King's / Queen's Bench Division of the High Court

KB-2023-004010 - [2025] EWHC 2689 (KB)

Fecha: 17-Oct-2025

XIII Submission as to costs of Mr Smith and CSM

XIII Submission as to costs of Mr Smith and CSM

127.

The starting point of Mr. Smith and CSM is the law relating to costs on the discontinuance of an action. They say that although there has not been a formal notice of discontinuance, the approach taken on 10 March 2025 when it was conceded that the WFO should be set aside was in effect a discontinuance of the action. The only reason according to MGWL why there was not a notice of discontinuance was because it was indicated that application would be made to set aside the notice of discontinuance on the ground that Mr. Smith and CSM should be at liberty to apply to enforce the cross undertaking as to damages. They submit that on a notice of discontinuance, the interim costs orders made to date stand to be reversed. (In the submission of MGWL, there is no rule that a notice of discontinuance reverses orders already made).

128.

It is therefore submitted that the court should reverse the orders for costs made in favour of MGWL, namely the orders of Ellenbogen J and Morris J made on 12 June 2024 and 30 July 2024 respectively. This would entail the repayment of monies ordered to be paid on account of costs comprising a total sum of £50,000.

129.

Even if existing orders stand, then absent any other order, the party discontinuing must bear the costs of the action. Mr. Smith and CSM submit that this is an action that should not have been brought and/or should have been withdrawn after the dismissal of the WFO as regards Mr Gollits, VDH AG and VDHI by Mr Tinkler on 15 December 2023, alternatively at latest after the dismissal of the appeal by the Court of Appeal on 8 August 2024. Any steps taken in the action thereafter even for committal should not have been brought and the costs ought to follow the event not of the committal, but the event of the section 25 proceedings and the WFO falling away.

130.

It is also submitted that in respect of costs not yet ordered, the court should say that those costs should be ordered against MGWL. The reasons for this are as follows:

(1)

there was only one winner in this action, namely the defendants and in particular Mr. Smith and CSM. The true application of the general rule that costs should follow the event is that the costs of the action should be paid by MGWL to Mr. Smith and CSM.

(2)

if the WFO was ever justified, it was obtained due to serious non-disclosure which was the subject of strong criticism both at first instance and in the Court of Appeal. Albeit that that was in respect of an application by other defendants, the clear inference is that the non-disclosure was material and culpable as regards these defendants. This must have infected the WFO against Mr Smith and CSM just as much as the WFO that was set aside as against those other defendants;

(3)

as noted above, whilst MGWL might have sought to argue that Mr Smith and CSM were in a different position from Mr Gollits, VDH AG and VDHI who succeeded in the s.25 CJJA argument, there is no reason to believe that it was a strong argument. Mr Smith and CSM have been unable due to the abandonment of the s.25 CJJA proceedings to argue their position. The Court should therefore assume that their position would have been vindicated that the s.25 CJJA argument, if pursued, would have failed as regards them also.

(4)

the whole history of this case gives rise to serious concerns that the present proceedings were successfully used by MGWL to persuade court in the BVI to postpone a trial in February 2024. The effect of the discontinuance was to deny Mr. Smith and CSM the opportunity to prove that those inferences were justified, alternatively that the alleged conspiracy against them should fail.

(5)

on this basis, the Contempt Application should not have been brought and therefore the costs should follow the event of the unsuccessful s.25 CJJA action despite the contempt having been proven.