Bath Rugby Ltd v Caroline Greenwood
| Jurisdiction | England & Wales |
| Judge | Paul Matthews |
| Judgment Date | 27 October 2020 |
| Neutral Citation | [2020] EWHC 2856 (Ch) |
| Date | 27 October 2020 |
| Court | Chancery Division |
| Docket Number | Case No: PT-2019-BRS-000103 |
[2020] EWHC 2856 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN BRISTOL
PROPERTY, TRUSTS AND PROBATE LIST (ChD)
Bristol Civil Justice Centre
2 Redcliff Street, Bristol, BS1 6GR
HHJ Paul Matthews
(sitting as a Judge of the High Court)
Case No: PT-2019-BRS-000103
Martin Dray (instructed by Royds Withy King LLP) for the Claimant
William Moffett (instructed by Stone King LLP) for the Third, Fourth, Seventh and Eighth Defendants
The First, Second, Fifth and Sixth Defendants did not appear and were not represented
Consequential matters dealt with on paper
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
On 13 October 2020 I handed down my judgment on the trial of this claim, dismissing it. I invited written submissions on consequential matters which the parties were unable to agree. I received such submissions on two issues, the question of costs and the question of permission to appeal. This is my decision on those two matters. I deal first with the question of costs.
COSTS
First of all, I set out some of the main events in the litigation relevant to this question. In June 2019 the claim was issued, against six named defendants. On 9 October 2019, when only the third and fourth defendants continued to resist the claim, Master Shuman ordered (i) a witness statement to be made and further disclosure given by the claimant, as well as (ii) a decision to be taken by 25 November 2019 by the third and fourth defendants as to whether they would continue to oppose the claim, and also (iii) a transfer of the claim to Bristol. On 23 October 2019 that further witness statement and disclosure were filed, served and given. On 21 November 2019 the third and fourth defendants confirmed that they would not continue to oppose the claim. On 20 December 2019 the seventh and eighth defendants applied to be joined, which I ordered on 7 January 2020. The documents disclosed by the claimant in October 2019 showed that the properties of the third and fourth defendants had not been retained in the Bathwick Estate by the time of the 1922 Conveyance, whereas those of the seventh and eighth defendants had.
At trial, therefore, only the seventh and eighth defendants appeared to defend the claim brought by the claimant. They were represented by solicitors and counsel who had previously represented the third and fourth defendants. Those four defendants (whom I shall hereafter refer to simply as “the defendants” for convenience) now seek one set of costs between them against the claimant. In principle the claimant does not resist this. But the defendants seek their costs on the indemnity basis, and the claimant is only prepared to concede them on the standard basis.
Rules
As is well-known, costs are in the discretion of the court ( CPR rule 44.2(1)). However, if the court decides to make an order, then CPR rule 44.2(2)(a) provides that
“the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party”.
In my judgment it is appropriate to make a costs order in the present case. There can be no doubt that the defendants are the successful parties, and the claimants the unsuccessful. Ordinarily, therefore, it would follow that a costs order for the claimant to pay the defendants' costs would follow. The only question is the basis of those costs.
Under CPR rule 44.3(1), the court may order costs to be paid under either the standard basis or the indemnity basis. The major differences between the two bases are, first, that on the standard basis costs must be proportionate to the matters in issue, and second, that the benefit of any doubt as to whether costs should be allowable is given to the paying party on the standard basis, but to the receiving party on the indemnity basis. The default position under the CPR is to award costs on the standard basis. The general practice is to award costs on the indemnity basis only in special circumstances, usually where the behaviour of the paying party takes the case out of the norm.
Special practice
However, the present case involved a claim under section 84(2) of the Law of Property Act 1925, and it is clear from the authorities that the exercise of the court's undoubted discretion on costs is affected by special considerations arising from the nature of such claims. These special considerations were explained by Lightman J in University of East London Higher Education Corporation v London Borough of Barking and Dagenham and others [2005] Ch 354, 377, as follows:
“10. … the claimant applying for the declaration is seeking for his own benefit the protection of a court order against the existence of any adverse rights and for this purpose must join as defendants all persons or representatives of all persons who may have adverse rights. The court must for this purpose be satisfied that there are no adverse third party rights whether or not such defendants take part in the proceedings. The policy of the law in these circumstances is to encourage the defendants to contribute to the investigation by the court encouraged by the knowledge that until the full facts are known and an informed decision whether to oppose the application can be reached they will be indemnified against costs incurred, and thereafter (in case their decision to oppose proves erroneous) undeterred by any risk that by doing so they may incur an adverse order as to costs. It is just that, as the price of the exercise of the court's extraordinary jurisdiction in his favour, the claimant should provide the fullest available information to third parties to enable them to make an informed decision whether to oppose the application and to act on such information and pay for the costs of this exercise; and that after this exercise has been completed the claimant should pay the costs of the defendant if the defendants succeeds in his objection, but should have no right to recover his own costs if the objection fails.”
Authorities
This special costs practice appears to date from 1937, when Clauson J decided Re Ballard's Conveyance [1937] 2 All ER 691, 697G-H (the report at [1937] Ch 473 does not mention the point). It had been followed by Wynn-Parry J in Re Pinewood Estate [1957] Ch 280, 289, and by Harman J in Re Forest Hill (1957) 8 P & CR 179, 181–82. It was summarised by Cross J in a Practice Note: Re Jeffkins Indentures [1965] 1 WLR 375 in these words:
“a plaintiff seeking a declaration that restrictive covenants do not affect his property is expected to pay his own costs. He is also expected to pay the costs of any defendants who enter an appearance down to the point in proceedings at which they have had a full opportunity of considering the matter and deciding whether or not to oppose the application. Any defendant who then decides to continue, and appears unsuccessfully before the judge, does so at his own risk as to his own costs at that stage. Such defendant should not however be ordered to pay the plaintiff's costs.”
In the more recent case of Re Wembley Park Estate Co Ltd's Transfer [1968] Ch 491, Goff J put the matter this way (at 505D-F):
“It appears that from 1937 or thereabouts there has been an established practice in these matters that where a party applies under section 84 of the Law of Property Act, 1925, to clear his title, he must pay his own costs and he must also pay the costs of the defendants down to the point in the proceedings at which they have had a full opportunity of considering the matter and deciding whether or not to oppose the application, but the defendants get no costs thereafter.”
The judge distinguished two other cases cited to him, and held that he should follow the established practice. But he glossed that practice by saying (at 507D-F):
“First, it would appear that under such an order the defendants have their costs, unless there were some special circumstances, down to the final appointment before the Master under which the case is adjourned to the judge. I wondered whether, since the defendants filed a great deal of evidence, the order giving them their costs ought to have stopped perhaps at some earlier stage, but it was necessary for them to investigate the position and obtain the large number of transfers which they put in evidence, and the actual increase in the costs already involved in finding that evidence cannot be substantial. It is difficult to see where one would draw the line in seeking to make a special order and I will therefore follow the ordinary rule.”
He also had to decide on what basis the defendants should receive their costs (and it appears that he was the first judge to do this). He said (at 507G):
“The last point is whether the costs of the defendants should be on a party and party or common fund basis. It seems to me in principle that they ought to be on a common fund basis since the obtaining of the order is something in the nature of a luxury to the plaintiff for which he ought to pay.”
The “party and party” basis mentioned there is now referred to as the standard basis, and the “common fund” basis as the indemnity basis. It is however fair to say that Goff J recorded in his judgment that counsel for the claimant conceded the basis of assessment, even though it accorded with what the judge...
To continue reading
Request your trial
-
Bath Rugby Ltd v Caroline Greenwood
...TRUSTS AND PROBATE LIST (ChD) His Honour Judge Paul Matthews (sitting as a Judge of the High Court) [2020] EWHC 2662 (Ch) and [2020] EWHC 2856 (Ch) Royal Courts of Justice Strand, London, WC2A 2LL Lady Justice King Lord Justice Newey and Lord Justice Nugee Case No: CA-2021-000406 Between: B......