England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE KINGSTON COUNTY COURT
(HIS HONOUR JUDGE MORGAN)

		Royal Courts of Justice Strand London WC2A 2LL Tuesday 20 November 2001

1. LORD JUSTICE CLARKE: The dispute between Mr Persson, the applicant, and Mr Ashford has a long history. It is described in various places, including a judgment of Aldous LJ on an application by Mr Persson for permission to appeal against an order of His Honour Judge Morgan in the Kingston County Court dated 5 June 2000.
2. The applicant had claimed damages against the defendant, whom he had instructed to do some conveyancing for him, in connection with the sale of his property in 1990 for damages for negligence and fraud. The alleged negligence related to the delay in performing the conveyancing, and the alleged fraud related to dishonesty in not transferring the proceeds of sale quickly enough into his account.
3. The history of the relevant events is fully set out in the judgment of Aldous LJ delivered on 20 December 2000. One of the applicant's difficulties at that time was that the resolution of the issues in the trial depended upon the attitude the judge took of the credibility of the two witnesses, Mr Persson and Mr Ashford (the claimant and the defendant), allied to the fact that the applicant did not notify his claim until nearly six years after the events and just before he began the proceedings. Aldous LJ held, after detailed analysis, that there was no realistic prospect of persuading this court to allow an appeal against the decision. He therefore refused permission to appeal on the merits.
4. Mr Persson also applied for permission to appeal against costs. The judge had ordered the applicant to pay the costs on an indemnity basis. Aldous LJ quoted the following passage from the judgment of the judge, after the judge had indicated that, since the applicant had lost, he must pay the defendant's costs:

"The issue is whether or not they should be assessed on a standard basis, or an indemnity basis. The claimant submits that they should be assessed on the standard basis, not an indemnity basis.

An indemnity basis is an exceptional basis, but I refer to my judgment in which it is abundantly clear that I regarded this case in many respects as an exceptional claim, and that the history of the bringing of the case was exceptional in the features that I have mentioned, in the lateness in bringing it, and the lack of any indication of any potential claim. But most importantly to me the claimant made and persisted in throughout the hearing, and it was a hearing which was spread over a number of days, he persisted in the strongest possible allegations of professional dishonesty and fraud, yet it is abundantly clear from my judgment and the finding I made that there simply was not the evidence to support those allegations, to justify making and persisting in those allegations. Indeed at one stage of the proceedings I did remind the claimant of the requirement of cogent evidence to support strong allegations.

I accept the submissions made by the solicitor for the defendant in this regard, it does seem to me to be a case which has been conducted by the claimant throughout in an unreasonable fashion, and to have been exaggerated in its quantum far beyond its nominal worth. In my view this is a plain case where the costs should be assessed on an indemnity basis."

5. Aldous LJ then said:

"The applicant criticises that exercise of discretion. He says that the judge took into account matters which he should not have done. He seeks to play down the allegations that he made. He used the expression 'mild' in respect of the allegations of dishonesty.

In my view the judge was entitled to take into account the delay in bringing this case, the lack of any letter before action until shortly before the action was brought, the allegations of fraud that were made. In those circumstances it was within the judge's discretion to award indemnity costs and this court would not interfere with it."

6. Subsequently there was a detailed assessment of the defendant's costs which came before Deputy District Judge Duncan. It first came before the Deputy District Judge on 11 April 2001 but it was adjourned because the applicant raised an issue as to whether the defendant's solicitors had infringed the indemnity principle. The assessment was adjourned to 18 June 2000, but on 11 June the applicant issued an application in these terms:

"The whole of the defendant's costs which are being assessed be disallowed, pursuant to CPR rule 44.14(1)(b) on grounds of improper conduct by the defendant, and that the defendant pay the claimant's costs per CPR 44.14(2)(a).

(a) The defendant in sworn evidence wilfully made a statement, material in the proceedings and which he knew to be false, that he had never spoken to the claimant's prospective purchaser Mr T J Norman and had not introduced him to a solicitor.

(b) The truthfulness of the defendant's evidence is material to all issues, because the judge relied on it.

(c) But for the misconduct of the defendant the judge's decision might have been different."

7. The Deputy District Judge rejected that application on two grounds. The first was that it was made too late and the second he put in this way:

"Further, it seems to me that the provisions at CPR 44.14(1)(b) are designed to enable a party to draw to unreasonable or improper conduct which might affect how the costs are dealt with, whereas in reality what Mr Persson was seeking to do was to reopen the basic substantive issues in the case, where of course not only was the case determined some considerable time ago but he was refused permission to appeal both by the trial judge and by the Court of Appeal."

8. The applicant subsequently applied for permission to appeal to the circuit judge against that order or ruling. The respondent also applied for permission to appeal. The applications were heard on 5 October by His Honour Judge Morgan who, as it happened, had been the trial judge. He granted the respondent permission to appeal but refused the applicant's application for permission. He also ordered the applicant to pay the costs of that application on an indemnity basis and assessed them at £2,364.50.
9. The applicant now seeks permission to appeal against one aspect of that order, namely the judge's decision that the applicant should pay costs on an indemnity basis. On refusing permission to appeal the judge said, (and I do not take this from a transcript of the judgment but from a detailed note taken by the solicitor for the defendant which seems to be both reasonably complete and reasonably accurate):

"The first point made by Mr Persson is that Deputy District Judge Duncan in dismissing his application on 11 June 2001 which related to the allegation that the Defendant had given false evidence. The effect of his application is that he effectively seeks a reversal of the trial Judge's order and that the Defendant should pay the costs."

10. The judge then set out what the Deputy District Judge had said, including the passage to which I have referred. He continued:

"Mr Persson says the Court has jurisdiction...."

and he set out CPR 44.14 and continued:

"The meaning of 'unreasonable or improper conduct' is not defined, but could not relate to the substantive issues which have already been tried says Mr Lawrence.

It seems to me that the Claimants are seeking to overturn a fundamental finding of fact which I made as the Trial Judge on the basis of fresh evidence which shows that the Defendant gave untrue evidence.

CPR 14 plainly did not contemplate that exercise. As Mr Lawrence said, a Cost Judge would be undoing the Trial Judge's finding. It is an appeal process and not an assessment. The Claimant should have proceeded by way of appeal. I am quite sure that Mr Lawrence's analysis of this is correct and I am satisfied that this rule does not entitle a District Judge to enter investigation into matters which have already been decided by the Trial Judge. The analysis of Deputy District Judge Duncan was quite correct. There is no merit in this appeal. This is an assessment not an appeal."

11. The ground upon which the applicant wished to rely was that he had available now some further evidence in the form of evidence from a Mr Norman and his solicitor, Mr Dunn, which he said undermined the credibility of the defendant upon which much of the trial judge's reasoning had depended.
12. The judge also considered in detail some other grounds relied upon by the applicant. Under the heading, "Misconduct since judgment; Breach of indemnity rule", the judge said:

"Mr Persson made a robust response to Mr Ashford's demand for costs. He has alleged that this demand was made with the apparent 'connivance' of the Defendant's solicitors. What evidence was there for this connivance? The demand for costs was not pursued by either Mr Ashford or his solicitors. In my view it is a wholly inadequate submission, a serious allegation that is not backed by any evidence. Not for the first time has Mr Persson made serious allegations of impropriety not backed up by evidence."

13. Under the heading "False certificate of on account payment" the judge included this:

"....that conclusion by the Defendant's solicitors cannot be unreasonable or improper conduct."

14. Under the heading, "With regard to misconduct during the proceedings", the judge held that there was no merit in the appellant's submission. Finally, with regard to the appellant's submissions, he said in relation to costs at the end of the trial:

"I have had the opportunity of re-reading my Judgment and the main reason I awarded indemnity costs was because Mr Persson had made serious allegations of dishonesty which he had failed to substantiate. The costs Judge could not go behind that decision and set aside my Costs Order.

I have no real hesitation in deciding that there is no real prospect of successfully appealing Deputy District Judge Duncan's decision and there is no other compelling reason for permission to be granted."

15. The defendant's solicitor applied for costs on an indemnity basis which the judge granted.
16. Mr Persson, who has addressed the court very courteously and shortly, recognises that this court has no jurisdiction to consider an appeal against the refusal of permission to appeal (see section 54(4) of the Access to Justice 1999; (see also Clark (Inspector of Taxes) v Perks [2000] 4 All ER 1 at pages 6 - 7 per Brooke LJ). Brooke LJ made it clear that:

"...if...an appeal court makes a further order, such as a costs order or an order refusing an adjournment, an appeal does in theory lie to this court, with permission, although it is likely to be a very rare case in which such permission would be granted."

17. The applicant thus seeks permission to appeal simply against the judge's exercise of his discretion in regards to (a) the basis; and (b) the quantum of costs.
18. The principal thrust of his argument is that the judge should not have ordered indemnity costs. In introducing his submissions in his skeleton argument, the applicant said:

"It is submitted that the availability of credible prima facie evidence that the respondent's evidence at trial on material issues was untruthful is a compelling reason for reviewing the appeal judge's decision to condemn the appellant in indemnity basis costs for his conduct of a permission to appeal application relying on this proposition."

19. The difficulty with that whole approach is, as the judge essentially observes, that that is a matter which could only properly be addressed by way of appeal from the judge's decision, so that it amounts to another attempt to reargue the point which the applicant initially sought to advance before Aldous LJ, albeit by reference to fresh evidence. The applicant says, correctly, that an order for costs on an indemnity basis is an unusual order for which the judge should have given reasons. While it is a less unusual order under the CPR than it was previously, I accept that it is an unusual, perhaps even an exceptional, order. I certainly accept that it should not be made without good reason and that, in general, a judge should give reasons for making it.
20. However, an appeal against it would have no realistic prospect of success unless it can be shown that it was not clear for what reason the order was made or it could be shown that the judge's reasoning was wrong in principle. The judge plainly thought that the application to the costs judge on what may be called "the false evidence point" was wholly misconceived because it involved what was in effect a challenge to an order for indemnity costs which he made as the trial judge.
21. The applicant has relied upon an unreported decision of this court in Raja v Rubin and submitted that his attempt to appeal this order does not amount to an abuse of the process of the court. He has simply made use of the machinery to appeal, much as was done in Raja v Rubin. However, this is, to my mind, an entirely different kind of case from Raja v Rubin and in my judgment a judge has power to order costs on an indemnity basis where the appeal is wholly misconceived. The appeal to the judge was wholly misconceived. In my judgment, therefore, there is no prospect of persuading this court to allow an appeal against that decision of the judge.
22. So far as quantum is concerned, the amount of costs was entirely within the judge's discretion. While I can see that, as Mr Persson put it, it was somewhat high, that is no ground upon which this court would interfere with the decision.
23. It follows that, although I am indebted to the applicant's arguments, the application must be refused.
Order: Permission to appeal refused.