Saint Benedict’s Land Trust Limited v London Borough of Camden Council & Anor

Mr Justice Edwin Johnson: Introduction

1. This is a most unfortunate case. By an order made on 23 rd December 2020 (sealed on 20 th January 2021) His Honour Judge Halliwell ordered the Appellant to pay the Respondents’ costs of a winding up petition, up to and including 20 th November 2020, to be subject to a detailed assessment on the standard basis, if not agreed. The Judge also ordered an interim payment on account of those costs, in the sum of £17,500.

2. Thereafter, in 2021, the Respondents commenced the detailed assessment of these costs. The amount of costs claimed by the Respondents in the detailed assessment was relatively modest. I have been told, in a recent set of written submissions received from the Respondents’ counsel, that these costs have been assessed in the sum of £26,287.15.

3. Unfortunately, completion of the detailed assessment has been substantially delayed, principally because the Appellant says that there is an issue as to whether the Respondents are actually liable to pay to their solicitors the costs which they were awarded by Judge Halliwell. To this end the Appellant made an application in the assessment proceedings to put the Respondents to their election, pursuant to paragraph 13.13 of CPR 47PD, to disclose their retainers with their solicitors ( “the Election Application” ) .

4. By an order made in the detailed assessment proceedings on 12 th September 2023, District Judge Bartley refused the Election Application. The Appellant, with the permission of the Vice-Chancellor, then appealed against the refusal of the Election Application ( “the Appeal” ).

5. The Appeal came before me in the Business and Property Courts in Manchester on 25 th March 2025. For the reasons set out in a judgment which I delivered on 31 st March 2025 ( “the Appeal Judgment” ) I concluded, with considerable reluctance and with no enthusiasm, that I was bound to allow the Appeal and to set aside the District Judge’s refusal of the Election Application. I made an order to this effect on 31 st March 2025. For reasons which I shall explain later in this judgment, I was not myself able to decide the Election Application in the Appeal Judgment, and I did not do so.

6. This left the question of what should be done with the Election Application; specifically whether the Election Application should be remitted back to the District Judge for decision, or whether I should decide the Election Application for myself. After receiving further written submissions from the parties, I concluded that it would be simpler and more cost-effective for me to decide the Election Application myself, by a paper determination. I made an order to this effect on 6 th May 2025.

7. As matters stand, the Election Application has generated both substantial delay in the detailed assessment proceedings, and substantial additional costs, both in the detailed assessment proceedings and in the Appeal. Those costs are out of all proportion to the costs originally awarded to the Respondents by Judge Halliwell, and continue to increase. I have already commented on this position in a postscript which I included to the Appeal Judgment.

8. Nevertheless, it now falls to me to make my substantive decision on the Election Application. This is my judgment on the Election Application.

9. With a view to trying to impose some limit on the steadily increasing costs of the Election Application, I have made my decision on the Election Application by way of a paper determination, without a further oral hearing. I have already received all the submissions I need, in order to determine the Election Application, both at the hearing of the Appeal and in the further written submissions of the parties, following the Appeal Judgment. It was therefore possible to avoid the additional expense of a further oral hearing. The Halliwell Judgment and the Halliwell Order

10. This case came before Judge Halliwell pursuant to a winding-up petition ( “the Petition” ) presented by the Respondents against the Appellant. I will refer to the proceedings on the Petition as “the Petition Proceedings” . The Petition debt, as alleged by the Respondents, comprised (i) £20,040 by way of costs which the Appellant was ordered to pay to the Respondents by Snowden J (as he then was) by an order made on 20 th December 2019, (ii) £2,082.50 by way of costs which the Appellant was ordered to pay the Respondents by Mostyn J on 27 th February 2020, and (iii) £29,863.07 in respect of a liability order made by District Judge Allison in the Magistrates’ Court on 4 th February 2020 for national non-domestic rates and costs.

11. The Appellant contested the Petition, on the basis that it claimed to have a cross claim which equalled or exceeded the Petition debt. In a judgment given on 18 th November 2020 Judge Halliwell determined that the Appellant did not have a genuine defence or cross claim sufficient to warrant an order dismissing the Petition, and that the Appellant was indebted to the Respondents in the sum of £46,976.46 ( “the Petition Debt” ). At that point counsel for the Appellant indicated that the Appellant could be put in funds to discharge the Petition Debt. The Judge therefore adjourned the Petition to 20 th November 2020, to allow for payment of the Petition Debt to be made.

12. In the event, what happened was that money to discharge the Petition Debt was provided by a third party. The third party was Norseman Holdings Limited, a company registered in Gibraltar. The signatory to the bank account of that company was a Mr Clive Gregory, brother of the individuals who were, respectively, the trustee and secretary of the Appellant. The amount provided was £47,000, which was paid to Harrison Carter Limited (subsequently re-named H&C Associates Limited), a company which, although not a firm of solicitors, had rendered assistance to the Appellant in relation to the Petition Proceedings.

13. Harrison Carter Limited then transferred the sum of £47,000 to the solicitors acting for the Respondents, Greenhalgh Kerr ( “GK” ). The transfer had been effected by the time the Petition Proceedings came back before Judge Halliwell, on the afternoon of 20 th November 2020. The Respondents’ case was that they had reason to believe that the payment was suspicious and that they had resolved to make a suspicious activity report to the National Crime Agency. The Respondents were however precluded, by the provisions of the Proceeds of Crime Act 2002 , from advising the Appellant of the action they intended to take. In those circumstances the Respondents asked the Judge to adjourn the further hearing of the Petition for another 14 days. The Judge acceded to this request and adjourned the further hearing of the Petition to 8 th December 2020.

14. In the period leading up to the adjourned hearing the National Crime Agency advised GK that they did not intend to investigate the matter further. Notwithstanding this advice, the Respondents elected to return the payment of £47,000. The payment was returned, I assume to Harrison Carter Limited, on 4 th December 2020.

15. This chain of events then generated a dispute between the parties, when the Petition Proceedings returned for hearing before Judge Halliwell on 8 th December 2020, as to what order should be made on the Petition. The argument at that hearing, so far as I am aware, was principally concerned with the question of whether the Respondents had been justified in returning the payment. For the reasons set out in a judgment dated 23 rd December 2020 ( “the Halliwell Judgment” ), the Judge concluded that the Respondents had not been justified in returning the payment.

16. This left the question of what to do with the Petition. The Judge stated his conclusion on this question at [48] in the Halliwell Judgment (italics have been added to all quotations in this judgment): “48. If I do not allow the petition to wind up the company, the Petitioners invite me to adjourn the Petition. However, in view of the procedural background and the length of time that has already passed since the winding-up petition was first presented, any further delay in this case would be most unsatisfactory. The winding up petition is dismissed.”

17. Judge Halliwell then heard argument on costs, consequential upon the Halliwell Judgment, at the hearing on 23 rd December 2020. I have seen a transcript of this argument. The Judge did not, to my knowledge, deliver a formal judgment in relation to the costs of the Petition, but what he decided was that the Appellant should pay the Respondents’ costs up to and including 20 th November 2020, that there should be no order as to costs between 21 st November 2020 and 8 th December 2020, and that the Respondents should pay the Appellant’s costs from 9 th December 2020 to 23 rd December 2020. The Judge made costs orders to this effect in his order of 23 rd December 2020 ( “the Halliwell Order” ). By paragraph 1 of the Halliwell Order the Petition itself was dismissed.

18. Although, as I have said, there was not, to my knowledge, a formal judgment on the costs of the Petition Proceedings, the logic behind the Judge’s decision on costs is apparent from the terms of the Halliwell Judgment. Up to 20 th November 2020 the Petition Debt was unpaid. The sum of £47,000 only reached the account of GK on 20 th November 2020. As such, I take the Judge’s reasoning to have been that the Respondents were entitled to pursue the Petition up to and including that date, and were entitled to their costs of doing so. Thereafter, I take the Judge’s reasoning to have been that the position changed, so far as costs were concerned. The Respondents believed that the payment was suspicious and notified the National Crime Agency. The National Crime Agency advised GK however that they did not intend to investigate the matter further. By the time of the hearing on 8 th December 2020 the Respondents were aware that the National Crime Agency would not be investigating the payment and, for the reasons set out in the Halliwell Judgment, Judge Halliwell concluded that the Respondents had not been justified in returning the payment of £47,000. Judge Halliwell clearly considered that this position justified an adverse costs order against the Respondents from 9 th December 2020 and 23 rd December 2020. So far as the period between 21 st November 2020 and 8 th December 2020 was concerned, Judge Halliwell clearly considered that the position was more equivocal, justifying no order as to the costs during this interim period. The Assessment Proceedings, the Bartley Judgment and the Bartley Order

19. Following the Halliwell Order, the Respondents commenced proceedings for the detailed assessment of the costs awarded to them by the Halliwell Order ( “the Assessment Proceedings” ).

20. In its Points of Dispute in the Assessment Proceedings the Appellant took the point that the Respondents might not have any liability to pay any costs to their solicitors, GK, because GK had acted for the Respondents pursuant to conditional fee agreements. The Appellant’s argument was that the outcome to the Petition Proceedings meant that liability to pay costs might not have been triggered under the conditional fee agreements, leaving the Respondents with no liability for costs to GK, and thus no right, by reference to the indemnity principle, to recover any costs from the Appellant. The Appellant put its case in the following terms: “The narrative to the Bill of Costs records the funding arrangements between the First and Second Petitioning Creditors and their legal advisors / Counsels as simply “The matter was privately funded”. Practice Direction 47.5 (3) states that the background information to a Bill of Costs should contain a brief explanation of any agreement or arrangement between the receiving party and his legal representatives, which affects the costs claimed in the bill. In correspondence accompanying the service of the Notice of Commencement dated 19 March 2021 and in response to previous requests for further information regarding the Petitioners’ funding positions, Greenhalgh Kerr write that “there appears to be no good reason why the conditional fee agreement should be disclosed”. It is the paying party’s position that they are entitled to this information in order to establish the validity of the individual client retainers. In fact, guidance encourages the receiving parties to disclose a redacted copy of their CFA’s (Hollins v Russell [2003] EWCA Civ 708 at para 220). The Bill of Costs does not state the date on which the conditional fee agreement(s) were entered. There is no mention of the agreed hourly rates recorded therein in order to satisfy the paying party that there has not been a breach of the indemnity principle. There has been no apportionment / moiety of costs incurred between the two Petitioning Creditors to reflect the possible different dates of implementation /charging rates contained within their respective CFA’s. The Costs Judge is requested to closely examine the funding documents provided to ensure that there has been no breach of the indemnity principle with special regard to the date of incorporation of the CFA’s, the scope of the CFA’s, the hourly rates recorded therein and the definition of “a win”. The paying party considers that if “a win” is defined within the CFA as a recovery of money, then the CFA is invalidated by the Petitioning Creditors returning the monies recovered by them in the case. The paying party therefore has a genuine issue that the definition of success as recorded within the various CFA’s entered has not been satisfied in this case. Greenhalgh Kerr’s own website records (with emphasis added) “Costs are dealt with on a “no recovery no fee” basis. Otherwise known as a “conditional fee agreement”, we charge an hourly rate for work carried out. If we “succeed” on a particular matter, in that a recovery is made , the costs are normally added to the debt and recovered from the debtor. If we are “unsuccessful” in that no recovery is made from the debtor, the costs are written off. ” The Costs Judge is asked to determine whether a recovery has been made in light of the fact that the money recovered as a result of these proceedings has been returned in full. The Bill of Costs appears to record work from or around the 19 February 2020. The Costs Judge is asked to confirm that the conditional fee agreement was in place at that time and if it was not, that a pre-CFA retainer exists. It is not known whether both Counsels (Michael Murphy and Tom Gosling) were instructed under separate conditional fee agreements with the First Petitioning Creditor and the Second Petitioning Creditor. If so, the Court is requested to also closely examine these documents to ensure that there is a valid and enforceable retainer and that there has been no breach of the indemnity principle. In the event that any of the CFA’s are found not to be enforceable, the Costs Judge is requested to apply an appropriate reduction to the costs claimed as a whole or as appropriate. If none of the CFA’s are found to be valid, then the costs recovery should be limited to those disbursements which are reasonable in amount, which may or may not include Counsels’ fees depending on the funding arrangements in place.”

21. The response of the Respondents was in the following terms: “The first & second petitioning creditors retained their Solicitors Greenhalgh Kerr pursuant to Collective Conditional Fee Agreements dated 30 September 2013 & 14 December 2017 respectively. The bill of costs (at page 3) sets out the hourly rate claimed in accordance with the retainers. The bill of costs has been certified at page 13 and the bill does not exceed the amounts which the petitioning creditors are liable for. There is no breach of the indemnity principle and there is no reason to go behind the certification signature on the bill of costs. The paying party has failed to demonstrate a genuine dispute which would require the court to look beyond the certification. The legal principles are clear. Bailey v IBC Vehicles Ltd [1998] 3 ALL ER 570 is authority for the proposition that the signature on the bill of costs is sufficient to satisfy any concerns regarding the receiving party’s entitlement to recover the costs as set out in the bill. The paying party’s citation of Hollins v Russell [2003] EWCA Civ 708 is misplaced. Hollins was concerned with the onerous Conditional Fee Agreements Regulations 2000 which were the precursor to the colloquially known ‘Costs Wars’. The advent of the 2013 Regulations put to rest the need for the Court to scrutinise CFA’s as had been the case hitherto. The Definition of ‘Win’ or ‘Success’ in the CCFAs has been triggered by the order of His Honour Judge Halliwell dated 18 December 2020. Without waiving privilege, the definition(s) do not rely upon the receiving party making a ‘recovery of money’ as speculated in the Point of Dispute. Even if it did, the receiving party received a payment of £47,000 in satisfaction of the petition on 19 November 2020. The payment was sufficient to discharge the sums due on the petition resulting in its discharge on 23 December 2020. The receiving parties will not be disclosing their CCFAs to the paying party.”

22. I will refer to the collective conditional fee agreements, as identified by the Respondents in the above response, as “the CCFAs” . It is common ground that the CCFAs are privileged and, as matters stand, the Respondents maintain their privilege in relation to the CCFAs.

23. By an order made in the Assessment Proceedings on 4 th August 2021, District Judge Bever made an order which required the receiving party, that is to say the Respondents, to file their retainer documentation (which I take to have been a reference to the CCFAs) by 4.00pm on 25 th August 2021. GK duly filed witness statements, exhibiting the CCFAs, on 24 th August 2021, with a covering email which requested that the witness statements should not be disclosed to the Appellant.

24. By further orders made in the Assessment Proceedings on 18 th January 2022 and 7 th September 2022 District Judge Bartley gave further directions in the Assessment Proceedings. By the second of these orders, the District Judge recorded the agreement of the parties that there were five issues to be determined in the Assessment Proceedings, as follows: “UPON the parties agreeing that there are 5x issues to be determined as follows: (1) Whether the retainer documentation of the Receiving Parties’ Solicitors is a privileged document; (2) Whether or not the Receiving parties should be put to election in respect of their fee agreements entered into with their Solicitors; (3) In the event the Receiving Parties are put to election and they choose to disclose the retainer, should it be in redacted form; (4) The definition of success etc; (5) Detailed assessment of the Receiving Parties’ costs UPON RECORDING THAT the first such issue was conceded by the Paying Party”

25. As can be seen, the order of 7 th September 2022 recorded that the first of these issues was conceded by the Appellant. The order also directed that the second and third issues should be listed for hearing on a date to be fixed. The second issue constitutes what I am referring to as the Election Application, by which the Appellant seeks to compel the Respondents to elect whether or not to disclose the CCFAs to the Appellant in the Assessment Proceedings.

26. It is not clear to me when or how the Election Application was actually made, but it is clear that it was made or was treated as having been made, because the Assessment Proceedings came on for hearing before District Judge Bartley on 4 th January 2023. The issue to be determined at that hearing was the second of the five issues identified above; that is to say: “Whether or not the Receiving Parties should be put to election in respect of their fee agreements entered into with their Solicitors;”

27. The jurisdiction of the court, in detailed assessment proceedings, to require the receiving party to elect whether to disclose a particular document to a paying party is contained in paragraph 13.13 of the Practice Direction to Part 47 of the CPR ( “Paragraph 13.13” ). Paragraph 13.13 is in the following terms: “The court may direct the receiving party to produce any document which in the opinion of the court is necessary to enable it to reach its decision. These documents will in the first instance be produced to the court, but the court may ask the receiving party to elect whether to disclose the particular document to the paying party in order to rely on the contents of the document, or whether to decline disclosure and instead rely on other evidence.”

28. As can be seen, Paragraph 13.13 becomes relevant where the court decides that it needs to see a particular document in assessment proceedings which, in the opinion of the court, is necessary in order to enable the court to make a decision in the assessment proceedings. In the first instance the relevant document only has to be produced to the court. The court can however ask the receiving party to elect whether to disclose the particular document to the paying party in order to rely on the contents of the document or, in the alternative, to decline disclosure and instead rely on other evidence.

29. By the Election Application the Appellant is not, as such, seeking an order of the court. What the Appellant is seeking is the agreement of the court to make a request to the Respondents, pursuant to Paragraph 13.13, for the Respondents to elect whether to disclose the CCFAs, or to decline disclosure and prove its liability to pay costs to GK in reliance upon other evidence.

30. As I have said, the Election Application came on for hearing before District Judge Bartley on 4 th January 2023. Both the Appellant and the Respondents were represented by counsel. The District Judge reserved his judgment on the hearing. The judgment ( “the Bartley Judgment” ) was handed down on 12 th September 2023. For the reasons set out in the Bartley Judgment, the District Judge decided that the Election Application should be refused, and that the Respondents should not be put to their election as to whether to disclose the CCFAs to the Appellant.

31. The Bartley Judgment is, as I have said, a lengthy judgment, but the core of the District Judge’s reasoning can be found at [99] to [101] of the Bartley Judgment, where the District Judge said this: “99. Having again considered Mr Wolman’s written submissions (filed on 28 th September 2021), in my judgment, the crucial decision and steps in this litigation are that, on 18 th November 2020, His Honour Judge Halliwell determined that the Councils had “successfully made out their case” and this resulted in payment being made. I cannot accept the submission that the Order dated 23 rd December 2021 ”gave the petitioning creditors nothing”. The reality is that the Councils did force SBLT to pay them the outstanding petition debt and the Councils achieved exactly what they wanted to achieve.

100. I wholly understand why Mr Wolman urges various inferences due to the unusual circumstances of this case but I am in a position whereby I have seen the definitions and I consider that the material definition has been met and satisfied. I cannot accept the argument that the Councils’ Solicitors website somehow overtops the contractual terms agreed by the Councils and their Solicitors. To the contrary, I accept Mr Wilcock’s submission that the website is nothing more than “sales puff”.

101. I have considered Pamplin v Express Newspapers [1985] 1 WLR 689 and I cannot accept that there is an issue which is real and relevant. In my judgment, the issue raised by SBLT is nothing more than fanciful being reflective of the way in which this litigation has proceeded over the years with multiple hearings and even a General Civil Restraint Order made by the then Vice-Chancellor. It seems all but impossible for the parties to agree on even basic matters. I consider that SBLT’s argument is based on a presumption which does not stand up given I have been able to consider the background in considerable detail and able to consider the crucial definition in the agreements.”

32. It is important to record, as is apparent from the reasoning of the District Judge at [100], that the District Judge had seen and considered the CCFAs. The Appellant had not seen the CCFAs, with the consequence that the argument before the District Judge was not conducted by reference to the actual terms of the CCFAs. The District Judge did make reference to the terms of the CCFAs in the course of the Bartley Judgment. In particular, the District Judge made the following reference to the CCFAs, at [84] to [86]: “84. As I mention above, on 24 th August 2021, the Councils’ Solicitors filed “witness statements….exhibiting their respective retainers”.

85. As I also mention above, I informed counsel on more than one occasion that I had had sight of the retainer documentation that ensued from the Order of District Judge Bever (as he then was): (1) As for the London Borough of Camden Council, there is a Collective Conditional Fee Agreement dated 4 th December 2017. There is a definition of the word “Successful” that runs to 39 words; (2) As for Preston City Council, there is a Collective Conditional Fee Agreement dated 30 th September 2013. There is a definition of the word “Successful” that runs to the same 39 words.

86. I am conscious that SBLT have not seen the definition. In my judgment, whilst it is only 39 words in length, it is a very wide definition.”

33. The District Judge concluded his decision on the Election Application in the following terms, at [108]: “108. In all the circumstances and for all the reasons given above, I am not minded to exercise my discretion to put the Councils to their election.” The Appeal

34. I have already made reference to the Appeal and its outcome. As I have already explained, I did not decide the Election Application in the Appeal Judgment. Rather, I concluded that the District Judge’s decision on the Election Application could not stand.

35. My reasons for that conclusion are set out in full in the Appeal Judgment. It is not necessary to repeat them. The essence of my reasoning was that the District Judge had asked himself the wrong question in the Bartley Judgment. The District Judge asked himself whether the outcome of the Petition Proceedings constituted a result which entitled GK to be paid under the terms of the CCFAs. The District Judge was satisfied, for the reasons which he gave, that the answer to this question was yes. This was not however the question which the District Judge was required to answer. The District Judge had to consider whether the Appellant had raised a factual issue in relation to the right of GK to be paid under the terms of the CCFAs which was a genuine issue, or a real and relevant issue, going beyond a sham or fanciful issue. The District Judge did address this question, at [101] in the Bartley Judgment, but by that point the District Judge had already reached his conclusion on the substantive question of whether GK had a right to be paid under the CCFAs, which effectively determined his answer to the question considered at [101]. In my view this meant that the District Judge had not adequately addressed himself to the question which had to be answered.

36. On the basis of my reasoning in the Appeal Judgment, the essence of which I have sought to summarise in my previous paragraph, I concluded, with considerable reluctance, that the Appeal had to be allowed and that the District Judge’s refusal of the Election Application could not stand.

37. As I have also explained above, the Election Application is now before me for my decision. Before I come to the CCFAs and my own analysis of the Election Application, it is helpful to set out a summary of the principles which govern applications for a receiving party to be put to its election pursuant to Paragraph 13.13. The relevant law

38. I have already set out Paragraph 13.13. The problem of how privileged documents should be dealt with, in (as it then was) the taxation of costs, was considered by Hobhouse J (as he then was), sitting with assessors, in Pamplin v Express Newspapers Ltd [1985] 1 WLR 689 . In that case the defendants commenced a taxation of bills prepared under two orders for costs made against the plaintiff, and lodged documents in accordance with what was then RSC, Order 62, rule 21. The documents were examined by the taxing master and were returned to the defendants at the taxation of the bills. The plaintiff was dissatisfied with some items allowed on taxation and applied for a review, objecting, amongst other matters, to not being permitted to examine the documents which had been lodged by the defendants. On the review the taxing master held that the plaintiff was not entitled to examine the defendants' privileged and confidential documents and rejected the plaintiff's objection. The plaintiff then applied for a review of the taxation by a judge. The application was dismissed.

39. The essential reasoning of Hobhouse J and the assessors, in dismissing the application, was as follows. A factual dispute might arise on a taxation or on a review which would require a claimant in the taxation (as the receiving party was referred to) to adduce privileged documents in order to prove their claim. In such circumstances the claimant could be required to elect whether to waive their privilege or to retain the confidentiality of the documents and prove their claim some other way. When a claimant lodged their documents in accordance with Order 62, rule 21 they did not have to make any election at that stage. In these circumstances, and on the facts of Pamplin , the defendants had never reached the stage where they were required to elect whether to waive their privilege. As such, the plaintiff was not entitled to see the defendants' documents and the taxation and review had been properly conducted.

40. In their judgment Hobhouse J and the assessors also took the opportunity to address the problems which could arise when dealing with privileged documents. At 691A and 691F-G, Hobhouse J identified the competing principles in the following terms: “The first principle is the principle of natural justice which applies wherever legal proceedings involve more than one person, and one party is asking the tribunal for an order which will affect and bind another. Natural justice requires that each party should have an equivalent right to be heard. This means that if one party wishes to place evidence or persuasive material before the tribunal, the other party or parties must have an opportunity to see that material and, if they wish, to submit counter material and, in any event, to address the tribunal about the material. One party may not make secret communications to the court.” “The second principle is the right of a party to keep confidential, and not disclose to his opponent (or the court), documents or transactions covered by legal professional privilege. This principle is also one which is directed to the achievement of justice. If parties are to be able to protect their legitimate legal interests and properly conduct their litigation in an adversarial situation, they must be able to communicate confidentially, and so must their legal advisers. This privilege can be waived by the party for whose benefit it exists. One of the ways in which this privilege can be waived is by adducing a privileged document in evidence, or giving evidence about privileged communications as, for example, adducing statements given to solicitors under the Civil Evidence Acts. Such waiver has been discussed in a number of cases, including Great Atlantic Insurance Co. v. Home Insurance Co. [1981] 1 W.L.R. 529 and General Accident Fire and Life Assurance Corporation Ltd. v. Tanter [1984] 1 W.L.R. 100 . The waiver consequent upon adducing a particular item of privileged material may not necessarily be confined to that specific item.”

41. Hobhouse J went on to confirm, at 695F, that the principles of natural justice applied in taxations as much as in other litigation: “Taxation, although adversarial, is not subject to all the incidents of ordinary litigation. R.S.C., Ord. 62 is, for present purposes, a self-contained code. The provisions of other orders for discovery and inspection of documents, etc. do not apply. However, it cannot be disputed that the rules of natural justice apply to taxation proceedings, and the question of principle which I have to decide on the present appeal is how the requirements of justice are best served in taxation proceedings, having regard to the fact that many of the relevant documents will be privileged, and the claimant may have a legitimate interest in protecting that privilege.”

42. Hobhouse J then proceeded to set out the answer to the problem of dealing with privileged documents, at 695G-696B: “The answer is that, ultimately, the principle that each party must have the right to see any relevant material which his opponent is placing before the tribunal, and which that tribunal is taking into account in arriving at its decision, must prevail. In the final resort, the claimant must be put to his election whether he wishes to waive his privilege and use the material, or to assert his privilege and retain the confidentiality of the document which the respondent is asking to see. In most taxations, the point where the respondent wishes to put the claimant to his election is never reached. The vast bulk of taxations are informal and involve questions of the simple assessment of the value of the work done or its justification or valuation as a party and party item. In such situations, the parties are content to rely on the extensive experience and expertise of the master. All parties are interested in completing the taxation expeditiously, efficiently and at a minimum cost. The respondent will normally have no interest in making the taxation more complicated or expensive. It is the duty of the master to conduct the taxation as efficiently and economically as is consistent with doing justice to both sides. It is his duty to prevent the respondent from misusing or abusing the taxation proceedings. The procedure currently followed by taxing masters is designed to achieve these ends and does justice.”

43. In terms of the circumstances in which the taxing masters should require a party to prove an entitlement to costs, and be put to their election, Hobhouse J formulated the following test, at 696H to 697B (the underlining is my own): “The master does not have any power to order discovery to be given; he does not have any power to override a right of privilege. But it is the duty of the master, if the respondent raises a factual issue, which is real and relevant and not a sham or fanciful dispute, to require the claimant to prove the facts upon which he relies. The claimant then has to choose what evidence he will adduce and to what extent he will waive his privilege. That is a choice for the claimant alone. The master then has to decide the issue of fact on the evidence. In considering whether he is satisfied by the evidence, the master will no doubt take into account that the claimant may have a legitimate interest in not adducing the most obvious or complete evidence, and may prefer to rely on oral evidence rather than producing privileged legal documents. What I have said about the essentials of the situation mirrors what was said by Sir John Donaldson M.R. in the WEA Records case [1983] 1 W.L.R. 721 , 724.”

44. It was not in dispute before me, on the hearing of the Appeal, that the principles set out in Pamplin are also applicable to assessments of costs pursuant to the CPR and, in particular, to the application of Paragraph 13.13.

45. As it seems to me, the essential test which emerges from Pamplin , before the receiving party can be put to their election in detailed assessment proceedings, is whether the paying party has raised a factual issue which is “real and relevant” and not “a sham or fanciful dispute” .

46. A further articulation of essentially the same test can be found in the judgment of the Divisional Court in Hazlett v Sefton Metropolitan Borough Council [2000] 4 All ER 887 . In this case the issue was whether the complainant, in a case of statutory nuisance, was entitled to an order compensating her for expenses properly incurred in the statutory nuisance proceedings. The expenses in question were the cost of the complainant’s solicitors. This in turn led to the question of whether the complainant was liable to pay any costs to her solicitors. The complainant produced a letter, which was said by the respondent local authority not to constitute an enforceable fee agreement. The complainant and her solicitor declined to give evidence on the question of whether there was a liability to pay the solicitors’ fees. The complainant appealed to the Divisional Court against the decision of the magistrate to refuse the claim for compensation on the basis that the complainant had not proved that she had properly incurred expenses in the proceedings. The appeal was allowed, on the basis that the magistrate had failed to address the questions of whether the complainant could rely on the presumption that she would be liable to pay her solicitors’ costs, or whether the complainant should have been required to adduce evidence.

47. For present purposes the judgment of the Divisional Court is relevant for the guidance which was given on the question of whether the complainant should have been required to produce further evidence, at 892j-893b (the underlining is my own): “In our judgment, it is reasonable to assume in those circumstances that, where the complainant has a solicitor acting for him in pursuing his complaint, he will be liable to pay his solicitor’s costs of doing so. In other words, there is normally a presumption that the complainant will be personally liable for his solicitor’s costs and it should not normally be necessary for the complainant to have to adduce evidence to that effect. Such an approach would be consistent with that adopted in the case of R v Miller where, although the factual circumstances were different, the wording of the relevant statutory provisions in the 1973 Act is very similar to the wording of s 82(12) of the 1990 Act. The complainant will therefore be able to rely on the presumption that he is liable for his solicitor’s costs where there is no effective challenge to it. Where, however, there is a genuine issue raised by the defendant as to whether the complainant has properly incurred costs in the proceedings, the position will be different. A defendant may, for instance, have grounds for believing that the complainant will not be liable to pay his solicitor’s costs, whether because he has entered into an unlawful and unenforceable conditional fee arrangement with his solicitor or for any other reason. In those circumstances, where the defendant has raised a genuine issue as to whether the complainant has properly incurred costs in the proceedings, the complainant will be at risk if he continues to rely on the presumption that he is liable for his solicitor’s costs. If he does not then adduce evidence to prove that he has properly incurred costs in the proceedings and the defendant can show by evidence or argument, that he has not, he would be most unlikely to succeed in recovering his costs.”

48. Finally, I should make reference to Hollins v Russell [2003] EWCA Civ 708 . In this case the Court of Appeal had to deal with six appeals, all of which were concerned with the enforceability of conditional fee agreements which had been enabled by the Courts and Legal Services Act 1990 . The judgment of the Court of Appeal, given by Brooke LJ, is lengthy. For present purposes I need only quote from the judgment at [55] and [56], where Brooke LJ described the practice of the courts on assessment, in relation to the disclosure of documents to the paying party or their solicitors (the underlining is my own): “55. In order to explain our conclusions, it is necessary to describe the practice on assessment as respects the disclosure of documents to the paying party or his solicitors. Although all relevant documents must be filed with the court, there is no automatic disclosure of these documents to the paying party. However, paragraph 40.14 of the Costs Practice Direction provides (in relation to detailed assessment) as follows:− “40.14 The court may direct the receiving party to produce any document which in the opinion of the court is necessary to enable it to reach its decision. These documents will, in the first instance, be produced to the court, but the court may ask the receiving party to elect whether to disclose a particular document to the paying party in order to rely on the contents of the document, or whether to decline disclosure and instead rely on other evidence."

56. Reference to the case law demonstrates the circumstances in which the court will exercise its discretion under this rule. In Goldman v Hesper [1988] 1 WLR 1238 , the Court of Appeal held that it would be rare to exercise this discretion under Order 62, rule 29 of the Rules of the Supreme Court 1965, which contained provisions now to be found in CPR 47.6 and that part of the Costs Practice Direction that relates to CPR Part 47. By lodging his documents with the court, the claimant waived his legal professional privilege to that extent. If there was a challenge in good faith to any item of costs, the taxing master could put the receiving party to his election and if the document was produced disclosure would be for the specific purpose of taxation of costs only. Accordingly, the privilege could be asserted on other occasions thereafter.”

49. Although Hollins was concerned with a series of cases involving conditional fee agreements made under the former regulations for conditional fee agreements, which gave considerably more scope for challenging their enforceability on assessment, it seems to me that the extract which I have quoted from Hollins is not confined, as a statement of principle, to the regulations then in force. It seems to me that the statement of principle is capable of more general application.

50. I was referred to other authorities at the hearing of the Appeal, but it seems to me that the three authorities referred to above are sufficient to demonstrate the principle which should be applied when the paying party in a detailed assessment seeks to have the receiving party put to their election as to whether to produce a privileged document on which the receiving party relies in the detailed assessment.

51. As I have said, the essential test, before the receiving party can be put to their election in detailed assessment proceedings, is whether the paying party has raised a factual issue which is real and relevant and not a sham or fanciful dispute. Putting the matter another way, and adopting an expression which is also used in the case law, there must be a genuine issue raised by the paying party, based upon a challenge made in good faith.

52. To this I would add the point, which can also be derived from the above case law, that there is a presumption, in favour of the receiving party, that the receiving party is liable to pay the costs of their solicitors. This presumption is not displaced by the paying party simply putting the receiving party to proof of their entitlement to costs. A genuine issue as the liability of the receiving party to pay their solicitors’ costs is required before the presumption is displaced and the paying party can be called upon to produce evidence of such liability. The CCFAs

53. I had not seen the CCFAs when I decided the Appeal. This was because I was only concerned with the Appeal at that stage, and not with the substance of the Election Application. Equally, the Appellant had not seen the CCFAs on the hearing of the Appeal. The CCFAs have not yet been disclosed to the Appellant. The Respondents are under no obligation to disclose the CCFAs to the Appellant, unless and until (i) they are put to their election pursuant to Paragraph 13.13 to disclose the CCFAs and (ii) the Respondents, if put to their election, elect to disclose the CCFAs to the Appellant.

54. For the purposes of my making my decision on the Election Application, I have now been provided with the witness statements originally filed with the court in the Assessment Proceedings, which exhibit the CCFAs. Those witness statements and their exhibits have only been filed with the court. They have not been served on the Appellant.

55. My decision on the Election Application pursuant to Paragraph 13.13 is therefore an unusual example of a court being called upon to make a decision by reference to documents, namely the CCFAs in the present case, which one party, namely the Respondents in the present case, has not seen. It is however clear from the authorities that the court is entitled to proceed in this way, in making its decision on whether to put a party to its election pursuant to Paragraph 13.13.

56. In these circumstances it is not appropriate for me to record in this judgment any of the terms of the CCFAs or to discuss those terms. It is common ground that the CCFAs are privileged from production and, in case it should be necessary formally to record this, nothing I say in this judgment is intended to or does remove or reduce that privilege.

57. I therefore confine myself to the information which already appears in the Respondents’ reply to the Points of Dispute, which I have quoted earlier in this judgment. There are two CCFAs which have been produced to the court. The first CCFA, in time, is between GK and the Second Respondent and is recorded as having been made on 30 th September 2013. The second CCFA, in time, is between GK and the First Respondent and is dated 14 th December 2017.

58. The Respondents’ case on the CCFAs, as expressed in their reply to the Points of Dispute, can be summarised as follows: (1) Under the terms of the CCFAs, the Halliwell Order was sufficient to trigger the liability of each of the Respondents to pay the fees and disbursements of GK in respect of the Petition Proceedings. The trigger for liability under the terms of the CCFAs does not rely upon actual recovery of the Petition Debt, and in any event the Petition Debt was paid, before it was returned. (2) The above is clear from the terms of the CCFAs. There is no issue in this respect, and no case for the CCFAs to be disclosed to the Appellant. The Election Application – analysis and determination

59. My analysis is necessarily very short. As I have explained, it is not appropriate for me to set out or discuss the terms of the CCFAs.

60. So far as the costs, as claimed by the Respondents in the Assessment Proceedings, represent disbursements of GK, as opposed to GK’s own charges, there is no genuine or indeed any issue raised by the Appellant. It is quite clear from the terms of both of the CCFAs, that properly incurred disbursements are to be paid by the Respondents, whatever the outcome of the claim in respect of which such disbursements are incurred.

61. So far as GK’s own fees are concerned, the position is not the same. In my view the Appellant has raised a genuine issue or dispute as to the liability of the Respondents to pay these fees under the CCFAs , as opposed to a sham or fanciful issue or dispute. I say this for two reasons which, for the reasons which I have explained, I express very briefly.

62. First, the outcome of the Petition Proceedings was somewhat unusual. The sum which was paid with the intention of satisfying the Petition Debt was paid, but was then returned, in circumstances where Judge Halliwell decided that the Respondents had not been justified in returning the payment. The Petition was dismissed, but the Respondents were awarded their costs of the Petition Proceedings up to 20 th November 2020. Looking at the terms of the CCFAs and the outcome of the Petition Proceedings, I do not find it possible to conclude that there is no issue at all as to whether the trigger for payment of GK’s own fees under the CCFAs was actually released.

63. Second, the bar is set fairly low, in terms of the test for determining whether a party should be put to its election pursuant to Paragraph 13.13. All that has to be shown is a genuine issue. There is also the concern that any court will have in making a decision on a document in circumstances where one party has not seen that document or had the opportunity to address its terms. While I do not doubt that courts should be robust, in assessment proceedings, in dismissing challenges of this kind which are clearly tactical and have no merit, I do not feel able to place the Appellant’s challenge into this category. In my view the Appellant has surmounted the relatively low bar of demonstrating a genuine issue.

64. I should make it clear, candidly, that I reach this result with no enthusiasm. I repeat the postscripts which I included at the end of the Appeal Judgment. I would much prefer to have been able to dismiss the Election Application, so that the Assessment Proceedings could be brought to an end, the costs generated by the Election Application could be prevented from escalating further, and the outstandings costs payable pursuant to the Halliwell Order could be paid. For the reasons which I have given, however, I am not able to dismiss the Election Application.

65. I should also make it clear that the Appellant should take no encouragement from this decision. All that I have decided is that the Appellant has surmounted the relatively low bar of demonstrating a genuine issue, so far as GK’s own fees in the Petition Proceedings are concerned. I have made no decision upon, and I express no view upon the substantive issue of whether the Respondents are liable, under the terms of the CCFAs, for GK’s fees of the Petition Proceedings. Assuming an election to disclose the CCFAs, that substantive issue will be for the court charged with the determination of that issue.

66. The issue raised by the Appellant is whether the Respondents are liable to pay that element of the costs awarded to them by the Halliwell Order which represents GK’s own fees of the Petition Proceedings. For the reasons set out in this judgment, I conclude that it is appropriate for the court, pursuant to Paragraph 13.13, to ask the Respondents to elect whether (i) to disclose the CCFAs to the Appellant in order to rely on the contents of those documents in order to prove their liability to pay the relevant costs, or (ii) to decline disclosure and instead rely on other evidence to prove their liability to pay the relevant costs. The outcome of the Election Application and the next steps

67. The Election Application is allowed. Pursuant to Paragraph 13.13, the Respondents will be asked to make their election in relation to the CCFAs.