Harlow District Council v Powerrapid Limited

An order for the costs of a compulsory purchase inquiry may, subject to its terms, include reasonable and proportionate costs incurred before formal notification of the order and costs incidental to the inquiry. The wording of section 250(5) of the Local Government Act 1972 does not require a narrower approach than that applicable to ordinary litigation. A successful objector’s costs are not restricted to attendance at the inquiry. The administrative application to make the Secretary of State’s costs order a rule of the High Court may itself fall within the recoverable costs. Appellate interference with a specialist costs judge’s assessment is justified only for an error of principle or a decision outside the generous ambit of reasonable disagreement.

The Secretary of State awarded Powerrapid Limited a full award of costs after it successfully objected to Harlow District Council’s compulsory purchase order. The award was made under section 250(5) of the Local Government Act 1972 and was subsequently made an order of the High Court.

Costs Judge Leonard held that, in principle, the award included pre-notification costs, costs incidental to the inquiry, costs relating to an overage clause affecting the land, and costs incurred in obtaining the High Court order. He also determined hourly rates for the claimant’s legal teams. The Council appealed on the scope of the award and the rates.

1. Scope of the costs order. The appeal was dismissed. An order for the “costs of” an inquiry under section 250(5) of the Local Government Act 1972 may include costs incurred before formal notification and costs incidental to the inquiry, unless the order contains an express restriction. The reasoning in Re Gibson’s Settlement Trusts and Newall v Lewis supported that approach.
2. Pre-CPO costs. Costs incurred before 27 September 2018 were recoverable in principle. Their ultimate recoverability remained subject to detailed assessment and the ordinary requirements of relevance, reasonableness, proportionality and connection with the inquiry. The Planning Practice Guidance did not impose a blanket mandatory exclusion of such costs.
3. Overage clause. Advice and representation concerning the overage clause were properly treated as costs incidental to the inquiry. The Council had relied on its construction of that clause, and the dispute was materially connected with whether compulsory acquisition was premature. The possibility of later valuation proceedings in the Upper Tribunal did not sever that connection.
4. High Court order. The application to make the Secretary of State’s order a rule of the High Court was an administrative step expressly contemplated by section 250(5), rather than fresh Part 8 proceedings. The resulting order could include the costs incurred in obtaining it.
5. Hourly rates. The challenge to the rates failed. A specialist costs judge was entitled to regard the inquiry as factually difficult and specialised, and to treat the guideline hourly rates as no more than a possible starting point. The judge’s assessment fell within the generous ambit of reasonable disagreement. The same approach applied to the smaller litigation-team element, where the judge had scrutinised and adjusted the rates.

The appeal was brought from Costs Judge Leonard’s ex tempore judgment of 6 October 2021 and reserved judgment dated 7 December 2021, together with the December 2021 costs order. The High Court dismissed all grounds of appeal.