Case Nos: CO/1314/2004,
Neutral Citation Number:  EWHC 20 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Friday, 18th February 2005
THE HONOURABLE MR JUSTICE SULLIVAN
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on the application of
(1) London Borough of Wandsworth
(2) London Borough of Hillingdon
(3) Anne Hardy
(4) Roger Wood
(5) Norman Mead
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Secretary of State for Transport Defendant
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(1) London Luton Airport Limited
(2) BAA Plc
(3) Stansted Airport Limited
(4) Heathrow Airport Limited
(1) Essex County Council
(2) Uttlesford District Council
(3) Hertfordshire County Council
(4) East Hertfordshire District Council
(5) North Hertfordshire District Council Claimants
The Secretary of State for Transport Defendant
(1) Stansted Airport Limited
(2) London Luton Airport Limited
(3) BAA Plc Interested Parties
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(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
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Mr David Smith (instructed by Richard Buxton Solicitors) for the Claimants
Mr Daniel Kolinsky
Mr Tom Hill (instructed by Essex County Council & others) for the Claimants
Ms Lisa Busch
Mr Richard Drabble QC (instructed by Treasury Solicitor) for the Defendant
Mr Tim Mould
Ms Carine Patry
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As Approved by the Court
Crown Copyright ©
POST JUDGMENT DISCUSSION
1. MR JUSTICE SULLIVAN: I think it would be helpful if you indicated what the Secretary of State's attitude is in paragraphs 1, 2 and 3. We will come to costs later.
2. MR DRABBLE: As you will see, the Secretary of State welcomes the conclusion of the judgment that the broad strategy of the White Paper was lawful, and its conclusion that the White Paper came at the end of an impressive attempt to grapple with a difficult and complex issue, and to provide a clear policy framework. The Secretary of State also accepts that, in the light of the judgment, the issue of the choice of runway option and the balance between capacity and environment issues at Stansted will need to be struck in the planning system. He anticipates that with the help, both of the broad strategy of the White Paper and the thorough and comprehensive guidance given in the judgment, the planning system will be able to deal with the issues both efficiently and fairly. He does not seek permission to appeal; nor does he seek to appeal the conclusions of the judgment on Luton.
3. As to relief, in the light of his acceptance of the judgment and the future role of the planning system, the Secretary of State respectfully agrees with the views expressed in paragraph 313 of the judgment, that it is unnecessary and inappropriate to seek to frame any particular form of declaratory relief (the judgment can speak for itself), and the Secretary of State's acceptance of the future role of the planning system will be on the transcript.
4. MR JUSTICE SULLIVAN: The sensible thing to do is to deal with any consequential applications you may have, including the point made in the note that you sent to me dealing with suggested corrections and the question of relief.
5. MR HILL: There are two issues, first, that of relief and the second of costs. I leave costs to one side.
6. MR JUSTICE SULLIVAN: Let us postpone costs. We will deal with relief first and then costs.
7. MR HILL: You will have seen my note on relief. You have upheld my client's attack on the treatment of Stansted in the White Paper and found that the elements which we have challenged are unfair and unlawful. Your Lordship proposes declaratory relief, presently in the terms of the judgment, as I understand paragraph 313. Whilst that will suffice for the lawyers, and we make no complaint about that, there is a wider audience so far as this litigation is concerned. We are anxious as to the practical implications of a general declaration, given the use to which this judgment will undoubtedly be put.
8. MR JUSTICE SULLIVAN: You are not seeking anything more than declaratory relief?
9. MR HILL: No. The judgment does impose a highly significant qualification on the plans for Stansted as set out in the White Paper. As has been made plain and as the Secretary of State has accepted, it leaves questions of the alignment of capacity and the impact of any second runway at large, to be determined as part of the planning and environmental impact assessment process. However, we suspect that the White Paper will not be republished to reflect this judgment. Instead, it will be for planning authorities and public libraries, and other forms of public reference, to alert readers, interested parties, potential house purchasers, to the qualifications contained in the judgment. We feel that expecting such facilities to retain full copies and interested parties to read their way through the judgment may be unduly onerous. It is for that reason that I propose, alongside a general declaration, that there be a specific declaration which refers to the various elements of the White Paper policy for Stansted in respect of which your Lordship has upheld my challenge. You did draw attention in the judgment, I think at paragraph 159, to the specific paragraphs which were the focus of the challenge, essentially 11, 1127 and 1140. You will have seen the specific declaration that I have proposed in the note. That focuses on the specific references which need qualification. I say no more than that I commend that suggestion for the practical reasons that I have explained, without wishing to embark upon a general debate as to what the judgment means. That would be inappropriate.
10. MR JUSTICE SULLIVAN: It is the practicalities as to whether, in the local public library or the planning department, you have the entire judgment, whether some person, a few years hence, has to read through the judgment, or whether there is some pithy expression of what the practical effect is, whether that would be of advantage to everyone.
11. MR HILL: I have nothing to add to that. That is the nature of the concern.
12. MR JUSTICE SULLIVAN: You have covered Luton in that as well.
13. MR HILL: I have. I hope that encapsulates the essence of the judgment.
14. MR JUSTICE SULLIVAN: May I find out from Mr Smith what your attitude is on this aspect of Luton?
15. MR SMITH: Perhaps unhelpfully, we do not support nor resist my learned friend Mr Hill's position. We stand aside from this debate. We do see the force of the practical aspects of it. As to the terms of any words, we do not enter into that debate and are neutral on the whole topic.
16. MR JUSTICE SULLIVAN: Mr. Drabble, in a sense you have given a foretaste as to what the Secretary of State's approach is. I do not know if that was written with knowledge of Mr Hill's submissions.
17. MR DRABBLE: It was. Paragraph 2 was written with an eye on Mr Hill's concern. I understand the concern in terms of the practicalities, where one tries to avoid the situation where every laymen has to read the whole of the judgment. We hope in paragraph 2 of the position statement that we have indicated acceptance of the real practical effects so far as Stansted is concerned. That will be available to any member of the public who wishes to see what happened in the light of the judgment. It is expressed in two sentences. In my submission there is no need to go any further.
18. MR JUSTICE SULLIVAN: That was my concern in trying to encapsulate the effect of a fairly long and detailed judgment in a short declaration. There would inevitably be nuances that people could spend hours arguing about. I was trying to avoid that.
19. MR HILL: That is why I tried to focus on the specific paragraphs.
20. MR DRABBLE: The practical effect is that people need to know the form of the runway. The capacity adopted by the White Paper, that still has to be determined. That we accept. We are on the record as saying that. We did not refer to Luton in the position statement. Plainly, if it is necessary, I will place on the record the Secretary of State's acceptance that the effect of the judgment is to indicate that there has been no consultation to date on the second option for Luton. Our position therefore remains that the approach in paragraph 313 is the appropriate approach. We are on the record as having accepted it, for the reasons that I have given.
21. MR JUSTICE SULLIVAN: I have to say that I have considerable sympathy with the proposition that the layman, coming into the local public library, should not have to wade through the whole of this judgment but, on the other hand, given that there is a public position statement from the Secretary of State, which is on the transcript and can be made available as a public document, and no doubt will be made available as a public document by the Essex/Herts group of authorities, and also, for example, the summary -- the overall conclusions of the judgment are relatively clear -- it does seem to me that it is questionable that the objective which you seek may be able to be obtained by other means.
22. MR HILL: Can I ask you to consider whether the summary which you gave at the beginning of today's proceedings could be made available on the website. That might assist in terms of addressing the audience that I have referred to.
23. MR JUSTICE SULLIVAN: Essentially, once you have that introduction it makes sense of the overall conclusions. If you do not have it the overall conclusions are not self-contained. They are not intended to be. The answer to your question is, yes. A transcript is being taken of it. I will tidy it up and it will be made available. I think that achieves the objective which you seek to achieve. It is not for the benefit of the lawyers or those who will be professionally involved in the inquiry, whenever it comes. It is more for the lay person who wants to understand what the practical implications of this is. I think that Mr Drabble's position statement on behalf of the Secretary of State and my summary will do the trick. That is the way we will resolve that. The next thing should be for me to thank you all for your corrections. I am afraid, Mr Smith, that your corrections got to me late yesterday after I had gone. I have not managed to incorporate them all yet. Most of them I accept and am quite happy to correct.
24. MR SMITH: Quite how that happened I am not sure. I think that I was the first out of the starting block. For some reason it did not get through. I apologise for that.
25. MR JUSTICE SULLIVAN: I am working on those. Most of them certainly will be incorporated. What is next?
26. MR HILL: I would wish to make a costs application. Your Lordship has upheld our principal complaint regarding Stansted and our entire complaint regarding Luton. By any reckoning we have been substantially successful and in my submission we should receive our costs in full. In making that submission I am aware that the court has a complete discretion in costs and also that the policy is not to seek to identify minute fractions where a claimant has succeeded on a clear majority but not all of his grounds. The only matter argued before your Lordship, on which my client did not succeed, was the rationality challenge in respect of commercial viability. However, for reasons that I will explain, that should not cause you to be deflected from the appropriate course of awarding us our costs.
27. There are two important points that I ought to make. First of all, although it ultimately occupied a significant proportion of the court's time, this was extended almost entirely due to the conduct of the defendant. In my 70 page skeleton the commercial viability issues occupied five pages as the background and a page and a half as to argument. The time ultimately taken on this matter was a function of the rather unfortunate wording of Mr Fawcett's second witness statement and the refusal, maintained over many weeks, to disclose material which should have been disclosed earlier. Your Lordship will recall that I had sat down and completed my submissions on day 2 before we saw the Key Messages Paper. That is not to mention the trail of other witnesses statement which followed in the wake of that first disclosure that could and would have been avoided had the defendant acted in another way. In my submission the exercise of the court's discretion should reflect that conduct and the lack of candour referred to at paragraph 250 of your judgment.
28. Point 2. In fact, as it turned out, the examination of the commercial viability material, including the Long Paper, the Key Messages Paper and Mr Thompson's witness statement of 16th December were all relevant to my principal complaint and would have justified such examination quite independently of the perversity ground. Your Lordship at paragraphs 259 and 265 of the judgment discusses the implications of the financial appraisal in a way which directly supports my principal complaint. I addressed you in those terms in my reply. Reference to the testing of viability in SERAS and subsequently was both relevant to and directly supportive to my main complaint. The costs order which your Lordship makes should reflect this position. I do not fully understand the defendants' stance on costs yet. I have read the position statement and the note in that on costs. I may have to reply in due course to what is said. My learned friend is seeking to deprive my clients of a third of the costs that we have expended by reference to the urbanisation argument raised in the grounds but not pursued in the skeleton argument or before you.
29. MR JUSTICE SULLIVAN: There was also the environmental impact assessment. It is the more generalised one before one adopts a policy, a strategic environmental assessment. It had been contended that they should have complied with that process. That was a matter that you did not pursue in your submissions. There is a section in your skeleton on it. I think that there are a number of grounds. In a sense it is two stages. There are a number of grounds in the claim form which really dropped away once the summary grounds and detailed grounds of the evidence had come in. There was material that was not explicitly mentioned in the White Paper. Plainly it was background material. You accepted certain things when you said: "Has this been done?" Answer: "Yes." There is that aspect. There is also the urbanisation and strategic environmental assessment.
30. MR HILL: The reason I raised the urbanisation issue is that it is the point that is focused on in the position statement at the end of paragraph 4. I briefly remind your Lordship of what happened. We did indeed raise concerns in the claim form about the way in which urbanisation issues had been addressed in the White Paper. The response to that was the witness statement of Mr Campbell. The Key Message from that witness statement, which you will not have had occasion to examine in any detail, was that subsequent to the SERAS studies and the publication of the White Paper, there were a whole series of further reports, and those reports were predicting a much lesser impact in terms of urbanisation than those considered in SERAS and in the White Paper. There was a table. You may recall that page 16 of that document indicates in the most recent tranche of reports, impacts of between one third and a half. That was the basis upon which we felt that we ought to reconsider the appropriateness of pursuing those grounds before you. We did not pursue them. I do not think that the fact that we did not pursue them is a basis for removing one third of our costs. Beyond that, there are of course the 26 files and the exhibits. I could start to take points about whether all that material, which we had to copy 20 times, was in fact necessary. I am not going to do that. I do not think that it will assist the court if I get into the sort of minute detail that I could.
31. MR JUSTICE SULLIVAN: One possible approach to the commercial viability matter might be, because it would not be the least unusual, these days anyway, for the court to say that there are, so far as you are concerned, three issues, Stansted, Luton and commercial viability. You have won on two of them. The Secretary of State has won on commercial viability, so any costs order ought to reflect that. Given the matters that you have mentioned and indeed are mentioned in the judgment, a possible approach to commercial viability would be to say in your case that it has won 2 but in the third match bad light stopped play. It is not as though it is one for the Secretary of State. One simply takes that out of the equation even though, if you like, the Secretary of State won it. That would be a possible approach. Mr Drabble, is it more convenient to hear from Mr Smith and then for you to reply to both sets of costs together?
32. MR DRABBLE: Indeed.
33. MR SMITH: In short, we say that the right order should be no order as to costs for our claim. I adopt, for the purposes of explaining the reasons for making that submission, a shorthand, which I hope is convenient, to address topics by reference to the Luton aspect, the Stansted viability aspect and the rest. Perhaps I should call them the landscape aspects, although there is a Northolt aspect where, as a result of matters that came in at an early stage, that was abandoned. I hope I do not have to go into minutiae. I confine myself to those three broad headings.
34. You recall from the way the Practice Direction puts matters that the starting point at 44.3(2) is that the general rule is that the unsuccessful party is to pay the costs of the successful party, but that the court may make a different order. Leaving aside the conduct of the defendant on the commercial viability aspects, that leaves the question in our case of, who is successful or not? At that broad level there is some success and some failure both ways in our case. You will recall the CPR at 44.3(4), the emphasis given to the question of whether a party succeeded on parts of his case, even if not wholly successful, and also 44.3(6), where the orders which the court may make include an order that a party must pay costs relating only to a distinct part of the proceedings at (f) order. Your Lordship will also recall that the implication of 44.3(7), is that where the court would otherwise consider making a paragraph (f), relating to a distinct part of the proceedings, if practicable the court must make an order, so far as here relevant, to pay a proportion of another party's costs. Probably that is the right order of addressing the issue insofar as there needs to be a disaggregation.
35. Having pigeonholed the conduct of the defendant in relation to Stansted and its viability, I need to bring it back in. That is 44.3(4)(a), the conduct of the parties. I look to your judgment at page 107, paragraph 306, where my Lord speaks of a deliberate fudge as far as Luton is concerned, after describing that saga at page 104, paragraph 294, as being most unfortunate. What I want to do now, not relying on that aspect of the history, is to look at how it is that your Lordship expressed degrees of unfortunateness for the Stansted aspect at page 89 of your judgment, paragraph 250. You emphasise this by understatement:
"It is, to say the least, most unfortunate that the Key Messages document was not disclosed at a much earlier stage in the proceedings."
You give two reasons. Whilst at paragraph 251 your Lordship speaks to the context of the first of those reasons as to candour and the reasons for the need for candour, your Lordship does refer to it as an isolated and uncharacteristic lapse, but that if it was a mistake or an oversight, it then became entrenched by the refusal to disclose on applications made. Indeed, the teeth came out slowly, one by one, until the molar came, the Key Messages, finally emerged.
36. MR JUSTICE SULLIVAN: A painful analogy.
37. MR SMITH: You did indicate how it is that a great deal of time could have been saved at paragraph 252 of your judgment. For these purposes I am not here now raising an indemnity costs point, but I submit that that conduct calls, unequivocally for those elements of the costs, the Stansted and viability aspects, to be reflected in our favour. We would say that it is not bad light stops play. It is a penalty try. We should have our costs.
38. Our claimants are two public authorities and three voluntary organisations which for their part rely on public subscriptions and donations. All of them contributed equally to the costs and liabilities of this challenge. My instructions are to the effect that if one seeks to get a feel for the contribution made by the three topics that I have mentioned, Luton, viability and landscape issues, to the overall costs, for Luton it is in a bracket of some 10 to 20 per cent. For ease we say about 15 per cent. The landscape and viability aspects accounted probably for about half of the residue each. This ignores altogether other peripheral aspects such as Northolt. It is a fairly broad brush. That would leave some 40 to 45 per cent for each of those within a range of about 40 to 60. If we get 15 per cent for Luton, about 40 to 45 per cent for the Stansted and viability aspects, very broadly the honours are about even. The indication would be that they lie in my favour. About half the costs by our assessment were attributed to the Luton and viability aspects. That does seem approximately about right, having regard to the amount of time spent in court, the amount of time that we had to prepare to deal with the viability aspect, with teeth coming in one by one, as one has to, to deal with a moving landscape but a differing picture emerging as the material came forward.
39. MR JUSTICE SULLIVAN: This exercise is on the basis of a penalty try rather than bad light stopped play.
40. MR SMITH: The conduct is grave. I have just about stopped short of making an application for indemnity costs. It is close to that territory. On the other hand, if separate orders were made, what has to be done, at considerable expense and resource, would be to separate out the various elements.
41. MR JUSTICE SULLIVAN: I will hear what Mr Drabble has to say about it, but I would have thought that it would be a nightmare to work out, particularly by reference to the original grounds, which were in a sense superseded by the way you put it in the skeleton argument, by gathering a number of threads together, so we were able actually, and it was convenient to do so rather than pigeonhole it under 10 separate grounds or whatever it is, to group the Heathrow issues under the landscape heading and then to deal with the viability issues. I have to say that I am not particularly sympathetic to try and split it up as between the original costs on ground 1 and not on other grounds, whatever it is.
42. MR SMITH: I do not need to develop that further.
43. MR JUSTICE SULLIVAN: I would need Mr Drabble to persuade me that that would be a good idea as opposed to some proportion or percentage approach.
44. MR SMITH: Yes. Going back to where I started, taking everything together, no order for costs would follow the letter if not the spirit, and certainly the objectives of the CPR, for dealing with matters expeditiously and fairly.
45. MR DRABBLE: I deal with Essex first. You will see from the position statement that the order we are suggesting for Essex is two thirds of the costs, that we pay two thirds of the costs. It is important to make clear that that is a transfer from the Secretary of State to Essex with no transfer back. When one looks at, for example, urbanisation, if one was to adopt the issue by issue approach, the position on urbanisation is that there was a challenge in the original claim form alleging perversity on urbanisation. The answer to that was not simply Mr Campbell's witness statement. It certainly was not simply the study which has taken place since the White Paper. It was putting in a very large volume of evidence dealing with urbanisation studies and dealt with in Mr Fawcett's Essex witness statement, paragraph 56 onwards.
46. MR JUSTICE SULLIVAN: This is the tip of the iceberg point. If points are not mentioned in the White Paper, one should not necessarily assume that they have not been considered or that reasons have been given.
47. MR DRABBLE: Indeed. There is a tip of the iceberg point in relation to your Lordship's judgment, because the issues were narrowed down between the claim form and Mr Hill standing on his feet. It may well be that a relatively small amount of the voluminous material needed to be prepared. It does not follow that we did not incur considerable expense, time and effort in meeting the urbanisation challenge. If you adopt an issue by issue approach, we ought to get our costs of that exercise. Similarly, a challenge as formulated on the claim form, put in legal terms, to at least the BIA(?) persons. We ought to get on an issue by issue basis our costs of that exercise. It is from that starting point that we suggest the order that we pay two thirds of Essex's costs, abandoning any claim for any issues coming our way, the fact that we are abandoning it being reflected in two-thirds. The logic is not that he wins Stansted and he wins Luton and we win commercial viability. It is a rough and ready position, reflecting the fact that some issues have cost us a lot of money and some have been abandoned. I do not propose in Mr Hill's case to say a lot about commercial viability. I see the point that Mr Hill makes, that some of the time spent on examining the Long Paper has been utilized by your Lordship as part of the issue on which my learned friend has succeeded. I accept that.
48. I deal with the commercial viability in respect of the Wandsworth challenge. Mr Hill's approach is that we should pay the costs of the commercial viability issue. The only basis for that submission would be a proposition that he has not advanced, namely that on sight of the Treasury documentation, Mr Fawcett's 6th witness statement, they are contending that, in the light of that information, the exercise of trawling through the CAA evidence paragraph by paragraph took up a lot of time. Mr Smith does not make that submission. Unless and until it is made, I do not accept that sight of the Treasury documentation would have prevented the considerable court time we engaged on in analysing, paragraph by paragraph, the documentation that we did disclose in relation to the CAA. It is the other way round. Mr Smith had the key issues paragraph. He made lengthy and further submissions on the basis that his criticisms were borne out by the key issues. There is no basis for an order for costs flowing to his client.
49. It is quite true that we did not accede to an application for discovery beyond those documents that we did disclose before the pre-trial review. At the pre-trial review we were alive to the fact that there was an application for discovery. You may remember that it was not pursued on your Lordship indicating that it might depend on what use we sought to make of the Treasury ----
50. MR JUSTICE SULLIVAN: And also I would be in a better position to decide the matter once I had got under the skin of the case.
51. MR DRABBLE: Yes. I make it absolutely clear that if there had been an application for discovery on the pre-trial review, it would have been resisted on the basis that the further documentation was internal briefing documentation, which was the case, but that it should not be assumed that the Treasury was ad idem with the BFT on all aspects of the matter. At the very moment that they were relying on the Treasury being ad idem, we made it clear that was not the right inference. That is the approach that I personally took. There was never any question of the court going away with the lasting impression that there were two bodies both ad idem on all issues. On the point that an inference has been drawn, we would have made it plain that that was not the case. We submit that, in the light of the Wandsworth case for costs, it is not the case that they would have saved any time, in terms of court submissions, had we disclosed earlier the key issue papers on the point and that Mr Smith would have abandoned the point. Taking an overall view -- I understand your Lordship's resistance to the issue by issue approach; I know that some on my side would not want that as the ultimate order -- we say that it should be a significant costs award in our favour.
52. MR JUSTICE SULLIVAN: I said that you could seek to persuade me that, looking at it ground by ground, would be appropriate. It does seem that since the grounds as originally pleaded did not reflect the way in which it was put in argument -- I am not saying that in any critical sense; things were much more conveniently gathered together and parcelled up than in the initial grounds -- I just think that it would be a disproportionately expensive exercise to try to attribute costs to grounds that did not emerge in that form during the course of the hearing.
53. MR DRABBLE: I understand that completely. Even if you were to make the order, the parties would thereafter try and sort it out.
54. MR JUSTICE SULLIVAN: On the basis that we looking at fractions or percentages ----
55. MR DRABBLE: We say that we ought to get our costs on whatever percentage reflects the fact that we have succeeded in everything except Luton. That ought to be reduced but that could be reflected on a crude basis. 75 per cent of our costs would be acceptable. Luton is a short issue. You will recall Lever arch after Lever arch.
56. MR HILL: I note the acceptance, so far as commercial viability is concerned, that we did have and do have a legitimate interest in those issues which go to our first principal complaint upon which we succeeded, and that, in reality, the matters that my learned friend is relying on to deprive us of a third of our costs are relatively narrow points which were not ultimately pursued in circumstances where there was good reason not to pursue them. We did not take court time with them. That is not an appropriate ground for depriving us of one third of our costs in the circumstances.
57. MR SMITH: My learned friend indicates that in order to make my point on commercial viability I would need to indicate that I would not have made the submissions, at least not in that way, had the Key Messages document come forward earlier. I recall indicating during argument that had they come earlier I would have adopted a different line. Because it came just before I was about to make my submissions I could not take it on board at that stage. It is very difficult to say, hand on heart, that none of the other material would have been looked at, the CAA papers for example. It is startling that my learned friend indicates that the only reason that the Key Messages document came forward was when it was being suggested that the Treasury and the Department were at one.
58. The whole tenor of Mr Fawcett's evidence, which prompted the applications for disclosure, in particular the passage, and I paraphrase, "discussions were held between those parties", which left the clear impression that there were no grounds for concern, the middle of paragraph 250, page 89. If those documents had been made available before even skeletons began to be drafted, one could expect a different and probably inevitably shorter line to be taken. As it is, we were given what appeared to be the be all and end all, including the September CAA report. We had to ask for the December CAA report. We had to ask for the September one. Those would have been the 2nd or 3rd teeth that were extracted. It is now said that only once it is made plain that the Treasury and others were at one, that the final molar came out. The suggestion that the Treasury and the BFT were at one appeared to come from Mr Fawcett's material. On the other aspect, where my learned friend says that there should be something in his favour, 75 per cent, if you are persuaded towards that approach, we would say in response that in those circumstances the right thing to do would be to make an order which does differentiate. We should have our Luton costs.
59. They should have whatever proportion you alight upon, taking into account the conduct and various other matters, and we will inevitably do our best to agree what those items are, some in one direction, some in the other, ultimately with the threat of a nightmare if we cannot agree. 1 would expect the parties to be able to agree. After all, if one is separating out Luton, that might be a stage earlier in trying to disentangle the other matters. Perhaps your Lordship could give an indication of what other costs should go in the direction of the Luton costs which should properly come to me.
60. MR JUSTICE SULLIVAN: You have five claimants, but I can see that there might be an argument for saying, so far as Luton is concerned, that the Luton claimant has been successful.
61. MR SMITH: It does not work like that. We are the five musketeers. It is one for all and all for one. Luton did have interests beyond just Luton. It is one for all and all for one. I say that I should have my Luton costs. They should have a proportion of their costs, taking into account their conduct.
62. MR JUSTICE SULLIVAN: So you would separate out Luton, even though you are the five musketeers, and then consider all the other issues, Heathrow, commercial viability and the others, if you like, which did feature very large in argument but may have featured beforehand. It is a question then of what proportion, if any, of the Secretary of State's costs on those issues the Secretary of State ought to have, bearing in mind the matters you addressed me on. It is really about commercial viability on those issues. Mr Smith, your submission is that if I am to make any order in the Secretary of State's favour, I ought to separate out the Luton costs first, give them to you, and then decide what percentage of the Secretary of State's costs on the other issues he ought to be ordered to pay.
63. MR SMITH: Yes.
64. MR JUSTICE SULLIVAN: If I am against you on the primary submission. Mr Drabble, that is a new suggestion as to the approach. Perhaps I am provisionally at least against Mr Smith on his primary submission. Therefore the question does arise -- --
65. MR DRABBLE: We come back to paragraph 5.
66. MR JUSTICE SULLIVAN: Grounds 10 and 11, they are the Luton grounds.
67. MR DRABBLE: If you talk about Luton and the other the position between myself and Mr Smith has come to this. We accept as one possible approach an order that we pay the Luton costs. We submit that the only correct way of dealing with the rest is that Wandsworth pay the remainder of our costs. The only argument about that is whether there is something in our conduct which means we have incurred costs that they should not pay or that they have incurred costs which should be set off. We turn to the submissions that I was earlier making. We do not accept that the proceedings were prolonged in the case of Mr Smith.
68. MR JUSTICE SULLIVAN: So far as costs are concerned, dealing firstly with the Essex case, I am not satisfied that there should be a full award of costs. It does seem to me that it is necessary that there should be reflected to some degree the fact that a number of issues were raised and then not pursued, which would have taken time to respond to, and, secondly, so far as commercial viability is concerned, the fact that the Essex challenge under this head was not successful, save to the extent of the additional financial implications that are mentioned in the judgment.
69. However, so far as commercial viability is concerned, bearing in mind the background to the matter, it seems to me that the fairest approach to that issue would be to allow the costs to lie where they were incurred, even though it might be said that the defendant succeeded on that issue. Bearing those matters in mind, it seems to me -- again one can only deal with the matter on an approximation -- that the Essex/Hertfordshire claimants ought to have 80 per cent of their costs. That fairly reflects both the issues that they did not pursue, on which the defendant had to incur expense refuting, and that part of the commercial viability challenge where the costs ought to lie where they fell.
70. Turning to the London Boroughs' challenge, I am not persuaded that it would be right to make no order for costs. The only basis on which that approach would be justified would be if I took the view that the Department's conduct was such as to justify a notional award of costs of that issue against it, even though it had succeeded on that issue. I do not consider that that would be justified, particularly in the case of the London Boroughs, because it is plain that their arguments on commercial viability did extend considerably beyond the issues that would be raised in the key papers documents. Once one adopts that starting point, that is to say that there should be some costs award in respect of the issues on which the Secretary of State was successful to the Secretary of State, it seems sensible, first of all, to separate out Luton as suggested by Mr Smith, and to order the defendant to pay the claimants' costs on what I have described as the Luton challenge.
71. That leaves the remainder of the costs on which the Secretary of State was successful, the Heathrow challenge, the commercial viability challenge and indeed various other matters that were raised, at least in the grounds and to some extent in the skeleton argument, but which are not in the event pursued in oral submissions. Bearing in mind what I have said in the judgment about the defendant's conduct in relation to the commercial viability issue, I am satisfied that there should be some discount. It would not be right to order the claimants to pay all of the Secretary of State's costs in respect of these issues because I am satisfied that to a degree time was wasted because there was not earlier disclosure. Also I bear in mind generally the desirability for full and frank disclosure. Doing the best I can, having separated out the Luton costs and ordered the defendant to pay the claimants' costs on those, I order the claimants to pay 70 per cent of the remaining costs, that is excluding Luton, to the claimants.
72. MR SMITH: I would be seeking permission to appeal. I hardly need remind you of the two bases in the CPR, the compelling reason test first. I hardly need mention that the White Paper is by design one expected to influence the lives of millions of people over a long timeframe, some 30 years odd, and is of some considerable importance. It is important that the White Paper should be tested for its security of legal footing, given the importance and the timeframe over which it is proposed to govern those millions of people. That legal footing should be tested by one more than one single judgment. I put the matter shortly. They are of a high order.
73. The second test is whether your Lordship is satisfied that I would have a real prospect of success. It is never the most attractive submission to have to make ----
74. MR JUSTICE SULLIVAN: It goes with the job.
75. MR SMITH: The main burden is likely to focus on the interrelated aspects of three shorthand headings, fairness and commercial viability of Stansted, where I would underline the difference between commercial viability on the one hand and fundability on the other. The second would be that, in the context of your Lordship's judgment on Stansted and the capacity in the White Paper, it should be understood to be revealing the uncertainty issue and lack of fallback, tied to fairness, which links with the third broad head, the pressures on Heathrow, including a huge terminal 6 and a mixed mode issue in the new landscape. It seems that our submissions on fairness, compared with the irrationally points and the Stansted commercial aspect, are distilled at page 96 of your Lordship's judgment, paragraph 269. You have taken all our submissions on fairness and compressed the answer into paragraph 269. If our issues can be dealt with shortly, so be it. We submit that those are powerful issues, and to deal with the matter on the basis that the government's policy decision that substantial financial support would not be forthcoming from public funds, is to succumb to one of the principal planks of our complaint, of how to deal with changes in the landscape when those changes in the landscape could be expected, if shown to those consulting, to result in submissions being made to those who are consulting that decisions, such as whether or not there should be financial support, could be revisited, as underlined by your decision in relation to Stansted, as the short paragraph emphasised. The pressures on Heathrow for terminal 6 are now, in the light of the White Paper, being look at in their own little box, and are likely to be consulted upon the basis that they are in their own little box, and possibly each in a little box of their own. That is how the thing tied together. We say that we would have a real prospect of success in seeking to persuade the appellate court that there was indeed something wrong with the consultation process. It should never have been completed without offering back opportunities to make representations on that new landscape. That is on the question of the commercial aspect, albeit interlinked on fairness.
76. Second, your Lordship's judgment at paragraph 249, which appears at page 88, sets out extracts from Mr Fawcett's material dealing with what you have headed as the commercial viability aspect, but every single paragraph that you recite speaks of financeability and fundability and does not address the important question, even if it is fundable or financeable, would it actually be commercially viable? Can it be said that Smith might be able to borrow X pounds, but would he sensibly be expected to build a new runway with that money, or would he be better off putting it into the building society? The only material that we have is a single page in the September CAA report, paragraph 145, page 42. There was (inaudible) outlook looked at where none of them provided a commercial return. If Smith were able to borrow the money he might as well throw it in the Thames. That has not been adequately dealt with by Government and it does not appear to have been dealt with in your analysis of the material. This comes back again to the additional significance, in the light of your judgment, over the fudge unravelled in the White Paper, the improvement of Stansted over the next 30 years. At paragraph 263, page 94 of your judgment, the goalposts have been moved. As indicated at paragraph 265, the commercial viability of an option with both the runway and the terminal capacity to accommodate an additional 46mppa was not tested. We have a hidden shortfall in your judgment, to indicate that 82,000,000 should be understood more in the sense of 67 or 68 million, a shortfall of 15 million passengers in the South East compared with (inaudible) would have demonstrated. Again, further pressure on Heathrow, which is unfair.
77. Turning to the slightly discrete element, mixed mode and terminal 6, your Lordship will recall having described both of those as being changes in the landscape, paragraphs 140 and 136 of your judgment.
78. Coming altogether and why it is that I ought to be expected to have a prospect of success on appeal of these conclusions, I reaffirm our submission that there was a change in the landscape, and that any fresh consultation would be in a different landscape, where it should be understood, in the sense of capable of embracing public help, to get the right solution moving. Counsel should have had the opportunity to suggest that in that changed landscape a different overall approach would be appropriate. I ask for permission for the Court of Appeal to say that you were wrong.
79. MR JUSTICE SULLIVAN: Whilst I acknowledge the importance of the White Paper, I am not persuaded that that is of itself a sufficiently compelling reason to permit an appeal on the grounds identified by Mr Smith, which relate very much to matters of detail rather than broader questions, and, looking at the second criteria, I have listened carefully to the points identified. Perhaps I am not the best person to consider whether there is an arguably fatal flaw in the judgment. I am not persuaded that Mr Smith has been able to identify any arguably fatal flaw in the judgment. I am not persuaded that there is a reasonable prospect of success. You will have the opportunity to persuade the Court of Appeal to the contrary. I have dealt with it briefly. I refuse permission to appeal to the London Boroughs.