Smolen v Solon Co-Operative Housing Services Ltd.

A party challenging a default costs certificate must identify the disputed items and give reasons sufficient to enable the court to assess the challenge. The overriding objective does not excuse the absence of formulated grounds where a fair opportunity has been provided. A costs order may be corrected to reflect the court’s clear intention where an arithmetical error is identified and the affected party has notice. An indemnity covenant in a lease does not, without more, govern liability for costs ordered in the proceedings. A consequential order giving effect to earlier non-compliance will stand where the earlier orders have been upheld and no extenuating circumstances are shown.

The claimant landlord brought proceedings in the Technology and Construction Court against the tenant for alleged breaches of repairing and yielding-up covenants in a six-year lease. Following disputes about expert evidence and the construction of the lease, the court ordered payments towards costs and expert fees and later struck out the claim for non-compliance, entering judgment for the tenant.

Jackson J dismissed an application to set aside several orders. Separately, Deputy Master McKay refused to set aside a default costs certificate for £96,052.74, and Pitchers J dismissed the appeal against that decision. Thomas LJ considered applications for permission or leave to appeal concerning the attempted reopening of those rulings, the adequacy of the challenge to the costs certificate, correction of an arithmetical error in the costs order, and the effect of the lease indemnity covenant.

Both applications were refused. Lord Justice Thomas refused permission to appeal against Jackson J’s decision and leave to appeal against Pitchers J’s decision.

1. The matters raised against the orders of 23 April, 6 May and 9 May 2003 had already been considered by the Court of Appeal. Their correctness could not properly be reopened. The order of 9 May was consequential on the claimant’s failure to comply with earlier orders. In the absence of extenuating circumstances, the court was bound to give effect to those orders, whose validity had already been upheld.
2. A person seeking to dispute a default costs certificate must set out what is disputed and the reasons for disputing it. Without that information the court cannot assess whether the certificate is correct. Ample opportunity had been given to the claimant. The overriding objective did not require a further opportunity where no grounds had been provided. Even assuming the medical evidence was adequate, it did not prevent the claimant from setting out at least some reasons for disputing the bill.
3. The increase in the costs order following the second hearing was unobjectionable. The original figure resulted from an arithmetical error. The claimant had notice of the proposed correction, and the judge had properly considered the matter and amended the order to reflect the court’s clear intention.
4. Clause 3(15) of the lease had no application to the circumstances in which the costs orders were made.

Solon was not entitled to claim costs for putting before the court a bundle which provided no assistance, save for documents which avoided a possible adjournment.

• Court of Appeal (Civil Division): Thomas LJ refused permission to appeal against Jackson J’s decision and leave to appeal against Pitchers J’s decision.
• High Court: Jackson J dismissed the application to set aside the orders of 23 April, 6 May and 9 May 2003. Pitchers J, sitting with Master Rogers and Mr Haslam, dismissed the appeal against Deputy Master McKay’s refusal to set aside the default costs certificate and later corrected the costs order.
• Court of Appeal (Civil Division): On 12 August 2003, Sedley LJ refused permission to appeal against the earlier case-management and strike-out orders.
• Technology and Construction Court: The claimant’s action was struck out for failure to comply with orders requiring payment towards costs and expert fees, and judgment was entered for Solon.