Jersey Unreported Judgments

Costs

[2025] JCA 078

Court of Appeal

1 April 2025

Before     :

Sir William Bailhache,  President; Helen Mountfield KC JA, and; The Rt Hon James Wolffe KC JA.

 

Advocate M. St J. O'Connell for the Appellant/Respondent.

Advocate R. J. McNulty for the Respondent/Cross Appellant

Advocate S. Williams for the Interested Party.

judgment

THE PRESIDENT:

1.        This is the judgment of the Court, decided on the papers with the agreement of the parties, on the costs of the appeals and cross appeals against various judgments of the Royal Court, our judgment being handed down on 24 February 2025.  In that judgment, the Court gave its reasons for allowing the appeal by the Interested Party, DFDS, against the refusal to set aside leave given to Brittany Ferries to challenge the Minister's decision of 3 December 2024 by way of judicial review; it allowed the cross-appeal by the Minister against the decision of the Royal Court to grant permission to challenge that Ministerial decision of 3 December 2024 by way of judicial review; and it refused the applications by Brittany Ferries for leave to appeal first, against the Commissioner's decision to refuse leave to challenge the Minister's decision of 7 November 2024 to terminate the Channel Island Procurement Process, and second, against the Commissioner's decision to refuse permission to challenge the Minister's decision of 3 December 2024 on the basis of an alleged failure to give adequate reasons for that decision.

2.        Following the handing down of judgment, the Minister and DFDS both applied for indemnity costs orders against Brittany Ferries in respect of the proceedings both in this Court and in the Court below.  Brittany Ferries contended that there should be no order for costs made, but if, notwithstanding that submission, any order was made, it should be made only in respect of the Minister's costs of the appeal and in that event on the standard basis.

3.        The rules governing the award of costs in judicial review proceedings are well established.  An applicant for judicial review should not ordinarily be required to pay the costs of a failed application for leave.  That is a starting point from which the Court may depart in the exercise of its general discretion in respect of costs where there are exceptional circumstances - and the Court has a broad discretion as to what constitutes such circumstances.  Sir Michael Birt, Bailiff, said in Larsen Oil and Gas Drilling Limited and Others v Comptroller of Taxes [2015] JRC 001:

"28.  The reason for this approach is clearly one of public policy. the importance of ready access to the Courts for judicial review requires that applicants should not routinely face the risk of an adverse costs order at the leave stage.  Clearly very different considerations apply once leave has been granted and the matter is then contested in the usual way .

29.  In my judgment, the policy considerations which underlie both the old and the new practice in England in relation to all hearings for leave -� the position in England is of course now different in relation to the costs of filing an acknowledgment of service -� are much the same as in Jersey.  I find them persuasive.  Accordingly, I hold that the general approach should be that a putative respondent should not be awarded his costs in relation to such a hearing unless the judge hearing the application considers in his discretion that there are grounds for departing from this normal practice.  I would prefer to put it this way rather than referring to -�exceptional circumstances' as the use of such an expression immediately invites dispute as to whether the circumstances are sufficiently different or unusual to become -�exceptional' as Auld LJ emphasised in the passage referred to above [R (On the Application of Mount Cook Land Limited) v Mount Eden Land Limited and Westminster City Council [2004] CP Rep 12 at paragraph 76 et seq], the matter is ultimately one for the discretion of the judge but having regard to the general approach."

4.        In Larsen and Others v Volaw and Others [2016] JCA 139, in relation to a subsequent application for leave to bring judicial review proceedings by Mr Larsen, this Court considered his appeal against a costs order made by the Bailiff when refusing leave.  Martin JA said this:

"15.  As the Bailiff recognised, the practice in this jurisdiction and in England is that an applicant for judicial review should not ordinarily be made to pay the costs of a failed application for leave.  That practice applies whether the application is dealt with on paper or disposed of after an oral hearing -� even if the oral hearing is requested by the applicant, and even if it follows a refusal of leave on paper.  As the Bailiff recognised, the Court nevertheless has a broad discretion to depart from the ordinary practice if the circumstances so require.  For my part, I think it desirable to retain the concept of exceptional circumstances being needed to justify a departure since it indicates the strength of the ordinary practice in a way that the Bailiff's formulation -� unless the judge hearing the application considers in his discretion that there are grounds for departing from -�the normal practice' -� perhaps does not.  Whichever formulation is adopted, however, the list of potential factors in Mount Cook is a useful guide to the circumstances that may justify a departure from the practice.  Also useful is the reminder, in para 79 of Mount Cook that "[W]hat amounts to exceptional circumstances or not following the general rule may vary considerably according to the circumstances of the case, including the strength or weakness of the application and the respective conduct and circumstances of the parties".

.

17.  Paragraph 77 of [Mount Cook] identified the public policy interest in attaining a balance between on the one hand providing ready access to the Courts by individuals or bodies seeking relief from and / or to draw attention to actual or threatened transgressions of the law by public bodies, and on the other protecting those bodies and the public that funds them from unnecessary, burdensome and costly substantive litigation.  In this case, there had been ample opportunity to draw attention to any transgression of the law affecting the notice - the question of its validity had already been exhaustively litigated by the time the appellants issued their application.  The appellant's application amounted in the circumstances to unnecessary and burdensome litigation; and in this exceptional case the Comptroller was entitled to protection against the costs of it."

5.        We think it might be helpful to add some further comments on the Mount Cook decision. The Civil Procedure Rules and the Practice Directions made in relation to them are more extensive than the Royal Court Rules but, in cases of judicial review, the overall structure is sufficiently similar that in our judgment considerable assistance as to the relevant principles can be taken from them. The policy considerations which, in our view rightly, the Bailiff accepted in the Larsen decision are based on a balance between competing factors -� the need to ensure that applicants for judicial review are not deterred at the leave stage by costs considerations not least so that maladministration can be identified and rectified must  be balanced with the need to preserve, by appropriate costs orders, the court's overall discretion to ensure the administration of justice is not adversely affected by claims for judicial review which ought not to be made, for the reasons set out in more detail in Mount Cook at paragraph 76 of the court's  judgment. In particular we emphasise that the policy approach which adopts a starting position not to award costs for unsuccessful leave applications assumes that in many cases these applications will be determined on the papers, or where not so determined, will be decided on a brief hearing before the court. As was said at paragraph 73 of Mount Cook:

"73.  It follows that judges before whom contested permission applications are listed, and in their conduct of them, should discourage long hearings and/or the filing by both parties of voluminous documentary evidence for consideration at them. In short, they should not allow the court to be sucked into lengthy and fully argued oral hearings that transform the process from an inquiry into arguability into that of a rehearsal for, or effectively, an expedited and full hearing of the substantive claim."

6.        There will of course be cases where the urgency of the decision which is required will mean that the leave application descends into more detail, if not the substantive case itself. In those circumstances a different approach to a costs award may be justified. In the present case, while the submissions before us did not amount to full argument on the substance of the application, the application for leave to appeal and the substantive appeal were rolled up, which meant that the hearing did involve a more detailed approach than might be required in many cases where leave for judicial review was being considered, at least in this court.

7.        The Minister claims that the following points, individually and in aggregate, justify an award of indemnity costs:

(i)        This was a hopeless case.

(ii)       Brittany Ferries failed to bring its application promptly both in respect of the first procurement process and the second.

(iii)      Brittany Ferries conducted itself unreasonably, and with a degree of cynicism by refusing to agree to the request to extend its lifeline ferry services for a reasonable period after the end of March 2025 so as to facilitate a more orderly second tender process; only then to offer the requested extension after the litigation had commenced.

(iv)     There was a lack of candour in Brittany Ferries' evidence in support of the application to the extent that it claimed to be unclear as to what the concerns of the Government of Jersey were about the financial standing of Condor Ferries.

8.        The same set of circumstances is said to justify an award of costs in relation to the leave application before the Royal Court as well as in the Court of Appeal. 

9.        DFDS in essence make similar points in respect of their application for costs.  The further point made by DFDS is that although this was an appeal in relation to a leave application, in fact the argument before the Court of Appeal (and to some extent below) involved a full merits examination of the basis of claim and amounted to conferring upon Brittany Ferries the advantage of an early substantive hearing of its claim.  DFDS made two further points -

(i)        Brittany Ferries was guilty of unacceptable and unreasonable litigation conduct by on the one hand failing to apply for an interim injunction restraining the Minister from executing the concession agreement, thereby avoiding the financial risk of providing a cross-undertaking in damages, and at the same time indicating that in the event that the concession agreement was executed, Brittany Ferries would seek to have it quashed as well as the ministerial decision in that respect. In that connection DFDS relied upon a letter from Ogier to Advocate O'Connell dated 29 December 2024 which contained the latter threat.

(ii)       Whatever order was made by way of standard or indemnity costs, DFDS considered that an interim costs order should be made on the basis of the analysis in Crociani and Others v Crociani and Others [2014] JCA 095. A draft bill was submitted on both the indemnity and standard bases  and the claim at 50% of those costs was made in these sums:  £44,227.75 on an indemnity basis and £36,762.78 on the standard basis.

10.     In their contentions, Brittany Ferries made the following submissions:

(i)        There was a general rule that an applicant for leave to bring judicial review should not have to pay the costs of unsuccessfully doing so. The Mount Cook case did provide helpful guidance as to what kind of circumstances might be "exceptional" for the purposes of departing from that rule. These were:

·         Where a claim was hopeless

·         Persisting in a claim after the applicant had been alerted to the fact that it was hopeless

·         Using judicial review for a collateral purpose

·         The applicant having had in effect, by reason of the leave application, an early hearing of the substantive claim.

(ii)       DFDS should not be entitled to a costs order because its case was substantially similar to that of the Minister and because an interested party was not normally entitled to its costs unless it had an interest which required separate representation. Reliance was placed on Bolton MDC & Ors v Secretary of State for the Environment [1995] 1 WLR 1176

(iii)      Leave was originally granted, so the application could not be regarded as hopeless. There has been no finding of an abuse of process. There has been no early hearing of the substantive claim.

(iv)     There was no special feature in the conduct of the litigation which would justify an award of indemnity costs. Allegations of -�cynical' and -�grossly unacceptable' conduct by Brittany Ferries have no basis in the judgments of the Royal Court or Court of Appeal, and are inconsistent with the facts. The reality was that Brittany Ferries found itself in a very difficult position when the first procurement ended as it did, and sought to act constructively by engaging in the second process while reserving its rights. While the Court of Appeal found that that the reservation of rights was not effective, and that Brittany Ferries should have acted more quickly, there is no basis for such allegations.

Decision

11.     Before handing down the final judgment, we indicated that we would sit to hand down the judgment and receive any ancillary applications. In the event, we handed down the judgment electronically because we were advised that the parties relied upon their written contentions filed in accordance with our directions. Subsequently, Brittany Ferries submitted further written submissions. DFDS objected to this course on the basis that if Brittany Ferries had wanted to respond to the DFDS contentions, they should have availed themselves of the offer of an oral hearing. We consider there is something to be said for this objection but as DFDS have themselves filed further submissions in case we rejected their opening position, we have considered all the submissions made on all sides.

Awarding the Minister costs in an application for permission to appeal

12.     We consider that an award to the Minister of his costs of appearing at the hearing of the appeal is justified, even though this is technically an application for leave to appeal.  Our reasons for this are as follows.

13.     Brittany Ferries competed for a commercial tender and were unsuccessful. The application for judicial review should be seen against the background of its commercial interest. There was nothing substantial in it and the application was not brought promptly.  There is no reason why the company should not pay the costs in principle, as with any unsuccessful party to litigation.

14.     The fact that the applications for judicial review were not brought promptly, in the face of an obviously urgent application, could be seen as part of the reason that decisions which might otherwise have been made on paper required court hearings, but as to his reasons for appearing in the Court below, the Minister did not argue (and certainly did not press) the point of delay. There was only mixed success, even though we take the view that the Commissioner erred in allowing any grounds to go forward.

15.     We do not consider that there are exceptional circumstances such as to justify departing from the Larsen principle in relation to the leave application before the Royal Court or DFDS's application to set aside the leave previously granted. The Minister chose to appear before the Royal Court although in fact he did not have to do so, and it was DFDS which made what (should have been) a convincing argument on delay, which the Minister did not press.

16.     However, we do not consider that the Larsen approach necessarily falls to be applied (at least without modification) to the costs of an appeal to this Court in relation to leave to appeal, and we do not consider it applies in the present case. All parties appealed (including Brittany Ferries).  Brittany Ferries lost convincingly. Whilst the decision was focused on permission -� in particular on delay -�  the urgency of the matter meant that we had to hold a full day rolled up hearing, and we also commented on the relative weakness of their substantive arguments. In effect, the parties had something not far short of a full hearing on the merits. By the time of the appeal the issue of delay had been squarely focused through the set aside application and DFDS' appeal against its refusal, an oral hearing of the application for leave to set aside the Commissioner's decisions, and to appeal, was inevitable, as was the decision of all parties to be represented. We see no reason why the Minister should not have the benefit of an award of costs of the appeal stage.

Whether and to what extent to award a second set of costs to DFDS

17.     The second issue is whether, even though we have decided to award some costs of a leave application, we should countenance awarding more than one set of costs.  We refer first to the House of Lords decision in Bolton in relation to circumstances where it may be appropriate to award more than one set of costs in a judicial review.  Lord Lloyd of Berwick said this:

"What then is the proper approach? As in all questions to do with costs, the fundamental rule is that there are no rules. Costs are always in the discretion of the court, and a practice, however widespread and longstanding, must never be allowed to harden into a rule.

But the following propositions may be supported.

(1) The Secretary of State, when successful in defending his decision, will normally be entitled to the whole of his costs. He should not be required to share his award of costs by apportionment, whether by agreement with other parties, or by further order of the court. In so far as the Court of Appeal in the Wychavon District Council case may have encouraged or sanctioned such a course, I would respectfully disagree.

(2) The developer will not normally be entitled to his costs unless he can show that there was likely to be a separate issue on which he was entitled to be heard, that is to say an issue not covered by counsel for the Secretary of State; or unless he has an interest which requires separate representation. The mere fact that he is the developer will not of itself justify a second set of costs in every case.

(3) A second set of costs is more likely to be awarded at first instance, than in the Court of Appeal or House of Lords, by which time the issues should have crystallised, and the extent to which there are indeed separate interests should have been clarified.

(4) An award of a third set of costs will rarely be justified, even if there are in theory three or more separate interests."

18.     That case concerned the costs of a challenge to a planning appeal, where naturally the position of the Secretary of State whose decision was under challenge (and who had not been awarded his costs below), might be thought highly relevant to any costs decision in an appeal court. In our view, that is a sound comparison with the position of the Minister here. Whatever his position on a leave application before the Royal Court, his position once leave had been given or on appeal from a leave decision, was critical to the decision which the Court ultimately had to make.  We do not see how the Minister could properly have declined to appear in the Court of Appeal.  So it is difficult to see how, once the matter came to the Court of Appeal, it would be right to deprive him of his costs.

19.     In application of the Bolton principles, we also consider that this is an appropriate case to award DFDS (and not the Minister) the costs of its set-aside application before the Commissioner; and to award DFDS  a second set of costs  as to its costs of appearing in the Court of Appeal.  We do not consider that DFDS should receive its costs of appearing at Brittany Ferries' initial leave application.  Our reasons for this conclusion are as follows.

20.     Larsen points us not to award costs in respect of Brittany Ferries' leave application for leave to apply for judicial review, at which DFDS chose to be present albeit the company was not then convened.  But the set aside application was a different matter.  It articulated and focused the issues on which, ultimately, we have disposed of the case, and on that application it was DFDS which set out to protect its own interests and at which it made the running on the arguments raised.

21.     To award DFDS its costs of the set aside application, in this case, would not be contrary to the usual approach to interveners as articulated in the arguments before us. DFDS is not a public interest intervener; it is a party directly affected by the decision.  Further, if we give DFDS its costs of the set aside application, we are not giving duplicative recovery since the Minister had not argued delay, and we are not awarding the Minister his costs of appearing at the set aside application.

22.     As to the costs of the applications for leave before the Court of Appeal, Bolton tells us that we should consider whether there was a separate interest for the intervener which needed to be protected. In our judgment, that is the position here. The Minister was concerned to defend his decision-taking process. By contrast, DFDS were concerned to ensure that their obligation under that process to be able to comply with the contractual terms they had secured as a result of their successful tender could be performed. The interest, though in some ways aligned, was different. The interest of the developer in a planning case cannot be compared with the interest of a party with contractual obligations, such as DFDS in the present case. Furthermore, the evidence provided by DFDS as to the impact of the leave application on its preparations for performing the contract which it was awarded was not material which was before the Minister. This emphasises the different interest which DFDS and the Minister had in these appeals.  We therefore consider that the just decision is to award both the Minister and DFDS the costs of the hearing before us.

Should costs be awarded on the standard or the indemnity basis?

23.     The next issue is whether we should award costs on the standard or the indemnity basis.  We do not consider there was anything sufficiently unusual in the conduct of these proceedings which would justify an award of indemnity costs, notwithstanding that the Condor Ferries refusal to extend the existing contract which placed the Minister and DFDS under time pressure in relation to the second procurement process. Nor do we consider that Brittany Ferries' failure clearly to articulate arguments on delay could be treated as a want of candour justifying an award of indemnity costs.

Should there be a payment on account?

24.     We see no reason not to award a payment of some proportion of the costs on account, with the balance to be paid following assessment if not agreed. 

Conclusion

25.     Accordingly, we order that Brittany Ferries to pay the costs of the Minister in relation to the appeal, again on the standard basis if not agreed, but that there be no order as to the costs of the Minister before the Royal Court.

26.     We also order Brittany Ferries to pay the costs of DFDS in relation to the DFDS application to set aside leave granted for judicial review and its costs of and incidental to the appeals, again on the standard basis, to be taxed on the standard basis if not agreed.

27.     We order Brittany Ferries to pay within 28 days of this order to DFDS the sum of £40,000.00 by way of interim order on account of those costs.

28.     Order accordingly.

Authorities

Larsen Oil and Gas Drilling Limited and Others v Comptroller of Taxes [2015] JRC 001. 

Larsen and Others v Volaw and Others [2016] JCA 139. 

R (On the Application of Mount Cook Land Limited) v Mount Eden Land Limited and Westminster City Council [2004] CP Rep 12. 

Crociani and Others v Crociani and Others [2014] JCA 095. 

Bolton MDC & Ors v Secretary of State for the Environment [1995] 1 WLR 1176