Aldemir v Cornwall Council

Under section 181(2) of the Licensing Act 2003, a magistrates’ court hearing a licensing appeal has power to make a costs order against a non-party. The breadth of the power concerns jurisdiction; whether it is just to exercise it depends on the circumstances.

A non-party costs application is exceptional and must be determined fairly. The proposed respondent must receive fair notice of the application and its grounds, together with a fair opportunity to respond. Where that has not occurred, the order must be set aside and reconsidered.

EBN Ltd appealed to the magistrates’ court against Cornwall Council’s revocation of its premises licence under the Licensing Act 2003. The appeal was dismissed. The magistrates’ court then ordered Mr Aldemir, who was not a party to the licensing appeal, to pay the Council’s costs of that appeal and of a separate withdrawn appeal brought by Max Leisure Ltd.

Mr Aldemir appealed by way of case stated. The principal questions were whether section 181(2) authorised a non-party costs order and whether the order had been made following a fair procedure. The court also considered the reasonableness of the order and the assessment of the total costs.

1. Jurisdiction. The words in section 181(2) of the Licensing Act 2003 permitting the magistrates’ court to make such order as to costs as it thinks fit are broadly framed. They include power to order costs against a non-party. The absence of express words referring to the person by whom costs are to be paid does not impose a party-only limitation.
2. Fair procedure. A non-party costs application may have significant financial consequences and must comply with natural justice. The proposed respondent must receive fair notice of the application and the grounds relied on, and a fair opportunity to answer it. There are no inflexible procedural rules, but a short opportunity to respond, without prior notice and without adequate time to prepare, will ordinarily be insufficient.
3. Where an application is intended, notice should generally be given before the substantive hearing. The grounds should ordinarily be reduced to writing and supplied before the application is determined. If notice has not been given, the application should normally be adjourned for a short period so that the non-party can consider the grounds and attend personally or through a representative.
4. The magistrates’ court had jurisdiction, but the procedure followed was unfair. The costs orders were therefore set aside and remitted to the District Judge for reconsideration. The reconsideration had to apply the principles governing non-party costs orders under section 51 of the Senior Courts Act 1981, including the requirement that the broad power be exercised justly. The two costs applications were independent. The challenge to the amount of costs disclosed no error of law.

• High Court (Administrative Court): Appeal by way of case stated allowed on procedural fairness. The District Judge’s non-party costs orders were set aside and remitted for reconsideration.
• Cornwall Magistrates’ Court: On 21 November 2018, the appeal against revocation of the premises licence was dismissed and costs were ordered against Mr Aldemir personally.