Gordon v Harry

J U D G M E N T

1. LORD JUSTICE PETER GIBSON: This is the adjourned hearing of an application for permission to appeal out of time. It comes before this court in unusual circumstances. On 16, 17 and 18 June 2003 Mr Recorder West-Knights QC, sitting in the Central London County Court, tried an action brought by the claimant, Juliet Gordon, against the defendant, Brian Harry. By the amended particulars of claim, Miss Gordon sought an order for the sale of 107 Woodcote Valley Road, Purley, a dwelling house of which she and Mr Harry were the joint registered proprietors and where they had cohabited. She also sought a declaration as to the beneficial ownership of the proceeds of sale. She alleged an agreement, prior to the acquisition of the property, that on a sale of the property she would receive a proportion of the proceeds corresponding to the 28 per cent proportion of the purchase price she had contributed out of her own resources, and that only after that would the remaining proceeds be divided equally. Mr Harry denied any such agreement. He maintained that the common intention had been that he and Miss Gordon should pool their resources and that they should own the property jointly. Mr Harry opposed the sale of the property.

2. At the trial before the Recorder, Ms Gordon was represented by counsel, Mr Robson, who appears for her today. Mr Harry had had solicitors acting for him at various times before and after the trial, but not at the trial when he appeared in person.

3. At the end of the trial the judge gave judgment. He was very critical of each of the parties. He referred to his difficulty in unravelling large parts of Mr Harry's evidence. He said that Mr Harry had changed his ground on a number of occasions. He found in relation to Ms Gordon's contributions towards the mortgage payments that Mr Harry was not only wrong but dishonest and that his credibility and reliability had become infected with an obsession about another dispute.

4. The Recorder was no less strong in his condemnation of Ms Gordon as a witness. He found that she had told deliberate lies with intent to deceive and had altered her version of the agreement which she was alleging. However, the Recorder held that Ms Gordon was entitled to an order for sale but that the net proceeds of sale should be held in equal shares. He made a declaration to that effect. The costs order which he made was that Mr Harry should pay Ms Gordon's costs of the action, save that Mr Harry should pay only two-thirds of the costs of the trial.

5. Shortly after the time for filing an Appellant's Notice expired, Ms Gordon's solicitors served on Mr Harry their bill of costs. The costs of the action up to the trial were said to be £11,396.14 plus £1,977.62 VAT. Her costs of the trial were said to be £10,000 plus £1,750 VAT, two-thirds of which were to be paid by Mr Harry. The receipt of that bill stirred Mr Harry into belated action. He appears to have received some help in the drafting of an Appellant's Notice, which he lodged eight weeks late on 27 August 2003.

6. His application for permission to appeal out of time came before me on 14 January 2004. This court had obtained a copy of the Recorder's judgment, but did not have a transcript of anything that he had said about costs, save for the order. I therefore directed that a transcript be obtained of the judge's comments following the judgment. I adjourned the hearing of the application.

7. It appears that a draft transcript was sent to the Recorder for approval because he then wrote to the Civil Appeals Office saying that, on reviewing the draft transcripts of the judgment and subsequent discussion as well as reviewing the order, the costs order seemed to the Recorder to be inconsistent with what he said was his "obvious intention and the out-turn". He asked that this be brought to my attention.

8. Having seen that letter, I took the view that the Recorder's comment would have to be disclosed to the parties. When the Recorder was notified of my view, he volunteered the order which he would have made and the thinking behind it. He wrote on 26 July 2004 to this court to say:

"On the basis of all the circumstances including:

(i) Mr Harry's having been wholly unreasonable on the matter whether there should be a sale, thus requiring proceedings to be issued

(ii) his conduct at trial, including those lies which I found he had told

(iii) The conduct of Ms Gordon, including her lies about the relationship with Mr Harry which I regarded as serious, they being repeatedly persisted with in the witness box

(iv) the wasting of, in effect, Day 1 (of 3), by a combination of an application by Mr Harry to adjourn the trial and the (rapid) resolution of the 'sale' question in favour of Ms Gordon

(v) Ms Gordon winning the sale point

` (vi) Mr Harry's winning the 'equal shares' point which occupied the rest of the trial

(vii) the way the other issues were resolved

(viii) my overall view of the parties

The order which I would have made was that Mr Harry pay Ms Gordon's costs of the action save that he should pay only one-third of the costs of the trial. The error was saying two-thirds.

Thus he would pay the cost of correspondence, issue and pre-trial work, but would only pay for those costs of the trial for which he was 'responsible':one day. He won the other 2 days (give or take the other issues and the conduct of both sides - see above). I did not consider it appropriate to order Ms Gordon to pay Mr Harry's costs of the other two days of trial; he was, in any event, by then acting in person."

9. The transcript of the post-judgment discussion shows that Mr Robson submitted, and the Recorder accepted, that Ms Gordon had to issue proceedings to obtain an order for sale. Mr Robson had argued before the Recorder that in any event Mr Harry should pay the costs of the first day which was wasted on Mr Harry's application for an adjournment. Mr Robson also submitted that Ms Gordon should be awarded the costs of the other two days on the basis that she had won on the majority of issues. The Recorder expressed his disagreement with that submission. He indicated that at least half a day was wasted on the adjournment and that Ms Gordon had won on the question of sale, but that had not added much to the hearing.

10. After hearing Mr Harry on the question of costs, the Recorder said to Mr Harry:

"The order which I am going to make in respect of costs is that you are going to pay the claimant's costs of this action, except that the claimant is only going to be allowed two-thirds of the costs of the trial. You do not have to pay for one-third of the costs of the trial. The reason for that, in part, is that I have made allowance for time wasted on Day One, and in part I have made allowance for the fact that a substantial amount of the time was in fact taken up at trial in discussing the question of how much ..."

11. At that point the Recorder broke off because, it appears, he had second thoughts. He said that he was allowed to rescind the order he had been making. That was plainly right because the order had not been perfected. The Recorder asked Mr Robson:

"Am I being unduly generous to the claimant?"

After further discussion with Mr Robson, to which I shall return, the Recorder attempted to explain to Mr Harry the order which he was making which repeated that Mr Harry was to pay the costs of the action, save that he was to pay only two-thirds of the costs of the trial.

12. At my direction the application is now restored for hearing on notice to Ms Gordon with the appeal to follow if permission to appeal is granted. Mr Harry continues to appear in person. He has first to persuade this court that he should be given an extension of time in which to file his appellant's notice. He gives two reasons for seeking an extension of time: (i) he only received Ms Gordon's bill of costs in the first week in August 2003; (ii) he is a litigant in person and it was necessary for him to seek advice on the merits of his application and the drafting of the appellant's notice.

13. Mr Robson opposes that application. He does not allege that Ms Gordon has suffered any prejudice by the delay before the appellant's notice was lodged, although in his skeleton argument he has pointed to the fact that Ms Gordon thought that this troublesome matter had been settled by the Recorder's decision. It is obviously unpleasant to her that the question of costs should still be live. She has been seeking to buy another property. The sale of the property has gone through. There has been no attempt to obtain a stay and she now finds that she may not be entitled to the costs which the Recorder had awarded by his order and have been paid.

14. I am prepared to extend time in the somewhat peculiar circumstances of this case, though I do so with some hesitation because of the extent of the delay. It is plain that it was Ms Gordon's bill of costs that belatedly caused Mr Harry to take some action to appeal the costs order. The costs were for a substantial sum; at least, it must have appeared substantial to Mr Harry as a litigant in person. The amounts claimed in a solicitor's bill of costs in litigation these days may well come as an unpleasant shock to litigants in person.

15. I turn to the merits of the application for permission to appeal. In his grounds for the appeal, Mr Harry says that at the trial he had argued that the proceeds of sale should be split 50/50 and that was what the judge had ordered. He said that, therefore, the judge erred in ordering him to pay the costs up to the trial as he was not the loser.

16. In his appellant's notice Mr Harry asks that there should be no order as to costs. However, in a letter dated 10 August 2004, which he sent to solicitors who had acted for Ms Gordon, he refers to the Recorder's acknowledgement of error and says:

"In the light of this error and the fact that I have already paid £21,382.08 in costs to Ms Gordon, on the basis of this mistake I am prepared to offer to drop the appeal if Ms Gordon is prepared to repay the correct sum immediately, failing which I will have no choice but to pursue the appeal to its conclusion."

17. Mr Harry has confirmed that what he means by repaying the correct sum is that all that he seeks is that in the Recorder's order that Mr Harry pay the costs of the action save for "two-thirds of the costs of the trial", there should be substituted "one-third of the costs of the trial".

18. Mr Robson submits that the Recorder's perfected order fell within the ambit of his discretion. He urges us to place to one side the contents of the Recorder's message to this court as he says the Recorder was impermissibly seeking to re-exercise his discretion. He says that the Recorder had ceased to have any jurisdiction apart from correcting any obvious error under the slip rule and this was not any such error.

19. Mr Robson asks us to take certain other matters into account. One relates to the Recorder not allowing Ms Gordon to recover her initial contribution to the purchase price of the property. Mr Robson says the Recorder was wrong in law. Ms Gordon has not appealed and she cannot assert that that is a point in her favour to be taken into account on this application and appeal. Mr Robson also points out that Mr Harry did have solicitors acting for him at various times, that he has not disputed the quantum of the bill of costs, nor has he sought a stay on the payment of costs until it was too late, and that the costs have been paid.

20. Mr Robson was plainly right to emphasise that the Recorder had a discretion and that this court will rarely interfere with the exercise of that discretion by the trial judge. But this court has the power to do so if persuaded that the judge has gone wrong.

21. I also accept that the Recorder had long since ceased to have any jurisdiction at the time he admitted to having made a mistake and that he cannot be permitted to exercise his discretion afresh. Nevertheless, the transcript does to my mind indicate, with all respect to him, that the Recorder did confuse himself on one point. After the Recorder had started setting out the order which he was going to make in the passage which I have cited, in the course of the subsequent discussion with Mr Robson he said:

"RECORDER WEST-KNIGHTS: You do not want your costs of Monday [Monday 16 June, the first day of the trial]?

MR ROBSON: We do want our costs of Monday. The defendant pays claimant's costs save for two-thirds of cost of trial being 17 and 18 June.

THE RECORDER: No. I am only going to give you two days of the three days of the trial. On reflection, I think that is the appropriate order.

So you are going to pay her costs of this action, except that the trial - which I hope is the most expensive part - you are only going to pay two-thirds, because you have won on the 'How much?' aspect But, set against that, you have also wasted, in my judgment, at least half a day."

22. Although Mr Robson had apparently accepted that Mr Harry should not have to pay two-thirds of the costs of trial being the costs for 17 and 18 June, the Recorder awarded Ms Gordon the costs of two of the three days notwithstanding that they were substantially taken up with the point on which Ms Gordon had lost (ie whether there was an agreement as she had claimed). When explaining the order to Mr Harry, the Recorder said that Mr Harry was only to pay two-thirds because he won on that point. That would appear to be a good reason why Mr Harry should not pay the costs other than the costs of the first day. But the Recorder went on to say that, "set against that", Mr Harry had wasted at least half a day. With respect, that makes no sense in relation to a defendant who was being ordered to pay the costs of two-thirds of the trial, that is the two days on which he had won. It does make sense if the Recorder intended that Mr Harry was entitled to at least some if not all the costs of the two days, against which the wasted costs which Mr Harry was ordered to pay could be set. I fear that the Recorder, as he has acknowledged in his courageously frank admission to this court, was in a muddle.

23. In my judgment, therefore, the judge did make a material error in the exercise of his discretion in making the order as to the costs of the trial. In contrast, he was entitled to make the order which he did as to the costs of the action other than the costs of the trial. As I have indicated, that is no longer disputed by Mr Harry.

24. In these circumstances, this court can exercise the discretion on the costs of the trial afresh. The Recorder had taken a poor view of each of the parties as witnesses and in their conduct of the trial. He was entitled to take the view that the costs of the first day's hearing were wasted because of Mr Harry's conduct and because Ms Gordon had won on the question of sale which had not taken a great deal of time. In my opinion, therefore, that part of the order plainly should stand.

25. The other two days were taken up with the equal shares question on which Mr Harry had won. However, whilst prima facie he was entitled to his costs of those days, because he appeared in person, his costs for those two days would no doubt be comparatively small compared with the costs of Ms Gordon for the first day, represented as she had been by solicitors and counsel.

26. In the circumstances it seems to me that the appropriate order is the one which the Recorder now says he had intended to make and which Mr Harry asks us to make, that Mr Harry should pay only one-third of the costs of the trial. That is the order which I would make in the exercise of this court's discretion having regard to all the circumstances.

27. In the result, I would extend time for lodging the appellant's notice to the day on which it was lodged. I would give permission to appeal out of time and would allow the appeal to the extent of ordering that Mr Harry should pay the costs of the action save that he should only have to pay one third instead of two thirds of the costs of the trial.

28. LORD JUSTICE TUCKEY: I agree.

ORDER: Application for extension of time and permission to appeal out of time allowed. Appeal allowed as indicated. Appellant's costs assessed in the sum of £500 plus £100 for the Appellant's Notice.