Whistl UK Ltd (formerly TNT Post UK Ltd), R (on the application of) v HM Revenue and Customs

Costs should ordinarily be determined after substantive disposal, even where an appeal may alter the result. An issues-based costs order requires a discrete issue on which the successful party lost. An interested party will not normally recover costs where its position substantially coincides with the defendant’s and its participation was unnecessary. In challenges concerning the lawful implementation of EU fiscal law, public policy may weigh against exposing interveners to costs where that could deter challenges.

The judgment dealt with matters left outstanding after the court’s final judgment of 23 October 2014 in two judicial review claims concerning the VAT exemption for postal services. The claimant sought permission to appeal and asked that costs be deferred. It also disputed HMRC’s recoverable costs and opposed Royal Mail Group Ltd’s application for intervention costs. The court determined permission, costs in both claims, and the interested party’s costs application.

1. Permission to appeal. Permission was refused. The proposed grounds substantially repeated arguments rejected in the final judgment, and there was no real prospect of success or other reason to grant permission.
2. Costs generally. Costs should be determined after disposal of the claims. The possibility of a successful appeal was not generally a reason to defer the issue. Any necessary adjustment could be made if the judgment were later disturbed.
3. CO/5302/2011. An issues-based order was inappropriate. HMRC had not lost a discrete issue; it had advanced an argument which the court rejected. HMRC recovered its costs, except the costs of attending the permission hearing, which were disproportionate because attendance was unnecessary and TNT Post had succeeded on permission.
4. Royal Mail Group’s costs. Applying Bolton Metropolitan District Council v Secretary of State for the Environment [1995] 1 WLR 1176, an interested party would not normally recover costs without a separate issue requiring its representation. Royal Mail Group’s position was aligned with HMRC’s and its participation was not necessary. Public policy also weighed against recovery because intervention costs could deter challenges promoting lawful implementation and application of EU fiscal law.
5. CO/2860/2006. TNT Post achieved limited success in the broad sense, but its central legal case was misconceived. It was awarded 30 per cent of its costs against HMRC and remained liable for HMRC’s costs of its unsuccessful amendment application.

The court had handed down its final judgment on 23 October 2014. This judgment refused permission to appeal and determined the outstanding costs issues.