England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT

		Royal Courts of Justice Strand London WC2
		6th October 2004

1. MR JUSTICE MUNBY: These are judicial review proceedings in which Charles J gave permission by an order dated 27th April 2004. As my brother pointed out, the defendant, the London Borough of Tower Hamlets, had failed in its obligation to lodge an acknowledgment of service and, despite the exhortation contained in his order, it has continued in that failure. The substantive hearing being listed for today, a day or two ago, the defendant spurred itself into action. It comes before the court today seeking permission to participate in the proceedings in circumstances where it acknowledges that without the court's permission it cannot do so.
2. The defendant's default verges on the disgraceful. The claim is under the right to buy legislation by one of its own tenants who is an elderly man aged 86 and in bad health. He has endured several months of litigation believing that the claim was not going to be defended: the consequence of which, as seen by him, would be that he would be entitled to buy his council house at a very substantial discount. Without going into the details, the effect of the defence, if the defendant is permitted to mount its defence and is successful in that defence, will be significantly to reduce the discount which he obtains, thereby causing him financial loss running to some thousands of pounds. This may be trivial in terms of the coffers of even an authority as poverty-stricken as the London Borough of Tower Hamlets, but it is obviously a very substantial sum for somebody in the claimant's condition.
3. The defendant, which finds itself in mercy, submits that the claimant will suffer no prejudice if it is allowed to defend at this stage other than as can properly be remedied by an order for costs. Conversely, it says, if it is not allowed to defend substantial sums of public money may accrue to the claimant by way of windfall. Mr Gregory, who appears as the claimant's representative and spokesman this afternoon, understandably submits that a mere adverse order in costs is not enough to meet the gravity of the defendant's serious and continuing faults. I am sympathetic to that approach, but the fact nonetheless is that I have to hold the scales fairly and evenly between these two litigants. I cannot allow myself to be swayed by the fact that an elderly gentleman believed until a day or two ago that he was going to get his council house at a very substantial discount.
4. The fact is that if the defendant is not permitted to intervene and mount a substantive defence, subject only to formal proof, the claim is bound to succeed.
5. The substantial issue at trial (unless the claimant and his supporting witnesses collapse altogether on the only matter in relation to which they have to give evidence, namely the date on which the letter was posted) will turn entirely upon whether or not the defendant can establish its case that the letter, even if posted, was not received by it. Thus, as I say, unless the defendant is permitted to participate in the proceedings and mount a substantive defence, the claimant is overwhelmingly likely to succeed. In other words, the penalty which I visit upon the defendant if I do not grant its application is very substantial. It amounts, in effect, to depriving it of any opportunity to defend the action in circumstances where, if it has an arguable defence, it will be deprived of that opportunity, and in circumstances where, if in fact it does have a good defence, the consequence is that the claimant will recover a windfall.
6. It seems to me that, subject to appropriate terms and conditions, I should permit the defendant to defend the matter. The fact as it seems to me is that, subject if appropriate to certain conditions and subject of course to questions of costs, the claimant can be fully compensated for any detriment which he has suffered as a result of the defendant's various defaults. Conversely, if I do not permit the defendant to mount a substantive defence, I may be inflicting upon it, and more importantly perhaps upon the public purse, an obligation to confer a not insubstantial windfall on the claimant. Accordingly, in all the circumstances, I am persuaded that, holding the scales fairly between the parties, justice requires that the defendant should, albeit at this very late stage, be admitted to intervene and defend.
7. Mr Rutledge, on behalf of the defendant, submits that the action is in the wrong court, that the claim is essentially one in private law, not in public law, that it could and should have been pursued in the county court, and he helpfully and very properly directs me to the terms of section 181(3) of the Housing Act 1985 which provides:

"If a person takes proceedings in the High Court which, by virtue of this section, he could have taken in the county court, he is not entitled to recover any costs."

8. That is precisely the kind of point which the defendant could and should have articulated at the earliest possible stage in an acknowledgment of service. If the defendant had done so, then that seeming defect in the procedure could have been remedied at a very early stage and before the incurring of substantial costs.
9. I am inclined to think that Mr Rutledge is right in saying this is essentially a private law dispute between a landlord and a tenant, albeit the landlord happens to be a public authority. But it seems to me to be, in all the circumstances, a point which should not be allowed to stand in the way of what is just and sensible. The case turns entirely on matters of fact. It seems to me the convenient course, irrespective of any argument about jurisdiction, is that the factual issue should be tried out before a circuit judge sitting in the county court and I am going to transfer the matter in accordance with CPR 54.20 to the Bow County Court. That, I emphasise, is as a matter of practical and sensible convenience. It is not because I have necessarily found in Mr Rutledge's favour on the argument as to jurisdiction. He may be right. I am not going to take up time deciding that peripheral point today. Whether he is right or not, the convenient thing is for this case now to proceed in the county court.
10. Since the point is one which the defendant could and should have taken at a much earlier stage, it seems to me that it is open to me and appropriate in the circumstances that I impose upon the defendant as a condition of being given permission to defend the proceedings that, in relation to all questions of costs -- and my view is that the costs both down until today and hereafter are best dealt with by the circuit judge, that is to say by the trial judge rather than me -- the defendant will be put on terms debarring the defendant from relying upon section 181(3) as against the claimant in relation to the period from and immediately after the making by Charles J of his order down to the end of the hearing today. That preserves the right which the defendant would have had if it had taken the point timeously before Charles J to protect its position in relation to costs down to that date. It prevents the defendant taking that point in relation to the costs incurred during the period when the point remained live only because the defendant was not properly defending the proceedings.
11. I am not ruling that section 181(3) does in fact apply, and if the defendant wishes to rely upon that section in relation to the period down to the making by Charles J of his order, then the defendant will have to satisfy the county court judge of that. But to the question whether section 181(3) applies or does not apply, if the defendant wishes to have permission to defend this claim, it will be on terms that the defendant does not take that point in relation to the costs for the period I have mentioned.
12. Mr Gregory has pointed out to me that not merely is his client elderly, but that his client is not in good health and that his client's health has deteriorated since these proceedings began. I floated during the course of submissions the question whether I should put the defendant upon further terms precluding it from disputing that the claimant had posted the relevant letter and thereby effectively confining the defendant to establishing a defence if it could. If I had been persuaded that the claimant was likely to die between now and the hearing in the county court, I would have been minded to impose such a condition, because plainly the claimant would be prejudiced. Perhaps I should say the claimant would be prejudiced if the case came to trial after he had died in circumstances where his estate would thereby be deprived of his evidence on a crucial issue, which evidence would have been available if the case had been tried earlier.
13. However, on reflection, and bearing in mind that the county court will be able to conduct a hearing of this case I am sure in the very near future, and that there is nothing to suggest that the claimant is at death's door, I have decided not to impose that condition.
14. Accordingly, I will give permission to the defendant to defend the matter, subject to the condition I have mentioned. The matter will be transferred to the county court. I today will give such directions as are needed in relation to the disclosure of documents and further evidence, thereby avoiding the need for a directions hearing in the county court. I think it would be convenient, as Mr Rutledge suggests, if he and Mr Gregory could now discuss outside court what further directions, if any, are needed. Whilst that is being discussed between them, it would also be of great assistance if Mr Rutledge's instructing solicitor could telephone Bow County Court, giving them the reference number for this action, and inform them of the following: that the action has been transferred and the file will be arriving at the court within a matter of next few days and that I have given directions that there is no need for a directions hearing in the county court. The solicitor can ask the county court to indicate what date they can provide for a hearing which, I think it is agreed, will last approximately half a day. My order will indicate, and Mr Rutledge your solicitor can make this clear to the county court, that the matter is to be listed for hearing in the county court as a matter of urgency at the earliest possible opportunity. Now, I envisage that there may be further disclosure. I should have thought that this is a case in which the local authority can give standard disclosure in CPR terms. How long is the local authority going to need for that? Seven or fourteen days?
15. MR RUTLEDGE: My Lord, if it is a case for disclosure, I would ask for fourteen days, my Lord, yes. My Lord, might we take the opportunity, Mr Gregory and I, to see if we can --
16. MR JUSTICE MUNBY: If you would. I only raise that last point because I do not want your solicitor going off to Bow County Court saying, the High Court judge wants a hearing as quickly as possible, then be given a date tomorrow. What I would hope is that any further disclosure that has to be made, or any further witness statements, can be dealt with in the course of the next two or three weeks and I would hope that the Bow County Court could be fixing a hearing in a month to six weeks' time.
17. MR RUTLEDGE: My Lord, yes. Perhaps Mr Gregory and I could spend just five minutes setting out a timetable, then I can give that timetable to my instructing solicitor and he can telephone the judge's clerk.
18. MR JUSTICE MUNBY: If you would.
19. MR GREGORY: Sorry, your Lordship. On that point, I am very concerned that the defendant has now not just got the opportunity to put in their defence, but also alter their defence. I feel that they should stick to their defence as put in.
20. MR JUSTICE MUNBY: Well, they are not altering their defence.
21. MR GREGORY: I apologise, I mean the evidence that they put in with their defence. It has been highlighted by your Lordship -- we did not have the opportunity to actually look at it -- we did not actually look at what they put in because it was not an issue until the application was successful.
22. Now I feel that they have been put in a better position, because now they have an opportunity to adduce even further evidence when, if this matter had gone ahead in this court today and they had not basically done any more, then they would have had to have relied on the evidence they put forward. Now, they can alter their position. It is just a point, your Lordship.
23. MR JUSTICE MUNBY: I think justice all round requires that the judge, when he or she deals with this matter, should deal with the matter on the basis of all the available evidence. I do not think it is shifting, it is simply a question of digging out a few more documents. So I think I contemplate that there will be a direction for standard disclosure, 14 days maximum for that, and if either side wants the opportunity to put in further evidence, then I will give directions for that.
24. Subject to that, I will simply direct the matter to be set down for hearing before the judge at the Bow County Court with a time estimate of half a day. If, by the time you come back, you actually have a date, then that date will go into my order. Otherwise, I will make an order in terms as a matter of urgency for the first available date on or after -- and so on so forth. But I am anxious that this be tried as soon as possible. Now, if you both could go and discuss matters outside and come back with a draft order, I would be grateful.
(A short break)
25. MR RUTLEDGE: My Lord, Mr Gregory and I have reduced the writing. Our suggested timetable, subject of course to my Lord -- the disappointing news from Bow is that they are currently listing half-day trials in March. Now, we cannot really do much about that, save for this -- and it is recorded in the suggested timetable -- we have agreed to make representations to Bow forthwith.
26. MR JUSTICE MUNBY: Well, that is not on, I am afraid. I only, as it were, went with the county court idea because it is supposed to be a simple, straightforward, quick court. I do not know, but if it was to go to the Queen's Bench list here, has anybody any ideas how long it would take to get it fixed up? I will ask the Associate to check, if she would.
27. MR RUTLEDGE: My Lord, perhaps whilst the Associate is doing that, I could just say what the fall-back position would be.
28. MR JUSTICE MUNBY: Yes.
29. MR RUTLEDGE: We have agreed to make representations to the county court for an earlier date. If, when the date comes back, it is not this year, we would jointly make an application for expedition to the county court explaining the circumstances. That is probably as far as we can go as parties.
30. MR JUSTICE MUNBY: I am sure you are right in that.
31. MR RUTLEDGE: My Lord, I am sorry that that is the news. I have to say it does not alter my submissions on the case.
32. MR JUSTICE MUNBY: No, but it may be that we can find half a day of judge time somewhere else rather than Bow.
33. MR RUTLEDGE: Might I hand up the timetable?
34. MR JUSTICE MUNBY: Certainly. (Handed).
35. MR RUTLEDGE: Essentially, my Lord, we are asking for fourteen days to do everything, that is to say put in a formal defence clearly setting out my case and any evidence in disclosure. Mr Gregory would do likewise and we simply get before a judge.
36. MR JUSTICE MUNBY: So this will be ready for hearing in 28 days?
37. MR RUTLEDGE: Yes, my Lord.
38. MR JUSTICE MUNBY: After 4th November?
39. MR RUTLEDGE: Yes. Well, I would say a week after that, my Lord, because on the 4th November we might get documents and witness statements. For our part, we are in no position to seek the court's indulgence, but we will have in our case fully pleaded evidence and disclosure within 14 days. We offer the undertaking that my Lord has suggested, and the formula of words about it continuing as though commenced in the county court. In my respectful submission, that removes any jurisdictional problem with 181(3), but my Lord has the undertaking in any event.
40. MR JUSTICE MUNBY: Yes.
41. MR RUTLEDGE: That is assuming 181(3) is still part of the law.
42. MR JUSTICE MUNBY: Well, indeed.
43. MR GREGORY: Your Lordship, there were only two points on that. When I was addressing the court earlier, I forgot to mention that Mr Terry's disease or problem now is called apnea. Basically his heart stops and obviously that might happen soon and it might not restart again, so when I was told March, I realised that March is no good to anybody.
44. MR JUSTICE MUNBY: Well, March is no good for anybody, not even to me.
45. MR GREGORY: The second point, your Lordship, which would be very helpful on our side, because we have been disadvantaged, is that a transcript of this hearing is produced. It will benefit the defendant as well as us, but we should not be footing the bill. It has been said how the defendants will basically recompense the claimant for this delay and I think that would be a small price to pay to at least bring Mr Terry up to speed on what happened at today's hearing.
46. MR JUSTICE MUNBY: Let us hear what the Associate has to say. (Pause). It looks at if there will be no particular problem in getting a date in the Queen's Bench list here -- it may be in front of a Deputy Judge, but that is perfectly satisfactory -- in November. (Pause).
47. MR RUTLEDGE: My Lord, I was simply checking that this court can transfer sideways.
48. MR JUSTICE MUNBY: Certainly. The only problem is that it then messes up your rather elegant solution to the 181(3) problem. It cannot then be continued as if issued in the county court. I do not think that it is really a problem.
49. MR RUTLEDGE: My Lord, I am just wondering -- thinking against myself, as it were -- the wording is "continue". I wonder whether the judge might say or might construe the matter as being deemed to have started in the High Court. That is the problem, my Lord. Obviously, I want to assist the court.
50. MR JUSTICE MUNBY: My difficulty is this. As you probably know, I normally sit in the Family Division, not the Queen's Bench Division, and in the Family Division this is no problem at all. I would very happily list this, as it were, in front of myself in the Family Division and sit as a circuit judge. That solves the problem in the Family Division -- we just sit simultaneously in both courts all the time.
51. My determination is to get this thing on as soon as possible. I think the answer is I will transfer it to the Queen's Bench Division to continue as though issued in that court. Then I will say, "on the first open date after 18th November". Then your paragraph 7 can come out.
52. MR RUTLEDGE: It can, my Lord, yes.
53. MR JUSTICE MUNBY: What I will do is to make an order and I will hand it back to you so you can make the necessary adjustments. I have scribbled in the Queen's Bench Division rather than the Bow County Court. So I will make that order. If you could just check that I have made all the relevant consequential adjustments and then if you have a quick word with the Associate, she can explain direct to you what she has just been telling me about going to the listing people through your clerk. As I understand it there should not be any difficulties in getting a hearing date in November.
54. So I will make that order. Have a word with the Associate. Subject to that, make the appropriate approach to Queen's Bench listing. If there is any problem, I am sitting in this court for the next three weeks, so please let me know. I am not prepared to have this case hanging around until next March. We only require half a day of judge time, give or take, and I am determined to ensure by hook or by crook that we will get a judge to deal with this. I do not think there will be a problem, but if there is some difficulty I would like to know so that I can assist if need be.
55. MR RUTLEDGE: I shall, my Lord.
56. MR JUSTICE MUNBY: Thank you very much.
57. MR GREGORY: My Lord, there was the matter regarding the transcript of the hearing.
58. MR JUSTICE MUNBY: Yes. I do not think we need a transcript. I am not sure if I have said anything of particular importance.
59. MR GREGORY: I thought you did, your Lordship. I thought that there were certain points that were raised that might be picked up on later, and obviously we were at a disadvantage at this hearing. It is the defendants who have caused us that disadvantage. I feel that if a transcript is ordered and they pay for this transcript, they will benefit from it as well. So even though they are paying for the transcript, they are getting the benefit of the transcript. But at least it is some recompense.
60. MR JUSTICE MUNBY: You are saying they should pay for it?
61. MR GREGORY: Yes. For the local authority it is a minor inconvenience and minor expense. It is a drop in the ocean for them.
62. MR JUSTICE MUNBY: What do you say about the transcript, Mr Rutledge?
63. MR RUTLEDGE: With respect, it is unlikely to assist. The judge is simply going to resolve an issue of fact. I cannot imagine there will be any issues about costs, my Lord. That is the only possible advantage in having a transcript. It is, with respect, an unnecessary expense.
64. MR JUSTICE MUNBY: What I am going to do is -- I am not going to direct a transcript of the whole of the proceedings. I will direct a transcript of my ruling.
65. MR GREGORY: Thank you, your Lordship.
66. MR JUSTICE MUNBY: I will order a transcript of my ruling on the application for permission, which I think includes the terms on which this is being transferred, on the basis that I have adjourned all questions of costs to the trial judge and it may assist the trial judge to have a copy of my ruling when it comes to dealing with that. I think, in the circumstances, I will direct that initially the transcript is to be paid for by the local authority, but leaving it to the trial judge as part of his general order as to costs to make some other order in relation to the costs of the transcript if he thinks it appropriate. But initially there is to be a transcript, and initially that transcript is to be paid for by the local authority.
67. MR GREGORY: I am much obliged.
68. MR JUSTICE MUNBY: That means that the claimant will not be held up and can see the transcript, but it will leave it open to the local authority as part of the overall arguments as to costs that it should be repaid. Is there anything else, Mr Gregory?
69. MR GREGORY: That is it, your Lordship.
70. MR JUSTICE MUNBY: Thank you both very much indeed.