Ali v Bashir & Anor

This is the judgment of the Court on the Petitioner’s application of 24^th October 2012 for an Order under CPR 44.3(8) for £25,000 to be paid by the First Respondent on account before a detailed assessment of the costs ordered to be paid to him takes place. The Petitioner was the unsuccessful candidate for election as councillor for the Maybury and Sheerwater Ward of Woking Borough Council. He challenges the election of the First Respondent. The Second Respondent is the Returning Officer. Following the dismissal of his application of 17^th July 2012 to dismiss the Petition on 27^th July 2012, the Court ordered the First Respondent to pay the Petitioner’s and the Second Respondent’s costs of his application to be assessed if not agreed. It was ordered that the costs of the Petitioner’s application of 12^th June 2012 for appointment of a Commissioner, for directions and for the scrutiny of relevant documents be costs in the Petition. No Schedule of Costs was produced to the Court on 27^th July 2012.

The facts giving rise to this application are set out in the judgment dismissing the First Respondent’s application are set out in the judgment giving reasons for the orders made on 27^th July 2012. Neither of the Judges who heard the applications on 27^th July 2012 was able to be present on the handing down of the judgment. This application was made on written submissions from the parties.

By letter dated 9^th August 2012 the Petitioner’s solicitors asked the First Respondent’s solicitors for their client’s proposals for settling the Petitioner’s costs ordered to be paid by him. No Schedule of Costs was provided with the letter although the number of hours and charge out rates of the Partner and the Employed Barrister of the solicitors was given as well as Counsel’s fees. The costs were said to total £32,784. No offer of payment on account of costs was forthcoming from the First Respondent.

Included in written submissions dated 12^th October 2012 on a suggested way forward to progress the scrutiny of votes which had been ordered, David Lock QC on behalf of the Petitioner set out grounds for seeking a substantial payment on account of the costs the First Respondent had been ordered to pay the Petitioner which were to be assessed if not agreed.

By application of 24^th October 2012 the Petitioner applied for an order for payment to him of £25,000 on account before costs are assessed. The grounds for the application were stated to be:

“The Petitioner is of modest financial means but is not legally aided. The reasons for this application are:

i)

to avoid the Petitioner being placed in the financial position whereby he is forced to make an application to the Court to withdraw the Petition; and,

ii)

the very high level of public interest in the Petition progressing to Trial.”

In his witness statement of 24^th October 2012 in support of the application, the Petitioner’s solicitor stated that his client does not have the financial resources to allow him to meet the legal costs of the petition on a private basis. He is an electronics engineer by profession. It was said that because of his income the Petitioner would not qualify for public funding for these proceedings. At paragraph 10 the solicitor states:

“Although he has secured a costs order in his favour for successfully defending the application, there is a real danger that the First Respondent will achieve his objective of preventing a trial on the merits because the Petitioner does not have further funds to continue his case through to trial.”

Served with the Petitioner’s solicitor’s statement was a Schedule of Costs which we attach as an appendix to this judgment. The Schedule is divided into sections showing the time spent by the Partner and by the Barrister employed at the Petitioner’s solicitors. All the items set on in Bill of Costs are for work done after service of the Petition but much was carried out before the First Respondent’s application of 17^th July 2012 to strike out the Petition was issued.

In his response of 1^st November 2012 to the application for an order for payment of costs ‘on account’ the First Respondent pointed out that he should only be paying towards the costs of the strike out application. He contended that the Schedule of Costs includes charges for work related to the preparation of the Petition and not the strike out application. As for his means he stated that he was not working as a taxi driver as suggested by the Petitioner and he “does not own any business at present”. He stated that he is “unemployed at the moment”.

The First Respondent quoted from an email he received from his solicitor to the effect that the Petitioner had not produced a Schedule of Costs at the hearing on 27^th July 2012. Therefore the usual rules in CPR 47.1 of assessment of costs at the end of the hearing should apply. He contended that there should not be an order for payment of costs on account as “there may well be a much larger costs order in the other direction”. It was said that an order for payment of costs on account would seriously prejudice him. He therefore asks the court not to make an order for a payment of costs on account.

In their reply dated 2^nd November 2012 to the response by the First Respondent, the Petitioner’s solicitors stated:

“Mr Bashir appears to misunderstand the schedule which has been served with the application. This relates to the costs of defending the application brought by Mr Bashir to strike out the Petition and not our legal work on the merits of the petition as a whole. No sums have been included in the Schedule which relate to those costs. However, following the commencement of the petition, the legal costs were almost exclusively focused on the legal issues around the strike out. This firm did not undertake substantial work on the facts underlying the case or the details of the scrutiny until after the strike out application was heard.”

The Petitioner’s solicitors stated that their client was surprised at the First Respondent’s assertion that he was not working as a taxi driver and did not own any business “at present”. Also they invited the court to note whilst asserting in his response of 1^st November 2012 that he was unemployed at the moment, the First Respondent had not provided any details of his assets. They invited the court to conclude that it was in the interests of justice for an order for a payment on account of costs to be made.

The order being sought by the Petitioner is for an amount to be paid on account of the order made in his favour following the hearing of 27^th July 2012 that the First Respondent pay his costs of resisting the First Respondent’s application to strike out the Petition to be assessed if not agreed. In accordance with CPR 47.1:

“The general rule is that the costs of any proceedings or any part of the proceedings are not to be assessed by the detailed procedure until the conclusion of the proceedings but the court may order them to be assessed immediately.”

One factor we take into account is the possibility that the Petition may ultimately be unsuccessful and the Petitioner be ordered to pay the First Respondent’s costs of the Petition. In those circumstances the court could set off one set of costs against another (see CPR 44.3(9)), which would reduce or possibly extinguish the amount which the First Respondent is to pay pursuant to our Order of 27^th July 2012 and may make the First Respondent a net receiving party rather than a net paying party. This is an important factor but not the only one.

Since neither party is legally aided, the inhibition on summary assessment does not apply and the risk of substantial injustice by the receiving party being unable to pay a costs order which may ultimately be made against him is likely to be less than in Hicks v Russell Jones & Walker [2000] WL 1720265. These were factors which were relied upon by the Court of Appeal in not ordering immediate detailed assessment.

The subject matter of these proceedings-the challenge to the election of a local councillor- is of public importance. We have no doubt that the cost of pursuing it with legal assistance will be considerable. We have seen the Schedule of Costs the Petitioner has already incurred. Through his solicitor the Petitioner has said that he is of modest financial means and the application for payment on account is made to avoid him being in a situation where he is forced to make an application to withdraw the Petition through lack of funds with which to pursue it. He is not legally aided and his solicitor is of the opinion that on financial grounds he would not qualify for public funding. The First Respondent states that he does not own any business “at present” and he is “unemployed at the moment”. He too does not depose to his assets. He says that he has applied for legal aid but no decision has yet been taken on his application. The evidence as to the financial position of neither of these parties is as detailed as it might have been. Nonetheless, such as it is, we consider that it allows us to proceed on the basis that neither can readily afford legal representation out of their own resources.

If the Petitioner were compelled to withdraw his Petition through lack of funds there would be no resolution of the issue of the legality of the election of the First Respondent. That would be undesirable in the public interest. Further, the costs which we ordered the First Respondent to pay related to an application which he initiated and on which he failed. In our judgment it would be wrong that the Petitioner be prevented from taking the Petition forward because he was required now to meet from his resources those costs which the First Respondent will be liable to pay him on a detailed assessment.

We have reminded ourselves that the amount which we can order to be paid on account should be no more than will almost certainly be demonstrated to be due to the Petitioner following a detailed assessment of his costs of resisting the strikeout application (see Shovelar v Lane [2012] 1WLR 637 at [58] per Ward LJ). As will become apparent, this is much less than the amount sought to be paid on account.

In Blackmore v Cummings [2010] 1 WLR 983 Elias LJ said that it was an important consideration that a party should not be kept out of the monies which would almost certainly be demonstrated to be due to him longer than is necessary.

Taking into account all these factors we make an order under CPR 44.3(8) that the First Respondent make to the Petitioner a payment on account of costs. We now consider which of the items on the Petitioner’s Costs Schedule are unarguably attributable to resisting the First Respondent’s application to strike out the Petition and whether the amounts of those costs are reasonable and proportionate.

The Petitioner instructed solicitors after issuing his Petition on 12^th June 2012. The First Respondent issued his application to strike out the Petition on 17^th July 2012. In deciding which costs could be said to be attributable to resisting the First Respondent’s application, we take the date of 17^th July 2012 as a watershed. There is no narrative or letter before that application which clearly establishes that any work carried out by the Claimant’s solicitors before that date was solely or principally undertaken in resisting the application. For example the first item in the Schedule of Costs: 30.5.12 included time on considering information provided by two individuals and researching scrutiny of votes. Their evidence was not referred to in resisting the First Respondent’s application. As can be seen from the wording of the Petitioner’s witness statement of 23^rd July 2012 it was made in support of the Petition. At paragraph 3 he stated:

“I make this statement in support of the Election Petition (‘the Petition’) that I have brought to challenge the election of Mr Mohammed Bashir as a Councillor for the Maybury and Sheerwater Ward. In particular, my statement is intended to support my application to fix a hearing for the trial of the Petition (‘The Application’).”

The statement concludes with a request that the Court grant the orders sought in the Draft Order on the Petitioner’s application. On its face the Petitioner’s statement was not produced to resist the First Respondent’s application to strike out the Petition although in part it may later have been relied upon for this purpose. No costs attributable to preparation of the Petitioner’s statement will be included in the order for a payment of costs on account. At a detailed assessment it may be contended that amendments to the statement made after 17^th July 2012 were attributable to responding to the First Respondent’s application. We are not in a position to make that assessment.

By contrast with the Petitioner’s statement, in her statement of 24^th July 2012 Elizabeth Evans says at paragraph 4:

“I make this witness statement in support of the Petition. In particular, I wish to address the form of the Petition in the light of the Second [First] Respondent’s application to the court dated 17 July 2012 to dismiss it.”

The narrative to the Schedule of Costs shows a ‘telephone conference with Liz Evans’ on 18^th July 2012 and ‘Amendments to witness statements of Elizabeth Evans’ on 24^th July 2012. These items are likely to relate to amendments to respond to the First Respondent’s application of 17^th July 2012. Accordingly a proportion of the work on the witness statements of Elizabeth Evans carried out after 17^th July 2012 will be taken into account in the amount of costs to be ordered to be paid on account.

Whilst the major part of the hearing on 27^th July 2012 was occupied by the First Respondent’s application, some time was spent on directions in relation to the Petition and in particular on the venue of the scrutiny. The case was listed not before 11am. The submissions on the First Respondent’s application had concluded within a little more than two hours. For the purposes of the order for payment on account of costs we allow 2 hours and 30 minutes for the Partner’s attendance at court. Having regard to the likely allocation of preparation time and the actual hearing time spent on each of the two applications, proportionality and reasonableness and how much will ‘almost certainly be demonstrated to be due’ in respect of counsel’s fees for the order for payment of costs on account we allow £3,500 plus VAT.

We have marked up the Bill of Costs to show the items and number of hours to be included on the sum ordered to be paid on account of costs. The items on the Bill of Costs included in our Order, the hourly rates and times allowed have been determined in accordance with the principle that the amount to be awarded in an order under CPR 44.3(8) is of costs which would ‘almost certainly be demonstrated to be due’. We base our decision on the Guideline hourly rates for Summary Assessment. Accordingly we allow rates appropriate for a SE1 postcode, £267 for the Partner and £165 for the Employed Barrister. On a detailed assessment it may be that a costs judge holds that work done by the Petitioner’s solicitors before 17^th July 2012 should be included in the costs of resisting the First Respondent’s application to strike out the Petition and that the higher hourly rates or the higher number of hours claimed by the Petitioner are reasonable and proportionate. On a detailed assessment of costs the First Respondent too will have an opportunity to raise points on the costs claimed.

The Claimant asks to be awarded the costs of this summary assessment in the sum of £2599. Having regard to the fact that the Claimant did not apply for a summary assessment of costs on 27^th July 2012 and did not provide the court with a Costs Schedule and the failure of the First Respondent to offer a sum on account of costs when the issue was raised by letter dated 9^th August 2012 we order the First Defendant to pay the Petitioner one half of the costs of the application, allowing £267 per hour for the Partner and £165 per hour for the Employed Barrister.

The First Respondent is ordered to pay the Petitioner the sum of £7,589.94 on account of costs pursuant to CPR 44.3(8) calculated in accordance with this judgment and as shown on the annexed marked up Schedule of Costs.

The First Respondent is ordered to pay the Petitioner the costs of the application for payment on account pursuant to CPR 44.3(8) in the sum of £902.70 calculated as set out in this judgment and on the annexed marked up bill of costs.

The payment on account and the costs of this application are to be paid within 14 days of the Order on this application.