Jacqueline Floyd (Appellant in Costs Appeal Claimant in Original Proceedings) S (Defendant in Original Proceedings) Legal Services Commission (Respondent in Costs Appeal)
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Cox |
| Judgment Date | 28 April 2010 |
| Neutral Citation | [2010] EWHC 906 (QB) |
| Date | 28 April 2010 |
| Court | Queen's Bench Division |
| Docket Number | Case No: CC/2010/APP/0010 |
[2010] EWHC 906 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Before: The Honourable Mrs Justice Cox Dbe
Case No: CC/2010/APP/0010
David Giles (instructed by Brightstone Law LLP) for the Claimant
Jeremy Morgan QC (instructed by Legal Services Commission) for the Respondent
Hearing dates: 14 April 2010
Mrs Justice Cox:
This is an appeal by Jacqueline Floyd (the Claimant) from the judgment of Costs Judge O' Hare, dated 24 November 2009, that she had shown no good reason for the delay in making a request that her costs be paid by the Legal Services Commission; and that she therefore could not proceed with her request.
The appeal concerns the Court's power to extend time when a late application of this kind is made by the successful, unfunded opponent of a legally aided litigant. The main issue is whether the Civil Procedure Rules apply in these circumstances, enabling the Court to exercise a discretion to extend time and to grant relief from sanction; and whether the Costs Judge was wrong in deciding that they did not apply.
The Facts
The background facts are not in dispute and can be shortly stated. The Claimant brought proceedings against the Defendant for possession of the residential property at Flat 2, 3 Salisbury Road, Hove in Sussex. The proceedings were based on the Defendant's non-payment of rent. An order for possession and for payment of the outstanding rent arrears was made by the District Judge on 9 June 2006, and the Defendant was also ordered to pay the Claimant's costs.
On 22 June 2006 the Defendant was granted public funding to enable him to appeal against this order to the circuit judge. On 31 October 2006 the Defendant's appeal was dismissed and the circuit judge made a Section 11(1) costs order, that is an order in favour of the Claimant, but with the protection afforded to the Defendant as set out in Section 11(1) of the Access to Justice Act 1999.
With effect from 16 November 2006, the Defendant's public funding certificate was amended to enable him to appeal to the Court of Appeal. He filed his Notice of Appeal on 21 November 2006.
On 18 March 2008 the appeal was dismissed with costs in favour of the Claimant, and the Court of Appeal made a further Section 11(1) costs order.
On 15 August 2008 the Defendant's public funding certificate was discharged.
Subsequently, and when he was no longer publicly funded, the Defendant filed a petition for leave to appeal to the House of Lords. The petition was refused on 5 November 2008.
The Claimant then sought to enforce the possession order and a request for warrant of possession was issued, with enforcement due to take place on 2 December 2008. The Defendant was granted a second public funding certificate on 27 November 2008, and he applied to the Court to discharge the warrant.
On 1 December 2008 this application was dismissed, although the warrant was suspended until 16 December 2008. A third Section 11(1) costs order was made. The Defendant was then evicted from the Claimant's property.
The Costs Proceedings
On 8 April 2009 the Claimant's solicitors wrote to the Legal Services Commission (LSC) enclosing bills of costs and associated documents in respect of the litigation in the County Court, the Court of Appeal and the House of Lords. They asked for points of dispute to be served by 30 April, failing which they would apply for default costs certificates.
In their response of 22 April the LSC drew the solicitors' attention to the fact that they had not followed the correct procedure, merely serving upon them a notice of commencement (Form N252) with supporting documents. The LSC pointed out that no costs applications had been made to the relevant courts/officers in accordance with the relevant regulations. In addition the letter contained the following paragraphs:
“Further you had three months in which to make your applications. Regulation 5(3)(c) of the CLS (Costs Protection) Regulations 2000 (as amended) states:
‘(3) An order under paragraph (2) may only be made if all the conditions set out in sub-paragraphs (a), (b), (c) and (d) are satisfied:…
(b) unless there is a good reason for the delay, the non-funded party makes a request under regulation 10(2) of the Community Legal Service (Costs) Regulations 2000 within three months of the making of the section 11(1) costs order;…’
The various orders were made on 31/10/06 and 18/03/08 (there was no order for costs in the House of Lords). Hence you had until 31/01/07 and 18/06/08 to issue your respective applications. Even if your N252s can be construed as applications (which for the avoidance of any doubt I say they cannot) they were all out of time. You have not shown any good reason for the delay and were you to issue your applications properly now they will be doomed to failure for this reason alone.”
On 19 May 2009, the Claimant's solicitors applied to the County Court for determination of the costs payable by the Defendant and by the LSC under the first and third Section 11(1) orders. On 5 June 2009 the LSC invited the Claimant's solicitors to agree to adjourn this application pending determination of an application in the Supreme Court Costs Office (SCCO) in respect of her costs in the Court of Appeal. On 10 June 2009 the County Court adjourned the first application generally. On 11 June the Claimant applied to the SCCO for determination of the costs payable by the Defendant and by the LSC under the second Section 11(1) order.
In further correspondence the Claimant's solicitors did not at any stage advance any reason for the delay in making these applications, despite requests by the LSC for them to do so in letters dated 29 June and 6 November 2009. No statement was ever served setting out the reasons for the delay before the matter came before the costs judge on 24 November 2009.
Cost Judge's Decision
The costs judge:
(1) Accepted the LCS's submission that he had no discretion to extend time unless there was a good reason for the Claimant's non-compliance with the three-month time limit in the rules;
(2) Decided that the Costs Practice Direction merely described the relevant practice and that the relief from sanction provided by the CPR did not apply to assist the Claimant in this case; and
(3) Decided that no good reason had been shown by the Claimant for extending time so that, notwithstanding the harshness of the result in the circumstances, the application should be dismissed.
The costs judge granted permission to appeal to this Court not because he considered it arguable that he had erred in law, but because of what he considered on the facts to be “an extremely harsh and seemingly unfair result” for this Claimant. It is common ground that this appeal can only succeed if the costs judge made an error of law in deciding as he did.
The Appeal
The appeal concerns only the claim for costs incurred in the Court of Appeal after the amendment to the Defendant's funding certificate on 16 November 2006.
On behalf of the Claimant Mr Giles submits that the costs judge did err in deciding that the CPR did not apply, and that he had no discretion to consider whether to grant relief from sanction and extend time for non-compliance with the strict three-month rule.
He submits essentially as follows:
(i) CPR 44.17, dealing with the application of the costs rules, only excludes those rules from applying to the assessment of costs in proceedings, to the extent that different provision is made in the relevant legislation (Section 11 of the 1999 Act and regulations made under the Legal Aid Act 1988). It does not have the effect of excluding the rules more generally, or of excluding the Court's case management powers under CPR 3. The rules will therefore apply to questions such as that arising in the present case: i.e. whether the Claimant should be permitted to proceed with her application for costs to be paid by the LSC.
(ii) CPR 44.17 refers to the Costs Practice Direction, paragraphs 21–23, which “sets out the procedure to be followed” where a party was wholly or partially funded by the LSC, as here.
(iii) Paragraphs 21.16 and 21.18 refer expressly to regulation 5 of the Community Legal Service (Cost Protection) Regulations 2000, which states when and how a non-funded party's costs can be awarded against the LSC. S. 21.18 refers to the criteria to be satisfied before the LSC can be ordered to pay any costs, the second of which is that:
“(2) Unless there is good reason for delay the non-funded party provides notice of intention to seek an order against the LSC within three months of the making of the Section 11(1) costs order;”
(iv) That appears to be a strict timetable to be followed by a non-funded party unless a good reason for delay can be shown. However, a strict timetable is also applied to the funded party in relation to applications by a receiving party under regulation 10, dealt with at paragraph 23 of the Practice Direction.
(v) Paragraph 23.5 however provides that, on being served with a receiving party's application,
“… the LSC funded client must respond by filing a statement of resources and serving a copy of it on the receiving party (and the Regional Director where relevant) within 21 days. The LSC funded client may also file and serve written points disputing the bill within the same time limit. (Under Rule 3.1 the Court may extend or shorten this time limit.)”
(vi) Thus the CPR, through the Costs Practice Direction para. 23.5, expressly permits the Court to exercise a discretion under CPR 3.1 and to extend time, whether or not a good reason...
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