Kelly, R (on the application of) v London Borough of Hammersmith & Fulham [2004] EWHC 435 (Admin)

Case No CO/3487/2003

[2004] EWHC 435 (Admin)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

THE ADMINISTRATIVE COURT

Venue Royal Courts of Justice

Date Monday, 26 January 2004

Strand

London WC2

B E F O R E:

MR JUSTICE WILSON

Between

THE QUEEN ON THE APPLICATION OF KELLYClaimant

-v-

Between

LONDON BOROUGH OF HAMMERSMITH & FULHAMDefendant

Computer-Aided Transcript of the Stenograph Notes of

Smith Bernal Wordwave Limited

190 Fleet Street London EC4A 2AG

Tel No: 020 7404 1400 Fax No: 020 7831 8838

(Official Shorthand Writers to the Court)

MR EDMUND ROBB (instructed by William Sturges, London SW1H 0QY) appeared for CLAIMANT

MR NORMAN JOSS (instructed by Thomas Watts & Co, London W8 4LF) appeared for DEFENDANT

J U D G M E N T

Monday, 26 January 2004

[1]MR JUSTICE WILSON: The claimant, Mrs Kelly, applies for judicial review of the decision by the London Borough of Hammersmith and Fulham ("the local authority") on 23 April 2003 not to apply for the vacation of a caution registered in its favour against property owned, or partly owned, by the claimant at 11 Ivatt Place off the Northend Road in Fulham.

[2]The issue arises in respect of accommodation provided by the local authority for the claimant's mother, Mrs Herbert, in the last 18 months of her life prior to her death on 31 August 2002, at its Goldhawk Road Elderly Persons' Home.

[3]Subject to an accommodated person's ability to pay and subject to a deduction for the first £19,000 of that person's capital the local authority has a duty under section 22(1) and (2) of the National Assistance Act 1948 to charge such a person the full cost of the provision of such accommodation.

[4]While Mrs Herbert lived in the home, she was assessed to pay an almost nominal sum towards the costs of the accommodation there. Since her death the local authority has computed the balance owing in respect of accommodation provided to her as being in the sum of £46,182.

[5]Following Mrs Herbert's death the local authority discovered that she had during her life been registered as a legal joint tenant owning the property at 11 Ivatt Place and so it placed a caution against dealings on the register referable to that property pursuant to what was then section 54 of the Land Registration Act 1925.

[6]As I will explain, the claimant objected to and objects to that caution. She alleged that Mrs Herbert had no beneficial interest in the property and that she held her joint legal interest in trust for herself, the claimant. To date, however, the local authority has declined to accede to the demands on behalf of the claimant to apply for the vacation of the registration of its caution.

[7]In these proceedings the claimant alleges that the local authority's decision not to apply for vacation of the caution is unlawful; and she seeks a declaration that the caution is unlawfully registered and should be lifted.

[8]Towards the outset of the oral arguments today I articulated to Mr Robb, counsel for the claimant, a preliminary concern about the vehicle which the claimant has chosen for the advancement of her protest about the alleged inaptness of the local authority's caution. For there is a recognised procedure for challenging the propriety of a caution. It is apparently still to be found in section 56 of the Land Registration Act 1925 which, so Mr Joss tells me, has survived the almost entire repeal of that Act by the Land Registration Act 2002. Section 56 provides:

"Any person aggrieved by any act done by the registrar in relation to a caution under this Act may appeal to the court in the prescribed manner."

[9]My view is that it would have been far preferable for the claimant, who wishes to assert that the caution has been wrongly registered on property which she alone owns and that it is reflective of a debt which is not payable by her and cannot be enforced against her property, to have used the procedure of application to the court under section 56 of the 1925 Act. Then of course the local authority could have defended the claim on the basis that the caution was validly registered because the deceased, Mrs Herbert, did have an interest in the property and did owe a debt to the local authority, which, when converted into a judgment, could be enforced by a charge on her interest in the property. Had the proceedings taken that form, the court could have determined the essential issue, namely, whether the deceased had a beneficial interest in the property as well as a legal interest. There would have been affidavits. There would have been not just requests by the local authority for disclosure but orders for disclosure. There would have been oral evidence given, certainly by the claimant and perhaps by others; and cross-examination delivered to her and perhaps to them. None of this is available in the present proceeding.

[10]This court is asked, as I consider, not directly to investigate the real issue but to declare as a paper exercise that the local authority's decision not to apply to vacate its caution was unlawful. I must say that, had I had any dealings with this case at any stage earlier than today, I might have wished to stay it or at least to give directions for the appropriate applications to be made and to be consolidated with it. But it is too late for all that.

[11]It did seem to me that, at times in his quite excellent submission, Mr Robb hit the buffers inherent in this public law enquiry only until the lawfulness of the local authority's decision not to lift its caution; and at times as I think he almost slipped into inviting me to draw conclusions as if I was the essential finder of fact, which I am not.

[12]What history is relevant to my limited decision? It is this:(a) In about 1968 Mrs Herbert and her husband moved into the property at No.11. Their daughter, the claimant, was then aged 7 and moved in with them. The three of them continued to live there. When she became an adult, the claimant remained living there. In due course, namely in 1989, the claimant had a son, Dean, and he also lived there.

(b) The property was council accommodation and during his lifetime Mr Herbert, husband of the deceased, was the tenant.

(d) In 1997 the claimant married. Her husband, Mr Kelly, came to live in the property with the claimant, with Dean, and with Mrs Herbert. Unfortunately since that time her husband has separated from the claimant and has left the property.

(e) For four years after the death of Mr Herbert the rent on the property was paid out of the claimant's bank account. At that time she was earning a good salary and her salary was being paid into the bank account. Mrs Herbert's only income was the state retirement pension. Mr Robb tells me on instructions that Mrs Herbert's pension was also paid into the claimant's bank account but that the claimant would pay her mother, Mrs Herbert, an equivalent sum in cash for her to deploy. How did she deploy it? There is no answer in the material before me. Perhaps it is a sensible guess to say that she will have spent that small amount of money one way or another for the benefit of the household.

(f) Late in 2000 Mrs Herbert, as a secure local authority tenant, applied to buy the property under the Right to Buy provisions of the Housing Act 1985. The papers relating to her application to the local authority are unfortunately not in evidence and would no doubt be produced in any enquiry which had as its centre the need to find facts. But it appears that Mrs Herbert used the right given to her under section 123 of the Act to require that the claimant, in her capacity as a member of her family who had been residing with her for more than one year, should share the right to buy with her.

(g) It appears that the freehold interest in the property was valued at that time in the sum of £120,000 and that, by virtue of the length of her and her deceased husband's tenancy of the property, Mrs Herbert was entitled under section 129 of the 1985 Act to a discount off that price of £50,000.

(h) The balance of £70,000 was borrowed by the claimant on mortgage. Although she was the sole borrower, she and Mrs Herbert jointly executed a mortgage over the property to secure that borrowing.

(i) The purchase was effected by a transfer dated 27 November 2000. It was the claimant who paid the legal and other incidental costs of purchase amounting to about £1,000. As I have said, the claimant and Mrs Herbert were the joint transferees of the freehold interest in the property. Paragraph 12 of the transfer form is designed to obviate issues as to the extent of equitable interest in cases of joint legal ownership. Paragraph 12 says:

"Declaration of trust. Where there is more than one transferee place X in the appropriate box."

Then the first box is delineated. Against that box is the sentence:

"The transferees are to hold the property on trust for themselves as joint tenants."

Then the second box is delineated. Against that box is the sentence:

"The transferees are to hold the property on trust for themselves as tenants in common in equal shares."

Then the third box is delineated. Against that box is the sentence:

"The transferees are to hold the property (complete as necessary)."

It is highly unfortunate that none of the three boxes was crossed. Conveyancers are repeatedly urged by the courts to ensure that, where legal title is taken by more than one person, the beneficial ownership is thus spelt out. I suppose conveyancers could respond that, if their instructions on the point are silent, they cannot do much to make the situation clear. However that may be overcharitable in any particular case. The result of the failure to place X in any of the three boxes is this, and perhaps more, litigation in this one case. (j) Just before the transfer on 27 November 2000, namely earlier in that month, Mrs Herbert, then aged 70 and in poor overall health, had a fall and was taken to Charing Cross Hospital. As things turned out, she was never to return home. She was moved at one point to St Mary's Hospital and then in March 2001 she went to the Goldhawk Road Elderly Persons' Home run or on behalf of the local authority, where, as I have said, she stayed until her death in August 2002. (k) At all times since that purchase the claimant has discharged the mortgage instalments out of her own resources without any contribution by Mrs Herbert even during her lifetime. (l) Prior to her move into the elderly persons' home a form about Mrs Herbert's financial circumstances was completed by or on her behalf. It made no reference to any ownership of any interest, legal or beneficial, in No.11. So the charge made for the accommodation during her lifetime was the nominal charge referable to her exiguous state retirement pension. (m) After her death the local authority caused a search to be made at the Land Registry and discovered that No.11 was held as a matter of law in the ownership of the claimant and of the deceased; so it reassessed the deceased so that she should pay the balance allegedly owing referable to accommodation, namely £46,182. It also caused a caution to be placed on the proprietorship register referable to the property on 5 December 2002. (n) From November 2002 to July 2003, when these proceedings were launched, there was correspondence between the claimant's solicitors and the local authority. (o) Mr Robb criticises the stance taken by the local authority early in the correspondence. For example he has pointed out a simple error which they made in a letter dated 19 November 2002. In that, however, the assault in these proceedings is on the validity of a decision reached in April 2003, it seems to me that errors articulated in November 2002, unless repeated, have little logical impact upon the validity of the later decision. It is quite clear that that particular error was perceived to be such by the local authority prior to April 2003. (p) In a letter dated 13 February 2003 the claimant's solicitors said on her behalf:

"The purchase under the 'Right to Buy' scheme was essentially made at that time because in the middle of 1999 Mrs Herbert was becoming particularly frail and ill. The Council's Social Services Department had been involved in supplying equipment to the property to enable Mrs Herbert to use the stairs there but, in fact, this did not cure the problem as Mrs Herbert proved too frail to negotiate the stairs by herself which staircase had been of such construction that it was not possible for a chairlift to be fitted. As a result of her condition Mrs Kelly and her mother discussed the situation and reached the conclusion that as Mrs Herbert would have to move into a nursing home then Mrs Kelly and her son would, as a result, have nowhere to live because they would then have to move out of the property as they did not have security. Mrs Herbert and her daughter made the decision that Mrs Herbert should exercise her right to buy and they accordingly proceeded on that basis. The property had to be put in the joint names of both parties because it was Mrs Herbert's right that was being exercised. As Mrs Kelly was ... earning a salary of £29,000 per annum she could support the one hundred per cent mortgage of £70,000 needed for the purchase at the price of £70,000. The reason for the purchase was to provide a home for both Mrs Kelly and her son ... ... It is quite clear that the purpose of the purchase was to provide a home not for Mrs Herbert but for her daughter and grandson ... In all the circumstances not only are we of the view that Mrs Herbert's interest in the property was of nil value, it is our opinion that the purchase was made for the sole purpose of providing a home for our client and her son and not for her mother, who at the time that the purchase was contemplated was no longer able to live other than where she could be provided with the appropriate nursing care." (q) In a reply dated 23 April 2003, received, according to the claimant's former solicitors, only on 30 June 2003, the local authority said: "

The legal advice given to date is that on the information currently available there is not sufficient evidence to contradict the presumption that Mrs Herbert had a beneficial interest in the house. Nor that if she had an interest that interest should be valued at nil or below the £19,000 threshold. However it may be that you are able to provide further information regarding these two issues. If so can you please write to the Head of Legal Services at London Borough of Hammersmith and Fulham ... Useful submission would include: (1) Beneficial ownership issue: (i) objective evidence of intention, eg instructions to or advice given by [the solicitors representing the claimant and the deceased in the purchase] or a statutory declaration from the lawyer there who handled the purchase (ii) documentary evidence of the alleged agreement between mother and daughter, eg letters, proposed tenancy agreement to regulate Mrs Herbert's continued occupation (iii) copy of any return of her assets made to the probate office after Mrs Herbert's death. (2) Valuation issue: ..." (r) The response of the claimant's solicitors to that demand for further evidence was that the local authority were asking for evidence which it knew did not exist and that an application for judicial review would be issued.

[13]Charges to be made for accommodation provided under section 22 of the 1948 Act are governed by the National Assistance (Assessment of Resources) Regulations 1992. Furthermore, in the exercise of his powers under section 7(1) of the local authority Social Services Act 1970, the Secretary of State has issued guidance entitled "Charging for Residential Accommodation Guide ["CRAG"]."

[14]The general effect of the guide is that local authorities are advised in certain respects to take a softer approach to the availability of a person's home as a source of payment for accommodation charges owed by that person than would be expected of a commercial creditor: for example if the person's stay in local authority accommodation is temporary; or if her ownership is of property which is occupied by a third party. In particular, as I shall show in a moment, guidance is given about the proper approach by a local authority to the valuation of an accommodated person's shared interest in a property. It seems that an accommodated person is not expected to force a sale of the property over the heads of other family members who may be in occupation there in order to realise her or his interest and pay her or his debt to the local authority for accommodation. A softer approach is taken, as I will show, in that the person accommodated who owes the money is expected not to force a sale on the open market but to seek to sell the property even perhaps at under-value to another family member.

[15]Great reliance is placed by Mr Robb upon paragraphs of this guide. The paragraphs which are relevant, or arguably relevant, to this claim are paragraphs 7.009 to 7.014A. They provide:

"Property to be taken into account Legal and beneficial owners 7.009 The treatment of property will depend on whether the resident is a legal or a beneficial owner. A legal owner is a person in whose name the property is held. A beneficial owner is one who is entitled to receive the profits or proceeds of property. In most cases the legal and beneficial owners will be the same person but, where this is not the case, the value of the property will be valued according to the following paragraphs. Legal ownership 7.010 For the purposes of assessing the resident's ability to pay a charge no account should be taken of the value of a property where the resident is a legal owner but has no beneficial interest in the property, ie the resident is holding the property on trust for the beneficial owners and has no right to the proceeds or profits should the property be sold. Beneficial ownership 7.011 Where the resident is the sole beneficial owner of a property the capital value should be taken into account in full... Joint beneficial ownership of property 7.012 Where a resident is a joint beneficial owner of property, ie he has the right to receive some of the proceeds of sale, it is the resident's interest in the property which is to be valued as capital, and not the property itself. The value of this interest is governed by 1. the resident's ability to re-assign the beneficial interest to somebody else 2. there being a market, ie the interest being such as to attract a willing buyer for the interest. 7.013 In most cases there is unlikely to be any legal impediment preventing a joint beneficial interest in a property being re-assigned. But the likelihood of there being a willing buyer will depend on the conditions in which the joint beneficial interest has arisen. 7.014 Where an interest in a property is beneficially shared between relatives, the value of the resident's interest will be heavily influenced by the possibility of a market amongst his fellow beneficiaries. If no other relative is willing to buy the resident's interest, it is highly unlikely that any 'outsider' would be willing to buy into the property unless the financial advantages far outweighed the risks and limitations involved. The value of the interest, even to a buyer, could in such circumstances effectively be nil. If the local authority is unsure about the resident's share, or their valuation is disputed by the resident, again a professional valuation should be obtained. 7.014A If ownership is disputed and a resident's interest is alleged to be less than seems apparent from the initial information, the local authority will need written evidence on any beneficial interest the resident, or other parties possess. Such evidence may include the person's understanding of events, including why and how the property came to be in the resident's name or possession. Where it is contended that the interest in the property is held for someone else, the local authority should require evidence of the arrangement, the origin of the arrangement and the intentions for its future use. The law of equity may operate to resolve doubts about beneficial ownership, by deciding what is reasonable by reference to the original intentions behind a person's action, rather than applying the strict letter of the law."

[16]It is important to stress that in my view these provisions do not, as Mr Robb came close to submitting, replace the general law as to the existence and extent of equitable interest in property. These provisions supplement the general law in the case of local authorities charging for accommodation: they inform the application of the general law to such cases.

[17]I have already remarked, and now I have made good my remark by reference to the paragraphs, upon the appropriately soft approach to the quantification of the value of a person's interest in her or his home when the interest is one of a number of interests in the home. That guidance as to the quantification of the value of a shared interest seems to me not to be a matter which is directly raised in these proceedings. These proceedings concern the issue of principle as to whether the local authority was within its lawful rights in considering that it could allege, and seek by continuing caution to protect, its rights against the existence in Mrs Herbert of a beneficial interest in the property. Such then is the background to the defendant's decision not to apply in April, or since then, for the vacation of its caution.

[18]On behalf of the claimant Mr Robb submits that on the evidence presented to the defendant there was only one possible conclusion, namely that Mrs Herbert had no beneficial interest in the property. He says, because he has to say so in proceedings such as this, that it was perverse and irrational and thus unlawful for the local authority to take any other view and thus for it not, after February 2003, to cause its caution to be vacated.

[19]As I have observed, most unfortunately there was no express declaration of the beneficial interests owned by the legal joint tenants. So what is in play in a case such as this is the principle described by Dillon LJ in Springette v Defoe

[1992] 2 FLR 388

at 392 that:

"...in the absence of an express declaration of the beneficial interests, the court will hold that the joint purchasers hold the property on a resulting trust for themselves in the proportions in which they contributed directly or indirectly to the purchase price, unless there is sufficient specific evidence of their common intention that they should be entitled in other proportions - eg in equal shares notwithstanding unequal contributions - to rebut the presumption of a resulting trust."

[20]In these proceedings the claimant has continually protested that she provided all the purchase money for the purchase of No.11, namely £70,000, by the borrowing on her part which at all material times she alone has serviced. But at least today Mr Robb has been constrained to accept that the analysis cannot be as simple as that: for this property, when bought, was worth £120,000; a discount off the price of £50,000 was granted; and it was granted to Mrs Herbert because of the length of her tenancy and, prior to that, her husband's tenancy of No.11.

[21]There is clear authority that the entitlement to a discount is a contribution not to the price - because the discount lowers the price - but to the value of the property. The clearest authority is the very case of Springette vDefoe. That was a dispute between cohabitants. The woman had been a council tenant for many years. Just prior to the purchase of the freehold from the local authority her cohabitant became joint tenant under the tenancy of the property. (The claimant in the present case never became a joint tenant of the property during the local authority's ownership thereof and so the man's case in Springette v Defoe would seem, prima facie to be, if anything, slightly stronger than that of the claimant). At all events, after the man had become a joint tenant with the woman of the property, the two tenants exercised the right to buy. The property was valued at £24,000 but because of the woman's long tenancy a discount of 41 per cent, namely £10,000, was granted by the local authority. So the price payable was only £14,000, to which the woman contributed £8,000 and the man contributed £6,000. The Court of Appeal held that the woman had contributed £18,000 so had a 75 per cent interest in the property. It held that the value of the discount to which she was entitled was part of her contribution. At page 395 Steyn LJ (as he then was) said:

"Given that no actual common intention to share the property in equal beneficial shares was established, one is driven back to the equitable principle that the shares are presumed to be in proportion to the contributions. If the matter is approached in this way, it seems to me right in principle that the discount of 41 per cent should be regarded as a direct contribution by the woman to the purchase. That is how Mr Bush J, a most experienced judge, approached the matter in Marsh v Von Sternberg [1986] 1 FLR 526. And that is how I consider this court should approach the matter."

[22]That decision was followed by the Court of Appeal in Evans v Hayward

[1995] 2 FLR 511

, which again was a situation where joint council tenants were buying the freehold at a discount granted by reference to the long tenancy history of just one of them. In that case Staughton LJ said at 516H that, while it was right to take the discount into account, it could not be regarded as a contribution to the actual purchase price and that perhaps it was preferable to treat it as giving rise to an inference that the two purchasers had agreed that it should be treated as a contribution by the party entitled to the discount. There is no need for me to dwell today upon the theory behind the legal relevance of the entitlement to the discount. Nobody, of course, is suggesting that it is a contribution to the price: but it is surely a contribution which has substantially increased the value of the asset.

[23]Thus, as today Mr Robb accepts, there is clear authority that, when applied to this case, the discount offered to Mrs Herbert, prima facie and on a resulting trust basis, gave her a 5/12 equitable interest in the property. Now, as I have made clear from my initial quotation from the judgment of Dillon LJ in Springette, that conclusion can be displaced by what he describes as sufficient, specific evidence of common intention that the entitlement should be otherwise than in the proportions suggested by the resulting trust principles. But in this claim Mr Robb has to say that the evidence that it was not mutually intended that Mrs Herbert should have any equitable interest is not only clear but so overwhelmingly clear that the local authority's registration of its caution and refusal to vacate it was capricious, irrational and unlawful.

[24]It seems to me that at this stage in my judgment I must be careful what I say: for, in the light of the decision which I am shortly to announce, there may be further proceedings in which the claimant may be able to establish that an agreement between her and Mrs Herbert should be notwithstanding that Mrs Herbert was the legal owner and that on a resulting trust basis a 5/12 owner, she was to have no beneficial interest in the property. But at this stage of the enquiry it is far from clear that that is the position. Indeed it is far from clear that the claimant is even alleging, otherwise than through her able advocate, that such is the position. In the letter dated 13 February 2003 she said through solicitors that it was intended that the property should be a "home" for herself and her son and not at all for Mrs Herbert. I note in parenthesis that, in a statement made in these proceedings dated 23 July 2003, she said that it was not envisaged that Mrs Herbert would occupy the house "for any length of time". At all events for the claimant to say that the intention behind purchase was to secure a house, whether wholly or primarily, for her occupation and that of her son, does not, as Mr Joss has submitted to me, carry the claimant's case as far as Mr Robb would wish. If that assertion is true, it may well be that there was an arrangement between the joint owners that Mrs Herbert would be unable, whatever her circumstances, to demand a sale of the property over the heads of the claimant and the son. It would be what Mr Joss has described as a purpose trust. But to say that the intention behind purchase was that No.11 should be a home for the claimant and the son is not the same as to say that the intention behind the purchase was that the property should be owned beneficially only by the claimant and not at all by the person who had contributed 5/12 of its value.

[25]The claimant has also pressed the fact that she alone has been responsible for the mortgage instalments since the purchase of the property. Of course she has: that is why at all events she has a 7/12 interest in the property. That mortgage borrowing on her part is to be taken, for the purposes of an analysis of equitable interest, as her contribution.

[26]Where, asks Mr Joss rhetorically, does the claimant say through solicitors at any time prior to the decision in April 2003, or for that matter in her statement dated 23 July 2003, words to the effect "My mother and I agreed that she would not be for practical purposes the owner of any part of this property"? She does not say so; and the box in the transfer form which would have made that clear was not ticked. Where, says Mr Joss, is the file of the conveyancing solicitors instructed by the claimant and Mrs Herbert at the end of 2000? It was requested by the local authority in the letter dated 23 April 2003. Surely, only three/four years later, the file would still exist. Perhaps that might make clear what the claimant and the deceased intended in relation to beneficial interests. Was, asks Mr Joss, the deceased given any advice before she allegedly surrendered a 5/12 interest in the property to her daughter such that, whatever her future needs and circumstances, she would have no ability to call upon that interest or the proceeds of its sale?

[27]All these questions remain unanswered. Whatever the ultimate conclusion may be in appropriately constituted proceedings, with hopefully extensive disclosure and cross-examination, one matter is, to me at least, quite clear: there has been nothing unlawful to date in the way in which the local authority has proceeded. It has proceeded from the foot of a belated discovery (she not having disclosed it during her life-time) that Mrs Herbert had a legal interest in the property. Behind any legal interest may well prima facie lie a beneficial interest. Then it discovered that, on a resulting trust basis, Mrs Herbert would indeed have a substantial, namely a 5/12, beneficial interest. On that basis, while making clear in the correspondence that it was willing to reconsider its views in the light of further evidence, it decided for the protection of the council tax-payers of Hammersmith and Fulham to put a caution on the property and to retain that caution until the issue should be the subject of consensual disposal or, if necessary, court adjudication.

[28]I dismiss this application for judicial review.

[29]MR JOSS: My Lord, if any application flows from my side we ask for an order for costs against the claimant.

[30]MR JUSTICE WILSON: Can Mr Robb say that if you had put in a better acknowledgment of service, we might not be here?

[31]MR JOSS: My Lord I submit it is not open to him to say that for the simple reason that a decision was made to go to judicial review on the same evidence. The fact that the acknowledgment does not present in the clearest possible way a point will be taken for the defendant preventing the application proceeding, permission being granted, in my submission should not count against the defendant.

[32]MR JUSTICE WILSON: Just looking at it logically, if permission had been refused you might have got a small amount of costs; you would have got your acknowledgment costs.

[33]MR JOSS: Indeed.

[34]MR JUSTICE WILSON: If there had been an application for an oral hearing you might have got those costs but you would not have got anything like the costs you are aspiring to get this afternoon.

[35]MR JOSS: My Lord, if I could put it this way. If no acknowledgment had been put in at all the position would have been the same, in my submission. We would have been here fighting this case subject only to the claimant's deciding, having looked at the evidence again and seeing the skeleton argument in response, it was not appropriate to proceed with it. My Lord, I would submit it would be unfair on Hammersmith and Fulham to prevent them recovering costs because their acknowledgment was not as full as it might have been, because at the end of the considerations the claimant decides whether the claimant wants to proceed and the claimant knows, has always known, what the facts are and has always known what the defendant's position is. It has not changed. It is just unfortunate that the judge dealing with permission was not given all the help that might have been of assistance from the defendant, but I think it would be very harsh on the defendant to make them bear their costs because they did not have it knocked out at the early stage.

[36]MR JUSTICE WILSON: Not only in the acknowledgment of service was the point not taken about a better avenue for a decision of the issue, but there was a hopeless muddle, was there not, about the names of the people? Mrs Herbert was described as Mrs Kelly throughout. The unfortunate judge did not get all that much help.

[37]MR JOSS: There was no obligation to put in an acknowledgment at all, and if the defendant had not put in an acknowledgment there would have been nothing before the judge whatsoever. He would have, one assumes, made exactly the same decision. And it is the fact that there is no obligation to put in points of an acknowledgment would not have prevented legal argument being presented at court.

[38]MR JUSTICE WILSON: Thank you very much, Mr Joss. Mr Robb?

[39]MR ROBB: My Lord, all I would like to point out to your Lordship - because I feel that I should not stray beyond what is proper to point out to you - the only point I would ask really for your Lordship to consider is that the acknowledgment of service due in on 21 August was actually late. I am trying to get the date for you now.

[40]MR JUSTICE WILSON: I probably have that in here. It looks like 26 September to me.

[41]MR ROBB: Yes.

MR JUSTICE WILSON: How does that impact on these costs?

[43]MR ROBB: The acknowledgment of service is meant to be in on time, and my understanding is, although it may take a few minutes to take you to the right place, is that you are entitled to consider, first of all as a general rule, the conduct of the case - and I may come to the various points on that - in coming to a decision on costs. But there is specific provision for you to consider late filing of acknowledgment of service. It is 54.9 in the Civil Procedure Rules. It says:

"The court may take failure to file acknowledgment of service into account when deciding what order to make about costs."

[44]MR JUSTICE WILSON: It has not failed to file it. It has just filed it late.

[45]MR ROBB: Yes, that is the point though, my Lord. The rule sets out consequence for a defendant or an interested party failing to file an acknowledgment of service in accordance with Rule 54.8, which says it has to be done within 21 days of service of the claim form. And this was a late filing of the acknowledgment of service. There was also a late filing of the skeleton argument. The skeleton arguments reached both the court and the Council on the 23 -- it was sent on 23 December from my chambers to the defendant council, and instructing solicitors also spoke to solicitors on the other side on that day to say that it had been sent through by fax. There has been some dispute about this, because the claimants filed their skeleton late saying that they had not got it on the 23. But I am instructed to inform your Lordship that that is something in issue. Your Lordship is entitled - I am sure I do not need to take you to the provisions - to consider the general conduct of the case, and I do not want to take it too far, but simply to ask you to bear in mind those two points.

MR JUSTICE WILSON: Thank you very much indeed.

[47]MR JOSS: My Lord, can I just respond to those two points -- the factual issues. The position I understand is that my instructing solicitor did not receive the skeleton, although my learned friend says there was conversation. We had a conversation, I am told, in which he was told that it would be coming, which he never saw it, and it was me calling for it on my return to chambers that prompted, I think, my learned friend to ensure that it was sent down to me immediately. I then responded to it and I think turned it round on the same day. That would have been just ---

MR JUSTICE WILSON: How late was the filing of your skeleton argument, whatever the background?

[49]MR JOSS: It was a matter of a few days - no more, and I think a couple of days at most would be the answer to that.

MR JUSTICE WILSON: What about the late filing of the acknowledgment?

[51]MR JOSS: My Lord, again I submit it does not take us any further because the reason this case has failed is because the evidence presented in support of it just is not good enough to establish as being appropriate for this tribunal, for the admission in court today. My Lord, we have arrived at a position where it should never have been here in the first place. If the claimant, I say again, had not even bothered to put in an acknowledgment -- you will see that as long as 54 -- that he may not take part in deciding whether permission should be given. So there will be no input at all from the defendant's side on that.

[52]MR JUSTICE WILSON: If you had not put in an acknowledgment, you really would have been in difficulties on costs, and I would have been fully entitled under 54.9(2) to take account of the fact that you had not made your points in a timely manner, Mr Joss, would I not?

[53]MR JOSS: My Lord, yes, I certainly accept that.

[54]MR JUSTICE WILSON: So what is the difference between failing to file an acknowledgment of service and putting one in which does not take an important point that might have arrested the case?

[55]MR JOSS: Well, my Lord, then I will change tact on that and say my submission is that the one point missing from the acknowledgment, in my submission, we would say there was sufficient material in the acknowledgment to resist the application for permission, which failed. And what your Lordship is doing is considering whether had your Lordship been reviewing it, receiving additional paragraph pointing out that it was the wrong -- specifically saying this is the wrong tribunal for this exercise, would have swayed in favour of the defendants or preventing permission being granted. My Lord, I simply say that -- it is something obviously you can take into account, but I would submit that the problem here is the making of application which should not have been made to this court, and certainly in making it, not presenting the evidence that was sufficient to substantiate it.

MR JUSTICE WILSON: Thank you very much, Mr Joss. (JUDGMENT ON COSTS)

[57]MR JUSTICE WILSON: The Local Authority asks for its costs and, if I accede in principle to the request, I suppose I may be asked to look at a schedule of costs, but I am asked to deal with the question of principle first.

[58]Faced with the fact that his claim has failed, Mr Robb points to the facts that the acknowledgment of service was some four or five weeks late (during the long vacation) in being filed and that Mr Joss' skeleton argument was also somewhat late. Mr Joss says that no obloquy should attach to him or his side for the lateness of the skeleton argument because the skeleton argument by the claimant had not been served upon him as it should have been. Be that as it may, the slight lateness of the skeleton seems to me to have no causal nexus with the fact that these costs have been incurred. Nor does the lateness of the filing of the acknowledgment have a causal nexus with the costs that have been incurred. I have been discussing with Mr Joss, although Mr Robb has not adopted this point and I think probably wisely, whether the claimant could be protected from having to pay costs by reference to the fact that the acknowledgment of service and the detailed grounds attached thereto, not only got into a frightful muddle and would have confused any judge looking at the matter on papers in terms of the names of the claimant and Mrs Herbert, between whom it was vital to differentiate, but did not take the point which has so exercised me, although it has not been determinative of the adjudication, namely that there was another better procedure for resolving the dispute between these parties. It crossed my mind that, had that point been clearly taken, it might have led to a refusal of permission and a stemming of the haemorrhage of legal costs. But sitting back, looking at the matter in the round, one cannot escape the fact that the claimant has brought a misconceived claim and should in principle pay the local authority's costs incurred in exposing it as misconceived. Yes, Mr Joss?

[59]MR JOSS: My Lord, I think schedules are exchanged. Can I ask whether your Lordship has had a copy?

MR JUSTICE WILSON: Yes.

[61]MR JOSS: Your Lordship will see that the total claim amounts to £5,628 for the claimant's(sic) side, as opposed to £13,692 on the defendant's side -- the claimant's side, I apologise. The hourly rates are significantly different and you will see in the usual way that the (inaudible) rates are very reasonable.

[62]MR JUSTICE WILSON: It may be the difference between an in-house legal provision and a commercial provision.

[63]MR JOSS: I think it is. I was simply going to say that one looks at the rates; they cannot be criticised in my submission, and then the other substantial proportion is me. Your Lordship obviously may take a view on counsel's fees including drafting points of dispute.

[64]MR JUSTICE WILSON: Shall I hear what Mr Robb has to say about that. Mr Robb, what do you say about this as a quantification.

[65]MR ROBB: My Lord, I am under instructions first of all clearly not to object in any way to counsel's fees. The only question I am asked to raise is whether it needed four fee-earners working on this. Otherwise to leave it in your hands, my Lord.

[66]MR JUSTICE WILSON: Well, Miss Blazdell did most of the work. She is a senior legal officer. Mr Barnett helped out, and Miss Mullins, Mr Vyas and Miss Rowe held the fort during illness and holidays. So it is not four fee-earners doing it at the same time. Is that right, Mr Joss?

[67]MR JOSS: That is the point I was going to make. There is no duplication.

MR JUSTICE WILSON: There is not?

[69]MR JOSS: No. Separate work at separate times.

[70]MR ROBB: I do not think that it was intended that I would get that point across - the duplication of work. I totally understand that there may have been filling in at different times.

MR JUSTICE WILSON: I think so.

[72]MR ROBB: So I am in difficulty, my Lord.

[73]MR JUSTICE WILSON: Mr Robb, I am terribly sorry but I do not think I can challenge this figure. I really do not think that it is right to take a broad sweep and say that the local authority should have say only 90 per cent of it. I think that they should have 100 per cent. I condemn the claimant to pay £5,628 in respect of costs.