Legal Watch:Property Risks & CoverageJuly 2015Issue 007

In this issue:

• Failure to prove cause of fire

• No action for breach of statutory duty in party wall case

• Breach of condition precedent requiring use of burglar alarm

• Requirement for notice in a liability policy

• Appropriate conduct of litigation in the Technology and Construction Court

Contact usIf you would like any further information on the cases or articles featured in this issue, please contact:

Paul ChaT: 0207 469 6235E: paul.cha@plexuslaw.co.uk

Marise GellertT: 020 7469 6249E: Marise.Gellert@greenwoods-solicitors.com

IntroductionThis month we cover two cases dealing with neighbours, the now reported case of Graves v Brouwer (covered briefly last month) and Bridgland v Earlsmead Estates Ltd. The former is an escape of fire case and the latter, a party wall case.

We also look at another fire case, Milton Furniture Ltd v Brit Insurance Ltd, which deals with policy coverage.

Thanks go to Paul Cha, for his article on another coverage case, Maccaferri Ltd v Zurich Insurance Plc.

Finally, we look briefly at the guidance on the ‘appropriate conduct of litigation’ given by the Technology & Construction Court in Gotch v Enelco Ltd.

Save the date

For those of you who like to plan your diaries well in advance, our 3rd National Property Risks and Coverage Annual Conference will be held from 1.30pm to 5.30pm on Thursday, 12 May 2016 at the London Stock Exchange. Further details to follow.

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Failure to prove cause of fireThe full Court of Appeal judgment has now been handed down in Graves v Brouwer [2015] EWCA Civ 595 from which it is clear that the background circumstances are not quite as straightforward as was thought when we reported the case last month.

What is now clear is that the alleyway where the fire was set actually formed part of Mr Brouwer’s property, as it gave access from his front garden to his back garden, so the fire was deliberately set on and spread from his own land.

BackgroundMr Brouwer (D) started a small fire in the alleyway next to his property, in order to burn confidential documents (four A4-sized pieces of card and paper). He asserted that the fire was ‘small and controlled’ and he had set it in the concrete alleyway intentionally, as he believed there was no risk of it spreading from there.

D claimed he did his utmost to control the fire and doused the ashes with his garden hose. Shortly afterwards, smoke was seen coming from the roof of the neighbouring property. He immediately sprayed his garden hose onto the roof eaves to try and extinguish the fire and shouted to the neighbours to get out of the property.

The property sustained substantial damage, requiring the neighbours to be out of their home for eight months. A subrogated claim was brought by Miss Graves’ (C) property insurers.

The experts agreed that the origin of the fire at the neighbouring property had not been absolutely established. Full consideration had not been given to all potential causes of the fire, which therefore could not be eliminated. No official Fire Brigade investigation report was available, only a short incident report, which concluded the cause of the fire was ‘bonfire going out of control’.

The experts considered that the only feasible mechanism of fire transfer from D’s property to C’s was the generation of

a ‘flying brand’, a piece of combustible material which had been ignited and had risen in the air.

C’s expert considered that the alleyway fire was the most likely cause, whereas D’s expert considered that the material ignited by D would have been highly unlikely to have been capable of emitting an ember of sufficient energy or duration to start the fire in C’s property.

During cross-examination, D’s expert was asked whether, if the court took the view that arson did not cause the fire, then on the balance of probabilities, the alleyway fire had to be the cause, even if improbable. He responded in the affirmative.

The judge rejected the possibility of arson and found that the house fire had to have been caused by the alleyway fire. However, she found that that it was a ‘freak accident’ for which D was not responsible and that he had taken all reasonable steps to extinguish the fire.

The appealThe issues on appeal were whether:

(1) the judge had erred in her approach to causation;

(2) D had been negligent.

The Court of Appeal commented that it was clear that the judge had regarded that one single answer from D’s expert as critical to the outcome into causation and that without it, she would have found that C had failed to prove that the cause of the house fire was an escape of fire from the alleyway.

His answer was neither a shift of view nor a concession and it followed that the process of reasoning which led the judge to conclude that C succeeded on causation was fatally flawed.

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She was not obliged to come to a conclusion at all and was drawn into expressing an unnecessary conclusion about arson by the formulation of the question to D’s expert on what was described by the Court of Appeal as ‘hectoring cross-examination’.

the process of reasoning which led the judge to conclude that C succeeded on causation was fatally flawed. The Court of Appeal therefore dismissed the appeal.

Strictly, that rendered unnecessary any consideration of the issue of negligence but as argument had been heard on that point, the Court of Appeal went on to consider it.

The Court of Appeal found that this was not a ‘freak accident’ in the sense that some unexpected phenomenon intervened, such as a sudden wind storm. Indeed, on the judge’s own hypothesis, what happened was exactly what C might have foreseen, hence his watching the fire so carefully and ‘arming’ himself with a hose.

The Court of Appeal held that the judge was entitled to reach the conclusion that she did on negligence. C’s appeal on that ground was, therefore, also dismissed.

CommentIt needs to be borne in mind that not all of the possible causes of the fire had been investigated and the judge was criticised for assuming that if arson had been ruled out, then the fire in the alleyway must have caused the fire.

The Court of Appeal considered the legal reasoning to be ‘on all fours’ with that in Rhesa Shipping Co v Edmunds, The Popi M [1985] WLR 948, which referred to the famous Sherlock Holmes quote “…when you have eliminated the impossible, whatever remains., however improbable, must

be the truth” as being inappropriately applied to the process of fact finding which a judge at first instance has to perform at the conclusion of a case of this type. Unlike Sherlock Holmes, a judge always had open to them the finding that the claimant has not proved their case.

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No action for breach of statutory duty in party wall caseIn the case of (1) Anita Bridgland (2) Anthony Bridgland v Earlsmead Estates Ltd [2015] CC Birmingham the court was required to consider a preliminary application as to whether parts of a claim brought by the claimants for damage caused by damp during party wall works by the defendants should be struck out as disclosing no cause of action.

BackgroundThe claimants (C) and defendant (D) owned adjoining properties in Stoke-on-Trent. D demolished its factory units, exposing the lower part of the flank wall of C’s property, which shortly afterwards began to suffer from severe damp, as a result of being exposed to the elements following the demolition works.

C commenced proceedings and asserted at paragraph 15(i) of the particulars of claim that D was guilty of breach of statutory duty, as it had failed to serve a notice under section 3 of the Party Wall etc. Act 1996 (the 1996 Act) thereby depriving them of the opportunity to avail themselves of the counter-notice regime in section 4.

C also asserted at paragraph 15(ii) of the particulars of claim that D had breached the statutory duty in section 7 of the 1996 Act, which stated that a building owner “shall not exercise any right conferred on him by this Act in such a manner or at such time as to cause unnecessary inconvenience to any adjoining owner”.

D applied either to strike out those assertions, on the basis that they disclosed no reasonable cause of action, or for summary judgment, on the basis that C had no reasonable prospects of success in relation to those assertions.

C sought to rely on the decision of HH Judge Thornton QC in Crowley (t/a Crowley Civil Engineers) v Rushmoor BC [2009] EWHC 2237 (TCC) as authority for establishing that a failure to comply with the provisions of sections 3 and 4 of the 1996 Act were actionable as breach of statutory duty.

D argued that that C had misunderstood the purpose of a counter-notice under section 4 of the 1996 Act and that C’s case was incorrectly based on the premise that had they served a counter-notice they would have been able to require the works to be performed in such a way as to prevent damp.

JudgmentThe court held that:

(1) the provisions of sections 3 and 4 of the 1996 Act did not enable C to state a case in the manner set out in their particulars of claim. Section 3 required the building owner to serve a party structure notice on an adjoining owner before exercising any of the rights set out in section 2. A party structure notice related to the building owner’s ‘proposed’ works.

Following such service, an adjoining owner could serve a counter-notice but such a counter-notice relates to ‘other’ work to be carried out on the party wall or structure, which “may reasonably be required for the convenience of the adjoining owner”. That other work was not the same as the proposed work which the building owner intended to carry out. The purpose of a counter-notice did not relate to the manner in which the building owner’s proposed work was to be carried out. In addition, such other work could only be carried out on the party fence wall or party structure; it was not the same as any ‘further’ work which the adjoining owner might wish to carry out, or have carried out on his own land.

On that basis, the claim at paragraph 15(i) of the particulars of claim was bound to fail as it disclosed no reasonable cause of action. Accordingly, it should be struck out or the defendant was entitled to summary judgment in respect of that sub-paragraph.

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(2) section 7(1) was a restrictive or qualitative provision designed to deprive the building owner of a defence which he might otherwise be able to maintain in the face of a complaint by an aggrieved adjoining owner that he had exercised a section 2 right in such a way as to cause unnecessary inconvenience. Accordingly, a breach of section 7(1) did not give rise to an action for breach of statutory duty.

The terms of section 7(2) of the 1996 Act are of wide and general application. Whilst not an imposition of strict liability, they provide that irrespective of how the building owner carries out any work in pursuance of the 1996 Act, if the adjoining owner suffers any loss or damage as a result, then the building owner is to compensate him for such loss or damage. They provide a complete and sufficient remedy to an aggrieved adjoining owner, such that it is unnecessary to seek to construe section 7(1) of the 1996 Act in such a way so as to provide a further category of relief to an aggrieved adjoining owner.

They provide a complete and sufficient remedy to an aggrieved adjoining ownerCrowley was not of direct application to the facts of this case as it was not concerned with section 7(1) of the 1996 Act. C were bound to fail on their claim as advanced in paragraph 15(ii) of the particulars of claim and again, it should be struck out or the defendant was entitled to summary judgment in respect of that sub-paragraph.

(3) a building owner is subject to the separate and disparate requirements of sections 3(1) and section 7(1) of the 1996 Act. Each applies to the way in which the building owner may exercise his rights under the 1996 Act. The fact that he has failed to comply with the service requirements under section 3(1) does not mean that he is not then exercising any right conferred upon him by the 1996 Act and as a result

is absolved from the separate requirement not to cause unnecessary inconvenience under section 7(1).

(4) the dispute as to whether or not unnecessary inconvenience had been caused to C fell within the terms of the dispute resolution mechanism of section 10 of the 1996 Act. C should therefore have exercised their remedies under the Act before resorting to court proceedings.

On that basis, the application was granted.

CommentThe court commented that the very fact that the 1996 Act contains a specific mechanism for resolution of disputes is a strong indication that a breach of the 1996 Act is not actionable other than by or through that mechanism and is, in itself, an indication that parliament did not intend to create a separate private law action for breach of section 7(1). That is despite the fact that the 1996 Act does not contain provisions enforcing the performance of that section.

Where a party wall dispute arises, therefore, it is clear that all possible remedies under the 1996 Act must be explored and exhausted before any consideration is given to issuing proceedings, which should be viewed as a last resort.

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Breach of condition precedent requiring use of burglar alarmIn the Court of Appeal case of Milton Furniture Ltd v Brit Insurance Ltd [2015] EWCA Civ 571 the appellant company (M) appealed against a first instance decision that it was not entitled to an indemnity from the respondent insurer (B) in relation to a fire at its premises.

BackgroundThe claim arose following a fire at M’s premises in Ashby de la Zouch. M had a Commercial Combined policy (the policy) with B. The issue in the appeal related to the construction of a general condition in the policy, General condition 7 (GC7).

M’s premises included a warehouse, an office, a workshop, an area referred to throughout as ‘the link’ and a house. The link was a building linking the house to the warehouse and office.

A fire had been started deliberately by an unknown person or persons late in the evening of Friday 8 April 2005 or in the early hours of Saturday 9 April 2005.

One of M’s owners had been asleep in the house and an employee had been asleep in the link and they were awoken by the fire alarm. The burglar alarm had not been set.

B declined indemnity on the basis of M’s failure to comply with two conditions precedent:

(1) that the burglar alarm had to be set ‘out of business hours’ or when the premises were ‘left unattended’;

(2) that the ‘protections’ required by the policy were not to be ‘withdrawn or varied to the detriment of the interests of underwriters without their prior consent’

The burglar alarm had not been set on the night of the fire and the burglar alarm was not being monitored as M had failed to pay the invoices of the monitoring company.

The policy contained a warranty (PW1) which stated:

“It is a condition precedent to the liability of the underwriters in respect of loss or damage caused by theft and/or attempted theft, that the burglar alarm shall have been put into full and proper operation whenever the premises […] are left unattended...”.

General condition 7 (GC7) of the policy also stated:

“The whole of the protections including any burglar alarm provided for the safety of the premises shall be in use at all times out of business hours or when the insured’s premises are left unattended and such protections shall not be withdrawn or varied to the detriment of the interests of underwriters without their prior consent”.

The judge at first instance found that GC7 was a condition precedent to B’s liability, but that it was qualified by PW1, so that M was only required to set the burglar alarm if the premises were left unattended, which they had not been, as there was someone asleep in the house and in the link.

However, he concluded that M had breached GC7 because the company responsible for monitoring the burglar alarm had stopped doing so as a result of M failing to pay its invoices. He held that M had been reckless as to the risk that the monitoring service would be cut off.

The appealM appealed, submitting that:

(1) GC7 was not a condition precedent to B’s liability. It was PW1 that was the condition precedent in relation to the burglar alarm and GC7 was subordinate to it;

(2) PW1 did not qualify GC7 and ;

(3) the building had not been left unattended, as people were asleep in parts of it;

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(4) it had not breached GC7 by causing or permitting the withdrawal of the burglar alarm monitoring service.

B argued that the meaning of the first limb of GC7 was plain and that the burglar alarm (and other protections) had to be in use at all times out of business hours (whether or not it was ‘attended’) and whenever the premises were ‘unattended’. The two requirements were clearly in the alternative and the court had to interpret a commercial document in light of business common sense. B also argued that the judge was wrong to conclude that the mere presence of the owner and employee in one small part of the premises meant that they were ‘attended’. Neither could be said to be ‘attending to’ the premises when asleep.

Arguments were also raised in relation to the second limb of GC7 and the question of the correct legal test as to whether any, and if so, what knowledge on the part of M was necessary for M to be in breach of contract.

Court of Appeal judgmentThe Court of Appeal dealt with each issue in turn as follows:

(1) was GC7 a condition precedent or was only PW1 the condition precedent?

The Court of Appeal agreed with the judge at first instance that, on a proper construction of the policy as a whole, there could be no doubt that GC7 was a condition precedent which applied to the burglar alarm in the same way as it applied to the other protections provided for the safety of the premises.

There was no conflict between GC7 and PW1 and both formed part of the ‘standard terms’ of the policy. Neither took precedence over the other. Although the language ‘overlapped’ it was not inconsistent.

On that basis, the appeal in relation to the judge’s conclusion that compliance with GC7 was a condition precedent to B’s policy liability was dismissed.

(2) was the judge correct to hold that PW1 qualified GC7, such that GC7 had to be ‘read down’ so that M’s obligations as regards the use and monitoring of the burglar alarm (but

not in other respects) were no more onerous than they would have been had the claim been a theft claim and PW1 had been applicable? In other words, M was only required to set the alarm if the premises were left unattended.

The Court of Appeal disagreed with the judge’s conclusion on this issue. The language of GC7 was plain – it required the whole of protections, including the burglar alarm to be in use in two alternative eventualities: first, ‘at all times out of business hours’, irrespective of whether the premises were unattended; and second, ‘at all times…when the insured’s premises are left unattended’, irrespective of whether the time of day was in or out of business hours. If the purpose was only to ensure the burglar alarm was set whenever the premises were unattended (whether in business hours or not) then it would only have provided that ‘the protections be in use at all times when the insured’s premises are left unattended’.

(3) was M in breach of the first limb of GC7?

The Court of Appeal held that there was a clear breach in this regard. It was not in dispute that the burglar alarm had not been set after close of business on the evening of 8 April 2005. It could have been set in the areas other than the house and the link but was not.

The second aspect of the first limb of GC7 was whether the premises were left ‘unattended’. The Court of Appeal disagreed with the view of the judge that the fact that the owner and an employee were sleeping in the house and the link respectively meant it was attended. Their mere presence in part of the building did not mean the building was ‘attended’ and the Court of Appeal accepted B’s contention that ‘attended’ clearly connoted someone actually being present and giving the premises some attention, not merely sleeping there, as they would not be in a position to observe any attempt by someone to interfere with it (as per Lord Denning in StarFire Diamond Rings Ltd v Angel [1962] 2 Lloyd’s Rep 217).

(4) was M in breach of the second limb of GC7 by causing or permitting the withdrawal of the burglar alarm monitoring service?

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The Court of Appeal pointed out that in finding that M was in breach of the first limb of GC7, in failing to set the burglar alarm, it was not strictly necessary to make a finding on this issue.

the Court of Appeal accepted B’s contention that ‘attended’ clearly connoted someone actually being present and giving the premises some attention, not merely sleepingThe Court of Appeal found that the construction of the second limb of GC7 was such that it imposed a strict obligation on M. Whilst ‘variation’ might require some knowledge on the part of an insured, a ‘withdrawal’ might be effected unilaterally by a third-party alarm company, irrespective of the knowledge of the insured. There was no reason why that should not be a breach of GC7.

The Court of Appeal stated that if it was wrong on that point, then the test was not one of recklessness, but one of reasonableness or common care. In other words, was M aware of the facts which gave rise to the withdrawal of the monitoring service, or should it have known of those facts? To argue that only actual knowledge was sufficient was wrong, as that would entitle an insured to evade its obligations under the policy by simply not engaging with the service provider so as to ensure they did not obtain actual knowledge of the cessation or intended cessation of the monitoring service.

On that basis, the appeal was dismissed.

CommentThere was an interesting discussion in the Court of Appeal in relation to the commercial difference, if any, between a vehicle and a property being ‘unattended’. Certainly so far as domestic properties are concerned, it is likely that most people would not regard a house as being ‘unattended’ if the occupants were upstairs asleep (which is probably why most domestic policies use the phrase ‘unoccupied’) and yet that is exactly the view taken by the Court of Appeal in this case. It does appear, then, that for a property to be ‘attended’ it requires a degree of activity or observation.

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Requirement for notice in a liability policyWhat nature of occurrence or event requires notice to be given under a liability policy?

An insured may become aware of an occurrence or event which causes third-party damage but in relation to which he is not (immediately) implicated. He only learns of a claim against him long after the occurrence or event arises. Does he lose the benefit of his liability cover if he fails to give notice of such event?

These issues were considered in the case of Maccaferri Limited -v- Zurich Insurance Plc [2015] EWHC 1708

BackgroundOn 22 September 2011, Mr McKenna suffered a serious eye injury while using a Spenax gun to attach wire caging together. Mr McKenna sued his employers. His employers sued the company from which the gun was hired. That company in turn sued the claimant company (C) from which it had hired the gun.

The claim was first intimated against C on 18 July 2013 almost two years after the accident. C notified its brokers on 22 July 2013 but Zurich refused to indemnify C on the grounds that the accident should have been reported by October 2011 (or June 2012 at the latest) and C was, therefore, in breach of a condition precedent to any liability on the part of Zurich to make any payment under the policy.

The notification clause required C, as a condition precedent to Zurich’s liability, to “give notice in writing to [Zurich] as soon as possible after the occurrence of any event likely to give rise to a claim with full particulars thereof”

JudgmentThe judge held that, in order to trigger the notification clause, an event must have occurred which was ‘likely to give rise to a claim’ i.e. an event with at least 50% chance that a claim against C would eventuate.

The judge found on the evidence that when the accident occurred there was a less than 50% chance of a claim against C eventuating. The judge noted C was not blamed at the time of the accident. He concluded that whilst it was possible the accident involved a fault with the gun, it was equally possible that it involved an error in the way it was used. The likely involvement of the Health & Safety Executive, the forensic testing of the gun and the seriousness of the consequent injuries were all insufficient in tipping the balance in favour of triggering the notification clause.

Zurich argued that the words ‘as soon as possible’ indicated that the obligation to notify arose when an insured could with ‘reasonable diligence’ discover that an event was likely to give rise to a claim. Zurich further argued that the requirement for full particulars imported a positive duty of inquiry on C so as to require it to undertake a ‘rolling assessment’ of claims likelihood.

The judge held that C did not have to carry out a ‘rolling assessment’ of the likelihood of a claim. Furthermore, the judge rejected (obiter) the argument that the insured was under an obligation to carry out with ‘reasonable diligence’ enquiries which might inform the assessment of the prospects of a claim.

C did not have to carry out a ‘rolling assessment’ of the likelihood of a claim On that basis, Zurich was obliged to indemnify C under the policy and a declaration to that effect was granted in favour of C.

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CommentA notification clause requiring the insured “to give notice of an event likely to give rise to a claim” is commonly found in third-party liability policies. The judge leaned in favour of the insured, C, in assessing on the evidence that there was a less than 50% chance of a claim eventuating even though C’s systems were open to serious criticism.

The judge assessed the likelihood of the claim at the time of the event. He held that the notification clause did not require the insured to carry out a ‘rolling assessment’ of the likelihood of a claim. This is unsurprising as insurers typically have the benefit of a long stop clause requiring the notification of any later claim or proceedings. There is no obligation on an insured to carry out enquiries with reasonable diligence in order to assess the prospects of that claim.

This case typifies the longer-tail nature of liabilities which can attach to third-party cover of this type.

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Appropriate conduct of litigation in the Technology and Construction Court(1) Simon Gotch (2) Susan Linda Gotch v Enelco Ltd [2015] EWHC 1802 (TCC) was a claim brought under Part 8 of the CPR for a declaration that the building contract that the claimants (G) entered into with the defendant (E) did not entitle E to refer a dispute to adjudication.

BackgroundThe court fixed the matter for a case management conference and ordered the parties to agree directions with a view to resolving the underlying dispute but G declined to comply with that order, informing the court that they only wished the court to determine the adjudication issue.

The judge formed the view that the declaration was not necessary, on the basis that there was no imminent threat of adjudication proceedings, so if the dispute was resolved by litigation, the declaration sought would probably serve no useful purpose.

JudgmentThe judge stayed the application for the declaration and directed that the proceedings be treated as if they had been started under CPR Part 7, pursuant to CPR Part 8.1(3), which provides that the court may at any stage order the claim to continue as if the claimant had not used the Part 8 procedure and, if it does so, the court may give any directions it considers appropriate. The judge also gave directions to enable E to pursue the underlying determination issue and a claim for damages by way of counterclaim. E was then to serve an annotated schedule of loss, to which G was to respond and then the parties were to meet to attempt to narrow the issues in relation to quantum.

The main thrust of the judgment related to how the costs of the case management conference should be dealt with and it was while dealing with costs that the judge gave guidance on the appropriate conduct of litigation in the Technology

and Construction Court (TCC), in particular with regard to conducting litigation in a proportionate manner so as to keep costs to the minimum.

The judge made it clear that that parties and their solicitors can no longer conduct litigation in a manner which does not keep the proportionality of the costs being incurred at the forefront of their minds at all times. By CPR Part 1.3 the parties are required to help the court to further the overriding objective.

On that basis, he said it was also no longer acceptable - if it ever was - for parties to pursue issues or applications that had no real impact on the issues that were central to the dispute. Further, it was:

“…no longer acceptable for solicitors to carry on a war of attrition by correspondence, whether instructed to do so or not: it is the parties who are the subject of the duty in CPR 1.3, not merely their solicitors.”

There will only rarely, even in substantial cases, be any justification for fighting or taking points simply ‘as a matter of principle’.

Whilst recognising that English law is an adversarial process, the judge made it clear that goes to the issues in the case, not to every aspect of the procedure. Parties to litigation, in the TCC at least, are expected to conduct that litigation in the manner that is most expeditious and economical.

Bringing the right issues to trial in the most economical fashion, and taking steps to ensure that the costs are kept at a level that is proportionate to what is at stake, is to be at the heart of the process.

In the words of the judge:

“Unreasonableness, intransigence and the taking of every point must in my view now be regarded as unacceptable, because conducting litigation in that way flies in the face of the overriding objective as it is now formulated. These

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The information and opinions contained in this document are not intended to be a comprehensive study, nor to provide legal advice, and should not be relied on or treated as a substitute for specific advice concerning individual situations. This document speaks as of its date and does not reflect any changes in law or practice after that date. Plexus Law and Greenwoods Solicitors are trading names of Parabis Law LLP, a Limited Liability Partnership incorporated in England & Wales. Reg No: OC315763. Registered office: 12 Dingwall Road, Croydon, Surrey CR0 2NA. Parabis Law LLP is authorised and regulated by the SRA.

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habits must disappear from the landscape of litigation in the TCC. If they do not, offending litigants must expect to bear the costs.”

In light of the earlier correspondence and the conduct of the litigation to date, the judge made the following costs order:

(1) E was to pay G’s costs of issuing the proceedings but excluding the costs of preparing and issuing the application notice on a standard basis;

(2) G were to pay E’s costs of the action between 17 April 2015 and 21 May 2015 (both dates inclusive) on an indemnity basis;

(3) G were to pay 50% of E’s costs (including 50% of counsel’s fees) for attending the case management conference on the standard basis;

(4) if the stay on the claimant’s application were to be lifted, the costs order at (i) above was to be set aside and any costs paid pursuant to it were to be repaid. Those costs would then become costs of the action and subject to any other costs order the court may make.

CommentThe language of the judge in this case was quite clear and parties would be well advised to bear it in mind not only in the TCC but generally, as it is only a matter of time before the other courts follow suit. It is, of course, understood that, on occasion, there are points of principle at stake but this case makes it clear that it must be understood that there may be a heavy price to be paid for standing by those points of principle.