Council fails in appeal over costs award made after landowner succeeded with compulsory purchase objection

Harlow District Council has lost on all grounds in an attempt at the High Court to overturn a costs award made against it in a dispute over compulsory purchase.

Mr Justice Choudhury, sitting with Costs Judge Rowley, concluded Harlow’s case was arguable but unsuccessful.

Landowner Powerrapid has a site on which the council made a compulsory purchase order (CPO), which the company successfully resisted and then sought its costs.

In October 2019 the Secretary of State made a costs award, later ordered by the High Court.

Costs Judge Leonard decided which categories of costs fell within that award and made a preliminary assessment of the hourly rates.

Harlow appealed against both the size of the cost award and the way the hourly rates of law firm BDB Pitmans were calculated.

In Harlow District Council v Powerrapid Limited (Rev1) [2023] EWHC 586 (KB) Choudhury J turned first to a ground concerned with whether the reference to “costs of the Inquiry” included costs that are “incidental to” it.

Harlow argued the costs judge erred in concluding that assessment on the standard basis (Newall v Lewis) in itself entitles a receiving party to recover costs incidental to proceedings and that the costs order provided only for the costs of the inquiry held into the CPO.

The council said the relevant Planning Practice Guidance stated eligible costs started from the date of the notification of the relevant order and that therefore it was not open to the judge to award costs for any previous period.

Powerrapid though said the judge had been correct that the order included costs incidental to the inquiry.

Choudhury J said: “[Harlow] submits that it was not argued before the judge that the manner of assessment should dictate what is in scope.

“However, that takes [it] nowhere, because the Newall principle (that ‘costs of’ includes ‘costs of and incidental to’) is not dependent on the distinction between the standard and indemnity costs…but on the basis for assessment in both, which is the reasonableness (or unreasonableness as the case may be) of the costs incurred and their amount.”

He said the power to award costs under s.250 of the Local Government Act 1952, which simply refers to “the costs of the party at the inquiry”, could include costs incurred before the notice of proceedings for the CPO was issued.

Choudhury J explained: “The policy reasons behind the approach to costs in CPO proceedings, i.e. that those from whom the state forcibly expropriates property should be fully compensated, support rather than undermine an approach to costs which is at least consistent with that under general litigation.”

He noted the CPO Guidance invited local authorities to consider funding the landowner’s reasonable costs and expenses in the course of negotiation in advance of acquisition.

“Such costs are clearly incurred before the issuing of CPO proceedings,” he said. "It would be odd if the effect of the CPO Guidance was that a more generous approach should be taken to meeting the costs of landowners who agree to sell their land than to the costs and expenses of those who are successful in objecting to the compulsory acquisition of their land.”

He said the more restrictive approach called for by Harlow concerned paragraph 40 of the PPG, but that related to planning appeals not CPO proceedings.

Choudhury J dismissed other grounds related to this and turned to the hourly rates for BDB Pitmans, noting there was a “heavy burden” on parties who seek to challenge such decisions.

Harlow argued the court should have regard to the costs judge not having presided over the substantive matter giving rise to the costs application, which meant the High Court was in “just as good a position to make a decision on the issue of hourly rates”.

Choudhury J said: “Specialist costs judges almost invariably will not have heard the substantive matter.

“Notwithstanding that, Parliament has entrusted costs judges with the specialist, and often difficult, task of assessing what costs and hourly rates are appropriate. In my view, it would be to usurp the role of the costs judge if the appellate court were to consider that it was in an equivalent position to the costs judge and/or had some greater right to interfere with a judgment merely because the judge below (like the appellate court) had not heard the substantive matter.”

He added: "The fact that a particular costs judge does not possess, or indeed that costs judges generally do not possess, detailed knowledge or experience of a particular specialist jurisdiction affords no basis, in my view, for treating the [original] judgment with any less deference than would normally be the case.”

Having rejected the argument about the hourly rates awarded in respect of the planning team Chowdhury J did the same with the rates for the planing and litigation teams.

For the planning team Choudhury J said there was room for argument on Judge Leonard’s decision but “the fact that not all costs judges would necessarily share that view or that the appellate court might take a different view is not enough for the defendant to succeed.

“The test is whether the judge’s conclusions exceeded the generous ambit within which reasonable disagreement is possible. In my judgment, it cannot conclusively be said that the judge’s conclusions fell outside that generous ambit. The nature of the work for the inquiry was not, as I have said, intrinsically straightforward.”

Harlow argued the litigation team had had little to do beyond ‘rubber stamping’ but the costs judge found there was more work done than that.

Mr Justice Choudhury said: “However, although not mere rubber stamping, it does not appear, on the face of it, that the work done by the litigation team was especially difficult or taxing.

“Certainly, if that work had been the only basis of claim before the judge, the rates awarded would have been difficult to sustain. I therefore have considerable sympathy with [Harlow’s] argument that in these circumstances, the hourly rates permitted for the litigation team ought not to be the same as those for the planning team.”

He said though that rates are assessed for a firm and not reassessed for different stages of litigation and there was no expectation that a litigant should use a different and cheaper firm for a smaller and simpler aspect of the work.

The cost of the litigation team was only £7,233, equivalent to 1.5% of the total bill, and “it is perhaps somewhat unrealistic to expect a costs judge to go through a full-blown ‘seven pillars of wisdom’ analysis in respect of that amount in order to reach a significantly different rate in the course of a concise oral judgment”.

Commenting on the case Landmark Chambers said the High Court held the award of costs “of” an inquiry includes costs “incidental” to it, and the costs of applying to the High Court to turn the award of the Secretary of State into an Order of the High Court were also recoverable.

Rupert Cohen of Landmark Chambers appeared for Harlow, instructed by Trowers & Hamlins.

Nick Grant, also of Landmark and led by Jamie Carpenter KC at Hailsham Chambers, appeared for the Receiving Party / Respondent Powerrapid, instructed by Richard Langley and Olivia Peake at BDB Pitmans. Nick Grant appeared unled for Powerrapid before Costs Judge Leonard.

Mark Smulian