Permission To Appeal Costs | When Hopeless Grounds And False Citations Justify A Costs Award Against The Applicant

The pursuit of hopeless appeal grounds through persistent undisciplined submissions—including AI-generated false citations—may constitute exceptional circumstances justifying a costs award against an unsuccessful applicant at an oral renewal of permission to appeal.

TAIWO V HOMELETS OF BATH LIMITED & OTHERS [2025] EWHC 3173 (KB)

In Taiwo v Homelets of Bath Ltd [2025] EWHC 3173 (KB), the court refused the oral renewal of an application for permission to appeal orders dismissing a claim under section 57 of the Criminal Justice and Courts Act 2015 for fundamental dishonesty and requiring indemnity basis costs. Applying PD 52B para 8.1 and the guidance in Mount Cook Land Ltd v Westminster City Council [2004] 2 Costs LR 211, Constable J found exceptional circumstances justifying a costs award against the unsuccessful applicant. These included the hopelessness of several grounds, persistent pursuit through numerous undisciplined submissions, and the citation of false AI-generated authorities which increased the burden on the court and respondent. The applicant was ordered to pay 75% of the respondent’s costs from the date of the paper refusal, on the standard basis, with a £7,500 interim payment. A limited civil restraint order was made against the applicant and her litigation friend.

Although I have found that none of the grounds were reasonably arguable, this does not of itself equate to hopelessness for obvious reasons: if it were otherwise, costs would regularly be awarded in the respondent's favour upon attendance at an oral renewal, when such an order is the exception rather than the rule. However, I have found that a number of the grounds were not just not reasonably arguable, but hopeless. They have also been persisted with in a manner which I have described above as demonstrating a complete lack of discipline, leading to the imposition of a limited CRO. The numerous iterations of documents and applications in the pursuit of the appeal, and its oral renewal, together with the citation of false authorities have all undoubtedly added to the burden on the Court and the Respondent.

Citations

Three Rivers DC v Bank of England (No 3) [2001] UKHL 16 A party alleging fraud or dishonesty must distinctly allege and prove it; however, the judgment noted that this test had limited assistance in the s.57 context. Howlett v Davies [2017] EWCA Civ 1696 The Court held that defendants need not specifically plead “fundamental dishonesty” provided that sufficient notice is given to the claimant of the issues being pursued, preventing any claim of ambush. Ivey v Genting Casinos [2017] UKSC 67 The case sets out the two-stage test for dishonesty requiring determination of the defendant’s state of mind followed by application of an objective standard of honesty; this test was applied in assessing dishonesty under section 57. Cojano v Essex Partnership University NHS Trust [2022] EWHC 197 (QB) Reinforced the two-limb test from Ivey for dishonesty and clarified that fundamental dishonesty under s.57 arises where dishonesty goes to the root of the claim. Oates v Harte Reade & Co (a firm) [1999] 1 FLR 1221 Established that anxiety caused by harassment constitutes a personal injury for limitation purposes, supporting the interpretation that such damages fall within section 57 of the 2015 Act. Senay v Mulsanne Insurance Co Ltd [2024] EWCC 12 Held that where fundamental dishonesty affects only the personal injury aspect of a claim, other damage elements like vehicle loss may survive dismissal. Reynolds v Chief Constable of Kent [2024] EWHC 2487 (KB) Suggested that not all elements of a claim must be dismissed under s.57 where dishonesty applies only to a part of the overall claims, depending on whether the undishonest portions are part of the “primary claim”. English v Emery Reimbold & Strick Ltd [2002] EWCA Civ 605 Set out the requirement for judgments to identify and explain the resolution of vital issues to ensure appellate courts can understand the basis of decisions. Ladd v Marshall [1954] 1 WLR 1489 Established the three-stage test for the admissibility of fresh evidence on appeal, requiring that the evidence could not have been obtained at trial with reasonable diligence. Mount Cook Land Ltd v Westminster City Council [2004] 2 Costs LR 211 Provided guidance that costs should only be awarded to a respondent attending a permission hearing in exceptional cases such as hopeless or abusive claims. Sartipy v Tigris Industries Inc [2019] EWCA Civ 225 Confirmed that a party for CRO purposes includes a person who is the real party behind totally without merit applications, not just those formally named. R (Kumar) v Secretary of State for Constitutional Affairs [2006] EWCA Civ 990 Supported also considering prior unlabelled but meritless applications when making a CRO, as long as the court knows enough about them to assess merit.

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Key Points

A respondent may be awarded costs of a permission to appeal hearing where the court considers it just, departing from the general rule in PD 52B that such costs are not normally recoverable.
In deciding whether to depart from that general rule, the court may take into account factors identified in Mount Cook, including hopeless grounds, persistence in them, abuse of process, and the burden imposed on the court and the opposing party.
When awarding costs at the permission stage, the court retains a broad discretion to determine the proportion of costs payable and may order both a percentage and an interim payment on account.
A limited civil restraint order may be imposed where a person has made two or more applications that are totally without merit, including earlier applications not formally certified as such, and may apply to someone who is the real party behind the litigation.
The submission of fictitious legal authorities is improper, increases the burden on the court and the respondent, and is a relevant factor when considering both costs and the imposition of a civil restraint order.

"I regard it as in the interests of justice that the Applicant's approach is marked with a costs order against her. However, taking account of the fact that not all the points taken were 'hopeless', I consider the appropriate balance is that the Applicant is to pay 75% of the reasonable costs incurred by the Respondent, to be assessed on a standard basis if not agreed, from the date of Sheldon J's order refusing permission on the papers (including any costs dealing with the CRO). There shall be an interim payment of £7,500 on account."

Key Findings In The Case

The Respondent was awarded 75% of its reasonable costs, to be assessed on the standard basis if not agreed, from the date of Sheldon J’s paper refusal of permission to appeal, due to the Applicant’s pursuit of numerous unmeritorious grounds, submission of documents containing fictitious legal authorities, and overall lack of litigation discipline [144].
A limited Civil Restraint Order (CRO) was imposed on both the Applicant and Mr Diamond pursuant to Practice Direction 3CPD.2, on the basis that they had made at least two applications that were totally without merit, and had further demonstrated a pattern of abusive, repetitive litigation conduct within the same proceedings [128–132].
The Respondent’s entitlement to indemnity costs from the Applicant under the Consequentials Order was upheld and revived, following the refusal of permission to appeal, in light of the Applicant’s failure to beat a Part 36 offer and findings of fundamental dishonesty under section 57 of the Criminal Justice and Courts Act 2015 [119–120].
The Applicant’s general non-entitlement to costs protection as a protected party was extinguished as the trial judge found she no longer lacked capacity, based on the oral evidence of her own expert and the judge’s findings as to her honesty, thereby validating the costs orders made against her, including the payment on account of £25,000 [114–115].
The Court awarded the Respondent a further £4,000 for the costs of addressing the civil restraint order, to be included within the broader costs order made against the Applicant, reinforcing that such costs can be awarded for consequential matters flowing from applications certified as totally without merit [140].

"The reliance upon false citations is just as unsatisfactory when presented to the Court by a litigant in person (or Litigation Friend), although of course the sanction for having done so may not necessarily be the same as those applicable if a registered lawyer is responsible for the submission. I make clear that where (as seems at least possible here) the citation was included in a document authored or reviewed by a lawyer, without attribution, whether for reward or pro-bono, for use by the litigant in person, that lawyer may, upon identification, be subject to a reference for misconduct or potential contempt."

The High Court’s decision in Taiwo v Homelets of Bath Limited [2025] EWHC 3173 (KB) demonstrates when exceptional circumstances justify departing from the general rule that respondents do not recover costs for attending permission to appeal hearings.

Background

The claim arose from events in 2010 when the defendant, Homelets of Bath Limited, sought to evict the claimant, Wemimo Mercy Taiwo, from a property in Bath. The claimant succeeded at a liability trial in 2018, where it was found she had been harassed and assaulted [§1]. The matter proceeded to a quantum trial to assess damages, with the claimant seeking approximately £2 million for psychiatric injury, injury to feelings, and loss of earnings [§2].

At the quantum trial before HHJ Blohm KC, the defendant successfully invoked section 57 of the Criminal Justice and Courts Act 2015. The judge found the claimant had been fundamentally dishonest regarding three matters: the genuineness of her marriage, her claims for Employment Support Allowance benefits, and the deliberate exaggeration of her disability from October 2013 onwards [§3]. Consequently, the entire claim was dismissed, including the claim for Vento damages for injury to feelings, which the court confirmed fell within the definition of “personal injury” for s.57 purposes [§84-89]. The judge also determined the claimant was no longer a protected party.

At a consequentials hearing on 13 March 2025, the judge ordered the claimant to pay the defendant’s costs of the claim, to be assessed on an indemnity basis, with an interim payment of £25,000 [§4]. The appointment of Mr Emmanuel Diamond as the claimant’s litigation friend was terminated. Furthermore, Mr Diamond and Mr Abayomi Bamidele Odebode were joined to the proceedings as additional defendants for the purpose of considering non-party costs orders under section 51 of the Senior Courts Act 1981.

The claimant sought permission to appeal both the quantum trial order and the consequentials order. The original Appellant’s Notice was filed by the claimant, and Mr Diamond later filed an N161 seeking a re-hearing of the permission application [§6, §11]. Permission was refused on the papers by Sheldon J on 28 March 2025 [§10]. This judgment concerns the oral renewal of that application for permission to appeal. A separate non-party costs order was later made against Mr Diamond and Mr Odebode on 6 August 2025 [§16]. Numerous further applications were made by the claimant and Mr Diamond throughout the appeal process.

A notable feature of the proceedings was the submission of documents containing false legal authorities, including citations to non-existent cases such as “Irani v Duchy Farm Kennels [2020] EWCA Civ 405” and “Chapman v Tameside Hospital NHS Foundation Trust [2018] EWCA Civ 2085” [§25-27]. The court found these were “no doubt falsely created by AI” and rejected Mr Diamond’s explanation that he had “stepped back” from the litigation when these documents were prepared [§26].

Costs Issues Before the Court

The court was required to determine several distinct costs issues arising from the litigation history. The primary issue was whether to award the respondent its costs of attending the oral renewal of the permission to appeal hearing, which is generally not permitted under the standard rules [§141]. A related issue was the appropriate basis and percentage of any such costs award. The court also had to consider the claimant’s liability for the costs orders made at the quantum trial consequentials hearing, namely the indemnity basis costs order and the £25,000 interim payment, the stay on which was now lifted [§119-120]. Additionally, the court had to address the procedural validity and merits of the appeal against the consequentials order, which included the termination of the litigation friend and the joinder of parties for non-party costs. Finally, the court was tasked with deciding whether to impose a civil restraint order on the claimant and/or Mr Diamond due to the manner in which the litigation and appeals had been conducted [§127].

The Parties’ Positions

The respondent sought its costs of responding to the application for permission to appeal. It requested that these costs be assessed on an indemnity basis, with an interim payment of £15,000, plus a summarily assessed sum of £4,000 for dealing with the civil restraint order application [§140]. The respondent invited the court to depart from the general rule in Practice Direction 52B paragraph 8.1 that respondents are not usually awarded costs for attending permission hearings, relying on the guidance in Mount Cook Land Ltd v Westminster City Council [2004] 2 Costs LR 211 [§141-142].

The applicant objected to any costs order being made against her [§140]. While her formal position on the respondent’s application was not detailed in the judgment beyond a general objection, her conduct and submissions throughout the proceedings formed the backdrop to the court’s assessment. The applicant, through Mr Diamond, had filed multiple iterations of grounds of appeal and skeleton arguments, some of which contained bogus legal authorities [§9-10]. The court noted that Mr Diamond appeared to be advancing arguments on the joinder issue for his own benefit rather than the claimant’s [§124].

The Court’s Decision

The court refused permission to appeal against both the quantum trial order and the consequentials order, finding none of the grounds to be reasonably arguable [§108, §126]. It also refused to extend time for the appeal against the consequentials order. The stay on the costs orders from the consequentials hearing was lifted, meaning the claimant was liable for the defendant’s costs on an indemnity basis, subject to detailed assessment, and was required to make the £25,000 interim payment [§119-120].

On the costs of the permission to appeal hearing, the court departed from the general rule in PD 52B paragraph 8.1 and made an order in the respondent’s favour [§144]. Applying the guidance from Mount Cook at paragraph [76], Constable J found exceptional circumstances. These included the hopelessness of several grounds of appeal, the persistent pursuit of those grounds through numerous repetitive and undisciplined submissions, and the citation of false authorities, which the judge found had “undoubtedly added considerably to the burden on the Court and on the Respondent” [§143]. The judge noted that not all arguments were hopeless, so a full award was not appropriate. Balancing these factors, the court ordered the applicant to pay 75% of the respondent’s reasonable costs incurred from the date of Sheldon J’s paper refusal (28 March 2025), including any costs dealing with the CRO, to be assessed on the standard basis if not agreed, with an interim payment of £7,500 [§144].

The court also granted a limited civil restraint order against both the claimant and Mr Diamond [§132]. This was justified by two applications found to be totally without merit: the application struck out by Bourne J [§127] and the earlier appeal against a costs budgeting decision, which Sheldon J had found to be “misconceived and unarguable” [§130]. The judge cited the persistent and undisciplined conduct of the litigation, including the submission of an unsolicited witness statement after the draft judgment was circulated, as further demonstration of the need for restraint [§136].

The judgment also affirmed the indemnity costs order from the consequentials hearing. It found no arguable basis to appeal the indemnity basis, holding that there could be no appeal against it “in principle given the Applicant’s failure to beat a Part 36 Offer“, and confirmed that the indemnity assessment and £25,000 interim payment should now take effect [§119]. Furthermore, it found the joinder of Mr Diamond and Mr Odebode for non-party costs consideration to be not reasonably arguable as a ground of appeal, noting Mr Diamond’s deep involvement in the claim’s conduct [§122-124].

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