Saxton v Bayliss & Ors

I have before me two appeals in relation to an order made by His Honour Judge Gerald after a trial of an action which took place last 17 October. The first is an appeal made by the third defendant against that part of the costs order which was made on that occasion and it was made after the trial of a preliminary issue in the action.

The action started on 11 November 2009 and concerns a dispute between two neighbours. The original claim form was issued against the first defendant only and was for an injunction preventing the defendant from obstructing the right of way to the rear of the cottages in Mill Street, either by himself or his agents, from obstructing the claimant's use or her right of way, either by physical means or by threatening or harassing her or her guests, either physically or verbally.

There was an application for an injunction. That was heard on 3 December by District Judge Brett sitting in the Bromley County Court and he dismissed the injunction application. He made an order adding the second defendant, which is the first defendant's mother, as a defendant and he ordered the claimant to serve an amended claim form and Particulars of Claim setting out fully her case as to the claimed right of way and obstruction thereof and, if so advised, the boundary, including a declaration. I understand that the application for an injunction was dismissed because the first defendant was not a proper party to that application in that he was not the owner of the relevant premises and therefore had no control over whether or not there was a right of way over those premises or indeed the extent of the boundary of those premises, whereas the second defendant is the owner of the relevant premises.

The Amended Particulars of Claim were served on or about 12 January 2010 and they included a prayer for relief, paragraphs 2, 3 and 4 of which were as follows. Paragraph 2 was a declaration that the boundary between numbers 4 and 5 Mill Street has been in the same position since prior to 1986 and any action in trespass by the defendants is statute barred. Paragraph 3 is a declaration that a right of way exists along the existing passageway to the side of number 1 Mill Street and to the rear of numbers 1 to 5 Mill Street, or alternatively 4, a declaration that such a right of way has been acquired by continuous use for in excess of 20 years in accordance with the Prescription Act 1832.

Subsequently the dispute between the parties was broadened to include allegations of harassment, trespass and nuisance and an Amended Particulars of Claim was served pursuant to an order of 8 July 2011 and that amended claim added the third defendant as party to the action and numerous particulars of the conduct amounting to harassment which were designed to cause the claimant anxiety and distress were added.

By the third defendant's Defence she pleaded in relation to the right of way issue that she had never been the owner of the relevant properties and had no responsibility therefor. My understanding is that it is accepted that that position is accurate. It seems clear to me that the third defendant was added as a defendant to the proceedings because of the allegations of conduct amounting to harassment and nuisance which had been alleged.

There was a pre-trial review on 10 August 2012 and His Honour Judge Gerald made an order for the trial of a preliminary issue. Paragraphs 1 to 4 of that order read as follows:

There are then a lot more orders relating to matters leading up to and the conduct of the trial. The trial duly took place on those dates and the claimant instructed solicitors and counsel. The defendants were litigants in person, Mr Bayliss on his own behalf and also for his mother, who is an invalid. The judge made clear at the outset what his judgment was going to be about, and I quote paragraph 2:

So it is clear from both the definition of the preliminary issue and from what the judge said in his judgment that what the trial was going to be about was the determination of the right of way and where the boundaries were. This matter is of some importance since it appears from both the correspondence prior to trial and from the skeleton arguments prepared by the defendants for trial that the third defendant at least thought the trial was also going to be about matters of trespass and nuisance. My attention was drawn to the skeleton argument, which was a joint skeleton argument of the first and third defendants, and there is a substantial section headed "Trespass and Nuisance", both an analysis of the facts and of the relevant law, running over many pages.

In his judgment His Honour Judge Gerald dealt, as he said he would, with the determination of whether or not there was a right of way and the correct position of the boundary and he concluded matters in favour of the claimant. He made a costs order against all three defendants and, as I have had said, it is that order, in respect at any rate of the third defendant, which is the subject of the appeal. The main contention of the third defendant is that she was, although a party to the action, not a party to the issue as to the existence or otherwise of a right of way and the location of the boundary. She contended that she was only in the action at all because of the harassment and nuisance claims.

There is no separate judgment of His Honour Judge Gerald which deals with the costs of the parties, however, his reasoning is apparent from the transcript of the argument after judgment, and in particular pages 178 to 180 of the bundle before me. It appears that, either at the beginning of the trial or at some stage during the trial, the third defendant had requested and been granted the right to make submissions to the court and to cross-examine the witnesses. The judge records that the cross-examination was, in the judge's words, at line 217 on page 179: "To pick up any points your husband omitted", a reference to her husband being a reference to the first defendant. With respect to the submissions His Honour Judge Gerald said this: "And also to make your own submissions, I agree you did not say that much." The core of the judge's reasoning is on page 180 at 231 when Mrs Bayliss, the third defendant, was protesting that she was only in the action because she was added for the purposes of the harassment, and the judge said this: "Well it is not a question of who is added, it is a question of who turns up and does battle, and you did." [Quotation unchecked.]

My attention was drawn to the usual authorities on the functions of an appellate court in cases like this, and in particular to the decision of Sir Stuart-Smith in paragraph 16 of Adamson v Halifax Plc [2002] EWCA Civ 1134 where he says this:

I was also referred to paragraph 32 of Tanfern v Cameron-Macdonald [2001] WLR 1311 and to the familiar passage of May LJ in EI Du Pont de Nemours v ST Du Pont [2006] 1 WLR 1368 paragraph 94. The claimant submits that, not only did the judge not err in principle, that he was right and plainly so. He submitted, and I quote from his submissions made orally, the first quote was: "As matters stand it would be perfectly proper to order costs against the third defendant, even if she had not taken part in the trial." That is a more extreme position than that taken by the judge, which was that he appears to have made the order for costs because she turned up and did battle. Further, counsel for the claimant submitted that "the third defendant participated in the background and is liable as a party", and she also submitted that she "joined the battle from the outset", furthermore that "she initiated the dispute". With respect to those latter two submissions, Mr Noble, counsel for the claimant, drew my attention to some passages from the correspondence.

Mr Noble also submitted that "it would be safe to say [and again I am quoting] that the judge found the second defendant lying in her evidence in relation to the boundary dispute and to the existence of the right of way". He also said that it was safe for me to conclude that the third defendant was an untruthful witness with respect to the photographs referred to in paragraph 45 of the judgment. This latter matter is of some significance because the judge does indeed deal with untruthfulness in respect of the photographs in his judgment. He deals with the position of the third defendant's daughter, who did give evidence about these photographs and her evidence, as I understand it, was to the effect that the photographs being relied upon by the claimant were a forgery. At paragraph 46 of the judgment His Honour Judge Gerald reached the conclusion with respect to the photographs that the evidence of the claimant was to be preferred. But he deals with the third defendant's daughter in paragraph 47 and he says this:

So in the places in the judgment where the honesty of a witness is in issue, particularly in the context of these photographs, the judge expressly deals with the matter. He deals with it in relation to the third defendant's daughter and reaches the conclusion that the witness was not being untruthful, merely that she was mistaken. In my judgment, it is quite impossible for me to reach a conclusion that the judge had in mind that the third defendant was being untruthful about these photographs. I go further and say it would be wholly wrong, in my judgment, to reach that conclusion when I have not had the opportunity of considering the third defendant as a witness myself and the judge simply does not deal with the honesty or otherwise of the third defendant in his judgment. When Mr Noble submits that I can safely conclude that the judge found the third defendant lying in her evidence with respect to the boundary and the right of way, in my view it would be not only unsafe but wrong to reach a conclusion on the veracity of a witness after a trial in which the judge has made no reference to the veracity or otherwise of a witness. Accordingly, I reject the assertions to the effect that the judge would have made this order for costs against the third defendant because the judge had reached the conclusion that the third defendant was an untruthful witness.

When it comes to a question of costs it does seem to me that the judge reached the conclusion, in fact it is plain that he did reach the conclusion, and his conclusion was based upon the fact that Mrs Bayliss, the third defendant, ought to pay the costs merely because she turned up and did battle. Looking at it without considering the authorities, that would seem to me to be a touch unfair against a litigant in person who believes, wrong as it turns out, that the trial is going to be about nuisance and trespass issues, and turns up for that reason, and who contributes to submissions and cross-examinations in the belief, no doubt, that she was contributing to part of the case, but I cannot imagine that she thought that she was putting herself at risk as to the whole costs of the dispute. Indeed that cannot be the position because she had previously said in answer to questions from the judge that she thought she was only there, that is to say only there at the trial, for the harassment issues.

Accordingly, and turning back to the question of whether or not this court can interfere with the exercise of the judge's discretion as to whether or not a costs order should be made against the third defendant, it seems to me that the judge did make an error of principle in that he should have taken into account the fact that the third defendant was not actually a party to the dispute as to the existence or otherwise of the right of way or to the location of the boundary, was not in a position to compromise that dispute, was not in a position to have an effect one way or another as to whether or not and when that boundary had been laid down. True she was a party to the action, but she was party to an action which had many parts and the judge had decided that a preliminary issue should be restricted to one part. It may be that the judge should have been firmer in not permitting Mrs Bayliss, the third defendant, to have her say, but in my experience it is quite common with litigants in person that if it is the husband and wife then both parties want to chip in, and it is also my experience that quite often the judge allows that to happen because sometimes it is the most expedient way of managing the process, although strictly only one of the parties perhaps has the absolute right to speak.

That, however, is not the end of the matter because the third defendant did come along and was involved and my attention was drawn to some of the cases on third party costs orders because it was submitted they shed some light on the approach I should take. My attention was drawn to Thompson v Berkhamsted [2009] 6 Costs LR 859, the decision of Blake J, where at paragraphs 17 and 18 he set out some of the principles, and incorporated into this judgment are pages 864 starting from: "From this learning I deduce the following principles are of potential relevance to the present case", incorporating all the principles over to 865 and the first three lines at the top.

My attention was also drawn to Symphony Group v Hodgson [1994] QB 179 at paragraph 192H, where again it is said that an order for the payment of costs by a non-party will always be exceptional and the judge should treat any application for such an order with caution. Then the point is made that in the context of warning a non-party Balcombe LJ makes the point that even if there is a good reason for not joining a non-party against whom there is a valid cause of action, he should warn the non-party at the earliest opportunity of the possibility that he might seek to apply for costs against him. That was a warning in the context of a non-party who had not been joined. Here of course the party has been joined, but Mrs Bayliss has not been joined for the purpose of a costs order being made against her. She was joined because of the harassment case which was set against her.

Mr Benson, counsel for the third defendant, submitted that the fair role would have been for the judge to warn Mrs Bayliss that she risked having a costs order made against her if she uttered a murmur at the proceedings in terms of cross-examination and submissions. Certainly, in my judgment, that would have been fair had it been in the judge's contemplation that a costs order might be visited upon the third defendant because, although she was very keen for the second defendant to win, nevertheless she was not a party to the dispute and, as I have said, could not have settled the dispute or could not have, for that matter, brought the dispute and, irrespective of whether or not her evidence was in favour of the dispute, she was not in a position to influence it other than as a witness. It is in the context of witnesses that my attention was drawn to another passage from Balcombe LJ at page 193H, which says that:

Mr Noble made much of the fact that Mrs Bayliss was involved in the dispute. He said she was involved in that she was the initiator of the dispute with the claimant, but it seems to me that in reality the third defendant was in fact no more than a witness. True it is that the judge preferred the evidence of the claimants on various matters, but I have already dealt with whether or not it would be safe for me to reach a conclusion that the judge thought the third defendant was lying.

My attention was also drawn to Jackson v Thakrar, which was another case about third party costs orders, in particular to paragraph 15. In fact this was a case where the wife of a bankrupt had raised £10,000 finance representation and in paragraph 15, dealing with the issue of causation, Judge Peter Coulson QC said this:

Insofar as that is a relevant test here, it seems to me that the extra costs caused by what the judge regarded as not saying very much in submissions and just adding to what her husband had said in cross-examination, in terms of causation the costs incurred by that must be fairly trivial in relation to the whole of the costs.

A point made by Mr Noble (which I might have mentioned earlier) was that in the order made after the judgment, paragraph 5 of the order is to this effect:

I was surprised when I read that order first time in preparation for this hearing because I had previously read the judgment and the judgment simply does not deal with the blocking up of the right of way and does not deal with whether or not any damages had been occasioned thereby. Mr Noble said that it was common ground that the right of way had been blocked up. That may be so, but the issue which had been prescribed for determination on that preliminary issue did not, it seems to me at any rate, include whether or not there was a liability for damages, and against whom, and did not include a factual inquiry as to whether or not a right of way had been interfered with. What it was intended to include at the hearing was exactly what the judge said at the beginning of his judgment and which had been prescribed by the order made on the pre-trial review. Be that as it may, there is no appeal against paragraph 5 of the order, but it does not seem to me the existence of that paragraph 5 in the order should have the effect of making a party liable for the costs when they would not otherwise be liable.

In my judgment, His Honour Judge Gerald was in error when he made an order for costs against the third defendant on the basis that he set out, that is to say it is merely a question of who turns up and does battle. It seems to me that the right approach is to consider whether or not the party against whom a costs order is sought is in fact a party to the issue and a party properly so called, and if the answer to that question is no, then of course there are provisions for making third party costs orders, but those provisions and the jurisprudence around them should be considered.

Taking into account the matters which I should take into account, as set out in the authorities to which my attention has been drawn, I am not satisfied that this is a case in which a costs order should be made against the third defendant, the reasons being that, yes, it is true she had an involvement in the trial, but she was not warned that she was going to incur a costs liability. She probably thought she was being helpful. Certainly she wanted to win, but when she wanted to win, what she really wanted was for the second defendant to win and the first defendant as her attorney. She gave evidence and, as I have already said, I do not for the moment come close to suggesting that her evidence was deliberately untruthful. In my judgment, there is no sufficient material here and it would not be fair or proper to inflict a costs order against the third defendant. Accordingly, in respect of the first matter I have to deal with, the appeal is allowed.

The second matter arises out of an interim order for costs. The position on that is that there was a bill of costs put in by the claimants in the sum of £200,000, not quite that amount, which included uplifts for success, and I am told that this schedule was only in respect of the right of way and boundary issues, but that is not what the judge thought. He gave very short reasons for his judgment and he said that:

The defendants accept that the first £20,000 ordered to be paid on account was properly ordered, and indeed it has been paid, but they say that the second £30,000 should not have been ordered. I asked Mr Benson whether or not he relied upon any error of principle in the judge's judgment and he was not able to identify any such error. He said that £50,000 altogether as an interim payment on account of costs is Wednesbury unreasonable and for that reason I can exercise the discretion myself. What Mr Noble says is that, yes, it is a high figure, but it is not an unreasonably high figure, that the defendants were warned that the costs were high and he submits that £50,000 altogether is on the low side. It was common ground what the principles were, that is to say it should be the irreducible minimum likely to be assessed on an assessment, and the second is that it should be such a figure which will aid or encourage a settlement of the costs bill.

It was put before me that the costs estimate at the CMC were in the sum of £50,000, a sum very, very much lower than the total sum of £190,000. I do not think it is prudent to place much reliance on that figure of £50,000. The figure of £50,000 came up in an exchange between Judge Dight at the CMC and Mr Noble, counsel for the claimant, and Judge Dight asked what is the estimate of costs and his answer was probably about double, and that is double the quantum of damages, which were £30,000. Then he says, "I do not know, £50,000 perhaps." It is pretty plain to me that counsel is not giving an informed estimate there. He admits to simply not knowing and he is guessing. It turns out that his guess was wrong.

The other matter which is relevant is that the defendants' own costs were not at all small. Their costs up to November 2010 were in the sum of £53,900, which is before the third defendant was added into the action and numerous particulars of harassment were introduced. The defendants' overall costs were in the sum of £70,465. My attention was also drawn to the fact that it was a three-day trial, there were three experts, there were three ring binders of documents. Counsel's fee alone was some £40,000, and that does not include the uplift to which apparently he had, or someone on his behalf had, reached agreement.

I am not satisfied that the figure of £50,000 was outside the ambit of the wide discretion given to the judge. Even if I would have come to a different figure myself, that does not alter things. In my judgment, the figures which the judge reached were figures to whichhe was entitled to reach given the ambit of his discretion. Accordingly, in respect of the second matter, the appeal is dismissed.