Hammond (a firm) v Pro-Fit USA Ltd [2007] EWHC 2941 (Ch) (28 June 2007)

Neutral Citation Number: [2007] EWHC 2941 (Ch) No. 2898/07 IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION Court No. 19 Royal Courts of Justice Strand London W. C.2. 28th June 2007 B e f o r e : THE HONOURABLE MR. JUSTICE MORGAN ____________________ HAMMOND (A FIRM) (Claimants) -v- PRO-FIT USA LIMITED (Defendants) ____________________ Transcribed from a DAR by J. L. Harpham Ltd Official Court Reporters and Tape Transcribers 55 Queen Street Sheffield S1 2DX ____________________ For the Claimants: Mr. A. Sutcliffe QC For the Defendants: Mr. G. Moss QC ____________________ HTML VERSION OF JUDGMENT ____________________ Crown Copyright © MR. JUSTICE MORGAN: The present applications are made in an administration application which was commenced on the 20 th April 2007 and is due to be heard in just under two weeks in a window opening on the 11 th of July 2007. The hearing of the administration application has a time estimate of two to three days. In the course of hearing the current applications, which are interlocutory applications, there have been detailed submissions made as to the issues in the administration application and the facts which are to be investigated (to the extent they will be investigated) in that administration application and accordingly I have had described to me the suggested issues in the administration application, the arguments or some of them that might be put forward and what the court's reaction to the evidence might or might not be. Because this is an interlocutory hearing, and because there will be a trial of the administration application, I wish to be very cautious indeed as to anything I say. In particular, I do not wish to pre-judge any matter that will be argued and decided in two weeks time and I do not want to pre-empt any decision that will be made on that occasion. However, I do have to give final rulings on the questions which are the subject of today's applications. I turn then to the applications by Pro-fit USA Limited for disclosure of documents. In according with the application notice there are two separate classes of documents which are the subject of the application. One of those I can deal with quite quickly at this point. It concerns documents relating to a valuation or valuations prepared by Mr. Hindley. I can deal with that shortly at this point because in the course of preparing for this hearing and in the course of the hearing itself, the issue has narrowed itself to one of costs only. So I am not going to go into that matter with the same thoroughness as it would otherwise deserve if it had been wholly argued out. The second class of documents where the matter has been fully argued relates to the communications between Hammonds, the applicants in the administration application, and a US company which has been described in short as Tag-It. I will have to say something about Tag-It in a moment. The application notice seeks disclosure of documents between Hammonds and Tag-It, but again in the course of preparing for this hearing and/or in the course of the hearing itself the class of documents has narrowed so that it relates only to a period of time from 13 th March of this year up to, I suppose, the present time. Tag-It comes into the history of this matter because Tag-It had some form of intellectual property licence with an associated company of Pro-fit USA. The associated company was Pro-fit Holdings Limited and not very long after Holdings and Tag-It entered into that licence they disagreed about their commercial relationship, so much so that Tag-It sued Holdings in a Californian Court for substantial sums and Holdings counter-claimed again for substantial sums. More recently Tag-It has extended the area of litigation and has brought a second action in California; this time it has sued Holdings and USA and indeed other parties. It is quite clear from the documents before the Court that there have been communications between Hammonds and Tag-It. I am not going to list those communications which the Court and which Pro-fit USA already know about, save to say that the communications appear to have started in late March 2007, according to Hammonds, and the Court has been shown a number of documents beginning with a detailed letter of the 17 th of April 2007, from Hammonds to Tag-It. The communications in written form, which have been disclosed and which have been seen by the Court, take one up to the 18 th of May 2007. Against that background, Pro-fit USA say that the documents so far disclosed are unlikely to be complete and in any case there will have been oral communications so that what Pro-fit USA wish to explore is whether there are notes of those oral communications so that they might be the subject of disclosure; alternatively that information should be given about the oral communications, which is the other part of the application in this respect. Before I go to the many arguments raised about disclosure of the Tag-It communications I should attempt to describe Pro-fit USA's case as to the relevance of these Tag-It communications to the administration application to be heard in two weeks time. Mr. Sutcliffe, QC, for Pro-fit USA Limited, essentially puts his case two ways. He draws my attention to the fact that in the administration application there will be a significant attack on the propriety of Hammonds' conduct following the cessation of their retainer by USA and in the period leading up to the issue of the administration application. He says that the propriety of Hammonds' conduct might affect the outcome of the administration application. The contrary argument is that Mr. Moss QC, acting for Hammonds, says that the propriety of Hammonds' conduct will not be, or will hardly be, a relevant issue. He reminds me that insolvency (and administration in particular) is a form of class remedy, where the Court is concerned to look at the interests of creditors generally and so the specific conduct of one particular creditor will not be given undue weight and is unlikely to influence the outcome of the proceedings before the Court. Mr. Sutcliffe retorts to that, although insolvency and administration may be a form of class remedy, so far as creditors generally are concerned, it is only Hammonds and Tag-It, who are of course implicated in these communications, the subject of the application, who are seeking or supporting the making of an administration order. The other way in which Mr. Sutcliffe puts his case as to the potential relevance of the Tag-It communications to the administration application is, he suggests, that the communications have served to frustrate the purpose of the administration. The purpose of the administration is, or at least includes, the possibility that there will eventually be a sale of Pro-fit USA's intellectual property to someone, possibly Tag-It. These communications in March, April and May of this year between Hammonds and Tag-It may have usurped the function of any administrator that might be appointed and imperil the possibility of a satisfactory outcome to the sale of USA's intellectual property. So those are the ways which, at the end of the argument, were finally being identified as the ways in which these communications might bear upon the outcome of the administration application. At that stage it is convenient to refer to one authority to which my attention has been drawn, that is the decision of Mr. Justice Lawrence Collins in Highbury Limited -v- Colt Telecom Group plc reported at [2003] 1 BCLC 290. That decision dealt with a question as to disclosure of documents and indeed orders for cross-examination of deponents of affidavits in the context of a petition for an administration order. I need not go to the facts in any detail but paraphrasing part of the head note, one sees that the petitioners in that case applied for an administration order on the grounds that having regard to the dramatic fall in the company's share price and the company's substantial operating losses and negative cash flows, the company was or was likely to become insolvent, both in terms of its cash flow and balance sheet and be unable to meet its liabilities when they fell due. Not surprisingly the respondent company challenged those assertions on the part of the petitioner and that lead to the petitioners applying for disclosure of documents, the provision of information and directions for cross-examination of certain expert witnesses and lay witnesses to be called on behalf of the company. The basis of the application was it was said to be necessary to test the evidence being put forward by the company so that the court could resolve the dispute as to the solvency of the company on the hearing of the petition. It is to be noted that the documentary material that was being sought went to a central issue in that particular application. That cannot be said with anything like the same force in the present case, where, even taking Mr. Sutcliffe's description of the relevance of documents at its highest, it is not something which is a central issue but something very much more peripheral than that. In the course of giving his judgment Mr. Justice Lawrence Collins commented on the unusual nature of the application. He said at paragraph 26 that the normal position was upon these lines and I quote, "The hearing of insolvency proceedings including administration petitions will normally be on the basis of written evidence but the Court does have the power to order disclosure of documents and information and to order cross-examination under Rules 7.7 and 7.60. The 1986 Rules do not provide disclosure against the procedure under the CPR which is inconsistent with the 1986 Rules." [Quotation not checked] He then referred to other cases and comments in other cases as to when it would be appropriate and when it would not be appropriate to order disclosure in insolvency proceedings. At paragraph 35 he expressed his general approach in these terms and I quote, "It seems to me plain that the nature and purposes of an application for an administration order, the nature of the enquiry by the court and the usual urgency of the application make it inevitable that only very exceptional circumstances would justify an order for disclosure or cross-examination in proceedings for an administration order." I think in order to make a judgment as to whether this is an exceptional case where I should allow the application for disclosure to go further, I should say a little bit more about the issues that are likely to arise, so far as one can predict, on the hearing of the administration application. Mr. Moss, on behalf of Hammonds, summarised the principal issues in the administration as follows. The first issue was whether Pro-fit USA was insolvent or likely to become insolvent. The second issue was whether there was a credible counter-claim by Pro-fit USA against Hammonds which had a potential quantum greater than Hammonds claim against Pro-fit USA. The third issues was whether the settled practice of the Courts in relation to disputed debts and cross-claims in the winding up jurisdiction applied also in relation to applications for the administration of companies. As a subsidiary issue, if an established practice relating to winding up did apply in this context also, whether there were special circumstances which would have been sufficient in the winding up context to persuade a court to wind up the company notwithstanding disputes about set-offs, defences and cross-claims. The fourth issue which Mr. Moss identified as potentially arising in the administration proceedings was whether what he described as the principal asset of Pro-fit USA, namely its intellectual property, had been transferred by it in 2006 to an associated company at an under value, or at any rate whether there was enough of a case so that it was desirable that an administrator as an officer of the Court should be permitted to go forward and investigate that possibility and pursue that possibility if so advised. That, at any rate was Hammonds', through their Counsel, description of the issues that might arise. I have already indicated the extent to which Mr. Sutcliffe would say that there are additional issues as to the propriety of Hammonds' conduct and as to an alleged frustration of the purposes of administration which will also have to be gone into on the administration application. In my judgment, the possibility of there having been communications between Tag-It and Hammonds and that those communications, if opened up by a need for disclosure, would bring to light matters which would have a significant effect on the outcome of the administration application, is a very low possibility indeed. I accept Mr. Moss's description of the principal issues. I do not regard the possibility of their being communications which might put Hammonds in a bad light and which might enable Pro-fit USA to criticise Hammonds as being a particularly high or strong possibility. I think consistently with the decision in Highbury Limited -v- Colt Telecom Group Limited this is not a sufficiently exceptional case to be, what I think would be, the first case of an order for disclosure in the context of an administration application. If in Highbury it was thought appropriate to try the question of insolvency without the documents which were being sought by the petitioner in that case, then it is very much more the case that it will be appropriate for the Court to try the issues arising in the present administration application without the disclosure that is sought in the present case. In addition, there are said to be other reasons why an order for disclosure in the present case is not appropriate. What is said on behalf of Hammonds is that the documents which are sought are the subject of legal professional privilege. What is said by Mr. Sutcliffe on behalf of Pro-fit USA is that there is no proper claim to privilege, alternatively there is here a sufficient case of iniquity so that the Court will override that privilege and thirdly it is said there has been a waiver of the privilege so that the defence of privilege is not made out. I will indicate my conclusion and then give brief reasons in support of it. First, I hold that the documents in question are privileged. Secondly, that there is not a sufficiently strong prima facie case of iniquity which would override the privilege and thirdly there has not been a waiver of that privilege. Starting with the claim of privilege, I need to refer to two statements in the evidence in order to form a view as to purpose behind the communications in questions. The first statement in the evidence is in the third affidavit of Mr. Clay, sworn on the 18th of June 2007, at paragraph 8. What he says is, and I quote, "The first communication between Hammonds and Tag-It did not take place until the end of March 2007 which was more than two weeks after we terminated our retainer. At that stage Hammonds had decided to apply for an administration order and the communications with Tag-It were referable to that litigation and are therefore confidential and privileged. Hammonds has not waived that privilege." In a later document, in fact a witness statement signed on the 19 th June 2007, Mr. Clay gives further information about the communications. I ought to read three paragraphs which are as follows: "At the end of March, completely out of the blue, I was contacted by Tag-It as I was not leading Hammonds efforts to recover our debt I asked Mr. Alderton/Mrs. Ling what to do. Clearly, as Mr. Dyne acknowledges in paragraph 14 of his witness statement Tag-It were likely to be an important player in any administration as Pro-fit USA had previously exclusively licensed some of its intellectual property rights to Tag-It. In essence Mr. Alderton/Mrs. Ling asked me to ascertain from Tag-It the position it would adopt in relation to Hammonds' application for an administration order, various outcomes of that application and in particular its approach should Pro-fit USA be put into administration. Such evidence was important if Mr. Alderton/Mrs. Ling were to be in a position to properly advise our finance director, Lawrence Campbell, and the Hammonds Partnership board, whether or not Tag-It would support (?) an administration application. Accordingly, the communications I had with Tag-It were directed to obtaining evidence from them for the benefit of Hammonds. A number of these communications were with Tag-Its external (?). In the end Hammonds decided not to rely on evidence from Tag-It." My reading of those statements as to the purpose behind the communications is that the dominant purpose of the communications was the purpose of advancing Hammonds' position in this litigation, being the administration application. The conclusion that one draws from that is that the communications were privileged communications. I should also draw attention to the terms of the letter of 17 th April 2007, which is the most detailed communication in the documents that have been disclosed. That letter is written three days or so before the commencement of the administration application. It describes the position in the proposed administration application and it ends on the last page of the letter with this paragraph: "We would be grateful if you could confirm by return that you are happy to support our application for an administration order and if you could also verify the amount of the outstanding claims by Tag-It against the company and the legal costs incurred to date, with an estimate of the legal costs through to trial". The remaining documents which have been disclosed are also entirely consistent with the communications being for the purpose of the administration application. Of course the court has not been shown the other communications but I have Mr. Clay's sworn evidence on that and I have no reason from the documents which have been disclosed to be doubtful or sceptical about, much less to reject, that evidence. Mr. Sutcliffe has shown me today what Tag-It did following the letter of the 17 th of April 2007. Tag-It contacted Pro-fit USA indicating that Tag-It knew about the administration proceedings and suggesting that the Californian litigation might be discussed with a view to settlement. Shortly after that Tag-It again approached Pro-fit USA and this time they proposed terms of settlement which included the acquisition of certain intellectual property rights of Pro-fit USA. It may be that Tag-It, when it received information from Hammonds, was using that information for the purpose of giving itself a negotiating position as a potential purchaser of the intellectual property, but I am not concerned with the use made by Tag-It of the information, I am concerned with the purpose which Hammonds had when they contacted Tag-It and communicated with Tag-It. I have described my understanding of that purpose and on that understanding the communications were the subject of legal professional privilege. The next point I ought to deal with briefly is whether the privilege can now be overridden by the Court because of iniquity on the part of Hammonds. I want to say relatively little about this. The detail of it may be a material matter or it may be a marginal matter, but to either extent it might be necessary for the judge at trial to go into this question. Mr. Sutcliffe has identified the wrong doing on the part of Hammonds by making careful detailed submissions about Hammonds' letter of the 17 th of April 2007. In particular he identified six breaches of confidence which he says were committed by Hammonds. Mr. Moss on behalf of Hammonds has gone through each of the six alleged b reaches of confidence and has put forward sustained substantial arguments as to whether they were or whether they were not breaches of confidence. I am not going to rehearse the arguments on both sides in relation to each of the six matters, but I am going to deal with this in a general way in a moment. It will be for the trial judge, if any of this is material, to revisit those matters, listen to submissions then and make up his own mind. The question of iniquity has been discussed in a large number of cases in the past, and both counsel referred to what was and what was not iniquity in general terms. I have also referred to in the course of argument to a certain paragraph in Hollander on Documentary Evidence 9 th Edition at paragraph 20.13 continuing to paragraph 20.15. The cases that it might have been material to look at in a little detail are first, Crescent Farm Sidcup -v- Sterling Offices 1972 Chancery 553 and Gamlen Chemical Co -v- Rochem No. 2 which is reported in 124 Solicitors Journal 276, a decision reached in 1980. In the Crescent Farm, according to the text book, various allegations as to the commission of economic torts were not regarded as sufficient to amount to iniquity. Whereas in the Gamlen case, dishonest actions by employees with a view to prejudicing their employers were held to be sufficient iniquity. Even if Mr. Sutcliffe made out all of his six allegations as to breach of confidence, I am very doubtful indeed whether the matters complained of, the circumstances in which they arose, the gravity of them, or the lack of gravity of them, would persuade me that there was a sufficiently strong prima facie case of iniquity which would permit me to override legal professional privilege at this stage. This question of overriding legal professional privilege at an interlocutory stage in relation to a matter where a later court may have to try the question of whether there was iniquity or not was considered by the Court of Appeal in Kuwait Airways Corporation -v- Iraqi Airways Co. No. 6 reported at 2005 1WLR 2734 . In paragraph 42 of his judgment Lord Justice Longmore said this and I quote: "I would therefore summarise the decision thus. (1) the fraud exception can apply where there is a claim to litigation privilege as much as whether is a claim to legal advice privilege; (2) nevertheless it can only be used in cases in which the issue of fraud is one of the issues in the action where there is a strong (I would myself use the words 'very strong') prima facie case of fraud as there was in Dubai Aluminium Co -v- Al-Alami [1999] 1WLR 1964 and there was not in Chandler -v- Church 137 NLJ 351; (3) where the issue of fraud is not one of the issues in the action, a prima facie case of fraud may be enough as in the Hallinan case 2005 1WLR 766 ." Mr. Moss submitted that the issue of iniquity was not one of the issues in the administration application and therefore a prima facie case of fraud was enough, and that was the test to be applied. Of course, if that is right that the issue of iniquity will not be an issue in the administration application, then that is a reason for not granting disclosure at all as it does not relate to an issue in the administration application, particularly where the test for disclosure is that there be exceptional circumstances as pointed out in the Highbury case. If Mr. Sutcliffe wishes to get round the Highbury decision by saying that the issue of iniquity will be an issue in the administration application and this is an exceptional case in accordance with the Highbury approach then he has to satisfy the further requirement that there is a strong or very strong prima facie case of iniquity. I am very very far from being satisfied that a case of iniquity at all, certainly a case of iniquity where the evidence shows a strong or very strong prima facie case has been shown, so I would decline to override the privilege I find to exist because of the criticisms made as to alleged iniquity on behalf of Hammonds. The last topic on this head is waiver of privilege. That has been investigated. One or two authorities have been cited. It emerged in the course of argument that the argument for waiver of privilege cannot properly be sustained. I have now dealt with two separate grounds for refusing disclosure of the Tag-It communications. The first is my application of the test in the Highbury case; the second is legal professional privilege. Both reasons support the conclusion there should not be disclosure and accordingly I reach that conclusion. I decline to make an order for disclosure in relation to the Tag-It communications. The position in relation to the Hindley valuation can be taken very much more briefly. I think I can summarise quite a lot of the history by recording the submissions on each side as to the costs of the application. Mr. Sutcliffe, on behalf of Pro-Fit USA, says that his clients were entitled to certain documents, that they brought this application for disclosure of those documents; and that they then received relevant documents. They do not wish to press an application for any further documents, but they should be regarded a someone who has brought an application and succeeded and should recover its costs. Mr. Moss, on behalf of Hammonds, submits in his skeleton argument, and in his oral submissions, that Pro-fit USA were not entitled to documents they sought. They were not entitled to them under CPR Rule 35.10. They were not entitled to them insofar as they were privileged. What has happened is that Hammonds have chosen, for reasons of their own, to provide documents which may very well be helpful to Hammonds and therefore Hammonds wish to have them in play, but if the matter had been argued out it would not be the case that Pro-fit USA would have demonstrated an entitlement to the documents. The fact the documents were disclosed voluntarily is not in any sense to be equated with success on the application. Mr. Moss's position is not to seek Hammonds' costs but rather to suggest that the appropriate course is that the Court should not investigate every twist and turn of the argument and come to a conclusion, but should instead order that the costs of this application, certainly before the hearing is concerned, should essentially be "in the case" as to the outcome of the administration application. He reminded me of other courts having taken that course rather than argue out points which are only relevant as to costs. In the course of today's argument Mr. Sutcliffe added to his earlier submissions by relying upon CPR Rule 31.14 and saying that the principal document that he was always concerned to secure, namely the initial valuation of Mr. Hindley, was a document mentioned in two affidavits and therefore the Court had power to order disclosure and would be expected to have ordered disclosure if it had not been disclosed voluntarily. Mr. Moss responded to that further submission of Mr. Sutcliffe. He made five points, which I will list briefly. He said that the document being the draft valuation dated 13 th April 2007 was not mentioned in the affidavits because, reading the affidavits, one simply did not know whether the thing being referred to was a document or something orally expressed. Secondly, he said that the Rule 31.14 does not allow the Court to override privilege unless the way in which the document has been described, itself was a waiver of that privilege and he submits that there was no such waiver here. Thirdly, he says that the jurisdiction under Rule 31.14 was discretionary and the Court has not had to consider how to exercise its discretion in a contested case. Fourthly, he says that there was no application which mentioned Rule 31.14 and fifthly, he says, that although the classes of documents in this part of the application are described at length, one would not have understood that the draft valuation report 13 th April 2007 was the subject of the application. Against the background of those submissions my conclusion is that Mr. Moss's overall answer is the correct one, that is to say that I should regard this as a case where there are arguments on either side, that those arguments as to who was right and who was wrong do not have to be gone into for their own sake because Pro-fit USA no longer seeks any substantial relief in this respect. It only seeks to have its costs and rather than spend more time investigating and weighing these arguments, the right course, the just course, is to say that costs involved in the making of the application up to the hearing of these matters should be essentially "in the case", that is to turn on who ultimately wins the battle of the administration application. That seems to me to be a just result and it also seems to be a result that other courts have been prepared to reach in not dissimilar circumstances. The last matter I ought to deal with is the date by which the respondent, Pro-fit USA, should serve its next round of evidence. An order had been made for this round of evidence to be served by 8 th of June 2007. By consent, time was extended to the 15 th June 2007, but even today, the 28 th June 2007, no such evidence has been prepared. In my judgment there is not a good reason why this evidence has not been prepared and indeed served on the applicant, Hammonds. We are now under two weeks from the start of this trial. The matter is being very hard fought. It is possible, indeed likely, that the evidence we are discussing to be served by the respondent, will take some time for Hammonds to digest, consider, react and follow up as need be. The fact that these disclosure applications have been occupying the parties since the 12 th June, is not a sufficient reason for Pro-Fit USA not serving evidence by the 15 th June. If Pro-fit USA had wanted to put in yet further evidence reacting to the disclosure, that would have been one thing. But that possibility does not justify not doing anything and not serving evidence dealing with all other topics. Nonetheless, it would be too harsh to make a debarring order preventing Pro-fit USA putting in any further response to the evidence. I am prepared to extend time for that evidence to be served.. I will make an Unless Order so that if the evidence is not served by the date I will specify then the respondents will not be in a position to put in further evidence out of time. It is obviously going to be unfair to one party or the other to choose a very short time or a very long time and I think in all the circumstances the deadline I will impose is 12 noon on Tuesday next, namely the 3 rd of July, and that will be the subject of an Unless Order as to the service of that evidence. So far as I understand it, those are all the matters requiring a decision, apart of course from the costs of this two day hearing. Who wants to make any application in relation to that? _____________ LATER MR. JUSTICE MORGAN: I have got to deal with the costs of the applications and Mr. Sutcliffe invites me essentially to reserve those matters to the trial judge because the trial judge will be looking at some of the points that I have looked at but only in a very preliminary way. He will get to the bottom of it or look deeper into it and that will enable him to judge retrospectively whose stance was justified in these applications. I take the view that if I see the way forward in a clear way I should deal finally with costs and not leave it to the Court at another time. I have found against Pro-fit USA on two grounds in relation to the Tag-It communications. The first ground was I followed the very clear guidance given by Mr. Justice Lawrence Collins in the Highbury case; that would by itself have been enough to defeat the application for disclosure. The second ground was I upheld the claim to privilege despite a range of arguments that needed to be considered as to whether there was privilege, whether there was iniquity, whether was waiver. I think having come to firm and final decisions on those points I should hold that costs follow the event of these applications, so subject to one matter which I will mention my ruling is that Pro-fit USA do pay Hammonds' costs of these applications. That will extend to any application which Hammonds made for a debarring order or an unless order as to the evidence. As I say I am not entirely clear whether there was formally such an application or whether it was an application made in the form of a submission only. The matter which I need then to mention is the fact that in the course of giving judgment dealing with the application relating to Mr. Hindley's valuation I indicated that some of the costs of that matter should be in the petition and I do not mean to go back on that, but that means I must identify a line of demarcation as to which costs are in the petition and which costs I am finally dealing with in my current ruling. Looking at the history of the application, the application that was made was supported by evidence. There was evidence on the other side. All that material so far related to both Tag-It matter and the Hindley matter, if I can describe it that way. Insofar as it related to the Hindley application, those are the costs which were in the petition. The costs of the 19 th of June when the matter came on in the interim applications list before Mr. Justice Rimer is rather more troublesome. In the end, for essentially practical reasons, I have reached the conclusion that the costs of the 19 th of June should be Hammonds' costs in any event. That is, no part of them should be costs in the petition as I have described. My reason for doing that is that I fear that if I said that some part of the costs of the 19 th June were in the petition and some part were Hammonds' costs in any event, it would simply be impossible to carry out an apportionment which would be rational. I have also had regard to the way in which the case developed and what had been achieved in relation to the Hindley application by the end of the 18 th of June and I do not think my line of demarcation is unfair, having regard to those considerations. I hope that line is clear or as clear as can be. Obviously one does not know until the costs judge gets his mind around it. Now, you have an application for a summary assessment. _______________ LATER MR. JUSTICE MORGAN: On the question of costs I am going to order a detailed assessment for various reasons. One reason being that there is an issue of principle that has to be debated at some time and detailed assessment is a proper time to debate it, as to Hammonds' ability to charge for acting for itself, Hammonds, as a litigant. I have certain expectations as to how that point will be decided but I am not going to shut the door on anyone who wants to argue it one way or the other. So that justifies the detailed assessment in this case. I will, however, make an order for an interim payment. I have got to bear in mind various things. First of all, the overall size of the bill. Secondly, what I am told is the size of the bill on the other side. Next the point in play, which is not being decided, as to Hammonds' ability to charge for itself. Further the fact that some of the costs are costs in the petition and therefore are not going to be the subject of this interim payment. There is also a lack of specificity or clarity about counsel's fees extending to £22,000 or £23,000. I am not being critical but it does make it more difficult to come to a confident view about what that concerns. I also want to leave scope for the costs judge to investigate individual items and perhaps produce a lower figure. In all the circumstances, the right sum in my view is £20,000 by way of interim payment and unless I hear very good reasons to the contrary that should be paid within 14 days. ___________________ BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII