England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand. London, WC2A 2LL
		01/02/2007

THE HONOURABLE MR JUSTICE WYN WILLIAMS:

1. On the 3^rd February 2004 the Defendant granted planning permission and listed building consent to a company known as Mentmore Towers Limited in respect of a scheme of development upon an area of land known as Mentmore Towers. On the 30^th April 2004 the Appellant filed a claim for judicial review in which he sought orders quashing those grants. By an order dated the 11^th March 2005 Forbes J dismissed the claim after a substantive hearing. Permission to proceed with the claim for judicial review had been granted to the Appellant by Richards J (as he then was) on 23^rd September 2004.
2. At the conclusion of the hearing before Forbes J on the 11^th March 2005 he made certain consequential orders one of which was in the following terms.

"... the Claimant do pay 75% of the costs of this claim not to include costs of the permission hearing to be subject to detailed assessment if not agreed and paid by the Claimant to the Defendant's solicitors. "

3. The parties could not agree upon the bill of costs presented by the Respondent. In consequence, the Respondent sought a taxation of its costs. The taxation was heard by Master Campbell on 3^rd July 2006. Before the Master, the Appellant raised a point which both parties and the Master considered was a point of principle. The point raised by the Appellant was that under the order of Forbes J he should not be liable for any costs incurred by the Respondent before the decision was made to grant him permission to bring his judicial review proceedings except for the costs incurred in preparing the Respondent's acknowledgment of service and grounds of opposition to the claim.
4. In a reasoned judgment the Master rejected the Appellant's contention. He held that under the order of Forbes J the Appellant was liable to pay what he described as "pre-permission costs" subject, of course, to such costs being reasonably incurred. The Respondent was not limited simply to the costs of preparing the acknowledgment of service and grounds of opposition.
5. The Master gave permission to appeal against that ruling.
6. Both parties agree that if the order of Forbes J had been made after a civil trial in the context of a private law dispute the Master's ruling would be correct. However, the Appellant argues that in the particular context of judicial review proceedings the Master's conclusion is wrong. In effect, the case for the Appellant is that the order of Forbes J is to be taken to mean that no pre-permission costs are recoverable (other than the costs of preparing the acknowledgement of service and summary grounds) notwithstanding that there are no words within the order which expressly suggest that is to be the case.
7. It is to be noted that no argument was addressed to Forbes J upon the issue of "pre-permission costs" generally. As his order makes clear, however, he was asked to exclude from the costs payable to the Defendant the costs of the permission hearing an application on the part of the Claimant to which he acceded.
8. In my judgment the task which the Master faced in relation to the point under consideration was one of interpreting the order of Forbes J. In the context of this case he had to decide whether the order meant that the Defendant was to recover 75% of its costs (except its costs of the permission hearing) or whether it meant that it was to recover 75% its costs from the date of the permission hearing together with that proportion of the costs of preparing and filing an acknowledgment of service and grounds of opposition.
9. Since no argument was addressed to Forbes J upon the point in issue it seems to me that an interpretation of the order necessarily depends upon the meaning which would normally be attributed to the words of the order at the date when it was made. In order to ascertain that meaning it is necessary to consider not only the words themselves but also any relevant statutory provision, the relevant procedural rules (the CPR), the relevant Practice Direction and any authorities then existing which can reasonably be taken to have had an effect upon what Forbes J intended by his order.
10. As I have said, both parties agree that in a private law civil dispute the words of the order would mean that the Defendant was entitled to recover costs reasonably incurred during the litigation and also costs reasonably incurred in advance of the litigation once the prospect of litigation had been raised by the Claimant.
11. Section 51 of the Supreme Court Act is the source of the power of the court to award costs and it provides that such power "shall be in the discretion of the court." As is obvious this provision casts no particular light upon the meaning of the order of Forbes J.
12. By virtue of CPR 44. 3(2) the general rule is that the unsuccessful party to civil litigation will be ordered to pay the successful party's costs. No doubt that is a provision which was firmly at the forefront of the mind of Forbes J. Equally the court is quite entitled to make a different order.
13. In 2004 a Practice Statement particular to judicial review proceedings was published. ^[1] That Statement provided that upon the grant of permission to bring proceedings for judicial review the grant would be deemed to contain an order that that costs would be costs in case. The Statement was silent about orders for costs if permission was refused and it was also silent about how a court should exercise its discretion in relation to costs after a substantive hearing.
14. By the time that Practice Direction was issued, however, there had been two decisions which dealt specifically with two interconnected issues. The first decision in time was Leach [2001] EWHC Admin 455. In that case Collins J had to consider an application by a Respondent to judicial review proceedings for its costs "in and about the submission of an acknowledgment of service which gave reasons why permission for judicial review should not be granted" after the court had determined to refuse permission. The learned judge acceded to the application and made an order for costs. He also considered what costs should be recovered. Those parts of his judgment most pertinent to the instant case are paragraphs 15 and 16. They read as follows: -

"15. How much in principle should he be able to recover? It seems to me that it should be limited to the costs incurred in actually producing the acknowledgement, and those will obviously depend on the circumstances. As I indicated in the course of argument, it may be that if an application for judicial review comes, as it were, out of the blue or without any sufficient advance warning, then it will be more expensive for the defendant to put together material for his acknowledgement of service. If, on the other hand, there has been, as there should be, advance warning and contentions made beforehand so that the defendant knows in advance what the issues are, then obviously the costs will be likely to be far less, because, in my view, it would not be appropriate for the costs involved in the acknowledgement of service to include costs incurred in dealing with threatened, as opposed to actual, proceedings.

16. That may seem harsh to an extent, but otherwise the position of a potential applicant is, as it seems to me, prejudiced because he will not know, when he has acted properly in giving advance notice, what he is potentially letting himself in for. If it is merely a question of costs incurred in the acknowledgement of service, they are likely to be relatively modest. If on the other hand, he chooses to plunge into litigation without doing what he ought to do in advance and giving the necessary warning, then it may be that he is asking for trouble and asking for the amount to be significantly greater. "

15. The second decision was R (Mount Cook) v Westminster CC [2003] EWCA Civ 1346. One of the issues in that case before the Court of Appeal was formulated as follows in paragraph 47 of the judgment of Auld LJ.

"47 The fourth issue raises a matter of considerable public importance, namely as to the guidance to be given by this Court concerning the award of costs at the permission stage of claims for judicial review. The issue affects not only claimants and defendants, but also the interested parties and the court itself in the access that it provides to justice, having regard to the overriding objective of dealing with cases justly in CPR Part 1. and good public administration. More precisely, on the facts of this case, the issue is whether Moses J was entitled in the exercise of his discretion to order Mount Cook to pay the Council's costs of filing an acknowledgement of service and of successfully resisting its oral application. "

In the remaining paragraphs of his judgment, (48 to 82) Auld LJ considered that issue in depth. He held that Moses J had been entitled to make an order that Mount Cook should pay the Council's costs of preparing and filing an acknowledgement of service and of appearing to resist the grant of permission. He also gave guidance upon when such orders should be made.

16. In paragraph 55 of his judgment Auld LJ expressed his view upon the effect of the decision of Collins J in Leach. He said

"I have set out Collins J's reasoning at some length^[2] to demonstrate that his ruling was confined to the award to a successful defendant at the permission stage of his costs of filing an acknowledgement of service. It did not extend to an award to a defendant of any of his other costs in successfully resisting a claim at the permission stage, in particular to any costs of and/or occasioned by an attendance at a permission hearing. "

17. In my judgment the decisions in Leach and Mount Cook are concerned with the jurisdiction and practice of the court to award costs to defendants who argue successfully at the permission stage that permission to bring the claim for judicial review should not be granted. Nothing within those decisions bears expressly or directly upon whether a successful defendant in proceedings in which permission has been granted can recover "pre-permission costs" under an order granting him his costs expressed in the way that Forbes J expressed himself.
18. As well as the decisions in Leach and Mount Cook I was referred to two other decisions which preceded the order of Forbes J and which are of obvious relevance. In Young CO/1543/2001 Ouseley J had before him a renewed application for permission which was to be followed by the full hearing if permission was granted. He refused permission to apply for judicial review on the grounds of delay and ended his judgment by saying "Had the matter proceeded before me on the merits, this plainly arguable case would nonetheless have been dismissed." There then followed a discussion between counsel and the judge about costs. At the end of that discussion Counsel for Applicant raised with the judge the decision in Leach and sought to argue that the judge should not award "pre-permission costs" except for those associated with the acknowledgment of service. Ouseley J rejected that suggestion. His reasoning was as follows.

"I would just say briefly that Mr. Harwood has submitted that the only costs which can be recovered before the grant of permission.....are the costs incurred by the defendant in preparing its acknowledgment of service and the grounds of resistance. He submits that that is the logical consequence of a sensible and purposive reading of the practice direction in relation to costs at permission hearings. I do not agree. The costs at permission hearings are subject to the particular rule, in my judgment, because whether a defendant is represented or not is a matter over which the claimant has no control and in respect of which the rules make no requirement. It is a matter of choice by the defendant. It is not thought appropriate as a general rule that the choice exercised by the defendant should lead to a significant costs burden caused only by the attendance of counsel and solicitors on an occasion where a matter is being filtered out only. But that seems to me to be irrelevant to the question of whether costs incurred before the permission hearing, in addition to the acknowledgment of service and grounds of defence, should be paid. Those costs, if the claim is ultimately unsuccessful will, unless there is clear evidence to the contrary, have been incurred as part of a successful resistance of the claim. Very often a lot of the preliminary work.... will be invaluable in the subsequent preparation of witness statements. It would be very odd if the happenstance of when that work was done should mean that it was recoverable or not. I can see no advantage, in terms of the administration of justice or in fairness to any party, that would require this work to be done only after permission had been granted if it were to be recoverable in costs. This would simply be to substitute a timing point for a substantive point. "

As I understand it the substantive decision was reversed on appeal in this case but nothing adverse was said about the ruling upon costs.

19. In R (Thurman and Earle) v LB Lewisham CO/2806/2003 Collins J refused an application by the Respondent for costs in a situation where a claim was brought but not pursued even to the stage of seeking permission. Accordingly no acknowledgement of service was ever filed. In rejecting the Respondent's application Collins J said:

"The costs of dealing with a threatened claim area generally irrecoverable, unless a claim is made, gets permission and eventually the claimant loses. Equally, if permission is not granted, such costs are not recoverable unless an Acknowledgement of Service is filed, in which case the court may make an order relating to the costs incurred in preparing that Acknowledgment: see Leach. Such costs will not usually include pre-claim costs. "

20. In my judgment both Young and Thurman and Earle suggest strongly that very experienced judges of the Administrative Court have considered it open to them to make orders for costs against unsuccessful applicants which include "pre-permission costs" after a substantive hearing. I reject the suggestion that Collins J's remarks were somehow limited. In my judgment his language is clear and, to repeat, amounts to the assertion that costs of dealing with a threatened claim (pre-permission costs) may be recoverable against an unsuccessful claimant after a substantive hearing.
21. In the light of this review of the relevant rules and the authorities which existed before Forbes J made his decision I have no doubt but that judges of the Administrative Court have proceeded on the basis that it is open to them to award "pre-permission costs" against an unsuccessful claimant after a substantive hearing. Given that understanding, in my judgment the most obvious and natural meaning of the order of Forbes J is that the Claimant should pay 75% of the Defendants costs including 75% of its "pre-permission costs" but not the costs of the permission hearing. In consequence I agree with the Master's interpretation of the order of Forbes J.
22. Mr Pereira, Counsel for the Appellant, argued that the reasoning which led to the decisions in Leach and Mount Cook should also lead to the conclusion for which he contends in this case. His primary contention is that in those cases the courts, as a matter of policy, considered it appropriate to limit the costs payable by an unsuccessful applicant in the event that his application for permission was unsuccessful unless one or more of the features identified in Mount Cook was present which justified a different order. He submitted that cases such as Leach and Mount Cook are cases where an applicant cannot surmount the comparatively low threshold test for the grant of permission and yet the applicants are protected from substantial orders for costs. Yet, if the Respondent is right, submitted Mr. Pereira, an applicant who has a case which is meritorious enough to warrant the grant of permission will find himself in a worse position, in relation to costs, than if his claim had not surmounted the permission hurdle. That, he said shortly, cannot be right.
23. It is true that policy issues strongly influenced the decisions in Leach and Mount Cook. I have quoted above from the judgment of Collins J in Leach and it is obvious that the learned judge was concerned with policy issues in reaching his decision. In Mount Cook Mr. Pereira pointed to the following passages.

".....The objects of the obligation on a defendant to file an acknowledgement of service setting out where appropriate his case are: 1) to assist claimants with a speedy and relatively inexpensive determination by the court of the arguability of their claims; and 2) to prompt defendants - public authorities - to give early consideration to and, where appropriate, to fulfil their public duties. It would frustrate those objects to discourage would-be claimants from seeking justice by the fear of a penalty in costs if they do not get beyond the permission stage or to clog up that stage with full-scale rehearsals of what would be the substantive hearing of a claim if permission is granted. Thus not' only the statutory scheme, [a reference to the CPR] as supplemented by the Practice Direction and Pre-Action Protocol, but also the public law context, is different from that governing the generality of civil law proceedings, differences that suggest the need for, and intention to provide, a different costs regime in such cases."^[3]

Having held that a general rule existed to the effect that an unsuccessful applicant at the permission stage would generally be ordered to pay the costs incurred by the respondent in preparing and filing an acknowledgment of service and having also held that the general rule was that such an applicant would not have to pay the costs of the respondent's appearance at a permission hearing Auld J concluded

"Such an approach seems to me to accord with public policy in providing ready access to the courts by individuals or bodies seeking relief from and/or to draw attention to actual or threatened transgressions of the law by public bodies, whilst, in exceptional cases protecting those bodies and the public that funds them from unnecessary, burdensome and costly substantive litigation....."^[4]

24. Drawing upon these passages Mr. Pereira argued that the practice of the courts in relation to pre-permission costs should be the same whether or not the proceedings end at the permission stage.
25. I do not think that this appeal is an appropriate vehicle for a decision about what the practice of the court should be. As I have said, the task of the Master and this court is to determine what Forbes J meant by his order. Since none of the arguments put before me were ever raised before Forbes J it is impossible for me to hold that Forbes J intended to reflect those arguments in his order and exclude "pre-permission costs. "
26. Mr. Pereira also relied upon the determination of Bean J in Tinn and Mardlin. CO/6012/2005. In that case Bean J made his order on the 1^st February 2006 and the order was that the Claimants should pay the Defendants costs from a specified date in the proceedings. Under the heading "Observations" he said: -

"The Defendant rightly accepts that the Claimants are not liable for his costs of the permission hearing or other pre-permission costs save for the acknowledgment of service and summary grounds. "

That observation was made following the consideration of written submissions by the parties.

27. The written submissions of the Applicants in Tinn and Mardlin are within the Bundle at pages 52 to 55. They contained the submission that the Claimants should not be responsible for "pre-permission costs." The reply of the Defendant was to concede that "pre-permission costs should be limited to the costs of the acknowledgment of service and preparation of summary grounds."^[5]
28. The written submissions of the Defendant in Tinn and Mardlin contain no explanation about why he made his concession. I should record, however, that in their written submissions the applicants relied upon the sort of argument deployed by Mr. Pereira in this case as to the effect of Leach and Mount Cook. I can only assume that that both the advisors of the Defendant and Bean J accepted the submissions made by the Applicants.
29. The determination of Bean J, however, cannot help in deciding upon the meaning to be given to the order of Forbes J. It was made many months after the decision of Forbes J and it was made in the context of the written submissions to him and with no reference to Young or Thurman and Earle:
30. I have reached the conclusion that this appeal should be dismissed. I should add two things for completeness. Firstly Mr. Pereira sought to introduce a witness statement from his instructing solicitor. I looked at the statement but as will be apparent it has played no part in my reasoning. In my judgment the reality is that the statement was not admissible in evidence since the requirements of Ladd v Marshall could not possibly be satisfied. Secondly, it was through the efforts of the Appellant's solicitors that the decisions in Young and Thurman and Earle were brought before the court. For that attention to professional probity I am grateful.

Note 1   Practice Statement (Judicial Review: Costs) [2004] 1 WLR 1760    [Back]

Note 2   Extracts from paragraphs 14 to 18 and paragraph 21    [Back]

Note 3   Paragraph 71 of the judgmen    [Back]

Note 4   Paragraph 77 of the judgment    [Back]

Note 5   Bundle page57    [Back]