Summary

A successful party was not to be deprived of part of its costs on the basis that the litigation, conducted at arm's length, was a test case and that the judgment might be of assistance to that party in the future.

Facts

Claimants' appeal from the order of HH Judge Marr Johnson made 20 August 1999 at Clerkenwell County Court dismissing their application for consent to demolish part of a boundary wall. The claimants were the freehold owners of a property in London which they had previously held under a long lease. The property was within an estate controlled by the defendant company and subject to a Scheme of Management ('the scheme') approved by the Leasehold Valuation Tribunal. The garden at the rear of the property was bounded by a brick wall, which also formed part of the boundary of the estate. The claimants wished to demolish part of the wall and install double gates so as to enable vehicular access and off-street parking. The local residents objected as did the defendant in its capacity as "guardian" under the scheme. The application for consent was made under cl.3.1 of the first schedule to the scheme which prevented any alteration to the "external appearance of any building or structure" and "no new or additional building or structure" to be built or erected without the guardian's consent which would not be unreasonably withheld. Consent was refused by the defendant solely on the basis of the effect of the proposals on an area outside the scheme. The judge rejected the application and the claimants appealed. On the issue of costs the judge only awarded the successful defendant 75 per cent of its costs on the ground that the case was a test case, the result of which might be of assistance to the defendant in the future as it related to the effect of the scheme in general. The defendant cross-appealed from that decision.

Held

(1) The claimants' case was hopeless. It was plain that the proposed work constituted the building or erection of a "new or additional building or structure" and the defendant had been entitled to have refused consent. (2) The defendant had been entitled to have considered the area outside the scheme in considering whether or not to grant consent. Although the provisions of the Leasehold Reform, Housing and Urban Development Act 1993 (see ss.69 and 70) made references to "an area" and "the area", which referred to the area covered by the scheme (contrast with the use of the words "neighbouring areas" in s.70(3)), it could not be accepted that the provisions of cl.2.1 of the first schedule to the scheme, which provided for enforcement of the scheme by the guardian "in order to maintain adequate standards of appearance and amenity and to regulate redevelopment within the estate in the interests of the area as a whole" limited the guardian to considering the interests of the area covered by the scheme. (3) On the issue of costs, the grounds upon which the court could depart from the usual order (that the successful party was to be awarded its costs) were set out in CPR 44.3(4) and (5). Though the list was not exhaustive it was wrong to deprive the successful defendant of part of its costs on the ground that the judgment might be of assistance to it in the future. This was litigation conducted at arm's length, and the only appropriate order was for the defendant to have its costs.

Appeal dismissed. Cross-appeal allowed.