Non-party Cost Orders - In Licensing Appeals

The recent High Court case of Aldemir v Cornwall Council [2019] EWHC 2407 (Admin) is of interest as it dealt with non-party costs orders in a licensing matter – deciding that non-party costs orders can be issued pursuant to s181 Licensing Act 2003 but that rules of natural justice must also apply.

In brief, Cornwall Council revoked a premises licence for Eden Bar held by Eden Bar Newquay Limited. The revocation was then appealed.

The sole shareholder and director of the licence holder company was Nimetullah Aldemir, who lived in Cyprus. However, Memet Aldemir (his brother) was the DPS and owner of the property who leased it to Eden Bar Newquay Limited.

District Judge Baker refused the appeal then also refused an adjournment, making a costs order against Memet Aldermir in the sum of £30,935.50.

This led to the several questions being addressed by the High Court, the salient ones being:

1. Does section 181 Licensing Act 2003 provide a basis for non-party costs orders to be made?
2. Was a fair procedure followed when the costs orders were made against Memet Aldermir?
3. Was it reasonable to make a costs order against Memet Aldermir?

On the first point, Justice Swift determined that s181(2) Licensing Act 2003 includes the power to make a costs order against a non-party.

On the second point, the words of the Justice Swift best sum this up:

“…an application for costs against a non-party is a course of action that is out of the ordinary and can, as was the case here, lead to significant financial consequences. It is important that such an application is heard and determined in accordance with a fair procedure. There is no need for anything elaborate; there are no particular hard and fast rules; but the principles of natural justice must be observed. The person against whom the application is made must have fair notice of the application and the grounds on which it is made, and a fair opportunity to respond to the application. I do not consider those principles were observed in this case.”

The answer to the third question follows from the second in that as a fair procedure was not followed then the costs order was set aside so that the application for costs could be reconsidered by the District Judge.