Smoke Club Ltd, R (On the Application Of) v Network Rail Infrastructure Ltd

On discontinuance of a judicial review claim, the specific costs principles governing permission stages prevail over the general discontinuance rule. A claimant does not avoid the defendant’s limited costs protection by discontinuing shortly before a renewed permission hearing. The Mount Cook Ltd v Westminster City Council approach generally limits a successful defendant’s recovery to acknowledgment-of-service costs, subject to exceptions. Where new material requires the defendant to undertake work which would ordinarily have been covered at the acknowledgment-of-service stage, that work may be recoverable. Additional costs may also be awarded where grounds are hopeless and persisted in, but arguability must be distinguished from hopelessness.

The claimant sought judicial review concerning a notice of intention to enter land acquired under a compulsory purchase order. Permission had been refused on paper, and the matter was listed for a renewed permission hearing. Shortly before that hearing, the claimant discontinued the claim.

The court had to determine the applicable costs rule, whether the claim fell within an exception permitting additional Mount Cook Ltd v Westminster City Council costs, and the extent of costs recoverable for material served after the acknowledgment of service.

1. Applicable costs rule. The general discontinuance provision in CPR 38.6 yields to the specific judicial review costs principles established in Mount Cook Ltd v Westminster City Council, [2003] EWCA Civ 1146. A claimant cannot improve its costs position by discontinuing shortly before a renewed permission hearing when continuation to that hearing would have attracted the more limited Mount Cook approach.
2. Hopeless grounds. The challenge to the purpose for which the land was acquired was hopeless because the purpose fell within the compulsory purchase order. The alleged representations concerning possession raised a disputed factual and legitimate-expectation issue and were unarguable but not shown to be hopeless. The challenge based on the claimant’s later occupation and investment was hopeless. A fourth ground added nothing. Two-thirds of the grounds were therefore hopeless, while one-third was unarguable but not hopeless.
3. Additional work. The defendant had to consider material served in reply to the summary grounds of resistance before the renewed hearing. Consistently with Mount Cook, the defendant could recover the costs of work which would ordinarily have been undertaken at the acknowledgment-of-service stage, even though the costs were incurred later.
4. Order. The claimant was ordered to pay the defendant’s acknowledgment-of-service costs and one-third of the subsequent costs, subject to detailed assessment if not agreed.

First-instance judicial review costs decision. No prior judicial decision is stated in the judgment.