England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL LONDON COUNTY COURT
His Honour Judge Bailey
Claim No: 0CL40089

		Royal Courts of Justice Strand, London, WC2A 2LL
		14/03/2012

Lord Justice Rimer :

Background

1. On 22 July 2011 I gave permission to the appellant, Joanne Harripaul, to appeal to the Court of Appeal against the dismissal with costs by His Honour Judge Bailey on 20 January 2011 of her appeal under section 204 of the Housing Act 1996 against a review carried out by a Housing Review Officer employed by the respondent, the London Borough of Lewisham. The permitted appeal was a second appeal. When giving permission, I expressed the view that the appellant had a real prospect of showing that the reviewing officer's decision was materially deficient and that the judge's upholding of it reflected unjustified benevolence. I regarded the appeal as having merit and I also considered that it would give this court the opportunity to give any necessary guidance as to the limits of the application of the observations of Lord Neuberger in Holmes-Moorhouse v. Richmond upon Thames London Borough Council [2009] 1 WLR 413, at [50] and [51].
2. Following the giving of that permission, the respondent informed the appellant that it would withdraw the review decision and carry out a fresh review and it invited the appellant to withdraw the appeal. The respondent's reason was said to have been based on the taking of an economic view of the likely costs of resisting the appeal. The result was an agreed form of consent order that, after providing (inter alia) for the carrying out of a fresh review, dismissed the appeal and varied the costs order in the county court to 'no order as to costs'. It also provided for a Community Legal Service Fund assessment of the appellant's costs of the appeal to this court. There remained, however, a dispute as to what, if any, inter party costs order in respect of the appeal should be made. The order referred that matter to this court, to be decided on the basis of the parties' written submissions. Submissions have been duly provided by Ms Roberts for the appellant and Mr Grundy for the respondent.

Submissions

3. The appellant's case for her costs, as advanced by Ms Roberts, is simple. The appellant has obtained the relief sought on the appeal (a quashing of the review decision and the carrying out of a fresh review). She is therefore the successful party and enjoys the benefit of the general rule under CPR Part 44.3 that she should have her costs. She recognises that that rule can be departed from but submits that there is no justification for doing so here.
4. Ms Roberts referred to the six-headed guidance provided by Scott Baker J in R (Boxall) v. LB of Waltham Forest (2001) 4 CCL Rep 258 in relation to the awarding of costs in judicial review cases that have been resolved. The present case is of a like kind, as the basis for the appellant's challenge to the review decision could only be on judicial review grounds. The guidance was as follows:

'22. Having considered the authorities, the principles I deduced to be applicable are as follows:

(i) the court has power to make a costs order when the substantive proceedings have been resolved without a trial but the parties have not agreed about costs.

(ii) it will ordinarily be irrelevant that the Claimant is legally aided.

(iii) the overriding objective is to do justice between the parties without incurring unnecessary court time and consequently additional cost;

(iv) at each end of the spectrum there will be cases where it is obvious which side would have won had the substantive issues been fought to a conclusion. In between, the position will, in differing degrees, be less clear. How far the court will be prepared to look into the previously unresolved substantive issues will depend on the circumstances of the particular case, not least the amount of costs at stake and the conduct of the parties.

(v) in the absence of a good reason to make any other order the fall back is to make no order as to costs.

(vi) the court should take care to ensure that it does not discourage parties from settling judicial review proceedings for example by a local authority making a concession at an early stage.'

5. Ms Roberts referred also to (a) the endorsement of that guidance given by this court in R (on the application of Scott) v. London Borough of Hackney [2009] EWCA Civ 217, including Hallett LJ's statement at [51] that a reasonable and proportionate attempt must be made to analyse the situation and determine whether an order for costs is appropriate and that a judge must not be too ready to adopt the fall back position of no order as to costs; and (b) this court's decision in R (on the application of Bahta and Others v. Secretary of State for the Home Department and Others [2011] EWCA Civ 895 in which, in the course of his judgment, Pill LJ said:

'64. In addition to those general statements, what needs to be underlined is the starting point in the CPR that a successful claimant is entitled to his costs and the now recognised importance of complying with Pre-Action Protocols. These are intended to prevent litigation and facilitate and encourage parties to settle proceedings, including judicial review proceedings, if at all possible. That should be the stage at which the concessions contemplated in Boxall principle (vi) are normally made. It would be a distortion of the procedure for awarding costs if a defendant who has not complied with a Pre-Action Protocol can invoke Boxall principle (vi) in his favour when making a concession which should have been made at an earlier stage. If concessions are due, public authorities should not require the incentive contemplated by principle (vi) to make them.

65. When relief is granted, the defendant bears the burden of justifying a departure from the general rule that the unsuccessful party will be ordered to pay the costs of the successful party and that burden is likely to be a heavy one if the claimant has, and the defendant has not, complied with the Pre-Action Protocol. I regard that approach as consistent with the recommendation in paragraph 4.13 of the Jackson Report.'

6. Ms Roberts makes the point that in this case there was no applicable Pre-Action Protocol and the respondent's concession was made only after the giving of permission for a second appeal. In any event, the burden is on the respondent to justify a departure from the general rule entitling the appellant to her costs. She asserts that, had the appeal been fought out, the appellant would have stood a good chance of success. There is, therefore, no good reason not to give the appellant her costs. The costs are anyway modest, being limited to the appellant's costs in the Court of Appeal (and specifically not including her costs wasted in initially pursuing the appeal in the High Court and in obtaining a necessary time extension for appealing to the Court of Appeal).
7. For the respondent, which asserts that the right costs order is 'no order', Mr Grundy submitted that where a public body like the respondent compromises a claim for judicial review (and the appellate challenge to the review decision was in substance such a claim), that should not be regarded as an indication that the public body accepts the merits of the claim. He placed reliance upon the observations of Simon Brown J (as he then was) in R v. Liverpool City Council, ex parte Newman (1992) 5 Admin LR 669 that:

'On the other hand, it may be that the challenge has become academic merely through the respondent sensibly deciding to short-circuit the proceedings, to avoid their expense or inconvenience or uncertainty without in any way accepting the likelihood of their succeeding against him. He should not be deterred from such a course by the thought that he would then be liable for the applicant's costs. Rather, in those circumstances, it would seem appropriate that the costs should lie where they fall and there should accordingly be no order.'

8. After also referring to the Boxall guidelines, Mr Grundy submitted that 'it follows that it is for the Appellant to establish a good reason why Lewisham should pay the Appellant's costs, and that in the instant case such good reason could only be that: it is "obvious" that the Appellant would have won the substantive appeal.' He then submitted that, and why, it was not so obvious and asserted that the appellant cannot have believed that she would do so or she would not have agreed to the compromise on the costs of the county court appeal. Mr Grundy also submitted that, as the appellant is publicly funded, her solicitors' costs will be paid.

Decision

9. In three respects, I regard the respondent's submissions as misdirected. First, the thrust of Pill LJ's quoted observations in Bahta's case is to the effect that, in events such as have happened here, the starting point is that the appellant is entitled to her costs and the burden of showing otherwise falls on the respondent. Mr Grundy's submissions amount to an unjustified attempt to reverse that position. Second, his suggestion that it is relevant that, because the appellant is publicly funded, her solicitors will be paid is out of line with what Pill LJ said in paragraph [61] of his judgment in Bahta's case:

'In the case of publicly funded parties, it is not a good reason to decline to make an order for costs against a defendant that those acting for the publicly funded claimant will obtain some remuneration even if no order for costs is made against the defendant….'

Third, whilst the court in Bahta's case was referred to ex parte Newman, and was concerned with the impact of concessions upon costs orders, it did not cite the passage from Simon Brown J's judgment upon which Mr Grundy relies. I do not regard Bahta's case as providing any general endorsement of the approach suggested in that passage.

10. I approach the present costs issue on the basis, therefore, that the consequence of the respondent's concession is that the appellant is to be regarded as the successful party on the appeal and that the starting point is that she should be entitled to her costs. The making by the respondent of the concession is of course a factor that must be brought into consideration. I do not, however, regard it as carrying the day in favour of the respondent on the issue as to costs. If the respondent has come to the view that the issue as to the soundness of the reviewing officer's decision does not merit the incurring of legal costs in arguing about it, it could well have taken that decision before, ideally at an early stage of the county court appeal.
11. As for the likely outcome of the appeal had it been fully argued, I find that difficult to assess. I do not regard this as a case in which it is obvious that the appellant would have won the appeal. I do, however, consider that she at least had a good arguable case that could well have resulted in success. The respondent is keen to suggest that the appellant must have regarded her case as less than gilt edged, else she would not have agreed to the compromise of the county court costs order that she did. There may well be something in that. Equally, I find it difficult to believe that the respondent's wish to halt the appeal process was not in part motivated by the consideration that it could not be sure of victory; and by a recognition that, had it fought it and lost, it would be likely to face an order for the costs of both appeals. An early settlement of the appeal would, on that basis, make good practical sense.
12. Overall, I have decided that this is a case in which the appellant should be regarded as the successful party. The starting point is that she is entitled to her costs. I have not been satisfied that, in the circumstances of the case, there are any factors justifying a departure from that general rule. I will order the respondent to pay the appellant's costs of the appeal, such costs in default of agreement to be the subject of a detailed assessment on the standard basis. I have indicated in [6] above the limits of the costs covered by such order.