I am grateful to Alex Bagnall from Total Legal Solutions for sending me a copy of the judgment of District Judge Haisley in Jailli -v- Bury Council, a copy is available here Jalili v Bury Council – Manchester CC – Judgment – 20210617 V Final. The judgment concerned the issue of how a claim for specific performance should be valued for the purpose of allocation of an action and, thus, for costs purposes.
THE CASE
The claimant settled a proposed action claiming specific performance and damages for disrepair. Both parties instructed expert surveyors and these surveyors disagreed on the amount of work that needed carrying out. The claimant’s expert stating these were £3,915 and the defendant £740. One reason for the difference in valuations was that the claimant assessed the costs on the basis of the “open market” costs of hiring builders, the defendant’s valuation was based on the costs of the work being done in-house by the defendant council. The defendant carried out the work its own expert identified as necessary. The matter then resolved on the claimant accepting the defendant’s Part 36 offer of £1,000.
THE DISPUTE AS TO COSTS
Part 8 proceedings for costs were issued. The parties could not agree on costs because there was a fundamental difference between them as to whether this was a case that would have been allocated to the small claims track. That in turn depended on how the costs of the repairs should be valued – on an “open market” basis or with the work being done “in-house” .
THE DECISION OF THE DISTRICT JUDGE: THE DEFENDANT’S APPROACH WAS CONCERNED
The District Judge found in favour of the defendant’s approach. The appropriate approach to the value of the claim was based on the assumption that the work should be done in-house.
18. That being so, it seems to me that the court cannot and must not close its eyes to the fact that, in essence, the order for specific performance would have required the Defendant,namely Bury Council, to put right the disrepair.
19. Consequently, the work would not be ordered to be carried out on the open market; it would be an order requiring a local authority which, as is common knowledge, would have its own in-house team of the relevant professionals undertaking the work, so it seems to me that the Claimant’s surveyor’s basis of valuing the requisite works was flawed, or certainly was not the relevant basis of valuing the relevant works for the purposes of this issue.
20. For the purposes of resolving the question of the value of the claim for specific performance, the open market valuation is not the relevant valuation in my judgment, it is valuation of the work being carried out by the Defendant itself, and so it seems to me that the approach to the question of valuation taken by the Defendant’s surveyor in the joint report is the more appropriate basis.
21. Also, the parties appear to have implicitly accepted that the Defendant’s surveyor had more accurately identified the nature and extent of the relevant works required to be carried out because it was only those works that had been identified by the Defendant’s surveyor which came to be carried out, and those works were carried out to the satisfaction of the Claimant, such that once those works had been completed, there subsisted no longer any claim for specific performance.
22. It seems to me, therefore, that the cost of the repairs to the relevant premises was not more than £1,000. In fact, it seems to me, on the balance of probabilities, it was significantly less, and on that basis, on issue 1, were the court looking at the question of to which track this claim would have been allocated by reference solely to the value of repairs, it would have been allocated to the small claims track, and so again for the purposes of issue 1 the court
would restrict, applying the overriding objective, the costs payable to costs that would have been allowed on the small claims track, which is the track to which the claim would have been allocated if allocation had taken place for the purposes of 46.13(3).
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