Khaira v Shergill (No 2)
| Jurisdiction | England & Wales |
| Judge | Richard Spearman |
| Judgment Date | 23 March 2016 |
| Neutral Citation | [2016] EWHC 628 (Ch) |
| Court | Chancery Division |
| Date | 23 March 2016 |
| Docket Number | Appeal No QB/2015/0457, A3/7011/2548SCCO Ref: JMS/1504576 |
[2016] EWHC 628 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
ON APPEAL FROM THE SENIOR COURT COSTS OFFICE
MASTER SIMONS
Royal Courts of Justice
Strand, London, WC2A 2LL
Richard Spearman Q.C.
(sitting as a Deputy Judge of the Chancery Division)
Appeal No QB/2015/0457, A3/7011/2548SCCO Ref: JMS/1504576
Nick McDonnell ( costs lawyer of Just Costs Solicitors instructed by Sahota Solicitors) for the Defendants
Roger Mallalieu ( instructed by Addlestone Keene) for the Claimants
Hearing date: 16 March 2016
Richard Spearman Q.C.:
Introduction and nature of the dispute
This is an appeal against the Order of Master Simons dated 10 September 2015. By that Order, he dismissed the application of the First to Fourth Defendants for an order setting aside a notice of commencement of detailed assessment which had been served by the Claimants. He also ordered the Defendants to serve Points of Dispute by 15 October 2015 and to pay the costs of that application. He refused the Defendants permission to appeal against his Order.
The Defendants applied to the High Court for permission to appeal against the Order of Master Simons, and on 5 October 2015 Globe J granted a stay of that Order pending determination of that appeal or further Order. The appeal was then transferred from the Queen's Bench Division to the Chancery Division. On 30 November 2015 Asplin J granted the Defendants permission to appeal. That is how the matter comes before me.
Although this case has a long and complex history, it is not necessary to say much about it for purposes of the present appeal. The litigation arises out of divisions which have broken out within a Sikh sect associated with three Gurdwaras (Sikh temples) in Bradford, Birmingham and High Wycombe. On 25 June 2008, proceedings were issued in the High Court. On 12 September 2011, His Honour Judge David Cooke, sitting as a judge of the High Court in the Birmingham District Registry, made orders (a) granting the Claimants permission to amendtheir particulars of claim and (b) dismissing the application of the Defendants to strike out the claim on the basis that it raised issues which were said to be unjusticiable (see [2011] EWHC 2442 (Ch)). The Defendants appealed to the Court of Appeal on the issue of justiciability (with the permission of the Judge) and on the grant of permission to amend (with the permission of the Court of Appeal), and the Court of Appeal allowed their appeal (see [2012] PTSR 1697). The Claimants appealed to theSupreme Court, which unanimously allowed their appeal and ruled that the issues in the case should all go to trial (see [2015] AC 359).
At the heart of the present appeal is the Order that was made by the Supreme Court following consideration of the parties' submissions on costs. That Order is dated 28 July 2014, and so far as material to the present appeal it ordered (at paragraph 1):
"The [Defendants] pay the [Claimants'] costs in the Supreme Court and the Court of Appeal, the amount of those costs to be assessed on the standard basis if not agreed between the parties".
In a nutshell, the issues before me are as follows:
(1) First, the Claimants contend that an Order made by an appellate court in this form confers an entitlement on the receiving party to immediate assessment, whereas the Defendants contend that it does not and that for such an entitlement to be conferred by any such Order it must expressly provide for an immediate detailed assessment of costs.
(2) Second, if they are wrong on the first point, the Claimants contend that the court (i.e. in the present case, a costs judge) has jurisdiction to make an order for an immediate assessment of the appeal costs even if the appellate court did not do so, whereas the Defendants contend that the only court that has power to order an immediate assessment of the appeal costs is the appellate court itself, and that if that court is not asked to or does not choose to order an immediate assessment that is the end of the matter.
(3) Third, if they are right on either of the first two points, the Claimants accept that Master Simons nevertheless had a discretion to allow the Defendants' application, but they contend that he was entitled (and right) to exercise his discretion as he did by dismissing the Defendants' application and permitting the immediate assessment which the Claimants had commenced to continue, whereas the Defendants contend the contrary.
It seems to me that the points raised by the first and second issues are of general importance. This is because I strongly suspect that paragraph 1 of the Order of the Supreme Court dated 28 July 2014 is in a form that is either standard or at least has been used in a number of other cases. It is also substantially in the same form as has been made by the Court of Appeal in a number of appeals to that Court, as I am able to say from my own experience of such appeals.
Further, such Orders have important consequences. The substantive issues in the present case transcend monetary values. However, many cases are about or are substantially about money. Moreover, the costs of litigation are frequently not only substantial but also greater than the sums in issue, possibly by a large amount. Even in the present case, where the Supreme Court made an order for an interim payment on account of costs in the sum of £150,000, the Claimants are seeking to recover an additional £83,343.92 in respect of the costs incurred in the Court of Appeal alone. It will make a significant difference to the litigants in many cases whether the receiving party is entitled to proceed to detailed assessment of the appeal costs immediately following conclusion of an appeal or has to wait until the conclusion of the trial.
In these circumstances, it might be thought surprising that these points have notalready been the subject of determination. However, the researches of Mr McDonnell, who appeared for the Defendants, and Mr Mallalieu, who appeared for the Claimants, have unearthed only the cases discussed below, in which the first point at least does not appear to have been decided.
If and to the extent that there is a genuine dispute as to the meaning and effect of the Order of any court, and maybe in particular an appellate court, it might be thought that the court which made the Order would be best placed to decide that issue. If another court is given the task of determining that dispute, there must be at least some risk that the other court will get it wrong. These considerations may be brought into an especially sharp focus where the court which made the Order is the highest court in the land, and the court which is tasked with interpreting that Order is a costs judge, or, on appeal, a Deputy High Court Judge. However, neither side before me has suggested that the Supreme Court should be asked whether it intended the result for which the Claimants contend or the result for which the Defendants contend.
One way of avoiding such disputes in the future would be for the receiving party to follow the counsel of prudence suggested (in relation to the regime under the Rules of the Supreme Court) by Sir Mervyn Davies in Harrod (Buenos Aires) Ltd (10 March 1993): "Where there is a doubt as to whether or not an order results in the 'conclusion of the cause or matter' the wise course is to ask the court (whether the High Court or the Court of Appeal) for consent to proceed to taxation forthwith". From the extracts of the transcript of the argument concerning costs which are quoted in one of the cases to which I was referred, that appears to have been what happened in Morris v Bank of America National Trust [2001] 1 All ER 954. According to those extracts, Leading Counsel for the receiving party sought an order for "an immediate detailed assessment" and for payment "forthwith". This was granted on the footingexplained by Morritt LJ that: "It is certainly the practice, as I understand it, in this court that where the appeal is a discrete matter the costs are ordered there and then and do not wait for the conclusion of the proceedings as a whole. The practice precedes the new rules". So far as concerns the present case, however, it is unclear from those extracts whether it was necessary for Leading Counsel to make the application which he made, or whether the Order of the Court of Appeal would in any event have had the effect of ordering costs "there and then".
The relevant rules
As was also the case before Master Simons, much of the argument before me revolved aroundthe provisions of the Civil Procedure Rules. Indeed, the first plank in the Defendants' argument on appeal is that Master Simons misdirected himself by failing properly to interpret and apply Rule 47.1 of the Civil Procedure Rules and the associated Practice Direction 47.
CPR 47.1 provides:
"Time when detailed assessment may be carried out
47.1 The general rule is that the costs of any proceedings or any part of the proceedings are not to be assessed by the detailed procedure until the conclusion of the proceedings, but the court may order them to be assessed immediately.
(Practice Direction 47 gives further guidance about when proceedings are concluded for the purpose of this rule.)"
Practice Direction 47 provides:
"Time when assessment may be carried out: rule 47.1
1.1 For the purposes of rule 47.1, proceedings are concluded when the court has finally determined the matters in issue in the claim, whether or not there is an appeal, or made an award of provisional damages under Part 41.
1.2 The court may order or the parties may agree in writing that, although the proceedings are continuing, they will nevertheless be...
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