Case No: A2/2008/1013

Neutral Citation Number: [2011] EWCA Civ 1816
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
HIS HONOUR JUDGE SEYMOUR QC

Royal Courts of Justice
Strand, London, WC2A 2LL

Date:  Thursday, 6 October 2011

Before:

LORD JUSTICE CARNWATH
LORD JUSTICE JACKSON
and
LORD JUSTICE GROSS

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Between:

	Lygoe trading as David Parry & Co, 
a firm no longer in practice	
Appellant	
	v		
	Ilsley	Respondent	

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(DAR Transcript of 
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The Applicant appeared in person.

Mr Stuart Cakebread (instructed by Curry Popeck) appeared on behalf of the Respondent.

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Judgment
Lord Justice Gross: 

1.	This litigation began with a claim by the appellant, Mr Lygoe, against the respondent, Mr Ilsley, for unpaid fees.  Mr Lygoe was at the time a solicitor and unfortunately subsequently struck off, though not for reasons of dishonesty.  Mr Ilsley was his client, at the time based in Monaco.  Mr Lygoe having claimed fees, Mr Ilsley responded with a counterclaim alleging that funds from the administration of his mother’s estate had been converted by Mr Lygoe.  In the event, the judge held that the sums already paid to Mr Lygoe overtopped the maximum amount of his claim.  He dismissed the claim and allowed Mr Ilsley’s counterclaim.  He ordered an assessment of Mr Lygoe’s costs, that is the unpaid fees claimed, not for the purposes of resurrecting the claim, but for the purpose, in effect, of quantifying the counterclaim.  

2.	The summary which I have just sought to give reflects, I hope accurately, the reasoning contained in the judgment of His Honour Judge Seymour QC, sitting as a judge of the High Court, as long ago as 21 April 2008.  The essential reasoning can be seen from a number of brief paragraphs in the judgment.  The judge began by highlighting the bills in paragraph 5 of his judgment.  There was an issue as to which of those attracted liability on the part of Mr Ilsley personally and which related to liability of separate companies.  The figures and the bills were helpfully set out by the judge at paragraph 5 and need not be repeated here.  In paragraph 48 of the judgment, the judge rejected Mr Lygoe’s evidence and held 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 Mr Lygoe’s practice for Mr Ilsley personally.  There was then some considerable debate about the sums relating to the administration of the estate, which again need not take up time today.  That debate is helpfully summarised in paragraph 49 of the judgment and reference should, I think, also be made to earlier paragraphs, in particular paragraphs 6 and 7 of the judgment.  The reason for that reference is that there is a fair acceptance in paragraph 7 that the proper costs of the administration of the estate should have been in the region of £10,000.  To that matter, I shall return presently.  

3.	In paragraph 69 of the judgment, the judge concluded that, for the reasons he had given, he found 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 various matters which relate back to the full list at paragraph 5.  It was also common ground that Mr Ilsley was 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 was produced. 

4.	The ultimate conclusions of Judge Seymour appear from paragraphs 72 and 73 of the judgment, which read as follows: 

“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. ...”

5.	As can be seen, therefore, the judge required a proper assessment of Mr Lygoe’s costs in order for the matter to proceed further.  The judgment, as I have already recounted, was given in April 2008.  Since then there has been minimal progress until this year.  It is fair to Mr Lygoe to say that between 2008 and at least the beginning of 2011 the lack of progress may perhaps not be attributed to him.  However that may be, the matter came squarely alive again from earlier this year.  

6.	In due course, the case came before Deputy Master Hoffman to whose treatment of it as a case management matter I would pay respectful tribute.  Master Hoffman heard the matter on 1 July.  At that hearing, the appellant, Mr Lygoe, did not attend.  Master Hoffman refused an application for an adjournment which had been submitted to him on the basis that Mr Lygoe had since 2008 been aware of the necessity to find the papers in support of the bills to be assessed.  He accordingly assessed Mr Lygoe’s bills at zero.  Master Hoffman, having made progress in that fashion, did not preclude Mr Lygoe from remedying the matter.  

7.	In paragraph 3 of his order, Master Hoffman indicated that Mr Lygoe could apply to set aside the order and to proceed with the assessments, provided that by 6 August this year he had done various things.  Amongst the matters which were required of Mr Lygoe were various papers, accounts, a VAT certificate and also copies of all disbursement vouchers, together with copies of counsel’s fee notes.  Counsel’s fee notes, it would appear, amounted to a relatively sizeable proportion of a £90,000 bill coming to something close to £30,000.  In addition, and for reasons which are entirely understandable, Master Hoffman ordered that Mr Lygoe should pay the costs of the first July hearing summarily assessed in the sum of £1,730 by 31 August 2011.  In the event, Mr Lygoe did none of the things required of him.
   
8.	The matter came back before Master Hoffman on 27 September.  He refused at that hearing to vary his initial order of 1 July and he made further orders as to costs.  Constructively, if perhaps unusually in the circumstances, he gave permission to appeal to this court so that the appeal from his ruling could be heard by this court, together with the appeal from the judgment of Judge Seymour for which Mr Lygoe had received permission to appeal some considerable time ago.  Master Hoffman gave a careful judgment on 27 September.  He outlined the history of the matter and he then explained why he had assessed Mr Lygoe’s bills at nil.  He said this: 

“The claimant has provided no good reason for failing to lodge disbursement receipts, including counsel’s fees notes and has provided no evidence to show that counsel has even been approached.  I can see no good reason why disbursement vouchers including counsel’s fees have not been lodged.”

9.	He referred to such efforts as Mr Lygoe had made to get papers which were now with the Law Society or the relevant regulatory body, but Mr Lygoe had not succeeded in making progress in that regard.  The Master underlined that there was much more that Mr Lygoe could and should have done and he observed: “Frankly this is simply not good enough.”  It may be noted that by 27 September even the costs order made on 1 July remained outstanding. 

10.	Thereafter the Master went carefully through the check list set out at CPR 3.9.  He weighed up the consequences for Mr Lygoe if he refused to vary the order and the consequences for Mr Ilsley if he did; he concluded that he could see absolutely no reason to vary his earlier order.  It is against that background that with leave Mr Lygoe appeals both from the judgment of His Honour Judge Seymour and the ruling of Master Hoffman.  I say “ruling”.  In fact it is the compendious effect of the two rulings of 1 July and 27 September.  Although chronologically it is plain that Judge Seymour’s judgment comes long before Master Hoffman’s rulings, it is in fact convenient to deal with the appeal from Master Hoffman first.  

11.	Mr Lygoe, who appeared as a litigant in person today, put his arguments for permission to appeal from Master Hoffman shortly.  He submitted that Master Hoffman had taken insufficient account of his circumstances.  He had been abroad.  Many of the relevant papers were with the regulatory authority and he could not get hold of them.  The effect of the Hoffman ruling, if I may call it that, would be to deprive of him any remuneration for work done.  An affidavit from a costs draftsman, Mr Brown, attested to the fact that considerable work had in fact been done.  Moreover, up to the beginning of this year, nothing had happened, for reasons which were not or not necessarily down to Mr Lygoe himself.  In those circumstances, he submitted that Master Hoffman’s ruling was unduly draconian and he should be given more time to try and get the papers.  

12.	For my part, with respect to Mr Lygoe’s submissions, I would unhesitatingly dismiss the appeal from Master Hoffman’s ruling.  My reasons are, in short, as follows: (1) His ruling was in effect a discretionary case management decision.  This court should be slow to intervene in respect of such rulings.  (2) Master Hoffman, as already recounted, carefully weighed the various matters which were before him and, in particular, he applied, in a sensible and realistic fashion, the CPR 3.9 check list.  (3) Mr Lygoe’s failings do not end with the failure or inability to produce files.  As Mr Cakebread for Mr Ilsley put it, “the length of non-compliance” is a striking feature.  That extends to the failure to produce vouchers or disbursements.  It also extends, as I have already highlighted, to the failure to meet a relatively small costs order.  (4) Even today there is no clear picture as to how much time might be needed.  Suffice it to say, were any extension of time to be given, it would run at least into six months, perhaps rather longer.  There has simply been too much delay already.  (5) Mr Lygoe complains that the effect is harsh.  Perhaps it is, but, with respect, he has brought it upon himself.  For those reasons, I would uphold the ruling of Master Hoffman and dismiss the appeal from it.

13.	The upshot of that is that there is nothing to be set in the balance between claims and counterclaim for the bills of costs. 

14.	As far as concerns the appeal from His Honour Judge Seymour, to which I next turn, the difficulty which is faced by Mr Lygoe is that the judge’s conclusions were all conclusions of fact.  Moreover, the matter proceeded before His Honour Judge Seymour on a particular accounting approach.  That was not the only approach which could have been followed, but seeking to unravel it piecemeal today to allow bits and pieces of an appeal (which was the broad effect of the grounds of appeal and skeleton argument in respect of that matter) would be quite unsatisfactory.  The case had proceeded before His Honour Judge Seymour on a particular basis and we would be most reluctant to interfere.

15.	There is, however, one area where those remarks do not apply.  In striking a fair balance between Mr Ilsley and Mr Lygoe against the background of the Hoffman ruling, it would seem unfortunate if sums which, on any event, were due to Mr Lygoe had to be repaid to Mr Ilsley when Mr Ilsley, as a fair-minded man, would obviously see that there was no proper ground for that happening.  Such a course might also have required the matter to be remitted to the judge with yet further delay and yet further costs.  For that reason the court canvassed with Mr Cakebread the possibility of revisiting at least two items in the balance of £114,000 at first blush due to Mr Ilsley.  Those two items were: (1) a sum of £10,000 broadly reflecting the fair costs of the work admittedly done on the estate; and (2) a sum of £18,588 reflecting work done on matters described in the paper as the “Red Sea” matters.  There was certainly evidence before the judge and recorded in the judgment that sums in respect of that work were paid to Mr Lygoe by a third party; thus, in effect, consistent with His Honour Judge Seymour’s judgment.  There was certainly a case to be made for reducing the £114,000 odd balance to reflect those monies.  

16.	Beyond that, for my part, I would not go.  Mr Cakebread helpfully accepted that Mr Ilsley would not challenge the £114,000-odd figure otherwise due to him by the deduction of a sum in total of £28,588.   The upshot was to reduce the principal sum due to Mr Ilsley to a figure of £85,970.14.  Again, for my part, if by the most helpful agreement of Mr Cakebread, I would proceed accordingly and reduce the sum to that figure. 

17.	There remains a question of interest.  The manner in which Mr Cakebread approached it struck us as fair, though some variation in the initial rate put forward seemed to be called for.  Mr Cakebread seeks interest from 31 May 2005, which was a somewhat later date than he might have contended for.  The starting date thus seems fair.  The figure overall for the period since then, averaging out a considerable variety of rates of interest, is claimed at five per cent.  Again, that seems fair, in particular when it is to be calculated as simple interest.  Mr Cakebread further and helpfully has calculated the interest figure from then until today in the sum of £27,310.68.  The upshot is, as of today, a total of £113,280.82 is due from Mr Lygoe to Mr Ilsley. 

18.	It follows that I would dismiss the appeal from Master Hoffman and I would, save for the reduction of the £28,000 odd by concession (as I have outlined) dismiss the appeal from the judgment of His Honour Judge Seymour.  

Lord Justice Jackson:
1.	I agree.  I only wish to add that I wholeheartedly endorse the approach to case management adopted by Deputy Master Hoffman in his order dated 1 July 2011 and in his judgment given on 27 September 2011.  If the Deputy Master had not adopted such a sensible approach, this litigation would have gone on indefinitely giving rise to yet further haemorrhaging of costs.  

2.	In delivering his judgment on 27 September 2011, the Deputy Master faithfully went through the checklist set out in Rule 3.9 of the Civil Procedure Rules.  It is intended that within a year or so a package of case management reforms will be introduced.  As one element of this package, the checklist in Rule 3.9 will be substantially pruned.  It is to be hoped that this pruning exercise will encourage both masters and judges to adopt a similarly robust approach to case management as has occurred in this case.

Lord Justice Carnwath:  

3.	I also agree.

Order:  Appeal dismissed