Alltrans Express Ltd v CVA Holdings Ltd

JurisdictionEngland & Wales
Judgment Date10 November 1983
Judgment citation (vLex)[1983] EWCA Civ J1110-5
Docket Number83/0443
CourtCourt of Appeal (Civil Division)
Date10 November 1983
Alltrans Express Limited
Plaintiffs (Respondents)
CVA Holdings Limited
Defendants (Appellants)

[1983] EWCA Civ J1110-5


Lord Justice Stephenson

Lord Justice Griffiths


Lord Justice Purchas


1980 A 2076








Royal Courts of Justice

MR. M. COLLINS QC and MR. J. RUSSELL (instructed by Messrs. Speechly Bircham, Solicitors, London EC4A 2HX) appeared on behalf of the Defendants (Appellants)

MR. A.A.THOMPSON QC and MR. I. FESSAL (instructed by Messrs. Joynson Hicks & Co, Solicitors, London W1P 9LN) appeared on behalf of the Plaintiffs (Respondents)


This is an appeal against an order of His Honour Judge Hayman, sitting as a judge dealing with official referees' business, in respect of costs. The order was made on 11th January of this year, and from it he gave leave to appeal. The order sets out the fact that there had been a hearing extending over fifteen days, and ends by saying:

"(I) do hereby assess the plaintiffs' damages in the sum of £2.00 (two pounds)

And Do Hereby Order that judgment be entered for the plaintiffs for the said sum of £2.00 (two pounds) with costs to be taxed if not agreed.

And I Do Grant the defendants leave to appeal on the question of costs".


The assessment came about under an order of a Master made as long ago as 6th November 1980; that order was:

"that the plaintiff has leave to enter judgment for damages to be assessed

2. The action be transferred to the Official Referee Business for assessment of damages.

3. Liberty to restore".


No question arises about the costs of the plaintiffs up to the entering of judgment under 0.14.


The claim related to the sale of shares by the defendant company to the plaintiff company; they were shares in a third company, and happily we are not concerned with the details of that sale. The claim was really a claim for £82,500, based on an undertaking that the defendants had given to make good a loss from the trading of the third company, and presumably because a breach of that agreement was proved or admitted, or taken to be proved, judgment was given against the defendants for damages to be assessed as I have said. The defence was that the loss had been calculated on the wrong basis, but of course it was not open to the defendants to repeat that defence at the hearing for the assessment of damages and, as I have said, after fifteen days the learned judge came to the conclusion that the plaintiffs were not entitled to £82,500 or anything like it; that they had failed to prove that they had suffered any damage as a result of the defendants' breach of contract and that they were therefore entitled to nominal damages, which he assessed at what I think is one of the figures now given for nominal damages, namely, forty shillings or two pounds. But the order that he made was that the plaintiffs should have the costs of that expensive battle which, on the face of it, they would appear to have lost.


I think each member of this court, on seeing the order that the judge had made, thought that he had plainly got the matter wrong and that the right order in such a case would be that the plaintiffs should pay the defendants' costs, the defendants being the successful party and not, as the learned judge apparently thought, the plaintiffs.


The learned judge, after considering going as far as making no order as to the costs of the assessment of damages, was persuaded by Mr. Thompson that his clients were the successful plaintiffs and that they should have those costs. The preliminary view which this court took led us to call upon Mr. Thompson to make that good without doing more than refer to the arguments submitted, according to the transcript that we have of them, by Mr. Collins to the learned judge and in his skeleton argument. When we put to Mr. Thompson in that way that the judge had made the wrong order and one that we could put right, he submitted with great clarity and cogency that we could not do that because we are prevented by statute and by authority from doing it where there is an appeal against an order for costs, which he submitted is in a special position in consequence of the statute and the authorities upon it. His submission was that this court can only entertain an appeal on the question of costs either where there has been no exercise of discretion by the judge who makes the order, or where his exercise of his discretion has not been judicial because he has taken into account some wholly irrelevant matter.


Mr. Thompson took us first to what is now s.l8 (l) (f) of the Supreme Court Act of 1981, which re-enacts a provision which has been the law through the Judicature Act 1925 since the Judicature Act of 1873. S.18 (l) (f) provides that no appeal shall lie to the court of appeal

"without the leave of the court or tribunal in question, from any order of the High Court or any other court or tribunal made with the consent of the parties or relating only to costs which are by law left to the discretion of the court or tribunal".


In support of his submission that on the hearing of appeals on costs the appellate court can only consider the two matters to which I have referred, Mr. Thompson relied first of all on a decision of this court in the case of Jones v. McKie and Mersey Docks and Harbour Board, reported in (1964) 2 All England Reports, 842. That was a case in which a judge had deprived one of two successful defendants of their costs because of conduct which he regarded as misconduct and as related to the issues in the action. By a majority, this court refused to interfere with his order. In the course of giving the leading judgment, Lord Justice Willmer referred to a well known passage in the speech of Viscount Cave, Lord Chancellor, in Campbell v. Pollak, (1927) Appeal Cases at p.811, in which the Lord Chancellor stated that it appeared to him that the true view was substantially that taken by Lord Sterndale, Master of the Rolls, in a passage which he had cited from Ritter v. Godfrey and which ends with this sentence:

"'But when a judge, deliberately intending to exercise his discretionary powers, has acted on facts connected with or leading up to the litigation which had been proved before him or which he has himself observed during the progress of the case, then it seems to me that a Court of Appeal, although it may deem his reasons insufficient and may disagree with his conclusion, is prohibited by the statute"—that is, the then existing predecessor of s.18 (l) (f)—"from entertaining an appeal from it'".


Lord Justice Willmer went on:

"What it comes to, I think, is that in order to justify an appeal as to costs only this court must be able to say that the judge in the court below, however much he may have been purporting to exercise his discretion, has not really exercised his discretion at all. This court can say that, but can say it only, as I see it, if it is satisfied that the judge in the court below has taken into consideration wholly extraneous and irrelevant matters. That, I think, is also substantially in accordance with what Lord Justice Jenkins said in Bay lis Baxter Ltd. v. Sabath: 'the matter as it now stands really comes to this, that in a case of this sort—that is to say in a case in which it is sought to appeal, without leave,'" "—and I stress those words—"'from an order relating solely to costs—such an application should not be entertained, in view of the express terms of s.31(l)(h) of the Judicature Act, 1925'"—that is, the predecessor of s.l8(l)(f)—"'unless the circumstances are such that this court can say, in effect, "In this case the learned judge did not in truth exercise his discretion at all". 'It is only in a case of that kind that this court has jurisdiction to entertain such an appeal'".


I stress again those words "such an appeal", which obviously refer back to an appeal without leave.


Then Lord Justice Harman's judgment was also called to our attention; Mr. Thompson relied on what he had said at the end of his judgment:

"Once one concludes that this was a case of an exercise of discretion, the matter is at an end so far as this court is concerned. It is only if there was no exercise of discretion at all that we could interfere, and I do not think there was no exercise of discretion".


Those words, if read literally, are, as it seems to me, too wide. They may have been too wide to cover the case with which their Lordships were dealing, if I may respectfully say so, namely a case which was, like both the authorities they cited, a case where leave to appeal either had not been given or had been refused. But in my judgment they certainly do not have any application to the instant case, or to any case where leave has been given by the judge who made the order as to costs.


Further, Mr. Thompson relied on an unreported recent decision of this court in the case of K.H. Taylor Ltd. v. Wold Farm Foods Ltd. I need not refer to the facts of that case. Again it was an appeal from a judge dealing with official referees' business in which the court, through the leading judgment of Lord Justice Ormrod, quoted and followed a decision reported in the Fleet Street Patent Law Reports of 1977 at p.569, Scherer v. Counting Instruments Ltd. In that case, which was again a case where leave had not been given, but in fact refused by an official referee, Lord Justice Buckley said:

"This court can, however, interfere if upon a true view of the facts the judge has either not...

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