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England and Wales High Court (Senior Courts Costs Office) Decisions


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Cite as: [2007] EWHC 90068 (Costs)

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Neutral Citation Number: [2007] EWHC 90068 (Costs)
Case No: SSCO Ref 06.A.524

IN THE HIGH COURT OF JUSTICE
SUPREME COURT COSTS OFFICE
MASTER ROGERS

Clifford's Inn, Fetter Lane
London, EC4A 1DQ
Claimant
Defendant
 2 January 2007

B e f o r e :


____________________

GAVIN KAY AND 7 OTHERS
Claimant
- and -

LONDON BOROUGH OF LAMBETH
Defendant

____________________

Mr James Carpenter (instructed by Devonshires) for the Defendant
Mr John Gimlette (instructed by the Legal Services Commission) for the Legal Services Commission
The Claimants were neither present nor represented
Hearing date: 4 December 2006

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    Master Rogers

    THE ISSUE

  1. The issue in this matter which was tried as a preliminary issue is whether the Defendants are out of time for bringing a claim under s.11 of the Access to Justice Act 1999 in respect of costs incurred by them in successfully defending successive appeals by the legally assisted Claimants to the Court of Appeal and to the House of Lords.  The hearing before me concentrated on two points, namely when were the issues between the parties "finally decided" and the correct meaning in the context of this case of the words "good reason".
  2. There remained outstanding issues as to the meaning of the expression "applications for funded services" but in the light of my decision on the above points it seems to me that it will be unnecessary for those points to be argued further.
  3. THE BACKGROUND

  4. All seven Claimants were "short life" occupiers of a number of properties owned by the Defendant.  As long ago as 1997 a dispute arose as to the legal status of both the occupants (whether they were council house tenants or merely licensees) and the council (whether it was the occupants' landlord).  Obviously that issue had important implications in relation to such questions as the occupants' right to buy and their security of tenure.
  5. The proceedings were started in 2000.  During the pendency of those proceedings it was decided that the issues as to the status of the parties should be dealt with as a preliminary issue.
  6. The trial of that preliminary issue started on 30 September 2002 before HHJ Cooke and lasted no less than 19 days.  On 13 December 2002 the learned Judge gave judgment against the occupants, the effect of which was that they had no further right of occupation and they were also ordered to pay the costs of the preliminary hearing but they were granted permission to appeal on limited issues.
  7. On 19 December 2003 the learned Judge also struck out the occupants' pleadings in relation to Human Rights Act points and again ordered them to pay costs but once again permission to appeal was granted.
  8. The appeals were heard, starting on 9 February 2004 in the Court of Appeal who handed down a reserved judgment on 20 July 2004.
  9. The relevant part of the order of the Court of Appeal (which was sealed on 23 July 2004) reads as follows:-
  10. "1.     That the appeals against the order of 13 December 2002 be dismissed.
    2.       That the appeals against the order of 19 December 2003 be dismissed.
    3.       That the Appellants do pay the Respondents' costs of the appeal such costs to be determined by a costs judge.  The Appellants who were in receipt of services funded by the Community Legal Service do pay the Respondents such amount if any as may be determined by the costs judge pursuant to section 11 of the Access to Justice Act 1999.
    4.       That the Appellant's costs be assessed in accordance with the Community Legal Services (Costs) Regulations 2000.
    5.       That the Appellants have permission to apply in writing within 7 days for leave to Appeal to the House of Lords. "
  11. The Claimants sought and were granted permission to appeal to the House of Lords and that appeal was heard on 12 to 15 December 2005 with the speeches dismissing the appeal handed down on 8 March 2006 (the case is fully reported at [2006] 2 WLR 570).
  12. On 8 March 2006 the following order was made in respect of costs:
  13. "It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty The Queen assembled, That the Order of Her Majesty's Court of Appeal of 20 July 2004 be, and the same is hereby, Affirmed, save as to costs, and that the Appeal be, and the same is hereby, Dismissed: And it is further Ordered, That the question of costs be adjourned in order that the parties may make written submissions within 14 days."
  14. On 5 June 2006 their Lordships delivered judgment in relation to the costs of the appeal and below as follows:
  15. "It is Ordered, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty The Queen assembled, That the appellants do pay or cause to be paid the costs of the London Borough of Lambeth, first respondent, in this House, the amount which it is reasonable for them to pay to include one leading counsel and two junior counsel and to be certified by the Clerk of the Parliaments in accordance with section 11 of the Access to Justice Act 1999 and the regulations made thereunder: And it is further Ordered, That the costs of the appellants in this House to be taxed in accordance with the Access to Justice Act 1999, such costs to include one leading counsel and two junior counsel: And it is also further Ordered, That, on the question of costs in the courts below, the Order of Her Majesty's Court of Appeal of 20 July 2004 and also the Orders of His Honour Judge Cooke sitting at Central London County Court of 13 December 2002 and 19 December 2003 be affirmed."

    THE DEFENDANTS' APPLICATION FOR COSTS AGAINST THE LEGAL SERVICES COMMISSION

  16. In respect of the Court of Appeal bill the application was made to this office and sealed on 8 September 2006.  It was accompanied by the documents that are required to accompany a section 11 application the most important of which is a fully costed bill of costs with the accompanying vouchers.
  17. The matter was placed before me as sitting Master that week and on 14 September 2006 I made the standard section 11 order appointing Friday 4 December 2006 as the date for the substantive hearing of the section 11 application.
  18. The timetable laid down in the standard order was not completely complied with and it was only with a few weeks to go before 4 December that the Legal Services Commission apparently first took the point that the application was outside the primary three month period and therefore failed.
  19. I understand that the same point has been raised by the Legal Services Commission in relation to the bill lodged on 8 September 2006 at the House of Lords but of course I have no jurisdiction to deal with that bill or any issues raised in respect of it. (But see paragraph 75 below).
  20. The hearing took place before me over half a day on 4 December 2006 and was conspicuously well argued by Mr James Carpenter of counsel on behalf of the Defendants, the London Borough of Lambeth, and by Mr John Gimlette of counsel on behalf of the Legal Services Commission.  The Claimants, who appear to have two firms of solicitors acting for them, were not represented before me on 4 December and I was told by their solicitors that legal aid for them to be represented was refused.  Obviously in the circumstances since the preliminary issue did not affect them as no costs were sought against them, this did not matter.
  21. At the conclusion of the oral submissions it was agreed that I should make a formal order under section 11 assessing the costs payable by the seven Claimants and each of them at nil and I duly made such an order.
  22. THE STATUTORY AND REGULATORY BACKGROUND

  23. Section 11 of the Access to Justice Act 1999 reads as follows:
  24. "(1) Except in prescribed circumstances, costs ordered against an individual in relation to any proceedings or part of proceedings funded for him shall not exceed the amount (if any) which is a reasonable one for him to pay having regard to all the circumstances including –
    (a) the financial resources of all the parties to the proceedings, and
    (b) their conduct in connection with the dispute to which the proceedings relate;
    and for this purpose proceedings, or a part of proceedings, are funded for an individual if services relating to the proceedings or part are funded for him by the Commission as part of the Community Legal Service.
    (2) In assessing for the purposes of subsection (1) the financial resources of an individual for whom services are funded by the Commission as part of the Community Legal Service, his clothes and household furniture and the tools and implements of his trade shall not be taken into account, except so far as may be prescribed.
    (3) Subject to subsections (1) and (2), regulations may make provision about costs in relation to proceedings in which services are funded by the Commission for any of the parties as part of the Community Legal Service.
    (4) The regulations may, in particular, make provision –
    (a) specifying the principles to be applied in determining the amount of any costs which may be awarded against a party for whom services are funded by the Commission as part of the Community Legal Service,
    (b) limiting the circumstances in which, or extent to which, an order for costs may be enforced against such a party,
    (c) as to the cases in which, and extent to which, such a party may be required to give security for costs and the manner in which it is to be given,
    (d) requiring the payment by the Commission of the whole or part of any costs incurred by a party for whom services are not funded by the Commission as part of the Community Legal Service,
    (e) specifying the principles to be applied in determining the amount of any costs which may be awarded to a party for whom services are so funded,
    (f) requiring the payment to the Commission, or the person or body by which the services were provided, of the whole or part of any sum awarded by way of costs to such a party, and
    (g) as to the court, tribunal or other person or body by whom the amount of any costs is to be determined and the extent to which any determination of that amount is to be final."
  25. The relevant regulations are the Community Legal Service (Costs Protection) Regulations 2000 and the Community Legal Service (Costs Protection) (Amendment No.2) Regulations 2001.  Paragraph 5 of the 2000 Regulations reads:
  26. "(1) The following paragraphs of this regulation apply where:
              (a) funded services are provided to a client in relation to proceedings;
              (b) those proceedings are finally decided in favour of a non-funded party;  and
              (c) cost protection applies.
    (2) The court may, subject to the following paragraphs of this regulation, make an order for the payment by the Commission to the non-funded party of the whole or any part of the costs incurred by him in the proceedings (other than any costs that the client is required to pay under a section 11(1) costs order).
    (3) An order under paragraph (2) may only be made if all the conditions set out in sub-paragraphs (a), (b), (c) and (d) are satisfied:
              (a) a section 11(1) costs order is made against the client in the proceedings, and the amount (if any) which the client is required to pay under that costs order is less than the amount of the full costs;
              (b) the non-funded party makes a request under regulation 10(2) of the Community Legal Service (Costs) Regulations 2000 within three months of the making of the section 11(1) costs order;
              (c) as regards costs incurred in a court of first instance, the proceedings were instituted by the client and the court is satisfied that the non-funded party will suffer severe financial hardship unless the order is made;  and
              (d) in any case, the court is satisfied that it is just and equitable in the circumstances that provision for the costs should be made out of public funds.
    (4) Where the client receives funded services in connection with part only of the proceedings, the reference in paragraph (2) to the costs incurred by the non-funded party in the relevant proceedings shall be construed as a reference to so much of those costs as is attributable to the part of the proceedings which are funded proceedings.
    (5) Where a court decides any proceedings in favour of the non-funded party and an appeal lies (with or without permission) against that decision, any order made under this regulation shall not take effect.
              (a) where permission to appeal is required, unless the time limit for applications for permission to appeal expires without permission being granted;
              (b) where permission to appeal is granted or is not required, unless the time limit for appeal expires without an appeal being brought.
    (6) Subject to paragraph (7), in determining whether the conditions in paragraph (3)(c) and (d) are satisfied, the court shall have regard to the resources of the non-funded party and of his partner.
    (7) The court shall not have regard to the resources of the partner of the non-funded party if the partner has a contrary interest in the funded proceedings.
    (8) Where the non-funded party is acting in a representative, fiduciary or official capacity and is entitled to be indemnified in respect of his costs from any property, estate or fund, the court shall, for the purposes of paragraph (3), have regard to the value of the property, estate or fund and the resources of the persons, if any, including that party where appropriate, who are beneficially interested in that property, estate or fund."
  27. Paragraph 4 of the 2001 Amendment Regulations reads as follows:
  28. "(1) At the beginning of regulation 5(3)(b) there shall be inserted:
                'unless there is a good reason for the delay,'.
    (2) In regulation 5(3)(c):
    (a)     after 'client' there shall be inserted ', the non-funded party is an individual,';  and
                (b)        'severe' shall be deleted.
                Signed by the authority of the Lord Chancellor.
  29. Thus it will be seen that the original regulations prescribed a rigid unextendable three month period within which any application for an order for costs against the Commission had to be mounted whereas under the later regulations there is a degree of discretion imported by the words "unless there is a good reason for the delay".
  30. It is common ground between the parties that the rigid three month limit applies where "applications for funded services" were made on or before 2 December 2001 where, as here, the slightly less restrictive wording applies to "applications for funded services" made on or after 3 December 2001.  This case raised interesting points on that wording where, as here, all the original certificates were granted prior to 3 December 2001 and some continued in force over and after that date, whereas two were discharged after that date and new certificates granted.  There was also apparently an issue as to the effect of legal aid for all the Claimants in the House of Lords being grouped under one "umbrella" certificate.  Mr Carpenter submitted that that question could not be resolved by me without further disclosure being given beyond that which was contained in the skeleton put in by Mr Gimlette on behalf of the Legal Services Commission.  At the conclusion of the submissions and after I had reserved judgment Mr Carpenter renewed his application but I refused to make an order bearing in mind Mr Gimlette's offer to bring to the hearing when this judgment is handed down copies of all the civil aid certificates relevant to this matter.  However, as I have already indicated in the light of my judgment on the issues before me these interesting, and no doubt difficult, questions do not arise for resolution by me and are not considered further in this judgment;  indeed they could not be because no submission has been made to me about them.
  31. THE FIRST ISSUEWHEN WERE THE PROCEEDINGS "FINALLY DECIDED"?

  32. Mr Carpenter in his helpfully comprehensive submissions amplifying his equally helpful skeleton pointed out that the phrase "finally decided" is not defined anywhere in the Access to Justice Act 1999, the Costs Regulations or the Costs Protection Regulations.  He did however point out that that expression did appear in the predecessor of the latter, namely section 18 of the Legal Aid Act 1988 which reads as follows:
  33.     "(1) This section applies to proceedings to which a legally assisted person is a party and which are finally decided in favour of an unassisted party.
    (2) In any proceedings to which this section applies the court by which the proceedings were so decided may, subject to subsections (3) and (4) below, make an order for the payment by the Board to the unassisted party of the whole or any part of the costs incurred by him in the proceedings.
    (3) Before making an order under this section, the court shall consider what order for costs should be made against the assisted party and for determining his liability in respect of such costs.
    (4) An order under this section in respect of any costs may only be made if –
                (a) an order for costs would be made in the proceedings apart   from this Act;
                (b) as respects the costs incurred in a court of first instance,       those proceedings were instituted by the assisted party and            the court is satisfied that the unassisted party will suffer          severe financial hardship unless the order is made; and
    (c) in any case, the court is satisfied that it is just and equitable in all the circumstances of the case that provision for the costs should be made out of public funds.
    (5) Without prejudice to any other provision restricting appeals from any court, no appeal shall lie against an order under this section, or against a refusal to make such an order, except on a point of law.
    (6) In this section 'costs' means costs as between party and party, and includes the costs of applying for an order under this section; and where a party begins to receive representation after the proceedings have been instituted, or ceases to receive representation before they are finally decided or otherwise receives representation in connection with part only of the proceedings, the reference in subsection (2) above to the costs incurred by the unassisted party in the proceedings shall be construed as a reference to so much of those costs as is attributable to that part.
    (7) For the purposes of this section proceedings shall be treated as finally decided in favour of the unassisted party –
    (a) if no appeal lies against the decision in his favour;
    (b) if an appeal lies against the decision with leave, and the time limited for applications for leave expires without leave being granted; or
    (c) if leave to appeal against the decision is granted or is not required, and no appeal is brought within the time limited for appeal;
    and where an appeal against the decision is brought out of time the court by which the appeal (or any further appeal in those proceedings) is determined may make an order for the repayment by the unassisted party to the Board of the whole or any part of the sum previously paid to him under this section in respect of those proceedings.
    (8) Where a court decides any proceedings in favour of the unassisted party and an appeal lies (with or without leave) against that decision, the court may, if it thinks fit make or refuse to make an order under this section forthwith, but if an order is made forthwith it shall not take effect –
                (a) where leave to appeal is required, unless the time limited       for applications for leave to appeal expires without leave     being granted;
                (b) where leave to appeal is granted or is not required, unless    the time limited for appeal expired without an appeal being             brought.
    (9) For the purposes of this section 'court' includes a tribunal."
  34. Mr Carpenter drew my attention particularly to section 18(7) of the Act and pointed out that that had been construed as he suggested in the case of R v Greenwich LBC ex parte Lovelace (No.2) [1992] l QB 155 at 164B.
  35. He submitted that in the absence of an express alteration of the definition of what he considered was already a term of art that Legal Aid Act definition persists under the Cost Protection Regulations and he pointed out, correctly, that this is a view expressed by the Legal Services Commission itself in its own manual of guidance for the profession at paragraph 2.4 which reads as follows:
  36. "1.        Regulation 5(3) Cost Protection Regulations and section 18(7) of the 1988 Act both define proceedings as 'finally decided' if there is no appeal, the time limited for applications for permission to appeal expires without permission being granted; or, if permission to appeal against the decision is granted, or is not required, no appeal is brought within the time limited for appeal.
    2.                     The work 'proceedings' is capable of different interpretations.  In an application for costs against the Commission, it does not necessarily mean the whole action, cause or matter."
  37. Mr Carpenter conceded that Regulation 5(3)(b) is expressed only in terms of the time that has passed since the making of the section 11(1) order, but this he submitted was in plain conflict with the pre-condition of Regulation 5(1)(b), namely that Regulation 5(3)(b) does not apply until there has been a "final decision", but by the time it does apply the three months may already be up.
  38. He instanced three scenarios which in his view demonstrated the absurd consequences of the provision if applied literally:
  39. "(a) If permission to appeal were given by the court of first instance, and the appeal was pursued within 21 days, it could never be said that the proceedings had been "finally decided":  an application for costs against the Legal Services Commission would be bound to fail.
    (b) If the appellant in that scenario thereafter decided, three months less one day after the order at first instance, not to pursue the appeal, on the Legal Services Commission's interpretation of Reg. 5, the successful party would have one day in which to lodge its Reg. 10 application.
    (c) If instead the appellant abandoned the appeal three months and one day after the order at first instance, on the Legal Services Commission's interpretation, the successful party would already be out of time to apply for an order against the Legal Services Commission, even though at no time up to that point had the jurisdiction to make such an order arisen."
  40. This led Mr Carpenter to take me on an extended tour of certain passages in Bennion on Statutory Interpretation, 3rd Edition, and that journey was even extended to consideration of the European Court of Human Rights case of Pérez de Rada Cavanilles v Spain, decided in 1998 and reported at 29 EHRR 109.
  41. Interesting and ingenious though that tour undoubtedly was I do not think it is necessary for me to lengthen this already long judgment by dealing expressly with each of the passages in Bennion and the E.H.R.R. case to which he referred me because the whole of his argument is constructed on the basis that paragraph 5 of the Regulations quoted above must be considered as a whole.
  42. However I prefer the submission made on behalf of the Legal Services Commission by Mr Gimlette to the effect that Regulation 5(3)(b) can be considered in isolation from Regulation 5(1) and should be read and construed on its plain language and means what it says.  On that basis he contended that the Defendant had until 20 October 2004 to apply to the court for an order under section 11 in respect of the Court of Appeal costs or, as he put it in his skeleton, "to make a request in respect of the CA costs".
  43. As to the absurd consequences outlined above by Mr Carpenter he submitted that these could readily be avoided by an early application being made well before the expiry of the relevant three month period coupled with a request for directions.  He did not consider that it was necessary in those circumstances for the party seeking costs from the Commission to go to all the expense of preparing a bill if agreement could be reached with the Legal Services Commission as to an extension.
  44. Although I consider that this is an unusual way of dealing with the matter and not one that I have encountered in the cases under section 11 that I have had to deal with before, I do acknowledge that it certainly would be a way of saving costs and one which ought to be adopted in an appropriate case.
  45. Mr Carpenter's fall back situation on this point was that the time for making a section 11 request was in effect extended until three months after the House of Lords handed down its decision on the costs of the final appeal on 5 June 2006, namely 5 September 2006.
  46. In my opinion Mr Carpenter fails on that fall back point also because all their Lordships did in March and June was to affirm the decisions both of the Court of Appeal and of His Honour Judge Cooke so that the legal effect was that the order made by the Court of Appeal in 2004 stood and accordingly Mr Carpenter fails on this his primary point.
  47. THE SECOND ISSUE:  WAS THERE A "GOOD REASON" FOR THE DELAY?

  48. Obviously there are two periods to be considered, the first being from 20 October 2004, three months after the Court of Appeal judgment, to 5 September 2006, three months after the House of Lords finally disposed of this case having delivered its substantive judgment some months earlier as indicated.
  49. The second period of delay is a much shorter one, namely from 5 to 8 September 2006.
  50. In order to explain the delays mentioned above and the thinking of the Defendants' solicitors and costs draftsman, three witness statements have been made on their behalf, namely by Mr Jonathan Roger Hulley, Charles Nicholas Billingham from Devonshires, Solicitors and by Mr Kevin Friedlander, their external costs draftsman.
  51. Mr Billingham was the partner in charge of the case though as he says in paragraph 2 of his witness statement he was only in overall charge and not running it on a day-to-day basis.
  52. The heart of his witness statement is to be found in paragraphs 5 to 11 thereof which read was follows:
  53. "5.        The reason I did not seek recovery of the Court of Appeal costs against the Legal Services Commission within 3 months of the Court of Appeal judgment on 20 July 2004 was quite simply that my reading of Regulation 5 of the Community Legal Service (Costs Protection) Regulations 2000 ("the 2000 Costs Regulations") was that there was no requirement on a party who had obtained a Section 11 costs order against the Legal Services Commission (as we had by virtue of the Court of Appeal judgment of 20 July 2004) to seek an order against the Legal Services Commission until the proceedings had been "finally decided" in Lambeth's favour (as the non-funded party).
    6.                     I specifically recall looking at the Regulations following the Court of Appeal decision and indeed discussing them with Kevin Friedlander, the costs draftsman.  I appreciate that Mr Friedlander does not recall any such conversation but I do recall speaking to him about the issue.  I do not seek to apportion blame here as I take responsibility for the decision not to apply to assess the costs at that stage.  However, I mention this merely to demonstrate that the issue was considered and not simply ignored and that a considered view was taken that it was a condition precedent that the proceedings had been finally decided for the three-month time limit under the Regulations to have effect.
    7.                     I should say at this point we were aware that the Appellants in the Court of Appeal intended petitioning the House of Lords for leave to appeal by early August 2004 after their application to the Court of Appeal had failed.  I attach to this statement marked "CNB 1" a copy of a letter from Thomas & Co who acted for a number of the Appellants in the Court of Appeal requesting an extension of time (which was subsequently granted) to bring their petition.
    8.                     I should also say that in entirely separate proceedings (Islington Borough Council v Tracey Green and Gary O'Shea (2005) EW Civ 56) in which I was instructed by the London Borough of Islington ("Islington") which went on appeal to the Court of Appeal and then to the House of Lords on a petition for leave to appeal in 2005, I took the same view of the effect of the 2000 Costs Regulations, namely that time (under Regulation 5) would not start to run for the purposes of applying for an order against the Legal Services Commission ("LEGAL SERVICES COMMISSION") until the proceedings had been finally decided by the House of Lords.
    9.                     In those proceedings the Legal Services Commission took no point regarding the date on which the Bills of Costs had been lodged.  They did not claim that Islington were out of time in relation to the Court of Appeal costs notwithstanding that the application was made some 7 months after the relevant order in the Court of Appeal.
    10.       There is now produced and shown to me at Exhibit "CNB 2" copies of the Court of Appeal order in the Islington case together with the House of Lords notification refusing leave to appeal and a copy of this firm's application notice dated 24 August 2005 seeking a determination pursuant to Regulation 10 of the 2000 Costs Regulations.  Also at "CNB 2" I refer to the letter from the Special Cases and Multi Party Actions Unit at the Legal Services Commission dated 20 September 2005 confirming that the Commission would not seek to oppose the application for costs and agreeing to pay the bill for the costs in the Court of Appeal totalling £17,651.26 (being the amount on the bill as drawn).
    11.       In my humble opinion it would be remarkable if the Legal Services Commission and in particular the Special Cases and Multi Party Actions Unit failed by an oversight to notice non-compliance with the three month rule in relation to the Court of Appeal costs unless, like me, they took the view that the 3 month "rule" only took effect from the date on which proceedings were finally decided pursuant to Regulation 5, paragraph (1)(b).  In the event that I and they were wrong in our interpretation of the meaning of the phrase "finally decided" at para (1)(b) of Regulation 5 of the 2000 Costs Regulations, and given what I have said above, I would humbly submit that there is good reason why time should now be extended to allow Lambeth to proceed with its application against the Legal Services Commission for recovery of its costs in the Court of Appeal."
  54. Mr Hulley, however, was in day to day control of the proceedings and paragraphs 10 to 23 of his witness statement explain in detail how he dealt with the matter and are set out below:
  55. "10.      On 5th June I received a copy of the abovementioned Order of the House of Lords.  After having spoken to Nick Billingham, I made contact with our independent costs draftsman, Kevin Friedlander of Suite 10, 4-5 Coleridge Gardens, London NW6 3QH advising him that the House of Lords costs order dated 5th June 2006 had been received, and made an appointment with him to meet him at our offices on Wednesday 7th June 2006.
    11.       At our meeting on Wednesday 7th June 2006, I informed Kevin Friedlander that he should prepare bills of costs in relation to both the Court of Appeal Order dated 20th July 2004 and the House of Lords Order dated 5th June 2006.  I do (sic) not specifically instruct him to prepare the bills of costs by 5th September 2006, however I did tell him to prepare the bills in accordance with the costs rules and procedure.  In any event, I gave him all the correspondence and pleadings files that I had in this matter and also copies of both Orders at this meeting.  I attach herewith marked as exhibit "JRH.1" a copy of an email that I sent to Kevin Friedlander on 5 June 2006 and also a file note of our meeting on 7 June 2006 marked as exhibit "JRH.2".
    12.       I then diarised 5th September 2006 as the date on which the two bills of costs should have been served on the Legal Services Commission and attach herewith marked as exhibit "JRH2A" a copy of my Outlook diary sheet of that date.
    13.       On 13th June 2006 Kevin Friedlander emailed me to inform me that he would commence drafting of the bills on either 14th or 15th June 2006, and also asked me for a copy of all our counsel's fee notes, which I duly sent him.  On 15th June 2006 I sent an email to Kevin Friedlander informing him that I had obtained a complete set of Counsel's fees as requested and informed him of the need to have a meeting with Nick Billingham in order to confirm the bills had need to be drafted and whether or not he required any other documentation.  He replied that he would attend Devonshires Solicitors to meet Nick Billingham and I on 16th June 2006.
    14.       On 16th June 2006 I recall meeting further with Kevin Friedlander to discuss the bills that needed to be prepared.  I understand that he also had a brief discussion with Nick Billingham and later that day he sent Nick and I an email confirming that he would draft the bills of costs as instructed.  He set out in some detail what he thought was required of him and he referred to the Court Orders in question, including their dates.  I attach herewith marked as exhibit "JRH.3" a copy of Kevin Friedlander's in this regard.
    15.       On 19th June 2006 Nick Billingham addressed an email to Kevin Friedlander, copied to me, confirming that he should proceed against the Commission in relation to costs in the Court of Appeal and House of Lords.  I attach herewith marked as exhibit "JRH.4" a copy of Nick Billingham's email.
    16.       On 25th July 2006 and again on 11th August 2006, I recall communicating with Kevin Friedlander and asking him for an update on how he was progressing with the bills of costs and also what he estimated the total amount of the bills to be.  He emailed me on 15th August 2006 and again on 18th August 2006 and advised that he had a vague estimate of the total amount of the bills being prepared and implied that preparation of the bills was progressing well.
    17.       On 31st August 2006 Kevin Friedlander emailed me to ask me when it was suitable for me to discuss the bills that he was preparing and whether we could meet on either 4th or 5th September to discuss the bills.  I attach herewith marked as exhibit "JRH.5 a copy of his email.
    18.       On 1st September 2006 I emailed Kevin Friedlander to inform him that we could meet to discuss the bills on 5th September 2006 and he informed me that he would be in attendance at Devonshires offices on 5th September 2006 between 10 am and 11 am.  I attach herewith marked as exhibit "JRH.6" my email to Kevin Friedlander and as exhibit "JRH.7" a copy of Kevin Friedlander's email to me.
    19.       Later that same day, I emailed Kevin Friedlander once again to ask him whether the bills were ready.  I attach herewith marked as exhibit "JRH.8" a copy of this email.  Kevin Friedlander then emailed me back that same day to inform me that the bills would be ready by Tuesday 5th September 2006 but that the date for service of the bills was Friday, 8th September 2006.  I attach herewith marked as exhibit JRH.9" a copy of this email.
    20.       We did meet on Tuesday 5th September 2006 and he again told me that the bills would be ready for service on 8th September 2006.
    21.       We also discussed the logistics involved for service of the bills on Friday 8th September 2006, including preparing relevant correspondence to be addressed to the Legal Services Commission, and the Judicial Office of the House of Lords.  Kevin Friedlander then attended Devonshires offices on Friday 8th September 2006 and the bills were duly served with the Legal Services Commission, the Supreme Court Costs Office and on the House of Lords Judicial Office on Friday 8th September 2006.
    22.       Kevin Friedlander has informed me that his explanation as to why he finalised the bills of costs to be served on Friday 8th September 2006 and not on Tuesday 5th September 2006, was that the mistake as a "clerical error" and that he had simply mis-diarised the correct date for service.
    23.       All I am able to say is that when communicating with Kevin Friedlander on 1st September 2006 as set out above and when meeting him on 5 September 2006, he advised me that Friday 8th September 2006 was the date for service.  I did not repeatedly challenge him in this regard, especially as he had confirmed his advice at our meeting on 5 September 2006, but instead relied on his experience and expertise as a costs draftsman, and trusted his advice in this regard."
  56. Finally, Mr Friedlander, the external costs draftsman who was involved, also made a witness statement.  In order to fully appreciate the submissions made it is I think necessary to set out below most of what Mr Friedlander said in his witness statement starting at paragraph 3 and continuing to the end, which is as follows:
  57. "3.        In relation to the Court of Appeal Order dated 20th July 2004, it is possible that I spoke to Nick Billingham immediately after the receipt of that in on or about 20th July 2004 in relation to whether or not a bill of costs should be produced at that time.  However, I can find no correspondence or attendance note in this regard and I also cannot recall any conversation with Nick Billingham at the time.  I am aware that Nick Billingham does recall a conversation with me at this time, and it may have occurred but I cannot remember this discussion.  I do however take the view that it would not have been appropriate to have prepared a bill of costs at this time because this matter had not been finally decided as envisaged in the costs regulations.  In any event, no bill of costs was prepared in relation to the Court of Appeal Order dated 20th July 2004 at that time.
    4.         On 5th June 2006 I received an email from Jonathan Hulley of Devonshires Solicitors informing me that the final costs orders in relation to this matter had been received and asking me to meet with him to discuss these orders.  I told him on that same day that I would be at Devonshires offices on Wednesday 7th June 2006 to speak to him.  I see from emails that I met with Jonathan Hulley on 7th June 2006.  I do not recall exactly what was discussed at that meeting.  However, I do recall Jonathan providing me with boxes of correspondence files and also copies of the Court of Appeal Order dated 20th June 2004 and the House of Lords Costs Order dated 5th June 2006.  I also recall him requesting me to prepare bills of costs in relation to both Orders.  In any event I was aware of the three-month rule in relation to the bills.
    5.         On 13th June 2006 I sent an email to Jonathan Hulley advising him that I was going through all the notes in my office from the previous bill that I had prepared in this matter and should be able to get started on the drafting of the new bills on 14th June 2006 or 15th June 2006.  I also asked Jonathan Hulley for a complete set of Counsel's fee notes.  I attach herewith marked as Exhibit KF1 a copy of my email addressed to Jonathan Hulley dated 13th June 2006.
    6.         On 13th June 2006, I received an email from Jonathan Hulley informing me that he would obtain Counsel's fee note and I responded to his email on that same day that I would be in the office on 14th June 2006 to have a further discussion about the bill of costs.
    7.         On 16th June 2006 I met with Jonathan Hulley and also had a brief discussing (sic) with Nick Billingham about the bills of costs that I was going to prepare in this matter.  On the same day I sent a detailed email to Jonathan Hulley copied to Nick Billingham, in which I set out what I thought was required of me and also referred to the Court Orders dated 13th December 2002, 19th December 2003, 20th July 2004 and 5th June 2006.  My email stated that I suggested that I prepare four bills in this matter.  I attach herewith marked as Exhibit KF2 a copy of this email.
    8.         On 19th June 2006 Nick Billingham sent an email to me, copied to Jonathan Hulley stating that as far as the Court of Appeal and the House of Lords bill was concerned, I should proceed against the Legal Services Commission.  He also gave me his hourly rates in relation to these bills and asked that I have a chat to him when next I was in the office.  I attach herewith marked as Exhibit KF3 a copy of this email.
    9.         When I began going through the Court Orders and documentation that Jonathan Hulley had provided to me in on or about 13th June 2006, I would have diarised the final date for service of the bills.  Unfortunately, this date was entered in my Outlook Diary as 8th September 2006 instead of 5th September 2006.  I attach herewith marked as exhibit KF3A a copy of my Outlook diary sheet for 8 September 2006.
    10.       When I was going through the documentation, I would have produced handwritten notes of what was required of me and it is possible that at that time I had written in handwriting 5th September 2006 as being the date of service but when I revisited my notes in order to enter the relevant date in my Outlook Diary, it is possible that I misread the figure 5 to mean the figure 8 and thereafter diarised the date incorrectly.  A further possible explanation is that the House of Lords Order dismissing the Appellant's appeals was handed down on 8th March 2006 (I was also given a copy of this Order by Jonathan Hulley) and I may have mentally collapsed that date with the House of Lords Costs Order dated 5th June 2006.  Certainly, I do make reference to the House of Lords Order dated 8th March 2006 in my narrative attached to the front of the bills of costs.
    I feel that it is important for the Court to understand the set routine that I follow when I prepare bills of costs.  My routine is as follows:
    ·        Following consideration of documentation, I go through the correspondence files and the pleading files.  During this time I prepare a chronology, prepare the schedule of documents, prepare a draft narrative and then make hand written notes which will eventually form part of the Work Done section of the bill of costs.  These handwritten notes deal with all the standard letters, routine telephone attendances and timed attendances on any individual.
    ·        Once the above is completed, I then check and finalise the chronology and draft narrative.  From the handwritten notes that I have prepared, I then prepare the Work Done section of the bill of costs.  This is all done from handwritten notes as I have described above and does not require the correspondence files or pleadings.  The section relates more to the mathematical side of preparing the bill of costs.
    11.       On 17th July 2006 and again on 15th August 2006 I corresponded with Jonathan Hulley by email to discuss my progress in preparing the bills of costs and also provided him with a rough estimate of the value of both bills of costs.
    12.       In an email dated 25th July 2006 I told Jonathan Hulley that I thought that the bills would be ready by the last week of August 2006.  I attach herewith marked as Exhibit KF4 a copy of my email in this regard.
    13.       On 31st August 2006 when discussing another matter with Jonathan Hulley I emailed him to ask when it would be best for him to discuss the bills of costs and suggested that we meet on either Monday 4th September 2006 or Tuesday 5th September 2006 to discuss.  I attached herewith marked as Exhibit KF5 a copy of my email in this regard.
    14.       Jonathan Hulley then emailed me on that day to tell me that we should meet on Tuesday on 5th September 2006 to discuss these bills.  Attached herewith marked as exhibit KF6 a copy of this email.
    15.       On 1st September 2006 I received a further email from Jonathan Hulley where he confirmed that the bills of costs needed to be served the following week (i.e. the week commencing Monday the 4th September 2006) and on the same day I confirmed to him that I would meet him on 5th September 2006 between 10 am and 11 am.  I attach herewith marked as Exhibit KF7 a copy of my email sent to Jonathan Hulley on that date.
    16.       On 1st September 2006 I received a further email from Jonathan Hulley asking me whether the bills of costs were ready.  I attach herewith marked as Exhibit KF8 a copy of this email.
    17.       On the same day, I emailed Jonathan Hulley to inform him that the bills of costs would be ready by Tuesday 5th September 2006 but that the date for service of the bills was Friday, 8th September 2006.  I attach herewith marked as exhibit KF8A a copy of this email.  I do apologise for this error, but I was always working on the date for service being Friday, 8th September 2006.  I had absolutely no intention of finalising the bills of costs after the correct date for service and had I been aware that the final date for service was in fact Tuesday, 5th September 2006, I would have ensured that the bills were served on that date.  This was an oversight purely down to human error and to illustrate how easy it can be (sic) make such a mistake I refer to paragraph 5 of the Supreme Court Costs Order dated 14 September 2006, which incorrectly referred to the date of the hearing being on Friday, 4 December 2006.  Of course, there is no such date.
    18.       On 5th September 2006, Jonathan Hulley and I met at the offices of Devonshires Solicitors.  We discussed the logistics for service of the bills of costs on the Legal Services Commission, the Judicial Office of the House of Lords, and the filing of the Court of Appeal bills of costs on the Supreme Court Cost Office on 8th September 2006.  I asked Jonathan Hulley to prepare the applications for service on 8th September 2006 to ensure that the process ran smoothly.  I thereafter returned to my office and re-checked all disbursements and totals in the Bills to ensure that the final amounts were included and prepared disbursement bundles ahead of the deadline for service (or so I thought) on Friday,8 September 2006.
    19.       I duly attended Devonshires' offices on Friday, 8 September 2006 with the final bills of costs to be served and after further meeting with Jonathan Hulley the bills of costs in relation to the Court of Appeal Order dated 20th June 2004 and in relation to the House of Lords Order dated 5th June 2006 were duly served on the Legal Services Commission and at the Supreme Court Costs office and at the House of Lords on Friday, 8th September 2006."
  58. To summarise the evidence contained in these three witness statements it seems to me what it amounts to is this.  So far as the Court of Appeal bill is concerned, Mr Billingham took a conscious decision not to serve a section 11 notice because of his interpretation of the relevant regulatory provisions, strengthened by what happened in another case where a similar point arose but the Legal Services Commission did not take the point against him.
  59. So far as the House of Lords bill is concerned it appears that a very human error, namely misreading an 8 for a 5 by Mr Friedlander caused the bill to be lodged three days late.
  60. It is against that factual background that it is necessary to test the rival submissions made to me by the advocates in relation to this point.
  61. In his submissions Mr Carpenter submits that Regulation 5(3)(b) is poorly drafted, inconsistent and confusing and that it would be inequitable to prejudice the Defendant for adopting what it is submitted is the only sensible reading of that regulation.  He also relies, understandably, on the attitude adopted by the Legal Services Commission in the parallel case of Islington v Green and O'Shea.  Although I have not lengthened this judgment further by reciting the exhibit CNB 1 to Mr Billingham's witness statement, it does clearly support the contentions made in the paragraphs which I have quoted.
  62. In that case the House of Lords refused permission to appeal on 25 May 2005 and the Letter of Notification of that fact is stamped as having been received by Messrs Devonshires the following day.  The application under section 11 was sealed in this office on 24 August 2005 and under part A contains the following wording:
  63. " … there by a determination of the amount payable by the Appellant and the Commission to be dealt with pursuant to Regulation 10 of the Community Services (Trust) Regulations 2000 because the Appellants' petition for leave to appeal to the House of Lords was refused on 25 May 2005. "
  64. On 20 September 2005 the Legal Services Commission acting through Mr John Scarpenter of the Special Cases Multi Party Actions Unit based at Red Lion Street wrote to Messrs Devonshires and the second paragraph of his letter reads:
  65. "I confirm that the Commission will not seek to oppose your application and I would like to reach an agreement with you as to the costs to avoid the need and expense of a detailed assessment."

  66. I should perhaps add that the next paragraph read:
  67. "I calculate that your bill totals £17,651,26 and as such would agree to that amount being paid to you in full and final satisfaction of the claim brought subject to your agreement."
  68. In his reply to Mr Carpenter's submissions on this point Mr Gimlette said that this matter had been dealt with by a different part of the Legal Services Commission and could not amount to an estoppel applicable to this case, nor indeed was it suggested on behalf of Lambeth that this was so.  He speculated that the reason that the Commission did not take the point was perhaps because, unlike this case, where the costs are well over £800,000, the amount was relatively small and probably not one on which the Legal Services Commission would want to expend much if any of their very limited resources.
  69. As to the short further period between 5 and 8 September 2006 Mr Carpenter suggested that the parties were well aware of the time limit but simply made an understandably human error in mis-diarising the date and ought not to suffer such a draconian punishment for such a short delay.
  70. Mr Carpenter accepted that there is no definition of "good reason" in the amendment regulations but submitted that there must be something more than mere physical impossibility which at least in the past has been suggested as being the only ground upon which the three-month period could be extended.
  71. Obviously one of the difficulties standing in Mr Carpenter's way is the decision of Master Campbell in Yenula Properties Limited v Naidu, decided by Master Campbell in the SCCO on 20 June 2003 and now on the SCCO page of the Court Service's website.
  72. Master Campbell's judgment deals with a number of different points but so far as this point is concerned the ratio of his judgment appears in paragraph 53 which reads as follows:
  73. "If I am mistaken and the amended Regulation 5(3)(b) does apply and means an application made by the unassisted party after 3 December 2001, it is necessary to decide whether the three reasons advanced by Miss Windsor are "good reasons" for the delay.  In my judgment, they are not.  In essence they boil down to pressure of work and lack of familiarity with the Regulations, neither of which, in my opinion, are "good reasons".  On the contrary, by the time Yenula's application was made to this court on 13 September 2003, the Cost Protection Regulations had been in force for 2 years and the Amendment No.2 Regulations in place for over 9 months.  In my judgment Yenula has not demonstrated a good reason for the delay and its application would fail on this ground too."
  74. The advocates agreed that whilst there is no definition within these Regulations of the expression "good reason" helpful guidance was to be found from the decisions of the higher courts in relation to extending the validity of writs and so forth.
  75. Mr Carpenter in his skeleton referred to the pre-CPR case of Kleinwort Benson v Barbrak[1987] l AC 597 where Lord Brandon of Oakbrook said at page 622H and following:
  76. "The question then arises as to what kind of matters can properly be regarded as amounting to 'good reason'.  The answer is, I think, that it is not possible to define or circumscribe the scope of that expression.  Whether there is or is not good reason in any particular case must depend on all the circumstances of the case …
    The decision whether an extension should be allowed or disallowed is a discretionary one for the judge who deals with the relevant application.  Jones v Jones shows that, in exercising that discretion, the judge is entitled to have regard to the balance of hardship.  In doing so, he may well need to consider whether allowing an extension will cause prejudice to the defendant in all the circumstances of the case."
  77. The submission was made by Mr Carpenter that though a pre-CPR case it nevertheless remained an authoritative statement of the law which ought to be applicable in construing these Regulations.
  78. In answer Mr Gimlette suggested that in considering what amounted to "good reason" that phrase must be given its full effect and it is not enough simply to say that a reason is given; that reason must be "good", submitting in paragraph 60 of his skeleton that "a reason is less likely to be a good one where it is only 'identified' after a breach of Regulation 5 has been drawn to the Applicants' attention.  In this case neither the court nor the Legal Services Commission nor any of the other parties were told – prospectively – that the Council intended to make a request but that – for whatever reason – it was unable to do so in time".
  79. So far as authority was concerned Mr Gimlette relied on the case of Dagnell v Freedman & Co [1993] 1 WLR 388, which of course post dates the decision in Kleinwort Benson.  He quotes with approval from the case of Baly v Barrett [1988] NI 369:
  80. "(1)      On the true construction of Ord. 6 r 8 the power to extend the validity of a writ should only be exercised for good reason.
    (2)        The question whether good reasons exists in any particular case depends on all the circumstances of that case.  Difficulty in effecting service of the writ may well constitute good reason, but it is not the only matter which is capable of doing so.
    (3)        The balance of hardship between the parties can be a relevant matter to take into account in the exercise of the discretion.
    (4) The discretion is that of the judge and his exercise of it should not be interfered with by an appellate court except on special grounds the nature of which is well-established.  In the Waddon case the House corrected an apparent misunderstanding of principle 3 above by emphasising that the question of the balance of hardship between the parties can only arise if matters amounting to good reason for extension, or at least capable of so amounting, have first been established.  In that case the balance of hardship between the parties may be a relevant factor in the exercise of the court's discretion.  But, if no matters amounting to good reason for extension, or capable of so amounting, have been established, the effect of principle (1) is that there is no room for the exercise of discretion at all, and that the question of the balance of hardship between the parties does not therefore arise."
  81. Mr Gimlette strongly submitted that a misunderstanding of the Regulations as he contended was betrayed by Mr Billingham could not amount to "good reason" as stated in the decision of Master Campbell.  Both advocates accepted that the decision of Master Campbell was not strictly binding on me but I have to say that I find it entirely convincing on this point would wish to follow it.  (In putting in that caveat I am not to be taken as doubting the rest of Master Campbell's judgment, simply that that is the only point on which it was cited to me as any sort of authority.)
  82. Mr Gimlette also relied on the decision of Sir Donald Rattee sitting as a Deputy Judge of the Chancery Division on appeal from Master Gordon-Saker in this office in the case of Hatton v Hopkins.  This case is so far not reported but will be appearing in Costs Law Reports shortly.
  83. That was a case where, in summary, the applicant's solicitor made a deliberate decision not to make a section 11 application until litigation had been completed on which the successful claim for costs formed only a staging post.
  84. Master Gordon-Saker had decided the case adversely to the applicant who had accordingly appealed and the relevant paragraphs of his judgment seem to me to be the following:
  85. "15.       He [Master Gordon-Saker] dismissed the application on the grounds that Mr Hatton failed to bring himself within any of the grounds provided by regulation 12(4) if the 2000 regulations on which the court can extend the three month time period permitted by regulation 10 for the making of an application for a determination under section 11 of the 1999 Act.
    16.                   I have read the provisions of regulation 12(4) and the three grounds therein set out.   It was appreciated on behalf of Mr Hatton (and I should say he was represented by counsel, not counsel presented appearing before me, at the hearing before the Master in March) that the only ground on which he could possibly persuade the court to extend time for his section 11(1) application was the third ground, 12(4)(c), that is to say that there were other good reasons justifying, in this case Mr Hatton's, failure to make an application within the time limit regulation 10(2), because plainly Mr Hatton was way, way out of time in making his section 11 application.  The three month period within which it was allowed under regulation 10(2) had expired in June 2003.  It was accepted on behalf of Mr Hatton that he had no grounds, at the stage at which the matter was before the Master on which he could say there had been any significant change in the client's circumstances within ground (a) in regulation 12(4), or on which he could show that any material additional information as to the client's financial resources had become available to him within paragraph (b) of regulation 12(4).  So he staked his application for an extension of time on the basis that he had some other good reason, not within (a) or (b) of regulation 12(4), for not having made the application within the three month time limit.
    17.                   As appears from paragraph 14 of the learned Master's judgment, the reason put forward on behalf of Mr Hatton as coming within head (c) of regulation 12(4) was that Mr Hatton understood that it was appropriate not to make an application for a determination under section 11 of the 1999 Act until all pending proceedings between himself and his clients (the respondents) had been determined, so that in effect the court could make its section 11 determination once and for all in relation to all orders for costs in favour of Mr Hatton against his clients, rather than having to do it piecemeal after each individual order.  There were, and as I understand it, are, still outstanding proceedings in this long drawn-out saga of litigation between Mr Hatton and the respondents, outside the bankruptcy proceedings.
    18.         Mr Rich, counsel on behalf of Mr Hatton before me, submits that what was also in the mind of his client was that it may be in due course he would be able to make an application for an extension of time of ground (a) in regulation 12(4), because the only substantial asset of he respondents was and is a house which has not been sold, and Mr Rich submits that this is borne out by evidence filed on behalf of Mr Hatton.  I accept that Mr Hatton had in mind that his best prospect of getting a substantial determination in his favour under section 11 would be when the house had been sold and there was money available to meet such a determination.
    19.                   However, as I have said, that was not a reason put forward before the learned Master, because, rightly, the view was taken that there had not been a significant change on which Mr Hatton could rely before the Master in March of this year.  The reason the Master was asked to allow the application under section 11(1) out of time was simply that Mr Hatton had reasonably believed that it was appropriate to delay making the application for a section 11 determination until all possible costs orders which might be the subject matter of such determination in still pending litigation between Mr Hatton and the respondents had been made.
    20.                   Not surprisingly, in my judgment, the learned Master went on to reject the application made on that basis.  It is quite clear that regulation 10(2) requires an application for a section 11 determination to be made within three months of any order for costs which is to be the subject matter of such a determination and, as the Master pointed out, there had been no further steps taken in any proceedings between Mr Hatton and the two respondents since the making of the bankruptcy order for costs on 14 March 2003, except for one thing and that is that on 9 August 2004 Mr Hopkins (the second respondent) had written to the Birmingham County Court asking for the costs paragraph of the bankruptcy order of 12 June 2002 to be varied in order to separate his liability for costs from that of the first respondent, Mrs Kendrick.  That letter from the second respondent was apparently responded to by a letter from the court in September 2004, telling the second respondent that if he wanted to pursue that point, he would have to bring an appeal, and in the event no such appeal was launched.
    21.         As the Master pointed out, and there was no dispute that this was correct, nothing else had happened in the proceedings between the parties since 14 March 2003, except that one isolated incident, which could have had no sensible bearing on the matter before the Master.
    22.         The learned Master decided that, although it might have been said before on behalf on Mr Hatton that it was reasonable not to make his application for a determination under section 11 of the 1999 Act until after the costs order of 14 March 2003, in other words, rather than within three months of the earlier order of 2002, because there was an appeal from the decision of the court in which the earlier order had been made which was ultimately determined on 14 March 2003, there was no possible good reason for Mr Hatton having delayed until December 2004 in making any application for a determination under section 11 of the 1999 Act in relation to the order of 14 March 2003 or the earlier orders of 2002.
    23.         The learned Master, in my judgment, rightly rejected the proposition that the regulations enabled the beneficiary of a costs order to wait until all possible orders for costs between him and the same clients in pending proceedings had been made before an application for the purposes of section 11 was made in relation to any one  such order.
    24.                   The Master having concluded that Mr Hatton failed to bring himself within the only ground for an extension of time on which he relied, namely that in subparagraph (c) of regulation 12(4), inevitably dismissed the substantive application for determination under section 11 of the 1999 Act which, by consent, he was treating as being before him.
    ....
    36.                   All that, and indeed the submissions made by Mr Rich on Mr Hatton's behalf, comes down to the same point:  the application which the Master treated him as having made and being before the Master in March 2005, failed because the application ought not to have been made until after the sale of the house, and the only reason it was made was that Mr Hatton was compelled to make it by the Master's order in November 2004.
    37.                   I have already explained that, while it might have been open to Mr Hatton to have the Master's order of November 2004 set aside on the grounds on which he is now relying if he had chosen to make an application for that relief, the fact is he did not, and he allowed the March proceedings to go ahead on the basis that there was not criticism of the November order.  The result of the March hearing in that situation was, I think, virtually inevitable, because he had no possible justification for seeking an extension of time for making an application for a section 11 determination under subparagraph (c) of regulation 12(4).  In my judgment, no possible valid criticism can be made of the Master's decision in March of this year that the application which Mr Hatton made before him on that occasion based on subparagraph (c) of regulation 12(4) was wholly without merit.  It was.
    38.                   Mr Hatton, through Mr Rich, expresses concern that the result of the decisions by the learned Master, is that, if and when there is a change in circumstances relating to the respondents, in particular by sale of the house, he, Mr Hatton, will be shut out from making a further application for a determination under section 11(1) of the 1999 Act on ground (a) in regulation 12(4).  It would be quite improper for me to express any view one way or the other on this appeal as to whether such a further application will, as a matter of law, be open to Mr Hatton in those circumstances.  I can only deal with the subject of the appeal before me and, as I have said, for the reasons which I have tried to explain, I see no good ground at this juncture for upsetting the order of the Master made on 10 November 2004 and no good ground on which I could interfere with the decision made by the Master in March 2005".
  86. In other words the Judge took the view that mere administrative convenience cannot amount to "good reason" within the meaning of the Regulations.
  87. Mr Gimlette also submitted that the solicitors embarked on a dangerous course by leaving the approval and lodging of the bills until the very last day of the three-month period and that they should not now be excused because they failed by three days to comply with the time limit.
  88. MY DECISION ON THE "GOOD REASONS" POINT

  89. I have given this matter long and anxious thought because I am conscious that a decision adverse to the solicitors will have enormous consequences for them.  However at the end of the day I am forced to the conclusion that in this case there was no "good reason" for not lodging the bills in time.
  90. So far as the Court of Appeal bills are concerned it is clear that Mr Billingham took a conscious decision based on his interpretation of the relevant Regulations not to lodge his section 11 application in respect of the Court of Appeal bills by 24 October 2004.
  91. Although he may have been strengthened in that view by virtue of what happened in another case, in the absence of any suggestion that there was an estoppel, I do not think that this can assist him.  As Mr Gimlette submitted to adopt that approach was a very risky course to take.  It would have been so easy to have made a formal section 11 application and to have asked the Legal Services Commission to grant an extension pending the appeal to the House of Lords which, on the authority of the other case mentioned, might well have been granted.  Even if it had not been granted, however, if it had been made towards the beginning of the three-month period then there would have been ample time for the solicitors to prepare a full application or at any event to have made an application and to have asked the Costs Judge for directions as to the preparation of a full bill.
  92. Insofar as the period between October 2004 and 5 September 2006 is concerned I do not think there is any "good reason" justifying an extension even if it subsequently appears that some of the certificates were granted after 3 December 2001.
  93. Turning to the short further period of three days, it does not seem to me that the fact that it is only a short period can avail the solicitors in this case.  Mr Hulley was aware that the three months ran from 5 June 2006 when the House of Lords handed down their supplementary order in relation to the costs of the appeal to their Lordships' House.  He unfortunately allowed his view that the three month period expired on 5 September to be overruled by Mr Friedlander who, no doubt due to a genuine and understandable error had mis-diarised the last date as being 8 September rather than 5 September.
  94. As I pointed out during the course of the submissions this problem would have been avoided if, to use a horrible expression, the solicitors had "double diarised" the date, a practice which I invariably used when in practice.  This is because it is understandable that to leave anything to the last day is extremely dangerous.  Illness or accident may supervene and prevent the time limit being complied with.
  95. If, however, a date say ten days or a fortnight before the deadline is inserted in the diary, and acted upon, the risk of the time limit being overlooked or not complied with, diminishes considerably.
  96. In my judgment Mr Hulley ought to have been more insistent that Mr Friedlander provided the bill to him for approval by himself and Mr Billingham well before the 5th, let alone the 8th September and following the decision in Yenula Properties I do not consider that there is a "good reason" for that further delay.
  97. CONCLUSION

  98. It seems to me that in the light of this judgment it will not be necessary for me to consider the other points touched on in paragraphs 21 and 22 of this judgment in relation to the dates and so forth of the Legal Aid certificates involved.
  99. However I am happy to entertain any submissions the parties may have in relation to that or any other issue including of course that of costs when this judgment is formally handed down.
  100. Finally, perhaps by way of postscript I ought just to say that strictly my decision can only be effective in relation to the Court of Appeal bill because that is the only bill which is before me.  The House of Lords' bill is a matter for their Lordships, though as the parties probably realise, the Clerk of the Parliaments is now assisted at the hearing of costs assessments by one of three costs judges (who did not include me).  I would like to think that that costs judge, whilst not being strictly bound by what I have decided in this case, would give it due weight in advising the Clerk of the Parliaments in relation to the House of Lords bill, but, as I have indicated, that is outside my control.


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