Murphy v Countryside In Partnership With Hunters Plc

The discretion on costs must be exercised with the general rule that the unsuccessful party pays the successful party. A successful defendant should not lose its costs merely because it tested the claimant’s evidence, sought thorough clarification from experts, or maintained a denial where it lacked knowledge of the event.

Appellate intervention is justified where the reasons for departing from the ordinary order cannot reasonably support that decision. Forensic blemishes, prolixity or cross-examination of points that later prove immaterial will generally not suffice, particularly where they add little to the trial’s length or expense.

This was an appeal by Countryside, the defendant in a negligence claim arising from the collapse of a plasterboard ceiling after alleged roof work. The Southend County Court dismissed the claim after finding that the water penetration was more probably attributable to heavy rain and an old roof than to negligence.

The judge nevertheless made no order for costs, criticising Countryside’s conduct, including its defence, cross-examination, expert correspondence, failure to inspect the roof, and decision not to pursue responsibility against subcontractors. Countryside appealed, arguing that the criticisms did not justify denying the successful party its costs. The respondent was not represented. The central issue was whether the costs discretion had been exercised on a proper basis.

Appeal allowed. Lord Justice Auld delivered the judgment, with Lord Justice Wall and Lady Justice Hallett agreeing.

1. Costs discretion. Under the Civil Procedure Rules 1998, CPR 44.3(1) confers a discretion whether to award costs, while CPR 44.3(2) provides the general rule that the unsuccessful party pays the successful party’s costs. In practice, the two provisions are considered together.
2. Appellate review. The trial judge has a wide discretion, informed by his conduct of the interlocutory preparation and trial. However, the Court of Appeal may intervene where the criticisms relied upon, individually or collectively, cannot reasonably justify departure from the ordinary costs order.
3. Conduct of the defence. Countryside was entitled to put the claimant to proof where it lacked knowledge of the alleged leakage and its cause. It was also reasonable to investigate the status of the replacement video, refrain from examining the roof in the prevailing conditions, and send thorough questions to the claimant’s experts pursuant to the judge’s order.
4. Subcontractors and cross-examination. Countryside’s decision not to bring in subcontractors was a considered decision which avoided complicating and overloading relatively limited litigation. A defendant in that position was not required to advance a positive allegation, such as that a witness was lying, before testing the claimant’s account. Forensic blemishes, prolixity, undue detail and testing points that ultimately proved immaterial were not, without more, a sufficient basis for withholding or apportioning costs, particularly where they caused little additional expense or delay.

The criticisms did not justify departing from the normal order. The appeal was allowed, and Countryside was awarded its costs below.

• Court of Appeal (Civil Division): On appeal, the court allowed Countryside’s appeal and ordered that it receive its costs below.
• Southend County Court: HHJ Yelton dismissed the negligence claim but made no order for costs in Countryside’s favour.