England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
(MR JUSTICE BLAKE)

		Royal Courts of Justice Strand, London, WC2A 2LL
		19th February 2013

Lord Justice Mummery:

1. This is an appeal from an order of Blake J dated 11 October 2011. He granted an application for judicial review sought by the appellant, which is a firm of solicitors, and quashed paragraphs 1, 3 and 4 of an order made in the Croydon County Court by Deputy District Judge Sadd on 25 March 2010 on the ground of lack of jurisdiction to make the order contained in paragraph 1.
2. Blake J, although he granted the quashing order sought in the judicial review proceedings, refused an application by the firm of solicitors for their costs of the judicial review proceedings. As for the costs of a Part 8 claim which had been heard in the county court, he remitted that to the county court by an amendment to his order under the slip rule. So all that is before us today is an appeal from Blake J's refusal to make an order for costs.
3. Permission to appeal from the refusal to order costs was granted on a renewed application by Rix LJ on 20 July 2012 in what he described as a "cascade of litigation". The permission had earlier been refused on a paper application considered by Hughes LJ on 20 March 2012. The permission granted by Rix LJ was limited to one ground, ground 5. That was the one that concerns the costs of the judicial review proceedings. All other grounds were refused.
4. Before I come to the submissions that have been made on the appeal, I should fill in the background to this litigation. The appellant firm of solicitors was retained by a client, who has been referred to in the proceedings as "the interested party", to act for him between May 2006 and January 2008 in both contentious and non-contentious matters. Following the termination of the retainer, the interested party attempted to get the amounts claimed by the appellant firm as costs assessed. The appellant firm resisted attempts to have a detailed assessment of its costs. They did so on the basis that the interested party had entered into a fixed fee agreement pursuant to Rule 19.5 of the Solicitors' Accounts Rules 1998. They submitted, therefore, that the costs were not subject to a detailed assessment.
5. On 24 October 2012 the costs judge, Master Haworth, found in favour of the interested party on this point. He rejected the appellant firm's reliance on a fixed fee agreement and directed a detailed assessment of all the costs claimed by the appellant firm while retained as the interested party's solicitors. I understand that there is a pending application in the County Court for permission to appeal against that order.
6. The interested party made a Part 8 claim in the county court and an application under the Solicitors Act 1974. However, the Croydon County Court had no jurisdiction to hear it. A question has arisen, which has been the subject of a submission this afternoon by Mr Lewis for the appellant solicitors, on whether the jurisdiction point was taken in the hearing before the Deputy District Judge. I will return to that in a moment. The firm took a point on jurisdiction when seeking permission to appeal against the Deputy District Judge's order to HHJ Ellis. Permission to appeal was refused. When the jurisdiction point, as finally formulated, was put before Blake J on the judicial review hearing, he held that it was a good point and made the quashing order which I have referred to.
7. I need not go into the details of the Solicitors Act 1974 and the reasons why there was no jurisdiction, because the only order that we are concerned with on this appeal is whether the judge erred in law in making no order as to the costs of the judicial review proceedings.
8. At the end of the judicial review hearing, Blake J was asked by the appellant solicitors to assess the costs of those proceedings summarily at £42,772 and they asked for an order against the interested party that he should pay that sum. The judge refused to make any order for costs and he declined to engage in an apportionment exercise as between the various issues on which the firm of solicitors had succeeded or failed before him. As regards the judicial review application, the judge said in the paragraphs towards the end of his judgment that there were a number of points relevant to the exercise of his discretion. He said that grounds of application for judicial review had been pursued on wrong criteria. He said that points had been abandoned or reshaped at the eleventh hour. He made a general criticism that the appellant firm was very much the author of its own misfortune. He commented that the litigation had not been economical, as the real point had not been focussed at an early stage. There was, he said, in an important paragraph which has been cited by Mr Lewis, a failure on the part of the firm to address the right submissions on the right point at the right time. That is a quotation from the judgment of Blake J at paragraph 72 where, having heard submissions, he said this :

"I am grateful to both counsel for their submissions. At the end of every case the question of who pays for the privilege of the litigation arises. For reasons which I hope I have made sufficiently plain in my substantive judgment, although the claimant succeeds on part of the claim for them in respect of part of the relief, there was a very considerable degree of failure to address the right submissions on the right point, at the right time. Rather than engage on an apportionment exercise between the issues on which the claimant succeeded and has failed, I conclude that the appropriate exercise of my costs discretion in this case is to direct there be no order as to costs. I so direct. "

9. Earlier on, during the course of interchanges between him and counsel, Blake J said to counsel who was then acting for the firm of solicitors:

"As for judicial review... this does not look like economical litigation focussing upon the real point early, with the chance of one side or the other to back off without too much additional costs. If I am going to exercise and proportion it, human rights claims and the cost [of] resisting you pay for; section 42 (1)(b) strike out argument you pay for; significant contribution to the failure to get any relief against HHJ Ellis, you pay for and then they pay for something that you succeeded on."

10. What the judge was there explaining was how to conduct an apportionment exercise. There had not been a total victory on the part of the solicitors even though they had succeeded in quashing paragraph 1 of the order of the 25 March 2010.
11. On the question of an appeal against costs it was accepted by Mr Lewis that he was appealing against the exercise of a discretion. That discretion is contained in Part 44.3 of the CPR to which he drew our attention. He drew attention in particular to the provision that relates to the conduct of parties, but I should also direct attention to the earlier parts of 44.3 where the nature of the discretion and the normal way it is exercised are stated:

"(1) The court has discretion as to –

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

(b) the amount of those costs; and

(c) when they are to be paid.

(2) If the court decides to make an order about costs –

(a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but

(b) the court may make a different order."

And then Mr Lewis drew our attention to 44.3(5)(c), which says " The conduct of the parties includes...", and then it says "the manner in which a party is pursued or defended his case or a particular allegation or issue".

12. It is clear from those provisions that the part relied on by Mr Lewis is that, as a general rule, the unsuccessful party will be ordered to pay the costs of the successful party. He says the solicitors were the successful party because they got paragraph 1 of the order of 25 March 2010 quashed, but, as is apparent from the parts of the transcript that I have read, it was not a complete and total success. As has been pointed out by Mr Van Tonder, there was another matter that was heard in the judicial review proceedings on which they failed and that was the question of the transfer to the senior court costs office. That had taken up time. They had not obtained the order they wanted to quash that order.
13. It is also apparent that issues were raised which were not pursued, in particular an issue under Article 6 of the Convention: what is called "the human rights point". Although that was raised on the day of the hearing, it was abandoned. Mr Lewis says that that should not have affected the judge's jurisdiction to order costs in his solicitors' firm's favour, because it had been reasonably raised. The comment, as made by Leveson LJ in the course of argument, was: how could the abandonment of a point not be the subject of relevant consideration by a judge when ordering costs? If the point has been raised and it has been abandoned, the judge no longer has to consider whether the point was reasonably raised or not. It has ceased to be a point in the proceedings, but it would have been a point which, by virtue of being raised, would have involved the other side incurring costs in having to prepare to meet it. So that was an example of the way in which the conduct of the case was relevant to the judge's discretion.
14. The judge also commented that the litigation had not been conducted in the most economical way. One can see that from the documents which we are provided with. We are provided with two lever arch files which are bulging with documents, but the only point of law that was relevant to the judicial review proceedings was, as Leveson LJ pointed out, a simple point under the Solicitors Act 1974 which barely required any documentation. It was simply a point of law. So it seems to me that the judge's comments about the lack of economy in the conduct of this litigation was a justified one.
15. Another point to which Mr Lewis has devoted some of his submissions is the point at which the jurisdiction question was raised. It was raised before Blake J successfully. Blake J obviously thought that it ought to have been raised much earlier, in an earlier hearing and in a more correct form. Mr Lewis concentrated on what had happened in the hearing before HHJ Ellis on the application for permission to appeal from the order of the Deputy District Judge saying, well the point on jurisdiction had been raised there. But I make two comments. First, it was not the same point on jurisdiction as was successfully raised before Blake J and, secondly, what the judge means by raising it at the right time was that the right time to raise a jurisdictional question is before the court of original jurisdiction, which makes the order that is subsequently quashed for lack of jurisdiction. We were taken to only one passage in the transcript relevant to whether this issue was raised before the Deputy District Judge. The question of jurisdiction was mentioned, but in a confusing way in which, within the same breath, the representative of the firm of solicitors was saying both that the court had jurisdiction and that it had no jurisdiction. So the point was never clearly raised before the Deputy District Judge. It was raised before HHJ Ellis, but not in the same form as it was raised in the judicial review proceedings.
16. In those circumstances I have reached the conclusion that the judge, Blake J, was fully justified in thinking that this was not a case for apportionment of costs according to issues. The fact is that, if one adopted that approach, some of the costs would have to be paid by the solicitors, some of the costs would have to be paid by the interested party, and, in those circumstances, he was entitled to say he did not think it was appropriate to engage in an apportionment exercise awarding costs on an issues basis. The appropriate way in which to exercise his discretion was to direct that there be no order.
17. As Mr Lewis accepted, this court is reluctant to interfere with the discretion of the judge who has heard the case when he comes to the question of costs. In my view Mr Lewis has fallen far short of demonstrating that Blake J acted on a wrong principle or that he misunderstood some significant point in the case or that he arrived at a decision which was plainly wrong. On the contrary, I think that the judge made a sensible and justified order in saying that, in all the circumstances, having regard to the way the litigation was conducted, the conduct of the parties, the abandonment of issues which were earlier raised and not raising the right point at the right time, the right order to make was no order as to costs.
18. For those reasons I would dismiss this appeal.

Lord Justice Leveson:

19. I agree. When Hughes LJ considered the application by the appellants for permission to appeal there were five grounds. He dismissed four as totally without merit and, in relation to the decision to make no order for costs, observed :

"[The judge] was entitled to take the broad view that this was litigation littered with errors on all sides and that costs ought to be left to lie where they fell."

As to that ground he believed it to be "very nearly" totally without merit. Mr Lewis clearly persuaded Rix LJ that there was somewhat more to it than that, but even Rix LJ made it quite clear that it was very difficult to upset the discretion of the judge on the matter of costs.

20. For the reasons advanced by Mummery LJ this appeal should be dismissed.

Order: Appeal dismissed