Saxton v Bayliss & Ors

Interference with a costs discretion is justified where the lower court applied the wrong principle or failed to consider a material matter. A person joined to proceedings is not automatically liable for all costs merely because she attends the trial, cross-examines witnesses or makes submissions. The court must identify whether that person was properly a party to the issue giving rise to the costs. If not, the exceptional jurisdiction concerning costs against non-parties, including the need for caution, warning and causation, must be considered. An interim payment on account of costs may stand where it falls within the trial judge’s broad discretion, even though an appellate judge might have selected a different figure.

The claimant brought proceedings concerning a right of way and boundary between neighbouring properties, later adding claims of harassment, trespass and nuisance. A preliminary trial was confined to the right of way and boundary issues. The third defendant had been joined principally in relation to the harassment and nuisance allegations, but attended the preliminary trial and participated in cross-examination and submissions.

His Honour Judge Gerald found for the claimant and ordered all three defendants to pay costs. He also ordered an interim payment on account of costs. The third defendant appealed the costs order against her, and the defendants appealed the further interim payment.

1. The appeal against the costs order was allowed. The appeal concerning the further interim payment on account of costs was dismissed.

2. An appellate court may interfere with a costs discretion where the judge erred in principle, omitted a relevant matter, considered an irrelevant matter, or reached a conclusion that was wholly wrong. The principles stated in Adamson v Halifax Plc [2002] EWCA Civ 1134, reflecting Roache v News Group Limited [1998] EMCR 172 and approved in AEI v Phonographic Performance Limited [1999] 1 WLR 1507, applied.

3. The trial judge erred by treating the question as simply who had attended and participated in the trial. The material questions were whether the third defendant was a party to the particular preliminary issues, whether she could compromise or affect those issues, and whether the circumstances justified making her liable for costs. She had been joined for other claims and was, in substance, no more than a witness on the preliminary issues. Her participation therefore did not justify imposing liability for the whole costs of those issues.

4. The principles governing costs against non-parties were relevant by analogy. Such an order is exceptional and must be approached with caution. A person who may face such liability should ordinarily be warned at the earliest opportunity. Causation is also relevant: the costs caused by the third defendant’s limited participation were trivial in relation to the total costs. These matters were considered in Thompson v Berkhamsted [2009] 6 Costs LR 859, Symphony Group v Hodgson [1994] QB 179 and Jackson v Thakrar.

5. The further payment of £30,000, making £50,000 in total, was within the trial judge’s wide discretion. The applicable considerations were that the payment should represent the irreducible minimum likely to be recovered on assessment and should assist or encourage settlement. The appellate court would not substitute its own figure merely because it might have reached a different assessment.

The judgment records appeals from orders made by His Honour Judge Gerald following the trial of preliminary issues in the County Court. The citation of the appealed decision is not stated.