MacDonald v Taree Holdings Ltd

On a second appeal, permission requires an important point of principle or practice, or another compelling reason. A costs decision will rarely justify permission because costs are pre-eminently discretionary.

When reviewing a reasoned judgment, an appellate court should normally identify the judge’s reasoning from the judgment itself. It will rarely be appropriate or necessary to scour the hearing transcript to supply unexpressed reasons.

Failure to serve a costs schedule 24 hours before a hearing is a relevant consideration in a summary assessment, but is not automatically decisive. The court must make a proportionate response. Depending on the circumstances, it may make no reduction, reduce costs as a sanction, require detailed assessment, or disallow costs where summary assessment cannot justly be undertaken.

The respondent had succeeded before a Deputy District Judge in setting aside a statutory demand for about £25,000. The Deputy District Judge nevertheless made no order for his costs because his schedule of costs had not been served at least 24 hours before the hearing.

Mr Justice Neuberger allowed the respondent’s appeal on costs. He held that the procedural default should have been taken into account proportionately and, in the absence of aggravating circumstances, did not justify depriving a successful party of all costs. He awarded and summarily assessed the costs below and on appeal.

Taree Holdings Ltd renewed its application for permission to bring a second appeal. It contended that the Court of Appeal should address the use of hearing transcripts on appeal and the proper sanction for late service of a costs schedule.

1. The renewed application for permission to appeal was refused. Lord Justice May held that the proposed second appeal did not satisfy the threshold in section 55 of the Access to Justice Act 1999. It raised neither an important point of principle or practice nor another compelling reason for the Court of Appeal to hear it.

2. A judge’s reasoning on appeal will normally be found in the judgment given. Although exceptional circumstances may justify looking beyond it, scouring a transcript of the hearing will usually be neither appropriate nor necessary. Mr Justice Neuberger was entitled to regard the Deputy District Judge’s stated reason as the substance of his full reasons. The transcript did not show that other material considerations must have been taken into account.

3. Costs are pre-eminently discretionary, and permission to appeal on costs will only rarely be granted. Mr Justice Neuberger was entitled to conclude that the Deputy District Judge’s sole stated reason for withholding all costs could not stand alone and that the costs order should be reconsidered. His resulting costs orders disclosed no appealable error of principle.

4. Under Part 44 of the Civil Procedure Rules and its Practice Direction, late service of a schedule of costs is a relevant matter when costs are awarded or summarily assessed. It is not necessarily determinative. The proper response depends upon all the circumstances and must be proportionate. A late schedule may cause no practical difficulty, may justify a reduction as a sanction, or may make a just summary assessment impossible so that disallowance of all costs is justified.

5. The proposed further appeal was also financially disproportionate. The court declined to entertain the academic request for wider guidance beyond these principles.

• Court of Appeal (Civil Division): renewed application for permission to bring a second appeal refused in [2001] EWCA Civ 312.
• High Court of Justice, Nottingham County Court (Mr Justice Neuberger): on 12 December 2000, allowed Mr MacDonald’s appeal against the costs part of the Deputy District Judge’s order and awarded his costs on the standard basis.
• Deputy District Judge Cooper: on 3 October 2000, set aside the statutory demand but made no order as to the successful debtor’s costs.