable.
10.
In the three narratives provided with the Statement of Case, Mr Thompson
showed the 28 chargeable hours for dealing with the claim, the time spent
dealing with the council in respect of his charges in this case (17.5 hrs) and
a further 36.5 hrs relating to the preparation and submission of this
reference. He also provided as part of the schedule of correspondence relating
to this dispute, a Scott Schedule setting out his (the claimants’) and the
council’s position on the various issues. He said that he would be responding
to the council’s statement of case and, if the hourly rate was to be an issue
and reserved the right to seek disclosure of the rates agreed with other firms
of surveyors.
11.
It was submitted that the council’s final offer still leaves 4 hours of
the casework on the main claim outstanding (whereas Mr Hargan had only queried
3.5 hours), his claimed expenses relating to that and his time spent on arguing
about surveyor’s charges. The material point here, he said, was that if the
council had agreed to pay for all the hours worked and claimed for, together
with the time spent discussing surveyor’s charges (as per Newman) he
would have been prepared to settle for the £160 per hour offered by the
council. However, they were trying to cut short the hours claimed, were
cutting £15 per hour off the hourly fee he had agreed with the claimants and
were disputing the claim for time spent arguing about fees. The extent of the
issues still in dispute were “the straw that broke the camel’s back”, hence the
reason why this reference was proceeding. The time taken discussing fees with
the council was, he said, entirely reasonable bearing in mind their
procrastination and the unreasonable and uncooperative stance they had taken.
Similarly, in respect of the costs of preparing for this case, it was
acknowledged that the time spent was considerable but all of it had been
necessary and was accounted for in the narrative he had provided.
12.
Having argued his position, Mr Thompson said that if the Tribunal finds
that the hourly rate that should apply in this case is £160 – a figure he had
reluctantly agreed with the council as a gesture of compromise, or any other
figure, that is the rate that will be charged to the claimants.
Council’s case
13.
In its Summary of Contentions (as expanded upon in its own Statement of
Case) submitted in response to the claimants’ Statement of Case, the council said
that the level of fees claimed by Mr Thompson both in terms of the hourly rate
and the amount of time expended were wholly unreasonable and disproportionate
in respect of a compensation claim relating to a single dwelling house. A
total of £3,840 plus VAT had already been paid to Hockenhulls; that sum already
being significantly more than had been paid to three other surveyors involved
with properties in Stopford Street. Those fees had ranged from £908.50 to
£1490.50 for dealing with property value and associated disturbance claims.
Mr Thompson’s claim for a further 17.5 hours relating to the dispute over fees
and hours was again disproportionate and not reasonably incurred.
14.
Regarding the £175 hourly rate, whilst it was acknowledged that the
council had been promptly advised that that was what had been agreed with the
claimants, it had never accepted it as an appropriate rate and had advised Mr
Thompson accordingly. The council said that according to the RICS ‘Guidance
Note on fee calculation post Ryde’s Scale’ relating to the exercise of
statutory powers in connection with land and property, surveyors’ fees should
“in all cases be proportionate to the size and complexity of the claim, and be
commensurate with the time, effort and expertise required to deal with the
case.” This was a typical residential property with a modest disturbance
element devoid of particularly complex or extraordinary issues, and the range
of fees the council would normally expect to pay in such circumstances would be
in the range of £90 to £150 per hour.
15.
In that regard, correspondence was produced from two local firms of
surveyors who had acted for claimants on residential units within the same
scheme. Roger Hannah & Co said that their fees had been agreed on the
basis of 1% of the total compensation paid, plus VAT for acting for a Housing
Association in respect of over 100 of the properties affected by this scheme. Roger
Hannah & Co’s principal invoice relating to 79 of the properties had been
raised in April 2009 and averaged £540 per property for negotiating market
value, disturbance and home loss payments. It was said that a typical property
would take between three and four hours of a surveyor’s time although it was
acknowledged that some marginal savings in time could be made due to the volume
of properties being dealt with. As to hourly charge out rates for 2009, they
said the range was £120 to £150 per hour depending upon the professional
undertaking the work. Peter Cunliffe, Chartered Surveyors, had been involved
in a number of CPO schemes in the area and had acted for over 50 individual
clients in relation to this scheme. Their fees were based upon the old Ryde’s
Scale or between £90 and £110 per hour whichever was the greater. The average
fee charged per property ranged between £850 and £1,200 for negotiating both
market value and disturbance issues.
16.
The council said that, purely in an effort to settle this dispute, it
had offered to pay an hourly rate of £160 despite it being above the normal
range and more appropriate for complex commercial claims. This hourly rate had
been accepted by Mr Thompson in emails of 20 October 2010 and 23 February 2011.
Nevertheless, that acceptance was qualified in that there was a stipulation
that the council must also agree the number of hours claimed. It appeared, it
was said, that Mr Thompson’s stance had changed following publication of the
Tribunal’s decision in Poole and he had reverted to claiming the
£175 per hour. In the light of the fact that it had not been possible to
compromise the claim with Mr Thompson, the council said that their offer was
withdrawn, and urged the Tribunal to determine a figure in the range £90 to
£150 per hour.
17.
Turning to the number of hours claimed (28 for negotiating and agreeing
compensation and 17.5 for negotiating fees) the council said that was again
unreasonable and disproportionate to the size and complexity of the case
especially when compared with the hours taken by other surveyors dealing with
similar cases. Whilst it was acknowledged that a claimant has the right to
choose which surveyor to use and to have their costs reimbursed, the fact
remained that such costs should be reasonable and proportionate to the size and
complexity of the case and commensurate with the time effort and expertise
required. In this case, both the hourly rate and the time expended were
substantially in excess of the norm, and thus the claim was unacceptable.
18.
The council had been prepared to pay fees at £160 per hour for eight
hours in respect of negotiating the market value and 6 hours for the
disturbance claim together with 10 hours relating to the fees dispute totalling
24 rather than the 45.5 hours claimed for.
19.
As to the amount of time spent in respect of preparation for this
reference, it was accepted that it was in the Tribunal’s discretion to
decide. However, it was stressed that rather than, as Mr Thompson had
alleged, it being the council that had procrastinated, it was in fact Mr
Thompson who had been unreasonably reluctant to accept the council’s offers to
settle the dispute. In this regard, the council said that it reserved the
right to counterclaim its own costs on the grounds of Mr Thompson’s
unreasonable behaviour.
20.
The reference in Mr Thompson’s Statement of Case talks with Mr Murray in
connection with fee rates generally (as shown at his Appendix 5) should be
ignored as is it is not directly relevant to this claim. In response to the
claimants’ request that the Tribunal exercise its discretion to award interest
by applying the Arbitration Act 1996, the council referred to Rule 3(2) of the
Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010 which
specifically states that part 1 of the Arbitration Act 1996 does not apply to
proceedings before the Tribunal, except for references by consent under Rule 30
– which is not the case here.
21.
The council said that it had a duty to act fairly towards all
residential and business owners and their representatives involved with
compulsory purchase proceedings. The payment of fees to one particular
claimant’s professional advisor that are wholly disproportionate and
unreasonable would have an impact on the cost of future regeneration
initiatives and as such the Tribunal was urged to dismiss the claimants’ claim
in its entirety.
22.
The witness statement of Mrs Boyle set out in detail the background to
the CPO which was made as part of a major regeneration project to redevelop the
Toxteth Street area of Openshaw (and a wider general area) to replace low
grade and abandoned housing with higher quality family homes. Although many
of the properties within the CPO area were acquired by agreement prior to
vesting, compensation in many others was negotiated and agreed through
professional advisors acting for residents who had been unable to agree. Ms
Boyle said that the claimants in this case took advantage of a Relocation
Package that had been developed by the council to assist displaced occupiers
who wished to remain in the area to bridge the gap between the value of their
old home and one of the new units.
23.
Ms Boyle then set out the chronology of events, and the council’s
contentions as included within the statement of case (and summarised above).
Pointing to the fact that Mr Thompson had on numerous occasions indicated that
he was prepared to agree an hourly rate of £160, he had reverted to his £175
per hour following his interpretation of Poole. She said she
had analysed the Poole case and said it was entirely
distinguishable from the case in hand as it was a different set of
circumstances (the laying of a water pipe over agricultural land), was complex,
and there had been particular problems such as the route being altered and
reinstatement delayed. The fee rate charged in 2010 at £120 per hour was
reasonable (as found by the Tribunal) as was the number of hours claimed (26)
bearing in mind the complexity of the case.
24.
Ms Boyle said that Mr Thompson had settled at rates below his £175
figure in cases both within the Toxteth Street CPO area and within the area of
the Edison Street CPO. She produced a Schedule of 5 cases where although
contending that £175 per hour was his contractual rate, he had agreed fees
between £125 and £160 per hour in four of them and a fixed £500 for the house
valuation with £120 per hour for negotiations on disturbance.
25.
A schedule prepared by Jacobs Engineering, the council’s professional
compensation surveyors, was also produced showing the fee rates and the hours
claimed for in all the Toxteth Street claims. Analysis of this, Ms Boyle said,
showed that in every case fees were considerably lower than had been claimed by
Mr Thompson, ranging from £300 to £1,600 depending on the size and value of the
house, the number of interests in it and whether or no disturbance was
claimed. Copy invoices were also produced showing the level of fees paid for
negotiating market value and these ranged from £350 to £800. Whereas not all
residential owners within the scheme had appointed surveyors, and not all
claims contained disturbance, an analysis of claims that are almost identical
to 64 Stopford Street (Appendix 11) showed the range of hours claimed by other
surveyors at between 3 and 10, with overall fees charged between £300 and
£1,150. This evidence, it was argued, proved beyond doubt just how out of
line Mr Thompson’s fees were, especially as the house value had been agreed
within a very short space of time and there were no particularly complex or
unusual issues within the disturbance claim which was also settled within a
reasonable period after Mr Thompson’s initial claim under that head was
submitted in August 2010.
26.
Indeed, a detailed analysis of Mr Thompson’s narratives (Appendix 12)
showed, she said, that even allowing generous amounts of time for the actions
listed (in comparison with what it was considered reasonable for a competent
surveyor to apply), Mr Thompson’s times were significantly overstated.
Furthermore, it was not, in her view, reasonable to charge hours for reading
relevant case law, sending unnecessary emails or disputing points that are
irrelevant to the case. Identifying a number of specific hours claimed and
considering the issue overall, Ms Boyle said that she had calculated 13 hours
15 minutes as reasonable – that being very close to the 14 hours assessed as
appropriate by both John Hargan and Bill Fulster of the council. One specific
example of too much time being charged related to a meeting Mr Thompson had
with her on 9 December 2011 which lasted for just 40 minutes. Mr Thompson,
when the meeting was arranged, had said he was in Manchester that day but
nevertheless he had claimed for 3 hours.
27.
Responding to this witness statement, Mr Thompson firstly complained about
the late service of this document and made the point that, being described as
“Witness Evidence” it was neither a witness statement of fact nor an expert
witness report. It was not clear whether it was intended to be a statement of
facts, or whether, as it appeared, she was attempting to give opinion evidence
as an expert witness or to make further representations as an advocate for the
council, or both. In any event, the report had not been accompanied by the
required Statement of Truth and it was clear that she had had no regard to the
RICS Practice Statements and Guidance Notes for surveyors acting as either
expert witnesses or advocates. A Declaration of Truth was subsequently
submitted to the Tribunal on 10 January 2013. There had also, Mr Thompson
said, been a breach of confidentiality in including details of the fees agreed
in other cases he was dealing with.
28.
Mr Thompson insisted that whilst the decision in Newman was
probably the most important in relation to this case as the time spent on
discussing surveyors’ charges was much greater, he did not agree with Ms
Boyle’s understanding of Poole. The laying of a water pipe through
farmland is no more or less complicated for those experienced in that kind of
work. Further, the period of time taken to settle a claim is not necessarily
related to its complexity. The charge out rate endorsed by the tribunal was
for a surveyor working in the agricultural sector where fees are generally
lower than “city centre” rates.
29.
As to the accusation that he had changed his stance in relation to the
applicable hourly rate following publication of Poole, Mr Thompson said
that the chain of correspondence did not support that accusation. In any
event, the council had now withdrawn its offer of £160 per hour and they could
not have it both ways.
30.
Regarding the statement that he had accepted lower fees in other cases,
Mr Thompson agreed that this was the case and set out the background to explain
the circumstances in each one. However, he said that those were not relevant
to this case since this one “is based upon its own contractual (for surveyors’ services)
and factual matrix.” He also said that despite the council’s evidence as to
what Roger Hannah and Co had said about their charges, he was aware that in
actual fact their Mr Cook’s normal charge out rates are £170 per hour.
Conclusions
31.
I consider firstly the claimants’ reliance upon Poole and Matthews.
In Poole v South West Water Ltd [2011] RVR 286, the
reference was, as here, relating solely to surveyors fees, compensation for
disturbance (only) having been agreed at £12,940.25. The claimant’s surveyor
argued that his fees, charged out at an hourly rate of £120 (agreed with his
client in late 2007) for 26.5 hours of time spent on negotiating compensation
for disturbance with South West Water Ltd (“SWWL”) over an 18 month works
period, together with £63.50 in disbursements. Those fees, he said, were in a
range of £80 to £126 per hour that had been published by the Central
Association of Agricultural Valuers following a survey of rates for associates
and qualified valuers for 2009. There had been particular issues relating to
the reinstatement of his client’s land that had necessitated three site visits
and extensive negotiations with SWWL. The compensating authority contested the
surveyor’s invoice on the grounds that this was one of 37 claims relating to
the same scheme (the laying of a pipeline) and in the other 36 surveyors’ fees
had been agreed on the basis of the 1996 Ryde’s scale plus 20%. They also
challenged the surveyor’s hourly rate, suggesting £80 to £100 per hour to be
more appropriate, the time he had spent on the matter and his disbursements.
32.
In his decision, the Member, Mr N. J. Rose FRICS, pointed out that the
Office of the Deputy Prime Minister issued a notice abandoning Ryde’s Scale
shortly after the Tribunal’s publication of Matthews v Environment Agency [2002]
3 EGLR 168 in 2002 and it had not been reviewed since. He said that following
that abandonment, the RICS had issued guidance as to the approach to be adopted
in future in the calculation of fees relating to the exercise of statutory
powers in connection with land and property. It said:
“The fee should in all cases be
proportionate to the size and complexity of the claim, and be commensurate with
the time, effort and expertise required to deal with the case.”
33.
Mr Rose then said, at paragraph 28:
“ I accept Mr Rowe’s evidence that the
original statement of claim was reasonable and that three meetings on site were
required to do justice to the claimant’s case. I find that representation by
an associate partner, the hourly rate of £120 applied to the time taken, and
expenses based upon 50p per mile, were proportionate to the size and complexity
of the claim and commensurate with the time, effort and expertise required to
deal with the case. In my judgment Mr Rowe was justified in seeking to agree
a time related fee with Mr Denne [the estates surveyor of the compensating
authority], rather than one calculated by reference to the officially abandoned
Ryde, and to charge for the time he spent doing so. In short, there are no
sound reasons for contesting Mr Rowe’s proposed charges…”
34.
Matthews was another case where the compensating authority in a
complicated case relating to compensation for sea defence works was arguing
that surveyor’s fees should be based upon Ryde’s scale, although it had agreed
that due to the complexity of the case that should be increased by 50%. The
claimants’ surveyors had been paid almost £29,000 by the claimants on the fees
basis that had been agreed between them, whereas the compensating authority’s
case was that, based upon Ryde, which was linked to the amount of compensation
determined or agreed the recoverable amount under this head was some £12,600.
At paragraph 75, the Member (again Mr Rose) said:
“ Mr Koldziej [counsel for the
compensating authority] accepts that the claimants’ entitlement to “full
compensation” under the Act means an entitlement to compensation no less and no
more than the loss imposed upon them. In the case of surveyor’s fees the
claimants have paid £28,932.35 to Grimley. It is agreed that the figure
represents a reasonable sum for the work involved. That being the case,
the application of Ryde’s Scale would result in the claimants receiving less
compensation than the loss they have suffered. It would not therefore represent
full compensation. Accordingly I find that the claimants are entitled to
reimbursement of all the fees paid to Grimley.” [My emphasis]
35.
It is this point that, it seems to me, is the foundation of Mr
Thompson’s arguments. His case is that having agreed his normal, standard
hourly rate with the claimants they are contractually obliged to pay it and the
council, by reneging on its duty to pay those charges, would be depriving the
claimants of compensation to which they were entitled.
36.
I do not think either of these cases assists Mr Thompson. Both of them
relate to Ryde’s scale which, as explained above, has long since been
abandoned. In this case there is no suggestion by the council that fees should
be based upon Ryde or any other such scale. They are simply saying that the
hourly rate was too high in comparison with rates being paid to other surveyors
involved in similar work and that, of more import in respect of quantum, the
number of hours claimed for both in respect of the negotiation of compensation
and the negotiations over fees were totally unrealistic.
37.
On the basis of the evidence before me, I agree. I am satisfied that
the council was perfectly justified, bearing in mind its responsibilities in
connection with the public purse, to challenge Mr Thompson’s hourly rate and I accept
the evidence and opinion of Ms Boyle in terms of what, realistically, would
have been not only a fair charge-out rate but also as to what could, mindful of
the RICS guidance, be construed as a reasonable time for the job to have
taken. The council’s evidence demonstrates that £175 per hour would not be
out of line for a complex commercial case but it also clearly shows the range
of fees that have been paid in residential cases which in general are still very
much below even the £160 per hour compromise figure that the council had been
prepared to offer in its attempts to compromise the matter.
38.
More importantly, in my view, the letters from two other firms of
surveyors that were produced, and the schedules of payments made to surveying
firms involved with this case demonstrate beyond peradventure just how
unrealistic and overstated Mr Thompson’s proposed charges relating to the
compensation claim were. It is clear that, as the council argued, negotiation
in respect of the compensation to be paid for the value of the claimants’ house
was a relatively simple and straightforward matter and could in no way be
considered complex. Similarly, the negotiation of compensation for what were
straightforward and uncontroversial items of disturbance could not, by any
stretch of the imagination, be deemed difficult and there was no suggestion
that they were.
39.
I find it incredible that Mr Thompson is claiming that it took 28 hours
to negotiate the claimants’ compensation (amounting to some £4,900 at his
quoted hourly rate) and that even in the light of the evidence of the charges
levied by other firms for similar work, he has consistently refused to
reconsider or to accept the council’s compromise offer unless the council was
prepared to accept all his claimed hours without adjustment of any sort. He
said that the council’s attempts to renegotiate both the hourly rate and the
time taken was the straw that broke the camel’s back and therefore reference to
the Tribunal had been unavoidable.
40.
Not only is Mr Thompson claiming a further 17.5 hours at his full rate
for arguing about his fees with the council, but it appears he has logged yet
another 36.5 hours in preparing this claim. In terms of proportionality, it
needs to be borne in mind that as a compromise, the council had offered to pay
for 24 hours at £160 per hour in respect of the claim and the arguments over
fees which amounts to the £3,840 already paid. The difference between the
parties (not considering pre-reference costs or the disbursement element, which
by itself is not material, is £4,122. The difference between them purely on
the fees for negotiating the compensation claim is: claimants - 28 hours x £175
= £4,900; council - 14 hours x £160 = £2,240. The time spent by Mr Thompson,
according to his narratives, on arguing fees and preparation of this claim
(which he also expects to be compensated for) is 54 hours which at £175 per
hour amounts to £9,450. To me, these figures put the disproportionality of pursuing
this dispute to the Tribunal into sharp perspective.
41.
In the light of the evidence, I conclude that the council was generous
in its compromise offer and could well have argued for a lower figure.
Although it said that that offer is withdrawn and that the hourly rate should
be determined at a lower level, I am mindful of the fact that that was a figure
the council had been prepared to pay, and indeed it has already done so. I
therefore determine the claimants’ surveyor’s fees payable by the council in
the sum of £3,840 plus VAT (which is for the compensation negotiations and time
for arguing fees) to which should be added the disbursements claimed in the sum
of £207.50. In respect of the claim for interest, I accept the council’s
argument (see para 20 above), and dismiss that aspect of the claim.
42.
This leaves the question of the 36.5 hours claimed in connection with
the preparation for and making the reference to the Tribunal. Bearing in mind
the evidence (which Mr Thompson accepted) that he had agreed lower charge-out
rates on other cases he was arguing with the council, I find it surprising that
he has continued to pursue this matter before the Tribunal. In the light of my
findings above that the reference was misconceived and the fact that I have
found entirely for the council in the matter, I determine that such costs are
irrecoverable. Similarly, despite what was intimated in the Schedule
accompanying his claim, there can be no question of there being any recovery of
costs incurred (Mr Thompson’s Appendix 5) in respect of the generic discussions
with the council over fees as they were not directly related to this case.
43.
Costs of the reference itself are only awarded in references conducted
by written representations in exceptional circumstances. Despite my criticisms
of Mr Thompson in respect of the claimants’ reference, I do not intend to
invite submissions or to make any award as to costs.
DATED 21
March 2013
P R Francis
FRICS
