Smoke Club Ltd, R (On the Application Of) v Network Rail Infrastructure Ltd [2013] EWHC 3830 (Admin)

[2013] EWHC 3830 (Admin)Case No CO/4785/2013
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
Venue Royal Courts of JusticeDate Tuesday, 29 October 2013
Strand
London WC2A 2LL
B e f o r e:
MR JUSTICE OUSELEY
Between
THE QUEEN ON THE APPLICATION OF SMOKE CLUB LIMITEDClaimantv
Between
NETWORK RAIL INFRASTRUCTURE LIMITEDDefendant
Computer-Aided Transcript of the Stenograph Notes ofWordWave International LimitedA Merrill Communications Company165 Fleet Street London EC4A 2DYTel No: 020 7404 1400 Fax No: 020 7404 1424(Official Shorthand Writers to the Court)
Mr J Lopez (instructed by Goodman Derrick) appeared for ClaimantMr J Maurici QC (instructed by Eversheds LLP) appeared for Defendant

JUDGMENTS 1 to 3: inclusive

[1]MR JUSTICE OUSELEY: This was to be a renewal hearing in relation to the application for judicial review following the refusal of permission on paper. Shortly before this hearing, the claimant served a notice of discontinuance. An issue has arisen as to what costs are payable, both in principle and in quantum.[2]The first argument in relation to costs in principle is whether the rule governing costs on discontinuance applies in such a way as to over-ride the normal practice in judicial review proceedings in relation to renewal hearings.[3]It is well established in judicial review proceedings, as the result of the decision of The Queen on the application of Mount Cook Ltd v Westminster City Council [2003] EWCA Civ 1146, and save in the special circumstances set out in that case, that a successful defendant receives the costs of his acknowledgment of service but does not receive the costs of successfully resisting the grant of permission at a renewed permission and hearing.[4]In CPR 54.16.7 in the White Book, the notes say under the heading 'Costs':
"The claimant will normally be ordered to pay the costs of the defendant to successfully resist the claim for judicial review. Similarly, an unsuccessful claimant will be ordered to pay the costs of the successful defendant. These costs will include the costs of dealing with the claim after permission is granted and costs reasonably incurred prior to the grant of permission, including the costs of serving the acknowledgment of service but excluding the costs of any oral permission hearing see R v Davey (Against Aylesbury Vale DC (practice note) 2008 1WLR 878."
[5]Mr Maurici QC for the defendant contended that the general provisions in CPR 38.61 apply. That provision, certainly in the generality of its language, says that where a claim is discontinued by a claimant, the claimant is liable for the costs up to the date of discontinuance.[6]The question is whether that general provision displaces the Mount Cook provisions where a notice of discontinuance is served by the claimant. In my judgment, it does not do so. The general provision in CPR 38.6 must yield to the specific provisions governing the judicial review claims, as set out in Mount Cook.[7]There are particular reasons for the particular rules governing costs at the paper and oral permission stage in judicial review, which are reflected in the decision and principles in Mount Cook. It would be extremely odd if a claimant could save himself the costs liability by proceeding further with judicial review proceedings so that he failed at the oral renewal stage and did not have to pay the costs of the successful defendant, but was liable to pay the costs that might have been incurred after the acknowledgment of service if he served a notice of discontinuance.[8]If the parties agreed that the claim should be dismissed, it is not said that the normal rule in 38.6 would apply so as to over-ride the Mount Cook principles. An outcome leaving the claimant better off if he incurred greater costs fighting proceedings tells powerfully in favour of the general rule in 31.6 yielding to the specific Mount Cook provisions.[9]I will now hear submissions about their application to this case. (Further argument was addressed to the Court) (JUDGMENT 2 of 3)[10]MR JUSTICE OUSELEY: The next issue before me in this debate about costs is whether in addition to the cost of the acknowledgment of service, however quantified, the defendant is entitled to Mount Cook costs in relation to subsequent events, including events up to the date of notice of discontinuance, on the grounds that the claim was hopeless and was persisted in despite its hopelessness. In other words, Mr Maurici submits that a Mount Cook exception applies.[11]Silber J, in refusing permission, did not cast aspersions on the degree of optimism or otherwise attendant upon the claim but it has fallen to me, without a very full debate on the facts, to form a view as to whether there are any and, if so which, grounds that are hopeless.[12]The case concerned the notice of intention to enter a certain property pursuant to a compulsory purchase order. The first ground was that the purpose for which the land was to be acquired, namely an emergency access, was not the purpose for which the lands acquisition had originally been conceived at the time when the order was made. That is true but irrelevant, so long as the purpose for which the land is being acquired falls within the scope of the order. It manifestly does and it is difficult to see how the considerations prayed in aid by Mr Lopez for the claimant as showing that it might arguably fall outside, could conceivably succeed. That argument was and is hopeless.[13]The second argument is that there are a number of representations, made by employees of the defendant to the claimant, that the defendant would not seek possession of this particular part of the order lands. There is a dispute of fact as to whether any such representations were made and with what significance.[14]Mr Maurici QC says that this was bound to fail because of the application of Oswald v Ayr Harbour Trustees, 8 AC 623 which concerns the way in which those possessed of statutory powers are disabled from acting in ways which conflict with them. It is also pointed out by Mr Maurici QC that the claimant went into possession aware of the risks and indeed urged the use of CPO powers in respect of its occupation in order to generate compensation.[15]I am not prepared to hold that this argument is completely hopeless without a complete understanding, which I do not have, of the scope of the legitimate expectation, however unlikely I regard its success. There must be a distinction between arguability and hopelessness. It is obviously clearly unarguable but whether it is so hopeless is another matter. I am not prepared to hold that it is hopeless.[16]The third ground is that the use of the powers of entry should have been reviewed in the light of the fact that after confirmation of the compulsory purchase order, the claimant, knowing that it was at risk had gone into joint occupation of the property, had invested money in the success of the nightclub and alternatives were being reconsidered by the requiring authority before a notice of entry.[17]That is untenable. It is perfectly clear that the claimant entered at risk, put himself at risk and had no basis for requiring a further consideration by the requiring authority of its use of powers under the CPO. If there is anything in this point it goes to the lack of hopelessness of the unarguable point about legitimate expectation.[18]Ground 3, I regard that as hopeless.[19]Ground 4 is simply a re-hash of the same points under a different guise and adds nothing to which I have not already decided. Therefore, two-thirds hopeless, one third unarguable but not hopeless.[20]Further argument was addressed to the Court

JUDGMENT 3 OF 3

[21]MR JUSTICE OUSELEY: It seems to me that there was a significant amount of material which the defendant had no choice but to read however little weight the claimants say should now be attached to it. This material came in as a reply to the summary grounds of resistance. The defendant was not in a position to respond to that for the purposes of a paper application, otherwise the process would become endless. But nonetheless, upon renewal which followed shortly after, the defendant had no choice but to consider this material.[22]The Mount Cook cost procedure contemplates that a party which has put in an acknowledgment of service and summary grounds for defence has effectively seen the claimant's claim and is not faced with new material which it legitimately has to consider and then respond to for the purposes of an oral hearing.[23]Where that happens, the question of whether those costs, which in the normal order of events would have been incurred at the AOS stage, should be also allowed for is an important issue.[24]It seems to me, consistently with the thinking in Mount Cook, that where that happens the party which has to defend itself further in a way which would have been covered in the AOS, is entitled at least to the costs of the work, it would have them done for the AOS. I do not therefore think that this is a case where costs should be confined to the AOS but should extend to cover one-third of the costs of the post permission costs of the defendant.[25]I also bear in mind that two-thirds of the points are hopeless and were persisted in well beyond the time they should have been disposed of. Unless keeping these proceedings alive for the purposes of negotiating, the claimant could have saved a certain amount of costs at all events by doing earlier what he did very recently.[26]For those reasons, the claimant will pay the defendant's costs of the acknowledgment of service and one third of the subsequent costs subject to detailed assessment, if not agreed.