Case Nos: HT-2024-CDF-000004 - [2024] EWHC 933 (TCC)

The Part 8 claim is dismissed.

The Part 7 claim is dismissed.

Since this judgment was provided in draft, the parties have invited me to determine the issue of costs on the basis of counsel’s admirably short written submissions. For Morganstone, Mr Smith submitted that Morganstone ought to be awarded the costs of both the Part 7 and the Part 8 proceedings, on the grounds that the object of both sets of proceedings was to determine whether Birkemp was entitled to be paid the sum awarded by the adjudicator and that Morganstone was successful on that overarching question and was therefore the successful party for the purposes of the litigation. For Birkemp, Mr Wygas submitted that the pragmatic outcome should be no order as to costs, on the basis that Birkemp was successful on the Part 8 claim and Morganstone was successful on the Part 7 claim, so that costs orders in favour of the successful party on each respective claim would cancel each other out.

In my judgment, the fair and just exercise of my discretion, having regard to all the circumstances of the case, is to make a limited costs order in favour of Morganstone. Mr Smith is right to say that the overarching issue in the dispute before me concerned Birkemp’s entitlement to payment of the sum awarded by the adjudicator. Morganstone succeeded on that issue. However, it chose to bring a Part 8 claim that did not succeed. Further, the declarations sought by the Part 8 claim went beyond the question of the validity of the adjudicator’s award; Morganstone sought a declaration that Birkemp had no contractual right to make the August Application or, therefore, to receive any adjudication award in respect of it. Morganstone failed to establish that wider point. Its success in the overall dispute related solely to its discrete ground of defence to the Part 7 claim. Having regard to the fact that each party failed on its own claim, but also to the facts that—as the parties recognised in their helpful agreement that the cases be heard and determined together—there was a principal overarching dispute and that Morganstone was successful in that dispute, I consider that justice is broadly served by an order that Birkemp pay the costs of the hearing but that otherwise there be no order as to costs.