Compensation – Costs – Certificate of Appropriate Alternative Development (CAAD) – Rule 10(6)(aa) of Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010 – Respondent acquiring land under compulsory purchase order – Appellant applying for CAAD to inform level of compensation – Tribunal cancelling “nil” certificate and substituting positive certificate – Respondent claiming costs – Whether appellant successful party – Whether conduct justifying award of costs in respondent’s favour – Claim dismissed
The appellant owned a site that was formerly 117 and 119-121 High Street, Stratford, London until it was compulsorily acquired by the respondent, as acquiring authority, under a compulsory purchase order. To help inform the level of compensation, the appellant applied to the respondent, as local planning authority, for a certificate of appropriate alternative development (CAAD). The respondent issued a “nil” certificate but that certificate was cancelled on appeal under section 18 of the Land Compensation Act 1961: [2024] UKUT 146 (LC); [2024] PLSCS 107.
Following further written submissions, the tribunal issued an alternative certificate, in which it certified that 8,214 sq m of mixed-use development would be appropriate alternative development. The respondent applied for its costs. A question arose whether the respondent should recover any of its costs of the appellant’s appeal against the respondent’s “nil” certificate.
Section 17(10) of the 1961 Act provided that: “In assessing any compensation payable… in respect of any compulsory acquisition, there must be taken into account any expenses reasonably incurred by the person in connection with the issue of a certificate under this section (including expenses incurred in connection with an appeal under section 18 where any of the issues are determined in the person’s favour)”.
Rule10(6)(aa) of the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010 provided that the tribunal might make an order for costs in proceedings under section 18 of the 1961 Act.
Held: The claim was dismissed.
(1) In conventional proceedings in other categories in rule 10(6), costs would ordinarily follow the event, with the successful party being entitled to receive their costs unless there was some reason for the tribunal to make a different order. The starting point was that the appellant was the winning party, since until its change of position in November 2023, the respondent was offering nothing by way of AAD, and as a result of the tribunal’s decision something approaching 90,000 sq ft of mixed-use development had been certified. That was a more favourable outcome for the appellant than the respondent belatedly allowed for in its proposed certificate. The respondent was not entitled to an issues-based order from November 2023 as it was not the successful party.
An application for costs by the unsuccessful party in proceedings was exceptional; in civil litigation the usual way in which a court would reflect the fact that the party who was unsuccessful overall had nevertheless succeeded on some issues would be by means of a reduction in the costs it was required to pay to the successful party; such orders were not routinely made.
(2) Section 17(10) of the 1961 Act meant that the tribunal was not required to determine the appellant’s entitlement to his costs at this stage. Nor did section 17(1) allow the compensation payable to a claimant whose land had been acquired to be reduced to reflect the fact that the compensating authority had had some success in a section 18 appeal. Someone whose land had been taken from them was entitled to be compensated for “any expenses reasonably incurred” in connection with the issue of a certificate. If some part of the appellant’s costs were not reasonably incurred, he would not be entitled to recover them, and the respondent had given no assurance that it would not seek a reduction in compensation on that basis. But neither had the parties asked the tribunal to defer consideration of the respondent’s costs application to be dealt with at the same time as, or after, the compensation issues. So, it was necessary to determine whether the unsuccessful respondent should receive some of its costs.
(3) The tribunal’s discretion under rule 10(6)(aa) had to be exercised in the light of case law on costs discretions generally. CPR rule 44.2 provided that the court might make a different order from the general rule that the unsuccessful party would be ordered to pay the costs of the successful party, and in deciding what order to make, the court would have regard to all the circumstances including whether a party had succeeded on part of its case, even if not wholly successful. Such a different order might include requiring a party to pay costs “relating only to a distinct part of the proceedings” (CPR rule 44.2(6)(f)).
The mere fact that the successful party had lost on one or more issues did not by itself normally make it appropriate to deprive them of their costs. Such an order might be appropriate if there was a discrete or distinct issue, which caused additional costs to be incurred or if the overall costs were materially increased by the unreasonable raising of one or more issues on which the successful party failed.
(4) Where an issue-based costs order was appropriate, the court should attempt to reflect it by ordering payment of a proportion of the receiving party’s costs if that was practicable. Such an order should reflect the extent to which the costs were increased by the raising of the issue; costs which would have been incurred even if the issue had not been raised should be paid by the unsuccessful party. Before making an issue-based costs order, it was important to stand back and ask whether, applying the principles set out in CPR rule 44.2, it was in all the circumstances of the case the right result. An order of that kind would only properly be made in a suitably exceptional case. The aim always had to be to make an order that reflected the overall justice of the case: Summit Property Ltd v Pitmans [2001] EWCA Civ 2020 and Pigot v Environment Agency [2020] 1444 (Ch) considered.
(5) While the tribunal had rejected the appellant’s case on land use, and on other issues, it was not persuaded that there was anything suitably exceptional about this appeal that would cause the tribunal to order the appellant to pay a proportion of the respondent’s costs, aside from a discrete issue relating to harm to heritage assets in respect of which the appellant would be ordered to a small proportion of the respondent’s costs.
James Pereira KC and Mark O’Brien O’Reilly (instructed by Holmes & Hill LLP) appeared for the appellant; Neil Cameron KC and Nick Grant (instructed by DLA Piper LLP) appeared for the respondent.
Eileen O’Grady, barrister
Click here to read a transcript of Bashir v Newham London Borough Council
