Rokvic v Peacock [2014] EWHC 3729 (TCC)

Published 19 December 2014

Akenhead J held that a claimant was entitled to its costs incurred in adjudication enforcement proceedings, even though those proceedings had been discontinued.

Executive Summary

This matter is an example of how the court exercises its discretion on costs following discontinuance. The Court found in favour of a successful party in adjudication, who had been forced to issue enforcement proceedings to recover the sums owed.

The Facts

Miss Rokvic employed Peacock to install mechanical electrical security and air conditioning systems at a property in London W14. A series of 3 adjudications were subsequently concluded in relation to these works.

Peacock commenced the first adjudication and a sum of £64,632.61 was found due to it, albeit on the basis that this sum did not take into account the set-off and counterclaims that had been raised by Miss Rokvic. Shortly after the first decision Miss Rokvic commenced two further adjudications in relation to those claims; a second adjudication regarding alleged defective works and a third in relation to delays. Decisions in the second and third adjudications were issued on 18 August 2014 in favour of Miss Rokvic; £138,596.29 plus interest was awarded in respect of defects, and £10,000 in damages for delays. Payments by Peacock in respect of the adjudicator's fees were also required by both decisions. Therefore, excluding matters of interest and adjudicators' fees, following all 3 adjudications a net amount of £107,183.71 had been found to be due to Miss Rokvic.

Peacock subsequently made a payment on account to Miss Rokvic of £63,291.34, but refused to pay the remaining balance awarded on the basis that they did not consider the second decision to be enforceable. Consequently Miss Rokvic commenced enforcement proceedings in relation to the second and third adjudications.

Following commencement of the court proceedings the parties continued to engage in discussions regarding an overall settlement of the dispute (encompassing the 3 adjudications). This culminated in a "without prejudice save as to costs" offer by Miss Rokvic to discontinue the enforcement proceedings if Peacock made a further payment to her of £43,892.37, this being the balance of the net amount Miss Rokvic was due following the 3 adjudications (£107,183.71 less the payment on account). The offer contained no mention as to the costs of the proceedings.

The offer was accepted and Peacock made the required payment. However Miss Rokvic then claimed that she was entitled to recover her costs of the court proceedings, in addition. The parties could not reach agreement and so the matter of costs came before the Court to decide.

Summary

Akenhead J awarded Miss Rokvic her costs, summarily assessed at £5,500.

The presumption under CPR Part 38 is that any Claimant who discontinues an action, including adjudication enforcement proceedings, will be liable for the Defendant's costs incurred up to the date of discontinuance (as well as their own costs).

Akenhead J held that this was the presumption to be applied where proceedings are discontinued, but that this presumption was rebuttable. Having reviewed the details of the settlement, Akenhead J decided that the default rule should not apply in circumstances such as these where the Claimant had succeeded to recover the full amount it was claiming. Discontinuance here was not due to weaknesses in Miss Rokvic's case against Peacock (as is often the case), but it was simply a term of the settlement agreement, through which Miss Rokvic had recovered the full sum.

It should be noted that even though Miss Rokvic was found to be entitled to recover her costs, she failed to recover the majority of the costs claimed on summary assessment. Miss Rokvic claimed costs of over £17,000, however Akenhead J only awarded the significantly reduced figure of £5,500 on the basis that this sum was more "appropriate" and reasonable for a Defendant to have to bear at an early stage in proceedings.