England and Wales Court of Appeal (Civil Division) Decisions

Kuzeva & Anor, R (on the application of) v London Borough of Southwark [2002] EWCA Civ 781 (30th May, 2002)

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEENS BENCH DIVISION
ADMINISTRATIVE COURT
Mr Justice Collins

		Royal Courts of Justice Strand, London, WC2A 2LL
		30 May 2002

Lord Justice Schiemann:

1. This is the judgment of the Court.
2. This appeal is by leave of Sedley L.J. against an order made by Collins J. on 3.7.01 in relation to costs. He ordered that there should be no order for costs throughout. It is submitted by the appellant claimants that he fell into error both in relation to the costs of the hearing before him on that day and in relation to various previous hearings.
3. The litigation was started by an old lady of some 80 years, Matriona Kuzeva, and her son-in-law, Vladimiras Anufrijevas. They were the claimants. The defendants are the local authority. There are also involved the family of the son-in-law which consists of his wife and three children. All came here seeking asylum. That claim was initially rejected but they remained here pending final determination on compassionate grounds. These centred around the state of health of the old lady. She had been diagnosed as suffering from a serious carcinoma, which involved a major operation and which left her in a very frail state of health. She was unable to get around without assistance and she was effectively not mobile. She had to remain in the wheelchair if not in bed. The result of that was that accommodation to cater for her needs had to be of a particular sort. The litigation is concerned with the question whether the authority had failed to act in accordance with its statutory obligations in relation to the provision of housing for this family. The claimants said that the Authority had not got on with finding them appropriate housing. The Authority said it was doing its best in the light of a difficult situation centring on the old lady’s state of health.
4. Unfortunately, since the decision of Collins J. the old lady has died. This has left the son-in law and his family as the only seekers for housing accommodation and the Authority have found them appropriate accommodation. So the underlying dispute has disappeared. There remains however an issue in relation to the costs of several hearings concerned with attempts by the claimants to secure housing. There is also in the background a claim in damages against the Authority for failure to provide appropriate housing whilst the old lady was still alive. That damages claim has not yet been heard by any judge and we are not directly concerned with its merits if any. We were told that an attempt had been made by the Authority to strike out that damages claim but had not succeeded.
5. The procedural history of the matter is as follows.
6. On 2.2.01 the claimants issued a claim form. It is completely blank save for a statement of truth apparently signed by a solicitor. With it however was served a document entitled ‘Detailed Statement of grounds to be attached to section 6 of the claim form’. That document was drafted by counsel. The relief sought is described thus

D seeks to obtain an order for possession on 14 February 2001 and demolish the flat thereafter. In the premises, there is an urgent need for an interim injunction to be granted requiring D to provide suitable temporary accommodation by 14 February 2001 pending the outcome of these proceedings or any final suitable offer of accommodation, whichever is the sooner.

7. Permission to apply for Judicial Review was granted on paper. That claim came on for hearing on 20.2.01. before Elias J. in a hearing that lasted 7 minutes. Without opposition, the application for an interim injunction was granted in the terms that the defendant must use its best endeavours to find the claimant and her family suitable accommodation as soon as possible and in any event within 8 weeks. The defendants were ordered to pay the claimants costs. No further issue arises in relation to that order.
8. In March property at 49, Gordon Road, was offered by the defendants but rejected by the claimants as unsuitable. Differences of view as to the suitability of accommodation are commonplace in this area of the law. Shortly thereafter the defendants were told that Mrs. Kuzeva was in hospital under-going surgery.
9. In those circumstances a further hearing was listed by the claimants on 4.5.01 before Lightman J. The amended order of the judge recites that the claimants were seeking a mandatory order requiring the defendants to house the claimants and her (sic) family in suitable accommodation and that damages were sought for the excessive delay caused by the defendants inactivity since its first assessment in February. (We have not seen amended particulars of claim which claim damages.) The defendants then took the view that Mrs Kuzeva’s case needed reassessment in the light of her condition after surgery and prognosis. The judge made the following order: ‘The application be adjourned generally; liberty to restore; if not restored by 28^th July 2001 the claim to stand dismissed; costs be reserved’.
10. The claimants assert that the defendants took no steps at all thereafter and so they listed the matter once more before Ouseley J. on 31.5.01. The order which he made refers back to the claim form of 2.2.01 and makes no mention of any claim for damages. It records an undertaking by the defendants that they would make a mobility assessment of the old lady within 7 days of being notified by the claimants’ solicitors that she was fit for such an assessment. Liberty was given to the defendant to apply to discharge the undertaking. It was recorded that there be no order on the application for interim relief. It was ordered that there be no order as to costs. No further issue arises in relation to this order.
11. Thereafter the claimants sought to restore the application and secured a date. The defendants identified a property at 5, Lanvanor Road as a possibility and suggested an adjournment of the next hearing while this was investigated. The case came on before Stanley Burnton J. on 15.6.01. His order refers back to the claim form of 2.2.01 and makes no reference to any damages claim. He adjourned the application so that 5, Lanvanor Road could be inspected on behalf of the claimants. He ordered the claim to be relisted on 3.7.01. On this occasion again costs were reserved.
12. The claimants accepted 5, Lanvanor Road as suitable only if adaptions were made to the premises. Unfortunately however, the owner of 5, Lanvanor Road then withdrew his offer to make it available. In those circumstances the claimants caused the case to be listed once more before Collins J., for a final hearing. A skeleton argument was served by the claimants which made no mention of the claim for damages nor was the claim referred to at the hearing. It was not suggested to the Judge that he should then and there try the damages claim or that costs should be reserved to be determined on the occasion when the damages claim was tried. The Judge said this :

The question arises what can I now do? Southwark recognises its duty. Southwark recognises the urgency. … Unfortunately the landlord then said he was withdrawing the offer. … Mr Swirsky submits that Southwark cannot be said to be to blame, and on the face of it that may very well be so. Nevertheless, the result is that nothing is available. … If [Mr Anufrijeva] is granted exceptional leave to remain in this country, then the situation will change, because the Housing Acts will then apply and different duties will be imposed. … I have decided that the sensible course to take is to adjourn the matter. …

Considerable time has passed since [Elias J. made his order.] I am not in a position to resolve the issues of fact which exist between the parties as to whose fault it was that various attempts to find suitable accommodation have come to nought. Suffice it to say that they have come to nought, but it is necessary in my judgment to do something now which brings the matter to a head.

I recognise of course that I cannot order the impossible. What I propose to do is to make a similar order to that made by Elias J., which is to require the authority to use its best endeavours to find the claimants and their families suitable accommodation as soon as possible. Pausing there, the Council have no difficulty with that because they say that it is precisely what they are doing in any event. But what I propose to go on to say is that, in any event, that accommodation must be found within 8 weeks. …

On those terms, therefore, I shall formally adjourn this application in the hope that at long last this will be the final occasion when it has to trouble the Court. It seems to me, in all the circumstances, that public funds being involved on both sides, the sensible course is to say no order for costs, save, in case you need it, a necessary order for detailed assessments.

13. When asked about the costs reserved on previous occasions Collins J said: “No order throughout.” The whole matter took 17 minutes before the Judge moved on to the next case in what is usually a heavy list. The Judge was not referred by either side to the provisions of section 22 of the Access to Justice Act 1999. That was unfortunate. It is not now disputed that the effect of Section 22 is that a party’s legal aid status is irrelevant to a consideration of whether there ought to be a costs order and if so in whose favour it ought to be.
14. The grounds of Appeal assert that the Judge erred in that he did not consider the claimant’s application for costs on normal principles but ordered that there should be no order for party costs because the claimants were in receipt of public funding. Certainly the short comment which we have quoted is open to that interpretation. That is why Sedley L.J gave permission to appeal. He stated at the time that he had refused permission to appeal on paper because there seemed to him to be a number of queries which might mean that the issue of principle was fogged by issues of fact. By the time we heard the case there was no issue of principle left in dispute and some of the fog surrounding the facts had cleared. This leaves this court in the position where it has a choice between three broad courses

To send the whole matter back to the Administrative Court in order for it to be decided

To reserve all questions of costs to the Judge who will hear (if there is a hearing) the damages claim.

To come to a decision itself uninfluenced by the view taken by Collins J..

15. No one urged upon us the first course and we do not adopt it. We were urged by Mr O’Brien to take the second course. When the matter of damages is addressed then that Judge will probably have made decisions as to the reasonableness as to the Authority’s actions at various points in time and will then be able to take those factors into account in making the appropriate costs orders. He submitted that if we were to uphold the judge’s decision that there should be no order as to costs his client would know that the Legal Aid authorities would have first charge on any damages he might recover and this might act as a disincentive to his exercising what Mr O’Brien claimed were his client’s rights under the Human Rights Act 1998 for damages.
16. Mr Swirsky, on the other hand, suggested that the third course was preferable. He submitted that the whole course of any action for damages was fraught with uncertainty. It was by no means clear that any action would succeed or even be pursued to trial. A decision as to costs now would at least clear the decks up to a point.
17. We think it right now to consider what order to make. The position in relation to any damages action and indeed Mr Anufrijeva’s continued presence in this country is too uncertain to justify putting the decision off to some future date.
18. The principles to be applied were recently considered in a helpful judgement by Scott Baker J. in an unreported decision Boxhall v Mayor and Burgesses of the London Borough of Waltham Forest decided on 21^st December 2000. There he reviewed the provisions of the Civil Procedure Rules and the case law and in particular R v London Borough of Wandsworth ex parte Heshmati a decision of this Court dated 4^th November 1997. The citations below will suffice for present purposes:

“The Court of Appeal referred to Blatcher v Heaysman [1960] 1 WLR 663 where a similar situation had arisen at first instance but the Court of Appeal had reversed the decision as contrary to the relevant provisions of the Legal Aid and Advice Act 1949. The President pointed out in Heshmati that Blatcher had been followed in a number of decisions thereafter and that:

“.... the Judge was wrong to make a special rule for a legally aided case. The two public bodies were in fact quite separate public bodies in this instance. One was a local authority, having a different financial position from that of the Legal Aid Board. But it is plain from the provisions of sections 31 (1) (b) of the Legal Aid Act 1998 that the Judge should have considered the application for costs upon the normal principles. In this case it is apparent from the terms of the judgment that costs would normally have followed the event.”

The authorities fall into two groups.

1. Cases that are settled before permission is granted:

“The fact that a case has not reached the permission stage is not a bar to a costs order. In R v Royal Borough of Kensington & Chelsea ex parte Ghrebregiosis (1994) 27 HLR 602 Brooke J. made an order for costs against the respondents. He said it was only in a very clear case that such an order should be made. But it was such a case. The letter before action set out the facts and law with admirable clarity. If the respondents had given proper attention to the merits of the case when they received the letter they would have taken the necessary steps to make the proceedings unnecessary. But the judge said his judgment should not be taken as a green light for applicants to seek orders for costs against a local authority that has made a concession at an early stage.

… in R v London Borough of Hackney ex p. Rowe [1996] COD 155 Sedley J. refused the applicant a costs order. He said the case did not meet the test enunciated by Brooke J. in Ghrebregiosis; it was not a plain and obvious case. The attempt to recover costs had simply incurred further public expense on both sides. He pointed out that the practice on costs should do nothing to discourage sensible settlement and pointless expeditions to the Court that incurred further costs. With that I entirely agree.

2. Cases that are discontinued after permission is granted but before a substantive hearing.

R v Liverpool City Council ex p Newman (1992) 5 Admin. L.R. 669 [was a case in which] Simon Brown J. said there was a general rule that if judicial review proceedings are discontinued the respondents would recover their costs provided that such discontinuance can be shown to be the result of the applicant’s recognition of the likely failure of his challenge. He went on to say:

“The position is, however, entirely different where, as here, the discontinuance follows some step which has rendered the challenge no longer necessary, which in other words renders the proceedings academic. That may have been brought about for a number of reasons. If for instance, it has been brought about because the respondent recognising the high likelihood of challenge against him succeeding has pre-empted his failure in the proceedings by doing that which the challenge is designed to achieve - even if perhaps no more than agreeing to take a fresh decision – it may well be just that he should not merely fail to recover his own costs but indeed the applicant’s. On the other hand it may be that the challenge has become academic merely through the respondent sensibly deciding to short-circuit the proceedings, to avoid their expense or inconvenience or uncertainty without any way accepting the likelihood of their succeeding against him. He should not be deterred from such a course by the thought that he would then be liable for the applicant’s costs. Rather in those circumstances, it would seem to me appropriate that the costs should lie where they fall and there should accordingly be no order. That might equally be the case if some action wholly independent of the parties had rendered the outcome of the challenge academic. It would seldom be the case that on discontinuance this Court would think it necessary or appropriate to investigate in depth the substantive merits of what had by then become an academic challenge. That ordinarily would be a gross misuse of this Court’s time and further burden its already over-full list.”

Having considered the authorities, the principles I deduce to be applicable are as follows:

The Court has power to make a costs order when the substantive proceedings have been resolved without a trial but the parties have not agreed about costs.

It will ordinarily be irrelevant that the claimant is legally aided.

The over-riding objective is to do justice between the parties without incurring unnecessary Court time and consequently additional costs.

At each end of the spectrum there will be cases where it is obvious which side would have won had the substantive issues been fought to a conclusion. In between, the position will, in differing degrees, be less clear. How far the Court will be prepared to look into the previously unresolved substantive issues will depend on the circumstances of the particular case, not least the amount of costs at stake and the conduct of the parties.

In the absence of a good reason to make any other order the fall-back is to make no order as to costs.

The Court should take care to ensure that it does not discourage parties from settling judicial review proceedings for example by a local authority making a concession at an early stage.

19. That appears to us accurately to state the position. Applying those principles to the present case as best as we can on the materials in front of us we have come to the conclusion that this is one of those cases where there was no good reason to make an order for costs against either party. In saying that we do not mean to question the order made by Elias J on 20^th February 2001 that the Authority pay the costs of that hearing.
20. In those circumstances, while recognising that, because of the uncertainty as to whether Collins J. was influenced by the Legal Aid situation, we ought to exercise our discretion afresh, we have come to exactly the same conclusion as the one to which he came and would dismiss this appeal.