Case No: A2/2011/0025
Neutral Citation Number: [2011] EWCA Civ 815
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
(SIR CHARLES GRAY)
Royal Courts of Justice
Strand, London, WC2A 2LL
Date: Wednesday, 22nd June 2011
Before:
LORD JUSTICE MAURICE KAY
LORD JUSTICE RICHARDS
And
LORD JUSTICE LEVESON

- - - - - - - - - - - - - - - - - - - - -
	SHERGILL	Claimant/Respondent	
	- and -		
	PUREWAL & ANR	Defendants/Appellants	
- - - - - - - - - - - - - - - - - - - - -
(DAR Transcript of WordWave International LimitedA Merrill Communications Company165 Fleet Street, London EC4A 2DYTel No:  020 7404 1400  Fax No: 020 7831 8838Official Shorthand Writers to the Court)
- - - - - - - - - - - - - - - - - - - - -
Mr Simeon Thrower and Mr Jagdeep Sekhon (instructed by Sahota Solicitors) appeared on behalf of the Appellant.Mr Jonathan Crystal (instructed by Blacks Solicitors) appeared on behalf of the Respondent.
- - - - - - - - - - - - - - - - - - - - -
Judgment

Lord Justice Leveson:

1.	On 14 December 2010, Sir Charles Gray, sitting as an additional judge of the Queen’s Bench Division, stayed an action in libel brought by Mr Daljit Singh Shergill  against Mr Rajinder Singh Purewal and PTI Derby Limited. It was based upon three articles published in the Panjab Times owned by PTI Derby Limited, and said to have been edited by Mr Purewal, although that fact was denied.  I shall refer to them collectively as “the newspaper”.  The action was stayed on the basis that the claim was not justiciable, on the grounds that it would require the court to determine religious doctrinal disputes and the extent to which religious procedures have been observed.  The issues fell “within the territory which the courts, by self-denying ordinance, will not enter”.  On the following day, he ordered that Mr Shergill, the claimant, pay the costs of Mr Purewal and PTI Derby Limited (“the defendants”) up to and including 17 June 2010 and that the defendants pay the costs of the claimants, including the costs of preparation for trial, and said that the claimants do pay the defendants’ costs for an application for a stay, in each case on the standard basis, subject to detailed assessment if not agreed.  Pursuant to leave granted by Smith LJ, the defendants appeal against the order for costs, which, as Sir Charles fully appreciated, leaves the newspaper facing a substantial balancing bill to pay Mr Shergill.

2.	It is unnecessary to describe the background to the claim in any detail.  Although Mr Shergill strongly contested the application for a stay, the judge concluded that the claim was intimately connected with allegations concerning the circumstances in which a successor is said to have been appointed to His Holiness Sant Baba Harbajan Singh Ji Varkat Maharaj following his sudden death, leaving neither a named successor nor a will.   Mr Shergill supported a contention that a Bhekh or conclave of senior priests had appointed as successor a holy man now styled as His Holiness Sant Baba Jeet Singh Ji Marahaj,  Mr Shergill is also involved in proceedings to obtain title to premises, or grudwaras, used by this sect of the Sikh religion in this country.  The newspaper has been critical of Mr Shergill, and challenges the appointment of Baba Jeet, whom it claims is improperly passing himself off as the heir to His Holiness Sant Baba Harbajan Singh Ji Varkat Maharaj.
3.	At the same as these proceedings have been ongoing, another libel action with a similar background circumstance was being pursued.  On 17 May 2010, Eady J stayed the action on the basis that the issue to be determined was non-justiciable; see His Holiness Sant Baba Jeet Singh Ji Maharaj v Eastern Media Group & Hardeep Singh [2010] EWHC 1294 QB.   Both parties were represented by leading and junior counsel, and for both sides were junior counsel also instructed in the trial at first instance of this litigation.  The result of the proceedings was thus known to all, although an appeal was intimated.  No step was taken to stay these proceedings or to raise the issue for the justiciability of the claim was likely to have fallen to be determined at some stage in any event, if only because the court’s self-denying ordinance would inevitably fall to be considered.

4.	Far from the matter being brought to the attention of the court, Mr Jonathan Crystal for Mr Shergill continued to press the claim, and Mr Henry Spooner name) for the newspaper maintained a complete defence.  It would be wrong, however, to suggest that the newspaper ignored the result of the earlier litigation. On 6 July 2010, purportedly acting pursuant to CPR 32.18, the newspaper served a notice to admit facts in these terms:

“The Claimant is required to admit that the core issues, problems and troubles involving and attaching to the Claimant’s attendance at the Oldbury Gudwara, on those occasions referred to in the articles complained of all relate to and eminate from the religious/doctrinal dispute, involving the successorship, authority and spiritual status within Sikhism of the holy man in India who refers to himself as “His Holiness Saint Baba Jeet Singh Ji Maharaj”, for which the claimant is a leading proponent of, supporter and promoter.  The Claimant’s disputed advancement of “His Holiness” at Oldbury is the root cause of all the “troubles” complained of in all the articles.”

For my part, this notice contains facts, assertions and conclusions, and it is not in the least surprising that no such admission was made.  On the other hand, in a letter dated 22 July 2010, the newspaper made the position clear in these terms:

“You are of course aware of the costs implications of your refusal to admit should the trial judge make a finding (which he can do irrespective of what the parties have pleaded) that issues at the core of this case are religious and hence non-justiciable.  

If the trial is stayed/aborted as a consequence of your refusal to admit this notice, then we put that down entirely to your conduct in refusing to admit this Notice to Admit, and we shall claim our costs for the entire action up to the point it be stayed and/or dismissed even if at trial.”

The reason for that letter was a response to the notice to admit also dated 22 July, but antecedent to the letter to which I have just referred, emanating from Mr Shergill’s solicitors, which specifically challenged the suggestion that justiciability had been determined by Eady J.  The letter reads: 

“We also do not agree that the Decision of Learned Justice Eady in the case of His Holiness Sant Baba Jeet Singh Ji Maharaj v Eastern Media Group and Another has any relevance or bearing on the issues in this case.  

We respectfully refer you to our pleaded case and the defamatory meanings which with respect have nothing to do with doctrinal issues, and thus the Decision of Justice Eady is irrelevant, as is the status of His Holiness Saint Baba Jeet Singh Ji Maharaj on the facts of this case ... 

If our position is not accepted, then we openly invite you to issue an Application to the court.  

We place you on notice that your Application will be resisted with indemnity costs.”

5.	No step was then taken to resolve the issue of justiciability, but the next important event concerns a litigation, His Holiness Sant Baba Jeet Singh Ji Maharaj v Eastern Media Group v Hardeep Singh when on 22 October 2010 Smith LJ granted the claimant permission to appeal on grounds that it was arguable that some pure issues of fact could be tried, although she noted that counsel had conceded that the judge had been right in respect of some issues (see [2010] EWCA Civ 1263).  At a later application in that case, following after the decision of Sir Charles in the present litigation, it was recorded by Sedley LJ (see [2011] EWCA Civ 139) that no attempt had been made to appeal the decision as to justiciability of the issue as to whether the claimant had been duly chosen the anointed leader of the sect.

6.	While that case was proceeding on a limited basis in this court, a pre-trial review in this litigation came before Langstaff J.  A skeleton argument prepared by the newspaper asserted that it was “eager and prepared for trial on this case”, not wanting to see delay or destruction as a consequence of what was said to be ill-preparedness on the part of Mr Shergill.  There is no suggestion that Mr Shergill demurred from the anxiety for trial; it was, after all, his litigation.  Thereafter, a trial bundle in excess of 1,000 pages was prepared.  Mr Shergill and five other witnesses were to be called for the claimant.  Mr Purewal and 14 witnesses were to be called for the newspaper.  The trial estimate of four days was thought to be insufficient by two days.  On the working day before the trial, the newspaper served a skeleton argument, the first section of which raised the issue of justificiability and the nexus of the case with that contested before Eady J.  Sir Charles dealt with the point, as we have recorded, and stayed the entire action.

7.	When it came to the question of costs, however, Sir Charles was very exercised by the failure timeously to take the point as to justiciability.  He said: 

“The point that can be made, and is made, on behalf of the defendants is that they did win the application which I have been dealing with.  That seems to me to be of marginal consideration.  What matters in the context of the present case far more in my view is whether the application for a stay should have been made sooner.  As to that I am quite sure it should have been.  I am not being critical of anyone individually, I simply do not know where the blame lies, but the simple fact to my way of thinking is that any application for a stay must be made as soon as the party seeking the stay must be made as soon as the party seeking the stay becomes aware of the facts which would warrant an application being made.”  

To the submission he was unrealistic to suppose that the newspaper could or should have made their application for a stay only after receipt of the statements of the witnesses, Sir Charles concluded that anyone knowing the broad facts of this case would have been reasonably confident that when an application for a stay was made, it would have a distinct chance of success.  He did not consider the statement in the case as material to issue of costs.  In those circumstances, having concluded that an application to stay should have been made no later than 17 June, that is to say one month after the judgment of Eady J, he ordered Mr Shergill to pay the costs prior to 17 June, together with the costs of an application to stay, but ordered the newspaper to pay the costs following 17 June, save for the costs for the application to stay.

8.	Before concluding a summary of Sir Charles’s judgment, it is worth adding three further points.  First, it is clear that Sir Charles appreciated the effect of the order that he was making.  The phrase he used was that “the costs recovered would be handsomely exceeded by the costs to be paid”.  Secondly, no reference in the judgment was made either to the notice to admit or the letter of 22 June 2010.  Finally, the judge did not make the point in relation to Mr Shergill that his counsel that represented the claim in the earlier that having knowledge of the case could and perhaps should have reached a similar conclusion when considering the continued viability of the litigation and the costs of pursuing the action for trial.

9.	In this court, Mr Simeon Thrower, who did not appear in the court below, argues that the failure to admit facts which should have been admitted is a circumstance to be taken into account for the purposes of costs: see CPR 32.18(2).  He also argues that the judge failed to take into account the letter of 22 July 2010, and therefore failed to have regard to all the circumstances as required by CPR 44.3(4).  That rule makes it clear that those circumstances include the conduct of the parties and whether a party had succeeded on part of his case, even if he has not been wholly successful.  

10.	As Mr Crystal correctly identifies, orders for costs fall very much within the discretion of the trial judge, and furthermore, the language of the costs provision is wide enough to encompass the considerations which Sir Charles brought to bear in the exercise of his discretion in this case.  Thus, the phrase “the conduct of the parties” specifically includes consideration of the extent to which a party should have taken steps earlier in litigation, being defined in CPR 44.3(5) as including: 

“(a) conduct before as well as during the proceedings ... 
(b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue; 
(c) the manner in which a party has pursued or defended his case, or a particular allegation or issue ... and in particular the extent to which the parties followed ...”

Thus Mr Crystal argues that, having adopted a position at the pretrial review of being “eager and prepared” for a contest, and having embarked on a trial wanting to fight the libel claim, the effect of the decision to seek a stay only as late as the first day of the trial was that substantial costs had been incurred by Mr Shergill and wasted for they would not have been incurred had the application been made earlier, although it is worth underlining that Mr Shergill by his solicitors adopted an extremely robust response to the suggestion of lack of justiciability and threatened his own indemnity costs application.  Furthermore, as early as 8 February 2010, in the Hardeep Singh, [2010] EWHC 555 (QB), case, Mr Crystal was making the point to Shaw J that at the heart of that action and indeed he mentioned two others, one of which must be the present litigation, was the status of the claimant in that case as the third holy saint.

11.	The approach of the learned judge can be tested in this way.  It is clear that Mr Shergill was anxious to demonstrate that he had been libelled, and in that way assist what he considered to be the legitimate claims being made in the actions brought in relation to the title of the premises used as gurdwaras.  The newspaper was equally anxious for the action to proceed, not only to demonstrate that Mr Purewal was not the editor of the Panjab Times but more particularly to undermine the claims made for the premises.  Both wanted the ultimate issues decided.  Assume that the newspaper had not sought a stay of the action on the basis of non-justiciability, but had been content to fight the action on its merits throughout the trial, with Mr Spooner perhaps taking the same view of the law as Mr Crystal.  In the light of the decision of Eady J, to say nothing of the underlying substantive law, it is inconceivable in my judgment that Sir Charles would not have taken the point as to justiciability himself and required the parties to argue it.  Assume then that he decided the case as he did; in my judgment, it would have been quite wrong merely to blame the newspaper for failing to take the point with equally blaming Mr Shergill for pursuing the action, without recognising the issue as to justiciability.  Even if it was not a question of blame, it is difficult to see on what basis it would have been appropriate to condemn the newspaper in the costs of the litigation for not taking a point which it wished to argue the action out, when in truth the action should never have been brought in the first place; although the judge would have been entitled to be extremely critical of the parties for not ensuring this issue was resolved at an early stage, to cast the entire responsibility on the newspaper would not, in my view, have been appropriate.  At the end of the day, it would have been rewarding the claimant, whose counsel had taken a wrong view of the law, at the expense of the defendant, whose counsel had taken a correct view of the law.

12.	In this case the newspaper in the end did take the point, the result of which was that a six-day trial was in fact avoided, albeit that the costs in the preparation for the trial had been incurred.  Further, the possibility that the claim would be lost by Mr Shergill simply because of want of justiciability had in fact been raised by the newspaper, and yet he chose to continue it.  In my judgment, there is no reason why Mr Shergill should have been protected in costs because he did not take an appropriate view of the actions he was bringing, and equally no reason why the newspaper should be in a worse position than having left the court to raise the matter of its motion.

13.	In the circumstances, in my judgment in criticising only the newspaper for failing to issue an earlier summons to stay the action, the learned judge failed to have proper regard to the overall responsibility of both parties to assess the case which each wished to pursue in the light of the inevitable approach of the court.  It can also be said that neither party complied with the overriding objective of putting the court in the position to ensure that the case was dealt with justly, and in particular expeditiously and fairly, bearing in mind the saving in expense, and allocating to it an appropriate share of the court’s resources; see CPR 1.2(b), (d) and (e).   In the circumstances, the exercise of his discretion was flawed, and it falls to this court to consider the issue of costs afresh.  In the light of the decision of Eady J, if not the underlying law, the judge was entitled to be critical of the newspaper for not issuing a summons to stay the action earlier.  He should also have been critical of Mr Shergill for pursuing an action that was not justiciable.

14.	A fairer approach to the question of costs would have been to deprive both parties of any costs after 17 June, being the date when both should have appreciated the consequence of Eady J’s conclusions, save only in respect of the costs in an application for a stay.  I say that particularly bearing in mind that counsel will rapidly have either known or appreciated that an appeal in relation to justiciability generally was not being pursued in the earlier action.  Thus, I would leave the judge’s order untouched in relation to the period before 17 June, but make no order for costs, save only to leave equally untouched the order of Sir Charles in relation to the application for a stay, which costs should not in my judgment include the costs of obtaining the witness statements.

Lord Justice Richards:

15.	I agree.

Lord Justice Maurice Kay:

16.	I also agree.  Accordingly, the appeal is allowed. 

Order:  Appeal allowed.