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 QUEEN'S BENCH DIVISION
(MR JUSTICE BUCKLEY)

		Royal Courts of Justice Strand London WC2A 2LL Wednesday 10 July 2002

1. LORD JUSTICE BROOKE: This is the final stage in this court of a series of applications which came first before Sedley LJ on paper on 22 January 2002, then before a 3-judge court on 18 April 2002, resulting in a judgment dated 14 May 2002 (Neutral Citation No 2002 EWCA Civ 645). That judgment is about to be reported in the All England Reports. Finally, there was a hearing before a 2-judge court on 30 May when judgment was handed down on 26 June under Neutral Citation No 2002 EWCA Civ 910. The facts of the matter are set out in these two judgments. An issue has now arisen as to the costs of this longstanding saga.
2. After Mr Justice Buckley gave judgment, there was a long delay before the notice of appeal was filed, for the reasons set out in our first judgment. Eventually the appellants were persuaded that they had to ask for an extension of time. They filed evidence in support. The defendants filed evidence in answer, but instead of putting that evidence concisely, they put in a long witness statement by Mr Bennett supported by a large number of documents. In due course questions must arise as to the proportionality of the extent to which that evidence was really necessary. I do not know how much solicitors' time was involved and I am not able to form a judgment on that.
3. Sedley LJ refused an extension of time and directed that any renewal should be on notice. He said that the application appeared to be irretrievably out of time, but he explained why he considered that, if the defendants surmounted that hurdle, there might well be an argument on the appeal which had a reasonable prospect of success. He ended his short note commenting that:

"If the application is to be pursued by the respondents on the preliminary issue on notice the claimant may also advance any knock out point he may have on the substantive issues, but that is all."

4. The claimant's solicitors seem to have understood that note as contemplating two further hearings in any event. On 12 February 2002, I explained in a note what the appropriate practice should be. My note should be put before the Costs Judge. I it I made it clear that I was granting an adjournment so that the claimants could be represented by counsel. I added that, ideally, they should make their representations in writing to the court and if they were to do so there would be no need for them to arrange the hearing to suit the convenience of their counsel.
5. In the event, the defendants' solicitors instructed counsel and put in long written submissions in relation both to the issue of an extension of time and in relation to the merits of the appeal. We then heard both counsel on the application. We set aside an hour for the hearing. We intended to deal with the whole matter that day, but the oral submissions on the extension of time were so long that, although we had received substantial written submissions on the merits of the application for permission to appeal, we considered that justice required that Mr Anderson should be given the opportunity of making oral submissions. We made it quite clear in paragraph 38 of our first judgment that we did not require Mr Goodfellow to attend this hearing. We had a clear understanding of the arguments with which he sought to resist the granting of permission.
6. Mr Anderson appeared on his own at the adjourned hearing, but the defendants' solicitors and counsel incurred further expense putting forward further arguments, despite our clear warning in that judgment. I am satisfied that any costs they incurred following that judgment on 14 May should be disallowed.
7. The question is what is the just order to make as to costs? On the one hand Mr Anderson says, "We won on the extension of time argument, we lost on the permission to appeal argument, and in all the circumstances one should regard that as a draw and make no order as to costs". Mr Goodfellow says, "We won, we knocked out the application for permission to appeal, they had to ask for an extension of time because they got themselves into such a muddle, we put in evidence to correct some evidence that they put in and they did not put in all the information the court needed in order to exercise its discretion under CPR 3.9 and so we have put in evidence about that and as to the prejudice, for example". Mr Goodfellow also said that although their submissions were lengthy, it was not a case which easily lent itself to a very short skeleton because the points raised on appeal were quite complicated. I accept Mr Goodfellow's submission on that regard. It was a case in which it was difficult to assess the merits of a proposed appeal in the absence of the assistance that he gave. He said that, given that Sedley LJ directed that the hearing should be on notice, his side should be allowed the costs of making the submissions and being heard in court.
8. On the other hand, once the argument had been placed on paper, they had placed their evidence about prejudice before the court and had corrected the necessary matters. They then elected, again by counsel, not only to argue the point on permission to appeal, but also to oppose the extension of time. Mr Goodfellow submits that the hearing was for those purposes, but in the event Mr Anderson's clients were put to the expense of a further hearing simply because we spent so much time on the extension of time application on which Mr Goodfellow's clients lost. It is always important, particularly in these ancillary matters relating to permission to appeal, that the parties' solicitors keep a sense of proportion. If they had said, "We will not instruct counsel to advance any oral arguments on that matter, we will leave it to the court", then that stance would not have run up the costs which were incurred.
9. There are principally two issues on this application for costs. The first is, where the costs should lie. In that respect I take the view that the broad brush approach encouraged by CPR 44.3 is appropriate in these circumstances. Secondly, and perhaps more importantly, there is a question of proportionality. This court was convened as a 3-judge court in Jolly v Jay [2002] EWCA Civ 277, as yet unreported, in order to explain to litigants what role respondents should have in these proceedings.
10. I accept that this is considerably more complicated than the ordinary run of the mill case. Nevertheless, it is incumbent on the solicitors for respondents to keep a careful eye on the costs they are incurring, particularly because they may well not be able to recover them from the other side. The need for solicitors to keep control of costs, particularly in these ancillary skirmishes, is more important than ever. I was told by Mr Anderson that the defendants' solicitors have been discussing with him the prospect of a bill for no less than £30,000 for costs in relation to these ancillary proceedings. Those costs do not include the solicitors' success fee.
11. In my judgment, so far as the appropriate proportion of the claimant's costs are concerned, I consider the defendants ought to pay three quarters of those costs. I have reduced them from the full amount because the defendants were, in the end, successful in obtaining an extension. The fact that they had to ask for an extension for time was their fault, and the fact that the claimants went to the time and expense of resisting the application at the early stage stemmed from the fact that all the material facts which the court needed to consider in order to exercise its discretion properly had not been placed before the court by the defendants' solicitors.
12. So far as proportionality is concerned, this must be a matter for the Costs Judge. I direct that this judgment be transcribed and a copy be made available to the Costs Judge. I also make it clear that this is a judgment to which the restrictions on citation do not apply and that it may be valuable in bringing home the message to respondents' legal advisers that they have to exercise caution about the costs which they incur in resisting applications of this kind.
13. As to proportionality, the claimant's solicitors seem to have incurred excessive costs in putting their evidence before the court in response to the application for an extension of time. The skeleton argument placed before the court by counsel for the claimant, while helpful, was very long and was supported by a huge number of authorities. The court could have reached a just conclusion on the application for permission to appeal without such costs being incurred by counsel on that scale. The claimant should not be allowed any costs following the first judgment. I hope that this will give the Costs Judge and the parties sufficient guidance when it comes to detailed assessment if the matter has to reach that stage.
Order: Application refused. Claimants to get costs of this application.