Fuseon Ltd v Senior Courts Costs Office
| Jurisdiction | England & Wales |
| Judge | Mr Justice Lane |
| Judgment Date | 28 January 2020 |
| Neutral Citation | [2019] EWHC 126 (Admin) |
| Date | 28 January 2020 |
| Docket Number | Case No: CO/3139/2019 |
| Court | Queen's Bench Division (Administrative Court) |
[2019] EWHC 126 (Admin)
THE HONOURABLE Mr Justice Lane
Case No: CO/3139/2019
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Rupert Cohen (instructed by Edmonds, Marshall, McMahon Limited) for the Claimant
Mr Riccardo Calzavara (instructed by Government Legal Department) for the First Defendant
Mr Richard Boyle (instructed by Government Legal Department) for the Second Defendant
Hearing date: 18 December 2019
Approved Judgment
A. INTRODUCTION
The claimant carries on the business of letting agents. It is a small enterprise, based in Horwich, near Bolton, Lancashire. Mr Laycock is its director. Between January 2009 and May 2015, a co-director of Mr Laycock was Timothy Shinners. As a result of Mr Shinners' fraudulent activities, the claimant accrued liabilities in excess of £100,000. When these activities came to light, Mr Laycock informed the Greater Manchester Police. They declined to investigate, citing the effects of “austerity”, which required them to prioritise the investigation of other forms of criminal activity.
In November and December 2015, Mr Laycock researched firms in the local area, which provided private prosecution services. Being unable to find such a firm, in January 2016 he instructed Edmonds, Marshall McMahon Limited (“EMM”), a firm based in London, which advertised itself as providing private prosecution services. EMM instructed a forensic accountant (fraud having been disguised in the accounts through the creation of invoices in respect of fictional transactions). EMM also instructed Counsel. On 26 August 2016, an information was laid at Preston Magistrates' Court. The final indictment contained six counts; two of false representations; two of making articles for use in fraud; and one each of theft and fraudulent trading.
The trial of Mr Shinners took place over eleven days at Preston Crown Court, before HHJ Knowles QC and a jury. On 9 June 2017, Mr Shinners was convicted on four counts. He was sentenced to three years' imprisonment (various terms being imposed concurrently). On 7 July 2017, HHJ Knowles QC ordered “that a payment be made to the prosecution out of central funds in respect of prosecution costs, including the cost of the investigation, and that the sum to be paid shall be determined”. The Crown Court had been specifically told that the claimant's costs were £427,909.66 (including VAT).
On 24 November 2017, the determining officer allowed the claimant the sum of £150,000, plus VAT in respect of the prosecution costs. The claimant requested a re-determination and, on 23 February 2018, the determining officer re-determined costs in the sum of £200,000, plus VAT. The officer's written reasons for that re-determined sum were provided on 5 April 2018.
The claimant appealed against that decision to a Costs Judge (Master Rowley), who gave judgment on 30 April 2019. He dismissed the claimant's appeal.
On 28 May 2019, the claimant requested the Master to certify points of principle of general importance, so as to enable the claimant to appeal to the High Court. On 7 June 2019, the Master declined to issue a certificate.
The present proceedings are brought pursuant to the inherent jurisdiction of the High Court to control the exercise of the authority of that Court, which has been delegated to the Taxing Master: ( R v Taxing Officer ex parte Bee-Line Roadways International Limited unreported, 5 February 1982). The nature of this jurisdiction was described by the Court of Appeal in R v Supreme Court Taxing Office ex parte John Singh and Co [1997] 1 Costs LR 49. Henry LJ held:-
“Counsel for the taxing master conceded that such a jurisdiction existed but submitted that it should be restricted to cases where there had been a real injustice.
I agree with both that concession and, in general terms, with the limitation on it. In his refusal to certify, the taxing master was exercising a “strong” discretion entrusted under the statutory scheme to him. The cases where the supervisory court could reverse a failure to certify would, in the circumstances, be very rare indeed …”
The claimant contends that the Master's decision contains errors of law. The Master is said to have wrongly upheld the delegated officer's decision that (a) EMM's London charging rates and travel expenses were not the appropriate yardstick; and (b) in applying the so-called Singh reduction, the claimant's recoverable costs should be reduced by reference to the costs of the Crown Prosecution Service, had it conducted the prosecution of Mr Shinners.
The claimant submits these errors are significant, not just because the claimant (in effect, Mr Laycock) is thereby out of pocket to the extent of more than £180,000, which has required Mr Laycock to take out a business loan. The errors have a more general significance because, if allowed to stand, they undermine the intention of the legislature (and the Lord Chancellor) to protect the position of those who bring private prosecutions; particularly where, as here, the police have refused to become involved, owing to a lack of resources.
The second defendant contends that there is no error in the Master's decision and that, even if there were, the Master was entitled to refuse to certify the case and there is no “real injustice” that requires remedy by the High Court, in the exercise of its inherent jurisdiction.
B. THE LEGISLATIVE FRAMEWORK
Part II of the Prosecution of Offences Act 1985 concerns defence, prosecution and third party costs in criminal cases. Sections 16, 16A and 17 concern the award of costs out of central funds.
In certain defined circumstances, a defendant may be awarded a defendant's costs order. Section 16(6) provides as follows:-
“(6) A defendant's costs order shall, subject to the following provisions of this section, be for the payment out of central funds, to the person in whose favour the order is made, of such amount as the court considers reasonably sufficient to compensate him for any expenses properly incurred by him in the proceedings.
(6A) Where the court considers that there are circumstances that make it inappropriate for the accused to recover the full amount mentioned in subsection (6), a defendant's costs order must be for the payment out of central funds of such lesser amount as the court considers just and reasonable.”
Section 17 deals with prosecution costs:-
“ 17. Prosecution costs.
(1) Subject to [subsections (2) and (2A)] below, the court may —
(a) in any proceedings in respect of an indictable offence; and
(b) in any proceedings before a Divisional Court of the Queen's Bench Division or the [Supreme Court] in respect of a summary offence;
order the payment out of central funds of such amount as the court considers reasonably sufficient to compensate the prosecutor for any expenses properly incurred by him in the proceedings.
(2) No order under this section may be made in favour of —
(a) a public authority; or
(b) a person acting —
(i) on behalf of a public authority; or
(ii) in his capacity as an official appointed by such an authority.
(2A) Where the court considers that there are circumstances that make it inappropriate for the prosecution to recover the full amount mentioned in subsection (1), an order under this section must be for the payment out of central funds of such lesser amount as the court considers just and reasonable.
(2B) When making an order under this section, the court must fix the amount to be paid out of central funds in the order if it considers it appropriate to do so and —
(a) the prosecutor agrees the amount, or
(b) subsection (2A) applies.
(2C) Where the court does not fix the amount to be paid out of central funds in the order —
(a) it must describe in the order any reduction required under subsection (2A), and
(b) the amount must be fixed by means of a determination made by or on behalf of the court in accordance with procedures specified in regulations made by the Lord Chancellor.
…”
Section 18 concerns the award of costs against an accused. In certain defined circumstances a court may make such order as to the costs to be paid by the accused to the prosecutor or other named person, as the case may be, as the court considers just and reasonable.
The Costs in Criminal Cases (General) Regulations 1986 ( SI 1986/1335) deal, at Part III with the payment of costs out of central funds. So far as relevant, regulation 7 provides as follows:-
“7.—(1) The appropriate authority shall consider the claim, any further particulars, information or documents submitted by the applicant under regulation 6(5), and shall allow such costs in respect of—
(a) such work as appears to it to have been actually and reasonably done; and
(b) such disbursements as appear to it to have been actually and reasonably incurred.
(2) In calculating costs under paragraph (1) the appropriate authority shall take into account all the relevant circumstances of the case including the nature, importance, complexity or difficulty of the work and the time involved.
(3) Any doubts which the appropriate authority may have as to whether the costs were reasonably incurred or were reasonable in amount shall be resolved against the applicant.
(4) The costs awarded shall not exceed the costs actually incurred. …”
Regulation 9 concerns the re-determination of costs by an appropriate authority. An applicant who is dissatisfied with the costs determined under the Regulations by an appropriate authority (other than before a Magistrates' Court) may apply to the appropriate authority to re-determine them. The regulation makes provision for the procedure to be followed on a re-determination, which can...
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