Powell v Swansea

A magistrates’ court has a discretion under section 64(1) of the Magistrates’ Courts Act 1980 to award costs, including deciding which party should pay them. The discretion must be exercised by reference to all relevant circumstances. Where a regulatory authority’s decision is successfully challenged, the court should consider whether it was made honestly, reasonably, properly and on grounds that reasonably appeared sound. If the authority wrongly applies an inapplicable policy, the decision cannot be treated as reasonable or properly founded. In such circumstances, an award of costs may plainly be required.

The claimant appealed against the magistrates’ refusal to award him costs after his successful appeal against the respondent authority’s refusal of applications to renew and transfer four hackney carriage licences. The magistrates found that the applications were made in time, were correctly completed and should have been treated as renewal applications. They nevertheless refused costs, relying on Bradford City Metropolitan District Council v Booth (2000) 164 JPR 485. The central issue was whether, in light of those findings, the magistrates had erred in law by refusing costs.

1. The appeal was allowed. The magistrates had erred in law in refusing an award of costs.
2. Section 64(1) of the Magistrates’ Courts Act 1980 conferred a discretion to make such order as to costs as was just and reasonable. That discretion extended both to the amount of costs and to the party liable to pay them. The approach stated by Lord Bingham in Bradford City Metropolitan District Council v Booth (2000) 164 JPR 485 was applied.
3. The first question was whether the regulatory authority had acted honestly, reasonably, properly and on grounds that reasonably appeared sound at the time. The financial prejudice to the applicant and the need to encourage public authorities to make and stand by sound decisions were additional considerations identified in the guidance.
4. The respondent had acted honestly, but had applied to renewal applications a policy which applied only to fresh applications. The findings that the claimant had applied in time and complied with the relevant requirements meant that there was nothing further he could reasonably have done without proper notification from the respondent. The respondent’s refusal therefore could not be regarded as reasonable, proper or based on grounds that reasonably appeared sound.
5. Because the respondent had purported to apply an inapplicable policy, this was plainly a case for an award of costs. The case was remitted to the magistrates for further consideration of the sum to be awarded. The costs of the proceedings in the High Court were summarily assessed at £3,000 inclusive of VAT.

• Magistrates’ court: The claimant’s appeal against the licensing refusal succeeded, but the magistrates declined to award costs.
• High Court (Administrative Court): The stated question was answered in the affirmative. The refusal of costs was set aside in substance, and the matter was remitted to the magistrates for further consideration of the sum payable.