PROVING THINGS 20: ALLEGATIONS OF IMPROPER CONDUCT HAVE TO BE PROVEN: INDEMNITY COSTS ORDERED

In Collins -v- Thanet District Council Collins anor v Thanet DC anor (19 4 16)(Jud) 2 [2016] EWHC 1008 (QB) His Honour Judge Yelton (sitting as a Judge of the High Court) considered the evidence available to support allegations of misfeasance in public office. (I am grateful to John de Waal QC of Hardwicke Chambers for sending me a copy of the transcript).

KEY POINTS

  • The claimants had not adduced evidence sufficient to establish misfeasance in public office.
  • The claimants’ own time spent preparing for a planning appeal did not amount to “special damages” for the purpose of an action for misfeasance in public office.

THE CASE

The case had purchased land outside a village for £26,000. They applied for planning permission to construct a dwelling. This was refused by the local authority but later allowed on appeal. (an application for costs was refused by the inspector on appeal, on the grounds that the local authority had not acted unreasonable).   Rather than developing the land they later sold it (with the benefit of planning permission) for the sum of £110,000.  They brought an action against two local authorities alleging the initial refusal was due to misfeasance in public office.

THE JUDGE’S DECISION

The judge described the allegations of improper conduct as “overblown and wholly unsustainable” and rejected the argument that the local authorities had acted unlawfully.

ABSENCE OF EVIDENCE TO PROVE DAMAGES

One surprising aspect of this case is the failure to plead or prove any special damages

“There is yet another problem in relation to special damages even if I am wrong about everything else (obviously in saying “everything else” is that the claim should be dismissed), and that is the case of Watkins v Secretary of State for the Home Department [2006] 2 AC 395, which Mr. de Waal QC, counsel for the first defendant, relies on as authority for the proposition that proof of special damage was an essential part of misfeasance in a public office. The claimants claim the costs of their time in preparing for the appeal, and that is where the claim comes from, but I agree with the submission of counsel for the first defendant that that is not a head of special damage.”

INDEMNITY COSTS

 The judge ordered the claimants to pay indemnity costs:

  • “Having given judgment in the case, half an hour or so ago, I am now asked to make an order for costs in favour of the first and second defendants which is not resisted and seems to me to be right. I am asked to order a payment on account, which I have not yet come to in detail.  But more importantly, from the point of view of the defendants, I am asked to make an order for indemnity as opposed to standard costs.
  • It is quite right, as Mr. Pitblado says, that the costs rules were changed from 1st April 2013 in a number of different respects. But, in my judgment, and I have had to deal with this issue on a number of occasions previously, nothing has changed as to the circumstances in which an order for indemnity as opposed to standard costs should be made.  The previous authorities remain in force.  How it is applied at the end of the day, because it now has to be applied taking into account the matters set out in the new 44.3(5), is a matter for the costs judge but the principle seems to me to remain and it does not seem to me to be proportionate to adjourn the matter for further time but rather I should conclude it today.
  • The Court of Appeal has been very careful not to set out any basis upon which first instance judges should make indemnity cost orders as opposed to standard cost orders, although there have been a number of authorities, all of which bear out the general principle that indemnity costs should not be ordered unless the matter is out of the ordinary in one respect or another, because the “ordinary” order for costs, if you like, is an order for standard costs. Justice Tomlinson in 2006, in the earlier litigation of Three Rivers District Council v Bank of England, set out a series of I think common sense propositions as to matters that a court should consider in deciding whether or not to make an order for indemnity costs.  The discretion, he said, is extremely wide, which is really what the Court of Appeal has said.  Secondly, there must be some conduct or circumstance which takes the case out of the norm.  I agree with that and that again is a common thread running through the cases.
“Insofar as the conduct of the unsuccessful claimant is relied on as a ground for ordering indemnity costs, the test is not conduct attracting moral condemnation … but rather unreasonableness.
The court can and should have regard to the conduct of an unsuccessful claimant during the proceedings … [and in particular] … as whether it was reasonable for the claimant to raise and pursue particular allegations …
Where a claim is speculative, weak, opportunistic or thin, a claimant who chooses to pursue it is taking a high risk and can expect to pay indemnity costs if it fails.”
          This is important:
“A fortiori, where the claim includes allegations of dishonesty, let alone allegations of conduct meriting an award to the claimant of exemplary damages, and those allegations are pursued aggressively inter alia by hostile cross examination.”
          Cross-examination was hostile in the sense that that was what was being suggested.  It was not hostile in the sense of being unreasonable cross-examination.
  • They seem to me to be important factors. If you look at the matters set out in para.(8) of Mr. Justice Tomlinson’s list:
“(a)  Where the claimant advances and aggressively pursues serious and wide ranging allegations of dishonesty or impropriety over an extended period of time;
(b)   … despite the lack of any foundation in the documentary evidence for those allegations, and maintains the allegations, without apology, to the bitter end.”
          in my judgment, are well met in this case because it seems to me that the key to this is what I said in the course of my judgment.  The claimants took the view that their application for planning permission was unanswerable, which in my view it was not, and therefore they took the view that if it was rejected it could only be because of dishonesty.  That was an unreasonable view to take.  In those circumstances, in my judgment, there should be an order for indemnity costs in favour of both defendants.
  • As to the amounts, my immediate view is that it should be £25,000 per defendant.”

RELATED POSTS

Proving things

INDEMNITY COSTS

 

 

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