R (Gunn) v Secretary of State for the Home Department; R (Kelly) v Same; R (Zahid Khan) v Same

JurisdictionEngland & Wales
JudgeLord Phillips MR
Judgment Date14 June 2001
Neutral Citation[2001] EWCA Civ 891
CourtCourt of Appeal (Civil Division)
Date14 June 2001
Docket NumberCase No: C/2000/6058

[2001] EWCA Civ 891

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Lord Phillips Mr

Lord Justice Pill and

Lord Justice Keene

Case No: C/2000/6058

R
and
Secretary of State for the Home Department ex Parte Gunn
The Queen, On the Application of Edward Kelly -v—secretary of State for the Home Department
and
The Queen, on the Application of Zahid Hussain Khan -v—secretary of State for the Home Department (In Relation to Orders for Costs)

Mr Jonathan Swift (instructed by Treasury Solicitor for the Secretary of State for the Home Department)

Mr Jeremy Morgan (instructed by the Legal Services Commission)

Lord Phillips MR

This is the judgment of the Court

INTRODUCTION

1

These are applications by the Legal Services Commission ("the Commission") requesting the Court to consider the lawfulness of orders for costs made adverse to the Commission and in favour of proposed respondents where funded litigants made applications for judicial review. The issues raised are of general importance at all levels of civil litigation.

2

In all three cases before the Court applications for permission to apply for judicial review to quash orders of the Secretary of State for the Home Department ("the Secretary of State") had been refused, in the case of R v Secretary of State ex p Gunn by Carnwarth J. on 16 March 2000, in the case of R v the Secretary of State ex p Kelly by Owen J. on 10 May 2000 and in the case of R v the Secretary of State ex p Zahid Hussain Khan ("Zahid") by Sullivan J. on 4 July 2000. In each case, applications were made to the Court of Appeal. In the case of Gunn, the application took the form of a renewed application for permission to apply for judicial review. In the other two cases the applications were made after CPR 52 had come into force, so that the applications took the form of applications for permission to appeal against the decision of the Court below. The application of Gunn was heard by Buxton L.J. on 14 July 2000, that of Kelly by Buxton L.J. on 25 August 2000 and that of Zahid by Hale L.J. on 18 August 2000. In each case the application was refused, costs orders were made against the applicant and provision was made for costs to be paid by the Commission. The order in Gunn provided:

"1. this application be refused;

2. the Applicant do pay the costs, such costs to be assessed if not agreed;

3. The costs of the Applicant be assessed in accordance with Regulation 107 of the Civil Legal Aid (General) Regulations 1989;

4. AND ON the application of the Respondent for an order that its costs of this application ("the Court of Appeal Costs") be paid by the Legal Services Commission pursuant to section 18 of the Legal Aid Act 1988

THE COURT HAS DETERMINED (subject to paragraphs (B) and (C) below) that:

(i) it is just and equitable that the Court of Appeal costs be paid out of public funds; and

(ii) that the Applicant is not liable to pay any part of the Court of Appeal costs

AND IT IS ORDERED that

(A) Subject to paragraphs (B) and (C) below that the Court of Appeal costs be paid by the Legal Services Commission

(B) the operation of paragraph (A) of this order shall be suspended until the expiration of 10 weeks from the date of the seal on this order (4.30pm on xxxxxxx) and, if the relevant Area Director gives notice of objection in accordance with paragraph (C), the suspension shall continue until the objections have been heard and determined; and

(C) a copy of this order shall be sent by the Civil Appeals Office to the relevant Area Director and, unless within the said period of 10 weeks the Area Director gives notice in writing to the Civil Appeals Office that the Legal Services Commission wishes to object to the making of a section 18 order and states the grounds of objection, paragraph (A) shall take effect without further order."

3

The order in Kelly provided:

"1. this application be refused

2. the Respondent's costs of this Application by paid by the Applicant such costs to be assessed if not agreed

3. the costs of the Applicant be assessed in accordance with Community Legal Service (Costs) Regulations 2000

(4) The Court having made an order for the payment of the Respondent's costs by the Applicant, who was in receipt of services funded by the Legal Services Commission, and made no determination of the liability of the Applicant.

(5) The Court directs that, if costs are not agreed under the costs order paragraph number 2

(a) the amount to be paid by the Applicant under the above order for costs and

(b) any application for an order for the payment of costs by the Legal Services Commission under regulation 5(2) of the Community Legal Service (Cost Protection) Regulations 2000 in respect of the proceedings in the Court of Appeal

shall be determined by a Costs Judge within three months of the date of the seal of this order, namely by Wednesday 3 rd January 2001 in accordance with regulation 10 of the Community Legal Services (Costs) Regulations 2000.

(6) In the event that an application is made for the payment of costs by the Legal Services Commission,

(a) IT IS RECORDED THAT the Court was satisfied that it would be just and equitable in the circumstances of this application that provision for the costs of these proceedings should be made out of public funds and

(b) THE COURT DIRECTS that, following the determination by a Costs Judge of any amount to be paid by the Applicant and subject to its terms, the Master makes an order for the payment of the costs by the Legal Services Commission.

IT IS FURTHER ORDERED that if the Legal Services Commission make an application to this Court it is reserved to Lord Justice Buxton."

4

The material parts of the order in Zahid were to the same effect as those in Kelly.

5

In his judgment on costs in Gunn, Buxton LJ dealt first with questions not now in issue in these proceedings. These were, (1) whether a renewed application for permission to apply for judicial review should be treated as an appeal and (2) whether there was jurisdiction to make a order for costs in favour of a proposed respondent in such proceedings. While these were live issues in the case of Gunn, they do not arise in later cases, to which CPR 52 and 54 apply. Before us the Commission sensibly decided not to pursue the points.

6

In explaining his order in relation to the Commission, Buxton LJ stated:

"10. Third, I did express the view in the judgment which I have delivered this morning that this was an application which should not have been renewed to this court. I do not make this order on that basis. My view is that this order is prima facie an appropriate one whenever an application is made to the court in circumstances where it may be expected that the Secretary of State would appear and that an application fails: whether it is an application that should never have been made at all or an application that, although reasonably before the court, is in the event unsuccessful.

11. I have set those considerations out at some length because I am not aware of such an order having been made previously in this court in these circumstances; and it may well be that the Legal Aid Board will wish to raise points in connection with it.

12. The order will be that this order will not pass the seal for a period of 10 weeks, during which time it will be open to the Legal Aid Board to make application to this court for the order to be set aside or reviewed. Any such application will be reserved to myself."

7

In Kelly, Buxton L.J. adopted his reasoning in Gunn as did Hale L.J. in Zahid. Buxton L.J. has since released to the full Court consideration of the Commission's application in Gunn.

The Statutory Regime

8

Jurisdiction to make an order for the payment of costs by the Commission (then the Legal Aid Board) to an unassisted party was conferred by section 18 of the Legal Aid Act 1988 ("the 1988 Act"), following earlier statutes. Sections 18(1) to (4) provided:

"(1) This section applies to proceedings to which a legally assisted person is a party and which are finally decided in favour of an unassisted party.

(2) In any proceedings to which this section applies the court by which the proceedings were so decided may, subject to subsections (3) and (4) below, make an order for the payment by the Board to the unassisted party of the whole or any part of the costs incurred by him in the proceedings.

(3) Before making an order under this section, the court shall consider what order for costs should be made against the assisted party and for determining his liability in respect of such costs.

(4) An order under this section in respect of any costs may only be made if—

(a) an order for costs would be made in the proceedings apart from this Act;

(b) as respects the costs incurred in a court of first instance, those proceedings were instituted by the assisted party and the court is satisfied that the unassisted party will suffer severe financial hardship unless the order is made; and

(c) in any case, the court is satisfied that it is just and equitable in all the circumstances of the case that provision of the costs should be made out of public funds."

9

Under that procedure the order against the Board was made, whether at first instance or on appeal, by the Court deciding the substantive dispute between the parties. Before doing so, the Court had to determine the liability, if any, for costs of the assisted party. The practice grew of making the order an "unless" order that gave the Legal Aid Board the opportunity to appear to challenge the order.

10

On 1 April 2000, the former Legal Aid Scheme was replaced by Community Legal Service funding under Part I of the ...

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