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Firstly R0b, thank you so much for your help with this. This is what I have come up with after going through all emails, etc so I would appreciate any glance over it before I send it to the solicitor.
Dear xxx,
I realise that my understanding of CPR 27.14(g)(2) was incorrect and as such, I have, this weekend sought advice with regards your accusation of unreasonable conduct Please find below my response.
I’m sure you will be familiar with the Court of Appeal case Dammermann v Lanyon Bowdler LLP [2017] EWCA Civ 269 where the Court provided guidance on the meaning of 'unreasonableness'. Specifically, the Court referred to Ridehalgh v Horsefield [1994] EWCA Civ 40 where the following was said:
"conduct cannot be described as unreasonable simply because it leads in the event to an unsuccessful result or because other more cautious legal representatives would have acted differently. The acid test is whether the conduct permits of a reasonable explanation. If so, the course adopted may be regarded as optimistic and as reflecting in a practitioner's judgment, but it is not unreasonable"
We entered into numerous communications with your client before any proceedings were brought against us, where we specifically outlined that we believed payment had been made and even sent evidence to your client of the same in the form of a printout of our online banking transactions. We then requested confirmation of your clients bank account details on 17th December 2019 and advised that we were seeking to make an additional payment as to clear our account balance in lieu of an investigation into the original payment. This request was not responded to until Wednesday 8th January 2020 and we then received the court claim on Tuesday 14th January 2020 (4 working days later) which obviously increased the amount being claimed and so we felt it necessary to defend our position. We were closed over Christmas until 13th January 2020 so did not have the opportunity to make the second payment offered. Proof of the original payment (in the form of a print out of our bank statement was then sent to your colleague, xxx on 14th January 2020).
We then spent a considerable amount of time and effort in communicating with your colleague, xxx, between 14th January 2020 and 11th February 2020, reiterating our offer to make an additional payment of the original invoice amount but this was continuously rejected by your client as they had now incurred the costs of the court claim.
As such, we not only made it clear to your client that we did not consider to be in breach of contract as we believed the invoice had been paid on instructions to our bank, but we also offered to make an additional payment as a gesture of goodwill, but was not, unfortunately given the opportunity to make this payment as the court claim was filed only a short time after your client sent confirmation of their bank details and as we were closed for our Christmas break, the court claim arrived before we saw the email from your client.
It is, of course, trite law that the general rule in civil cases is that he who asserts must prove. Quite simply, your client, upon receiving our denial of liability, could have presented us with further evidence that the invoice had not been paid prior to commencing proceedings. Instead, your client chose to pursue proceedings and to this date had not offered any evidence that the monies had not been received, namely a bank statement, and as such, we have made our payment in settlement of the claim purely to close the matter in an effort to enable us to purchase new stock from your client via advance payment terms. Our payment to your client has therefore been made on trust that the monies have not been received, as has previously been mentioned, no evidence of your clients claim has been forthcoming.
We have not only responded to all of your contact in a timely manner, we have chased responses when we’ve not heard back from you, and have increased our offer from monthly instalments to full payment of the claim in an effort to settle this matter once and for all and subsequently, we have since made payment in full of the amount claimed by your client. As far as we are concerned, the claim has been settled and we have informed the court of the same.
We reject your suggestion that our conduct has been unreasonable at all. On the contrary, we consider your client issued proceedings prematurely and your client could, and should, have provided a copy of its bank statement at the pre-action stage, and allowed us the opportunity to make the second payment we offered after having received the confirmation of bank details (for the record, I don’t believe less than 4 working days is a reasonable amount of time). Had it done so, we believe that the matter could have been resolved without the need for legal proceedings and your client would not have incurred the costs it is seeking to recover. Nevertheless, your client must have been alert to the fact that the sums in dispute meant that the claim would likely be allocated to the small claims track and therefore costs recovery is limited.
Accordingly, we are of the view that in all the circumstances, we have been reasonable in defending the claim. In any event, your client acted irrationally and prematurely in issuing legal proceedings which has contributed to your client's legal costs that could have been avoided.
With the above being said, I would like to reiterate that until this unfortunate incident, we had a good relationship with your client, and we would very much like to rebuild our relationship with them and to continue to use their products and, however should your client wish to pursue this course of action then we will robustly defend any claim for costs pursuant to CPR 27.14(g).
Given that your client's claim is now settled, any request for costs will require an application to be made to the court so as to enable us an opportunity to file any opposing statements.
I realise that my understanding of CPR 27.14(g)(2) was incorrect and as such, I have, this weekend sought advice with regards your accusation of unreasonable conduct Please find below my response.
I’m sure you will be familiar with the Court of Appeal case Dammermann v Lanyon Bowdler LLP [2017] EWCA Civ 269 where the Court provided guidance on the meaning of 'unreasonableness'. Specifically, the Court referred to Ridehalgh v Horsefield [1994] EWCA Civ 40 where the following was said:
"conduct cannot be described as unreasonable simply because it leads in the event to an unsuccessful result or because other more cautious legal representatives would have acted differently. The acid test is whether the conduct permits of a reasonable explanation. If so, the course adopted may be regarded as optimistic and as reflecting in a practitioner's judgment, but it is not unreasonable"
We entered into numerous communications with your client before any proceedings were brought against us, where we specifically outlined that we believed payment had been made and even sent evidence to your client of the same in the form of a printout of our online banking transactions. We then requested confirmation of your clients bank account details on 17th December 2019 and advised that we were seeking to make an additional payment as to clear our account balance in lieu of an investigation into the original payment. This request was not responded to until Wednesday 8th January 2020 and we then received the court claim on Tuesday 14th January 2020 (4 working days later) which obviously increased the amount being claimed and so we felt it necessary to defend our position. We were closed over Christmas until 13th January 2020 so did not have the opportunity to make the second payment offered. Proof of the original payment (in the form of a print out of our bank statement was then sent to your colleague, xxx on 14th January 2020).
We then spent a considerable amount of time and effort in communicating with your colleague, xxx, between 14th January 2020 and 11th February 2020, reiterating our offer to make an additional payment of the original invoice amount but this was continuously rejected by your client as they had now incurred the costs of the court claim.
As such, we not only made it clear to your client that we did not consider to be in breach of contract as we believed the invoice had been paid on instructions to our bank, but we also offered to make an additional payment as a gesture of goodwill, but was not, unfortunately given the opportunity to make this payment as the court claim was filed only a short time after your client sent confirmation of their bank details and as we were closed for our Christmas break, the court claim arrived before we saw the email from your client.
It is, of course, trite law that the general rule in civil cases is that he who asserts must prove. Quite simply, your client, upon receiving our denial of liability, could have presented us with further evidence that the invoice had not been paid prior to commencing proceedings. Instead, your client chose to pursue proceedings and to this date had not offered any evidence that the monies had not been received, namely a bank statement, and as such, we have made our payment in settlement of the claim purely to close the matter in an effort to enable us to purchase new stock from your client via advance payment terms. Our payment to your client has therefore been made on trust that the monies have not been received, as has previously been mentioned, no evidence of your clients claim has been forthcoming.
We have not only responded to all of your contact in a timely manner, we have chased responses when we’ve not heard back from you, and have increased our offer from monthly instalments to full payment of the claim in an effort to settle this matter once and for all and subsequently, we have since made payment in full of the amount claimed by your client. As far as we are concerned, the claim has been settled and we have informed the court of the same.
We reject your suggestion that our conduct has been unreasonable at all. On the contrary, we consider your client issued proceedings prematurely and your client could, and should, have provided a copy of its bank statement at the pre-action stage, and allowed us the opportunity to make the second payment we offered after having received the confirmation of bank details (for the record, I don’t believe less than 4 working days is a reasonable amount of time). Had it done so, we believe that the matter could have been resolved without the need for legal proceedings and your client would not have incurred the costs it is seeking to recover. Nevertheless, your client must have been alert to the fact that the sums in dispute meant that the claim would likely be allocated to the small claims track and therefore costs recovery is limited.
Accordingly, we are of the view that in all the circumstances, we have been reasonable in defending the claim. In any event, your client acted irrationally and prematurely in issuing legal proceedings which has contributed to your client's legal costs that could have been avoided.
With the above being said, I would like to reiterate that until this unfortunate incident, we had a good relationship with your client, and we would very much like to rebuild our relationship with them and to continue to use their products and, however should your client wish to pursue this course of action then we will robustly defend any claim for costs pursuant to CPR 27.14(g).
Given that your client's claim is now settled, any request for costs will require an application to be made to the court so as to enable us an opportunity to file any opposing statements.
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