R Notting Hill Genesis v Camberwell Green Magistrates' Court

On 22 March 2019, Murray J granted the claimant, Notting Hill Genesis, formerly Notting Hill Housing Trust, permission to apply for judicial review of the order made by the defendant, Camberwell Green Magistrates' Court, dated 25 October 2018, awarding prosecution costs against the claimant in the sum of £21,052.80 in favour of Clarke Barnes Solicitors.

On the 20 December 2018, the claimant filed a claim form by which it challenged the refusal of Camberwell Green Magistrates' Court to state a case for the consideration of the High Court in the case of Holly Smith v Notting Hill Genesis, case number 01800222534.

Murray J made the order he did following the guidance given by Simon Brown LJ in Sunworld Ltd v Hammersmith & Fulham LBC [2000] 1 WLR 2102 at 2016. The judge decided that the correct course was to grant permission for the judicial review directly challenging the costs order, given that the Magistrates' Court had given its written reasons dated 5 December 2018 for refusing to state a case and justifying its order. Therefore, in his view, there existed sufficient material from the Magistrates' Court to enable this court to deal with all of the properly arguable issues in the case.

At this hearing Mr Michael Mullen appears for the claimant. I have a statement on behalf of the defendant from Mr Michael McMahon, who was the legal adviser in the case of Ms Holly Smith v Notting Hill Genesis, on 25 October 2018.

The defendant does not appear and is not represented today. Ms Holly Smith, the interested party, has not participated in these proceedings since filing written submissions in relation to the application for a case stated.

The factual background to the present claim is as follows: the underlying Magistrates' Court proceedings were a prosecution brought by Ms Holly Smith, the prosecutor, against the claimant for the alleged failure to a abate a statutory nuisance pursuant to s.82 of The Environmental Protection Act 1990 (‘the EPA’).

The prosecutor commenced those proceedings by laying an information at the court on 17 January 2018. The proceedings related to 62B Hitherfield Road, Streatham, SW16 (the “property”). The information alleged that a mouse infestation, caused by disrepair to the fabric of the property, had rendered the property prejudicial to health since the end of August 2017. Following a number of interim hearings, the proceedings were compromised by an agreement dated 20 June 2018 that was made shortly before the listed trial. In essence, the Magistrates' Court proceedings, and any associated civil proceedings, were settled on the basis that Ms Smith would be rehoused and receive damages in the sum of £2,500 compensation.

Notting Hill Genesis also agreed

“… to pay Clarke Barnes reasonable fees of the prosecution, to be assessed by the Magistrates Court if not agreed” para.5(a).

Clarke Barnes were the solicitors acting for Ms Smith.

The claimant and Ms Smith were not able to agree a figure for the solicitors' reasonable fees of the proceedings, and so the matter was listed before the court on 25 October 2018 for a hearing to determine the issue of cost. The claim form, at para.7, records that:

“At that hearing the prosecutor was represented by her solicitor and the claimant was represented by counsel. The court heard lengthy submissions and were referred to skeleton arguments and a number of authorities by the parties”.

Mr Mullin appeared for the claimant.

At the conclusion of the hearing, the magistrates ordered the claimant to pay £21,052.80 to Clarke Barnes Solicitors, which appears to have represented the entirety of the costs sought by Ms Smith without any deductions on assessment. The magistrates gave their reasons by way of an oral judgment. There is a verbatim note of that judgment.

The claimant challenges the decision on four grounds:

(1) the magistrates' decision that the total amount payable was reasonable and properly incurred in the proceedings was one that no reasonable court could have reached;

(2) that the magistrates erred by not properly considering whether the legal costs sought were proportionate to the compensation obtained. Instead, they made a finding that there is no “necessary direct correlation” between the compensation paid to Ms Smith and the costs being sought;

(3) the reasons provided by the magistrates were inadequate and demonstrate that they had not properly considered the submissions made by the claimant orally and in writing;

(4) the defendant avers that the power to order payment, under s.82(12) of EPA, is limited to an order that the defendant pay the person bringing the proceedings; the court ordered that the costs be paid to Clarke Barnes. The defendant avers that that was outside their jurisdiction. I shall consider these grounds in turn.

On ground one, Mr Mullin submits that the magistrates erred in ordering costs that were obviously grossly disproportionate. The vast majority of the work done by Ms Smith's legal representatives was undertaken by extremely experienced solicitors. This was a relatively low-value, entirely run-of-the-mill matter that would normally be handled by a paralegal or trainee under the supervision of a junior solicitor. Mr Mullin submits that the use of Grade A fee-earners for the vast majority of the work is unreasonable and improper.

Of course, the grade of fee-earner is a matter for the person instructing them as they are liable for the fee, but where that fee is to be recovered from...