England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL LONDON COUNTY COURT
(HIS HONOUR JUDGE KNIGHT)

		Royal Courts of Justice Strand London WC2 Monday, 30th July 2001

1. LORD JUSTICE MANCE: This matter comes back before me today having been before me on 27th April 2001. Although it remains a without notice application for permission to appeal, Professor Penrose and Miss Penrose have been here in person and I offered the opportunity to Professor Penrose to make any points that he wished without turning the matter into a hearing between the parties; he did make two points to which Mr Mahmood has had the opportunity of responding.
2. Many of the matters dealt with in my previous judgment have now been clarified. The substance of the order is clarified by production of the actual schedules which were before His Honour Judge Knight on 19th December 2000, and they show that, mathematically, his order makes perfect sense. The reason for the increased figure which he ordered, compared with any figure which was before Miss Recorder Worrall, QC on 22nd September, appears by the revised schedules. In short, the increase is explained by an updating of the solicitors' costs to account for the fact that they had to attend for so long a time on 22nd September. That seems in principle legitimate. Secondly, and this is perhaps slightly more open to investigation, there is now a substantial figure for preparation for trial prior to adjournment not previously estimated relating apparently to counsel's fees in the sum of £900 plus VAT. One can however say in relation to that figure, if it constitutes trial preparation, then either it was completely wasted, in which case one can understand why in principle it should be recovered; or, if it was of some ultimate benefit, then that would no doubt be taken into account under the detailed assessment of trial costs which His Honour Judge Knight ordered on 19th December.
3. Mr Mahmood has put before me the detailed bill of costs claimed by the Penroses under that order for detailed assessment, and they are very substantial indeed. They are over £28,000 plus VAT. No doubt they would merit being looked at, and no doubt the interrelationship with the orders made by Miss Recorder Worrall and His Honour Judge Knight would be borne in mind by the costs assessment judge. Mr Mahmood points out in this connection that on page 16 one finds a heading, "application to adjourn, ie costs not previously summarily assessed", and he says that that looks, on the face of it, a little surprising, since surely the order made by Miss Recorder Worrall on 22nd September was designed to sweep up all costs relating to the application to adjourn. I cannot go into that sort of point further at this stage. If it was designed to sweep up these costs then no doubt these costs on page 16 and 17, would be disallowed, and the Recorder's order would be taken into account in that way.
4. The points now remaining are really two. First, Mr Mahmood continues to object to the detailed quantum of the revised schedules which he says should have been made subject of an order for detailed assessment. He draws my attention to the rules of court, particularly practice direction Part 44.13.13, where it is stated:

"The court will not give its approval to disproportionate and unreasonable costs.

Accordingly:

(b) If the judge is to make an order which is not by consent, the judge will, so far as possible, ensure that the final figure is not disproportionate and/or unreasonable having regard to Part 1 of the CPR. The judge will retain this responsibility notwithstanding the absence of challenge to individual items in the make-up of the figure sought. The fact that the paying party is not disputing the amount of costs can however be taken as some indication that the amount is proportionate and reasonable. The judge will therefore intervene only if satisfied that the costs are so disproportionate that it is right to do so."

5. Professor Penrose pointed out to me that the revised schedules of costs were sent to Mr and Mrs Mahmood by the Penroses' solicitors, Osbornes, on 13th December 2000. The solicitors wrote, following the Mahmoods' departure from court during the trial:

"On Tuesday, the judgment will be delivered and there will then be an opportunity for each side to make their submissions as to cost. If you fail to attend hearing, those submissions will be one sided and it is therefore in your interest to come to court.

Whereas we anticipate that any costs order will be subject to detailed assessment, you will recall that Recorder Worrall reserved part of the costs thrown away by your application to adjourn to the trial Judge. We have now updated the costs schedule to take into account the actual time spent in court on 22 September and enclose the amended schedule with this letter. For the voidance of doubt and whatever result of the action, we will make a submission to the Judge on Tuesday that you pay at least these costs."

6. I did not have that letter before me on the previous occasion. It is only supplied as a result of the inquiries which I caused to be made by my previous judgment, and as a result of the helpful note from counsel for the Penroses in response. That is a note of 31st May 2001. It is quite plain that Mr and Mrs Mahmood have had the most ample opportunity to consider the sort of points they would now like to make and to raise them before the trial judge, and indeed to raise any other objections to summary assessment, which is what was quite clearly being sought by the Penroses. But they did not trouble to attend the delivery of the judgment and they have no one really but themselves to blame for most of what followed, at least as regards their complaints about the amount of money ordered to be paid.
7. However, Mr Mahmood has continued to pursue his investigations into the matter, and he has come across a further point which relates to the judge's power to do what he did on 19th December. It is necessary to look at the nature of the orders made. The first order by Miss Recorder Worrall on 22nd September 2000 was that the claimant "do pay the defendant's wasted costs of £1,584.72 by 6th October 2000, the balance of wasted costs, ie the costs of the trial bundle paid by the defendant in default of the claimant, and the costs of today's application, which are to be considered by the trial judge". So there, as I read it, she was undoubtedly summarily assessing the first element of wasted costs in the sum of £1,584.72, and she was positively ordering the defendants to pay the cost of the trial bundle and the cost of the application on 22nd September which she was further ordering should be considered by the trial judge. So she did not summarily assess those costs. The reason for that, according to counsel's note, is that the application for the adjournment took a quite unexpectedly long time during the court day. Explanations were sought by the Mahmoods of items, and Miss Recorder Worrall went through each item of the statement of costs; but there was according to counsel, no specific challenge to work included or the rates charged. Miss Recorder Worrall then initially ordered the sum of £1,584.72 believing that that was the total of all the individual items listed in the statement. Counsel then pointed out that it was only the total of the costs for the pre-trial conference. In the light of that confusion, the time of the day and the Mahmood's extreme reaction to the confusion, she made an order in respect of the pre-trial conference costs and reserved the balance to the trial judge.
8. The trial judge, as the transcript of the hearing before him shows and as the letter of 13th December from Osbornes contemplated, was invited by counsel for the Penroses summarily to assess the two heads of costs which Miss Recorder Worrall had said were to be considered by him, and in the space of discussion which extends only over two pages of the transcript and does not go into any detail, he concluded:

"Well, I am satisfied that these reserved costs ought to be awarded to the defendants. The principle seems to be accepted by Recorder Worrall. I cannot see myself in that situation how one can distinguish the rest of these costs and I have reviewed them independently and independently of the decision of the learned Recorder but it does it seems to me that these costs, being the balance of the costs attributable to the adjournment but also including preparation of the trial bundle, ought to be awarded to the defendants and therefore I summarily assess the balance of those cost. The total of them is what - just over 4,000, is it?"

9. He was then given the figure and he summarily assessed the costs at that figure.
10. On the face of it the judge there puts a somewhat different interpretation on Miss Recorder's Worrall order to the interpretation which I put on it. The judge, on the face of it, does not seem to have thought that Miss Recorder Worrall had positively ordered the two heads of costs to be paid, reserving the amount to the trial judge. He seems to have thought that she had simply reserved the whole of the matter of whether any costs should be paid, as well as their quantum in respect of those two heads, to the trial judge. I suppose that is also a possible interpretation of a not very adequately formulated paragraph in the order. Unfortunately there is no transcript of the hearing before Miss Recorder Worrall and so one cannot check the position.
11. But, however it may be, the question arises – and this is Mr Mahmood's second and more substantial point – whether the trial judge had any jurisdiction to make a summary assessment. Summary assessment is intended to relate to the costs of a hearing which has just occurred either by way of trial of a case on fast track, or in some other matter where the hearing has lasted not more than one day. That would of course be appropriate to the hearing before Miss Recorder Worrall but it certainly would not be appropriate in relation to trial costs.
12. His Honour Judge Knight had not dealt with the hearing before Miss Recorder Worrall. The costs of the two heads on one basis or another were reserved to him. The question arises whether he had power under the rules to deal with them summarily. Mr Mahmood draws my attention to Rule 13.8:

"The court awarding costs cannot make an order for a summary assessment of costs by a costs officer. If a summary assessment of costs is appropriate but the court awarding costs is unable to do so on the day, the court must give directions as to a further hearing before the same judge."

13. So he submits that in so far as there was an order for summary assessment by Miss Recorder Worrall, what she should have done was order that the matter come back before her again. In so far as there was not an order for assessment by Miss Recorder Worrall but the costs were just reserved generally for consideration to the trial judge, he was not the judge who had conducted the hearing lasting not more than one day in respect of which the summary assessment was requested, and so once again, he was not, the appropriate person to assess them.
14. I see the gist of that argument; and the conclusion to which, if it were a good argument, it would lead, would no doubt be that the matter of these costs should be further considered, presumably on a detailed assessment now. If I were to grant permission to appeal now, still further costs would be incurred, the matter would come back before a full court and it would, at best, as I have said, lead to an order in the Mahmoods' favour that there should be a detailed assessment of these cost.
15. There is no doubt about the principle that the Mahmoods should pay these costs. Furthermore, since they have lost the trial there is no doubt about the principle of their having to pay a very substantial further sum of costs on that score. They did originally pay very promptly the sum of £1,584.72 but Professor Penrose has expressed understandable concern about the extent to which this litigation can go on with further hearings on the subject of costs, increasing the costs which the Mahmoods have to pay, in circumstances where their means, as Mr Mahmood himself avows, are very limited.
16. The note from counsel, which as I say was helpfully written, was accompanied by a letter from Osbornes of 1st June 2001, which again referred to costs incurred in answering my request, in the sum of £125 on the part of counsel, and £324 on the part of solicitors, plus VAT; so over 500 with VAT. Again I am not in a position to deal with those in any detail, but it seems to me that any such costs were incurred in large measure because of the Mahmoods' fault.
17. The fact is that this second hearing has taken place because Mr and Mrs Mahmood did not put before me the revised schedules which it is now clear they received on 13th December. The whole of the present problems really arises because the points which Mr and Mrs Mahmood now wish to take on the detail of the matter, and indeed on the substance of the matter about whether the trial judge should have dealt with it at all, were not taken on 19th December; although Mr and Mrs Mahmood could have attended then, they chose not to. So it seems to me that this is not a case where it would be appropriate to give unconditional permission to appeal. One must, it seems to me, keep the matter in proportion and remember that litigation should not just be allowed to run up further costs which will never be paid, when the amount, if any, to be gained by the litigation at the end of the day may well be less than the further costs which will be incurred in gaining it. It seems to me that the point of principle which Mr Mahmood raises, namely that the wrong judge purported to make the summary assessment, may have some weight, and that I should grant some relief to him and his wife in that light. However, I think I should only do so on terms. It is under the rules provided that an order giving permission may be made subject to conditions, and there are furthermore powers in the court to order security for costs of an appeal. This appeal, if it goes ahead, will incur further costs, unless it leads to some agreement between the parties that all these costs should be the subject of detailed assessment - and I say, without in any way being in a position to compel this, that there might be some sense in that and the Penroses might like to think about it.
18. What I propose to do in the circumstances is grant permission to appeal subject to conditions, and if those conditions are not satisfied then the permission to appeal will not take effect. Looking at all the costs which have been incurred (including the costs said to be incurred in answering my inquiry which, were incurred due to the Mahmoods' fault), what I think is appropriate is that permission to appeal should be made conditional upon payment into court of £1,750. Unless that sum is paid into court within 14 days there will be no permission to appeal.
(Permission granted with conditions; no order for costs).