Bishop & Anor v Transport for London

In a compulsory-purchase compensation reference, the Upper Tribunal’s costs discretion is broad and fact-sensitive. The successful party is identified realistically by looking at the reference as a whole, not merely by asking who received a payment or by dividing the case into periods. A claimant’s recovery on one small head may leave the acquiring authority as the successful party where the main claim fails and the award is far below the authority’s offer. The Tribunal may then award the authority pre-offer costs, subject to an appropriate adjustment for the claimant’s limited success. Appellate interference is exceptional and requires an error of principle, material omission, immaterial consideration, serious irregularity or a wholly wrong exercise of discretion.

The appellants pursued a compulsory-purchase compensation claim concerning leasehold interests acquired for the Crossrail project. The Upper Tribunal awarded £46,815 for clearance expenses but rejected the principal claims for lost remuneration and other losses.

In its costs addendum, the Tribunal held that Transport for London was the successful party. It ordered the appellants to pay 80% of TfL’s costs incurred before its sealed offer of £378,000 plus costs, and all relevant costs after the offer. The Tribunal refused permission to appeal. The central issue before the Court of Appeal was whether the Tribunal had erred in treating TfL as the successful party for the reference as a whole and in awarding it pre-offer costs.

1. Review of discretion. The appeal was dismissed. The Court applied the restrictive appellate approach stated in Atlasjet Havacilik Anonim Sirketi v Ozlem Kupeli and others [2018] EWCA Civ 1264 and Mann v Transport for London [2018] EWCA Civ 1520. An appellate court should not interfere with a costs decision unless the tribunal erred in principle, omitted a material factor, relied on an immaterial factor, acted with serious irregularity or exercised its discretion wholly wrongly.
2. Successful party. Section 29 of the Tribunals, Courts and Enforcement Act 2007, Rule 10 of the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010 and the Practice Directions confer a broad costs discretion. The Tribunal must assess success realistically and with common sense by reference to the reference as a whole. The concept is not rigid, and it is not necessary to divide the reference into pre-offer and post-offer periods when identifying the successful party.
3. The fact that a claimant receives some compensation does not automatically make the claimant successful. Relevant matters include the size of the claim, the extent and importance of the success, the issues pursued, the evidence and hearing time required, the parties’ conduct and the effect of any offer. Here the appellants recovered only about 1% of their claim on one discrete issue, while their principal claim and two other heads failed entirely. TfL was therefore properly regarded as the successful party.
4. The money-only authorities, including Day v Day (Costs) [2006] C.P. Rep. 35, were of limited assistance. The payer-of-the-cheque approach is not apt to determine success in a compensation reference, where compulsory acquisition itself creates the acquiring authority’s liability to pay compensation.
5. Section 4 of the Land Compensation Act 1961 governed the post-offer position, but it did not prevent the Tribunal from awarding TfL pre-offer costs after finding it successful in the reference as a whole. The Tribunal was entitled to reduce those costs by 20% because the award was modest but real, TfL could have made an earlier offer and the appellants had to proceed to establish the sum awarded. The discount was an evaluative allowance, not a precise allocation of costs.
6. The decisions in Purfleet Farms Ltd. v Secretary of State for Transport, Local Government and the Regions [2002] EWCA Civ 1430 and Blakes Estates Ltd. v Government of Monserrat (Practice Note) [2006] 1 W.L.R. 297 concerned the proportion of costs payable where the claimant was accepted to be successful. They did not establish that an acquiring authority could never be the successful party or recover pre-offer costs. The Tribunal’s costs order was lawful and the appeal was dismissed.

• Upper Tribunal (Lands Chamber). In its decision dated 18 October 2017, reported at [2017] UKUT 405 (LC), the Tribunal awarded £46,815 compensation. In its costs addendum dated 8 January 2018 it ordered the appellants to pay 80% of TfL’s pre-offer costs and the applicable post-offer costs. Permission to appeal was refused on 16 February 2018.
• Court of Appeal (Civil Division). The appeal against the costs order was dismissed.