PROVING THINGS 227: FAILURE TO PROVE A DEBT CLAIM: “THE PROOF REQUIRED TO DEMONSTRATE THAT THE CLAIMANT IS ENTITLED TO THE SUMS WHICH IT CLAIMS IS SADLY LACKING”

The judgment of Mr Justice Turner in Emery Planning Partnership Ltd v Bevan [2022] EWHC 494 (QB) illustrates a failure by a claimant to prove a debt claim.  It is (yet another) object lesson that facts and evidence are needed to prove a claim.  The claimant failed to prove the sums were owing. The judge also rejected the claimant’s argument that the action should have been adjourned to allow the court to assess damages once issues of liability had been determined.

“… the proof required to demonstrate that the claimant is entitled to the sums which it claims in this case is sadly lacking. I am not persuaded on the balance of probabilities that the amounts claimed are due because I simply have no real idea as to how these figures are calculated and made up.”

THE CASE

The claimant sued on invoices for work done in relation to a planning issue. The defendant denied that the money was owing counterclaimed alleging breach of duty, they.  The judge dismissed the counterclaim. However the judge found that the claimant had not produced evidence to prove the quantum of its claim. The claimant appealed. The appeal was largely unsuccessful, the judge allowing one item for counsel’s fees for which evidence had been provided in the bundle.

THE JUDGMENT AT FIRST INSTANCE

“28. The claimant’s entitlement to the amount which it claims depends upon proving who did what work and when, whether or not there has been uplift and the circumstances which justify the claim (if any) to such uplift. As I have already indicated, it seems to me that providing adequate detail of these matters is especially important where there has been such a very significant increase in costs.

29. The claimant apparently has a record of who did what work and when but it has not disclosed it. I derive that finding from the evidence of Mr Gascoigne. It is clear from the terms of the defence itself that Mr Bevan required a proper breakdown of the fees but none was ever provided.

30. In my judgment, the proof required to demonstrate that the claimant is entitled to the sums which it claims in this case is sadly lacking. I am not persuaded on the balance of probabilities that the amounts claimed are due because I simply have no real idea as to how these figures are calculated and made up.”

THE CLAIMANT’S (LARGELY) UNSUCCESSFUL APPEAL

The trial judges decision was upheld by Mr Justice Turner on appeal.

1. 1. The claimant was unable to persuade the judge that, bearing in mind the defendant’s failure to articulate and give particulars of what level of further proof he required and his failure either to plead or argue at trial more specifically the issues he took regarding the quantification of the claim, the defendant ought not to have been required to descend into any further evidential detail.

1. 1. I find that the Judge, with one exception, was entitled to take the view he did as to the steps which the claimant ought to have taken in order to prove the quantum of its claim. The exception relates to a fee note from counsel in the sum of £1,650 dated 22 November 2016. The Judge wrongly observed in paragraph 33 of his judgment that “none of the fee notes relevant to counsel’s fees appears in the bundle before me.” However, that particular fee note was in the bundle and the Judge’s attention had been drawn to it in counsel’s closing submissions. Since no issue had been taken by the defendant as to the quality of counsel’s work and the Judge had found against the defendant on all other challenges to his liability to pay such of counsel’s fees as had been proved, I consider that the claimant was entitled to judgment in respect of this fee note together with interest thereon.

1. I do not, however, consider that the judge was wrong to find that the remainder of the claims in respect of counsel’s fees had not been proved. No fee notes relating to such disbursements had found their way into the trial bundle. These would have been expected to have provided a break down of the work to which the claimed fees related and how they had been calculated.

MORE GENERAL COMMENTARY

1. 1. In granting permission, Fordham J found it “a little odd that no commentary or authority has been identified which is said to assist the Court on what proof is, in principle, needed in an invoices case based on contract terms involving hours and rates and levels, given CPR 16.5(4). If there is any such assistance available, whether in support of or adverse to the defendant. I would expect this to be addressed for the appeal hearing.”

1. 1. Neither side was able to assist me further on this point.

1. 1. There are, perhaps, a number of reasons for this dearth of authority. Not least of these is that in cases where the claimant perceives no substantive challenge to quantum and the defendant merely defaults to putting the claimant to proof by the operation of CPR 16.5(4) or otherwise then the issue is often raised at an early stage by way of an application for summary judgment and not at trial. In these circumstances, if the claimant’s evidence falls short of proving quantum then the issue can, if appropriate, be postponed to a determination on a later date.

1. 1. An example can be found in the case of Devonshires Solicitors LLP v Khaled Elbishlawi, Lam Developments Ltd [2021] EWHC 173 (Comm). In that case, a summary judgment application had been made relation to a number of invoices. Some had been fully particularised and broken down whereas other had not. The Court held:

“27. In the present case, it is apparent on the material before the court that detailed breakdowns, including of time spent, have been provided in relation to invoices Nos. 263739 and 253173. No specific points have been taken in relation to particular items on those bills being excessive. In the circumstances, I consider that there should be summary judgment for the amounts claimed in those invoices…

28. In relation to the other invoices, it is not clear on this application as to exactly how much detail has been supplied. I have not been shown details of time spent in relation to those invoices. In the circumstances, I consider that the position as to those invoices is effectively the same as that for the bill considered in Turner v Palomo, and that the order should be substantially the same as was made in that case, namely that there should be summary judgment for a sum to be determined on a detailed assessment to be carried out by a costs judge. Therefore there is such judgment against LAM in respect of invoices 249442, 251328 and 252592, and against Mr Elbishlawi in respect of invoice 267076.”

1. 1. It is in this context that I deal with a further ground of appeal before me to the effect that the Judge ought to have entered judgment in this case for a sum to be determined. This solution would have been similar to that adopted in Devonshires Solicitors although neither side relied upon this authority before me.

1. 1. The defendant argued that such an approach would not have been available to the Court as a matter of law. I reject this proposition. The Court’s case management powers were sufficiently flexible to allow for this course to have been taken providing, of course, that it was otherwise considered to be appropriate.

1. 1. Nevertheless, I am not satisfied that this ground of appeal is made out.

1. 1. The transcript reveals that it became entirely obvious that the Judge was very concerned about the apparent absence of documentary or other proof of the quantum of the claim as the claimant’s counsel’s submissions to the court were developed.

1. 1. He intervened to say:

“Well, it’s a matter for you but, at the moment, I’ve looked through the disclosure list and I’ll tell you what’s concerning me. There are two components of your claim. One is Mr Hunter’s fees and I’ve explained to you what my concerns are about that. The second is your client’s own fees, which, as I understand it, depend on a sliding scale. The contract provides that the fees should be subject to the sliding scale depending on who’s doing the work and there may be additional fees if work is done urgently. So, I have absolutely no idea how the figure which you claim is made up. We don’t know how many hours each person spent. We don’t know when it was done, whether additional fees were claimed for urgency, any of that, do we? Again, those aren’t in the disclosure list as far as I can see.”

1. 1. After this judicial intervention, counsel was given the opportunity to take further instructions on the matter over a period of half an hour before the hearing resumed. Accordingly, the claimant had the chance then to argue before the Judge that if he were not satisfied that the case on quantum had been made out then he should postpone the determination of the issue until a later date with whatever costs consequences might flow from taking such a course. However, no such application was made and counsel’s further submissions continued to be limited to contending that the burden of proof had been discharged on the evidential material already before the Court.

1. 1. Of course, the Court’s case management powers enable it to act upon its own initiative but a party seeking to argue on appeal that the Judge below ought to have taken a course which had not been advanced by that party will often face an uphill struggle. Indeed, tactical considerations may have militated against providing the Judge with an alternative approach which may have been seen to have weakened the claimant’s central point on the adequacy of the evidence already provided and expose him to the risk of additional delay and costs.

1. 1. Had any such argument been raised, it is likely that the defendant would have opposed the suggestion and the issue could have been determined there and then taking into account all of the competing factors rather than, for the first time, on appeal.

1. 1. Furthermore, the decision as to whether or not to postpone the assessment of damages would have been one of case management involving the exercise of a broad discretion. It is not, therefore, for the appellate court to substitute its own view for that which may have been reached by the Judge below but to assess whether the exercise of that discretion would have fallen outside the broad parameters of what a reasonable court could have decided. I am not satisfied that in the circumstances of this case that the Judge, if requested so to do, would have been obliged to give the claimant a second bite of the cherry particularly bearing in mind that the overriding objective requires the court to take into account the desirability of proceeding expeditiously, saving expense and allotting to the proceedings a proportionate share of the court’s resources. In this context, a court may be more likely to be attracted to taking the course of postponing the assessment of damages at the stage of a summary judgment application than where the matter had come to trial.

1. 1. I ought to point out that the nature and extent of the evidence which may be sufficient to discharge the burden of proof in any given debt claim will vary depending on the circumstances of the case and my observations in this judgment should not be taken as seeking to establish any principle of more general application. Each case will depend upon its own facts.

CONCLUSION

1. It follows that, save for the sum of £1,650 evidenced in counsel’s fee note to be found in the trial bundle in respect of which I give judgment together with interest, this appeal is dismissed. The parties are invited to draft an order reflecting my findings and have liberty to make any applications for ancillary orders on paper.