Cambridge City Council, R (on the application of) v Alex Nestling Ltd

Where a statutory appeal from a local authority’s administrative decision gives the magistrates a broad discretion over costs, costs do not automatically follow the event. The authority’s honest, reasonable and proper discharge of its public function is a particularly important consideration. The court must assess all relevant circumstances, including the particular financial prejudice to the successful appellant and the need to protect sound public decision-making from undue financial exposure. A different conclusion on appeal does not, without more, justify a costs order against the authority. An award based substantially on the ordinary civil rule, or on inconsistent reasoning about the authority’s conduct, may be quashed.

The local authority refused to extend licensing hours for premises in a residential area, although it allowed part of the application. On appeal under section 181 of the Licensing Act 2003, the magistrates extended the hours in part and ordered the authority to pay £2,000 towards the licensee’s costs.

The magistrates accepted that the authority had acted conscientiously and properly, but relied on the partial success of the appeal, the licensee’s expenses and the authority’s more generous treatment of two other premises. The authority appealed by Case Stated, arguing that the costs order was legally unsustainable.

1. Appeal allowed. The costs order was quashed. The respondent had not appeared, and the court considered that remittal to the magistrates would be inappropriate. On the facts found, the magistrates could not properly award costs against the authority.
2. Under section 181 of the Licensing Act 2003, the magistrates had a broad discretion to make such order as to costs as they thought fit. The discretion was not confined to cases in which the local authority had acted unreasonably or in bad faith.
3. Following the guidance in City of Bradford Metropolitan District Council v Booth [2000] 164 JP 485, the court had to consider all relevant facts and circumstances. It could order costs to follow the event, but was not required to do so. In a comparable statutory appeal, it should give particular weight to the authority’s honest, reasonable and proper performance of its public duty, the financial prejudice to the successful appellant, and the need to encourage public authorities to make and maintain sound administrative decisions without fear of undue financial exposure.
4. The ordinary civil rule that costs follow the event had no proper role as a governing principle in this type of case. The magistrates’ reference to that rule, their presentation of the authority’s proper conduct as outweighed by the different appellate conclusion, and their reliance on treatment of other premises were legally flawed. The latter consideration could only have been relevant if it supported a finding of unreasonable double standards, which was inconsistent with the magistrates’ acceptance that the authority had acted properly.
5. The respondent was ordered to pay the authority’s costs in the sum of £3,000, summarily assessed, with liberty to apply in writing within 21 days.

1. Magistrates’ Court: Allowed the licensing appeal in part under section 181 of the Licensing Act 2003 and ordered the local authority to pay £2,000 towards the respondent’s costs.
2. High Court (Administrative Court): Allowed the appeal by Case Stated and quashed the costs order.