Truscott v Truscott ; Wraith v Sheffield Forgemasters Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE KENNEDY,LORD JUSTICE WAITE,LORD JUSTICE AULD |
| Judgment Date | 31 July 1997 |
| Judgment citation (vLex) | [1997] EWCA Civ J0731-10 |
| Docket Number | No CCRTI 96/1383/C |
| Court | Court of Appeal (Civil Division) |
| Date | 31 July 1997 |
[1997] EWCA Civ J0731-10
Lord Justice Kennedy
Lord Justice Waite
Lord Justice Auld
No CCRTI 96/1383/C
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM ORDER OF HIS HONOUR JUDGE COLTART
Royal Courts of Justice
Strand
London WC2
MISS E GUMBEL (Instructed by Alison Trent of London) appeared on behalf of the Appellant (Truscott v Truscott)
MR G MANSFIELD (Instructed by Marsh Ferriman & Cheale of Littlehampton, West Sussex) appeared on behalf of the Respondent (Truscott v Truscott)
MR J MORGAN (Instructed by Nelson & Co of Leeds) appeared on behalf of the Appellant (Wraith v Sheffield Forgemasters)
MR G SANKEY QC and MR P KILCOYNE (Instructed by Russell Jones & Walker of Bristol) appeared on behalf of the Respondents (Wraith v Sheffield Forgemasters Ltd)
1. General
These two appeals, which we heard on the same day, raise the same important issue in relation to taxation of costs, which it is easiest to formulate by reference to the facts of the cases themselves.
2. Truscott
Mr and Mrs Truscott were divorced in 1986. Custody of their two children was awarded to Mrs Truscott, and there was an order for periodic payments in favour of each child. In February 1989 that order was registered in the Crowborough Magistrates' Court. On 1 st November 1990 Marsh, Ferriman and Cheale (MFC), solicitors acting for Mrs Truscott, obtained in the Brighton County Court a charging order nisi in relation to the house in which Mr Truscott was living with his second wife. The sum claimed as arrears of maintenance was £5156.38, but it was not a judgment debt, and Mr Truscott did not admit liability. It is now common ground that the Crowborough Magistrates' Court having been given the task of enforcing the order for periodical payments Mrs Truscott was not entitled to take enforcement proceedings in any other court (See section 3(4) of Maintenance Order Act 1958 and the Charging Order Act 1979). The application for a charging order nisi was therefore misconceived. That was at once drawn to the attention of MFC by the Magistrates' Court, but surprisingly MFC went ahead and on 10 th December 1990 the charging order was made absolute. Mr Truscott appeared in person at the County Court, but not being a lawyer did not take the jurisdictional point. On 5 th August 1991 MFC applied for an order for sale, and Mr Truscott then consulted Alison Trent & Co (ATC) solicitors of Fleet Street, London. He had previously been represented by solicitors in East Grinstead with whom he had become dissatisfied, and a friend who had been in similar difficulties had recommended that he consult ATC. ATC obtained legal aid and wrote to MFC explaining why the charging order should never have been sought. Neither to that letter nor to either of two reminders was there a reply. ATC then on 29 th November 1993 obtained an order striking out the order for sale, and on 10 th August 1994 Judge Hammerton made a wasted costs order in favour of Mr Truscott. The costs were taxed by District Judge Merrick on 15 th December 1994, when he allowed ATC's charges at the rate they claimed, namely £95 per hour. It is accepted that it was an appropriate rate for a firm of their size and standing practising from their address, but on behalf of MFC it was contended that Mr Truscott should not have used London solicitors. He should have gone to solicitors in the Brighton area as the charging order had been obtained in the Brighton County Court, or he should have consulted solicitors in Tunbridge Wells where he lived. On 5 th June 1995 District Judge Merrick conducted a review, but he adhered to his original decision. MFC, as they were entitled to do, appealed, and on 13 th February 1996 Judge Coltart on this issue ruled in their favour. There were two other issues which he was asked to consider, namely the basis of taxation and the uplift. On the first of those issues he ruled in favour of MFC and on the second issue in favour of ATC. Neither of those rulings have been challenged before us, but they may be of some significance when we come to consider the final order made by Judge Coltart, namely his order in relation to costs
3. Wraith
In 1985 Mr Wraith was employed by Sheffield Forgemasters Ltd at their premises in Sheffield. He fell from the walkway of an overhead crane, and sustained very serious injuries. He consulted his trade union, which instructed their solicitors, Russell, Jones and Walker (RJW), a well-known London firm, to act on the plaintiffs behalf. Proceedings were commenced in London, but by consent they were transferred to Sheffield. In May 1993, on the third day of the trial, the action was settled. The defendants submitted to judgment in the sum of £350,000 and costs. RJW then submitted their bill of costs in which they claimed remuneration at a normal rate for a firm of their size and standing in London, but the rate was substantially more than the average charged by Sheffield firms. The defendants' solicitors—based in Leeds—objected, contending in substance that the plaintiff's solicitors should only be entitled to recover what would have been charged by a Sheffield firm. Neither before the District Judge nor before Potter J (sitting with assessors) did the defendant's solicitors prevail
4. The Issue
So the issue which arose, both in the Brighton County Court and in the High Court at Sheffield, was whether the liability of the unsuccessful party ordered to pay costs should be restricted to what a reasonably competent solicitor practising in the area of the court (or in the area where the successful party lived) might have been expected to charge, or whether the successful party should be entitled to recover the sums claimed by the solicitor who was in fact instructed to act on his behalf.
5. The Rule of Court and its history
In both cases costs fell to be taxed on the standard basis, and Order 62 Rule 12 (1) of the Rules of the Supreme Court applies to actions both in the High Court and in the County Court (see Order 38 Rule 1(3) of the County Court Rules). As far as material Rule 12(1) provides:—
"On a taxation of costs on the standard basis there shall be allowed a reasonable amount in respect of all costs reasonably incurred and any doubts which the taxing officer may have as to whether the costs were reasonably incurred or were reasonable in amount shall be resolved in favour of the paying party."
This rule has only been in its present form since 1986, and authorities prior to that date have to be read with due regard to the wording of the rule which was in force at the relevant time. Rule 32 of Order 40 of the Consolidated General Orders of the Court of Chancery, so far as material, provided that:—
"Where costs are to be taxed as between party and party, the Taxing Master may allow to the party entitled to receive such costs all such just and reasonable expenses as appear to have been properly incurred in—"
various steps in an action are then listed, and the rule continues:—
"but in allowing such costs, the Taxing Master shall not allow to such party any costs which do not appear to have been necessary or proper for the attainment of justice or for defending his rights, or which appear to have been incurred through over-caution, negligence or mistake or merely at the desire of the party."
So the test seems to be an objective one, to be applied by the Taxing Master after the event, allowing only costs he considers to have been "necessary or proper for the attainment of justice". That it has been urged upon us by Mr Mansfield Q.C., for Mrs Truscott (in reality MFC) and by Mr Morgan for Sheffield Forgemasters, is the approach which we should adopt, because it seeks to safeguard the interests of both parties, and tends to keep down the costs of litigation by limiting so far as possible the costs which a party even if successful can recover.
In the patent action of Smith v Buller (1875) LR 19 EQ 473 Sir R. Malins V-C, said at 475:—
"It is of great importance to litigants who are unsuccessful that they should not be oppressed by having to pay an excessive amount of costs."
The plaintiff in that case was held liable to pay the costs, and the Vice-Chancellor continued:—
"I think he ought to bear no more than the necessary costs. I adhere to the rule which has ready been laid down, that the costs chargeable under a taxation as between a party and party are all that are necessary to enable the adverse party to conduct the litigation, and no more. Any charges merely for conducting litigation more conveniently may be called luxuries and must be paid by the party incurring them. The plaintiff is the attacking party, and has failed, and he must therefore pay all charges necessary to the litigation. But if the Defendants give greater facilities for the conduct of the case than are strictly necessary, they ought not to be allowed to throw them upon the plaintiff."
As Mr Sankey Q.C. for Mr Wraith pointed out, what was said by the Vice-Chancellor cannot be applied directly to the rule with which we are concerned, because it was said in relation to a rule which in significant respects was quite differently worded.
In the 1959 version of Rules of the Supreme Court Order 62 Rule 28 dealt with Assessment of Costs and Rule 28(2) provided that:—
"Costs to which this rule applies shall be taxed on the party and party basis, and on a taxation on that basis there shall be allowed all such costs as were necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being taxed."
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