[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Phillips & Co (a firm) v Bath Housing Co-Operative Ltd [2012] EWCA Civ 1591 (11 December 2012) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2012/1591.html Cite as: [2013] 1 Costs LR 163, [2013] 1 WLR 1479, [2012] EWCA Civ 1591, [2012] WLR(D) 372, [2013] 2 All ER 475, [2013] 1 EG 48, [2013] BPIR 102, [2013] CP Rep 12

[New search] [Printable RTF version] [View ICLR summary: [2012] WLR(D) 372] [Buy ICLR report: [2013] 1 WLR 1479] [Help]

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE SALISBURY COUNTY COURT
HIS HONOUR JUDGE HUGHES Q.C.

		Royal Courts of Justice Strand, London, WC2A 2LL
		11 December 2012

Lord Justice Lloyd:

Introduction and summary

1. The appellant in this case, Bath Housing Co-operative Ltd (the "Client"), needed to obtain possession of a flat in Bath from one of its tenants. It retained the respondent, Phillips & Co, (the "Solicitors") to act for it for this purpose. Their task was complete by the end of 2003. The Solicitors' fees had not been agreed, so they were entitled to claim a reasonable amount for the work done. It was for them to put forward their claim, by way of a bill, and the Client was entitled to have this assessed by the court. If it was not paid the Solicitors had six years from the end of 2003 in which to bring proceedings to claim payment, but they did not do so until more than six years had elapsed. In the meantime, they wrote to the Client in September 2004 to tell it what amount they claimed was payable to them by way of their costs. The Client replied by a letter dated 20 September 2004, protesting about the amount claimed. Nothing relevant to this appeal happened after that for a long time.
2. When the Solicitors did bring proceedings for payment, the Client relied, among other defences, on the lapse of time, under the Limitation Act 1980. The Solicitors' response was to rely on the Client's letter as an acknowledgment, which they said had the effect that the six year period started again. If that is right, the claim was not out of time. This gave rise to two questions: (1) is the case within the terms of the Limitation Act 1980 about acknowledgments and (2) if it is, was the Client's letter an acknowledgment for this purpose? The judge below said that the answer was yes to both questions. For reasons which I set out below, I agree with him.
3. The Solicitors issued these proceedings in the Salisbury County Court on 8 September 2010 claiming some £52,000 which they said was due by way of professional fees and interest. Relying on the limitation defence, more than six years having passed since the work was done, and in the absence of a Reply, the Client applied for summary judgment. The Solicitors said that the Client's letter dated 20 September 2004 was an acknowledgment under section 29(5) of the Limitation Act 1980 so that the six year period had started running again. The Claim Form was issued within six years of the date of that letter.
4. The District Judge held that the Client's letter was not an acknowledgment, and therefore dismissed the claim. On appeal, His Honour Judge Hughes Q.C. held that the claim fell within the scope of section 29(5), and that the letter was an acknowledgment, so he allowed the appeal and left the claim to proceed as regards the other defences. His order was made on 23 August 2011. Sir Richard Buxton gave permission to appeal on both points.
5. Thus we have to decide, first, whether a solicitors' claim for costs, billed but not yet fixed by assessment or agreement, is a claim such as falls within the terms of section 29(5) of the Limitation Act 1980 and secondly, if it does, whether the letter was an acknowledgment of that claim for the purposes of the section.
6. There is authority in the High Court in favour of the judge's reading of section 29(5), which he followed, as he had to. The point has never been considered in the Court of Appeal, despite the provision having been in the relevant form since the Limitation Act 1939. The Law Commission made proposals for the reform of this and other provisions of the Limitation Act 1980 in its report No. 270 in 2001, to which we were referred, but nothing came of those proposals. The enactment of the 1939 Act was preceded by a Report of the Law Revision Committee (its Fifth Interim Report, 1936, Cmd. 5334) but nothing in that report touched upon this particular provision. We are therefore left guessing as to the source and the meaning of the statutory text. Somewhat unexpectedly, in 2012, it was submitted to us that the old forms of action were of assistance on this, for reasons which I will explain.
7. The Client's letter dated 20 September 2004 was in the following terms:

"We received your letter and associated figures dated 10^th September on 16^th September. They were brought to the attention of the Ordinary General Meeting of Bath Housing Co-operative held that evening.

The members were astonished and deeply shocked by the level of the costs claimed: they are in order of 3-4 times higher than was anticipated and budgeted for.

Throughout the course of the case, we repeatedly requested your estimates of the costs incurred to date. However, no written notification was received.

The co-op is currently under intense pressure in terms of losing a significant tranche of its housing stock. I enclose a copy of an e-mail from Councillor Darracott of B&NES which illustrates this.

As you know, Bath Housing Co-operative is a small, voluntary organisation run by its un-paid members in their spare time. We simply do not have the capacity to deal both with your invoice and these pressures from B&NES and Solon at the same time and we are already on track with the latter.

Accordingly, we have no option but to put your invoice to one side until mid to late October when (hopefully) we shall have more time to deal with it in the detail which it warrants."

8. Section 29(5) is as follows:

"(5) Subject to subsection (6) below, where any right of action has accrued to recover

(a) any debt or other liquidated pecuniary claim; or

(b) any claim to the personal estate of a deceased person or to any share or interest in any such estate;

and the person liable or accountable for the claim acknowledges the claim or makes any payment in respect of it the right shall be treated as having accrued on and not before the date of the acknowledgment or payment."

9. Subsection (6) is of no relevance to this case. Under section 30 the acknowledgment must be in writing and signed by the person making it, and must be made to the person whose claim is being acknowledged. Section 23(4) of the 1939 Act was in the same terms as the present section 29(5).

Acknowledgments: the legislative history

10. In the Limitation Act 1623 no provision was made for time to start again by virtue of an acknowledgment or part payment. Judges mitigated the effect of the statute by treating an acknowledgment or part payment in the first six years as a promise to pay which revived the original action, by a process which Lord Sumner in Spencer v Hemmerde [1922] 1 AC 507 at 519 described as "the task of decorously disregarding an Act of Parliament".
11. Statutory recognition was given to this approach by section 1 of Lord Tenterden's Act, in 1828, in which, after referring to the 1623 Act, and its equivalent for Ireland, the provision continued as follows:

"and whereas various questions have arisen in actions founded on simple contract, as to the proof and effect of acknowledgments and promises offered in evidence for the purpose of taking cases out of the operation of the said enactments; and it is expedient to prevent such questions, and to make provision for giving effect to the said enactments and to the intention thereof: Be it therefore enacted ... that in actions of debt or upon the case grounded upon any simple contract no acknowledgment or promise by words only shall be deemed sufficient evidence of a new or continuing contract, whereby to take any case out of the operation of the said enactments or either of them, or to deprive any party of the benefit thereof, unless such acknowledgment or promise shall be made or contained by or in some writing to be signed by the party chargeable thereby."

12. The Mercantile Law Amendment Act 1856 extended the provision to acknowledgments signed by the agent of the relevant party.
13. The Limitation Act 1939 made the new provision as to acknowledgments which is now found in section 29(5) of the 1980 Act. Section 23(4) sets it out, removing the reference to a promise, and using, in place of the words (in 1828) "in actions of debt or upon the case grounded upon any simple contract", the words "any right of action … to recover any debt or other liquidated pecuniary claim".

The nature of the Solicitors' claim

14. The first issue on the appeal is therefore whether the Solicitors' claim was for "a debt or other liquidated pecuniary claim". For this purpose it is necessary to examine the nature of the claim. It is not said that there was any agreement as to the basis of the costs payable, which would be a contentious business agreement under section 59 of the Solicitors Act 1974. Accordingly, the Solicitors' entitlement to costs is to an amount which, if the Client sought an assessment of the bill, would be determined by a costs judge having regard to the skill, labour and responsibility involved in the work done: see section 66 of the 1974 Act. By comparison, if the work in question had been non-contentious business the solicitor would be entitled to "such sum as may be fair and reasonable to both solicitor and [client] having regard to all the circumstances of the case" and to a number of other matters specified in article 3 of the Solicitors' (Non-Contentious Business) Remuneration Order 1994 (in force at the relevant time, but now replaced). The solicitor puts forward his claim in a bill, but the client is entitled to require that the costs be assessed under section 70 of the Solicitors Act 1974. Even if the time limit for a request for an assessment has expired, the court may direct that an analogous process be carried out by a costs judge, if the solicitor sues the client for the amount of the costs and the client raises real disputes or queries as to the quantum of the bill. Thus, although the solicitor puts a figure on his own claim for costs, by the calculation set out in his bill, it is not for an ascertained sum until it has been fixed by agreement or by assessment.
15. Evans LJ said that a solicitor's claim for costs not fixed by agreement or assessment is not for a liquidated sum, in Turner & Co v O. Palomo S.A. [2000] 1 WLR 37. There a solicitor had sued his client on bills of costs where the time for calling for an assessment under the 1974 Act had expired. On the solicitor's application for summary judgment the court had ordered that the bills be referred to a costs judge for assessment. The solicitor in that case asserted an agreement that the time of the relevant fee-earner was to be paid for at a given hourly rate, and claimed that although, in principle, the number of hours charged for could be challenged, that would require a negligence claim, which had not been asserted. Evans LJ giving the judgment of the court said this at page 52:

"Mr Morgan submits that the legal basis for the solicitor's claim is found in section 15 of the Supply of Goods and Services Act 1982 in any case where a contract exists between the solicitor and client. The contract contains a statutory implied term 'that the party contracting with the supplier will pay a reasonable charge', and what is a reasonable charge is a question of fact. This has to be read, in the case of a solicitor, subject to the terms of the retainer in the particular case and subject also to the statutory provisions which give the solicitor, as well as the client, certain additional rights. But we do not see any difficulty in holding that the solicitor's claim is for a reasonable sum, whether by statute or at common law, and not for a liquidated sum. Again in accordance with general principles, the burden of proving that the sum is reasonable rests upon him. This is supported, if authority is needed, by the judgments in Re Park and Jones & Son v Whitehouse which I have quoted above."

Of course, that case was not concerned with the Limitation Act 1980.

16. The claim is likened to a quantum meruit claim in some of the cases. Thus, in Thomas Watts & Co (a firm) v Smith [1998] 2 Costs LR 59, at 73, Sir Richard Scott V-C said this:

"In my judgment, in a case such as this, where solicitors are applying for payment of their bill, the situation is analogous to one in which a plaintiff is applying for an unquantified sum which has to be quantified by a judicial process before judgment can be awarded for the appropriate amount. This is common in damages claims. Judgment for damages to be assessed is a very common form of order under an Order 14 application. Where a quantum merit for work done, the benefit of which has been obtained under a contract but where the contract sum has not been agreed, is claimed, there may be an order for judgment to be entered for the plaintiff with the quantum to be assessed. In my judgment that is the position of the plaintiffs claim in the present case. It is no doubt too late, having regard to the terms of section 70 of the Solicitors Act 1974, for Dr Smith to make an application for taxation. But if the court is to be asked to make an order for payment by Dr Smith, the client, of the amount claimed by the solicitors, a process of judicial assessment must, in my judgment, first take place."

17. On the other hand, the liability of the client is clearly one in debt rather than in damages. A quantum meruit liability is in the nature of a debt, even if it has not yet been quantified in a binding manner between the parties.
18. In Coburn v Colledge [1897] 1 QB 702 the solicitor's cause of action was held to accrue as soon as the work is complete. The Court of Appeal said that a writ could have been issued at that time, though non-delivery of a bill might be a defence. It was not a necessary element of the cause of action for the solicitor to allege and prove that a bill had been delivered. Lopes LJ said at page 708 that "the solicitor would have sued in indebitatus assumpsit or on a common money count for work and labour". Similarly, under section 69 of the 1974 Act, absent special circumstances mentioned in section 69(1), the solicitor cannot issue proceedings for recovery of the costs until the month has elapsed, but nevertheless the cause of action is complete before delivery of the bill.
19. What I draw from these cases is that a solicitor's claim for fees in circumstances such as this (leaving aside, therefore, cases of contentious or non-contentious business agreements) is a claim in debt (as opposed to damages) in the nature of a quantum meruit, but that it is not quantified unless and until it is either assessed by the court or agreed by the client or is the subject of a judgment (whether or not preceded by an assessment), and that the court's task of assessment is to be carried out by a judicial process by reference to the relevant legislative provisions.

What claims are within the scope of section 29(5)?

20. The statutory phrase speaks of "debt or other liquidated pecuniary claim". The proposition that it should be a pecuniary claim is not surprising or problematical.
21. The word "debt" can be used in a number of different senses. In terms of classification, a distinction is drawn between a claim in debt and a claim in damages. The distinction may be clear in terms of analysis, but it sometimes produces what seem to be odd distinctions in practice. For example whether a claim under a guarantee is in debt or in damages may depend on a close reading of the terms of the guarantee: see McGuinness v Norwich and Peterborough Building Society [2011] EWCA Civ 1286.
22. That distinction had to be addressed in that case because a bankruptcy petition must be based on a liability which is a debt for a liquidated sum: see Insolvency Act 1986 section 267(2)(a). In the case last mentioned it was held that the debtor's liability under the guarantee did create a debt, not merely a liability in damages.
23. Closer to the present case, Proudman J in Truex v Toll [2009] 1 WLR 2121, held that a solicitor's claim for costs, not fixed by agreement, assessment or judgment, was not a debt on which a bankruptcy petition could be founded. She referred to Thomas Watts & Co v Smith and to Turner & Co v O Palomo, and said this at paragraph 24:

"… it would seem to follow as a matter of principle that a claim for solicitors' fees not as yet judicially assessed or determined is not a claim for a liquidated sum which can be the subject of a bankruptcy petition under section 267 of the 1986 Act, even if the period for challenge under the 1974 Act has expired."

24. If the debtor in question were the subject of a bankruptcy order, the solicitor could prove for his claim as a bankruptcy debt under section 322 of the Insolvency Act 1986, but that is because "bankruptcy debt", for purposes of proof, is defined at section 382 as including "any debt or liability to which [the bankrupt] is subject at the commencement of the bankruptcy". For that purpose, therefore, distinctions between debt and damages, and between liquidated and unliquidated liabilities, are irrelevant.
25. There is therefore some scope for debate as to the width of the word "debt" in this context. As for the word "liquidated", I would take it that, in ordinary legal usage, this requires that the liability should be for an ascertained amount. Most liquidated claims would be for a debt. Obvious examples include the outstanding principal and unpaid interest (at a contractual rate) on a loan, and sums due by way of rent or hire, and the price of goods (if specified in the contract). Conventionally, unliquidated claims are normally in damages. Some damages claims, however, may be liquidated. A good example is a building contract which has a liquidated damages clause defining the builder's liability if the work is not complete by the stipulated finishing date.
26. In Dwr Cymru v Carmarthenshire County Council [2004] EWHC 2991 (TCC) Jackson J held that a claim for damages for negligence or nuisance could not come within the scope of section 29(5). At paragraph 49 he observed that, before 1939, the doctrine of acknowledgment only applied to claims in contract and that no claim in tort had ever been held to be within the provision. He also gave these further reasons:

"2. The phrase "liquidated claim" connotes a claim for a specific sum or, alternatively, for a sum which can be readily and precisely ascertained. None of the authorities reviewed in Part [4] of this judgment is inconsistent with this proposition. A claim for damages in tort is by definition not a liquidated claim. The assessment of damages in tort involves the application of a set of common law rules to the particular circumstances of the case. The application of those rules may be relatively straightforward in some instances, but that does not make the claim a liquidated one.

3. The global phrase "any debt or other liquidated pecuniary claim" suggests a sum which is due to be paid pursuant to some contractual or similar obligation. The words on their natural meaning do not connote damages or compensation which the law requires to be paid by someone who has acted in breach of an obligation or duty."

27. He went on to observe, at paragraph 51, that a claim for liquidated damages under a contract following, for example, delay by a builder would be within the provision, because the builder would be liable to pay "a specified and predetermined sum which has been calculated in accordance with a term of the contract". That is consistent with my comment above as to the scope of the phrase "liquidated pecuniary claim".
28. Jackson J's use of the phrase "claim for a specific sum or, alternatively, for a sum which can be readily and precisely ascertained" as giving the meaning of the word "liquidated" opens up the question at issue in the present case. Must the claim be for a specific sum, and if not, how far away may it be from being specific and still count as liquidated?
29. It is interesting (but no more than that) that when the Law Commission looked at this topic in the course of its work on limitation of actions, leading to its report in 2001, it took the existing law as extending to "claims for a specified amount". Its comment was that "there does not seem to be any reason in principle to distinguish between claims for specified amounts and claims for unspecified amounts": paragraph 3.148. Its draft Bill would have been in general terms on this point: "where a person against whom a cause of action subsists has acknowledged the cause of action": clause 27. However, nothing has come of that recommendation, or of any of the Commission's other recommendations on limitation of actions in that report.
30. As I mentioned earlier, the scope of section 29(5) has been addressed in the High Court in relation to claims of the kind with which this appeal is concerned. In Amantilla Ltd v Telefusion plc (1987) 9 Con LR 139 His Honour Judge John Davies Q.C. sitting on Official Referees' Business held that a builders' claim for a quantum meruit was a claim within section 29(5). He said this on the point:

"If the parties themselves cannot agree on what is a reasonable sum, the contractual obligation to pay such a sum provides a sufficiently certain and definitive datum to enable the court to ascertain its amount by calculation and circumstantial (or "extrinsic") evidence, in accordance with the terms of the contract and without any further agreement of the parties. Indeed, it would be remarkable for the law to impose such an obligation if it did not have those attributes.

A quantum meruit claim for a 'reasonable sum' lies in debt because it is for money due under a contract. It is a liquidated pecuniary claim because 'a reasonable sum' (or a 'reasonable price' or 'reasonable remuneration') is a sufficiently certain contractual description for its amount to be ascertainable in the way I have mentioned ... Such a claim is different in kind from its opposite, which is a claim for unliquidated damages. The former is a claim for a specific sum, namely a reasonable sum due under a contract; it is no less specific for being described in words rather than in figures, provided it is sufficiently defined to be ascertainable - which it is, as I have already explained. The task of the court, if it has to assess such a sum, is one of translating the words of the contract into figures in order to effectuate the intention of the parties. The nature of a claim for unliquidated damages is wholly different. The function of the court is not one of interpreting the contract but of deciding, in accordance with legal principles, what compensation, if any, should be paid to redress any harm done by its breach. It is for these elemental reasons that a quantum meruit claim is a liquidated pecuniary claim, whilst conversely a claim for unliquidated damages is not, and cannot be such, even though it be claimed at a definite figure."

31. In turn, Mr John Crowley Q.C., sitting as a Judge of the High Court in Byatt v Nash (28 June 2002), followed that decision and applied it to a solicitor's claim for fees. That case involved non-contentious work, but there is no difference in principle, as it seems to me, between contentious and non-contentious work for this purpose.
32. Judge Davies also referred to older authority, not on limitation but on a phrase somewhat similar to that which we find in section 29(5). In the Rules of the Supreme Court, as originally enacted, an application for summary judgment could only be made in limited circumstances. One of them was where the claim was made by a specially endorsed writ under Order 3 rule 6; that applied if the claim was only to recover "a debt or liquidated demand in money". In Lagos v Grunwaldt [1910] 1 KB 41 the Court of Appeal held that a claim by a foreign lawyer for professional charges for work done, endorsed on the writ as a claim for a given amount, was within that rule. Cozens-Hardy MR said succinctly that it was within the rule as "a liquidated demand for money, £1,469, or something which could have been claimed under the old indebitatus count". Farwell LJ went into the point at greater length, as follows, at 47-8:

"Two preliminary objections are taken. The first is that Order III., r. 6, does not apply, because this is not a debt or liquidated demand arising under a contract. It is a claim on contract for quantum meruit. In my opinion that is within the rule. I think the words "debt or liquidated demand" point to the old division of common law actions to be found in Bullen and Leake, 2nd ed., p. 28. The old indebitatus counts "which have from time to time been rendered more and more concise are designated with little difference of meaning by the terms indebitatus counts, money counts or common counts; the expression common counts or common indebitatus counts being often used to designate those of most frequent recurrence, viz., where the debt is for goods sold and delivered, goods bargained and sold, work done, money lent, money paid, money received, interest, and upon accounts stated; and the expression money counts being sometimes used to particularize those for money lent, money paid, and money received. The most appropriate name seems to be indebitatus counts." And the learned authors go on to say, "there were also formerly in use counts known as quantum meruit and quantum valebat counts, which were adopted where there was no fixed price for work done or goods sold, &c. These counts, however, have fallen into disuse, and have been superseded by the general application of the indebitatus counts." In my opinion that is the true view; everything that could be sued for under those counts comes within the description of debt or liquidated demand."

33. The claim for summary judgment would therefore have succeeded but for a defect in the evidence, the other ground relied on by the Defendant.
34. That decision also suggests that such a claim would have been regarded as within the scope of an acknowledgment under the 1623 Act and Lord Tenterden's Act, being an action of debt or upon the case grounded upon any simple contract. An indebitatus count was a claim on a simple contract, under the old forms of action.
35. If, therefore, a claim for a solicitor's bill, not yet fixed, would have been within the scope of an acknowledgment under the legislation as it stood before 1939, and since it was within the phrase "debt or liquidated demand in money" for the purposes of the Rules of the Supreme Court as they stood not only in 1910 but still in 1939, then it would not seem very surprising to find that it was a claim which was within the new provision in the 1939 Act, now replaced by section 29(5).
36. It is true that instances of apparently anomalous distinctions could be drawn, on this basis, as to how the provision would apply. Suppose a contract for the sale of goods without a specified price, so that a reasonable price was payable. If the purchaser took delivery but failed or refused to pay the price, the vendor's claim for the price would be within section 29(5) albeit not for a sum specified in the contract. If, however, the purchaser refused to accept the goods, the vendor's claim for damages would not be within the section, and it still would not be even if there was a price specified in the contract and a ready market existed for the goods such that the calculation of the damages would require no more than setting the market price at the completion date against the contract price.
37. It can be said, however, that anomalous distinctions often arise according to the nature of the demarcation line in question.
38. For the Client, Mr Crawford relied on the decision of Proudman J in Truex v Toll for the proposition that a claim such as that of the Solicitors in the present case is not for a liquidated debt, and on Turner & Co v O. Palomo to show that this proposition is not limited to the realm of insolvency. For the Solicitors Mr Burns contended that the position is clear from the Court of Appeal's decision in Lagos v Grunwaldt, and that the first instance decisions of Judge Davies and Mr Crowley are clear, consistent and logical. He also relied on words of Lord Brown of Eaton-under-Heywood in Bradford & Bingley plc v Rashid [2006] UKHL 37, [2006] 1 WLR 2066 at paragraph 60:

"Dungate v Dungate [1965] 1 WLR 1477 was to my mind correctly decided. Acknowledgments are not confined to admissions of debts which are indisputable as to quantum as well as liability."

39. It does not seem to me that the latter point carries any weight in the present context. Dungate v Dungate was about a liability for principal and interest on several loans; there was no doubt that the claims for these were debts within the then section 23(4) and would be within section 29(5) now. The issue was whether any, and if so which, of the loans had been the subject of an acknowledgment. There were likely to be disputes as to quantum, turning on how much had been paid. Lord Brown's statement says nothing about the nature of the liability that may come within the provision, because liability under a loan clearly would do so.
40. The cases about insolvency are different. As to these, it seems to me that the statutory context, namely a rule as to what are the liabilities upon which a bankruptcy petition can be founded, could well be expected to impose stricter and more specific requirements than a provision about extending the running of time in the case of an acknowledged liability. As I have mentioned above, liabilities in damages can be the subject of proof in bankruptcy even if not yet liquidated, in the sense of having been quantified in a binding manner. It is not surprising that the rule as to what sort of liability can be the basis of a petition should require that a figure be specified as the amount of the liability, both because it must exceed the threshold amount for a petition (currently £750) and because the debtor must be able to show whether, and if so to what extent, it is the subject of a genuine dispute, which might be as to quantum or as to liability, or both.
41. As regards the comment of Evans LJ in Turner & Co v O Palomo, that the claim is for a reasonable sum but not a liquidated sum, that is to be understood in the relevant context, namely the solicitor's entitlement to judgment, whether for a given amount or for an amount to be assessed. In this context it does not seem to me that his use of the phrase "a liquidated sum" has any particular bearing on the interpretation of section 29(5). The context is too different.
42. It seems to me, moreover, that there is force in Mr Burns' point that, when one is considering something which may count as an acknowledgment, this may arise at quite an early stage in the history of dealings between the parties about the claim. In the nature of things, since limitation is an issue, by the time the question comes to be decided six or more years will have run from the date when the cause of action accrued. In that context it seems to me that it would be understandable that the legislation should not require the same precision and certainty as it does for presentation of a bankruptcy petition or for consideration of what a claimant is entitled to by way of summary judgment. A claim, after all, is unilateral, and something which is to be relied on as an acknowledgment is likely to come into being relatively early on. It would be understandable if things occurring at that stage could be looked at in a more general way than is appropriate or necessary once one comes to a judicial determination of rights, or, as in the case of bankruptcy, the assertion of remedies against the proved or alleged debtor.
43. Mr Crawford argued, with some force, that, if and to the extent that Jackson J's obiter comment in Dwr Cymru is valid, namely that, if the claim is not for a specific sum, it should be "for a sum which can be readily and precisely ascertained", that is not a proposition which can readily be satisfied as regards a solicitor's claim for costs in circumstances such as the present, whether the costs are for contentious or non-contentious work. The claim can be precisely ascertained, but only (if disputed) by going through the process of judicial assessment, which is not necessarily a process any more "readily" carried out than a judicial assessment of damages for tort or for breach of contract. It may not necessarily be "complex and controversial", as the assessment of damages in tort would have been in Dwr Cymru (see Jackson J at paragraph 54), though some costs assessments can be quite elaborate and contentious. But Mr Crawford argued that, because it was not a mere arithmetical exercise, the quantification of the liability for costs was one which did not allow the claim to be properly described as liquidated. It requires quantification "by a judicial process", to take up Sir Richard Scott V-C's words in Thomas Watts & Co v Smith.
44. He submitted therefore that Mr Crowley's decision was wrong, in any event, and, if necessary, that Judge Davies' decision was wrong as well, because the quantification of the builder's quantum meruit claim would also involve the exercise of judgment rather than only the ascertainment of facts and the application of arithmetic to the facts as found. His submission was that a debt, for the purpose of section 29(5), must be for a liquidated sum, that is to say one which is already ascertained. Alternatively he argued that, at most, it includes a liability the amount of which can be ascertained by identifying facts and applying arithmetic rather than judgment. On either basis he said that a quantum meruit claim, and certainly a solicitor's claim for professional fees, is not within the terms of the provision, because of the judicial exercise of assessment which had to be undertaken before the amount of the liability could be fixed. He said that this was much closer to the process of assessing damages for breach of contract or in tort, and that, therefore, this kind of claim could not be treated as a "debt or other liquidated pecuniary claim", because it was not "liquidated".
45. That argument places a considerable weight on the use of the word "liquidated". It has support from the Law Commission's use of the phrase "specified claims". However, it would give rise to its own anomalies.
46. As Mr Burns submitted, it seems to me likely that the draftsman of the 1939 Act had in mind the then current rule of court about specially endorsed writs, as considered in Lagos v Grunwaldt. That rule, as interpreted and applied by the courts, shows that a "liquidated demand" was not then treated, in that context, as requiring that the amount of the liability should already have been ascertained. It therefore casts a different light on the use of the word "liquidated" in the 1939 Act. This would allow a solicitor's claim for professional fees to be regarded as within the provision. It is also consistent with the proposition that such a claim would have been within the scope of an acknowledgment under Lord Tenterden's Act. It would be odd if the effect of the 1939 Act had been to narrow the range of claims which could be acknowledged.
47. For those reasons, despite the possible oddity of a quantum meruit claim being classified, for this purpose, as a liquidated claim, it seems to me that a claim by solicitors for remuneration, even though not yet fixed by assessment or otherwise, is within the phrase "debt or other liquidated pecuniary claim" in section 29(5)(a). I would hold that Judge Davies and Mr Crowley Q.C. were right in their decisions to which I have referred. It seems to me that the better view is that a solicitor's claim for professional fees, even though not yet fixed by agreement or assessment, did fall within section 23(4) of the 1939 Act and still does under section 29(5) of the 1980 Act.
48. It is therefore a claim which is open to be acknowledged under that provision. I do not need to decide whether it qualifies as a "debt" or an "other liquidated pecuniary claim". One way or the other it is within the statutory phrase.

Was the claim acknowledged?

49. I have quoted the Client's letter above. What is most noticeable about it in this context is that it expresses concern about the amount of the claim, but not about the fact of there being a claim at all. If the letter had been entirely non-committal about the substance of the solicitors' claim, then it may not have acknowledged anything, for example if the gist of it had been: we have received your letter, but we are under too much pressure to deal with it now, for reasons specified (or not), and we will come back to you when we have time.
50. Mr Crawford argued that the letter acknowledges receipt of the solicitors' letter and the existence of the retainer, but that it does not acknowledge the sum claimed, nor any other sum, nor yet a general liability to pay costs once assessed. He submitted that the reference to a lower sum having been budgeted for is not an acknowledgment that any amount is due, or even that there is a liability in principle subject to quantification.
51. In Dungate v Dungate [1965] 1 W.L.R. 1477 the Court of Appeal had to consider whether a letter from a borrower to a lender (they being brothers) was an acknowledgment, it having said "keep a check on totals and amounts I owe you and we will have an account now and then … Sorry I cannot do you a cheque now". It was clear that an acknowledgment did not have to identify the amount of the debt, and the court held that the terms of the letter could be understood by reference to extrinsic evidence. The court held that the letter amounted to saying "I owe you money", and that this was sufficient for the letter to be taken as an acknowledgment.
52. I do not take that as a definition of what an acknowledgment must amount to. As Lord Sumner said in Spencer v Hemmerde [1922] 2 AC 507, at 519 (at a time when the acknowledgment had to be able to be construed as carrying with it a promise to pay) "everybody agrees that comparison with the words of other debtors is of little use".
53. However, looking at the letter as I have set it out above, it does seem to me that it amounts to saying "we owe you something", inasmuch as it refers to the claim and takes issue, or indicates that issue will be taken, with the amount claimed, but not with the principle that something is payable. Viewed in that way, it seems to me that Judge Hughes was right to hold that the claim had been acknowledged, and therefore that the proceedings were not barred by the lapse of time.

Conclusion

54. As indicated above, I agree with Judge Hughes that the claim is within the section, and that the letter was an acknowledgment. It follows that, despite the submissions ably presented to us by Mr Crawford for the Client, I would dismiss the appeal.

Lord Justice McFarlane

55. I agree.

Lord Justice Longmore

56. I agree. Mr Crawford urged us to come into the modern world of "common sense" as exemplified by Evans LJ's remark in Turner & Co v O. Palomo S.A. [2000] 1 WLR 37, 52 that a solicitor's claim is "for a reasonable sum … and not a liquidated sum". No one nowadays, he submitted, would consider that a claim, requiring judicial assessment if disputed, was a claim for a liquidated sum or "a right of action … to recover … any debt or other liquidated pecuniary claim" within section 29(5)(a) of the Liquidation Act 1980. To hold otherwise would be to pay a reverence to ancient forms of action which was inappropriate for the 21^st century.
57. Appeals to modernity are all very well but the Limitation Acts are technical Acts. If the phrase "debt or other liquidated pecuniary claim" had sprung fresh from the mind of the legislature (or, more likely, the Law Commission) in 1980, there might be something to be said for Mr Crawford's submission. But it did not; the phrase first appeared in section 23(4) of the Limitation Act 1939 and it is necessary to ascertain what it meant at that date, when a virtually identical phrase was in current use in the Rules of Court and Lagos v Grunwaldt had been decided only 29 years earlier. The meaning of the phrase cannot have changed between 1939 and 1980.
58. I am therefore persuaded by my Lord's analysis that the Solicitors' claim is for a debt or other liquidated pecuniary claim. I am also persuaded that the letter of 20^th September 2004 constituted an acknowledgment and that this appeal should, accordingly, be dismissed.
59. I would, finally, pay tribute to the judgment of His Honour Judge Hughes QC in the present case. He rightly perceived that he was, formally, bound by the decision of Mr John Crowley QC and rightly distinguished the decision of this court in Turner v Palomo. I found his judgment most helpful in coming to my own conclusions.