The London Borough of Tower Hamlets v The London Borough of Bromley

An issues-based costs order should be made only where justice and the circumstances of the particular case require departure from the general rule that costs follow the event. Success on some arguments does not, by itself, justify such an order, particularly where the material and evidence relevant to unsuccessful arguments also contributed to success on the principal issue.

Permission to appeal requires either a compelling reason or a real prospect of success. A general public interest in the subject matter, without evidence that the circumstances are common, is insufficient.

This was a consequential judgment following the determination of a dispute between The London Borough of Tower Hamlets and The London Borough of Bromley concerning ownership of a sculpture. Tower Hamlets succeeded in establishing acquisition of title by operation of the Limitation Act, but failed on its claim to be the paper-title owner. Bromley established paper title, but could not assert it because of the limitation finding.

The court addressed whether costs should be apportioned on an issues-based basis and whether Bromley should receive permission to appeal.

1. The general rule under Civil Procedure Rules 1998, rule 44.2(2), is that the unsuccessful party pays the successful party’s costs. The court may depart from that rule after considering all the circumstances, including partial success and party conduct.

2. Tower Hamlets was not wholly successful because it failed on the paper-title claim. However, the historical material and evidence deployed on that issue were also relevant to the limitation claim on which it succeeded. The paper-title arguments were focused and reasonably maintainable. Their failure did not justify depriving Tower Hamlets of costs.

3. Following Fox v Foundation Piling [2011] EWCA 790 at [62], departure from the general rule requires caution and must be justified by the needs of justice and the particular circumstances. As stated in HLB Kidsons v Lloyds Underwriters [2007] EWHC 2699, failure on some arguments does not of itself warrant an issues-based order. The general rule therefore applied, with Bromley to pay Tower Hamlets’ costs.

4. Permission to appeal was refused. The asserted wider significance of the judgment was unsupported by evidence that the unusual circumstances were common. The proposed argument concerning ownership and public purposes had no real prospect of success on the judge’s view, which applied the statutory language. The question whether further public money should be spent was left to the Court of Appeal.

This was a first-instance consequential judgment following the court’s earlier judgment in the same proceedings. The earlier judgment determined the competing paper-title and limitation claims; the present judgment determined costs and permission to appeal.