Rowland v Environment Agency

Under CPR 44.3, the unsuccessful party will generally pay the successful party’s costs. The court may depart from that rule to reflect success or failure on separate issues and the parties’ conduct. Loss on particular factual points does not by itself justify an adjustment. A departure requires a genuinely discrete issue on which the successful party lost, or unreasonable conduct warranting a costs sanction. Where the substantive issues were won and no such circumstances were established, the general rule should apply.

This was an appeal from the High Court of Justice, Chancery Division, where Lightman J had ordered the appellant to pay the respondent’s trial costs. The present judgment concerned the costs of the appeal and whether the order below should stand. The respondent had succeeded on the substantive issues, including the appellant’s contentions concerning section 2 and section 5 of the 1885 Act. The appellant relied on factual points on which the respondent had lost, alleged unreasonable conduct, and argued that the appeal had been made necessary by the respondent’s position concerning a February 2001 letter. The central issue was whether those matters justified departing from the general costs rule.

Costs

1. Disposition. The court unanimously awarded the costs of the appeal to the respondent and left the High Court’s costs order undisturbed.
2. Under CPR 44.3, the general rule is that the unsuccessful party pays the successful party’s costs. The court has discretion to make a different order, including an order reflecting success or failure on separate issues and the conduct of the parties.
3. The greater part of the trial concerned the appellant’s primary contention that section 2 of the 1885 Act extinguished public rights of navigation over Headsor Water, and that section 5 authorised the replacement of obstructions. The respondent succeeded on the substantive issues.
4. The appellant’s identification of particular factual matters on which the respondent had lost did not establish loss on a discrete issue warranting a costs adjustment. Nor had unreasonable conduct by the respondent been shown.
5. The criticism concerning the February 2001 letter was not accepted. The respondent’s arguments showed that it had not resiled from what the letter offered, while the appellant had criticised the letter as inadequately framed. The general rule therefore applied, with no deduction from the respondent’s costs.

Lord Justice Peter Gibson gave the judgment. Lord Justices May and Mance agreed.

• Court of Appeal (Civil Division): under [2004] EWCA Civ 37, awarded the respondent the costs of the appeal and declined to interfere with the order below.
• High Court of Justice, Chancery Division: Lightman J ordered the appellant to pay the respondent’s trial costs.