Birmingham County Council v Forde
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE CHRISTOPHER CLARKE |
| Judgment Date | 13 January 2009 |
| Neutral Citation | [2009] EWHC 12 (QB) |
| Docket Number | Case No: CC/2008/APP10340, S.C.C.O. Ref: CC0607674, Claim No: 6bm02295 |
| Court | Queen's Bench Division |
| Date | 13 January 2009 |
[2009] EWHC 12 (QB)
IN THE HIGH COURT OF JUSTICE
BIRMINGHAM DISTRICT REGISTRY
ON APPEAL FROM MASTER CAMPBELL
COSTS
QUEEN'S BENCH DIVISION
Mr Justice Christopher Clarke
Case No: CC/2008/APP10340, S.C.C.O. Ref: CC0607674, Claim No: 6bm02295
Kerry Bretherton (instructed by Birmingham City Council) for the Appellant
Roger Mallalieu (instructed by McGrath Solicitors) for the Respondent
Hearing dates: 4th – 6th November 2008
MR JUSTICE CHRISTOPHER CLARKE :
This is an appeal from the judgment of Master Campbell, the Costs Judge, of 30 th April 2008 on certain preliminary issues about costs in litigation between Birmingham City Council (“the Council”) and one of its tenants, Miss Rose Forde (“Miss Forde”). As Master Campbell rightly observed, it is in reality a further round in a dispute between the Council and Miss Forde's solicitors, McGrath 1, an established legal practice specialising in housing repair litigation.
The dispute arises in this way. The Council has a very large housing stock and, historically, a poor record in housing disrepair. Many tenants bring claims against the Council. Of those many have instructed McGrath. The Council is concerned at the very large sums that it has had to pay out, year by year, in costs, to McGrath and others, and seeks to limit its exposure. The dispute between the parties has a substantial history. In order to address the points at issue it is necessary to examine the chronology of events, including the legislative background and its changes. I have been much assisted in my consideration of the validity of those points by Master Hurst, the Senior Costs Judge, and Mr Clive Heaton, QC, who have sat with me as assessors.
The legislative background
A council tenant who complains that his house or flat has not been repaired has a number of remedies open to him. Section 11 of the Landlord and Tenant Act 1985, which is applicable to periodic Council tenancies, provides for certain covenants to be implied into such a tenancy, including covenants (a) to keep in repair the structure and exterior of the dwelling-house, and (b) to keep in proper working order the installations in the dwelling-house for the supply of water, gas, and electricity. The obligation to repair is an obligation to effect repairs within a reasonable time of receiving notice (or having knowledge) of the defect: Makin v Watkinson [1870] L 6 Ex 25; O'Brien v Robinson [1973] AC 912; Morris v Liverpool CC [1987] 20 HLR 498. The tenant can, and often does, sue the Council in the County Court for breach of those covenants, and, if necessary, for an order for specific performance of the obligation to repair. The tenant will also rely on the express terms as to repair contained in the tenancy agreement.
In addition the tenant can bring a claim under section 82 of the Environmental Protection Act 1990. That section enables a person aggrieved by the existence of a statutory nuisance to complain to the magistrates. A statutory nuisance includes “any premises in such a state as to be prejudicial to health or a nuisance”: section 79 (1) (a). Proceedings may be brought against the person responsible for
the nuisance: section 82 (4) (a); and the section gives the magistrates power to order the person responsible to abate it: section 82 (2) (a). But the magistrates cannot make such an order unless the tenant has given the Council 21 days notice of his intention to bring the proceedings specifying the matters complained of: sections 82 (6) and (7)The magistrates also have power to order costs in the circumstances set out in section 82 (12), which provides:
“(12) Where on the hearing of proceedings for an order under subsection (2) above it is proved that the alleged nuisance existed at the date of the making of the complaint, then, whether or not at the date of the hearing it still exists or is likely to recur, the court shall order the defendant (or defendants in such proportions as appears fair and reasonable) to pay to the person bringing the proceedings such amount as the court considers reasonably sufficient to compensate him for any expenses properly incurred by him in the proceedings”.
The County Court also has the power to order the Council to pay the successful tenant his costs. Whether and to what extent it will do so depends, amongst other things, on whether the case is allocated to the Small Claims Track or the Fast Track. If the claim is allocated to the Small Claims Track, the successful tenant will, in most cases, only recover (a) fixed costs of commencement under CPR 45 (under £ 100); (b) Court fees; (c) an expert's fee, generally fixed at a maximum of £ 200; and (d) out of pocket expenses,
loss of earnings or leave of the winning party or a witness personally: CPR 27.14; BCC v Avril Lee [2008] EWCA Civ 891. The Court will not award any further costs against the Council unless it has behaved unreasonably: CPR 27.14 (g). If the claim is allocated to the Fast Track, and the tenant wins, he or she will be likely to recover his costs, unless the amount that he recovers is an amount which, if sought originally, would have meant that the case was allocated to the Small Claims Track, in which case the Court may decide to award him only those costs attributable to a case on that track.
The criteria for allocation of a case to the Small Claims Track in a claim which includes a claim by a tenant of residential premises against his landlord are as follows. Where (a) the tenant is seeking an order requiring the landlord to carry out repairs or other work to the premises and (b) the cost of repairs or other work is not more than £ 1,000 and (c) the financial value of any other claim for damages is not more that £ 1,000, the claim will normally be allocated to the Small Claims Track: CPR 26.6. Accordingly, if at the time of allocation the tenant is seeking an order to carry out repairs and either there is over £ 1,000 outstanding work or a damages claim for over £ 1,000 the case will go into the fast track (assuming it is not more than £ 15,000). If the tenant is not seeking such an order the claim will be allocated to the Fast Track if it is for more than £ 5,000. In the present case the Particulars of Claim contained no claim for specific performance.
Under the Funding Code public funding cannot be refused in housing disrepair cases on the ground that a CFA is available. But Paragraph 5.4.6 of the Code provides that:
“An application will be refused if a case has been or is likely to be allocated to the small claims track”.
Where the likely damages are small an application is liable to be refused on the ground that the cost benefit ratio is too low. The evidence of Mr Cox, a Senior Legal Advisor to the Legal Services Commission, was that caseworkers were more likely to reject on that ground rather than on the ground that the case was likely to go to the Small Claims Track (where public funding is not available) because determining whether the case would go to the Small Claims Track involved a degree of prediction e.g. as to whether repairs would be completed. The evidence of Mr Heathcock (see para 48 below) was that a refusal on the latter ground was very rare 2.
The provisions of section 82 and the costs regime in respect of the Small Claims Track were no doubt intended to provide an incentive for Councils, and other landlords, to complete any outstanding repairs timeously 3. These rules as to costs have also led tenants and the Council to use the system to their best advantage.
Because costs cannot be recovered in the Magistrates Court if the alleged nuisance no longer exists at the date of the complaint it is in the interests of tenants, or their solicitors, that any repairs should not be completed within the 21 days notice period. This has led to bulk notices being served just before public holidays, so as to increase the prospect of recovering costs because all the repairs are not carried out by the time of the complaint 4. If that default occurs, the tenant may be able to recover (i) her costs of instructing a surveyor to produce a report on whether there is a statutory nuisance and, if so, what is needed to abate it; and (ii) her solicitors' costs. That report will then be available to be used for the purpose of any subsequent civil action. Further the finding of the magistrates, which has to be to the criminal standard, will be binding.
On the other hand, because the claim will come within the Small Claims Track if (a) any outstanding repairs are worth not more than £ 1,000 and (b) any claim to damages is also not more than that sum, it is in the interests of Councils to complete those repairs prior to allocation of a case to a track. (It is, of course, also in the interests of the tenant that repairs should be swiftly carried out). If the Council has done so (the likelihood of which is increased if there has been a previous order under section 82), the claim may only attract very limited costs because the case is allocated to the Small Claims Track. In his judgment in BCC v Crook [2007] EWHC 1415 Irwin, J, recorded that, in the course of the hearing before him “Birmingham acknowledged that it was the deliberate policy of their legal department to press cases away from the allocation as fast track cases. We were told “this is litigation””. We were told that what was being referred to was very low claims, and that there was no policy of inappropriate pushing of claims into the Small Claims Track.
In Birmingham City Council v Avril Lee, [2008] EWCA Civ 891, the Court of Appeal considered a case where the tenant complied with the Housing Repairs Pre-action Protocol, as a result of which repairs were completed before proceedings were...
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