Holden & Company v Crown Prosecution Service (No. 2)
| Jurisdiction | UK Non-devolved |
| Judge | Lord Griffiths,Lord Bridge of Harwich,Lord Jauncey of Tullichettle,Lord Slynn of Hadley,Lord Woolf |
| Judgment Date | 26 May 1993 |
| Judgment citation (vLex) | [1993] UKHL J0526-1 |
| Date | 26 May 1993 |
| Court | House of Lords |
[1993] UKHL J0526-1
Lord Griffiths
Lord Bridge of Harwich
Lord Jauncey of Tullichettle
Lord Slynn of Hadley
Lord Woolf
House of Lords
My Lords,
I have had the advantage of reading in draft the speech prepared by my noble and learned friend, Lord Bridge of Harwich. For the reasons he gives I too would allow the appeal.
My Lords,
This appeal raises a question of some constitutional importance. Modern legislation has given authority to the courts, in a variety of well defined circumstances, to order the costs incurred by a party to criminal proceedings to be paid out of "central funds". This is a convenient shorthand expression which, ever since it was first introduced by the Courts Act 1971, has always had the same definition. This is now found in Schedule 1 to the Interpretation Act 1978, which provides:
"'Central funds', in an enactment providing in relation to England and Wales for the payment of costs out of central funds, means money provided by Parliament."
The orders here under appeal were made by the civil division of the Court of Appeal for the payment of the several respondents' costs out of central funds in circumstances where no express statutory authority to make such orders could be invoked but in purported exercise of a power to do so which the court held to be implied in section 51(1) of the Supreme Court Act 1981 which, until recently amended by section 4(1) of the Courts and Legal Services Act 1990, provided:
"Subject to the provisions of this or any other Act and to rules of court, the costs of and incidental to all proceedings in the civil division of the Court of Appeal and in the High Court … shall be in the discretion of the court, and the court shall have full power to determine by whom and to what extent the costs are to be paid."
The operative language of this provision reproduces in identical terms language which was originally enacted by section 5 of the Supreme Court of Judicature Act 1890 and which has remained on the statute book ever since. Hence the Court of Appeal's interpretation of it not only has the far reaching consequence that a general power in all civil proceedings is conferred on the court to order payment of costs out of central funds whenever a successful litigant cannot recover his costs from any other source; it also leads to the startling conclusion that this power was conferred by Parliament in implied terms many years before a similar power was first conferred in express terms on courts in criminal proceedings, and the power has since remained dormant for a century, its existence unsuspected until now.
The respondent firms of solicitors had all been the subject of orders made by the Crown Court that they pay the whole or part of the prosecution costs in criminal trials in which they had represented the defendants. Their appeals against these orders were heard in November 1989 and were successful. At that time such appeals, although arising out of criminal proceedings, lay to the civil division of the Court of Appeal under section 50 of the Solicitors Act 1974 and were themselves civil, not criminal, proceedings. The orders against the solicitors had in each case been made by the Crown Court judge of his own motion and the Crown Prosecution Service had not sought to support them. Hence it was not appropriate to order the costs of the successful appellants to be paid by the Crown Prosecution Service. When a question arose as to whether the court had, in the circumstances, jurisdiction to order the solicitors' costs to be paid out of central funds, the court decided, for reasons of no present importance, to adjourn consideration of that issue. When it was resumed in October 1991 the Lord Chancellor's Department was permitted to be joined in order to contest the jurisdiction issue. The court's decision affirming its jurisdiction to order and in fact ordering that the solicitors' costs should be paid out of central funds is reported at [1992] 1 W.L.R. 407. The Lord Chancellor's Department now appeals by leave of your Lordships' House. Consideration of the appeal will also require consideration of two previous reported cases in which the court held itself empowered to award costs out of central funds in the absence of any express statutory authority to do so. The first was the decision of the Court of Appeal (Criminal Division) in Re Central Independent Television p.l.c. [1991] 1 All E.R. 347, in which costs out of central funds were awarded to the successful appellant under section 159 of the Criminal Justice Act 1988 against an order made by the Crown Court under section 4 of the Contempt of Court Act 1981. The second was Reg v. Bow Street Metropolitan Stipendiary Magistrate, ex parte Mirror Group Newspapers Ltd reported at [1992] 1 W.L.R.412 as a note to the report of the case now under appeal, in which costs out of central funds were awarded to the successful applicants in judicial review proceedings who secured the quashing of an order made by the magistrate under section 4 of the Act of 1981.
In both the Bow Street case and the decision now under appeal primary reliance was placed on the decision of this House in Aiden Shipping Co Ltd v. Interbulk Ltd [1986] A.C. 965 in support of the proposition that a power to award costs out of central funds could be implied in section 51 of the Supreme Court Act 1981. That case arose from a tripartite dispute between the owners, charterers and sub-charterers of a ship. A single event in which the ship was damaged led to two separate arbitrations, one between the ship-owners and the charterers, the other between the charterers and the sub-charterers. An issue arising in both arbitrations in due course led to two notices of motion in the High Court. Both motions were heard together, both turned upon the decision of the same issue and, in substance, the proceedings were precisely analogous to a single proceeding between plaintiff, defendant and third party. Technically, however, each motion was a separate "proceeding". The question before the House was whether in these circumstances the judge had properly ordered the unsuccessful ship-owners to pay not only the costs of the proceeding on their own motion against the charterers, but also the costs which the charterers were ordered to pay to the sub-charterers, technically incurred in the separate motion by the charterers against the sub-charterers. The House answered this question in the affirmative and declined to follow earlier authority of the Court of Appeal limiting the jurisdiction under Section 51(1) of the Act of 1981 in the sense that the costs of any "proceeding" could only be ordered to be paid by a person who was a party to the same "proceeding". In a speech, with which the other members of the House concurred, Lord Goff of Chieveley pointed out the absence in the words "the court shall have full power to determine by whom …. the costs are to be paid" of any limitation which dictated that result.
In the Bow Street case Nolan L.J. cites a passage from Lord Goff of Chieveley's speech and concludes at [1992] 1 W.L.R 413:
"The speech of Lord Goff makes it clear, therefore, that no restriction is to be implied into section 51(1)."
He then proceeds to hold that Section 51(1) empowers the court to award costs to be paid out of central funds. In the instant case Lord Lane C.J. says at [1992] 1 W.L.R 411:
"Section 51 of the Act of 1981 confers jurisdiction on the court to make an order for costs in the broadest terms, subject only to rules of court. Mr. Laws invites us, in effect, to apply a limitation on the statutory jurisdiction so conferred, as a matter of construction. But this was just the error which was exposed by the House of Lords in Aiden Shipping Co Ltd v. Interbulk Ltd [1986] A.C. 965. There is no warrant for restricting the wide words of section 51 so as to exclude the power of the court to award costs out of central funds when justice requires."
My Lords, with all respect, I totally disagree with both these passages. They vividly illustrate the danger of taking a judicial pronouncement out of its context and applying it to a situation far removed from the subject matter to which the original language was addressed.
It is to be remembered, when construing the language of legislation enacted in 1890, that the position of the Crown at that time in relation to the costs of civil litigation was very different from today. At common law the Crown as a party to civil litigation neither paid nor recovered costs. Before 1890 this rule had been modified by statute in certain limited categories of proceedings: see, for example, sections 1 and 2 of the Crown Suits Act 1855 ("An Act for the payment of costs in proceedings instituted on behalf of the Crown in matters relating to the Revenue …") and section 5 of the Customs, Inland Revenue and Savings Bank Act 1877 (applying to proceedings by the Crown under the Customs Acts the same rule as to costs as in proceedings between subject and subject). But there was no general reversal of the common law rule until the enactment of section 7 of the Administration of Justice (Miscellaneous Provisions) Act 1933, which provides:
"(1) In any civil proceedings to which the Crown is a party in any court having power to award costs in cases between subjects … the costs of and incidental to the proceedings shall be in the discretion of...
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