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
DIVISIONAL COURT
(LORD JUSTICE RICHARDS, MRS JUSTICE SWIFT)

		Royal Courts of Justice Strand, London, WC2A 2LL
		17th February 2009

Lord Justice Elias:

1. This is an application for a protective costs order ("PCO"). The case is due to be heard next week. The applicant is an assured tenant in social housing managed by the defendant trust. The Trust is a registered social landlord under the Housing Act 1996. Apparently it is the seventh largest registered social landlord in the county.
2. The applicant lives with her three children. She was issued with a notice of possession in March 2007. She sought judicial review before the Divisional Court (Richards LJ and Swift J). At that stage both parties were represented by leading and junior counsel. An important issue for the court was whether the defendant's housing management functions were public functions, with the consequence that the Trust is to be regarded as a "public authority" for the purposes of section 6(3)(b) of the Human Rights Act and is amenable to judicial review. The court concluded that it is a public authority and issued a declaration to that effect. However, the court dismissed the challenge to the notice seeking possession on the facts. The Trust were given leave to appeal the decision insofar as it is reflected in the declaration. They wish to establish that they are not in fact a public authority within the meaning of the Human Rights Act. The matter is considered to be of great concern to registered social landlords throughout the country.
3. The Equality and Human Rights Commission has also sought the right to intervene. They wish to make representations in opposition to the Trust and to support the Divisional Court's decision. So far they have been given the right to make written representations but no right to appear and make oral submissions.
4. It is important to focus on precisely what the applicant is seeking in this application. We have been assisted this morning by Mr Richard Drabble QC. Apparently the position is that the Legal Services Commission will fund this litigation for both junior and leading counsel, but only on condition that they will not be liable for the Trust's costs if the Trust proves to be successful.
5. In my judgment it is important to bear in mind that, when granting leave to appeal, it was certainly open to the court to have made it a condition of the Trust pursuing the appeal not only that they should not undertake not to pursue costs against the claimant, if successful, but in fact that they should bear the costs of both parties in the appeal. The power to impose conditions of that kind is granted by CPR Part 52.37. As an example, in the notes in the White Book the case of Morris v Wrexham CBC [2001] EWHC Admin 697 is identified as a case where leave to appeal was granted on condition that the appellant pay the respondent's costs of the appeal in any event. Mr Drabble stated that no application was made for a condition of that kind below because it was thought at that stage that the Legal Services Commission would fund the appeal, but in fact they have taken the position that they will not do so, unless, as I have indicated, the Trust states that it will not pursue its costs if successful.
6. This application is, as I have said, for a protective costs order. The principles which have been developed for providing such orders were set down by the Court of Appeal in the case of R (Corner House Research) v SSTI [2005] 1 WLR 2600 at 74. The basic approach is that the court should, in its discretion, do what is fair and just having regard to a number of considerations. The Trust contends that it would be improper to grant the application in the light of these considerations. I will deal with those in a moment.
7. It is, however, worth making a preliminary observation. There can be no doubt that this case is raising an issue of some public importance -- of great importance, in particular, to the Trust. It is vital that there is proper representation for both sides before the court. If the claimant does not obtain the PCO that they seek, with the result that they are not represented before the court, then either the Equality and Human Rights Commission would have to take the burden of providing the necessary representation or the court would have to appoint an amicus. I have little doubt that if it had been appreciated when leave was granted that the court might have to appoint an amicus, permission would not have been granted on that basis. In any event it would now involve a delay to take the step. Perhaps the most important point is that, if either of those two bodies, the amicus or the intervenor, were to be running the arguments against the Trust in the appeal, then the Trust would, in any event, not be able to recover any costs against either of them. There is, therefore, a considerable air of unreality about the stance that the Trust is taking, it seems to me. Nonetheless Mr Baker has sought to contend that, if one looks at the relevant criteria set down in the Corner House case for determining whether or not a PCO should be granted, then it is plain that it should not be granted in the circumstances of this case.
8. It is a very unusual case, in this regard: although it is plain that a PCO can be granted at any stage in the proceedings and in principle that can even be at the appellate stage (see for example Goodson v HM Coroner for Bedfordshire and Luton [2005] EWCA Civ 1172 in the Court of Appeal), nonetheless we have not been referred to any authority which has involved an application for a PCO by somebody who is the respondent to the appeal. The principles appear to have been developed to deal with a case where it is in the public interest that litigation should be conducted and the litigation would be discontinued if a PCO were not to be made. That plainly is not this case, since the Trust is in control of the appeal and would pursue this appeal whether or not a PCO is granted. It is not possible, it seems to me, to apply the principles set out in the Corner House case, particularly at paragraph 74, precisely to the circumstances we have here, but the development of this jurisdiction is a common law development and I am in no doubt that in principle it is appropriate for the applicant to make the application of the kind that has been advanced today.
9. Looking at the considerations which are set out in the Corner House case at paragraph 74, Mr Baker does not dispute that some of them are satisfied in this case. Plainly the case raises an issue of general public importance and the public interest requires that the issue should be resolved. Although, in a skeleton argument, he submitted that if one had regard to the financial resources of the applicant and the respondent, it was not necessarily fair and just to make the order because the respondent trust is a charitable body and a non-profit-making body, he has sensibly not pursued that particular submission before us this morning. I have no doubt that the disparity between the financial resources is such that it is not a factor which militates against the making of the order.
10. He does, however, rely upon two features identified by the Court of Appeal in the Corner House case, which he says are considerations not met here. The first is that the applicant should have no private interest in the outcome of the case. The significance of that was emphasised in the Goodson case, to which I have made reference. That was a case where it was alleged that there had not been a proper investigation into a death, pursuant to Article 2 of the Convention, as there ought to have been. That case failed at first instance, and costs were awarded against the claimant, who then sought a protective costs order for the appeal.
11. One of the issues that was raised before the court was whether it is necessary in all cases that the applicant should have no private interest of any kind in the outcome of the proceedings. It was submitted that it ought not necessarily disqualify the court from making an order that there was some private interest, provided it was outweighed by the public interests involved. Moore-Bick LJ, in his judgment, rejected that submission and concluded that it was a requirement that there should be no private interest in the outcome of the case. That was consistent with the judgment of Dyson J in R v Lord Chancellor, ex parte Child Poverty Action Group 1999 1 WLR 347, which was a decision which was applied -- with some variations -- by the Court of Appeal in the Corner House case.
12. Mr Baker says that here the applicant has a private interest. She is in a position where, following the declaration from the Divisional Court, she will now have the benefit of public law protection as an assured tenant. I do not accept that that is the kind of private interest which the court was talking about in the Corner House case. In the Goodson case, to which I have made reference, at paragraph 28 reference was made to the fact that, in some cases, a personal litigant who has standing to apply for judicial review may have a private interest in the outcome of the case in the sense that there will be some benefit, but it is no more than the interest that will apply to the population or a section of the population as a whole. That seems to me to be the position here. This appeal is being conducted in the public interest at the behest of the Trust, not to assert a private interest of the applicant. The possession order against her will stand come what may, and any personal interest she may derive is no greater than that which will accrue to the benefit of all tenants in the same position that she is.
13. The final consideration is whether, if the order were not made, it would result in the applicant discontinuing the proceedings and that it would be reasonable for the applicant to do so. Plainly that consideration cannot apply strictly in those terms in this case. As I have indicated, it is not the applicant who is pursuing the appeal; it is the Trust that is pursuing the appeal. If one applies that consideration by analogy, the question, it seems to me, is whether the effect of refusing the order would be that the applicant would no longer take part in the case and whether she would be acting reasonably in so doing. I have no doubt that it would be reasonable at that stage for her to refuse to take part. She could theoretically be at risk of costs and there is no continuing interest she has in the outcome of the case over and above that which all tenants may have in the outcome. It follows that, in my judgment, if one applies, by analogy, the rules identified in the Corner House case to this rather special set of circumstances where the applicant is the respondent to the appeal, then they all are in favour of the PCO being granted.
14. Mr Baker submitted that it was not crucial that the applicant should be represented, because there is a judgment of the Divisional Court which sets out in some detail the contending arguments. I do not accept that. It is important that this case should be properly argued before the court, and it is not an answer to say that the court could get by with the account of the relevant arguments set out in the judgment of the Divisional Court below.
15. For these various reasons, therefore, in my judgment the criteria for granting the order requested by the applicant are satisfied. The order should be made in terms that the Trust cannot seek to recover its costs against the applicant or against the Legal Services Commission. As I have said, I have absolutely no doubt that that is the condition that could have been imposed when leave was granted. I do not think that the Trust is prejudiced as a result of that order being made at this stage. I am satisfied that the conditions relating to the grant of a PCO are satisfied in the circumstances of this case, particularly given that it is only in those limited terms.

Lord Justice Toulson:

16. I agree. I add only a few words because this case does not fall neatly within Corner House guidelines. The order of the court below was in an unusual form. It stated:

"It is ordered that, save for the declaration in paragraph 2 below, the claim is dismissed."

Then followed the declaration about the Trust's amenability to judicial review as a public authority within the meaning of the Human Rights Act 1998, section 6(3)(b). After the court had handed down its written judgment, the Trust sought a formal order in the form just described in order that it should be able to appeal against the declaratory part of the judgment, notwithstanding that the claim for judicial review had itself been dismissed. This was a highly unusual situation. As Elias LJ has observed, it would in those circumstances have been well within the permissible range of the court's powers on considering the application for permission to appeal to have made such permission conditional, at least on the Trust not seeking any order for costs against the respondent or the Legal Services Commission. The Trust might consider itself fortunate that it was not made subject to a condition requiring it to pay both sides' costs of the appeal, since the appeal was being brought in order to establish a point of law of general importance to registered social landlords. It is against that highly unusual background that we come to consider this unusual application. I am satisfied that justice requires it to be granted for the reasons given by Elias LJ.

17. Like him I am puzzled by what the Trust has hoped to achieve by resisting the application. If the application were refused, the respondent would be unrepresented on the appeal. That would be the practical effect, as we understand it. It would be most unsatisfactory that the court hearing the appeal should not be assisted by oral argument on both sides. The only way of achieving that would be either through the intervention of the Equality and Human Rights Commission or by the appointment of an amicus. Those are both less obvious methods than by the respondent being represented and if either of those courses were followed the Trust would have no prospect of recovering its costs. In the circumstances I agree that the order should be that the appellant shall not recover any costs in the appeal against either the respondent or the Legal Services Commission.

Order: Application granted