Harry A Coff Ltd., R (on the application of) v Environment Agency

A defendant’s costs order from central funds should ordinarily be made where a prosecution is dismissed, unless positive reasons justify refusal. The court must distinguish the making of the order from the later assessment of costs. An apparently excessive figure, particularly where costs overlap with those of another defendant, is a matter for assessment and does not justify refusing the order in principle.

Findings that a company and an individual are effectively the same, or that the individual is the company’s directing mind, require evidential support. A person’s status as managing director and correspondence on company headed paper are insufficient by themselves.

The Environment Agency prosecuted Harry A Coff Limited and Michael Coff for alleged waste offences. The informations against the company were dismissed. Michael Coff later pleaded guilty to the corresponding offences.

The company then sought a defendant’s costs order from central funds. The District Judge refused the application, considering the claimed amount unreasonable and extravagant and finding that the company and Michael Coff were effectively the same. The case was stated for the High Court to determine whether that refusal was legally wrong.

1. Appeal allowed. The District Judge was wrong to refuse a defendant’s costs order in principle because counsel had indicated that the costs exceeded £6,000. The application was for an order under section 16 of the Prosecution of Offences Act 1985, with costs to be assessed. The assessor could account for duplication and determine what expenditure was properly incurred by the company.
2. The Practice Direction (Costs in Criminal Proceedings) stated that such an order should normally be made unless there were positive reasons for refusing it. The examples concerning misleading conduct did not justify treating the company’s application as involving costs incurred by Michael Coff.
3. The finding that Michael Coff was the company’s directing mind had a special legal meaning and was unsupported by the evidence. His being managing director, writing on company notepaper, and being one of three directors did not establish that finding. There was no evidence of the shareholdings or division of responsibility between the directors.
4. The related findings that Michael Coff and the company were effectively one and the same, and that he would recover costs through the company, were likewise unsupported. Any risk of recovery through apportionment could be addressed during assessment.
5. The refusal was quashed. The High Court substituted a defendant’s costs order in favour of the company, with the costs to be assessed. The matter was not remitted because further proceedings would cause unnecessary expense and no injustice would result.

The matter arose from an adjudication in the Reading Magistrates’ Court on 26 November 2002. The District Judge refused the company’s application for a defendant’s costs order after the informations against it had been dismissed.

The High Court, exercising its jurisdiction on a case stated, quashed that refusal and substituted a defendant’s costs order, subject to assessment.