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In this guest blog, my colleague Olivia Heininger considers the case of Leech Homes Limited v Northumberland County Council [2021] EWCA Civ 198, which was heard in the Court of Appeal on appeal from the Upper Tribunal (Lands Chamber) (‘UT’).
The judgment is a clear reminder that the powers awarded to the UT to determine costs are not as wide as many would assume.
Leech Homes applied for a Certificate of Appropriate Alternative Development (a ‘CAAD’) in connection with land which Northumberland County Council was compulsorily acquiring for the construction of the Morpeth Northern By-pass.
The question of costs arose in the Court of Appeal. When Leech Homes lost their appeal on the CAAD in the UT, it was ordered to pay the Council’s costs on a standard basis. In making this decision, the UT applied Rule 10 of the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2020. Leech Homes challenged that award of cost (as well as the underlying decision on the CAAD).
In December 2011, a report on costs published by the Senior President of Tribunals led to the creation of Rule 10. At the time this was implemented, however, the decisions on CAAD appeals was not with the UT’s jurisdiction as this did not happen until April 2012. The judges, therefore, found that Rule 10 could not have been intended to have applied to CAAD appeals and the UT could therefore not rely on Rule 10 to order that Leech Homes pay costs.
So what rules do apply to CAAD appeals? In the absence of Rule 10 applying, the Court considered section 17(10) of the Land Compensation Act 1961 would govern the award of costs for CAAD appeals. Section 17(10) limits recoverable costs to expenses incurred by the landowner so costs were not recoverable by the Council.
Once again the UT’s powers to awards costs have been shown to be more restricted than practitioners might expect. This should be a reminder that the costs of a CAAD challenge may not always be recovered. We expect the UT Rules to be amended as a result of this decision.
For these reasons, I conclude that the power of the UT to make a costs order (absent unreasonable behaviour) was not enlarged when CAAD appeals were transferred to it; and that in consequence the UT did not have the power to make the costs order that it did. It is a matter for the Tribunal Procedure Rules Committee to consider whether any change in the Procedure Rules is desirable.
