London Borough of Tower Hamlets v Gregory (Rev 1)

The costs restriction in section 181(3) of the Housing Act 1985 depends on whether proceedings could have been brought in the County Court, not whether they ought to have been. An order under rule 54.20 of the Civil Procedure Rules 1998 does not itself deem proceedings to have been capable of being brought there. The court must examine the proceedings as launched and their substance. Right-to-buy and service issues may fall within Part V, but proceedings which also challenge wider maladministration are not necessarily proceedings under Part V. Where County Court jurisdiction is not established, the High Court retains jurisdiction to award costs.

An elderly council tenant sought to exercise the right to buy under the Housing Act 1985. The dispute concerned when his notice was served and the council’s handling of his application. He commenced judicial review proceedings in January 2004. Charles J granted permission; Munby J refused default judgment, directed that the claim continue, and made an order under rule 54.20 of the Civil Procedure Rules 1998.

The substantive issue was later decided in the County Court in the tenant’s favour. The deputy judge ordered indemnity costs. The council abandoned its service ground on appeal and challenged only the High Court’s jurisdiction to award costs. The central question was whether the proceedings could have been brought in the County Court under section 181 of the Housing Act 1985.

Appeal dismissed with costs subject to detailed assessment. Lord Justice Moses gave the leading judgment. Lord Justice Carnwath and the Chancellor of the High Court agreed.

1. Section 181(3) of the Housing Act 1985 prevents recovery of costs in the High Court only where the proceedings could, by virtue of section 181, have been taken in the County Court. The relevant question is whether they could have been brought there, rather than whether it would have been proper or preferable to do so.

2. The council’s submission that the order under rule 54.20 of the Civil Procedure Rules 1998 necessarily established County Court jurisdiction was rejected. Rule 54.20 permits proceedings to continue as if they had not been started under the judicial review procedure. It does not deem them to have been capable of being brought in the County Court. The court must analyse the proceedings as they stood when launched.

3. Questions concerning the date and sufficiency of service of the right-to-buy notice could have been determined in the County Court under Part V of the Housing Act 1985. They were not, however, the whole of the proceedings. The claim also challenged the council’s responses and alleged maladministration in dealing with the tenant’s assertion of his right to buy. There was therefore insufficient material to conclude that the proceedings were solely under Part V or could have been brought in the County Court by virtue of section 181(1).

4. The council’s failure to acknowledge service deprived it of the opportunity to seek strike-out under rule 54.13 of the Civil Procedure Rules 1998. Its later argument was consequently unattractive, but that procedural history did not replace the statutory jurisdictional inquiry.

5. Lord Justice Carnwath emphasised that the conclusion turned on the particular and unfortunate history of the case and was not general guidance on the operation of the system where a local authority acted improperly.

1. Court of Appeal (Civil Division) — On appeal, the council’s challenge to the jurisdiction to award costs was rejected and the appeal was dismissed with costs subject to detailed assessment: [2006] EWCA Civ 1366.
2. Bow County Court — A deputy judge, Mr Supperstone QC, found that the right-to-buy notice had been served on 6 March 2003 and ordered indemnity costs.
3. High Court — Charles J granted permission for judicial review. Munby J refused default judgment, ordered that the proceedings continue, and made an order under rule 54.20 of the Civil Procedure Rules 1998.