England and Wales Court of Appeal (Civil Division) Decisions

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

		Royal Courts of Justice Strand, London, WC2A 2LL
		10th April 2008

Lord Justice Lloyd:

1. Mr Man, the appellant, is a tenant of the respondent, Westminster City Council. He is acting in person although he has valuable assistance from Mr Mercouris, who previously helped him when Mr Mercouris was working for the Royal Courts of Justice Advice Bureau. Mr Man also has, we understand, acute sight and hearing difficulties.
2. He refused to pay service charges demanded by the city council. The city council sued him for those and obtained a default judgment for £2,252.43. Mr Man applied to the county court to have the default judgment set aside and he succeeded, by way of an order dated, I think, 11 May 2004, upon terms which required him to pay the sum in question into court within seven days, (which was done) and which transferred the issue to the Leasehold Valuation Tribunal, which has relevant jurisdiction to investigate the reasonableness of service charges. The order, which was made by District Judge Hasan, also, in terms, ordered the claimant to pay the defendant's costs assessed at £1,000. That was later rectified so that it read "the defendant to pay the claimant's costs" assessed at £1,000. That sum was not paid.
3. The matter did proceed in the Leasehold Valuation Tribunal; at least it got started in that tribunal, but at that stage Mr Man offered to settle the dispute, being worried, he says, about the possible escalation of costs. Westminster's solicitors, Messrs Judge & Priestley, prepared a draft order to deal with the Leasehold Valuation Tribunal Proceedings which would have said:

"Upon the parties agreeing to the terms of this Order in full and final settlement of all outstanding matters between the parties, it is hereby agreed by consent that:-

1. The Application be withdrawn by the Applicant.

2. The full Judgment sum and Respondent's costs paid into the Central London County Court by the Applicant pursuant to the court order dated 24 May 2004 be paid to the respondent forthwith."

4. Mr Man appears to have signed that but neither Westminster nor their solicitors did and so that order did not proceed, and presumably an order of the Leasehold Valuation Tribunal could not effectively have dealt with sums paid into the county court under a county court order. That draft order is therefore really a red herring. Judge & Priestley also drafted a Consent Order in the form of a Tomlin Order in the Central London County Court. This recorded that the claimant and the defendant had agreed a settlement to the action in the terms set out in the Schedule and it recorded an undertaking by Mr Man to withdraw his application from the Leasehold Valuation Tribunal and then in its operative part it said this:

"By consent it is ordered that:

1) the sum of £2,252.43 paid into court by the Defendant pursuant to the Court Order dated 24 May 2004 be paid out of court to the Claimant's solicitors forthwith;

2) All further proceedings in this action be stayed."

5. That was dated 30 September 2004, signed by Mr Man and by Judge & Priestley and we have in the appeal bundle, at page 90, a copy bearing the Central London County Court stamp. The Schedule refers to the sum which had been paid into court. It is not in the most intelligible terms but it certainly does not refer to the outstanding costs. If that order was effective in accordance with its terms Westminster was able to obtain out of court the money that had been paid into it but could not get anything else and by virtue of the stay of further proceedings, on the face of it, could not take any further step to enforce the Costs Order.
6. District Judge Taylor, in his judgment on the application which ultimately led to this appeal referred to the order as having been sealed: that is at paragraph 7 of his judgment. So, he appears to have regarded it as an effective court order. The next thing that happened, it seems, is that someone in the county court pointed out that the order did not deal with whatever interest had accrued on the sum in court and suggested that, failing such a reference, it would be payable to Mr Man. The respondent's solicitors prepared another version of the Tomlin Order, dealing with interest, but still not with costs. That was signed by both parties, as regards the appellant under mild protest, but does not seem to have been sealed by the court. Certainly, there is no copy in the appeal bundle that bears the court stamp or seal.
7. Next the county court pointed out that the order said nothing about the previous Costs Order. That is in a letter dated 31 January 2005, which is in the bundle at page 97. The respondent's solicitors prepared yet another version, which did deal with the costs, but the appellant refused to sign that and then on 14 April 2005 the respondent issued an application notice asking for a determination that the action had been settled on the terms that the sum in court be paid out to the respondent and that the appellant pay the respondent's costs previously ordered or, alternatively, asking for directions for the disposal of the action. Two witness statements were put in on this application on either side -- two, one from Westminster and one from the solicitors, for the respondent and two from Mr Man on his side.
8. That application came before District Judge Taylor on 7 December 2005. He declared that the Tomlin Order was a binding agreement so far as it went in the amended form, but the claim for interest (a reference which is puzzling) and for costs had not been compromised. From the terms of the note that we have of his judgment he seems to regard the Tomlin Order as effective so far as it went and as reflecting agreement between the parties as regards to the £2,252.43 and, by amendment, the interest on that sum. But he said at paragraph 13 that the £1,000 costs was a fait accompli which had already been ordered and was payable within 14 days of the original order and was not the subject of any variation or extension of time for payment.
9. In his judgment he does not address the possible significance of the stay of proceedings in paragraph 2 of the Tomlin Order, which, on its face, very arguably precludes the receiving party under the earlier order from taking any proceedings to enforce it. Judge Paul Collins gave permission to appeal but Judge Crawford Lindsay, before whom the first appeal came, dismissed it. He said that the Tomlin Order effectively compromised all further proceedings, but not so as to affect the right of the respondent to enforce the previous order for costs. He agreed with the district judge that the Tomlin Order did not vary or discharge the previous Costs Order. Permission to appeal to this court was refused on paper by Mummery LJ but, as is his right, Mr Man requested an oral renewal and that is what has come before this court this morning after some delay due to attempts on Mr Man's part, or on his behalf, to secure representation, which have not yet succeeded.
10. Together with the application for permission to appeal Mr Man has applied for permission to adduce additional evidence about the course of the negotiations, among other things, and has also complained about the course of the proceedings below and even the accuracy of the transcript. None of those points seem to me to justify a second appeal and the most significant aspect to the additional evidence to which, as I understand it, Mr Man wishes to refer is a letter that was in fact before the district judge, I think I am right in saying, namely the letter of 15 November 2004 which is at page 96 of the trial bundle.
11. At the heart of Mr Man's case, however, is a point which seems to me to have substance and general importance. If the Tomlin Order of 30 September 2004, with or without the later minor variation as to interest, was effective as an agreement and as a court order, then in terms it did provide for only one payment to the respondent, namely the payment out of court of the money that had been paid into court, and it also stayed the proceedings, thereby, on the face of it, precluding the respondent from enforcing any previous order, including that already made by District Judge Hasan for costs. If that is so, says the appellant, how can the respondent be entitled to enforce that Costs Order? On Mr Man's behalf it is suggested, with some force, that since this arises from the terms of the Tomlin Order, which are in more or less standard form, that is to say in particular from the stay provision which is a universal feature of Tomlin Orders, it is a point of general principle. If, as a general principle, Tomlin Orders in this form do not prevent parties from enforcing previous orders which are not expressly provided for in the agreed terms, where is the finality that a compromise is intended and understood to achieve? In that respect it seems to me that there is what can be regarded as an important point of principle involved in the decisions below on which they are, I think I can say, likely to be held to have been, at any rate arguably, wrong.
12. What can be said is that even if the correct answer is that the Tomlin Order was binding as a compromise but subject, on appropriate evidence, to being set aside at the suit of the respondent as being based on a mistake or subject to rectification then the appellant would be right so far as his contention today that, as matters now stand, the earlier Costs Order is not enforceable and the orders below of District Judge Taylor and HHJ Lindsay ought not to have been made, including the adverse Costs Orders that both judges made against Mr Man. It would remain open to Westminster, if it wished and thought appropriate, to attempt to have the Consent Order set aside in other proceedings on grounds such as can vitiate a Consent Order.
13. In such a context, it seems to me appropriate to point out that it would no doubt be relevant that it was the respondent's own solicitors who drafted the order in question and who manifestly overlooked, if the respondent is right, the need to deal expressly with a) interest on the money in court, a minor matter and b) more significantly, the outstanding Costs Order. It would also be relevant that when they did this they were dealing with, on the other side, a litigant in person, albeit one assisted informally through the Royal Courts of Justice Advice Bureau.
14. I would urge the respondent, on seeing the terms of the order which we propose to make and this judgment, to think somewhat carefully before any significant further costs are incurred on the appeal whether it is sensible or appropriate for them to contest this appeal or to take any further step in relation to the Tomlin Order which, on its face, appears to be an effective compromise barring them from recovering the added costs. That is a matter for the parties, but in the circumstances in which we have considered Mr Man's application substantially on paper and having indicated to Mr Man the limited basis on which we propose to grant permission to appeal, Mr Mercouris has not sought, on his behalf, to argue for a more extensive grant of permission to appeal, it seemed to me to be appropriate to set out my reasoning, for the benefit not only of Mr Man but also of Westminster, at somewhat greater length than I otherwise would have done in granting permission to appeal.
15. For those reasons I would dismiss Mr Man's application for permission to adduce further evidence on the appeal. I would grant permission to appeal on one specific ground. I think this ground corresponds with the terms of the Grounds of Appeal advanced on Mr Man's behalf at pages 9 to 11 of the appeal bundle but his skeleton argument and the statement under practice direction at paragraph 14.4A undoubtedly go wider than this and accordingly I think it appropriate to formulate the ground as follows and to refuse permission on all other grounds.
16. The ground permitted is formulated in this way. The claim by the claimant against the defendant was compromised by the Consent Order dated 30 September 2004 which was valid and effective as an agreement and as a court order. That order provided that all further proceedings in this action were stayed. It was therefore not open to the claimant to enforce the order dated 11 May 2004 as regards costs and the judge was wrong in law to hold that the claimant was still liable to pay the claimant the costs which were the subject of an order dated 11 May 2004.
17. I should say that in putting forward that formulation I am not, of course, expressing the view of the court; I am attempting to express the contention of the appellant in succinct terms. I should also say that I understand District Judge Hasan's order by which the original costs obligation arose to have been dated 11 May 2004; but there are references to it being dated 24 May 2004 and since the appeal bundle does not include a copy of the front page of the order we cannot tell which is the correct date. I suspect it was made on 11 May but that it was not finally drawn up until 24 May. I would, as I have said, refuse permission to appeal on all other grounds and I would grant a stay of execution of all sums ordered to be paid by the defendant to the claimant pending the determination of the appeal. I also direct that a transcript of the judgment be obtained at public expense for the benefit of Mr Man.

Lord Justice Buxton:

18. I agree with everything that my Lord has said. There is nothing that I wish to add, save to underline the advice he gave to the respondent in this appeal to review the matter carefully before it proceeds further. Permission to appeal will therefore be granted in the limited terms set out by my Lord. Should the appeal go forward it will be heard by a court of three, one of whom may be a High Court judge; a time estimate of two hours. We are very grateful, in particular, to Mr Mercouris for his very considerable assistance in this case. The appellant will be provided with a copy of the judgment at public expense.

Order: Application granted in part