“If there was doubt as to what the terms of the order meant, I accept that it would be reasonable to look to the reasoning in the decision letter in order to interpret it. However, that is the extent of what is permissible. What is not allowed is to change the terms of the order to reflect the reasoning that underpinned it.” 
“the court must construe the order, simply by looking at the order and any admissible material available. It is permissible to look at what the maker of the order intended. However, this remains a matter of construction and does not extend to rectification of an order that may have been made in error.” ; Dinch v Dinch  1 WLR 252
“parties are entitled to rely upon the terms of an unchallenged order. Each party must consider the terms of the order. If a party considers that there has been an error, they must challenge it.” 
The costs of the application for costs
Rejecting an argument by the Appellants that they should not have been ordered to pay the Respondents’ costs associated with applying for the costs of three planning appeals on the basis that such costs did not fall within the scope of the order, Mrs Justice Yip said:
“In my judgment, [the power under section 322A of the Town and Country Planning Act 1990] does extend to the inclusion of costs reasonably incurred in seeking an order for costs. In the context of litigation, the costs of substantive proceedings are considered to include the point up to the disposal of the claim and determination of any liability for costs. Once there is an order for costs, the substantive claim is at an end and proceedings thereafter relate to the assessment of costs in respect of which a separate order for costs is required.” 
Indemnity v standard basis costs
Rejecting an argument by the Respondents that, as a matter of law, the proportionality rule does not apply to an assessment of the costs ordered pursuant to section 250(5) of the Local Government Act 1972 and section 322A of the Town and Country Planning Act 1990, Mrs Justice Yip said:
“By the order of the Administrative Court of 28 November 2016, the costs order became an order of the High Court. A Detailed assessment of the costs payable under a High Court order is to be carried out in accordance with CPR44.3. CPR44.3 applies where the court is to assess the amount of costs, whether by summary or detailed assessment. The Deputy Master was to assess the amount of costs by way of detailed assessment and was therefore required to apply the relevant rules.” 
“The conclusion that the Appellant had acted unreasonably so as to justify the making of an award of costs did not amount to an express or implicit order for costs on the indemnity basis, nor did it disapply CPR44.3(2)(a). I do not consider it proper for the Respondents to seek to argue otherwise, having submitted their Bill of Costs on the correct basis that costs were to be assessed on the standard basis.” 
This was an appeal against decisions of Deputy Master Erwin-Jones in the Senior Courts Costs Office.
Relevant Background Facts
- The order for costs giving rise to the assessment proceedings arose out of three planning appeals made by the Appellant in which the Respondents were granted Rule 6 Party status.
- All the appeals were ultimately withdrawn.
- On 21 July 2016, having found that the Appellant had acted unreasonably so as to justify the making of an award of costs, the Secretary of State ordered them to pay the Respondents’ costs incurred in the first and second appeals, limited to those costs incurred from 2 March 2015 (inclusive) less any expense commonly incurred in all three appeals.
- The Appellant was also ordered to pay the Respondents’ costs incurred in relation to the third appeal, less any expense commonly incurred in all three appeals, to be assessed in the Senior Courts Cost Office if not agreed.
- The parties were unable to agree the costs payable and the Respondents therefore applied to the High Court for an order under section 250 of the Local Government Act 1972 so as to obtain an enforceable order for costs, allowing them to commence detailed assessment proceedings.
- On 28 November 2016, Dr E Franey, an Administrative Court Office lawyer, exercising the delegated power under CPR 54.1A, made an order providing that the Secretary of State’s order be made an order of the court and the Appellant should pay the Respondents the costs to be assessed.
- Pursuant to that order, the Respondents commenced detailed assessment proceedings on 23 December 2016 by serving a Notice of Commencement and a Bill of Costs in accordance with the procedure set down in CPR part 47.
- The Appellant served points of dispute to which the Respondents replied before the detailed assessment hearing.
- The Bill of Costs sought the assessment of the Respondents’ costs on the standard basis.
- The total costs claimed, excluding any costs of the detailed assessment, were £130,559.80.
- The Deputy Master assessed the costs payable at £66,960.40 and allowed costs of the detailed assessment in the sum of £26,928.50.
Grounds of Appeal
The Appellant challenged the Deputy Master’s assessment on three grounds:
- The Deputy Master was wrong to allow costs that had been incurred commonly in all three appeals, so long as they were only claimed once. The Appellant’s case was that the terms of the order provided that all common costs were to be disallowed.
- The Appellants should not have been ordered to pay the costs associated with applying for the costs of the appeals as such costs did not fall within the scope of the order. The Appellant maintained that such costs fell outside the scope of the order. Further, it was argued, the Secretary of State has no power to include such costs within the orders it can make under the statutory matrix.
- The Deputy Master erred in her application of the proportionality test under CPR44.3. In particular, the Deputy Master took account of matters that were the subject of separate County Court proceedings and did not form part of the appeals in relation to which costs were to be assessed.
The Deputy Master granted permission to appeal on grounds 1 and 2, but not ground 3.
The Respondents’ Cross Appeal
The Respondents sought to cross-appeal in relation to the Deputy Master’s application of the proportionality test as follows:
- As a matter of law, CPR44.3(2)(a) does not apply to an assessment of the costs ordered pursuant to section 250(5) of the Local Government Act 1972 and section 322A of the Town and Country Planning Act 1990.
- The decision of the Secretary of State expressly or implicitly disapplied the proportionality test and/or was analogous to a decision that costs should be assessed on the indemnity basis.
- The Deputy Master exceeded the generous ambit of her discretion by failing to give adequate weight to the complexity and importance of the matter and/or by making an arbitrary deduction in 33 per cent after carrying out the line-by-line assessment.
The Secretary of State’s Order
The Secretary of State’s order was contained in a letter which also set out the reasons for the decision. Immediately before setting out the formal decision, the letter contains the following paragraphs:
“18 – … it is acknowledged that all three appeals involve many of the same issues to be addressed and consequently it is inevitable that there will have been a certain amount of duplication in the evidence submitted. Therefore, it is considered reasonable that the award of costs should be limited to any expense that was not commonly incurred in all three appeals.
19 – It is also noted that the appellants contend that some of the evidence obtained by the rule 6 party was not wasted as it had already been prepared for county court proceedings. For the avoidance of doubt, the secretary of state’s power to award costs is interpreted as enabling him to award to a party the costs necessarily and reasonably incurred in relation to the proceedings before him (the appeal process). Expense incurred in proceedings unrelated to the appeal process is not before the secretary of state to consider and neither does he consider the amount of costs payable. That will be for the parties to resolve, by agreement, on the evidence of expense actually incurred in the appeal proceedings or, failing that, in the context of an application to the Senior Courts Cost Office for detailed assessment.”
The Respondents’ solicitors were concerned that the terms of the order did not reflect the intention of the planning inspector who made the decision. They believed that the intention was to avoid the same costs being recovered more than once, rather than to prevent the common costs being recovered at all.
They made contact with the Planning Inspectorate’s Costs and Decisions Team seeking clarification but were advised by Ms Sarah Williams, a member of the team, that it was not possible to amend the costs decision once it had been made and that the only way it could be reconsidered was by way of a challenge to the High Court. She continued:
“Nevertheless, we take the view that, when read in conjunction with paragraph 18 of the decision, the intention of the costs order is clear. Although costs were awarded in all three appeals, as some of the same issues were involved there will have been a certain amount of overlap of the evidence and, consequently, some of the costs incurred will have been reusable in all three appeals with no extra expense involved. Therefore, such costs can only be claimed once.”
The Respondents did not seek judicial review of the decision or otherwise seek rectification of the order. Instead, they applied to the Administrative Court for the order made by the Secretary of State to be made an order of the court, producing the order of 28 November 2016.
The Bill of Costs
The Bill of Costs was presented on the basis that the Appellant had been ordered to pay the Respondents’ costs of the appeals, “in each case on the basis that the costs incurred in all three appeals can only be claimed once.” The Respondents sought to rely on the email from Ms Williams of 24 August 2016.
The Appellant took objection to this as a preliminary point.
The Detailed Assessment
At the start of the detailed assessment the Deputy Master considered the whole decision letter dated 21 July 2016 and the email from Ms Williams, concluding:
“I can see that the wrong which the Planning Inspectorate was trying to avoid was for the paying party to have to pay for three sets of virtually identical evidence.”
She referred to paragraph 18 of the letter before saying:
“I am going to use my powers in accordance with the overriding objective to conclude that what the Planning Inspectorate was endeavouring to do in that situation was to ensure that the receiving party was only paid once for the evidence used in all three appeals rather than three times.”
She rejected the suggestion that the Respondents should have challenged the order in the High Court on the basis that clarifying the position by email was a proportionate way to proceed.
The Respondents’ Position
The Respondents contended that the Deputy Master’s interpretation was clearly correct.
They objected to interpretation of the order being based on the literal wording read in a vacuum and ignoring context.
They accepted that if the order was read literally, any costs incurred commonly in relation to all three appeals could not be recovered.
However, they argued that a purposive and pragmatic approach must be taken to the wording of the order in order to do justice.
It was agreed that it is not open to a costs judge to go behind an order for costs that has been made and that all the costs judge can do is interpret and give effect to the order: Cope v United Dairies (London) Ltd  2 QB 33.
MRS JUSTICE YIP:
THE COMMON COSTS ISSUE
29. In my judgment, despite Mr Stacey’s admirable attempts to persuade me otherwise, the Respondents’ position amounts really to an argument that the order was wrongly drawn so that it did not reflect what was intended and/or produced a result that was plainly unreasonable or irrational. It was not seriously argued that the wording of the order itself can in fact be read as allowing the common costs to be recovered, but only once. That is just not what the order in fact says.
30. If there was doubt as to what the terms of the order meant, I accept that it would be reasonable to look to the reasoning in the decision letter in order to interpret it. However, that is the extent of what is permissible. What is not allowed is to change the terms of the order to reflect the reasoning that underpinned it.
As Jacob LJ put it in Richardson Roofing Company Ltd v The Colman Partnership Ltd  EWCA Civ 839 at paragraph 24,
“Judgments are reasons for orders; they are not the orders.”
The authority cited by the Respondents, Dinch v Dinch  1 WLR 252, merely confirms that
the court must construe the order, simply by looking at the order and any admissible material available. It is permissible to look at what the maker of the order intended. However, this remains a matter of construction and does not extend to rectification of an order that may have been made in error.
31. I do not accept that the intention of the decision letter is as clear as the Respondents assert. Frankly, the decision is confused and confusing. Paragraph 18 clearly states that, “It is considered reasonable that the award of costs should be limited to any expense that was not commonly occurred [sic] in all three appeals”. That sentence appears consistent with the terms of the order.
32. I cannot accept that it is proper to look at the email of 24 August 2016 which contains an ex post facto analysis of the terms of the order by someone other than the decision-maker. Indeed, Ms Williams acknowledged that interpretation of the decision was ultimately for the courts. In my judgment, the Deputy Master fell into error in taking account of what Ms Williams had said.
33. As the Respondents’ solicitor had identified, the wording of the order did not convey what they thought was intended. In those circumstances, the Respondents could not simply rely on Ms Williams’ opinion – or, indeed, anyone else’s opinion – as to the intention of the order. The order needed to be challenged. Rather than seeking to do that, the Respondents applied for the unsatisfactory terms of the order to be crystallised into an order of the court. Once that had been done, all the Deputy Master could do was to give effect to the wording of the order.
34. It may seem that this produces an unduly harsh result for the respondents. The Planning Inspectorate appear to accept that the intention was to avoid duplication of costs, but not to place a further limitation on what could be recovered. However,
parties are entitled to rely upon the terms of an unchallenged order. Each party must consider the terms of the order. If a party considers that there has been an error, they must challenge it.
In this case the appropriate route for a challenge was judicial review. Had a different order been made, it would have been open to the Appellant to challenge its terms if it considered them unreasonable. It is unfair and inappropriate for a costs judge to assess costs on the basis of what she thinks the order should have been rather than what is actually recorded.
35. It was therefore not appropriate for the Deputy Master to go behind the unchallenged order. She was wrong to say that she was exercising powers in accordance with the overriding objective. She was not exercising a discretion. Rather, she was required to give effect to the wording of the order. She did not do so.
36. The first ground of the Appellant’s appeal therefore succeeds.
THE COSTS OF THE APPLICATION FOR COSTS
37. The Appellant objects to costs relating to work done in relation to the applications for costs being included in the assessment. The Appellant maintains that such costs fall outside the scope of the order. Further, the Appellant argues that the Secretary of State has no power to include such costs within the orders it can make under the statutory matrix.
38. The deputy master rejected those arguments. In doing so, she said, “It is evident during all litigation – and I am going to treat the Rule 6 work in this case effectively as litigation – that litigation is to be treated as a whole and the remedies which parties may seek one against the other, within the context of litigation or disputes, will of course include issues as to costs.” She continued, “It is inconceivable that the costs of asking PINS to make an order in accordance with the guidance itself issued is not going to be recoverable inter partes, particularly in conditions such as these where the conduct of the paying party was so denigrated by PINS…”
39. Section 250 of the Local Government Act 1972 provides for the minister to make orders as to the costs of the parties as at the inquiry and as to the parties by whom the costs are to be paid. Where an inquiry or hearing does not take place because, for example, an appeal is withdrawn, section 322A of the [Town and Country Planning Act 1990] gives the Secretary of State the same power to make an order “in relation to costs incurred for the purpose of the inquiry or hearing as if it had taken place”.
40. In my judgment, that power does extend to the inclusion of costs reasonably incurred in seeking an order for costs.
In the context of litigation, the costs of substantive proceedings are considered to include the point up to the disposal of the claim and determination of any liability for costs. Once there is an order for costs, the substantive claim is at an end and proceedings thereafter relate to the assessment of costs in respect of which a separate order for costs is required.
41. I do not accept Mr Edwards’ submission that these statutory proceedings were very different from an ordinary civil action such that wholly different principles should apply. Neither does the argument that the process of seeking costs in this field is intended to be completed with minimum cost carry any weight. The reasonableness of costs incurred in dealing with the costs application still fell to be considered on detailed assessment. There is no need or justification for the policy which Mr Edwards claimed could be read into the statutory scheme of disallowing the recovery of the costs of the costs application to make sure that such costs would be low. Any party who runs up excessive costs on such an application will not recover them on detailed assessment.
42. I do not accept the analogy that Mr Edwards sought to draw with the discontinuance of a civil claim and a subsequent application to set aside a deemed order that the Claimant should pay the Defendant’s costs. The statutory scheme provides for an application for costs to be made at the end of an inquiry or hearing in the same way that an application for costs may be made at the conclusion of court proceedings. There is no deemed order. The Secretary of State is given power to make orders as to the costs for the parties and as to whom costs are to be paid. Section 322A of the 1990 Act extends that power to proceedings under the Act where no inquiry or hearing in fact takes place. The withdrawal of the appeals did not bring those proceedings to an end until costs had been dealt with. The application for costs was part of the proceedings under the 1990 Act and the costs referable to it were properly included as part of the costs incurred for the purposes of the inquiry or hearing.
43. It follows that I consider that the Deputy Master was right to include those costs in her assessment and I dismiss the Appellant’s second ground of appeal.
44. By the order of the Administrative Court of 28 November 2016, the costs order became an order of the High Court. A Detailed assessment of the costs payable under a High Court order is to be carried out in accordance with CPR44.3. CPR44.3 applies where the court is to assess the amount of costs, whether by summary or detailed assessment. The Deputy Master was to assess the amount of costs by way of detailed assessment and was therefore required to apply the relevant rules.
45. If there was any doubt about the application of part 44 in the context of a detailed assessment following an order made under the statutory scheme, that is resolved, in my judgment, by considering CPR44.1(2)(i)(a) which expressly states that parts 44 to 47 apply to the costs of proceedings before a tribunal or other statutory body.
46. CPR44.3(4) provides that where the court makes an order about costs without indicating the basis on which the costs are to be assessed, the costs will be assessed on the standard basis. Where costs are to be assessed on the standard basis, CPR44.3(2) provides that the court will only allow costs which are proportionate to the matters in issue. Costs which are disproportionate may be disallowed or reduced, even if they were necessarily incurred. Any doubts about proportionality are to be resolved in favour of the paying party.
47. It follows that there is no doubt that the Deputy Master was required to assess the costs on the standard basis and to apply the proportionality test under CPR44.3(2)(a).
48. It is not properly arguable that the Deputy Master erred in law in applying the proportionality test. She was required to do so.
The conclusion that the Appellant had acted unreasonably so as to justify the making of an award of costs did not amount to an express or implicit order for costs on the indemnity basis, nor did it disapply CPR44.3(2)(a). I do not consider it proper for the Respondents to seek to argue otherwise, having submitted their Bill of Costs on the correct basis that costs were to be assessed on the standard basis.
I also note that the points of law and construction contained in paragraphs 1 to 5 of the Respondents’ Grounds of Appeal do not appear to have been taken before the Deputy Master. I see no good reason why the Respondents should be allowed to advance these matters on appeal.
49. I refuse permission in relation to those grounds which are without merit.
50. That leaves an argument on either side that the Deputy Master misapplied the proportionality test so as to reach a decision which fell outside the generous ambit of her discretion.
51. That argument has probably become academic in light of my conclusions on ground 1 of the Appellant’s appeal. The parties are agreed that, regrettably, the consequence of allowing the appeal on Ground 1 is that the matter will have to be remitted for a new assessment, correctly applying the terms of the order. In those circumstances, the Master will be required to apply the proportionality test, approaching it through a different lens. The exercise of the discretion in relation to proportionality may be very different once the excluded common costs have been removed. Certainly, it would not be right for the discount of 33 per cent applied by the Deputy Master to be carried through in any way to the new assessment. I intend in the circumstances to deal only briefly with the argument in relation to the Deputy Master’s exercise of her discretion.
52. The Appellant contended that the Deputy Master took account of matters that were not relevant to the value of any relief in the proceedings when considering the issue of proportionality and so maintained that the Deputy Master failed to apply the test properly. Presumably, the implication, although not expressly stated, is that the Deputy Master has arrived at an assessment that is too generous to the Respondents.
53. The Respondent, by contrast, contents that the deputy master failed to give sufficient weight to the complexity and importance of the issues and has reduced the total by 33 per cent without justification. The implication, again not expressly stated, is that her assessment was unduly mean to the Respondents.
54. I have considerable sympathy for the Deputy Master. As she observed, the conduct of both parties throughout was such as to put them at loggerheads rather than seeking to engage in a collaborative manner consistent with the overriding objective. She noted that she had experienced that conduct over the two days of the hearing. That conduct has continued through the appeal. I note that the parties were unable even to agree the terms of an order reflecting the deputy master’s decisions, including her grant of permission to appeal. I have seen some correspondence about this issue and am decidedly unimpressed with the conduct on both sides and echo what the Deputy Master said.
55. In my judgment, at the conclusion of what I consider to have been an unnecessarily lengthy and contentious detailed assessment hearing, the Deputy Master exercised her discretion under CPR44.3 in an appropriate way.
56. I therefore refuse permission in relation to the Respondents’ appeal relating to proportionality. I would have refused permission too on that part of the Appellant’s appeal that relates to proportionality. In the event, as I have refused permission to the respondent, the Appellant withdraws this ground.
57. The effect of my decision in relation to ground 1 of the Appellant’s appeal is that the assessment will have to be set aside and the costs payable will have to be reassessed, excluding the costs common to all three appeals.
58. As I canvassed with the parties, it seems to me that there would be benefit in the new detailed assessment being reserved to Master Howarth as he has sat with me as an assessor today and, with his agreement, I direct that.
59. In hope rather than any expectation given the history I would urge the parties to consider whether they might now reach a sensible consensual resolution. I am sure neither party seriously intended matters to become so protracted. Even at this stage it seems to me that litigation risks exist on both sides. I stress that the exercise of the discretion in relation to proportionality is again at large. For my part, without expressing any concluded view at all, I consider that the unfairness identified by Mr Stacey in applying what was probably a bad order, may have some bearing on the exercise of that discretion. I say no more than that.