Gemma Court v Beyond Housing Limited. Teesside Combined Court Centre. 12 February 2026. HHJ Robinson BEM. (Copy of Judgment. Our thanks to Andrew Hogan of Hailsham Chambers for circulating it.)
This was a County Court appeal of a first instance decision on allocation and costs. It was a housing conditions claim, initially with works valued at some £1061.34 ex VAT by the claimant’s expert and at £243.16 by the defendant’s expert (NB at National Housing Federation rates). Damages were claimed at between £5,000 and £10,000.
When the claim came before a District Judge for an allocation hearing, it was common ground that the works had been completed (at a date post issue of the claim) Directions to trial on the small claims track were agreed (and allocation to small claims was not appealed). The claimant then raised pre-works costs and asked for an order that these be costs in the case on a fast track basis, referencing Birmingham City Council v Lee (2008) EWCA Civ 891.
The District Judge refused to make such an order, holding that the effect of CPR 26.9 was that once allocated to small claims track, the case had always been a small claim.
The claimant appealed the costs decision arguing that
that injustice would be done to the appellant if she was unable to preserve her entitlement to costs up to 30 September 2024 when repairs were completed. It was said that the starting point for the District Judge should have been Practice Direction 7A and a consideration of the claim form and particulars of claim, and in doing so it would have identified that the normal track at the point of issue of proceedings was the fast track. In respect of Birmingham City Council v Lee, it was submitted to be a binding authority which the District Judge did not apply. The District Judge was said to have erred by failing to apply the structured approach for the exercise of her discretion which emanates from the relevant Protocol, the CPR and Birmingham City Council v Lee.
The Circuit Judge upheld the appeal.
PD 7A provided that small claims was not the normal track where there was a claim for an order for works and either works or damages are estimated to be more than £1,000.
CPR 26.9 provided that small claims was the normal track where the claim includes a claim for works and neither the cost of works, nor damages, exceed £1,000. Otherwise, fast track was the normal track for such claims (up to damages of £25,000).
Birmingham City Council v Lee held that the Pre-Action Protocol (now for Housing Conditions Claims in England), which provided
“If the tenant’s claim is settled without litigation on terms which justify bringing it, the landlord will pay the tenant’s reasonable costs”.
In Birmingham v Lee, an order allocating to the small claims track, was varied to add
“Pursuant to CPR 44.9(2), the claimant shall have her costs in the cause on the fast track basis up to 26 September 2006.”
CPR 44.9(2) had subsequently been amended in 2013, and that amendment revoked later in 2013. What remained of relevance in the CPR was CPR 46.13(1): “Any costs orders made before a claim is allocated will not be affected by allocation”, and also PD 46.7.1.(3) on costs up to admissions by a defendant that affected track.
The District Judge had erred in not adopting the structured approach required by CPR 26.9, and her statement that she could not see how the claim could ever have been a fast track claim illustrated this. There was no reasoning of this.
While the claimant was right that a written application on costs was not necessary, there had been no foreshadowing of the costs issue, which was simply raised at the hearing on the day. The DJ had not misdirected herself as to her discretion or jurisdiction in the absence of an application or warning on the point.
At the point of submitting the allocation questionnaire it would have been preferable for the appellant to have included the issue as an alternative position should the claim be allocated to the small claims track, as that would have given notice to the District Judge, and then when the position changed once the repairs were completed that provided a further point at which the court should have been updated.
The DJ had not addressed Birmingham v Lee and had given no reason for not being minded to make a similar order.
The appeal being allowed, the Circuit Judge turned to what order should instead be made.
The CJ considered that the position across PD 7A and CPR 26.9(2)(b) is not entirely clear.
There is a textual differences between CPR PD 7A as set out above and CPR 26.9(2)(b), in that pursuant to the latter the small claims track will be the normal track where there is a claim for specific performance and the cost of repairs are estimated to be not more than £1,000 “and” the level of any damages is not more than £1,000, whereas pursuant to the former and as set out above if “either” is more than £1,000 the small claims track will not be the normal track. It may be a matter which the Civil Procedure Rule Committee may wish to consider.
(NL note – with all respect to the Circuit Judge, I don’t think there is an issue here. For small claims both works and damages must be not more than £1,000 each. For fast track, either works or damages must be more than £1,000, not necessarily both. The logic is consistent.)
The value of works was a matter of expert evidence, and this would reduce the risk of the claimant inflating the value of the claim, which would be a serious issue.
Of course, any claimant knowing this could, on the claim form, seek to inflate valuations to simply place it within the wording of CPR PD 7A. If that were to be done, it is a matter which would have serious consequences, including arguments of abuse of process, contempt of court and cost consequences. Given reliance is required on expert evidence to prove the claim, instances of such conscious inflated valuations are likely to be rare.
The proper valuation approach was commercial/open market rates, not NHF trade association rates.
In addition, it was a valid consideration that the defendant’s expert was apparently an employee of the defendant.
I also note that on Mr. Sowden’s report bears the respondent’s logo on every page, and his email is an email address of the respondent. However, at paragraph 17 Mr. Sowden says there is no conflict of interest. The issue of whether Mr. Sowden is an employee or agent of the defendant is relevant, because in discharging his duty pursuant to Part 35 of the Civil Procedure Rules he should address whether there is an actual or potential conflict of interest, and an analysis of that should be set out. This will enable a judge to properly consider the report and determine whether permission is given to rely upon it, and where permission has been given to assist with addressing matters of weight. It is permissible to instruct an expert who is employed by a party, as per Field v Leeds City Council (1999) CPLR 833 CA, however, the guidance within the White Book 2025 helpful comments (on page 1123): “the fact of employment may go to the weight to be given to their evidence”.
So, the claimant’s valuation of works was preferred.
On damages, while there was little evidence on damages at this stage in proceedings, this was pleaded as a three year claim
I have been referred to Fishwick v Gentoo Group Limited (unreported, 8 May 2025), where His Honour Judge Freedman determined as follows:
“… I have been referred to Wallace v Manchester City Council(1998) EWCA Civ 1166. This gives some guidance about the level of damages that might be awarded in these circumstances. It is no more than guidance, but it makes it plain that anything of the order of £200 per year over a four-year period is far less than what a judge should award”.
Adopting a similar approach to His Honour Judge Freedman, and noting the period of time is 3 years as opposed to 4 year, I am satisfied that if successful in the claim the level of damages, considering the case of Wallace, would surpass the £1,000 threshold.
On that basis, fast track would clearly have been the normal track.
The only change post issue was the completion of works, which put this squarely in a Birmingham v Lee position.
Whilst the specific elements of the CPR have changed since Birmingham City Council v Lee, that does not alter the underlying principle of the decision. Furthermore, the principle is consistent with CPR PD 46 at paragraph 7.1(3) as I have set out above, in that when the financial value of a claim changes by way of a partial admission such that the disputed sum falls within the parameter of the small claims track, “the court may allow costs in respect of the proceedings down to that date”. The principle fits entirely with the issue before the court – the claim has changed by virtue of repairs being completed, but the work undertaken pursuant to the Protocol to reach that point should have the prospect of being recovered. I appreciate there is a material difference in that there is no partial admission, but it is the wider principle I reference by way of illustration which sits comfortably with that wider principle of the Court of Appeal in Birmingham City Council v Lee.
In any event, the discretion as to costs under CPR 44.2(1) applied.
Order varied to include
“Pursuant to CPR 44.2(1), the claimant shall have her costs in the case on the fast track for costs incurred prior to completion of repairs of the property subject to this claim”.
The Circuit Judge notes the effect of such an order
The effect of such cost provision in the Order is that if the appellant succeeds in her case, such costs can be duly assessed; if she is unsuccessful, she will not be awarded any such costs. Furthermore, if the appellant is successful but recovers less than the fast track lower sum for housing disrepair claims, it would be normal for the judge to permit only recovery of costs pursuant to CPR 27.14 for both pre and post completion of the repairs.
Comment
This is a sensible and, for what it is worth, I think a correct decision. There are some helpful practice points – on foreshadowing and preparation for making submissions on pre-works costs, for example.
The point on the cost of works being the open market/commercial rate, not the defendant’s in-house or NHF rates is one we’ve seen before, and it makes sense – the issue is the value of works, not what the defendant could get them done for.
The warning on ‘in-house’ experts is also one to be widely considered. An employed surveyor can be a Part 35 expert, but the potential conflict needs to be fully addressed in the expert’s report.
As a last footnote, I’ve not seen this judgment in Fishwick v Gentoo (if anyone wants to send me a copy, I’d be grateful), but taking Wallace v Manchester as indicating a de minimis value for damages is troubling. That judgment was 28 years ago! Social rents have changed – upwards – very considerably since then. It was also pre Fitness for Human Habitation.
Social housing rents have doubled in the 28 years or so since CPR 26 was first formulated. In the same time, typical repair costs have doubled (for example, the average cost of a gas boiler was £750 in 1998; now it is £1,500). The rules committee updated the threshold for Small Claims Track money claims (£5,000 to £10,000) several years ago, but for housing condition claims they remain £1,000/£1,000. Meaning that the tenant now only needs around half the period of liability, or half the actual repairs, as they did 25 years ago to say that the Fast Track is the normal track for their claim.
Far be it from me to suggest that recovering costs for the claimant’s solicitor is the main point of the majority of these claims ….