North Oxford Golf Club v A2 Dominion Homes Ltd (Formerly Known As Chernwell Family Housing Trust)

A costs judge’s assessment will rarely be overturned on appeal, particularly where proportionality involves an experienced judge’s evaluative judgment. An appellate court should interfere only where the decision is plainly wrong or proceeds from an incorrect legal approach. In assessing proportionality, the court must consider the applicable factors, including the importance, complexity and difficulty of the matter, the work undertaken and the parties’ conduct. Mediation expenses may in principle form part of the costs of an action, but their recoverability depends on the mediation agreement and surrounding terms. The overriding objective may justify refusing permission where the amount in issue is small compared with the costs and court time required.

The claimant brought a substantial subsidence claim arising from tree roots affecting its clubhouse and associated buildings. The claim settled at trial for £850,000, with the defendant also agreeing to remove the trees and pay reasonable costs.

On detailed assessment, Master Simons found the claimant’s costs disproportionate, reduced the hourly rates and disallowed certain mediation participation costs. The claimant sought permission to appeal and a retrospective six-month extension of time. The issues were whether the Master had erred in assessing proportionality, hourly rates and mediation costs, and whether permission and an extension should be granted.

1. Permission and extension of time. Permission to appeal was refused on all grounds. The claimant’s six-month delay made the retrospective extension application highly unlikely to succeed.
2. Proportionality. Master Simons had applied the correct approach, including the factors in CPR 44.5(3). He had considered the claimant’s reasonable expectations, the complexity and difficulty of the case, its importance, the parties’ conduct and the planning of the work and costs. His conclusion that the costs were disproportionate was not merely open to him; it was plainly right. An experienced costs judge is particularly well placed to make this evaluative assessment, which will rarely be overturned on appeal.
3. Hourly rates. The Master was entitled to use Oxford solicitor rates as his starting point and to allow somewhat higher rates. There was no real prospect of a successful appeal on this issue.
4. Mediation costs. Mediation costs may in principle be recoverable as costs of the action. The mediation agreement and related correspondence nevertheless entitled the Master to distinguish between participation costs, such as the mediator’s fees and room hire, and preparation and presentation costs. The authorities did not provide a clear answer, but the Master was probably entitled to disallow the participation costs.
5. Overriding objective. The mediation costs in dispute were modest, whereas further argument would materially increase costs and consume court time. Refusing permission on that ground was consistent with, and required by, the overriding objective.
6. Order. Permission was refused on all grounds. The claimant was ordered to pay the defendants’ costs of £21,625.88.

not stated in the judgment.