Gore v Naheed and Ahmed [2017] 3 Costs LR 509
[2017] 3 Costs LR 509
Costs consequences following the claimant's failure to engage in mediation, albeit that the court had difficulty in accepting that the desire of a party to have his rights determined by a court of law in preference to mediation could be said to be unreasonable conduct.
Case 31
Gore
v
Naheed and Ahmed
[2017] 3 Costs LR 509
Neutral Citation Number: [2017] EWCA Civ 369
Court of Appeal (Civil Division)
24 May 2017
Before:
Patten, Lewison and Underhill LJJ
Headnote
The court considered an appeal by the defendants against an order following judgment in an action for damages and an injunction in respect of an alleged obstruction of a right of way. Permission to appeal had also been granted in respect of the costs order, which provided that the defendants pay the claimant’s costs. On appeal, the defendants submitted that because of the claimant’s failure to engage with their invitations to submit the dispute to mediation, the judge had been wrong not to have made some deduction or allowance against the claimant’s costs in accordance with the guidance contained in PGF II SA v OMFS Company 1 Ltd [2013] 6 Costs LR 973.
The court allowed the appeal against the judge’s award of general damages, but otherwise dismissed the appeals. The judge had taken into account the failure to engage in mediation, but concluded that it was not unreasonable to have declined to mediate. His refusal to make an allowance on these grounds was not wrong in principle. However, in reaching its decision, the court had some difficulty in accepting that the desire of a party to have his rights determined by a court of law in preference to mediation could be said to be unreasonable conduct, particularly where, as in the present case, those rights were vindicated. Only those paragraphs relevant to costs have been included.
Cases Cited
PGF II SA v OMFS Company 1 Ltd [2013] 6 Costs LR 973
Judgment
1. PATTEN LJ: This is an appeal by the defendants, Mrs Naheed and Mr Ahmed, against an order made by HH Judge Harris QC on 22 September 2015 following judgment for the claimant, Mr Gore, in his action against them for damages and an injunction in respect of the alleged obstruction of a right of way. Permission to appeal has also been granted in respect of the costs order which the judge made on 15 January 2016 after the receipt of further written submissions.
[…]
40. On the basis that Mr Gore was entitled to the right of access to the Garage which he claimed, it becomes necessary to consider the subsidiary issues of the terms of the injunction and the costs order. As I indicated earlier, the appeal in relation to the order for an injunction is limited to para 4 of the order which states that it will not be an obstruction for the defendants to park a vehicle on the driveway for the purpose of loading and unloading if the vehicle is not parked there for more than 20 minutes. The defendants say that the period is too short and should be two hours.
41. It is important to emphasise that the order contains a general injunction against the defendants requiring them not to obstruct vehicular access to the Garage. The order does not specify what will amount to an obstruction but only what will not. The result is that on some occasions it will doubtless be possible for a delivery van to be parked in front of the garage for up to two hours or even longer without obstructing access to the Garage simply because Mr Gore or a tenant of the Granary has no need to use the driveway at that particular time.
42. But, assuming that there are competing needs for the use of the driveway between the claimant and the defendants, the judge obviously decided what in his view was the maximum period of untolerated parking that could be imposed on Mr Gore consistently with the reasonable use of the driveway. Neither side has suggested that the inclusion of para 4 of the order was wrong in principle nor has there been any argument about the evidence on which the judge’s order was based. In these circumstances, I do not see any grounds upon which this court would be justified in interfering with the judge’s assessment of this issue. There has been no application to adduce any new evidence to show that the judge’s order is unworkable or to support a minimum period of two hours. Nor, as I have said, have we been directed to evidence at the trial which should have caused the judge to opt for a longer period. I would therefore dismiss this ground of appeal.
43. The judge’s order does, however, require to be amended so as to make it clear that the right to obtain direct access to the Garage for parking is limited to its ancillary use in connection with the occupation of the Granary and would not extend to a tenant of the Garage alone. This is not a matter of dispute between the parties and it is agreed that para 1 of the judge’s order should be varied by adding at the end the words “in the garage in connection with the use and occupation of the Granary but not further or otherwise”.
44. That leaves the question of damages and costs. The defendants challenge the judge’s award of general damages in the sum of £2,500. The judge deals with damages in [29]–[33] of his judgment but most of this, quite understandably, contains his findings on the claim for special damages based on the alleged premature termination of a tenancy of the Granary due to the obstruction of the driveway by the defendants and the problems subsequently encountered by Mr Gore in trying to sell the property.
45. The judge found that the claimant did suffer loss due to the defendants’ obstruction of the driveway in the form of loss of rent but was not persuaded that the claimant had suffered any recoverable loss in respect of the subsequent periods of time. He did, however, make an award of general damages based on the inconvenience and difficulty caused by the obstructions between December 2012 and February 2014.
46. As Mr McNae points out, this was a time during which the Granary was let and during which Mr Gore suffered no personal inconvenience or distress due to the obstructions of the driveway. On the judge’s finding, these did cause the tenant to leave early but that was after February 2014 and Mr Gore has been compensated for the loss of rent by the award of special damages.
47. In these circumstances and given that no claim for general damages was either pleaded or advanced at the trial, I think that the award of £2,500 cannot stand. I would therefore allow the defendants’ appeal in respect of this part of the judge’s order.
48. The judge made a separate order that the claimant should have his costs of the claim on the standard basis after considering written submissions. It is clear that Mr Gore was the overall winner so as to bring into operation the general rule that he should have his costs. But the defendants submitted and now submit on this appeal that the judge should have made some allowance in their favour for the fact that Mr Gore refused to or failed to engage with their proposal that the dispute should be referred to mediation.
49. Mr McNae referred us to the decision of this court in PGF II SA v OMFS Company 1 Ltd in which Briggs LJ emphasised the need, as he saw it, for the courts to encourage parties to embark on ADR in appropriate cases and said that silence in the face of an invitation to participate in ADR should, as a general rule, be treated as unreasonable regardless of whether a refusal to mediate might in the circumstances have been justified. Speaking for myself, I have some difficulty in accepting that the desire of a party to have his rights determined by a court of law in preference to mediation can be said to be unreasonable conduct particularly when, as here, those rights are ultimately vindicated. But, as Briggs LJ makes clear in his judgment, a failure to engage, even if unreasonable, does not automatically result in a costs penalty. It is simply a factor to be taken into account by the judge when exercising his costs discretion.
50. In this case the judge did take it into account but concluded that it was not unreasonable for Mr Gore to have declined to mediate. His solicitor considered that mediation had no realistic prospect of succeeding and would only add to the costs. The judge said that he considered that the case raised quite complex questions of law which made it unsuitable for mediation. His refusal to make an allowance on these grounds cannot in my view be said to be wrong in principle.
51. The other aspect of the costs appeal concerns the judge’s order that the defendants should pay interest under what was CPR 36.17(4) on the costs Mr Gore has paid to his solicitors. Mr McNae says that this power was only exercisable when the claimant has obtained a result at least as advantageous as the terms of his Part 36 offer but that in this case there was no such offer. The written submissions which were provided to the judge by Mr Webb for the claimant make it clear that interest on costs was in fact sought under s 74 of the County Courts Act 1984 which does not depend on a Part 36 offer having been made. It seems to me that the judge was exercising the jurisdiction contained in what was then CPR 44.2(6)(g) and that the reference in para 9 of his order to CPR 36.17(4) is simply an error. I would therefore dismiss this ground of appeal.
52. In summary, therefore, I would allow the defendants’ appeal against the judge’s award of general damages but otherwise dismiss these appeals.
53. LEWISON LJ: I agree.
54. UNDERHILL LJ: I also agree.
Jonathan McNae (instructed by Louise Greer Solicitors) appeared for the appellants (Naheed and Ahmed).
Henry Webb (instructed by Richard Wilson Long Solicitors) appeared for the respondent (Gore).
