Rashid v London Borough of Merton

LADY JUSTICE ARDEN: This appeal is about the costs of judicial review proceedings. The essential question in the proceedings was the funding of an appropriate placement for the Appellant, who has special educational needs. He was the Claimant below and his mother was in the case his litigation friend.

The matter was settled on the basis that the Administrative Court would make an appropriate order as to costs. His Honour Judge Bidder made an order that there should be no order as to costs. That is the order under appeal.

This will be a short judgment. This case turns on the precise facts of this particular case. The result of the appeal is, therefore, of interest only to the parties. It is unnecessary for me to set out the terms of the compromise or the background to it in detail or the reasons given by the judge. For the same reason, it is not necessary to set out the parties' submissions or to summarise the cases to which they have referred the court. All those matters are well-known to the parties.

The appeal involves the application of established principles. The principal authority is M v Croydon LBC which identifies three broad categories of case of which only (ii) and (iii) are relevant. The relevant passage describing those categories is as follows:

The appropriate order for costs in these categories will depend on the facts of the case. The court may decide that it is appropriate to make no order for costs but it may decide on some other order. Often this is because it forms a view about who was the successful party.

In this case in March 2013 the Administrative Court made an interim order requiring the Respondent to make payments each week towards the placement of the Appellant at the Higashi School in the United States. The court gave the Respondent a short amount of time to put in submissions. The Respondent put in a letter opposing an order, but an interim order was then made ex parte. Then the Respondent put in summary grounds of opposition in which it asked for a "rolled up" hearing at which it would apply for discharge of the interim order as well as deal with the merits of the application, but that application was never, in the event, heard.

In my judgment, these proceedings were a holding measure to obtain funding for the school of the parents' choice abroad in the United States while a place at a school in the Uk, Thornbeck College, which was acceptable to them became available. This happened in June 2013. The Appellant was, as I see it and will explain in more detail, the winner.

It is true that a claim for long term funding at Higashi School was raised in these proceedings and was never decided, but the position is that that issue became academic. The Respondent did not press during the currency of the proceedings for the child to be taken to any other school before that indeed happened following the compromise. As I see it, the Respondent was not, as it contends, disadvantaged by the delay in getting the discharge application heard. Indeed, it never pressed for these proceedings for the discharge of the interim order to be heard on an expedited basis.

What happened was that the Respondent made an application for the matter to be heard within four weeks in its summary grounds, but it never followed that matter up. In July 2013 the matter came before Lord Carlisle QC and he made directions for a hearing after 28 August, but there was no application before him for expedition. In the meantime, a place had become available at Thornbeck College. The Respondent in effect accepted that the Appellant should move from Higashi School to Thornbeck College when that place became available.

That is, in summary, how I see it. Now for the arguments. The Appellant's principal argument based on category (ii) in the Croydon case before the judge was that the judge should have awarded the Claimant costs as the substantial winner and that the Respondent had had to accept, contrary to its principal grounds of opposition in the proceedings, that it had statutory power to make payments towards the placement of a person outside the United Kingdom.

It also, as I see it, wrongly made the point that the Respondent had by the compromise and prior to negotiations accepted that it had that power because it continued to fund the Appellant at Higashi School until the place at Thornbeck College actually became available. I am not persuaded by their arguments. The local authority had power to make payments pursuant to the judge's interim order and indeed to settle that matter. As I read the documents, the Respondent merely agreed to make interim payments because of the interim order.

Turning to the Respondent, the Respondent's first argument before the judge was that the principal ground of opposition contained an issue of law which had never been decided so the court could not say who the winner on that issue was and thus this was primarily a category (iii) case. I accept that the substantive issue was never decided.

The Respondent also contends that the Appellant's mother had not recovered from Merton payments made by her for the placement. She had contended in the proceedings that the Respondent was liable to repay for the payments which she had made between December 2012 and March 2013 when the proceedings were issued. Therefore, the Respondent for these reasons contends that the Appellant was not the winner and that therefore the appropriate order was no order as to costs.

The appeal court does not normally intervene in the exercise of discretion as to costs unless there is an error of principle or the exercise of discretion is perverse, but here, as I see it, the judge did not consider whether on the facts of the case a court could determine who was the effective successful party.

In my judgment, this was an error of principle because there had been significant developments since the proceedings were launched, though in fairness to the judge I would say that these were not fully brought out in the short skeleton arguments placed before him. Those significant developments related to the fact that a UK school placement acceptable to both parties had become available though it had to be deferred because of construction work at the school.

Although the claim as launched sought a contribution to a permanent placement at Higashi School, it was clear from the Appellant's mother's witness statement filed at the start of the judicial review proceedings that a place at Thornbeck College would be suitable, but this was not then available.

There was also the question of what should happen before a mutually acceptable place in the United Kingdom became available. The Appellant's mother took the view that it would be harmful to interrupt the progress that the Appellant had made at the school in the United States up to that date. The Respondent's case was of course that it had made lawful assessments and offered a number of institutions in the United Kingdom and that the mother was therefore rejecting those placements.

But as I have explained, the Respondent did not follow those points up by asking for an expedited hearing so that de facto the position became that it was funding the school in the United States. It became accepted between the parties that the child would go to Thornbeck College and when an order was made in August 2013 it was clear that Higashi School would be the interim solution.

I should point out that Mr Mant directs us to Naureen for the proposition that success must be success in the action or by concession. An interim order is not success, but the question of who is the winner in proceedings is a question which is case specific and it turns on the facts.

In my view, it became clear three months after the judicial review became available that there would be a place at Thornbeck College so that the parties knew that this case was about interim funding. The Appellant succeeded in getting that by the order for interim relief. The Respondent did not take the steps necessary to have that matter restored for a hearing on an expedited basis.

In my judgment, the failure to consider who was the winner in this case was an error of principle and the exercise of discretion to award costs should be set aside. This case is distinguishable from Dempsey where the Claimant achieved an assessment by an interim order. In this case, the mother achieved something else, namely the interim funding.

The discretion now falls to us to exercise. I would exercise it in favour of the Appellant as I take the view that the Appellant was substantially the successful party. It was suggested that some small deductions should be made because the Appellant;s mother failed to recover the payments for December 2012 to March 2013, but that would only be a small deduction and in those circumstances I do not think it is appropriate to make it.

LORD JUSTICE SALES: I agree. This appeal should be dismissed for the reasons given by my Lady. I also agree with the order which my Lady proposes to make.

I, like my Lady, emphasise that this case turns very much on its own particular facts. As events transpired in the course of the litigation between the parties, the principal issue between them was funding for the interim period until a place became available at Thornbeck College. On that issue, the Appellant was the successful party and the costs order ought in principle to reflect that reality.

I would emphasise the timetable within this litigation. The order made by Philip Mott QC sitting as a Deputy Judge of the Administrative Court granting interim relief in favour of the Appellant in the first instance was made on 14 March 2013. The order included a provision:

This reflected the fact that, as I see it, the order was being made effectively on a without notice basis. However, no such application was made. Instead, an acknowledgment of service was filed.

In the summary grounds for opposing the claim, the Defendant asked for a rolled up hearing. Although the Defendant asked for the court to discharge the interim order, it issued no application notice to secure that result. In the alternative, it asked that the rolled up hearing take place within four weeks. Four weeks went by and it was abundantly clear that no such rolled up hearing would take place. No application for expedition was issued, nor indeed was any such application formally made in the acknowledgment of service.

The matter next came before the court in the order made by Lord Carlisle QC sitting as a Deputy Judge of the Administrative Court on 9 July 2013 where he continued the interim relief and adjourned matters to a rolled up hearing which would take place at some point after 23 August. Again, there was no effort made by the Respondent to press for some earlier resolution of what by that stage was plainly the principal issue between the parties, namely who should be responsible for the interim funding for the Claimant pending the availability of a place at Thornbeck College.

On 26 July 2013 the Respondent made a part 36 counteroffer to pay the £1,860 a week toward the Higashi placement until 16 August 2013 pursuant to the court's interim order dated 14 March 2013, in other words accepting that that interim order should remain in place. By 27 August 2013 Thornbeck College was not ready to receive the Appellant and the Respondent offered to extend the period of payment until 31 October 2013 on the condition that there was no order as to costs. By 13 November 2013 Thornbeck College was still not ready to receive the Appellant. The Respondent wrote proposing to continue to contribute £1,860 per week towards the costs of the placement pursuant to the original order made by Philip Mott QC until 30 November 2013.

On 25 March 2014, following further negotiations, the parties filed a consent order. This recorded that the Respondent had paid £1,860 per week towards the costs of the Higashi School until the week of 11 November 2013 when the Appellant returned to England, that the claim for judicial review was withdrawn and the question of costs would be determined on the papers. It was to implement that order, which was sealed on 31 July 2014, that Judge Bidder made his determination.

In my view, this chronology emphasises the point made by my Lady that as events transpired, the principal issue between the parties had become the funding of the Appellant's place at Higashi on the interim basis until a place became available at Thornbeck College. The Respondent acquiesced in the interim order that had been made against it and indeed agreed to that being rolled over until such time as the place at Thornbeck College became available.

In those circumstances, like my Lady, I regard the Appellant as having won on the matter that was principally in issue between the parties and the costs order should follow accordingly.