Daly v Eversley School & Ors

This is a renewed application by Mrs Daly for permission to appeal from a decision of HHJ Knight QC made in the Central London County Court, in which he dismissed a costs appeal by the applicant against an order made by Master Gordon-Saker. This is, therefore, a second appeal for which this court has no jurisdiction unless the appeal raises some important point of principle or practice or there is some other compelling reason for us to hear it.

The applicant was the unsuccessful claimant in proceedings brought under the Race Relations Act against five defendants. She alleged that they discriminated against her whilst she was on a teacher training course. The trial took ten days and she was ordered to pay the defendants’ costs, subject to a detailed assessment. They were jointly represented by the in-house solicitors of the defendant council. In their final bill they claimed over £87,000.

The applicant served points of dispute and applied for an order that the court should disallow all the defendants’ costs on two grounds: the first was that the costs claimed were about double the pre-trial estimates which the defendants had given; the second, alleged misconduct by the defendants during the course of the proceedings by non-disclosure of two documents and late exchange of a witness statement. The defendants’ explanation for the difference between their costs estimates and the amount claimed, which the master accepted, was that their estimates were based on in-house solicitors rates. They had not understood that they were entitled to claim the commercial rates upon which their final bill was based.

The master heard and dismissed the application and then proceeded with the detailed assessment, in which he reduced the bill to about £64,500. In his ruling on the applicant’s application, he rejected her contention that the estimates of costs had been made fraudulently or in an attempt to mislead anyone. He told the applicant, however, that if she had been misled she could argue, on the detailed assessment which was to follow his ruling, that she should not have to pay any more than the sums which had been estimated. We have no record of what happened at the detailed assessment and there is no appeal against it. Although there was and is no evidence that the applicant in fact relied on the estimate, she obviously achieved a fair measure of success because she succeeded in reducing the bill by about 25%.

On appeal the judge found no grounds to interfere with the master’s decision on this first point. In her skeleton argument and in her submissions to us this morning, the applicant’s main point is that the decisions of the master and the judge on this point were unfair. If the defendants were to be allowed any costs they should have been held to the estimates. Furthermore, some of the figures put before the court before the trial were not just estimates but were actual statements of costs incurred.

The applicant relied on Leigh v Michelin Tyre Company[2003] EWCA Civ 1766, in which, at paragraphs 26 to 30, this court gave guidance about the circumstances in which erroneous costs estimates might be taken into account so as to reduce the recoverable amount. There are no set rules to be applied to this situation, but the court indicated that absence of a satisfactory explanation for the error and reliance on the estimate by the paying party were two such circumstances which might form the basis for a reduction.

But here there was an explanation which the master obviously found satisfactory and no reliance was shown by the applicant. Furthermore, it may well be that the master did make some reduction because of the erroneous estimates, as he said he might. We just do not know. All in all, this point does not cross the threshold for a second appeal as Rix LJ pointed out when he refused permission to appeal on the papers.

The master rejected the applicant’s second point on the basis that the allegations of misconduct should have been raised at the end of the trial before the trial judge, and so it was not open to the applicant to raise them at the detailed assessment. HHJ Knight appears to have disagreed with this view but concluded in paragraph 53 of his judgment that none of the allegations upon which the applicant relied would have warranted any deduction from the costs awarded to the defendants. The complaints which the applicant made were that, despite orders for disclosure, the defendants did not disclose two of the three letters they had received from parents about her, and that the signed statement from the parent whose letter they did disclose was not sent to her until shortly before the trial, although it had been signed several months earlier.

As to the two letters, the applicant accepts in her skeleton argument that the trial judge, HHJ Dean QC, refused her application for specific disclosure of these documents months before the trial itself. So there was no question of misconduct by the defendants for failing to disclose them. The witness statement was served nearly four weeks before trial and the applicant has not sought to show that she had been prejudiced by its late service. For these reasons, I agree with HHJ Knight that neither of the applicant’s complaints could have justified any reduction in the costs awarded to the defendants.

This morning Mrs Daly complains (although this does not feature explicitly in her notice of appeal) that she proceeded before HHJ Knight on the basis that all she needed to show was that the master had made an error of law in failing to consider her complaints of unreasonable conduct, and she would then be entitled to a re-hearing before another master. She was mistaken about this. HHJ Knight was clearly entitled to deal with the matter as he did and he dealt with the merits of her complaints. I do not think that the point she now raises is one which gives her any ground for appeal; still less does this point, or any of the other points which she makes about the conduct of the proceedings by the defendants, cross the threshold for a second appeal.

For those reasons, I would dismiss this renewed application for permission to appeal.

I agree.