[2024] EWHC 1238 (TCC)

The first matter that arises is the costs of the two applications that were in effect dealt with on 22 March and by my judgment handed down on 24 April 2024.

Lloyds made an application for an extension of time to comply with an unless order the facts of which are set out in that judgment. The application was made in a manner which I described in that judgment as unsatisfactory. The time for payment of the sums due pursuant to the unless order expired at 4.00 pm on Friday 8 March 2024. At 3.57pm that day Lloyds filed on CE file an application for an extension of time to comply with the unless order. When they did so they failed to give any reasons for the application. They gave their reasons by a witness statement which was filed the following day, that is on the Saturday, on the CE filing system under the heading “Miscellaneous.” A revised application notice was also filed. They made no attempt to inform Accor’s solicitors as to what they had done and the application that they had made and Accor only became aware of the application when it was referred to in an email from Lloyds’ solicitors to TCC listing on the afternoon of 12 March 2024.

As I observed in the judgment, the circumstances in which the witness statement was added as it were to the application were unsatisfactory. Lloyds’ solicitors appeared to be seeking to lead Accor to believe that the revised form of the application together with the witness statement had been filed at 3.57pm on 8 March when in fact the final form of the application and the witness statement were not what had been filed at that time.

In the course of argument on 22 March, Mr Bowling accepted that the costs of regularising that position at least should be visited on Lloyds but he submits that, since he was successful in his application for an extension of time, the order that the court should make should, at worst, be one of costs in the case or defendant’s costs in the case. He does not argue that costs should follow the event to the extent that, because he was successful in his application, he should recover his costs.

Mr Blackett, however, asks for the defendants’ costs. Even though Lloyds were successful in the application, the circumstances in which it was made, he says, should lead the court to exercise its discretion to award him his costs of the application.

I am conscious that the normal rule is that costs should follow the event and that it would be unusual for the court to exercise its discretion to order costs to be paid to a party that was unsuccessful, but it seems to me that this is a case in which that unusual order ought to be made.

I do not intend to repeat the entirety of my previous judgment but it was clear from the evidence that a deliberate decision was taken not to comply with an unless order. A deliberate decision was taken to make an application, as I put it, almost literally at the last minute. It was then done in a poor fashion which inevitably led to the incurring of further costs which ought to have been wholly unnecessary and it put Accor in a position in which, although they could have consented to the extension of time being made, the very circumstances of the making of the application led them to be rightly suspicious and concerned about the basis on which the application was made.

In addition, instead of that then being a single application with a single witness statement, the evidence in support of the application developed between its making and the actual hearing in a way that would also undoubtedly have put the defendant to additional time and cost expenditure which would have been wholly unnecessary had a proper application been made at an appropriate time.

In these unusual circumstances, and taking account of Lloyds’ conduct, it seems to me that Lloyds ought to bear the costs, not only their own costs but Accor’s costs, of the application to extend time and I so order. In other words, I order that the claimants pay the defendants’ costs of the application for the extension of time.

Mr Blackett also submits that he ought to have his costs of his application for judgment to be entered which was made at about 4.26pm on 8 March in circumstances where it was clear that Lloyds had failed to comply with the unless order. He says that had Lloyds taken sensible steps to inform Accor’s solicitors of what they were doing, had done it correctly, and had, in accordance with CPR Part 27.3, served the application as soon as practicable - which in this case would have been immediately - that application for judgment would not have been issued. It had clearly been prepared in advance and in anticipation of a breach of the unless order. Certainly no criticism could attach to Accor for having prepared the application in advance and issued it as soon as the unless order was not complied with.

In the event, as I said, Accor was not aware until 12 March that the application to extend time had been made. Again Mr Blackett says that that shows disregard for the provisions of Part 27.3 and he submits that during the period between 8 March and 12 March when Accor became aware that the application had been issued – even then not because they were told by Lloyds but because they saw reference to it in other correspondence - Lloyds took the risk that Accor would issue an application for judgment to be entered and all the consequential matters that followed. Therefore, he submits that Lloyds should also pay the costs of that application, albeit it was inevitably unsuccessful because the application for an extension of time succeeded.

I have considerable sympathy with that argument but it seems to me that it goes to support what I have described as the unusual costs order that I have made on the application for the extension of time and that it goes too far to also order Lloyds to pay the costs of the application which was made for judgment to be entered and which was necessarily unsuccessful. I, therefore, do not make an order that the claimants pay the defendants’ costs wasted on that application.

There were some small costs incurred on a further application for an unless order which was not in the event pursued because the monies were paid. They were, as I understand it, paid late hence the application for the unless order and, unless Mr Bowling seeks to persuade me otherwise, I should have thought, therefore, that the costs of that application ought to be paid by Lloyds.