England and Wales Court of Appeal (Civil Division) Decisions

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

		Royal Courts of Justice Strand London WC2 Wednesday, 16th January 2002

Wednesday, 16th January 2002

1. LORD JUSTICE CHADWICK: This is an application for permission to appeal against an order made on 26th October 2001 by His Honour Judge Cowell, sitting at West London County Court, in proceedings brought by Mrs Penelope Wilson, the applicant, against Robertson's (London) Ltd, who are pawnbrokers.
2. The action was commenced on 18th April 2001. In the action Mrs Wilson claims the return of certain jewellery pledged by her to the defendant pawnbrokers as security for loans. She claims the return of that jewellery on the basis that the credit agreement fails to comply with the requirements of the Consumer Credit Act 1974. She is no stranger to this complex area of law because she has already been successful in another action, Wilson v First County Trust, in respect of a motorcar which she pawned to the defendant in that action. An appeal in that action was first heard by this court on 9th November 2000. Judgment was given in Mrs Wilson's favour on 23rd November. The judgment upheld her submission that the effect of section 127(3) of the 1974 Act was that the security could not be enforced in any circumstances.
3. Following the decision on 23rd November 2000 this Court heard further argument on the question whether or not section 127(3) of the 1974 Act was incompatible with provisions in the Human Rights Act 1998. On that occasion it was addressed, not only by the parties to the action, but also by counsel on behalf of the Secretary of State as intervener and by counsel instructed by the Treasury Solicitor as Amicus.
4. The court's judgment on that issue was handed down on 2nd May 2001; that is to say just after the current proceedings were commenced. In that judgment the court held that it was appropriate to make a declaration of incompatibility; and it did so. The Secretary of State (but not the parties) has sought permission to appeal against that decision. Permission has been granted by the House of Lords; and a petition is pending.
5. It was in those circumstances that the defendants in this action, having given notice of their intention to defend, sought a stay of the current action. They did so on 22nd May 2001. At that date all that they knew was that the Secretary of State might petition the House of Lords for leave to appeal in Wilson v First County Trust; and that, if he did so, the House of Lords might allow that petition. Accordingly, the application for a stay was supported by a witness statement made by Mr Hallam, a partner in the firm of Park Nelson, in which he said there was some possibility, in effect, that amending legislation might be introduced which would reverse the current effect of section 127(3).
6. Mrs Wilson gave notice of her opposition to that application in a letter dated 11th June 2001. The hearing of that application for a stay was fixed for 19th June 2001, which was, Mrs Wilson tells me, a Tuesday. Shortly before the hearing, on or about 15th June, the Secretary of State served on Mrs Wilson her petition for permission to appeal against the order made in this court in Wilson v County Trust on 2nd May 2001. It was clear from that petition that one of the points which the Secretary of State would seek to argue before the House of Lords (if leave to appeal were granted) was that the Court of Appeal had been wrong in holding that there was no restitutionary claim independent of the Consumer Credit Act 1974 in cases of this nature. The Court of Appeal had based its conclusion on that point on observations of the House of Lords in Dimond v Lovell [2001] 2 WLR 1121 - see in particular the speeches of Lord Hoffmann and Lord Hobhouse. The Secretary of State submits, in her petition, that that issue needs to be reconsidered in the light of any perceived incompatibility with the Human Rights Act.
7. In those circumstances, when the matter came before the district judge he was faced not only with two substantial judgments of this court, but also with a lengthy petition for permission to appeal to the House of Lords. He recognised that one of the points that might be resolved by the House of Lords, if it gave permission to appeal and subsequently heard the appeal, was whether or not in a case of this nature the pawnbroker would have a defence based on a counterclaim for restitution. It was in those circumstances that he took the view that the right course was to stay further proceedings in this action until it was known whether the House of Lords had given leave to appeal and if leave were given until the appeal was heard. That was the order which he made on 19th June 2001. Mrs Wilson appealed to the county court judge and that order was confirmed by the county court judge on 26th October 2001.
8. Insofar as Mrs Wilson seeks to appeal that part of the order the position is that this is an application for a second appeal in relation to a case management decision taken by a district judge and confirmed by the county court judge. As Mrs Wilson recognises, a second appeal is subject to the restrictions set out in section 55(1) of the Access to Justice Act 1999 and CPR 52.13:

"The Court of Appeal will not give permission for such an appeal unless satisfied that it raises an important point of principle or practice or there is some other compelling reason for the Court of Appeal to hear it."

9. The only point in this context is whether a district judge, in the exercise of case management powers, is entitled to stay proceedings until a difficult and important point of law is resolved by the House of Lords in circumstances where there are pending proceedings which will or may lead to that result.
10. In my view that is not a point of principle or practice which requires to be considered by this court. It is a matter of almost everyday experience that courts do stay proceedings in those circumstances. Indeed, that was the position in relation to all the litigation in this area of the law following the decision in Dimond v Lovell.
11. But the district judge went on to hold that Mrs Wilson should pay the costs of the application before him, which she had opposed; and he assessed those costs at £1,000. He gave permission to appeal. Judge Cowell, while dismissing the appeal in relation to the stay of the action, was sympathetic to the view that Mrs Wilson should not have to pay those costs until after the stay in the action had been lifted. To require her to pay them immediately would lead to a situation in which she would have to find the money to do so at a time when her claim to recover her property was still in a state of suspense. Accordingly, although it has not been part of his order, he indicated that those costs should not be enforced until after the stay had been lifted. That appears to have been accepted by the defendants, Robertson's (London) Ltd. However, Judge Cowell ordered that Mrs Wilson pay the costs of the appeal before him. He assessed those at £850 and he required them to be paid before the end of 2001. Mrs Wilson sought a stay of that order from this court which was refused by Buxton LJ on paper on 19th December 2001.
12. Her application to appeal in relation to costs, therefore, has two limbs. First, she says that the district judge should not have ordered her to pay the costs of the application before him; and that that is not cured by the suspense imposed on enforcement by Judge Cowell; secondly, that Judge Cowell should not have ordered her to pay the costs of the appeal.
13. It is convenient to deal with the second of those points first. The position before Judge Cowell was that Mrs Wilson was seeking to reverse the district judge's decision that the action be stayed. She failed to achieve that result. The ordinary consequence would be that she should pay the costs of that appeal. That is what the judge ordered. Section 55(1) of the 1999 Act does not apply to her application for permission to appeal against that order for costs. The test to be applied is the ordinary test: that the appeal must have some real prospect of success. In my view there is no prospect of success against the judge's order that she should pay the costs of the appeal before him; and no prospect of success against his assessment of those costs at £850. This, after all, was an appeal which occupied the time of the county court judge for two hours.
14. That leaves only the question whether she should have permission to appeal in relation to the costs order made by the district judge as amended or varied by His Honour Judge Cowell. She says with some force that, at the time when she opposed the application for a stay, the application was made on the basis that there was some prospect of amending and retrospective legislation, and that it was wrong to grant a stay in those circumstances alone. By the time the application came before the district judge it could be based, and was based, upon the restitution point which had emerged in the Secretary of State's petition delivered shortly before that hearing. So, she submits, she should not be penalised in costs for resisting an application on the grounds that it was made in circumstances where the real basis for the application did not emerge until the hearing.
15. There are two difficulties with that submission. The first is that she did not put her appeal to Judge Cowell on that basis. She pursued her resistance to the order for a stay of the action notwithstanding that the position had changed as a result of the Secretary of State's petition. The second problem is that an appeal against the district judge's order for costs would be a second appeal to which the restrictions in section 55(1) of the 1999 Act apply.
16. In my view this is not a case in which permission to appeal can be granted. There is no real prospect of success in an appeal against the order for costs made by the district judge; and, even if there were, this is not a case which satisfies the requirements of CPR 52.13.
17. I should add this. The defendants have accepted that they should not seek to enforce the order for costs made by the district judge until after the lifting of the stay in the action. It seems to me that, if the stay in the action is lifted, the matter will then have to be reconsidered in the light of the decision of the House of Lords in Wilson v County Trust. If the effect of that decision is that there is no restitution claim so that there is, in effect, no defence to Mrs Wilson's action, then there is no reason why that costs order should not take effect. But if the House of Lords holds that there is, at least potentially, a restitutionary claim - so that these proceedings continue - then it may be necessary for the court to consider whether the costs order should be enforced during the pendency of these proceedings. That is an application which Mrs Wilson can make to the county court in due course. It is unnecessary to resolve the point now.
18. All that I do at this stage is to dismiss her application for permission to appeal.
(Application dismissed; no order for costs).