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Peter Clark v (1) Terrie Wixon Gibbs (2) Pippa Smith, Taunton County Court, 1 September 2005

6 September 2005
The issues

Pre-Action Disclosure Under CPR R. 31.16 – Whether New Evidence Should Be Admitted On Appeal – Order For Costs Under CPR R. 48.1 – Compliance With PD 52 As To Service Of Skeleton Arguments

The facts

The Applicant (“PC”) was a contractor who undertook building works on a property owned by the Second Respondent (“PS”). Whilst on site in May 2004 the First Respondent (“TWG”) asked the Applicant to sign a JCT Minor Works form contract which had been procured and completed by TWG, who owned and ran a renovation company naming TWG as contract administrator and PS as employer. TWG retained the only copy of the contract.
A dispute concerning payment of £19,000 subsequently ensued. On 17.12.04 Battens solicitors, acting on behalf of PS, wrote to TWG asking for a copy of the contract. TWG replied stating that although a JCT Minor Works form contract had been considered, she could not recall that matters went any further and asserted that she did not have a copy. PC applied for an order for pre-action disclosure against TWG and PS, requiring them to carry out a reasonable search for and disclosure of the contract by list under CPR r. 31.16. TWG denied that any contract existed, asserting that all works were carried out under an oral contract, and therefore refused to consent to the application. PS likewise denied all knowledge or possession of the contract.

The application was heard by DJ Smith on 3.5.05. Counsel for TWG and PS vehemently argued that the court should not make an order for disclosure of a non-existent contract. It was further submitted on TWG and PS’s behalf that PC was in breach of the pre-action protocol for construction disputes, as PC had failed to write a detailed letter of claim.

The District Judge ordered PS and TWG to undertake a reasonable and proportionate search and make disclosure by list by 17.5.05. The Judge applied the general rule under CPR r. 48.1(2) that the applicant should pay the costs of the application, assessed at £1,366, and further observed that PC had not complied with the relevant pre-action protocol. On 17.5.05 solicitors acting for PS and TWG faxed to PC a copy of the contract. On 25.5.05 disclosure by list took place, showing that the contract had been in TWG’s possession.

PC applied for and was granted permission to appeal the DJ’s order for costs, seeking to rely on the new evidence that a copy of the contract had remained in TWG’s possession, which had been discoverable on a reasonable and proportionate search. PC’s case on appeal was TWG’s opposition to the application was unreasonable.

PC also appealed the DJ’s finding that he had breached the pre-action protocol, on the basis that it was unreasonable to expect a detailed letter of claim to be prepared without sight of the contract. PC sought to show that in fact TWG had breached the protocol by failing to make a full exchange of information which was obviously necessary in order to narrow and resolve the dispute and to enable the parties to appreciate their true position.

PC argued that it was in the interests of justice for the discretion on costs to be exercised afresh by holding a rehearing at the appeal.

Further, Counsel for PS and TWG submitted a skeleton argument on the morning of the appeal, having only been briefed shortly before the hearing. Counsel was therefore forced to apply under CPR r. 3.9 for relief from sanction, as PD 52 paras 7.6 and 7.7 require that skeleton arguments should be filed and served 7 days prior to any appeal by a Respondent who wishes to address arguments to the appeal court.

TWG and PS sought permission to argue that the order made below should stand. The Applicant had obtained the order he sought and TWG had complied with it – there was no evidence that TWG had acted in mal fides. The court could correct any apparent injustice at the close of proceedings under CPR r. 44.

The decision

HHJ Cotterill noted the importance the Court of Appeal attached to compliance with PD 52 in Scribes West Ltd v. Relsa Anstalt [2004] EWCA Civ 835. However, given that the court was minded to allow the appeal following perusal of the papers, Counsel for the Respondent would be allowed to briefly develop the submissions outlined in the skeleton submitted late.

The court accepted that it could have regard to the fresh evidence that the only copy of the contract had remained in TWG’s possession. In light of this, the appeal court would exercise the discretion afresh. Had DJ Smith known the contract was in TWG’s possession, and that the repeated and vehement denials that there was no written contract was not in fact the case, he would have not have made a costs order against the Applicant.

The approach of TWG in opposing the application had been unreasonable. TWG’s good faith was doubted. TWG should have searched for and disclosed the contract after PC had asked for it. The appropriate order was for TWG to repay £1,366 to PC with interest, in addition to paying PC’s costs of the application under CPR r. 48.1(3) and on appeal, which totalled approx. £8,500.


For further details please contact Brent McDonald at bmcdonald@2tg.co.uk

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