The facts of the possession claim that arose in South Lodge Flats Limited v Malik and others [2022] EWCA Civ 411 are unusual, but the case provides a useful reminder of the court’s broad discretion on costs, especially if the general rule is displaced by concession.
Iftikhar Malik (Iftikhar) owned the long lease of a flat in Kensington. The flat was occupied by his brother Vaqar and Vaqar’s two adult sons (the appellants). The freeholder issued a claim against Iftikhar for the purpose of investigating a leak from the flat and this resulted in Iftikhar issuing a Part 20 claim against the appellants seeking possession and declarations about the beneficial entitlement to the lease. That Part 20 claim was defended on a number of grounds.
The hearing of the trial went part heard after nine days. Subsequently and as a consequence of the coronavirus pandemic Practice Direction 51Z was introduced to stay possession proceedings. The county court judge concluded that PD51Z did not apply to this claim and the matter continued with the appellants failing to comply with directions, eventually the trial concluding and a possession order being made. After that final order, the decision of TFS Stores Ltd v The Designer Retails Outlet Centres (Mansfield) General Partner Ltd [2020] EWCA Civ 833 was handed down. This gave an expansive reading to the scope of PD 51Z such that any proceedings in which there was a claim or counterclaim for possession whether or not initiated under CPR Part 55 would be stayed.
The appellants applied for an extension of time and permission to appeal. These applications, together with the appeal itself, were dealt with as a rolled up hearing by Meade J. The respondent’s efforts to distinguish TFS Stores were rejected. In order to decide whether to grant an extension of time for the appeal the judge applied the three-stage test in Denton v T H White Ltd [2014] EWCA Civ 906.
It was found that the default was serious and without good reason. Unusually, though, he was also able to know that the county court’s decision on the ambit of CPR 51Z was wrong and that it would be unjust to allow the matter to go forward as if it were right. Accordingly, Meade J both granted the extension of time and allowed the appeal on terms that the appellants paid the costs incurred by Iftikhar for a specific period of the litigation. As to the costs of the appeal, he made no order.
It was this decision not to allow the successful appellants some of the costs of their appeal that the appellants took to the Court of Appeal. The general rule is that the unsuccessful party should pay the costs of the successful party (which the court will no doubt also consider in deciding whether to make an order at all). In this case, though, the general rule was displaced by concession. A judge cannot be criticised for not making an order he was not asked to make. How far to depart from the general rule was a matter for the judge’s discretion.
Of the three Denton hurdles, the appellants had lost on two and succeeded on one. A lot of money had been spent on the second issue. Had the appellants appealed an earlier order in time there could have been significant savings. There was a rational explanation for the order made and the fact that another judge may have decided the costs issue differently was beside the point. There was no one right costs order and the appeal was dismissed.
Elizabeth Haggerty is a barrister
