Shergill v Purewal & Anor

When a claim is stayed as non-justiciable, the costs order must reflect the overall conduct and responsibility of both parties. The court should consider whether each party reasonably raised, pursued or contested the issue, whether earlier steps should have been taken, and the effect of the overriding objective. A defendant is not automatically liable for costs merely because it raised non-justiciability late. A claimant may also bear costs consequences for continuing an action whose non-justiciability was reasonably apparent. If the first-instance judge fails to evaluate those matters cumulatively, the appellate court may reconsider costs afresh and substitute a fairer order.

Mr Daljit Singh Shergill brought libel proceedings against Mr Rajinder Singh Purewal and PTI Derby Limited concerning articles published in the Panjab Times. Sir Charles Gray stayed the action after concluding that its issues were non-justiciable because they were intimately connected with religious and doctrinal disputes.

The judge made a split costs order, requiring Mr Shergill to pay costs up to 17 June 2010 and the defendants to pay costs thereafter, subject to the costs of the stay application. The defendants appealed with permission, arguing that the judge had failed to consider their notice to admit, a warning letter, and the overall conduct of both parties. The central issue was whether the costs discretion had been properly exercised.

1. Appeal allowed. Lord Justice Leveson gave the judgment, with Lord Justices Richards and Maurice Kay agreeing.
2. Costs are subject to a broad discretion under rules 44.3(4) and 44.3(5) of the Civil Procedure Rules 1998. The court must consider all the circumstances, including conduct before and during proceedings, the reasonableness of raising, pursuing or contesting an issue, the manner in which the case was pursued or defended, and whether earlier steps should have been taken.
3. The judge was entitled to criticise the defendants for failing to seek a stay earlier, particularly after the decision of Eady J in His Holiness Sant Baba Jeet Singh Ji Maharaj v Eastern Media Group & Hardeep Singh [2010] EWHC 1294 QB. However, he should also have criticised Mr Shergill for continuing to pursue an action whose non-justiciability was reasonably apparent. The costs responsibility could not fairly be placed on the defendants alone.
4. Both parties had failed to assist the court in achieving the overriding objective, including dealing with the case expeditiously and fairly, saving expense and allocating an appropriate share of court resources. That failure made the first-instance exercise of discretion flawed.
5. The Court of Appeal considered costs afresh. The order for the period before 17 June 2010 remained unchanged. Neither party was to recover costs after that date, except that the order concerning the costs of the stay application remained in force and did not include the costs of obtaining witness statements.

1. Court of Appeal (Civil Division): Appeal allowed. The costs order was varied so that neither party recovered costs after 17 June 2010, apart from the costs of the stay application.
2. High Court of Justice, Queen’s Bench Division: Sir Charles Gray stayed the libel action as non-justiciable and made a split costs order. The defendants were ordered to pay costs after 17 June 2010, subject to the costs of the stay application.