Jonathan Alexander Ltd v Proctor
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE HIRST,LORD JUSTICE PETER GIBSON,MR JUSTICE BUXTON |
| Judgment Date | 21 December 1996 |
| Judgment citation (vLex) | [1995] EWCA Civ J1221-10 |
| Docket Number | CCRTF 95/1473/C |
| Court | Court of Appeal (Civil Division) |
| Date | 21 December 1996 |
[1995] EWCA Civ J1221-10
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE WEST LONDON COUNTY COURT
His Honour Judge Hunter
Before Lord Justice Hirst Lord Justice Peter Gibson Mr Justice Buxton
CCRTF 95/1473/C
MR A DYER ( MR A CHRISTIE on 21/1295) (Instructed by Goodman Derrick, London, EC4A 1EQ) appeared on behalf of the Appellants.
MR D CORD (Instructed by Payne Hicks Beach, London, WC2A 3QG) appeared on behalf of the Respondent.
This is an appeal brought with leave of the single judge by the appellants, Jonathan Alexander Ltd ("the company"), against the order of Deputy Circuit Judge Hunter, made on 3 June 1994 in the West London County Court, whereby it was ordered that the appeal of the respondent, Amanda Proctor ("the defendant"), against the order for costs made against her by Mr District Judge Trent on 7 April 1994, be allowed.
The company claimed against the respondent the sum of £1702.63 being the balance of the cost of building work. To that claim, which was not disputed as to the unpaid balance, there was a defence and counterclaim, supported by an extensive Scott Schedule, alleging that some of the work was not done properly and that some of the materials supplied were of poor quality. After a three day trial the company succeeded, and the sum of no less than £14,300 counter-claimed was reduced to £1,672. Judge Medawar QC ordered that there be judgment for the company on the claim in the sum £30.63 (the counterclaim being dismissed), and that the company's costs in the action, to include the claim and the counterclaim, were to be taxed on scale 2 "with leave to the defendant to argue costs as a preliminary point before the District Judge".
At the trial, the company had been represented by one of their directors with leave of the court, and the crucial question which Judge Medawar was in effect reserving to the District Judge was whether, in the circumstances, it was in principle entitled to recover its costs. These total a sum of approximately £25,000, of which the lion's share is in respect of an hourly rate for the director's time, though they also include some £7,500 disbursed in respect of the fees of expert witnesses, on which we were not askd to make a separate ruling.
On 7 April 1994 the matter came before District Judge Trent. He dismissed the defendant's application for an order that the company was not entitled to its costs pursuant to Judge Medawar's order. However, District Judge Trent's decision was reversed on appeal on 3 June 1994 by Deputy Circuit Judge Hunter.
In his judgment, the judge relied on a passage in the County Court Practice 1995 at page 1595 which states under the heading "Meaning of 'costs'" that:-
"In the present context the term 'costs' is used to connote the cost of conducting litigation but —save in the case of a litigant in person —includes solely the remuneration of solicitors (and occasionally lay representatives in small claims matters) including repayment of disbursements (including counsel's fees) incurred in the course of litigation".
The judge then identified the source of the court's power, cited below, to give leave for a director to appear on behalf of the company, but said that there was nothing to suggest that the exercise of this power "endows the company with the status of a litigant in person", and that this was supported by a further note in the County Court Practice 1995 at page 1639 which states:
"A litigant in person is now entitled to recover costs; Litigants in Person (Costs and Expenses Act) 1975 (the 1975 Act). There is no definition of a 'litigant in person' in either the Act or the Rules, nor is there a reported case on the point. It is suggested that a company which is allowed to appear by a director or other officer is not entitled to costs as a litigant in person as the company itself cannot appear personally but only by an agent".
On behalf of the appellant, Mr Dyer submitted the correct starting point is Section 51 of the Supreme Court Act 1981 ("Section 51") which provides so far as relevant as follows:-
"(1) Subject to the provisions of this or any other enactment and to rules of court, the costs of and incidental to all proceedings in
(a) the civil division of the Court of Appeal;
(b) the High Court, and
(c) any county court,
shall be in the discretion of the court.
(2) Without prejudice to any general power to make rules of court, such rules may make provision for regulating matters relating to the costs of those proceedings including, in particular, prescribing scales of costs to be paid to legal or other representatives.
(3) The court shall have full power to determine by whom and to what extent the costs are to be paid."
This, he submitted, gave the court the widest possible discretion, and he drew particular attention in the present context to the words "legal or other representatives" at the end of Section 51(2). This provision, he submitted, rendered inaccurate the notes quoted above from the County Court Practice, at all events since 1981. He suggested that the editors had not caught up with the present statutory position.
Mr Dyer pointed out that the power in the court to grant right of audience on behalf of a company to a director is now based on Section 27(2)(c) of the Courts and Legal Services Act 1990 which gives a right of audience before a court in relation to any proceedings to a person who "has a right of audience granted by that court in relation to those proceedings".
So far as the County Court is concerned, however, this power extended back well over 100 years (Section 72 of the County Courts Act 1888, reproducing Section 10 of the repealed Act of 1852); see also Charles P. Kinnell & Co -v- Harding, Wace & Co [1918] 1 KB 405).
In summary, he submitted that the director, having been granted right of audience in this action as the company's representative, Judge Medawar had a completely unfettered discretion to award the company its costs pursuant to Section 51.
As a second string to his bow, Mr Dyer submitted that the company was a litigant in person within the scope of the 1975 Act, which provides that, in proceedings inter alia in a County Court:
"where …… any costs of a litigant in person are ordered to paid by any other party to the proceedings … there may subject to rules of court, be allowed on the taxation or other determination of those costs sums in respect of any work done, and any expenses and losses incurred, by the litigants in or in connection with the proceedings to which the order relates".
He submitted that the phrase "in person" defines the status of the litigant, ie as being an unrepresented as opposed to a represented litigant; thus the term litigant in person is as apposite to a company as it is to an individual, seeing that the company remains the litigant throughout, and seeing that the Act, which gives no definition of a litigant in person, draws no distinction between an individual and a corporate person.
On behalf of the respondent, Mr Lord made it clear that the court's power to grant right of audience to the director was not disputed, and so not the issue presently before this court.
On the first issue raised by Mr Dyer, Mr Lord submitted that the crucial question was to determine the meaning of the term "costs" in the relevant legislation and rules of court. Apart from two special exceptions referred to below, this term was, he submitted, restricted first to charges and disbursements incurred by solicitors, and secondly, since 1975, to sums in respect of any work done, and any expenses and losses incurred, by litigants in person.
The former was provided for by Order 38, Rule 3(1) of the County Court Rules 1981 ("CCR") which stipulated under the heading "Costs to be regulated by scales" that:
"For the regulation of solicitors' charges and disbursements…. there shall be three scales of costs…."
The latter were provided for by Order 38, Rule 17 of the CCR under the heading "Litigant in person" which, in effect, reproduces Section 1 of the 1975 Act.
The two special exceptions are:-
(1) A fee or reward charged by a lay representative in small claims proceedings, as laid down in Order 19, Rule 4(1) of the CCR, which provides:
"In this rule 'costs' means:-
(a) solicitors' charges,
(b) sums allowed to a litigant in person pursuant to Order 38, Rule 17,
(c) a fee or reward charged by a lay representative for acting on behalf of a party in the proceedings."
(2) In the High Court, a case falling within RSC Order 62 Rule 2(2), which provides that Order 62 shall having effect "with such modifications as may be necessary, where by virtue of any Act the costs of any proceedings before an arbitrator…. are taxable in the High Court.
Thus, in Piper Double Glazing Ltd -v- DC Contracts [1994] 1 WLR 777, Potter J held that arbitration costs fall within the scope of this rule, seeing that under Section 18(1) of the Arbitration Act 1950, unless a contrary intention is expressed therein, every arbitration agreement is deemed to include a provision that the costs shall be in the discretion of the arbitrator, and that any costs directed by an award to be paid shall, unless the award otherwise directs, be taxable in the High Court. It follows, Mr Lord submitted, that the first note quoted above from the County Court Practice 1995 is accurate. I now proceed to consider these rival arguments.
The lynch-pin of Mr Dyer's argument is Section 51. It is, in my...
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