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	England and Wales High Court (Administrative Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Manchester City Council v Manchester Magistrates' Court & Anor [2009] EWHC 1866 (Admin) (15 July 2009) URL: http://www.bailii.org/ew/cases/EWHC/Admin/2009/1866.html Cite as: [2009] EWHC 1866 (Admin)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT

		Royal Courts of Justice Strand London WC2A 2LL
		15th July 2009

1. MR JUSTICE BURTON: This has been the hearing before me of a case stated by the Manchester Magistrates' Court, and in particular by Deputy District Judge Birrell, who made an order on 17th September 2008 which is challenged before me by the Manchester City Council as applicant.
2. The defendant, on the face of it, is the Manchester Magistrates' Court, but also properly joined as defendants are two defendants before that court on 17th September 2008, Messrs Braithwaite and Pinnock. They were served with the proceedings properly, which proceedings relate only to the issue of an award of costs in their favour. Given the circumstances which I shall describe, the probability is that it does not affect them personally in any way, and that the only people who are affected by the costs order, as to whether it stands or not, are their respective solicitors, because the costs order was made in favour of the clients, but no doubt with the purpose that the solicitors should receive the sums. The sums have not been paid by Manchester City Council pending this appeal.
3. The solicitors have, neither of them, attended, as they could have done, had they so wished, nor have the defendants. The solicitors for Mr Braithwaite have, however, been in contact with the court, courteously indicating that neither they nor the defendant would attend or instruct counsel. I shall refer a little later to one particular aspect of the letter of 6th July, recently received from Messrs Clifford Johnson & Co, the solicitors for Mr Braithwaite.
4. Against that background, I have had the benefit of argument from Miss Anna Short of counsel for the Manchester City Council, who was the counsel who appeared below, on 17th September, when the order for costs of £2,000 each in favour of Messrs Braithwaite and Pinnock was made by the Deputy District Judge. The issue arose in circumstances whereby, at the hearing on 17th September, as I shall describe, the City Council decided, in the light — and this was accepted by the Deputy District Judge in his judgment to have been the case — of the progress of the two defendants, that it would not proceed with its application for an ASBO (an Anti-Social Behaviour Order), which was otherwise listed to be heard on that day, and the next if necessary. Consequently, they withdrew both their applications. The defendants, in the case of Mr Braithwaite represented by Counsel, Miss Baillie, and, in the case of Mr Pinnock, represented by a solicitor, Mr Omeri, made applications for costs. It was those applications which were granted to the extent of £2,000 each by the Deputy District Judge.
5. Miss Short drew the leading authority on the issue of costs in such circumstances to the attention of the Deputy District Judge. It is the case of City of Bradford Metropolitan District Council v Booth [2000] EWHC Admin 444 in the Divisional Court per Lord Chief Justice, Lord Bingham CJ, on 10th May 2000. He was dealing with s64(1) of the Magistrates' Court Act 1980, which gave power to a Magistrates' Court, in its discretion, to make such order as to costs, on making the order for which the complaint is made, to be paid by the defendant to the complainant, or, on dismissing the complaint, to be paid by the complainant to the defendant "as it thinks just and reasonable".
6. The court in Booth was dealing with the question as to whether the local authority should pay costs in that case where the complaint was dismissed. Lord Bingham said as follows:

"23. I would accordingly hold that the proper approach to questions of this kind can for convenience be summarised [in] three propositions:

24. (1) Section 64(1) confers a discretion upon a Magistrates' Court to make such order as to costs as it thinks just and reasonable. That provision applies both to the quantum of the costs (if any) to be paid, but also as to the party (if any) which should pay them.

25. (2) What the court will think just and reasonable will depend on all the relevant facts and circumstances of the case before the court. The court may think it just and reasonable that costs should follow the event, but need not think so in all cases covered by the subsection.

26. (3) Where a complainant has successfully challenged before justices an administrative decision made by a police or regulatory authority acting honestly, reasonably, properly and on grounds that reasonably appeared to be sound, in exercise of its public duty, the court should consider, in addition to any other relevant fact of circumstances, both (i) the financial prejudice to the particular complainant in the particular circumstances if an order for costs is not made in his favour; and (ii) the need to encourage public authorities to make and stand by honest, reasonable and apparently sound administrative decisions made in the public interest without fear of exposure to undue financial prejudice if the decision is successfully challenged."

7. This guidance in Booth has been followed and referred to in subsequent cases, for example R (Cambridge City Council) v Alex Nestling Limited [2006] EWHC 1374 (Admin) and, most recently, in Perinpanathan v City of Westminster Magistrates' Court [2009] EWHC 762 (Admin) per Goldring LJ. The relevance of the latter case is that Goldring LJ, in giving judgment, made it plain that Lord Bingham's words did not simply relate to administrative decisions, but would also relate, insofar as not otherwise apparent, to such decisions as whether to prosecute or, in this case, whether to withdraw a case already begun, although that was not the subject matter of Perinpanathan.
8. As was drawn to the attention of the Deputy District Judge in this case, there is also a statutory provision which applies, and applied to the facts before the learned judge, where a complaint was not proceeded with. Although, therefore, it is not exactly the same section as was dealt with by Lord Bingham, because it is in materially the same terms, it was rightly accepted by both parties to apply. It is s52(3) of the Courts Act 1971:

"Where—

...

(b)a complaint is made to a justice of the peace acting in any local justice area but the complaint is not proceeded with, a Magistrates' Court acting in that area may make such order as to costs to be paid by the complainant to the defendant as it thinks just and reasonable."

9. Plainly there are additional factors to bear in mind when one is considering not proceeding with/withdrawing a complaint, compared with where the complaint goes ahead and is either granted or dismissed. There is, in any event, a further decision that is being made, by the body which has already launched the proceedings, to withdraw them.
10. The ordinary test in the Administrative Court, well established over many years, where a case is withdrawn is that it is very often the outcome that there will be no order for costs unless it is apparent which side would have won (see e.g. R (Boxall) v Mayor & Burgess of LB of Waltham Forest CO/3234/2000 21 December 2000. That may or may not be a helpful test for the Magistrates' Court to apply, but it is plain that they have a wide discretion which must be exercised judicially.
11. So far as this decision is concerned, two applications were made before the District Judge which he had no difficulty in dismissing. The first was that, in relation to an earlier hearing, which had required to be adjourned, there ought to be a wasted costs order in favour of the defendants with regard to that hearing. That was dismissed. Then an argument was run in the course of the costs application which eventuated in the £2,000 order to which I have referred, that the ASBOs should never have been issued. This is an argument which, as I shall describe, had been adumbrated by those representing Mr Pinnock the week before the hearing. It is quite plain from the decision of the Deputy District Judge, to which I shall refer, that that suggestion was roundly dismissed. The decision, therefore, to apply for an ASBO was one properly made. Consequently, it can only be in relation to the withdrawal of such application, with any costs consequences flowing, that the learned magistrate ought to have been addressing his mind.
12. The case stated by the learned magistrate says as follows in relevant part:

"12. I was of the opinion that:

(i) The application for anti-social behaviour orders arose out of an incident in March for which both respondents were prosecuted and were either convicted or pleaded guilty;

(ii) Neither was made subject of a CrASBO, [that is an ASBO imposed, criminally, upon conviction for the incident to which reference is made in (i)];

(iii) Both respondents had made progress and it is for this reason that the appellant has decided not to proceed".

That is the finding to which I referred earlier.

"(iv) I have to balance the respective interests of the authority and the individual;

(v) The appellant [the Council] acted in good faith;

(vi) Those facing applications for anti-social behaviour orders should not be forced to agree to them for economic reasons;

(vii) It is just and reasonable to award costs that would be reflective of public funding; and

(viii)I acknowledge the force of the argument that it is unclear what [the] basis of funding was and that it was not in place until at least last week.

13. I was of the opinion that it was just and reasonable to order the appellant to pay £2,000 plus VAT to each respondent."

13. The references in (vii) and (viii) should at this stage be explained, because they formed a considerable part of the argument before the District Judge. It seems that Mr Omeri's firm had applied for legal aid for Mr Pinnock, and the person who had had conduct of the file, who had now left the firm, had, it seems, applied for funding to the Legal Services Commission on what he thought was the correct form, CDS3, when he should have used form CDS14. The result of that was that legal aid was not available and not granted to his client, albeit that it may well be that at all material times, at any rate up to, as the District Judge found, "at least last week", the firm and Mr Pinnock thought that legal aid was covering the matter.
14. So far as Mr Braithwaite is concerned, he did have legal aid in respect of the earlier hearing, or maybe more than one hearing. I have the fee note of Miss Baillie, which was produced to the learned magistrate, which has four entries on it:

"12th May 2008 * perusing papers / preparation / brief for the defendant on directions hearing / conference

10th June 2008 * perusing papers / preparation / brief on pre-trial review hearing / conference

8th July 2008 * perusing papers / preparation / brief for the defendant on anti-social behaviour order application / conference".

8th July 2008 was the date on which the case had been adjourned, which had been the subject of the unsuccessful application for wasted costs.

15. It would appear, although the matter is unclear, that in respect of all or some of those matters there was legal aid in place. In circumstances which then and now still remain unexplained, however, Mr Braithwaite did not have the benefit of legal aid for the hearing on 17th September 2008. Why that was was not explained, nor when the absence of legal aid was discovered.
16. The significance of all this is that Miss Short, before the District Judge, and of course before this court, did then, and has now, emphasised the importance of the indemnity principle: no costs will be awarded in favour of a successful party against an unsuccessful party, save in respect of costs for which the successful party is liable to pay. Of course, if legal aid is in place, then that is covered. In the absence of legal aid, there is required to be a retainer under which the private client or, in this case, his parent or guardian agrees to pay the solicitors; otherwise, the solicitors have no retainer, are not entitled to sue for their fees and are equally not entitled to recover those fees from the opposing party. So much was accepted by the parties in argument before the District Judge, and there was reference to Gundry v Sainsbury [1910] 1 KB 99 as one example of such a proposition.
17. In those circumstances, exploration was made before the District Judge in that regard. He records in the case stated what he was told:

"9. The first respondent's legal representative, Mr Omeri, stated:

• The solicitor who originally had conduct of the file applied for legal funding on the wrong form;

• The retainer resulted from a telephone conversation with the client's mother approximately 1½ weeks prior to the hearing when Mr Omeri gave a figure in line with that which was sought".

That is, seemingly, £2,000 plus VAT.

"• That if public funding had been obtained, the funding would have been on the non-standard basis of approximately £2,000;

• No client care letters had been sent out; and

• His client's mother had agreed to pay the fees incurred prior to the telephone conversation.

10. The second respondent's legal representative, Miss Baillie, stated:

• She had spoken with a partner of her instructing solicitors' firm who was not the solicitor with conduct of the file;

• There had been a telephone conversation with her client's mother;

• The fees quoted were £203 per hour; and

• There had been a public funding certificate that had covered the first hearing."

18. It was in that context that the District Judge expressed the opinion that he sets out at (vii) and (viii) at paragraph 12 of the case stated, which I have cited.

The questions for the High Court are as follows:

"(1) Whether the discretion under section 52 of the Courts Act 1971 was correctly exercised, given the guidance in Bradford Metropolitan Borough Council v Booth;

(2) Whether the indemnity principle applies to costs orders made under section 52 of the Courts Act 1971;

(3) If the answer to question 2 is 'yes',

(a) Whether there was any or any sufficient evidence to prove the nature, date and terms of any private retainers between the defendants and their solicitors;

(b) Whether in the absence of such evidence, the costs orders made offended against the indemnity principle;

(4) Whether I was entitled to take into account as a relevant factor in the exercise of my discretion the fact that the respondents had not been made the subject of an anti-social behaviour order on conviction in related proceedings;

(5) Whether any reasonable judge, properly directing himself, could have awarded costs to the respondents in the amount and on the basis that I did."

19. It seems clear to me that the learned judge did act Wednesbury unreasonably in reaching the conclusions he did. So far as his conclusions in respect of costs are concerned, he did refer to the case of Booth. However, he did not address the issue as to exactly what decision it was that would lead to the order for costs. Given that he had concluded that the application for costs on the basis that the order should never have been sought did not find favour, he was addressing only a situation in which, as he found, the application was withdrawn because "both respondents had made progress".
20. Such a decision is one which Miss Short submits ought not to be put at risk by costs consequences. On the one hand, the Council had decided properly to bring the application at the outset and, on the other, they had, for good reason, decided, in the light of the progress of both respondents, not to proceed with it. Such was not, on the face of it, a case which ought, in the exercise of discretion, to lead to a costs order against them. Of course, that would not be enough to intervene, because it may still have remained within the discretion of the learned magistrate, properly directing himself, to decide what course to take, but it does appear to me quite clear that he also took into account wholly irrelevant matters in reaching the conclusion he did.
21. First, he refers to the fact that he took into account (paragraph 4 of the questions to the court) as a relevant factor in the exercise of his discretion the fact that the respondents had not been made the subject of a CrASBO. That means that he put that down on the side of making a costs order against the Council. That seems to me, unexplained at any rate, to be an extraordinary proposition. It may be that he had not appreciated, or recalled, that the application for an ASBO was made before the criminal proceedings which had led to convictions for the defendants at the instance of the police or the Crown Prosecution Service. It is common ground, because they are the incidents referred to in the ASBO, that the incidents in question, namely on 12th and 20th March, so far as concerns Mr Braithwaite, and 20th March so far as concerns Mr Pinnock, formed both the subject of the original ASBO application by the appellant, Manchester City Council, and the criminal convictions.
22. According to the note of hearing, there was some discussion raised by the District Judge himself (paragraph 9 of the note of hearing) as to "why neither respondent had been made the subject of an ASBO on conviction. The reason for this was not apparent on the papers and was therefore a matter of speculation." It may be that the magistrates had not imposed a CrASBO because they knew that there was an outstanding application for an ASBO; but it does not seem to me that this would even have been a matter relevant to take into account on the discretion as to whether to impose an ASBO, but certainly it would not be a relevant matter to take into account in deciding whether to award costs against the Manchester City Council in respect of the bringing of the ASBO application, which had, of course, antedated the criminal convictions.
23. The next matter which appears to me to have been taken into account, and wrongly so in the circumstances, is as set out in paragraph 12(vi) of the case stated. It is obvious that those facing applications for anti-social behaviour orders should not be forced to agree to them for economic reasons, but I find it impossible to see how that is a relevant factor in this case. One of them had legal aid, but for some reason lost it; and the other did not have legal aid through the error of his solicitors. No one forced them into agreeing anything, because in any event the ASBOs were withdrawn for proper reason, as the District Judge accepted. That factor — and it is not clear how that factor weighed with the District Judge — is, in my judgement, irrational.
24. As for his conclusion that he acknowledged the force of the argument that it was unclear what the basis of funding was and that it was not in place until at least last week, that is manifest in relation to the facts that I have described. There appears to be a finding that the basis of funding was in place last week. That can only be a reference to Mr Omeri's evidence, or assertion, that there was a retainer with the client's mother approximately 1½ weeks prior to the hearing. I shall return to that. But so far as Mr Braithwaite is concerned, no indication is given as to when it is that there had been a telephone conversation with Mr Braithwaite's mother. Indeed, all that was said by Miss Baillie was that there was a quotation for fees of £203 per hour. Even if there was some retainer, which had arisen after it had become apparent to someone that no legal aid was in place, that would only have been in respect of the previous week, although there is half a suggestion — unfounded, in my judgement, in terms of reality — that the mother of Mr Pinnock may have agreed, retrospectively, to become liable for all the previous fees, fees which would only have arisen as a result of the admitted error of the solicitor's own firm!
25. Therefore, even if there was such a retainer in respect of the previous week, in my judgement that could not begin to justify an order for £2,000 plus VAT, and an order which was intended — because the District Judge asked for schedules, which were, in very rough form, produced by the afternoon, coupled with counsels' fee notes — to be in respect of the entirety of the application, notwithstanding what I have said earlier in this judgment, as opposed to being limited to the period subsequent to the arrival on the scene of some retainer or other.
26. Insofar as there is a question before me as to whether the indemnity principle applies to costs orders made under section 52 of the Courts Act 1971, having seen no argument to the contrary, I am entirely satisfied they do.
27. Insofar as I am asked whether there was any sufficient evidence to prove the nature, date and terms of any private retainers, and whether, in the absence of such evidence, the costs orders made offended against the indemnity principle, it seems to me that, even on the basis of the District Judge's own findings, any such retainer arose only in the week prior to the hearing and would not justify the order he made.
28. In those circumstances, I turn to the conclusion as to what course should be taken in the absence of the defendants. It is quite plain to me that they have chosen not to attend and are thereby taking the risk that they will lose the benefit, or, more accurately, their solicitors will lose the benefit, of the sums awarded by the District Judge. I propose, having quashed the decision of the District Judge on the basis that it was unreasonable and infected by inappropriate evidence and conclusions, to which I have referred, to substitute my own conclusion as to what order would (and should) have been made on 17 September, applying the ordinary principles. I propose to accept, for this purpose, the finding of the learned magistrate that there was some retainer or other in respect of costs for at least a week prior to the hearing, but that does not lead to the order of £2,000 each for the two defendants.
29. It is at this stage that I must now filter in consideration of what is, according to the note of hearing, the reality behind what occurred. The note of hearing recites matters as follows (this is a note by Miss Short, who is before me):

"1... Prior to the hearing I had been advised that the second respondent [Mr Pinnock] had been advised that the application for the ASBO would be withdrawn, although the legal representative stated that he would not agree that this would be on the basis of no order for costs. It had been agreed with the first respondent that the application would be comprised on the basis of an interim order remaining in place for a further 2 months, but that this would be subject to the court's approval.

2. I discussed the matter with Miss Baillie at court. She was not content for the interim to remain in place and questioned the power to compromise the application on this basis. It was agreed that the application would also be withdrawn."

30. On that basis, therefore, the week before the hearing, the time when, on the finding of the District Judge, for the first time a retainer was in place, was the same time as, certainly so far as Mr Pinnock was concerned, there was an agreement to withdraw in the light of Mr Pinnock's improvement since the events in March 2008 for which he had been convicted. The assertion by Mr Omeri was that that was not acceptable unless his costs were paid. There was no conceivable basis for that, certainly in the light of the District Judge's finding that the application for the ASBO had been properly brought. The course that should have been followed should have been an agreed withdrawal, and there would have been no need for Mr Omeri to attend at all at the following hearing, particularly in the light of the difficulty with regard to legal aid, which he by then knew. It is quite plain that no order would be made by this court in respect of Mr Pinnock.
31. So far as Mr Braithwaite is concerned, I have already indicated that there is no sign as to when it is that there was the alleged conversation with his mother when a fee of £203 per hour was quoted. There is also no indication as to when it is that Miss Baillie's brief was delivered. The course that was described by Miss Short in her note of hearing led to a sensible compromise at that stage, and was then bettered at the hearing.
32. The letter that Clifford Johnson & Co wrote to the court is, against that background, somewhat strange, certainly if what Miss Short says is right. The 6th July letter to the court, a copy of which was not sent to the appellant as it should have been, says:

"At the hearing on 17th September 2008 Manchester City Council/Local Authority, without prior warning or notice, advised the Deputy District Judge that the application for an ASBO would be withdrawn. We are advised by Miss Baillie of counsel that at the hearing on 17th September it was clear that the local authority applicant had decided prior to the hearing on 17th September to withdraw the application for an ASBO.

It is not clear why the local authority did not notify the respective defendants and/or their solicitors..."

I intervene to say this point is not made by the solicitors for Mr Pinnock.

"... and the criminal listings department at the Magistrates' Court — ie to avoid unnecessary costs and the costs of preparing these cases fully for trial."

33. This is not the basis on which the matter was put to the District Judge. If in fact a case had been put, it would have been a wasted costs application to say, "You knew last week that you were going to withdraw this application and you did not notify us". Then a good case for costs since that date in favour of Mr Braithwaite both could and should have been put forward, but it was not put forward on that basis. The basis on which it was argued was that the ASBO application should never have been brought; alternatively, in any event, that the whole costs should be paid, notwithstanding the availability of the discretion, or in accordance with it, as set out in Booth.
34. In the absence of this matter being put before me properly, and of any attendance being made before me by the defendant, I have no hesitation in accepting the note of hearing by Miss Short, which she has both confirmed to me today in the writing to be accurate to the best of her belief, and also accords with an interdepartmental memorandum by the Manchester City Council dated 13th November 2008, which she has shown me, long before this point was raised last week, on 6th July 2009, in a letter to the court, not copied to the defendant. In those circumstances, I have no doubt that in respect of both these defendants the decision, in the one case to withdraw, and in the other case to ameliorate and then withdraw, the ASBO applications were each proper exercises of discretion by the Manchester City Council and should not have led to any order for costs, not to speak of the order, which apparently was intended to reflect the entirety of the costs of the applications, which was made by the District Judge. In those circumstances, this appeal is allowed, the order is quashed and is substituted by an order that there be no order for costs.
35. MISS SHORT: My Lord, in the circumstances we do not seek any further costs order from the appeal today, given the circumstances of the respondents.
36. MR JUSTICE BURTON: Thank you very much.