James Churchill v Merthyr Tydfil County Borough Council
| Jurisdiction | England & Wales |
| Judge | Sir Geoffrey Vos,Lord Justice Birss,Lady Carr |
| Judgment Date | 29 November 2023 |
| Neutral Citation | [2023] EWCA Civ 1416 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Appeal No: CA-2022-001778 |
and
[2023] EWCA Civ 1416
Lady Carr of Walton-on-the-Hill, LADY CHIEF JUSTICE OF ENGLAND AND WALES
Sir Geoffrey Vos, MASTER OF THE ROLLS
and
Lord Justice Birss
Appeal No: CA-2022-001778
Case No: H42YJ543
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE COUNTY COURT AT MERTHYR TYDFIL
Deputy District Judge Kempton Rees
Royal Courts of Justice
Strand, London, WC2A 2LL
Michel Kallipetis KC, Iain Wightwick and Maya Chilaeva (instructed by Simon Jones of Merthyr Tydfil County Borough Council) for the appellant/defendant (the Council)
Robert Weir KC and Tom Carter (instructed by McDermott Smith Law Ltd) for the respondent/claimant (Mr Churchill)
Rupert Cohen (instructed by Law Society Legal Services Team) for the Law Society of England and Wales (the Law Society)
Nicholas Vineall KC and Amy Rogers for the Bar Council (the Bar Council)
Edwin Glasgow KC and Kelly Stricklin-Coutinho (instructed by Stewarts) for the Civil Mediation Council, Centre for Effective Dispute Resolution, and the Chartered Institute of Arbitrators
Justin Bates and Tom Morris (instructed by Anthony Gold Solicitors LLP) for the Housing Law Practitioners Association
Elizabeth England (instructed by Capsticks LLP) for the Social Housing Law Association
Hearing dates: 8–10 November 2023
Approved Judgment
This judgment was handed down by the judges remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be 10:30am on 29 November 2023.
Sir Geoffrey Vos, MASTER OF THE ROLLS:
Introduction
The headline questions in this case are whether a court can lawfully order the parties to court proceedings to engage in a non-court-based dispute resolution process, and, if so, in what circumstances it should do so. The kind of non-court-based dispute resolution in issue is an internal complaints procedure operated by a local authority, to which the claimant was not contractually bound. A question has also arisen as to whether, and in what way, the nature of the non-court-based dispute resolution process should be taken into account by the court.
The relevant circumstances are simple. Mr Churchill bought a property at 9 Gellifaelog Terrace, Penydarren, Merthyr Tydfil, CF47 9HL (the property) in 2015. The Council owns adjoining land (the land) to the east of the property. Mr Churchill claims that, since 2016, Japanese knotweed has encroached from the land onto the property causing damage to it, a reduction in its value and loss of enjoyment. Mr Churchill's solicitors sent the Council a letter of claim on 29 October 2020, to which the Council responded on 20 January 2021. The Council's response queried why Mr Churchill had not made use of its Corporate Complaints Procedure. 1 It said that, if Mr Churchill were to issue proceedings without having done so, the Council would apply to the court for a stay and for costs. Despite that warning, Mr Churchill issued proceedings in
nuisance against the Council in July 2021. On 15 February 2022, the Council duly issued the stay application, as it had threatenedDeputy District Judge Kempton Rees (the judge) dismissed the stay application on 12 May 2022, having delivered a reserved judgment. He held that he was bound to follow Dyson LJ's statement in Halsey v. Milton Keynes General NHS Trust [2004] EWCA Civ 576, [2004] 1 WLR 3002 ( Halsey) to the effect that: “to oblige truly unwilling parties to refer their disputes to mediation would be to impose an unacceptable obstruction on their right of access to the court”. The judge also held that Mr Churchill and his lawyers had acted unreasonably by failing to engage with the Council's complaints procedure. That conduct was contrary to the spirit and the letter of the relevant pre-action protocol. On 4 August 2022, HH Judge Harrison granted the Council permission to appeal. He referred the matter to this court on the grounds that it raised an important point of principle and practice and that there were many other similar cases.
The relevant pre-action protocol was the Practice Direction on Pre-Action Conduct and Protocols which came into force in 1999. It was substantially amended to its current form on 6 April 2015, and was updated in August 2021 (the PD). The PD applied to this case, because there was no specific preaction protocol applicable to Mr Churchill's nuisance claim. It may be obvious, but it is worth stating expressly, that the PD applies to pre-action conduct, whilst this case concerns the powers of the court once proceedings have been issued. I will return to that point.
The PD provides at [3] that, before commencing proceedings, the court will “expect the parties to have exchanged sufficient information to – … (c) try to settle the issues without proceedings; (d) consider a form of Alternative Dispute Resolution (ADR) to assist with settlement; … and (f) reduce the costs of resolving the dispute”. At [8], the PD provides that “[l]itigation should be a last resort. … the parties should consider whether negotiation or some other form of ADR might enable them to settle their dispute without commencing proceedings”. At [11], the PD provides that, if proceedings are issued, “the parties may be required to provide evidence that ADR has been considered”, and that a party's refusal to participate in ADR might be considered unreasonable and lead to an order to pay additional costs. [13]–[16] of the PD deal with compliance with it. Notably, [14] provides that the court may decide that a party has not complied with the PD if they have “unreasonably refused to use a form of ADR, or failed to respond at all to an invitation to do so”. [15] of the PD says that, where there has been non-compliance with it, the court may order that sanctions (mainly costs sanctions specified in [16]) are to be applied or that the “proceedings are stayed while particular steps are taken to comply” with the PD.
Against that background, the main issues that this court has to resolve are as follows:-
i) Was the judge right to think that Halsey bound him to dismiss the Council's application? This involves a consideration of whether the passages in Halsey relied upon by the judge were part of the main reasoning of that decision.
ii) If not, can the court lawfully stay proceedings for, or order, the parties to engage in a non-court-based dispute resolution process?
iii) If so, how should the court decide whether to stay the proceedings for, or order, the parties to engage in a non-court-based dispute resolution process? This involves a consideration of the relevance of the kind of non-court-based dispute resolution process being considered.
iv) Should the judge have acceded to the Council's application to stay these proceedings to allow Mr Churchill to pursue a complaint under the Council's internal complaints procedure?
I shall proceed then to deal with the four issues that I have just identified.
Issue 1: Was the judge right to think that Halsey bound him to dismiss the Council's application for a stay of the proceedings?
The simple question under this heading is whether the passage from Halsey upon which the judge relied was a necessary part of the reasoning that led to the decision in that case. In Latin, one would ask whether the passage was “ obiter”. I prefer to avoid the use of Latin in order to make the court's judgment as accessible as possible.
It is necessary first to understand what was in issue in the two cases decided in Halsey. Halsey itself was a claim under the Fatal Accidents Act 1976, which had been dismissed with costs. The claimant appealed the costs order on the ground that the defendant had refused invitations to mediate the claim. The second claim, Steel v. Joy, concerned consolidated personal injury claims by the same claimant against two separate defendants who had, admittedly, caused the claimant injury in incidents 2 years apart. The substantive issue concerned the failed contribution claim brought by the first defendant against the second defendant. The first defendant contended that the second defendant had failed to respond to their offer to mediate, so that the first defendant should not have been ordered to pay the costs of the contribution claim.
In Halsey, Dyson LJ described at [2] the costs question in the cases as being “of some general importance” and as being “should the court impose a costs sanction against a successful litigant on the grounds that he has refused to take part in an alternative dispute resolution”. The Court of Appeal's decisions were: (a) in the first case that the claimant had “come nowhere near showing that [the defendant] acted unreasonably in refusing to agree to a mediation” ([50]), and (b) in the second case that “the first defendant has not proved that the second defendant acted unreasonably in refusing to agree to mediation” ([81]).
At [3], the Court of Appeal said it would begin by “giving some guidance as to the general approach that should be adopted when dealing with the costs issue raised by these two appeals”. The heading that follows is “General encouragement of the use of ADR”. At [4], the court dealt with the relevant provisions of the CPR, including CPR 26.4(1) (now CPR 26.5(1)) which provided that “a party may, when filing a completed allocation questionnaire, make a written request for the proceedings to be stayed while the parties try to settle the case by alternative dispute resolution or other means”.
At [5], Dyson LJ recited that...
To continue reading
Request your trial