England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
(MR JUSTICE LADDIE)

		Royal Courts of Justice Strand London WC2 Thursday 19th July 2001

Thursday 19th July 2001

1. LORD JUSTICE JONATHAN PARKER: This is an application by Mr and Mrs Robert Slot, the application being made by Mrs Slot in person, for permission to appeal against an order for costs made by Mr Justice Laddie on 19th February of this year when allowing Mr and Mrs Slot's appeal against an order made by District Judge Harvey in the Guildford County Court on 2nd June 2000. By his order, District Judge Harvey had given summary judgment against Mr and Mrs Slot, the claimants in the action, in favour of East Hampshire District Council, the defendant in the action, and had dismissed the claim with costs. Accordingly the effect of Mr Justice Laddie's order was to reinstate the action.
2. The action arises out of conversations which took place between Mr and Mrs Slot and the council some years ago concerning the possibility of planning permission being granted for the construction of two or more houses on a plot of land owned by Mr and Mrs Slot. Mr and Mrs Slot allege that they were told that planning permission would be granted, and that, in reliance upon that statement, they terminated a tenancy agreement with the tenant then occupying the house situated on the land, and put the land on the market with a view to selling it to a developer. Later, however, the council informed Mr and Mrs Slot that planning permission would not be granted. In the action, Mr and Mrs Slot claim relief against the council on the basis that the council is, in the circumstances, obliged to grant planning permission. In the alternative they allege misrepresentation.
3. The action was commenced as long ago as 2nd June 1997. Initially it appears that the case was referred to arbitration, but it was later removed from the arbitration list since it was thought that it raised a difficult question of law. Mr and Mrs Slot appealed against the decision to remove the case from the arbitration list, but their appeal was dismissed both in the Guildford County Court and subsequently in the Court of Appeal.
4. On 2nd June 2000, Mr and Mrs Slot applied to have their claim transferred to the small claims track. The council appear to have countered that by applying at the same hearing for summary judgment against Mr and Mrs Slot on the basis that their claim had no real prospect of success; alternatively, that their statement of case disclosed no cause of action. The hearing took place before District Judge Harvey, who began by hearing the council's application for summary judgment. As Mr Justice Laddie stated in the course of his judgment on appeal from the District Judge, in reaching his conclusion that it was appropriate to strike out the action, the District Judge had relied heavily on oral statements made by Mr and Mrs Slot during the course of the hearing. In his judgment Mr Justice Laddie concluded, plainly correctly in my judgment, that this was not a legitimate approach for the District Judge to have adopted. Rather, he should have proceeded on the basis of the pleaded allegations by Mr and Mrs Slot. As to that, Mr Justice Laddie concluded:

"On the pleadings as they stand at the moment, the Slots have at least an arguable claim against the council."

5. That conclusion was in itself enough to justify the order which the judge made allowing an appeal from the order of the District Judge.
6. However, Mr Justice Laddie went on to express grave doubts as to whether the claim would succeed at trial, commenting that it appeared likely that the Slots would have, as he put it, an uphill task to win the action.
7. Having delivered judgment allowing Mr and Mrs Slot's appeal, Mr Justice Laddie then heard argument on the question of costs. Both sides were at that stage represented by counsel. Counsel for Mr and Mrs Slot asked for their costs. In the alternative, he submitted that there should be no order for costs. Counsel for the defendant council submitted that the particular facts of the case took it outside the normal rule that costs should follow the event.
8. In the event, Mr Justice Laddie ordered that Mr and Mrs Slot's costs be costs in the case. The order simply reads:

"That costs are to be claimant's costs in the claim."

9. The order does not expressly refer to the costs of the hearing before the District Judge, although there can, I think, be no doubt that they were intended to be included.
10. Mr and Mrs Slot contend that the judge erred in principle in not giving them their costs of the appeal and of the hearing before the District Judge in any event. They suggest that the judge was concerned by the fact that taxpayers' money might be wasted if a costs order was made against the council. They point out that if the judge had entertained such a view, it would be a misapprehension of the position because the litigation was being conducted by the council's insurers. They rely on the case of Scherer and Another v Counting Instruments Ltd and Another [1986] 2 All ER 529, as showing that an appellate court can overturn a costs order where the judge has not properly exercised his discretion. Mrs Slot has referred me to a passage in the headnote on page 529 just below G which reads as follows:

"The judge was required to exercise his discretion judicially, i.e. in accordance with established principles and in relation to the facts of the case and on relevant grounds connected with the case, which included any matter relating to the litigation, the parties' conduct in it and the circumstances leading to the litigation, but nothing else."

11. She has also referred me to a passage from the speech of Viscount Cave, Lord Chancellor, in Donald Campbell & Co v Pollak [1927] AC 732, quoted by Lord Justice Buckley in the Scherer case, on page 533, which reads as follows:

"What it comes to, I think, is that in order to justify an appeal as to costs only this court must be able to say that the judge in the court below, however much he may have been purporting to exercise his discretion, has not really exercised his discretion at all. This court can say that, but can say it only, as I see it, if it is satisfied that the judge in the court below has taken into consideration wholly extraneous and irrelevant matters."

12. Mrs Slot submits that the judge took into account an irrelevant matter, namely the impact of a costs order on council taxpayers in the council's district.
13. Mrs Slot has also submitted that the consequence of the order which the judge made as to costs is that the parties are no longer on an equal footing so far as negotiations for settlement of the action are concerned. She submits that there is no longer a fair playing field for negotiation, and that the negotiating position of herself and her husband has been substantially weakened by the order which the judge made.
14. She also relies on a dictum of Lord Justice Winn in Stratford v Lindley (No.2) [1969] 3 All ER 1122, at 1124, where Lord Justice Winn referred to:

"The impracticability of any assessment of theoretical prospects of success had the parties gone to trial."

15. In the documentary material submitted by Mr and Mrs Slot, they also contend that there was an admission by the council to Mr Justice Laddie that Mr and Mrs Slot had an arguable case. Finally, in the documentary material they suggest that the case remains subject to the former rules of the Supreme Court and not to the Civil Procedure Rules.
16. Despite Mrs Slot's courteous and succinct submissions I can, for my part, see no basis at all for an appeal against the costs order which Mr Justice Laddie made in this case. The discretion given by the Civil Procedure Rules in relation to costs is very wide indeed; see part 44.3. Rule 44.3(5)(b) in particular requires the court to take into account, among other things, whether it was reasonable for a party to raise or pursue a particular allegation or issue. Mr Justice Laddie plainly had in mind the possibility, which he considered to be a real one, that at trial the trial judge might conclude (although Mr Justice Laddie was of course in no position to form any concluded view on this point) that Mr and Mrs Slot had unreasonably pursued their claim, with the consequence that they ought not to be in a position to recover any of their costs of the interlocutory hearings. That was, however, a matter for the trial. In my judgment Mr Justice Laddie was acting well within the ambit of his discretion in making the order which he made, thereby leaving open the possibility of a costs order of the kind which I have indicated. In the particular circumstances of this case, he considered that justice required that Mr and Mrs Slot should not recover their costs of the interlocutory hearings unless and until they succeeded at trial.
17. It is said by Mrs Slot, as I indicated earlier, that Mr Justice Laddie took into account extraneous matters, namely the prospect of council taxpayers being burdened with litigation costs arising out of this action.
18. Mrs Slot tells me that at some stage during argument the judge referred to the fact that council taxpayers might find themselves having to fund part of the litigation costs, but there is no transcript of the argument before me, and certainly no reference to that is made in the judgment. Accordingly, there is no basis upon which I could conclude that Mr Justice Laddie attached any weight to that factor when he exercised his discretion as to costs.
19. In my judgment the judge was acting well within the ambits of the wide discretion conferred upon him by part 44 of the Civil Procedure Rules when he made the costs order which he made. Accordingly, for those reasons, I refuse permission to appeal.
ORDER: Application dismissed. (Order not part of approved judgment)