High Court rules district judge could make non-party costs award after licensing hearing, but allows appeal over procedure

A district judge hearing a licensing appeal has the power under the Licensing Act 2003 to make a non-party costs award, a High Court judge has ruled.

However, in Aldemir v Cornwall Council [2019] EWHC 2407 (Admin) Mr Justice Swift allowed the appeal on the basis that a fair procedure was not followed when the applications for costs were determined.

The High Court judge ruled that the costs orders made against the appellant, Memet Aldemir, must be set aside and reconsidered by District Judge Diana Baker.

The district judge had made her ruling on costs following a hearing on 19–20 November 2018.

The appeal before the district judge was against a decision taken by Cornwall Council’s licensing sub-committee on 25 April 2018.

The sub-committee had revoked the premises licence previously granted to Eden Bar Newquay Ltd ("EBNL"), which operated premises at 1 Beach Road in Newquay, known as Eden Bar.

The sole shareholder in and director of EBNL was Mr Aldemir's brother Nimetullah Aldemir, who is resident in Cyprus. Memet Aldemir was the designated premises supervisor.

The events that had led to the council's decision to revoke the premises licence had comprised:

(a) an incident involving Mr Aldemir on 4 August 2017 which had resulted in his conviction for an offence under section 4 of the Public Order Act 1986 (fear or provocation of violence); and

(b) evidence from the police of various and frequent breaches of licence conditions.

District Judge Baker considered the merits of these matters for herself. Her conclusion was that the incident that had taken place on 4 August 2017 was "appalling", and that Mr Aldemir had been the aggressor in an unprovoked and sustained attack.

She concluded that the council had reached correct conclusions about the various licence breaches; she rejected the argument made on EBNL's behalf that the council had not reached a decision by a fair process.

The district judge refused the appeal on all grounds raised by the appellant. Mr Justice Swift said it was more than apparent that she was “entirely unimpressed by Mr Aldermir’s conduct of the proceedings”.

District Judge Baker was then asked by the council to make an order for costs. Refusing an adjournment, she ordered Mr Aldermir to pay £30,935.50 in costs of the Eden Bar appeal, saying he was the ‘controlling force’ of the company.

An application to the Magistrates Court to state a case was later made on 10 December 2018.

District Judge Baker stated the case on 7 March 2019 which contained the following questions:

(1) Did she have any statutory power to order costs against a non-party?

(2) If she had such a power was it reasonable to make such an order in this case?

(3) Were the total costs reasonable?

(4) Was she wrong to hear and determine an application for costs against Mr Aldemir who was not a party to the licensing appeal, was not present at court, did not have legal representation in court, and had no notice of the application?

Mr Justice Swift concluded that:

• The power at section 181(2) of the 2003 Act includes the power to make a costs order against a non-party.
• He could fully understand District Judge Baker's frustration at the way in which Mr Aldemir had conducted himself during the litigation. Nevertheless, an application for costs against a non-party was a course of action that was out of the ordinary and could, as was the case here, lead to significant financial consequences. “It is important that such an application is heard and determined in accordance with a fair procedure.”
• The principles of natural justice must be observed. “The person against whom the application is made must have fair notice of the application and the grounds on which it is made, and a fair opportunity to respond to the application. I do not consider those principles were observed in this case.”
• When the applications are reconsidered they should be determined in accordance with the principles formulated by the courts in the context of non-party costs applications under section 51 of the Senior Courts Act 1981.

The costs orders made against Mr Aldemir were therefore to be set aside and reconsidered by the District Judge.