Daly v Eversley School & Ors

On a second appeal, the Court of Appeal has jurisdiction only where the proposed appeal raises an important point of principle or practice, or there is another compelling reason for hearing it.

Erroneous costs estimates do not automatically limit recoverable costs. The court may consider whether the error has been satisfactorily explained and whether the paying party relied on the estimate. Alleged procedural misconduct justifies a costs deduction only where it materially warrants one. A prior refusal of specific disclosure, or service of a witness statement nearly four weeks before trial without demonstrated prejudice, does not do so.

Mrs Daly was the unsuccessful claimant in proceedings under the Race Relations Act against five defendants. She was ordered to pay their costs, subject to detailed assessment. The defendants’ final bill exceeded £87,000, although earlier estimates had been substantially lower.

Master Gordon-Saker rejected an application to disallow the costs, accepting an explanation based on the use of in-house rather than commercial solicitors’ rates. He subsequently reduced the bill on detailed assessment. HHJ Knight QC dismissed Mrs Daly’s costs appeal. She then made a renewed application to the Court of Appeal for permission to bring a second appeal, relying on the costs estimates, alleged disclosure misconduct and an asserted entitlement to a rehearing.

1. The renewed application for permission to appeal was refused. This was a proposed second appeal, so the Court of Appeal had jurisdiction only if it raised an important point of principle or practice, or there was some other compelling reason for the court to hear it.

2. As to the costs estimates, Leigh v Michelin Tyre Company [2003] EWCA Civ 1766 established that there were no fixed rules for dealing with an erroneous estimate. The absence of a satisfactory explanation and reliance on the estimate by the paying party were circumstances which might justify reducing the recoverable costs. Here, the master had accepted the defendants’ explanation that the estimates were based on in-house rates, whereas the final bill used commercial rates. There was no evidence that Mrs Daly had relied on the estimates. The master might also have made a reduction at the detailed assessment, but the court had no record of that assessment. The issue therefore did not meet the second-appeal threshold.

3. The alleged misconduct did not justify a costs deduction. The trial judge had refused specific disclosure of the two letters months before trial, so the defendants’ failure to disclose them was not misconduct. The witness statement had been served nearly four weeks before trial, and no prejudice had been shown from its timing. HHJ Knight was therefore entitled to conclude that neither complaint warranted reducing the costs.

4. Mrs Daly was mistaken in contending that establishing an error of law by the master automatically entitled her to a rehearing before another master. HHJ Knight was entitled to consider the merits of the complaints, and no arguable second-appeal point arose from that approach.

Order: application refused.

1. Court of Appeal (Civil Division) refused the renewed application for permission to appeal on 4 September 2007.
2. Central London County Court, HHJ Knight QC, dismissed Mrs Daly’s costs appeal from the master’s decision.
3. Master Gordon-Saker rejected the application to disallow the defendants’ costs and later reduced the bill on detailed assessment.