England and Wales Court of Appeal (Civil Division) Decisions

Neutral Citation Number: [2011] EWCA Civ 939
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE COURT OF PROTECTION
BAKER J.
[2010] EWHC 3385 (Fam)

		Royal Courts of Justice Strand, London, WC2A 2LL
		02/08/2011

Lord Justice Hooper :

1. This is an appeal from a judgment of Baker J [2010] EWHC 3385 (Fam) making an award of costs at the conclusion of long running proceedings in the Court of Protection. The award of costs related to an eight day interim hearing (14, 19, 20, 25, 26, 27 January, 10 February and 8 March 2010) and, following the hand down of the judgment on 26 March [2010] EWHC 621 (Fam), a further hearing on 6 May 2010.^[1]
2. Baker J at the conclusion of his 16 page judgment said:

"In all the circumstances, I conclude that this is a case for departing from the general rule set out in rule 157 of the Court of Protection rules, and I make an order in the following terms:

(1) That the local authority [the appellant, Manchester City Council] should pay the costs of G, F and E, including pre-litigation costs, up to and including the first day of the hearing before me on 14th January 2010 on an indemnity basis.

(2) The local authority shall pay one third of the costs of G, F and E from that date up to and including the hearing on 6 May 2010 on a standard basis.

(3) All costs will be subject to a detailed assessment, if not agreed."

3. The appellant, Manchester City Council, obtained permission to appeal that judgment. Mr McGuire QC (who did not appear in the court below) on behalf of the appellant submits that the judge should not have departed from rule 157 and should have made no order apportioning the costs. If he is wrong about that, he submits that the only order that should have been made was a limited order against the appellant in respect of the costs incurred by the respondents up to and including the first day of the hearing on 14 January.
4. E, born in September 1990, suffers from a condition known as tuberous sclerosis with associated physical problems and serious learning difficulties which cause significant social and communication problems. His expressive and receptive language skills have been assessed by a speech and language therapist as developmentally equivalent to an 18-24 month old child.
5. E comes from a troubled family. G is his older sister. He was first placed with F in respite care in 1995, at the age of four or five, and finally accommodated with her on a full time basis under section 20 of the Children Act 1989 in 1999. Thereafter throughout his childhood he was looked after by F. In the words of Baker J:

"He had some contact with his birth family, including occasional visits from his sister G, but, as I found in my first judgment, it is "beyond argument that E has been treated and has regarded himself as a member himself of F's family – in the words of her counsel, he is an integral part of family life".

6. Some idea of the vital importance of F in E's life can be gained from the fact that in May 2008 E went into hospital for four months for surgery on his spine. In the words of Baker J:

"Her dedication to E during his time in hospital is widely acknowledged as having paid a considerable part in his successful recovery. His surgeon comments upon F's 'immense contribution to E's recovery and her very positive interaction with staff at the hospital'".

7. On 7 April 2009 the appellant removed E from F's care and placed him in a residential establishment called the V unit. The principal cause of the removal was a report from E's school that something E had said about "don't lock the door" and mention of a wardrobe suggested that he might be sleeping in the wardrobe. A further cause of concern appears to have been an incident (about which there was considerable dispute^[2]) which occurred whilst F and E were on holiday shortly before the removal.
8. On 11 June F was informed that E would not be returning home. On 15 June E was moved to a residential establishment on Z road. Following his removal from F, E's behaviour became of such concern that it was thought appropriate to administer drugs, including what we were told was a very strong anti-psychotic drug of the kind used to treat very serious mental illness.
9. Following the removal F was not involved in the decision making process and F was only permitted to visit E for the first time in December, five months after the removal.
10. G, E's sister (with the benefit of legal aid), filed an application in the Court of Protection in November 2009.
11. Extraordinarily the appellant took the position that its conduct in removing E from F in the way that it did was lawful. It only formally abandoned that position on day one of the main hearing (although the concession had been made in a skeleton argument served a few days before).
12. Baker J in his costs judgment summarised his findings in the main judgment:

i) "that E lacks capacity to make a decision as to where he should live;

ii) that the local authority in the area where he lives wrongfully deprived him of his liberty and infringed his rights under Article 5 of the European Convention for the Protection of Human Rights and Fundamental Freedoms by placing him on 7 April 2009 at a residential establishment known as the V Unit without seeking authorisation under the Deprivation of Liberty Safeguards and Schedule A1 of the Mental Capacity Act 2005 ["MCA"] or an order of the Court of Protection; and by subsequently placing him at another residential establishment known as Z Road without seeking an order of the Court and;

iii) that the same local authority had infringed his rights under Article 8 of ECHR, when they placed him at the V Unit, by removing him from the care of F, who had for many years cared for him as a foster carer and latterly an adult carer, without proper authorisation; by further failing to give any or any adequate consideration to his family life with F at the time of the removal or for many months thereafter; failing adequately to involve F in the decision making process about E's future, and restricting contact between E and F for several months after his removal."

13. Baker J used strong terms to describe the appellant's failings: blatant errors, lamentable, deplorable, grave and serious.

The law

14. The appeal can only succeed if Baker J made an error of law or if his conclusions are conclusions which no reasonable judge could reach. In so far as costs decisions are concerned, it is well established that:

"The judge has the feel of a case after a trial which the Court of Appeal cannot hope to replicate and the judge must have gone seriously wrong if this court is to interfere." (Straker v Tudor Rose [2007] EWCA Civ 368, [2007] C.P. Rep. 32, para 2)

15. Baker J set out the relevant Court of Protection rules and Civil Procedure rules:

"22. The rules governing the award of costs in the Court of Protection are set out in Part 19 of the Court of Protection Rules. The following rules are relevant to this application.

23. Rule 157, entitled "Personal welfare – the general rule", provides:

"Where the proceedings concern P's personal welfare, the general rule is that there will be no order as to the costs of the proceedings or of that part of the proceedings that concerns P's personal welfare."

24. Rule 159, headed "Departing from the general rule", provides as follows:

"(1) The court may depart from rules 156 to 158 if the circumstances so justify, and in deciding whether departure is justified, the court will have regard to all the circumstances including

(a) the conduct of the parties;

(b) whether a party has succeeded on part of his case, even if he has not been wholly successful; and

(c) the role of any public body involved in the proceedings.

(2) The conduct of the parties includes

(a) conduct before, as well as during, the proceedings;

(b) whether it was reasonable for a party to raise, pursue or contest a particular issue;

(c) the manner in which a party has made or responded to an application or a particular issue; and

(d) whether a party who has succeeded in his application or response to an application, in whole or in part, exaggerated any matter contained in his application or response…"

25. Rule 160 provides that, subject to the provisions of the Court of Protection Rules, some parts of the Civil Procedure Rules 1998 shall apply, with appropriate modifications, to costs incurred in relation to proceedings under the Court of Protection Rules. This includes Part 44 of the Civil Procedural Rules relating to costs. Of these latter rules, the following are relevant to the current applications.

26. Under CPR 44.3(1) "the court has discretion as to

(a) As to whether the costs are payable to one party to another;

(b) The amount of those costs;

(c) When they are to be paid."

27. Under CPR 44.3(6), "the orders which the court may make under this rule include an order that the party must pay

(a) a proportion of another party's costs;

(b) a stated amount in respect of another party's costs;

(c) costs from or until a certain date only;

(d) costs incurred before proceedings have begun;

(e) costs relating to particular steps taken in the proceedings;

(f) costs relating only to distinct part of the proceedings; and^[3]

(g) interest on costs from or until a certain date, including a date before judgment."

28. The distinction between indemnity and standard costs are set out in CPR 44.4 which provides inter alia as follows.

"(1) Where the court is to assess the amount of costs (whether by summary or detailed assessment) it will assess those costs

(a) on the standard basis; or

(b) on the indemnity basis,

but the court will not in either case allow costs which have been unreasonably incurred or unreasonable in amount.

(2) Where the amount of costs is to be assessed on the standard basis, the court will

(a) only allow costs which are proportionate to the matters in issue; and

(b) resolve any doubt which it may have as to whether costs were reasonably incurred or reasonable and proportionate in amount in favour of the paying party.

(3) Where the amount of costs is to be assessed on the indemnity basis, the court will resolve any doubt which it may have as to whether costs have been reasonably incurred or reasonable in amount in favour of the receiving party."

Baker J's judgment

16. Having set out the competing submissions and having rightly deprecated the practice of relying on arguments that the impact of costs orders would reduce the local authority's social care budget, the judge continued:

40. "Of course, it is right that the Court should follow the general rule where appropriate. Parties should be free to bring personal welfare issues to the Court of Protection without fear of a costs sanction. Local authorities and others who carry out their work professionally have no reason to fear that a costs order will be made. The submission that local authorities will be discouraged from making applications to the Court of Protection if a costs order is made in this case is a thoroughly bad argument. The opposite is, in fact, the truth. It is only local authorities who break the law, or who are guilty of misconduct that falls within the meaning of rule 159, that have reason to fear a costs order. Local authorities who do their job properly and abide by the law have nothing to fear. In particular, the Court of Protection recognises that professional work in this very difficult field often involves very difficult judgments and decisions. The Court is not going to impose a costs burden on a local authority simply because hindsight demonstrates that it got those judgments wrong."

17. I agree.
18. The judge continued:

"41. In this case, however, I am entirely satisfied that the local authority's blatant disregard of the processes of the MCA and their obligation to respect E's rights under the ECHR amount to misconduct which justifies departing from the general rule."

19. In the next paragraph he said:

"... I do consider the local authority's conduct, certainly up to the moment when the issue of deprivation of liberty was conceded at the start of the hearing in January, amounted to "a significant degree of unreasonableness" so as to give rise to a liability for costs on an indemnity basis."

20. The judge also rightly rejected the argument that a costs order should not be made because the legislation was new and complex:

"Miss Irving boldly relies on the ignorance of the local authority's staff as an excuse and submits that the complexity of the statutory provisions left large numbers of professionals uncertain as to the meaning of "deprivation of liberty". Given the enormous responsibilities put upon local authorities under the MCA, it was surely incumbent on the management team to ensure that their staff were fully trained and properly informed about the new provisions. If a local authority is uncertain whether its proposed actions amount to a deprivation of liberty, it must apply to the Court."

21. He also pointed out, rightly in my view, that:

"... the local authority's actions in this case would have infringed E's Article 5 and 8 rights under the old law as well as under the MCA."

22. The judge then turned to the issue of the costs of the next seven days of the hearing (19, 20, 25, 26, 27 January, 10 February and 8 March 2010). He recited the argument of counsel for the appellant:

"that some form of investigatory process, almost certainly involving court proceedings, would have been required in this case in any event."

23. The judge said that in making this argument counsel for the appellant was on stronger ground. The judge continued:

"43. ... The proper course would have been the making of an urgent authorisation (by the V Unit) and/or standard authorisation (by the local authority) which could have been reviewed by the Court of Protection under section 21A of the MCA. When E moved to Z Road, a domiciliary care provider not covered by DOLS, the local authority should have applied to the Court of Protection for an order under section 16 or an interim order under section 48. In one or both of these ways, the issues of E's alleged ill-treatment by F, and his future residence and overall best interests, would have come before the court."

24. The judge then made the following important findings:

"But, in my judgment, the hearing would have been significantly shorter, and the issues less complex, than they were by the time of the hearing in January to March 2010. In particular, the best interests analysis would have been less complicated than it was by that date when E had been living away from F for over nine months. Furthermore, if the local authority had followed the proper procedure under the MCA, G's role in the proceedings would, in my judgment, have been much more peripheral. It is highly likely that she would not have had to initiate any proceedings herself, and possibly would not have even been a party at all. In the event, it was G who had to take the lead in establishing that the local authority's conduct amounted to a deprivation of E's liberty."

25. He continued:

"44. Assessing the extent to which the delays in the commencement of proceedings extended the scope of the necessary enquiry is very difficult and a "broad brush" approach is unavoidable. In considering the scope of the enquiry which the court was required to carry out, I bear in mind that not all of the delays were attributable to the local authority.

45. ... In all the circumstances, I conclude that this is a case for departing from the general rule set out in rule 157 of the Court of Protection rules ..." .

Submissions and discussion

26. Mr McGuire submits that this was a paradigm or typical Court of Protection case and the general rule therefore applied. Mr Mansfield QC and Ms Street do not agree. In my view they are right and for the reasons given by the judge in the passages which I have quoted, he was right not to treat this as a typical case.
27. Mr McGuire submits that Baker J, even if he was right to make some order of costs in relation to the unlawful deprivation of liberty issue, should have made an order relating only to the costs of that issue. Given that the respondents had to prepare on the issue of whether E should be permitted to return to F's care, no order for costs on that issue should have been made. Mr Mansfield reminds us that a costs order relating only to a distinct part of the proceedings should not normally be made because of the complications that follow.^[4] Furthermore, the judge in the important passage set out above in paragraph 24 made findings that the costs of preparing for the issue of whether E should be permitted to return to F's care were considerably enhanced by the appellant's conduct both in removing E unlawfully and not conceding the unlawfulness until the last moment. Mr McGuire sought to attack that finding. In my view the judge was not only entitled to make that finding but driven to it.
28. Mr McGuire also criticises the order for indemnity costs (an order which E had not sought). The judge gave his reason which I have set out in paragraph 19 above for making this order. In my view his conclusion was one that he was entitled to reach.
29. As to the second part of the order that the appellant shall pay one third of the costs of G, F and E from that date up to and including the hearing on 6 May 2010 on a standard basis, Mr McGuire submits that the appellant had won the case and no order should have been made. I do not agree. It is right to say that on 26 March Baker J in his main judgment did not order the return of E although he did so on 6 May. But as his main judgment shows this was a finely balanced decision. The judge, having set out in detail the advantages of E returning to live with F, said:

"174. The disadvantages of returning E to F at this stage include:

(1) the fact that he has been living away from F for nearly a year and has become relatively settled at Z Road;

(2) the likelihood that a further move will cause him considerable emotional difficulties even though it would consist of a return to a home with which he was familiar;

(3) the consequent likelihood that his emotional distress would lead to more challenging behaviour;

(4) the likelihood that F would struggle to cope with that behaviour as she did (in my judgment) in the months leading up to his removal from her care in April 2009;

(5) the need for F to be provided with training and guidance as to how to manage E's behaviour before he can safely be returned to her care;

(6) the risk that without that training and guidance E may be subjected to inappropriate physical restraint;

(7) the risk that the disruption caused by the move may set back the progress that has clearly made at school;

(8) the consequent risk that he will not be deemed suitable to move on to college to further his education and training in life skills;

(9) the fact that F is a sole carer who will have to bear almost all the responsibility for caring for E;

(10) the fact that F has demonstrated a lack of candour which if repeated may affect her relationships with the professionals who help care for E."

30. The first eight of those, as Ms Street points out, relate primarily to the delay in the matter coming before the court because of the appellant's conduct.
31. In his main judgment the judge continued:

175. "In addition, there is one particular concern which I have had about returning E to F at this stage. It is clear to me that no final decision can be taken about his long-term placement until the comprehensive psychiatric report ordered by the court in December 2009 is available. There is a significant possibility that, when that report is available together with all the other material, the court will conclude that the better long-term placement for E is in a residential home, either at Z Road or in some other establishment. E's needs are complex and very substantial. It is likely that those needs will grow as he gets older. It seems to me that there is a very real possibility that the court will conclude in July that, notwithstanding the dedication and commitment that F has shown towards E in many years, she will not be able to cope with him in the long-term. In those circumstances, despite the clear benefits of returning to the family home that he has known most of his life, the court may well be driven to the conclusion that the better course would be for him to live elsewhere. It therefore seems to me that, if E now returns to F, there is a real risk that he will have to move again after the hearing in July. In my judgment, the emotional harm which E would suffer as a result of moving to F now and then moving elsewhere after July would be very considerable."

32. Mr McGuire criticised the respondents for not having obtained the report earlier. That, in my view, is an unfair criticism. There would have been no point in going to the expense of preparing such a report until it was clear that the judge was minded to permit E to return to F. Mr McGuire also criticised the respondents for not seeking an adjournment on 14 January after the appellant had made the concession. I see no merit in that point.
33. Mr McGuire submits that the judge was wrong to apportion the costs of the hearing after the first day in the way that he did, making his argument that the costs would have to have been incurred in any event. In my view the judge met that point in the passage which I have already quoted in paragraph 24 above.
34. For these reasons I would dismiss the appeal.

Mr Justice McFarlane

35. I agree.

Lord Justice Mummery

36. I also agree.

Note 1   Both judgments are available on BAILII.    [Back]

Note 2   Baker J resolved the dispute against F.    [Back]

Note 3   By virtue of CPR 44.3 (7) Where the court would otherwise consider making an order under paragraph (6)(f), it must instead, if practicable, make an order under paragraph 6(a) or (c).    [Back]

Note 4   See above f/n 3.    [Back]