Mohammadi v Shellpoint Trustees Ltd & Anor

This is an appeal by Leila Mohammadi against the Order of Master Campbell as Costs Judge made on 15^th August 2007 (“the August Order”). Although in form it was an appeal against the whole of the August Order, it raised two points of substance, for both of which she obtained permission to appeal from Evans-Lombe J on her oral application on 17^th June 2008, a previous written application having been refused by him on paper.

The first and main point, to which I will refer as “the Legal Aid Point”, concerned the question when, during long and protracted litigation mainly in the Central London County Court, Mrs Mohammadi had been “a legally assisted person” within the meaning of sections 2(11) and 17(1) of the Legal Aid Act 1988, with the substantial but partial protection afforded by section 17 from liability to pay her opponent’s costs. The second point, to which I will refer as “the 75% Point”, consisted of her challenge to an earlier detailed assessment by Master Campbell of her costs incurred in a partially successful hearing in the Court of Appeal, pursuant to a judgment given on 16^th July 2003.

On the morning of the hearing of this appeal, Mrs Mohammadi lodged supplementary grounds of appeal alleging various forms of procedural misconduct ranging from bias to a failure to consider the disproportionate positions of the parties, including a reference to Article 6 of the Human Rights Act 1998, for none of which she had obtained permission, and none of which in the event she pursued either by adducing evidence or making submissions. I need therefore say nothing further about them.

Mrs Mohammadi did however at the same time also lodge what purported to be an affidavit tendering fresh evidence in relation to both the Legal Aid and 75% Points. For the Respondents, Shellpoint Trustees Ltd and Anston Investments Ltd, Mr Howard Lederman of counsel sensibly made no objection to the court reading the affidavit, and the exhibits (only some of which were before Master Campbell) on a de bene esse basis, while submitting that Mrs Mohammadi had shown no sufficient grounds for the admission of fresh evidence on appeal.

In my judgment Mrs Mohammadi did not show sufficient reason for adducing fresh evidence on appeal, but in any event the contents of her affidavit and those of its exhibits which were new added nothing of real weight to the relevant evidence before Master Campbell which I shall shortly describe, and to the extent that it sought to put a different gloss on the relevant facts, it was unpersuasive.

Mrs Mohammadi is and has at all material times been the long leasehold owner of a flat known as 8 Eaton Hall, London NW3 2DW, and the Respondents were at all relevant times her landlords. Litigation between them about the flat began as long ago as April 1993. Mrs Mohammadi claimed damages for breach of repairing covenants, and the Respondents claimed forfeiture based upon alleged failures to pay services charge and ground rent. The main features of that litigation were a trial in the Central London County Court leading to judgments in May, June and October 2002, relating respectively to repairing and subsidence, credit for decoration works and forfeiture respectively, together with an appeal to the Court of Appeal in 2003 in which Mrs Mohammadi was partially successful, obtaining, as I have mentioned, an order for payment of 75% of her costs by the Respondents.

Mrs Mohammadi obtained public funding for her litigation by means of three overlapping Legal Aid Certificates, to which it is convenient to refer by using the letter at the end of each, namely W, E and J. For present purposes, it is only Certificates W and E which matter, and their summary histories may be described as follows:

In a later letter to Mrs Mohammadi dated 6^th July 2007, the Legal Services Commission said this, in the last paragraph:

“One other matter needs to be added to the above information – at various times your certificates were discharged and then reinstated. I should point out that the reinstatement of the certificates following a discharge means they were deemed never to have been discharged and as far as costs protection is concerned, you would have been covered for work done within the scope of the certificates from their original issue dates (23/8/1990 and 20/10/1993 respectively) until their final discharge dates (24/7/2002 for A/N/3 and 16/4/2004 for A/N/2).”

It is apparent that the references to Certificates A/N/3 and A/N/2 are references to amended versions of Certificates W and E respectively, although for some unexplained reason, the final discharge date for Certificate E appears to be different. Nothing turns on the discrepancy.

It is necessary to focus closely on Mrs Mohammadi’s legal representation during the periods between successive discharges and reinstatements of the two Certificates, and shortly prior to their final discharge in (or after) 2002. On 7^th November 1996, two days after the first discharge of Certificate W, Mrs Mohammadi’s then solicitors told the Respondents’ solicitors that she would be proceeding thereafter in the case as a litigant in person. This appears as a dated item in the Respondents’ detailed bill submitted for taxation (“the Bill”) at page 12. There was a hearing on 14^th November at which it is to be inferred that Mrs Mohammadi appeared in person (Bill page 19). Mr Lederman, who appeared at that hearing and the hearing before Master Campbell in August 2007, recalled her having done so. On 19^th December 1996 the Respondents’ solicitors received a Notice of Acting from John R Bottrill as solicitor for Mrs Mohammadi, together with notice of reinstatement of legal aid (which had occurred in relation to Certificate W three days earlier (Bill page 21)).

On 9^th July 1999 the Respondents’ solicitors were notified that Mr A T Freer was acting for Mrs Mohammadi in place of John Bottrill. On 23^rd November 1999 they received a further notice of intention to proceed, notice of change of solicitor and notice of amendment to Mrs Mohammadi’s legal aid certificate (Bill page 26).

Certificate W was discharged on 23^rd March 2001, and on 14^th June Mrs Mohammadi, acting at this stage in person, made an application to transfer an aspect of the dispute to the Leasehold Valuation Tribunal. She told me that she did so with the assistance of a law student (Bill page 32). On 19^th June, Certificate E was also discharged. On 5^th October 2001 the Respondents’ solicitors received a further notice of acting for new solicitors on Mrs Mohammadi’s behalf, both Certificates having been reinstated on 1^st October (Bill page 35).

On 30^th May 2002 there was a hearing in the Central London County Court at which Mrs Mohammadi was represented by Goldkorn Davies Mathias. Mrs Mohammadi told me that as a result of events which occurred then and shortly thereafter, she lost confidence in those solicitors and discharged them. There followed a hearing on 10^th June when Mrs Mohammadi was, briefly, acting in person. In July 2002 she retained Dean & Dean on a privately funded basis and, as a result, Certificates W and E were finally discharged on 24^th July 2002. Mrs Mohammadi does not claim to have been legally aided at any time thereafter.

Mrs Mohammadi’s case, put both by her costs draftsman Mr Jones to Master Campbell in 2007 and, ably by herself to me, was that she had been a “legally assisted party” within the meaning of section 17 of the 1988 Act for the whole of the period between September 1990 and 24^th July 2002. She said that during the periods when she had been without legal representation in 1996 and 2001 she had taken no active steps herself. In the words of Mr Jones’ submission to Master Campbell (recited at paragraph 5 of his judgment):

“She was not “acting”, she was simply holding the line until she could find another solicitor. She was certainly not conducting litigation, she was simply appearing at hearings until she could find a new firm of solicitors to take her case, the old ones having been dismissed by her or ceased acting for her for some other reason.”

Understandably, she relied heavily on the last paragraph of the Legal Services Commission’s letter of 6^th July 2007, which I have quoted above, in support of the submission that, where a legal aid certificate is discharged, but later reinstated rather than replaced by a new certificate, the effect for all purposes is as if it had never been discharged.

For the respondents, Mr Lederman submitted that Mrs Mohammadi was only to be regarded as a legally assisted party in the litigation within the meaning of section 17 during such period as she was in receipt of legal advice and assistance from solicitors pursuant to a legal aid certificate, that during periods between the termination of the retainer of one firm and the retainer of another firm she was not therefore a legally assisted party and that, a fortiori, during any part of those periods in which she took active steps in the proceedings as a litigant in person, she cannot have been a legally assisted party. He submitted that whatever the effect of the Legal Services Commission’s views about the effect of reinstatement of a discharged certificate as between the Commission and the assisted party, the reinstatement of a previously discharged certificate could not rewrite history so as to require that party to be deemed to be legally assisted during a period when, in fact, there had been no certificate in force.

Sections 17(1) of the Legal Aid Act 1988 provides as follows:

“The liability of a legally assisted party under an order for costs made against him with respect to any proceedings shall not exceed the amount (if any) which is a reasonable one for him to pay having regard to all the circumstances, including the financial resources of all the parties and their conduct in connection with the dispute.”

This well known section affords a legally assisted party a substantial degree of protection against liability to pay her successful opponent’s costs. Like Master Campbell, I shall refer to it as “costs protection”.

Section 18 of the same Act makes provision for payment by the Legal Aid Board in certain circumstances, where proceedings to which a legally assisted person is a party are finally decided in favour of an unassisted party. Both sections are, in effect, triggered by the phrase “legally assisted person” which, according to section 2(11), means:

“Any person who received, under this Act, advice, assistance, mediation or representation and, in relation to proceedings, any reference to an assisted party or an assisted party is to be construed accordingly.”

Two decisions of the Court of Appeal, namely Turner v. Plasplugs Ltd [1996] 2 All ER 939 and Burridge v. Stafford [2000] 1 WLR 927 show that the dates upon which or periods during which a litigant is a legally assisted person are not rigidly governed by the dates of commencement and discharge of a legal aid certificate. Thus, in Plasplugs, it was held that where the steps for which a limited legal aid certificate had been granted had been accomplished, the certificate was spent without the need for a formal discharge, so that the assisted person could not be regarded as a legally assisted party in respect of any procedural steps taken thereafter, and thereby lost costs protection under section 17.

In Burridge, it was held that where a litigant discharged her solicitors and began acting in person, she thereupon immediately ceased to be a legally assisted party for the purposes of cost protection under section 17, even though her legal aid certificate was only discharged some time later.

The Court of Appeal considered a non-exclusive list of five alternative possible candidates for the date upon which a litigant ceases to be a legally assisted person or party for the purposes of sections 17 and 18. They were:

Candidate (v) was rejected, notwithstanding its simplicity, on the authority (inter alia) of Plasplugs. Candidate (iii) was rejected, because the court record is not concerned with whether the solicitor on the record is acting under a legal aid certificate. Lord Woolf MR, giving the leading judgment continued, at paragraph 30 (page 935):

“I am however unhappy about Mr Gimlette’s candidate. This is the date on which a solicitor ceases to act. It seems to me there are two problems with this candidate. The first is that the date may be very difficult to identify. Secondly, it will be unknown to the other parties whose position can be adversely affected (as these cases show) by the date upon which a party ceases to be legally assisted. It does not seem to me necessary to adjudicate finally upon that date. This is because I am satisfied that at least from the date that a previously legally assisted party starts to act in person, he ceases to be, within the meaning of section 2, a legally assisted person for the purposes of sections 17 and 18 of the Act. If the nominated solicitor ceases to act for him and he commences acting in person, he is no longer receiving the benefit of legal aid. From that date onwards he loses the protection of section 17 and the Board ceases to be liable for him under section 18.”

As Master Campbell observed, the present case is not precisely on all fours with the facts of the two cases considered together in Burridge. They were not cases where a certificate was discharged and then reinstated, or cases where the litigant had to hold the fort while seeking to replace one firm of solicitors, acting under a legal aid certificate, with another firm nominated for that purpose.

I invited Mr Lederman to assist the court (since Mrs Mohammadi had no legal representation before me) on the question whether the 1988 Act or the Civil Legal Aid (General) Regulations 1989 (“the Regulations”) afforded any support for the expressed view of the Legal Services Commission that, upon reinstatement, a legal aid certificate is deemed to have effect as if it had never been discharged. He drew my attention to Regulation 74(2), which provides that:

“Subject to this Part of these Regulations, a person whose certificate is revoked shall be deemed never to have been an assisted person in relation to those proceedings except for the purposes of section 18 of the Act; and a person whose certificate is discharged shall, from the date of the discharge, cease to be an assisted person in the proceedings to which the certificate related.”

Regulation 74 is part of Part X of the Regulations. Nowhere in that Part could counsel or I find any express provision about reinstatement of a certificate, still less about its effect. Counsel told me that he had been unable to find such a provision anywhere in the Regulations. The provisions for appeal in Regulation 81 suggest by implication that a discharge which is successfully appealed may, in retrospect, be deemed to be of no consequence, but that is all.

For completeness I should add that Master Campbell concluded, correctly in my judgment, that although the statutory scheme laid down by the 1988 Act and the Regulations has since been superseded, Mrs Mohammadi’s case is to be determined pursuant to the 1988 Act, since she first applied for legal aid before 1^st April 2000: see, in particular Article 5(1) of the Access to Justice Act 1999 (Commencement No 3 Transitional Provisions and Savings) Order 2000.

In my judgment the legal issues thrown up by this part of Mrs Mohammadi’s appeal should be resolved as follows. First, during any period when she was in fact acting in person, Mrs Mohammadi was not a legally assisted person, even though she was actively seeking to reinstate for her benefit the provision to her of legal advice, assistance and representation under the Act in connection with her pending proceedings. Further, it makes no difference in my judgment that, on two occasions after she acted briefly as a litigant in person, Mrs Mohammadi later obtained the services of a new firm of solicitors under her reinstated certificates.

Secondly, (and to the extent that it matters) Mrs Mohammadi was not a legally assisted person for the purposes of section 17 during any period after a firm of solicitors which had ceased to act for her had communicated that fact to the Respondents’ solicitors, even if a period of time then elapsed before she took any active steps as a litigant in person. Thus, if and to the extent that the Respondents incurred costs during such a period (for example in preparing and issuing an application after being notified that Mrs Mohammadi’s then solicitors had ceased to act, but before she took an active step by appearing in court in response to it), those costs would have been incurred at a time when Mrs Mohammadi was not a legally assisted person.

Thirdly, whatever may have been the view of the writer of the Legal Services Commission’s letter of 6^th July 2007, the reinstatement of a legal aid certificate for the purposes of enabling new solicitors to act after the discharge of that certificate when previous solicitors ceased to act, does not have the effect retrospectively, that the litigant is deemed to have been a legally assisted person for the purposes of section 17 during the period between the discharge and the reinstatement of the certificates or, more importantly, during any period between the termination of the old firm’s retainer, and the commencement of the new firm’s retainer. In that respect, I say nothing about the possible effect as between the Legal Services Commission and any particular litigant of the reinstatement of a certificate (coupled with such a statement as appears in the July 2007 letter), so far as concerns, for example, the ability of the litigant to obtain payment of her solicitors’ costs from the Legal Services Commission. The question with which I am concerned is whether any such retrospective deeming effect operates so as adversely to affect the position of third parties, and, in particular, opposing parties in the litigation in question.

My reasons for those conclusions are as follows. First, the conclusion that, for as long as Mrs Mohammadi was in fact acting in person she was not a legally assisted person inevitably follows from the analysis of the Court of Appeal in Burridge, and from the plain meaning of the definition in section 2(11) of the 1988 Act. The definition requires inquiry as to whether a person is in receipt of advice (etc) under the Act. A litigant acting in person cannot be in receipt of legal advice in that sense. The phrase “acting in person” as used by the Court of Appeal in Burridge means taking some active step in the proceedings, rather than merely the converse of not being legally represented. Otherwise there would have been no difference between Categories (i) and (iv) in the list which I have summarised above.

Secondly, it would in my judgment be wrong to treat the state of mind of the litigant acting in person as determinative of the question whether she had at that stage ceased to be a legally assisted person, so as to distinguish between litigants like Mrs Stafford who decide to act in person permanently and litigants like Mrs Mohammadi who act in person only while seeking to obtain alternative legal representation. It would be wrong because an investigation of the litigant’s motivation would be altogether too subjective and uncertain, and would have, on its face, nothing to do with the objective question stated in section 2(11) of the Act, namely, whether the litigant was in receipt, under the Act, of legal advice etc.

Thirdly, as Lord Woolf observed in Burridge, the question whether at any particular time a litigant is a legally assisted person is of real importance for the other litigants in the case. They need to be able to know whether their opponent is or is not, at any particular time, a legally assisted person, for consequences arising under both sections 17 and 18. It cannot therefore be right that the other litigants, once informed that the previously legally assisted person has ceased to be in receipt of legal advice and representation, is nonetheless kept in suspense until the outcome of any investigation as to his opponent’s motivation, or the outcome of any subsequent application to reinstate the legal aid certificate in question.

That conclusion may go slightly further in resolving the issues in Burridge beyond that which, on the facts, the Court of Appeal considered strictly necessary. But I go further only in concluding that when a legally assisted person’s solicitors have ceased to act, without another firm being retained under a legal aid certificate, and that fact has been communicated to the opposing party, then from the moment of that communication the litigant ceases to be a legally assisted person.

In fairness to the writer of the Legal Service Commission’s letter of 6^th July 2007, the final paragraph only purported to assure Mrs Mohammadi that her certificate was, upon reinstatement, deemed never to have been discharged, for the purposes of her being “covered for work done within the scope of the certificates from their original issue dates”. The letter contained no express observation about the effect of reinstatement of a discharged certificate upon the costs protection afforded by section 17. Even if it had, I would not, with respect, have been bound by it, and for the reasons given, I would have disagreed with it.

It follows that in my judgment Master Campbell resolved the issue of law as to Mrs Mohammadi’s status or otherwise as a legally assisted person entirely correctly, by saying, in paragraph 8 of his judgment that:

“Applying Burridge, for any dates upon which she was acting for herself, as opposed to having or being given legal advice, Mrs Mohammadi did not have costs protection and those periods must be identified, and for those periods she will remain liable for costs subject to any set-off for the costs of the defendants.”

It was then necessary for Master Campbell to apply that correct statement of the law to the facts before him, which I have summarised above. There has not been transcribed the part of the hearing (if any) in which he set out his analysis. The only guidance available to me as to his analysis is to be found in the terms of paragraph 1 of the August Order, which is in the following terms:

“The Claimant was not a legally assisted party for the purposes of Parts Two, Part Three, Six, Eight and Nine [of] the Defendant’s Bill of costs dated 7^th September 2005 under section 17 of the Legal Aid Act 1988.”

The Respondents (Defendants) had helpfully prepared their Bill by dividing it into parts so as to distinguish between the periods when, on their submission, Mrs Mohammadi was, and was not, a legally assisted person. Unfortunately, the parts of the Bill thus identified by Master Campbell do not, as Mr Lederman was eventually constrained to concede, precisely reflect the application of the legal principle which the Master correctly identified to the facts as I have described them.

Part 2 of the Bill related to the period from 8^th November 1996 (the day after the Defendants’ solicitors were notified that Mrs Mohammadi would be continuing as a litigant in person) until 19^th December 1996, when they received notice of acting under a legal aid certificate from John Bottrill on Mrs Mohammadi’s behalf. Plainly, for the reasons which I have given, Mrs Mohammadi was not a legally assisted person during that period.

By contrast, Part 3 related to the period from 19^th December 1996 until 26^th April 1999, during the whole of which Mrs Mohammadi was represented by solicitors with the benefit of a relevant legal aid certificate. Mr Lederman suggested that the reference to Part 3 in the August Order must have been a typographical error which ought to be corrected under the slip rule. Whether or not that be so, as to which I have insufficient information, it is clearly not a period in respect of which Mrs Mohammadi was without costs protection.

Mr Lederman pursued his submission that the reference to Part 3 was an error by submitting that for part of the period covered by Part 4 (from 9^th July 1999 until 20^th September 1999), Mrs Mohammadi was not a legally assisted person because her solicitor Mr Freer did not have authority to act under her legal aid certificate. That submission was not supported by the evidence, since there is reference in the Legal Services Commission’s letter of 6^th July 2007 to an amendment to show Mr Freer as having conduct. In any event, there being no cross appeal, and since Part 4 is concerned with a miniscule amount of costs, such that Mr Lederman invited the court to deal with this issue rather than remit it to Master Campbell, I decline to include any part of the period covered by Part 4 within the period for which she was not a legally assisted person.

Part 6 of the Bill covered the period from 23^rd March to 1^st October 2001. From 14^th June she was clearly acting in person, and from March until June it appears probable that she had no solicitors acting for her. Since in any event, the costs itemised in that part of the Bill are concerned entirely with the period following 14^th June, Part 6 was correctly included in paragraph 1 of Master Campbell’s Order.

Finally, Parts 8 and 9 of the Bill commenced with the Defendants’ attendance at the hearing on 10^th June 2002, by which time, as I have described, Mrs Mohammadi had discharged Goldkorn Davies & Mathias, and after which, as she readily acknowledges, she received no further legal advice or representation under the Act, albeit that, later on, she instructed another firm on a privately funded basis.

With the exception therefore of the reference to Part 3 of the Bill in paragraph 1 of Master Campbell’s August Order, which should not have been included, he correctly applied the legal principle which he had identified to the underlying facts.

There remains the difficulty that it is impossible for this court to know precisely how much (if any) of his assessment of the costs of Parts 2, 3, 6, 8 and 9 of the Defendants’ bill in the sum of £15,482.10 was attributable to the costs itemised in Part 3. It is of course possible, if the reference to Part 3 was an error, that no part of the aggregate amount of £15,482.10 is attributable to a period when Mrs Mohammadi was a legally assisted person. I can envisage no way of resolving this outstanding question other than by remitting the matter back to Master Campbell to adjust, if necessary, the amount assessed in paragraph 2 of his Order in accordance with this judgment.

The Court of Appeal awarded Mrs Mohammadi 75% of her costs, and Master Campbell assessed that 75% at £12,657 inclusive of VAT. In fact, he did so by paragraph 3 of his earlier order dated 25^th June 2007 which is not, formally, the subject matter of this appeal. Nonetheless Mr Lederman very properly invited me to deal with the matter, taking no procedural point that Mrs Mohammadi had not in terms appealed that earlier order. She may readily be forgiven for her mistake, since oblique reference to that assessment is made in paragraph 5 of the August Order in connection with his order for interest in her favour, and in paragraph 7 in relation to the costs of that earlier assessment.

Mr Mohammadi was legally represented by solicitors and counsel before the Court of Appeal and had submitted a costs estimate on that occasion, in the sum of £19,085.65 inclusive of VAT.

At the assessment on 25^th June 2007 (when Mrs Mohammadi was not legally represented) she could advance no evidence other than that costs statement to support a detailed assessment, and unsurprisingly the Master used it as the basis of his assessment in the sum of £14,000 plus VAT, reduced to £12,657 by allowing only 75%.

Mr Mohammadi criticised that assessment on two grounds. First she said that in fact her costs had been higher than the amount in the costs statement, and produced a letter from counsel who appeared on that occasion in an attempt to make that submission good, but only by a modest amount. Secondly she submitted that there was no ground for Master Campbell to have assessed the costs at less than the full amount stated in the costs statement.

In my judgment there is no basis for upsetting Master Campbell’s assessment of those costs, which, after the addition of VAT and before the reduction to 75% amounted to £16,450, against the £19,085 claimed. It does not appear that any attempt was made before him to claim more than what was stated in the costs statement, and his use of that statement as the basis for a detailed assessment was a practicable way of assisting Mrs Mohammadi as (by then) a litigant in person to obtain a detailed assessment of a costs order in her favour. It is perhaps a little unfortunate that Master Campbell gave no reasons in the note of his decision for reducing the amount to the modest extent which he did, but I am no means satisfied, in particular after considering the matter with my assessors, that the reduction was in any way wrong. This ground of Mrs Mohammadi’s appeal therefore fails.

The outcome therefore is that Mrs Mohammadi’s appeal fails in substance, save for the need for Master Campbell to consider, if either party requests him to do so, whether, in the light of this judgment, any deduction needs to be made from the sum of £15,482.10 in paragraph 2 of his Order, by reference to the need to exclude Part Three of the Bill from the items in respect of which Mrs Mohammadi lacked costs protection under section 17.

I wish to record the valuable assistance provided to me by my assessors. Nevertheless the content of this judgment is entirely my own.