I, PETER SEWARD LASKEY of 2 Duke Street St.James', London SW1Y 6BJ, solicitor will say as follows:-

1. I am a partner at Amhurst Brown Colombotti and have acted for the Claimant since June 2001. I make this statement in support of my client's application dated 23 December 2002 for an Order that the interim costs order of Mr Justice Gray herein dated 5 May 2000 be discharged or stayed.

The assessment of the First Defendant's costs.

2. Mr Irving has made a statement dated 23 December 2002 in support of his application in which he refers to the status of the costs order made in the First Defendant's favour by the Court of Appeal in July last year. The position in relation to that order is as follows:

a. A stay of the Order that Mr Irving should pay £150,000 on account of the First Defendants' costs of the trial had been ordered pending Mr Irving's appeal against the substantive judgment of Mr Justice Gray in Mr Irving's libel action against the two defendants. The substantive appeal was heard in June 2001 and judgment dismissing the appeal was delivered in July 2001. The above stay of execution of the interim payment order was also lifted.

b. After judgment had been handed down Mr Richard Rampton QC on the First Defendant's behalf applied for and was granted a six month extension of time for the commencement of detailed assessment proceedings in respect of the First Defendant's costs of the trial and the appeal. This application was made on the basis that the time required for this task would be very significant given the complexity of the factual issues involved, the length of the trial and the volume of work and papers involved. The Court of Appeal acceded to that application. The time for submitting a bill to the Supreme Court Costs Office (SCCO) for detailed assessment therefore expired on 19 April 2002 -- that is, nine months after the Court of Appeal judgment was handed down.

c. Attached to this statement is a bundle of correspondence passing between my firm and Davenport Lyons (on the First Defendant's behalf). As part of the correspondence leading up to the hearing of Mr Irving's appeal against the Bankruptcy Order my firm wrote to Davenport Lyons on 17 May 2002 asking what steps had been taken to progress the detailed assessment. An exchange of letters ensued in which my firm pressed Davenport Lyons to clarify what steps, if any, they had taken to prepare the bill for assessment, and Davenport Lyons resolutely refused to answer that question, latterly saying that it should be addressed after the appeal hearing. We wrote again after the appeal hearing repeating the question, but I can find no record of a reply in our files.

d. I can confirm that this firm has not received any notification from the SCCO of the filing of any papers by the First Defendant, or service of any draft bills or notices of commencement of assessment proceedings.

3. In those circumstances it appears highly likely that no assessment has been commenced, and that neither the First Defendant nor Davenport Lyons (nor costs draftsmen instructed on the First Defendant's behalf) have taken any steps to prepare bills for assessment.

4. In contrast, it appears that some quantification exercise has been undertaken for the purposes of preparing the proof of debt submitted on the First Defendant's behalf. Neither Mr Irving nor my firm have been provided with copies of the proof of debt, and it is therefore difficult to comment on it, save to say that the only quantified and enforceable claim which the First Defendant has is for £150,000. The entire balance of the claim which appears to have been submitted -- which has increased since the Court of Appeal hearing from £2m to £2.6m -- is at best contingent, and given the observations of Gray J. in May 2000 (referred to in Mr Irving's statement) its true quantum must be open to serious doubt.

The hearing before Peter Smith J and the witness statement of Kevin Bays.

5. As will be apparent from the skeleton argument filed in support of this application, one of the fundamental bases on which it is founded is the information provided to Mr Justice Peter Smith on the hearing of Mr Irving's appeal against the bankruptcy Order. I was present throughout the hearing of that appeal, and believe that it would be of assistance if I explained how it came about that the First Defendant produced the statement by Mr Bays, the partner at Davenport Lyons having the conduct of the libel proceedings for the First Defendant.

6. It will be seen from the skeleton argument filed on Mr Irving's behalf in support of the appeal before Mr Justice Peter Smith -- a copy of which is at exhibit PSL 2 to this statement -- that one of the principal submissions made was that there was prima facie evidence of maintenance, in that the First Defendant had not paid their own costs, but that these had been paid either by their parent company, or their parent company's insurers. It was submitted that until all the relevant evidence on that issue had been disclosed, and made available to the court, it had been premature of the Deputy Registrar to make a bankruptcy order, and that the First Defendant's apparent unwillingness to clarify the position previously suggested that they had something to hide.

7. In the course of submissions this point was repeated, and the Learned Judge invited the First Defendants' to deal with it by means of a written statement. A copy of the statement made by Mr Bays is attached at PSL 3. It will be noted that the second half of paragraph 2 and the whole of paragraph 3 of the statement are written in a different pen. This arose because a draft of the statement, excluding those sections, was first passed to Adrian Davies, counsel for Mr Irving, for his comments. Mr Davies observed that the statement should but did not say who had paid the bills -- as opposed to whether the First Defendant was primarily liable to do so. It was only in response to that comment that the extra wording was added, revealing for the first time that, as had always been suspected, the First Defendant's insurers had, in effect, paid all the bills (since the First Defendant has presumably claimed back the VAT which they themselves paid).

8. I confirm that the contents of this statement are true.

Dated

Amhurst Brown Colombotti

2 Duke Street St James'

London

SW1Y 6BJ

 

Ref: PSL/1DI009/30525

 

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