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
		20/07/2018

Mr Justice Spencer:

1. This is my decision on the issue of costs arising from the judgment I handed down on 14^th May 2018: [2018] EWHC 1125 (QB).
2. In advance of handing down that judgment I directed on 1^st May 2018 (when the draft judgment was circulated) that any submissions on costs and ancillary matters should be filed and served by 4pm on 9^th May 2018. On behalf of the defendant, Mr Wong's submissions dated 9^th May were duly filed and served. The defendant is seeking his costs of the committal proceedings, and seeks those costs on the indemnity basis. He also asks for a summary assessment. In fact, because the defendant has been legally aided since 8^th March 2018, summary assessment is not permitted: see PD 44, paragraph 9(a).
3. At that stage, owing to an administrative oversight, I had not been provided with the defendant's statement of costs for summary assessment, dated 8^th May 2018, in the total sum of £84,031.08. That claim for costs relates entirely to the period from which he became legally aided. It was unclear whether the defendant was also seeking costs prior to that date as a litigant in person.
4. On behalf of the claimant, on 10^th May 2018 Mr Patel QC sought an extension of time to file and serve his submissions on costs and ancillary matters. It seemed to me sensible that his submissions should address the figures claimed by the defendant. I therefore directed that the defendant should provide the missing information (i.e. figures for costs claimed as a litigant in person) by 16^th May, and granted the claimant an extension to 17^th May for the filing of his submissions. I also directed that each party must file and serve by 4pm on Friday 25^th May a final document in response to the other party's submissions on costs. Thereafter, if appropriate I would decide the issue of costs on the papers but would convene a hearing, if necessary, for further argument.
5. On 16^th May Mr Wong on behalf of the defendant duly served a statement of the defendant's costs as a litigant in person, up to the date legal aid was granted. The total sum claimed is £7,717.
6. On 17^th May 2018 the claimant's submissions on costs were served, although at that stage Mr Patel had not seen the figures for costs claimed by the defendant. In those written submissions Mr Patel disputes the defendant's entitlement to any order for costs on the indemnity basis. He submits that the claimant should have his costs against the defendant up to 4^th April 2018, 12 days before the final hearing, and on the indemnity basis. The total sum clamed is £352,867.82. Alternatively, he seeks costs on a more restricted basis, as I shall explain in due course.
7. In further written submissions, each dated 25^th May 2018, Mr Wong and Mr Patel respectively developed their arguments. There is little if any common ground between them. I am nevertheless satisfied that I can decide the issues of costs properly and fairly on the basis of written submissions, without the need for a further hearing.

The defendant's application for costs

8. Mr Wong's primary submission is that the claimant should pay the defendant's costs on the indemnity basis, even though he is legally aided. Mr Wong does not address, specifically, the defendant's claim for costs as a litigant in person. Mr Wong submits, on the authority of Brawley v Marczynski (No 2) [2002] EWCA Civ 1453, that it is within the discretion of the court to award indemnity costs to a publicly funded litigant. He submits that despite the observations at paragraphs 159 and 168 of my judgment, the claimant should have withdrawn the application for committal, or the majority of it, from 23^rd March 2018 when it should have been apparent that the alleged breaches were now of a wholly technical nature. The significance of the date 23^rd March 2018, although not spelt out in Mr Wong's submissions, is (presumably) that it was then that WordPress confirmed that the blogs at (vi) and (vii) were set to private mode but would not be deactivated (see paragraph 73 of my judgment).
9. Mr Wong relies upon the approach of Briggs J (as he then was) in Sectorguard Plc v Dienne Plc [2009] EWHC 2693 (Ch), at [45]- [47]:

"It has long been recognised that the pursuit of committal proceedings which leads merely to the establishment of a purely technical contempt, rather than something of sufficient gravity to justify the imposition of a serious penalty, may lead to the applicant having to pay the respondent's costs".

Mr Wong submits that here, by my judgment, there has not even been proof of a technical contempt. The consolidated application for committal has been dismissed in its entirety

10. Mr Wong further submits that the manner in which the claimant has conducted the litigation has generated unnecessary and additional work. He complains in particular about the volume of material served, eleven lever arch files subsequently reduced to three lever arch files. He complains that the claimant's solicitors did not engage properly with the defendant's solicitors to agree a trial bundle.
11. In his further submissions, dated 25^th May, Mr Wong relies upon the principles summarised by Tomlinson J in Three Rivers District Council v The Governor and Company of the Bank of England [2006] EWHC 816 (Comm) in relation to the circumstances in which the court is likely to exercise its discretion to award indemnity costs. There it was held that the critical requirement is that there must be some conduct or some circumstance which takes the case out of the norm. It is not necessary that the conduct of the unsuccessful party should attract moral condemnation, although that would undoubtedly provide a ground for exercising the discretion. Rather, the test is unreasonableness. The court should have regard to the conduct of the unsuccessful party during the proceedings, both before and during the trial. This will include whether it was reasonable for the unsuccessful party to raise and pursue a particular allegation. Also relevant is the manner in which the unsuccessful party pursued its case and its allegations. The circumstances will take a case out of the norm and justify an order for indemnity costs where the unsuccessful party advances and aggressively pursues serious and wide ranging allegations of dishonesty or impropriety over an extended period, particularly if that is done despite the lack of any foundation in the documentary evidence for such allegations.
12. Although this is a helpful summary of the authorities, I note that the Court of Appeal has expressly declined to give guidance to judges intending to make orders for costs on the indemnity basis, save that there must be something in the unsuccessful conduct which takes the case "out of the norm". This underlines the importance of recognising the breath of the court's discretion whether to make such an order: see Excelsior Commercial and Industrial Holdings Ltd v Salisbury Hammer Aspden & Johnson [2002] EWCA Civ 879 at [32], and the notes at paragraph 44x.4.3 of the White Book 2018.
13. Mr Wong submits that this case is out of the norm. He submits that the claimant pursued a number of untenable and weak allegations. The case in relation to web blog (i) was weak. The case that there were breaches in relation to web blogs (vi) and (vii) was also weak, particularly once those websites had been rendered inaccessible to the public on 19^th March 2018. He submits that the claimant raised and pursued serious and exaggerated allegations of blackmail and lack of integrity in reliance on tenuous documentary material. He submits that crucial to the exercise of the court's discretion is the question whether the claimant should have maintained to the final hearing some, or even any, of the allegations of contempt.
14. In response Mr Patel submits on behalf of the claimant that there is no sound basis for awarding the defendant any costs on the indemnity basis. There has been no finding of misconduct on the part of the claimant. Nor can the claimant's conduct be properly categorised as unreasonable to a high degree, or unreasonable at all. It is not sufficient that the losing party's conduct may be shown in hindsight to be wrong or misguided.
15. I have given these and all the other written submissions careful consideration. In my judgment the defendant should have his costs of the application from the date when he became legally aided, 8^th March 2018. But those costs will be on the standard basis not the indemnity basis. My reasons are as follows.
16. As I explained at paragraph 159 and 160 of the main judgment, the claimant's conduct cannot, in my view, be described as oppressive or disproportionate, or an abuse. When the committal application was commenced on 26^th January 2017, web blogs (vi) and (vii) were still fully accessible. Nor at that stage had the defendant taken any steps to deactivate blogs (ii) to (v). He did so only after the Second Order was made on 28^th March 2017. The combined efforts of the claimant and the defendant had failed to secure the deactivation of blogs (vi) and (vii), but there was a continuing obligation on the defendant, under the Second Order, to use his best efforts to achieve that outcome. It was only very late in the day, on 19^th March 2018, that the breakthrough came when WordPress set those blogs to private view only. The claimant's solicitors were not informed of that development until 3^rd or 4^th April 2018, only a week before the final hearing.
17. I am not persuaded that the claimant's conduct in pursuing the proceedings, even after that date, was so unreasonable as to justify an award of costs on the indemnity basis. I am satisfied, however, that in principle costs should follow the event from the date when the defendant became legally aided, 8^th March 2018. That coincided, broadly speaking, with the hearing before Cheema-Grubb J on 5^th March 2018. Although the whole application was adjourned on that occasion it is plain, by my findings, that the defendant ultimately succeeded in defending each and every allegation of contempt which was still being advanced at the hearing on 5^th March. The only factual difference between the situation on 8^th March 2018, when the defendant became legally aided, and the date of the final hearing before me, 16^th to 18^th April, was that it was not until 19^th March that the breakthrough with WordPress in relation to blogs (vi) and (vii) was achieved. However, as my findings in the main judgment make clear, even without that development the claimant would have failed to prove to the criminal standard that the defendant had not used his "best efforts" to procure the deactivation of web blogs (vi) and (vii).
18. For these reasons I am entirely satisfied that from 8^th March 2018, at the latest, the claimant was undoubtedly the unsuccessful party and the defendant the successful party. I see no reason to depart from the general rule that the unsuccessful party should be ordered to pay the costs of the successful party: see CPR 44.2 (2).

The claimant's application for costs

19. On behalf of the claimant Mr Patel (at paragraph 4 of his initial submissions on costs) disputes the defendant's entitlement to costs even in respect of this final period, from 8^th April 2018 onwards. Mr Patel submits that the claimant should recover against the defendant his own costs of and incidental to the committal application until 4^th April 2018, the date when the claimant's solicitors were informed that web blogs (vi) and (vii) were now in private mode. Alternatively the claimant seeks his costs against the defendant of and incidental to the application until 28^th March 2017, a year or so earlier, the date of the hearing before Turner J when the Second Order was made. In the further alternative the claimant seeks against the defendant, at the very least, the costs occasioned in considering the defendant's evidence filed and served but not relied on at the final hearing.
20. As to Mr Patel's submissions, for the reasons already explained I reject the suggestion that the claimant is entitled to his costs until 4^th April 2018. Such an order would fly in the face of the overall reality of the outcome of the proceedings. I shall address the alternative suggestion of costs of and incidental to the application until 28^th March 2017 when I consider, in principle, the incidence of costs for the period before 8^th March 2018 when the defendant became legally aided.
21. I reject entirely the third suggestion in Mr Patel's submissions that the claimant should in any event have his costs of considering the defendant's evidence filed and served but not relied on at the final hearing. The evidence filed by the defendant consisted of a very full and helpful chronological witness statement from the defendant, cross-referenced to a single lever arch file of documents. Many of the documents in that bundle were already in the claimant's bundles but the chronological arrangement in the defendant's bundle was particularly helpful even though, in the event, not all the documents in that bundle were admissible once the defendant chose not to give evidence.
22. Nor can it be right in principle to penalise the defendant on costs for choosing not to give evidence. He had filed and served a witness statement in accordance with the order by Cheema-Grubb J. In the event, he did not need to give evidence. The burden of proving the contempts rested firmly on the claimant. It is artificial in the extreme to suggest that a great deal of extra time was wasted in reading and analysing what the defendant was saying. It was all relevant background. In no sense could it be described as wasted preparation time, contrary to the suggestion in Mr Patel's further written submissions (at paragraph 20).

The period before the defendant became legally aided on 8^th March 2018

23. In respect of the earlier period before the defendant became legally aided on 8^th March 2018, each party seeks his costs against the other.
24. The defendant claims costs as a litigant in person on the basis of his schedule dated 16^th May 2018, in the total sum of £7,717. This includes a total of £4,731 in respect of work done on documents, based on 249 hours at £19 per hour. The balance is made up of 44.5 hours spent attending hearings and £1,912.50 for disbursements. Although Mr Wong does not address this period of the claim in his written submissions, no doubt the contention would be that as the defendant is the successful party overall, having defeated each and every allegation of contempt, he should have his costs of the whole proceedings even though he was a litigant in person throughout this earlier period.
25. In reply, Mr Patel submits that the claimant rather than the defendant should have his costs for a substantial part of the period up to 8^th March 2018, to reflect the fact that the proceedings were properly brought and the fact that it was not until comparatively late in the day that the defendant took steps to comply with the First Order. It is on this basis that the claimant seeks his costs against the defendant at least up to the date of the hearing before Turner J on 28^th March 2017. I shall therefore examine in turn the respective claims of the parties in respect of the costs of the proceedings for the earlier period
26. On behalf of the claimant Mr Patel submits that the committal proceedings were necessary only because the defendant failed to comply with the French court's judgment, before and after it was registered in England. The defendant did not engage meaningfully with the proceedings at all until the hearing on 28^th March 2017, when the matter was first listed for trial before Turner J. It is said that the defendant should have disclosed from the outset the attempts he had made to comply with the injunction. He could and should have obtained legal aid at a much earlier stage.
27. In response Mr Wong submits, as a preliminary point, that the claimant should not be permitted to pursue his own application for costs at all, in view of the fact that he failed to serve his costs submissions by 9^th May 2018, as directed. Mr Wong submits that it is apparent from the e-mail correspondence that no action was taken by the claimant to prepare his own application for costs until that deadline was looming or had even passed. Mr Wong submits that the claimant thereby forfeited his opportunity to claim his own costs.
28. I reject that submission. I gave directions for the filing of submissions and granted the claimant an extension of time not least because, at that stage, it appeared that the defendant had not filed any statement of costs setting out the amount claimed.
29. On the merits of the claimant's application for costs for this earlier period, Mr Wong submits that there is no reason to depart from the usual principle that the unsuccessful party will be ordered to pay the costs of the successful party. He also points out the difficulties which flow from an issue-based order and suggests that, if the court is minded to depart from the usual course of costs following the event, a percentage costs order would be the better approach.
30. Having considered all these arguments carefully I have reached the clear conclusion that in respect of the period up to 8^th March 2018, when the defendant became legally aided, there should be no order for costs as between the parties. Although the costs claimed respectively in respect of this period are hugely different in scale and amount, I reach my conclusion as a matter of principle.
31. For the reasons already explained and emphasized, it is understandable that the application to commit was launched in the first place. To that extent proceedings were justified even though ultimately they were unsuccessful. However, any order I make must also reflect the fact that on all the allegations, in both the original and the consolidated application to commit, the claimant ultimately failed completely and the defendant ultimately succeeded completely.
32. The most difficult issue I had to decide was whether there was a breach of the injunction in relation to web blog (i), where the content was radically reduced and altered but the web page was not completely deactivated. My conclusion was that the defendant had done sufficient to amount to the "withdrawal" of the web page at URL (i): see paragraph 152-154 of my judgment. The version which I found to be compliant with the order was in place at the latest by 10^th April 2017, the date of the requested excisions pursuant to the Second Order: see paragraphs 39-40 and 147 of my judgment. But in fact almost the whole of those reductions had been made before the committal proceedings were issued. The version extant at that stage, in the form of the print taken on 24^th January 2017 exhibited to the claimant's solicitor's affidavit dated 26^th January 2017, is at page 997-1000 of the claimant's composite bundle (page 1488 -1491 of the original bundles).
33. As to web blogs (ii) to (v), I also note that as at the same date, 24^th January 2017, web blogs (ii), (iii) and (v) had also been reduced (effectively) to the same state as web blog (i), although they were not actually deactivated until after the Second Order made Turner J on 28^th March 2017. The relevant content of those three web blogs was likewise exhibited to the same affidavit, copied at pages 1001-1015 of the claimant's composite bundle, pages 1492-1506 of the original bundles.
34. It follows that although the defendant was technically in breach of the First Order by not deactivating web blogs (ii)-(v) immediately he was served with that Order, there was in fact substantial compliance by an early stage, and full compliance thereafter within the time scale laid down in the Second Order.
35. As to the web blogs (vi) and (vii), I have found in the main judgment that the claimant failed to prove that the defendant had the wherewithal to deactivate those blogs. I have accepted that the defendant has used his best efforts to do so. The defendant co-operated with the claimant's IT expert, Mr Coyne, in an attempt to procure complete deactivation. At the hearing before Turner J on 28^th March a way forward was agreed which, on my findings, the defendant complied with.
36. Balancing all these competing factors I conclude that in respect of this earlier period the just and proportionate conclusion is that there should be no order as to costs between the parties. I reach this conclusion having regard to all the circumstances, pursuant to CPR 44.2(4), including the conduct of both parties and whether a party has succeeded on part of his case even if that party has not been wholly successful. I bear in mind that the conduct of the parties includes conduct before as well as during the proceedings. Conduct includes whether it was reasonable for a party to raise or pursue a particular allegation or issue and it includes the manner in which each party has pursued or defended his case or a particular allegation or issue: see CPR 44.2(5).
37. In my judgment it was reasonable for the claimant to commence these committal proceedings and pursue them, but that does not mean that the claimant is entitled to his costs when, ultimately, his case has failed completely. Equally, the fact that the defendant has ultimately succeeded completely does not absolve him from responsibility for the state of affairs which made it necessary to bring the committal proceedings in the first place. Had the defendant done or offered to do at the outset that which eventually he did or offered to do, it may be that these committal proceedings could have been avoided altogether, or could at least have been reduced in duration and complexity.
38. In short, in relation to this earlier period, until the defendant became legally aided, each side was, to a degree, successful. The claimant succeeded in achieving a substantial reduction in the offending content of the web blogs in question. The defendant co-operated to a sufficient extent that ultimately he was found not to have been in contempt at all.
39. It is for all these reasons that I have reached the firm conclusion, in the exercise of the court's discretion, that no order for costs is the appropriate outcome in relation to the period before the defendant became legally aided.

Conclusion

40. My overall conclusion is, therefore, as follows:

(1) In respect of the period up to the defendant's becoming legally aided on 8^th March 2018 there will be no order as to costs between the claimant and the defendant in relation to the committal application and the consolidated committal application.

(2) In respect of the period from 8^th March 2018 onwards, when the defendant became legally aided, the claimant must pay the defendant's costs of the committal application and the consolidated application on the standard basis, those costs to be the subject of detailed assessment if not agreed.

41. There will also, in any event, be an order for legal aid assessment of the defendant's costs.
42. For the assistance of the costs judge in carrying out the detailed assessment, I wish to record the following observations in relation to the defendant's legal aid costs, in view of some of the written submissions made by the claimant.

(a) In my judgment the defendant was fully entitled, and indeed obliged, to serve his witness statement dated 4^th April 2018, pursuant to the order of Cheema-Grubb J dated 6^th March 2018, and should have his costs of doing so. He was also entitled to serve and should have his costs of the accompanying bundle of documents exhibited to that statement which, for the reasons already explained, was a most helpful bundle in understanding the case chronologically.

(b) The work done by Mr Wong, and the fees claimed, are in my judgment entirely justified.

(c) But for the fact that summary assessment of costs in favour of a legally aided defendant is not permitted under the rules, I would have had no hesitation, on summary assessment, in allowing Mr Wong's fees and the vast bulk of the other costs claimed. In particular, it seems sensible to me that the solicitors who worked on the case should have split their time in reading and considering the voluminous bundles served by the claimant. I note that one of the solicitors perused the claimant's files A, B, C, 9, 10 and 11, while the other perused the claimant's files 1 to 8. That was a sensible division of labour.

43. I propose to hand down this judgment on Friday 20^th July 2018, having circulated the judgment in draft, together with a draft order. There should be no need for the parties to attend, unless there is some further issue to be resolved.