O'Beirne v Hudson
| Jurisdiction | England & Wales |
| Judge | Lord Justice Waller,Lord Justice Hooper,Lord Justice Etherton |
| Judgment Date | 09 February 2010 |
| Neutral Citation | [2010] EWCA Civ 52 |
| Docket Number | Case No: A2/2009/0994 |
| Court | Court of Appeal (Civil Division) |
| Date | 09 February 2010 |
[2010] EWCA Civ 52
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM LIVERPOOL COUNTY COURT
His Honour Judge Stephen Stewart Qc
District Judge Harrison
Before: Lord Justice Waller
Vice-President of the Court of Appeal, Civil Division
Lord Justice Hooper
and
Lord Justice Etherton
Assisted by Senior Costs Judge Hurst
Case No: A2/2009/0994
7IV14726
Benjamin Williams (instructed by Armstrongs) for the Appellant
Jeremy Morgan QC (instructed by Keoghs) for the Respondent
Hearing date: 30 th November 2009
Lord Justice Waller:
This is an appeal from a decision of His Honour Judge Stewart QC dated 23rd March 2009 by which he reversed a ruling of the Costs Judge, District Judge Harrison dated 3 rd December 2008. This judgment is being handed down at the same time as that in Drew v Whitbread, the appeals having been argued consecutively raising somewhat similar points. In both appeals we have sat with Senior Costs Judge Peter Hurst for whose guidance we are extremely grateful. The relevant provisions of the CPR are fully set out in Drew v Whitbread and will not be repeated in this judgment. In this appeal the question is whether, where a case has been settled before any allocation by a consent order ordering costs to be paid on the standard basis, the costs judge is entitled to take the view that the case would have been allocated to the small claims track and thus that the paying party should only pay costs on the small claims track basis.
On 3 rd September 2006 the appellant was the driver of a car stationary at a roundabout when his car was hit from behind by a car driven by the respondent. Costs of repairs to the appellant's vehicle were paid prior to the issue of proceedings. The appellant issued proceedings claiming general damages exceeding £1000. Prior to the case being allocated to any track, settlement was achieved in the sum of £400 general damages and £719.06 hire charges and payment of costs. That settlement was recorded in a consent order, paragraph 4 of which provided that “The defendants do pay the claimant's reasonable costs and disbursement on the standard basis, to be subject to detailed assessment if not agreed.”
The respondent disputed the appellant's bill of costs and on the assessment by points of dispute took a general point that if the case had gone to the allocation stage it ought to have been allocated to the small claims track. The respondent relied on a decision of the Court of Appeal in Voice & Script International Ltd v Alghafar [2003] EWCA Civ 736 and asserted that “the costs as a matter of principle should be “small claims” costs. Accordingly the court cannot permit recovery of costs other than those prescribed by Part 27 of the CPR; Issue Fee: £75 Medical Report: £200. The court may not order the paying party to pay costs except the fixed costs payable under CPR 27.14 and Part 45 namely: £80.00 fixed costs and £15 miscellaneous fixed costs for service of documents.”
It is not in dispute that if costs on a “small claims “ basis were all that could be allowed the sums identified by the respondent would be all that would be payable. It will be noted that nothing would be allowed for the employment of lawyers, it being understood that in essence “small claims track” claims are intended to be conducted without lawyers.
In response to the general point the appellant submitted that the terms of the consent order were such as to preclude the application of Part 27 or Part 45. It was submitted that Voice & Script was concerned with the appropriate order to be made at trial and, having regard to the wording of the order consented to, that costs should assessed on a standard basis, and that it followed that any fixed cost regime was excluded. It was that submission which was accepted by District Judge Harrison by a judgment dated 3 rd December 2008.
She accepted that both firms of solicitors would have been equally aware that, had the case been allocated, it would have been allocated to the small claims track and that before the allocation the parties reached a settlement on the terms recorded in the order. The District Judge ruled in paragraphs 9 and 10 of her judgment as follows:—
“9. I have looked at that order carefully. In my view, a straightforward reading of the face of that order is such so as to exclude any reference to the application of small claims track costs. It is, on the face of it, a recording of the agreement between the parties, and my assessment of the nature of that agreement is that the order, as to costs that it contained, is, as Mr Pilling suggests, wholly distinct from an order which would restrict the claimant in the small claims costs regime.
10. In that regards, I take into account the knowledge of the value of the claim available to both parties, and the very considerable experience of both sets of representatives in this regards. In the event that the defendant did not seek to pay costs other than small claims track, I have no understanding as to why they would sign an order in those terms. It is my view that the effect of paragraph 4 must be to fetter my discretion, and equally, that the effect of paragraph 4 must be to preclude the matter being limited solely to the small claims track regime, notwithstanding the arguments of the defendant.”
The District Judge ultimately assessed the appellant's costs at £3,987.29.
The respondents appealed to His Honour Judge Stewart QC. Before the judge the respondents did not put their case as highly as before the District Judge. The judge in his judgment of 23 rd March 2009 records as follows:—
“13. The first point is dealt with by the fact that the defendants do not say that the construction of the agreement is to limit the claimants to the small claims track or to costs by reference of the small claims tack, but that the Court had a discretion to decide whether or not to assess costs by reference to the small claims track.”
The judge then accepted the proposition that the Costs Judge has no power to vary the costs order, and summarised the issue before him in this way:—
“17. Therefore as I say it is clear that it is impermissible to rewrite a costs order. That does not answer the question as to the proper interpretation of that order and the proper interpretation of the contract which gave rise to that order. The question is not whether it can or cannot be rewritten, clearly it cannot be rewritten. The question is whether the District Judge was right in saying that it precluded the Court in its discretion on assessment in assessing costs by reference to the small claims track.”
The judge then cited from Voice and Script paragraph 20 of the judgment of Judge LJ, as he then was, which is in these terms:
“20 … By treating the absence of allocation to track as conclusive in my judgment District Judge Jenkins misdirected himself. The omission may have meant that the small claims costs regime did not follow as a virtual automatic starting point, but it did not preclude the Court even from considering whether it would be reasonable to make an assessment consistent with the small cost regime, or for that matter to apply the regime for a claim which it should never have exceeded and never was anything more than a small claim. If that approach is not expressly stated in the Civil Procedure Rules, it follows from two essential principles. First, the discretionary nature of costs orders; and secondly, the overriding requirement of proportionality in civil litigation generally and also as an essential agreement for consideration when any question of costs arises. See Home Office v Lownds [2002] EWCA 365.”
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