Refusal to award fixed costs and contractual costs

by Readers Question

10:08 AM, 24th October 2018
About 3 weeks ago

Refusal to award fixed costs and contractual costs

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Refusal to award fixed costs and contractual costs

I have been in court again! The case was heard in Canterbury County Court yesterday, Wilson v Manser and Manser, which went in the landlord’s favour. The Judgement itself is not of particular interest, but the refusal of Deputy District Judge Eyley to award fixed costs and contractual costs is of considerable importance to the Letting Industry.

An Assured Shorthold Tenancy provides for the Landlord to be reimbursed for Solicitors Fees, Counsel’s Fees and other fees incurred in bringing a case for a breach in tenancy conditions.

However, DDJ Eyley said he was exercising his discretion not to award costs against the Defendant ex-Tenant.

What is of particular interest was the Judge’s refusal not to allow contractual costs.

Any landlords with repossession cases brought by Mortgage Companies will welcome the news as will any landlord involved in Service Charge cases in the County Court or Property Tribunal where legal fees are contractual and are always added to the debt.

Landlord Judith Wilson was represented by Ben Leb, a Barrister of Stour Chambers Canterbury, and the tenants by Vivien Gambling a Solicitor from Kent Law Clinic.

Fergus Wilson



Comments

AJ

7:34 AM, 25th October 2018
About 3 weeks ago

I find this quite worrying that a judge can decide not to award costs of eviction against the tenant.

Derek t

9:19 AM, 25th October 2018
About 3 weeks ago

Reply to the comment left by AJ at 25/10/2018 - 07:34
Surely this must be challenged if the contract states that it can be claimed this makes the whole contract at risk
Another nail in the letting market coffin from the landlords point of view

LordOf TheManor

9:35 AM, 25th October 2018
About 3 weeks ago

Same happened in my case heard on 11 September 2018. The tenants attempted to derail the Possession Order hearing with assertions of illegal Landlord actions. Thankfully the judge was having none of it... but he refused the case to be transferred up to the High Court. He invited the unrepresented tenant to plead for extra time due to 'exceptional circumstances'..... so that was duly pleaded and the Judge gave them 4 weeks to quit. 9 October was the date on the Possession Order.
According to the tenants, the Local Council were able to provide emergency accommodation from 15 October, so no need for the bailiffs, tenants said. They'd be gone very shortly.
We booked the bailiffs anyway. Just as well..... as of today, the tenants still haven't surrendered the property.
So it's a case of no costs awarded to the landlord and no house back yet due to the Judge's refusal to allow the case to be transferred up to the High Court.
For the record: the case has been going since April 2018. No issues with the landlord's paperwork or notice serving process. It's a Section 21 claim with rent arrears of £3,500 at the date of the hearing.

Ian Narbeth

11:15 AM, 25th October 2018
About 3 weeks ago

Fergus
You write: "Any landlords with repossession cases brought by Mortgage Companies will welcome the news as will any landlord involved in Service Charge cases in the County Court or Property Tribunal where legal fees are contractual and are always added to the debt."
Is that meant as an ironic (dare I say sarcastic) comment? You surely don't expect a judge to exercise his discretion in favour of a landlord against a mortgagee or against a tenant, do you?
On the substantive point why has the judge exercised his discretion not to enforce the contract? It's not my specialist area but my understanding is the judge can reduce the contractual costs if they have not been reasonably incurred or are not reasonable in amount. He should not throw them out altogether where the landlord succeeds.

Peter Fredericks

11:46 AM, 25th October 2018
About 3 weeks ago

I find that Judges are inconsistent in their approach. I have actually had a Deputy District Judge tell me I could have claimed more in contractual costs against a tenant under the AST and she would have awarded them! The outrage with the Canterbury case is that the landlord won and the Judge would not award fixed costs and contractual costs (I'm not clear whether this was a small claims track, fast track or multi-track case) .. but what planet do these civil service types live on? This ia very raw deal for the landlord bringing the case. The case however is a County Court one which I think does not count as a citable case precedent?
My wooden spoon award goes to a "Judge " in York who heard a breach of contract case without reference to the my pleadings and told me at the end of the case that he needed a copy of my Particulars of Claim for his file (even though I referred to parts of the Particulars during the hearing) . Sometimes it really makes you wonder why we should bother at all with this sclerotic and overpriced Courts system, the sometimes unreal people in the Judiciary and the rather hapless Courts' administration with its outdated and vastly overpriced "service".

Neil Patterson

8:33 AM, 26th October 2018
About 3 weeks ago

From Fergus:

"Re Ian Narbeth’s comment.

Yes I was being sarcastic!

The judge handed down the judgment.

There was a fairly lengthy argument about costs where Mr Leb argued that the claimant (my wife) was entitled to
her costs under the tenancy agreement. Mr Leb referred the Court to the appropriate case law including,
Chaplair v Kumari, Gomba Holdings v Minories Finance and the relevant provisions of the CPR
including CPR 27.14 and Part 44.

Ms Gambling complained that the claim for costs had not been pleaded and therefore it was
inappropriate to allow it and had it been pleaded it would have been met by a defence that clause
was an 'unfair contract term'. She further argued that a contractual provision could not displace the
CPR rules.

Mr Leb pointed out that the Court of Appeal disagreed with Ms Gambling's submissions and that her
contention regarding a contractual indemnity clause was fanciful (if not vexatious). In the event, Mr
argued that there a contractual entitlement to costs.

What surprised me most was that Ms Gambling a Pro Bono Solicitor from Kent Law Clinic pleased the clause was an “Unfair Contract”.

Can you believe it? It is in the standard contract given to use by HMG and Ms Gambling thought it an Unfair Contract Term?

Well Landlords will be happy to learn that DDJ Eyley was having none of it and refused to rule it was an unfair contract!

My advice to landlords is in a Breach of tenancy conditions case (i.e. tenant disrepair) make sure you read CPR 27.14 and Part 44 and take a copy off the internet and take it to Court with you.

As far as the comment of another reader is concerned. The Judge refused Permission to Appeal. However, I am sure Property 118 readers will all agree this is now a matter of National Importance so I will seek Permission to Appeal next week when I receive the Judgement."

Luke P

8:49 AM, 26th October 2018
About 3 weeks ago

Reply to the comment left by Neil Patterson at 26/10/2018 - 08:33
Neil, perhaps ask FW to create his own account on here rather than the go-between through you.

Ian Narbeth

10:15 AM, 26th October 2018
About 3 weeks ago

Reply to the comment left by Neil Patterson at 26/10/2018 - 08:33
" I will seek Permission to Appeal next week when I receive the Judgement"

Good on you Fergus for doing the heavy lifting.

White Collar

23:05 PM, 8th November 2018
About A week ago

Rule 27.14 has no place here. The only rule applicable is 44.5. This decision is not binding and no weight should be attached to it.
Sounds like Counsel didn't did a good job in my opinion. Having had conduct of over 200 hearings I've never had a case like this.


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