Prasannan v Royal Borough of Kensington and Chelsea

On an appeal against a licensing decision, the costs jurisdiction is governed by section 181(2) of the Licensing Act 2003. It gives the magistrates’ court an unfettered discretion to make such order as to costs as it thinks fit. That discretion is not constrained by section 64(1) of the Magistrates’ Courts Act 1980, and costs need not automatically follow the event. The court must take account of all relevant matters and disregard irrelevant matters. Non-compliance with case-management directions and late production of documents may be relevant. A substantial costs order is not unlawful merely because it is substantial; it will be unlawful if, on the facts, it is in substance a financial penalty rather than an assessment of costs.

The appellant appealed by way of case stated against a magistrates’ court decision concerning the revocation of two premises licences. The magistrates’ court allowed the appeal concerning the 2006 licence by imposing stringent conditions, but the appellant’s appeal concerning the 2005 licence was dismissed by consent. The court ordered the appellant to pay £20,000 in the respondent local authority’s costs.

The appeal concerned whether the magistrates’ court had power to order a successful appellant to pay the respondent’s costs and whether the amount ordered was so unjust that it amounted to an unlawful financial penalty.

1. Appeal dismissed. Both questions posed by the case stated were answered in the negative.
2. In a licensing appeal, the relevant costs jurisdiction was section 181(2) of the Licensing Act 2003. It was independent of section 64(1) of the Magistrates’ Courts Act 1980. Section 181(2) conferred an unfettered discretion to make such order as to costs as the court thought fit. The more complex possible outcomes of licensing appeals supported that construction.
3. The discretion remained subject to the ordinary requirements of legality. The court had to take account of relevant matters and disregard irrelevant matters. The magistrates’ court was entitled to consider the appellant’s failure to comply with case-management directions and her late production of documents, even though the documents had been admitted in evidence.
4. Crawley Borough Council v Attenborough and Attenborough [2006] EWHC 1278 (Admin) did not support the appellant’s argument. The observations concerning section 64(1) were obiter, and the decision had concerned an exercise of the section 181(2) jurisdiction.
5. The authority of R v Highgate Justices ex parte Petrou [1954] 1 All E.R. 406 did not make the present order unlawful. Unlike that case, there were no facts showing that the costs order was a penalty disguised as costs. The sum was substantial but was supported by a written costs breakdown, was less than the sum claimed, and was not obviously unjust in light of the two appeals and the respondent’s representation at a two-day hearing.

• West London Magistrates’ Court: allowed the appeal concerning the 2006 premises licence subject to a stringent condition, dismissed the appeal concerning the 2005 licence by consent, and ordered the appellant to pay £20,000 in costs.
• High Court (Administrative Court): dismissed the appeal by way of case stated and answered both questions in the negative.