Personal injury – Costs – Fraud – Judgements

Martin Raymond Owens v Mark Noble: CA (Civ Div) (Lords Justice Sedley, Elias, Lady Justice Smith): 18 March 2010

The Court of Appeal was required to determine consequential matters following its judgment on the appeal of the appellant (O) against the award of substantial damages to the respondent (N) for injuries suffered in a road traffic accident.

The court had held that fresh evidence adduced by O tended to show that that judge at first instance had been deliberately misled as to the extent of O’s injuries, and that there was an issue of fraud to be tried which should be remitted for determination by a High Court judge. Upon circulating its draft judgment, the court had issued a proposed draft order in which its preliminary view was that the remission should be to the original trial judge, and that in the event that the fraud was found to be proved and N’s damages had to be reassessed, there should be no order for costs in respect of the appeal. The parties were invited to make submissions on that proposed order. N contended that, as a matter of principle, it was undesirable that the trial judge should decide whether a fraud was perpetrated on him, as he was in danger of being both witness and judge, and that the situation was akin to that of a judge in whose presence there occurred an alleged contempt of court, where the judge should not try the issue of contempt himself. O, objecting to the draft order in respect of costs, submitted that it would be remarkable for a party who had, ex hypothesi, been guilty of fraud to receive a favourable costs order and that, if fraud was proved, he should have his costs of the appeal.

Held: (1) The situation in the instant case was not in any way similar to the position of a judge who had witnessed acts that might amount to a contempt of court: a closer analogy was the remittal of a case to a county court or employment tribunal which had made an error of law. It was convenient and economical to send a case back to the same tribunal unless there was good reason not to do so. The matter would, accordingly, be remitted to the trial judge, if he could be made available, to decide the issue of fraud on the evidence which was put before him.

(2) The reason that the draft order had proposed no order for costs was that, to a large extent, O’s submissions on the appeal had failed. O had contended that the evidence of fraud was sufficiently strong that the assessment of damages should be sent back to a judge for rehearing without determination of the issue of fraud. That contention had been rejected and the court had instead determined that the issue of fraud was to be tried before there could be any question of reopening the assessment of damages. N had, therefore, succeeded on the main issue on the appeal. In those circumstances, it would not be just to make N pay O’s costs of the appeal even if he was found to be guilty of fraud. The just order was that there be no order for costs in that eventuality.Judgment accordingly.

Andrew Hogarth QC, Catherine Peck (instructed by Clarke Willmott LLP) for the appellant; Clive Freedman QC, William Latimer-Sayer (instructed by RWPS LLP) for the respondent.