[2024] UKUT 0414 (LC)

The parties were given until 24 January 2025 to make any application for costs and both parties did so. The objectors made an application for costs on 13 January 2025 and the applicants, in their application for costs dated 23 January 2025, made responses to that application. The objectors responded to the applicant’s application on 5 February 2025.

Paragraphs 16.10 and 16.11 of the Tribunal’s Practice Directions dated 2 January 2024 state:

“16.10

Unsuccessful objectors will not normally be ordered to pay any of the applicant’s costs, unless they have acted unreasonably. Because the applicant is seeking to remove or diminish the property rights of the objector the Tribunal will not usually regard making an objection and pursuing it to a hearing as unreasonable.

16.11

Successful objectors will usually be awarded their costs unless they have acted unreasonably.”

The first issue between the parties was the extent to which the objectors were successful. The second issue was whether either party had acted unreasonably. The objectors submitted that, even if they were deemed to have been unsuccessful, a costs award in their favour was justified because the applicant had acted unreasonably in their conduct of the matter. The applicant submitted that objectors should pay a proportion of its costs because the scope and manner of their objection was unreasonable and they had refused offers of settlement which exceeded the compensation awarded.

On the first issue, the objectors submitted that they were successful in opposing the application for discharge of the restriction under ground (a), that the restriction was obsolete. They were awarded compensation of £15,000 for modification of the restriction so were also successful in opposing the application for modification of the restriction under ground (c), that modification would cause no injury. The applicant submitted that it was overall the successful party, having obtained modification of the restriction with only modest compensation being ordered.

Lengthy submissions were made by each party on the issue of unreasonable conduct by the other, including extensive exchanges of email correspondence concerning without prejudice settlement offers. Not all correspondence was labelled “without prejudice save as to costs” and the parties are reminded that only that which is can be revealed in an application for costs. A number of authorities were cited, but each case is fact specific and none of the authorities was sufficiently close to the facts of this case to be helpful.

Taking a holistic view of the way in which the parties conducted themselves I do not find evidence that either party has acted unreasonably. The applicant was successful in achieving an order for modification, although not in their application for discharge of the restriction, nor in their position that no injury would be caused to the objectors. The objectors sought to prevent modification of the restriction as finally ordered, and in their pleadings did not offer to agree to modification for compensation. They cannot therefore regard the order of modest compensation as a successful outcome.

There is no particular feature of this case which would justify a departure from the Tribunal’s usual approach as reflected in paragraph 15.10 of the Practice Directions.

I therefore determine that each party shall bear their own costs in this matter.