England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
NOTTINGHAM DISTRICT REGISTRY
(HIS HONOUR JUDGE INGLIS)

		Royal Courts of Justice Strand, London, WC2A 2LL
		2nd September 2008

Lord Justice Longmore:

1. This is an application for permission to appeal in relation to costs. There is already going to be an appeal to this court in the substance of the matter because the question that arose at trial was whether the defendant tenants had correctly operated a break clause in a fifteen year lease at the end of five years. The judge held that they had because they had sent a fax which had been acknowledged (as he found) many months later, and that that was sufficient to bring the lease to an end. That was a point that did not take much time to argue at the trial.
2. There was a three day trial, very largely on the question whether the tenant's process server had served the relevant documents at the right or the wrong address. The judge would have held that he had served them at the right address but for the fact that after the relevant witness, a Marie Young, had been cross-examined and it had been put to her that she was lying when she said she was in the office until 5.00 on the Friday afternoon because her line manager had been absent and it was suggested that she had taken an early Friday afternoon off, she was so indignant at that suggestion that she went back over the adjournment of the case between the evidence and speeches and found a relevant telephone bill that showed that she was in fact in the office. But for that fact, the judge said that he would have held that the process server, a Mr Hampton, had served the documents at the right address. In the event, in the light of that very late evidence in relation to the telephone calls made, he decided not merely that Mr Hampton had served the documents at the wrong address but that he must have appreciated that that was the position when he was giving his evidence, if not at the time he made his first statement, and that he was therefore a lying witness.
3. Nevertheless when it came to costs, the judge decided that the successful defendant should have their costs not only because they had won the case but also because, as he put it, the claimants had not conducted the case in a proper way by disclosing telephone records at the proper time and they had only come forward extremely late. So far, it would be difficult to attack that as an exercise of discretion of the judge, but Mr Taylor this morning has submitted that whereas the decision would be difficult to challenge if Mr Hampton had not been a lying witness, the fact that Mr Hampton was a lying witness completely changed the picture and the order of the judge should have been that the defendants should not have had their costs, or at most only a small proportion of them.
4. This question of costs Mr Taylor wishes to argue as a separate matter and he needs permission to appeal, the judge having given permission to appeal only on the substantive construction issue, namely whether fax acknowledged many months later would be sufficient to meet the requirements of the break clause.
5. Tuckey LJ has already refused this application on paper, pointing out, because there was some doubt about the matter, that the claimants needed permission to mount a free standing appeal against costs, although of course if their appeal generally succeeds the question of costs will then become at large, but he added:

"But I would refuse permission on the basis that such an order would have been within the wide discretion as to costs which a trial judge has."

6. Mr Taylor in a compelling short submission submits that the judge did not have any regard, or at any rate any sufficient regard, to the fact that Mr Hampton was a lying witness, and in the context of the question whether the defendant should be entitled to indemnity costs, observed that there was no criticism of the parties or the parties' solicitors in the fact that Mr Hampton was a lying witness, and Mr Taylor has submitted that it would be useful for the court to give some guidance as to whether that is a correct approach.
7. I fear I do not think that it would be a suitable case for any guidance to be given. Each case does inevitably turn on its own facts. Mr Taylor submits that the parties' conduct is in issue because they put a lying witness into the witness box; alternatively that the untruthfulness of a witness must be relevant in any event. That, as it seems to me, puts the matter much too high. It is all a question of the facts of the case. The judge clearly had on board Mr Taylor's arguments. One aspect of his decision was that the parties themselves could not be criticised, in the sense that they could not be said to have known in advance that Mr Taylor was to be a lying witness. But whether or not a lying witness makes a difference to costs must depend on the discretion of the judge in the individual case. This is not a case where any general principle arises. Some judges would perhaps have made a more beneficial order to the claimants in respect of costs than others, but it is to my mind impossible to say that this judge's order in this case was outside the broad discretion as to costs which the judge has, and it would not be appropriate therefore for there to be a freestanding appeal on costs. As I have indicated, if the claimants actually win the appeal then costs will be an issue in any event, and nothing that I say today on this short interlocutory application should be treated as in any way influencing any argument or decision as to costs which will then be made.

Order: Application refused