Mendes & Anor v London Borough of Southwark [2009] EWCA Civ 594

Case No C1/2008/2178[2009] EWCA Civ 594
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN’S BENCH DIVISION
ADMINISTRATIVE COURT
(MRS JUSTICE DOBBS)
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate Monday, 23 rd March 2009
Before
LORD JUSTICE SEDLEYLORD JUSTICE MOORE-BICK
Between
MENDES & ANRAppellantsLONDON BOROUGH OF SOUTHWARKRespondent
(DAR Transcript ofWordWave International LimitedA Merrill Communications Company165 Fleet Street, London EC4A 2DYTel No: 020 7404 1400 Fax No: 020 7831 8838Official Shorthand Writers to the Court)
Ms B Prevatt (instructed by Steel & Shamash) appeared for Appellants.Mr D Broatch (instructed by Southwark Legal Services) appeared for Respondent.
Judgment
[1]The first appellant, a citizen of Portugal, is an EEA national with the rights of entry and establishment that such nationality carries. Without going through the legal paper chase to which the appellant’s counsel, Ms Prevatt, has provided a valuable guide, the effect of the primary and secondary legislation which requires local authorities to make provision for homeless persons was that the appellants, with their two children, were eligible for housing assistance by virtue of Regulation 2(2)(a) of what are known for short as the Homelessness Regulations 2006. These regulations, made under the Housing Act 1996, applied provided that the first appellant was a worker within the meaning of the Immigration (European Economic Area) Regulations 2006.[2]There is no dispute that, prior to the events which led to the present dispute, the first appellant was a worker and therefore a qualified person for the purposes of the Homelessness Regulations. Regulation 6(2) of the EEA Regulations then provides:
“A person who is no longer working shall not cease to be treated as a worker … if – (a) he is temporarily unable to work as the result of an illness or accident;”
[3]The family came here in May 2007. The first appellant found work, latterly with a cleaning company, but on 22 January 2008, having hurt his shoulder badly enough to prevent him doing his work, he left the job. At the end of that month the family were referred by Environmental Health to the homeless persons unit in Southwark because their accommodation was unfit for habitation, and they were duly placed in temporary accommodation.[4]The first appellant was interviewed on 2 April 2008 and explained why he was out of work. The following day a decision was issued to the effect that as an economically inactive EEA national he was ineligible for assistance. For the reason I have given this was legally mistaken. The concept of economic activity is a convenient summary of EEA Regulation 6(1), which lists the classes of “qualified persons”. But because he was temporarily unable to work as a result of illness or accident, the first appellant continued by virtue of Regulation 6(2)(a) to be a qualified person.[5]On the basis of this erroneous decision he and his family were required to vacate the temporary accommodation in the first week of May 2008. The date for vacating given in the section 184 refusal letter was 4 May; a formal notice to quit was given for 5 May; the section 188(3) letter refusing temporary housing set the date at 6 May. By the beginning of May the first appellant now qualified not under Regulation 6(2)(a) but under Regulation 6(2)(b), which provides: (2) A person who is no longer working shall not cease to be treated as a worker for the purpose of paragraph (1)(b) if -- … b) he is in duly recorded involuntary unemployment after having been employed in the United Kingdom, provided that he has registered as jobseeker with the relevant employment office and --(i) he was employed for one year or more before becoming unemployed;(ii) he has been unemployed for no more than six months; or(iii) he can provide evidence that he is seeking employment in the United Kingdom and has a genuine chance of being engaged; It was under (ii) or (iii) that the first appellant now qualified.[6]A review was sought under section 202. In the event -- an event conveyed by letter dated 9 May -- he was successful; but the section 188(3) decision whether to provide housing pending the review was itself based on legally erroneous reasoning: it ignored Regulation 6(2)(b)(ii) and (iii) in favour of (i), which had no application, with the result that the local authority declined to provide further temporary accommodation. The decision was conveyed by letter of 23 April. The appellants’ solicitors’ follow-up letters pointing out the legal error had no effect.[7]The May Bank Holiday was now coming up, and the appellants were due to be evicted, if not on Sunday 4 May or Monday 5 May (a bank holiday), then at what could well be dawn on Tuesday 6 May. It was the solicitors’ professional obligation within the law to prevent this happening. Perhaps anomalously, the usual appeal to the county court is not available against a section 188(3) decision. This meant issuing judicial review proceedings and doing so in sufficient time to make an emergency application, pending a permission decision, in order to preserve the appellants’ accommodation. The reviews officer on 23 April had indicated her expectation that the review would be completed by Friday 2 May (in the event it took a further week), but that too was going to come too late for remedial intervention if it turned out to be adverse.[8]In my judgment the responsible course for the appellants’ solicitors was to do what they did. They told the local authority on Thursday 1 May that they were about to issue proceedings, sending them the papers in draft at about 2.40pm. Having had no response they issued them at 3.15. The claim was for review of the section 188(3) refusal, but the grounds focussed, rightly, on the underlying errors of law in the section 184 decision.[9]At 4.30 the defendant’s legal department phoned to agree to extend accommodation for a further two weeks; thereafter they agreed to preserve it pending the review decision. The following day Saunders J granted an order for temporary accommodation pending determination of the permission application, giving as his reason that there was a strong prima facie case that Regulation 6 had been misinterpreted.[10]On 9 May a review decision was issued accepting that the first appellant was a qualified person. Having achieved what they sought, the appellants’ solicitors agreed to withdraw the judicial review proceedings. This was done on 6 June by means of a consent order which provided for costs to be decided by a single judge on the basis of written submissions. It was Dobbs J to whom this task fell. On 13 August she directed that there be no order for costs. This was the outcome that the local authority had sought. The appellants had sought an award of costs in their favour. By way of reasons Dobbs J wrote simply:
“Having considered the submissions of both parties it seems to me that there is no good reason for costs to be awarded to either party.”
[11]It is Ms Prevatt’s submission that there was an unanswerable reason why the appellants should have recovered the costs of issuing the judicial review proceedings, namely that they had been legally justified in doing so and that without them they and their children would wrongly have been made homeless. It is Mr Broatch’s submission, on the other hand, for the London Borough of Southwark that the proceedings had been compromised before the grant of permission and without adjudication, and that it was within the wide discretion of the judge in those circumstances to direct that the costs should lie where they fell.[12]Before I deal with that issue it is necessary to deal with two other issues that have entered the arena. Jurisdiction.[13]First, Mr Broatch submits that this court has no jurisdiction to entertain the appeal, notwithstanding that Hooper LJ has granted permission to appeal, that no application was made to set his grant aside, and that the submission does not feature anywhere in the grounds annexed to Southwark’s Respondent’s Notice. The submission nevertheless is that, although section 16 of the Supreme Court Act 1981 in terms confers jurisdiction on this court “to hear and determine appeals from any judgment or order of the High Court”, section 31(3) of that Act forbids the making of any application for judicial review without leave. Since this case was aborted before leave had been granted, the argument goes, there is nothing against which to appeal.[14]There is of course no judgment of the High Court on the merits but there is a valid order for costs. Indeed it is Mr Broatch’s case that the order should not be interfered with. In that situation section 16 of the 1981 Act appears to me to give the clearest possible jurisdiction for this court to entertain an appeal against the order if such an appeal is arguable, as Hooper LJ has held it to be.[15]Failing this argument, Mr Broatch falls back on a submission that the court should nevertheless elect not to entertain the appeal. While it is possible that an appeal may be dismissed without more if its subject matter turns out to be too abstract or too inconsequential to merit the court’s attention, the present is far from being such a case. While the amount of costs at stake is not large (it is probably in the region of £1850), the Legal Services Commission, which has authorised and is funding this appeal, is understandably concerned at the impact on its budget if, every time an individual who is eligible for public funding has to go to court in order to preserve their home and the local authority then acknowledges its mistake and concedes the case at pre-permission stage, the Legal Services Commission has to pick up the bill.[16]Moreover, any victory which Mr Broatch might have achieved on this argument would probably be pyrrhic. For every judicial review claim which is manifestly well-founded and has to be conceded at an early stage, there may be one which is manifestly ill-founded and is withdrawn for that reason before the permission stage. If a judge in a case of the latter class refused without good reason to give an intended defendant the costs of settling its reply before the claim was withdrawn, Southwark would, I think, not be thanked by other local authorities for having persuaded this court that it either could not or should not entertain an appeal. The issue, in other words, is a substantial and important one from both sides’ point of view.[17]The closest Mr Broatch has been able to come to finding support for his alternative submission is the dissenting judgment of Simon Brown LJ (as he then was) in R v Holderness BC ex parte James Roberts Developments Ltd [1992] 66 P&CR 46. But even Simon Brown LJ accepted that any power there might be to decline to entertain the residual issue on costs would not be aptly exercised where a point of general importance arose. For the reasons I have given this is such a case. Reasons.[18]Ms Prevatt for her part is concerned at the want of any express reasons for the judge’s decision. It is submitted on the basis of English v Emery Rheinbold [2002] 1 WLR 2409 that the judge was under an obligation to explain in at least short form why she considered that no order for costs was appropriate. This seems to me, with respect, to be right even -- one might in fact say especially -- where by consent submissions have been confined to writing. The parties were entitled to some indication, however brief, of why it was that the judge preferred Southwark’s submission that there should be no order for costs to the appellants’ submission that the costs should be theirs.[19]Rightly, however, neither side has proposed that we would be justified in remitting the case for reasons to be provided. Ms Prevatt’s submission is that the absence of reasons entitles this court to substitute its own decision. If, alternatively, the absence of reasons is taken as implying that Southwark’s written submission had been accepted, then Ms Prevatt submits that the judge was so plainly wrong to accept that submission that this court can and should overset her decision, discretionary though it was.[20]Unless the judge simply wrote off the arguments as intractably contradictory (and there is no evidence that she did; nor would she have been justified in doing so), she will have evaluated them against the documents on file. That would, I think, have shown among other things the following:(a) The respondent council asserted that all that it had been told was that the first appellant had resigned from his job. Without an explanation, that did not bring him within Regulation 6(2)(a) of the EEA regulations. Ms Prevatt submits that it was made perfectly clear by the letters of the solicitors instructing her on 24 and 25 April, a full week before the judicial review claim was issued, that the appellant had resigned from his job because of an arm injury. A swift perusal of the correspondence shows that this is undoubtedly right.(b) The respondent now submits by way of Mr Broatch’s skeleton argument that:
“…there was a factual dispute or certainly an issue about the circumstances in which [the first appellant] left his job. If an employee resigns he may well be ‘voluntarily unemployed’. There is a difference between: (i) resigning because of a possible injury; (ii) being suspended from work because of injury; (iii) being laid off from work because of an injury; and (iv) being dismissed because of an injury; In cases (ii) and (iii) of course, the contract of employment subsists.”
Of course these things are different, and of course the second and third of them do not necessarily bring the contract of employment to an end. But the first, if one omits the mysterious word “possible”, does, and that is what the local authority had been told was the case here. It may well be that they were entitled to some time to check whether it was so, but this they had already done: their letter of 23 April recorded that the first appellant’s employers had confirmed the reason for his resignation. It cannot possibly follow, therefore, as Mr Broatch goes on to contend that it does, that there continued to be in this situation “a legitimate basis for the s.184 decision-making officer concluding that the appellant was voluntarily unemployed.” (c) For these and the reasons of law touched on earlier in this judgment the respondent council had visibly no answer to the claim for judicial review. (d) For the reasons I have given, the claim was not issued prematurely. On the contrary, it was issued at the last moment consistent with the solicitors’ duty to their clients.[21]Mr Broatch nevertheless urges that we ought not to intervene in what is an inherently discretionary decision. He draws our attention in particular to this court’s decision in R(Scott) v LB Hackney [2009] EWCA Civ 217. A judicial review claim had been compromised at a late stage, leaving only costs in issue. Having considered written submissions, the Deputy High Court Judge made no order for costs and gave short written reasons for his decision. They ended:
“I cannot confidently conclude that the claimant would have succeeded on its core claim if the matter had proceeded to a final hearing, and, taking account of the need not to discourage reasonable settlements, the fair course is to make no order for costs.”
[22]Hallett LJ at paragraph 48 of Scott expressed the view that no costs was on any view the right order. At paragraph 51 she made these general observations, with which the other two members of the court agreed:
“… when an application for costs is made, a reasonable and proportionate attempt must be made to analyse the situation and determine whether an order for costs is appropriate. I emphasise a reasonable and proportionate attempt, bearing in mind the pressures on the Administrative Court, yet another hard pressed institution. A judge must not be tempted too readily to adopt the fallback position of no order for costs.”
[23]To this valuable guidance one should add, as Hallett LJ did, the formulation of Scott Baker LJ (as he then was) in R(Boxall) v LB Waltham Forest[2001] 44 CCLR 258, paragraph 22:
“(i) the court has power to make a costs order when the substantive proceedings have been resolved without a trial but the parties have not agreed about costs. (ii) it will ordinarily be irrelevant that the Claimant is legally aided; (iii) the overriding objective is to do justice between the parties without incurring unnecessary court time and consequently additional cost; (iv) at each end of the spectrum there will be cases where it is obvious which side would have won had the substantive issues been fought to a conclusion. In between, the position will, in differing degrees, be less clear. How far the court will be prepared to look into the previously unresolved substantive issues will depend on the circumstances of the particular case, not least the amount of costs at stake and the conduct of the parties. (v) in the absence of a good reason to make any other order the fall back is to make no order as to costs. (vi) the court should take care to ensure that it does not discourage parties from settling judicial review proceedings for example by a local authority making a concession at an early stage.”
[24]Applying this approach to the present case, it seems to me that this was a case in which it was plain at the point of time at which it came before Dobbs J that the appellant would have won, because it was clear from the decision letter that Southwark had not applied the correct test in reaching its decision and that the test, if correctly applied, would have resulted in the family being accommodated. It was also apparent that the reason why the case had been compromised was that the local authority had conceded as much, first in substance by offering to continue temporary accommodation and then in principle by reversing the section 184 decision on review. This entailed and entails no criticism of the local authority’s officers, who had plainly acted conscientiously throughout but who understandably, in view of the complexity of the legislation, had got it wrong. Nor does it involve any criticism of the local authority’s lawyers, who sensibly stopped the escalation of costs by taking a realistic view of the case at an early stage. But by then some costs had already been incurred by the appellants and because they had been incurred reasonably and timeously they were in principle recoverable.[25]In my respectful judgment Dobbs J should so have held. There was no sufficient reason in the documents before her to resort to the default position of no order as to costs. I would allow the appeal accordingly and would substitute an order that the appellants do recover their costs of the judicial review proceedings.[22]I agree. There is nothing I wish to add.

Order

Appeal allowed

Cited in 3 later judgments