Notting Hill Genesis, R (On the Application Of) v Camberwell Green Magistrates’ Court (2019) EWHC 1423 (Admin)

I missed this at the time – May this year – I think because I was on hiatus. It is something of an oddity. It may well also be primarily of historical interest in any event, for reasons I’ll explain later.

This was a judicial review of a costs order made by Camberwell Green Magistrates on a settled Environmental Protection Act 1990 s.82 prosecution. The Magistrates had refused to state a case for the consideration of the High Court.

Ms S – the interested party – was a tenant of NHG. She had brought an EPA prosecution against NHG for failure to abate a statutory nuisance. The nuisance alleged was

that a mouse infestation, caused by disrepair to the fabric of the property, had rendered the property prejudicial to health since the end of August 2017. Following a number of interim hearings, the proceedings were compromised by an agreement dated 20 June 2018 that was made shortly before the listed trial. In essence, the Magistrates’ Court proceedings, and any associated civil proceedings, were settled on the basis that Ms Smith would be rehoused and receive damages in the sum of £2,500 compensation.

The settlement terms were also that NHG were “… to pay Clarke Barnes reasonable fees of the prosecution, to be assessed by the Magistrates Court if not agreed”. Costs weren’t agreed and there was a costs hearing at the Magistrates. Both parties were represented, Ms S by her solicitor and NHG by counsel. The Magistrates ordered ordered the claimant to pay £21,052.80 to Clarke Barnes Solicitors, which seems to have been the full costs claimed.

NHG brought the present JR. They argued:

(1) the magistrates’ decision that the total amount payable was reasonable and properly incurred in the proceedings was one that no reasonable court could have reached;

(2) that the magistrates erred by not properly considering whether the legal costs sought were proportionate to the compensation obtained. Instead, they made a finding that there is no “necessary direct correlation” between the compensation paid to Ms Smith and the costs being sought;

(3) the reasons provided by the magistrates were inadequate and demonstrate that they had not properly considered the submissions made by the claimant orally and in writing;

(4) the defendant avers that the power to order payment, under s.82(12) of EPA, is limited to an order that the defendant pay the person bringing the proceedings; the court ordered that the costs be paid to Clarke Barnes. The defendant avers that that was outside their jurisdiction.

At the JR hearing, only NHG were represented. It is usual for the court under review not to participate, but perhaps something of a surprise in the circumstances that nobody attended for the interested party, or indeed had filed any submissions at all in the JR.

On (1) NHG argued that the Mags were wrong to order costs that were ‘obviously grossly disproportionate’. The case had been handled by a Grade A solicitor where it was “a relatively low-value, entirely run-of-the-mill matter that would normally be handled by a paralegal or trainee under the supervision of a junior solicitor”.

Further, the Magistrates had concentrated wholly on the hours claimed, not the rate.

NHG relied on Taylor v Walsall and District Property & Investment Company Ltd (1998) 30 HLR 1062 where it was said:

“Clearly s.82(12) calls for an essentially broad brush approach. It requires only the crudest form of taxation process but, that notwithstanding, whereas here a substantial sum is claimed by way of cost, the Justices must, in my judgment, take proper steps to investigate just how that claim is arrived at and the detailed grounds upon which it is sought to challenge it.

What they must ask is the basis upon which any time or head of cost is said by the respondents not to have been properly incurred, whether wholly or in part. If items of expenditure result from unreasonable conduct of any sort on the complainant’s part, it is not disputed by Mr Singleton that those items can properly be deducted from the bill by the Justices.”

The High Court held

I agree with these criticisms of the Magistrates’ Court decision. In my judgement, the defendant erred in not dealing with the detailed submissions made to it on an individual basis. In particular, I consider the defendant erred in failing properly to consider the submission that the use of Grade A fee-earners for the majority of the work was unreasonable.

On (2), NHG argued that the Magistrates finding that there need be no correlation between the amount of compensation and costs was an error of law.

Mr Mullin (for NHG) accepts that the magistrates were entitled to take into account the non-financial element of the agreement between the parties – but it does not follow, he submits, that there is no need for any correlation between the level of costs and the level of compensation. He submits that the modest level of compensation indicates the level of infestation was not high and, further, it cannot be inferred from the fact that Ms Smith is to be rehoused that that was solely as a result of the mouse infestation. The compromise agreement refers to the settlement of any claim she may have “for disrepair, nuisance or breach of tenancy”, not just arising out of the infestation.

The High Court accepted that it was at least arguable that there was an analogy with civil proceedings, where, as per CPR 44.3(5) costs are proportionate if they bear a reasonable relationship to

(a) the sums in issue in the proceedings;
(b) the value of any non-monetary relief in issue in the proceedings;
(c) the complexity of the litigation;
(d) any additional work generated by the conduct of the paying party; and
(e) any wider factors involved in the proceedings, such as reputation or public importance.

The Magistrates had erred in finding there was no need for a correlation between costs and damages and non-financial compensation.

On ground (3), NHG argued that the Magistrates reasons had failed to address significant issues raised by NHG, namely:
that the order had apparently been made under s.17 of the Prosecution of Offences Act 1985, but that it was in fact made on the basis of s.82(12) of the EPA. This, NHG had argued, limited the prosecutor “to recovering an amount reasonably sufficient to compensate her for any expenses properly incurred by her in the proceedings (s.82(12)). He submitted therefore that the court had no power to award sums in relation to expenses incurred prior to the issue of these proceedings, or indeed for costs incurred after the trial date.”

Secondly, where the costs were so high and the solicitors were instructed under a CFA, the Magistrates should have considered the terms of the CFA.

The High Court accepted these points.

On ground (4) this was largely academic, but “nevertheless, Clarke Barnes are not a party to the litigation and it is therefore unclear on what basis monies can be ordered to be paid directly to them. The compromise agreement expressly states that the claimant agrees to pay Clarke Barnes’ reasonable fees for the prosecution, to be addressed by the Magistrates’ Court, if not agreed.”

In summary:

the magistrates have erred by not considering the individual items challenged, in particular by not dealing with the point made by the claimant as to the use of a Grade A fee-earner throughout the proceedings; by failing to consider the jurisdiction point, and by failing to consider the CFA. If they did consider any of these points, they have failed to give their reasons for any decision they reached in relation to them.

The decision was quashed and remitted to the Magistrates to be heard by a different bench.

Comment

[Update 01/11/2019 To make this case even stranger, it has been pointed out to me that the Magistrates had no jurisdiction to assess the costs at all. Section 82(12) EPA says:

Where on the hearing of proceedings for an order under subsection (2) above it is proved that the alleged nuisance existed at the date of the making of the complaint [or summary application], then, whether or not at the date of the hearing it still exists or is likely to recur, the court [or the sheriff] shall order the [defendant or defender (or defendants or defenders] in such proportions as appears fair and reasonable) to pay to the person bringing the proceedings such amount as the court [or the sheriff] considers reasonably sufficient to compensate him for any expenses properly incurred by him in the proceedings.

There was no hearing for an order under subsection 2, therefore no power for the court to order payment, or to decide on a fair and reasonable proportion. ]

Oh my. It is hard to know where to start. This is such a mix of good points and, well, considerably less good points brought by NHG, but with no-one to argue against them.

It is quite true that, as per Taylor v Walsall, even the ‘crude’ taxation in the Magistrates Court should involve investigation of the costs and attention to the grounds of challenge to them.

It is also clear that it is not akin to detailed assessment, which was where NHG was headed… And the suggestion that an EPA is something routinely done by a grade D paralegal fee earner under the supervision of a grade C solicitor is, shall we say, one of those bad points taken on detailed assessment that doesn’t succeed (but then the Admin court doesn’t do costs assessment). The attendance at court by a grade A rather than send junior counsel point is considerably more valid as an argument, it has to be said.

I am genuinely unsure whether the civil measure of proportionality can or should be imported to criminal proceedings under s.82 EPA. This is something that cries out for proper and detailed argument. What is more, the standard civil measure does not work for EPA proceedings where compensation is not ‘ part of the claim’ but is wholly at the discretion of the Magistrates at trial. That a settlement with payment of compensation was reached does not make an EPA a civil claim. It is a prosecution where a finding of guilt is sought, with an order compelling the remedy of the nuisance.

The jurisdiction point – the extent of costs recovery under the EPA – again cries out for proper and detailed argument. Granted, it is not something the Magistrates should have ignored.

The ‘consideration of the CFA’ point – I am mystified. I can’t think of any basis for that argument. Assuming it was a valid CFA, that is that. NHG don’t seem to have raised validity of the CFA as an argument, just that scrutiny of it should somehow be related to the level of costs sought.

And the ‘costs ordered to be paid to the solicitors’ point, well, NHG had settled on terms that payment would be to the solicitors. Granted, the phrasing would usually be to ‘claimant’s solicitors’ (or prosecutor’s solicitors here) rather than to ‘firm name’ but as that was an agreed term, I’m at a loss as to the point of taking that up in the Admin Court when it was reflected in the Mags’ order.

But there are still other oddities. Why was this pursued as an EPA where the allegation was that the pests entered the property through disrepair to the fabric of the property? That could be a civil disrepair claim and include the infestation as a consequence of the disrepair.

Still, once ‘fitness for human habitation’ under s.9A LTA 1985 applies general to existing tenancies in England, from 20 March 2020, my suspicion is that EPA prosecutions by tenants will become history. S.9A covers all the same issues and more than s.82 EPA, and has the advantage of not being a risky, flawed, easily frustrated criminal procedure. As such, this decision may have a limited period of relevance.