Upper Tribunal Tax and Chancery Chamber

UT (Tax & Chancery) UT/2022/000099 - [2024] UKUT 00184 (TCC)

Fecha: 24-Abr-2024

The CPR case law

The CPR case law

26.

The principles to be applied when deciding whether to make a costs order under the CPR were summarised by Gloster J (as she then was) in Kidsons v Lloyds Underwriters [2007] EWHC 2699 (Comm) (“Kidsons”) at [10]:

“The court’s discretion as to costs is a wide one. The aim always is to “make an order that reflects the overall justice of the case” (Travellers’ Casualty v Sun Life [2006] EWHC 2885 (Comm) at paragraph 11 per Clarke J. As Mr. Kealey submitted, the general rule remains that costs should follow the event, i.e. that “the unsuccessful party will be ordered to pay the costs of the successful party”: CPR 44.3(2). In Kastor Navigation v Axa Global Risks [2004] 2 Lloyd’s Rep 119, the Court of Appeal affirmed the general rule and noted that the question of who is the “successful party” for the purposes of the general rule must be determined by reference to the litigation as a whole; see paragraph 143, per Rix LJ. The court may, of course, depart from the general rule, but it remains appropriate to give “real weight” to the overall success of the winning party: Scholes Windows v Magnet (No 2) [2000] ECDR 266 at 268. As Longmore LJ said in Barnes v Time Talk [2003] BLR 331 at paragraph 28, it is important to identify at the outset who is the “successful party”. Only then is the court likely to approach costs from the right perspective. The question of who is the successful party “is a matter for the
exercise of common sense”: BCCI v Ali (No 4) 149 NLJ 1222, per Lightman J. Success, for the purposes of the CPR, is “not a technical term but a result in real life” (BCCI v Ali (No 4) (supra)). The matter must be looked at “in a realistic … and … commercially sensible way”: Fulham Leisure Holdings v Nicholson Graham & Jones [2006] EWHC 2428 (Ch) at paragraph 3 per Mann J.”

27.

In Day v Day [2006] EWCA Civ 415, a mother and a son were in dispute as to the beneficial ownership of the net proceeds of a property sale. Ward LJ gave the leading judgment; he held at [17] that “in a case like this, the question of who is the unsuccessful party can easily be determined by deciding who has to write the cheque at the end of the
case”. He went on to find that the judge below had failed to identify the successful party, and this was a “fundamental error of principle” which allowed the Court of Appeal to intervene. Sir Martin Nourse delivered a concurring judgment, in which he said that as a result of the failure to identify the successful party “this court is entitled, indeed bound, to interfere with the judge’s exercise of his discretion”.

28.

In Hutchinson v Neale [2012] EWCA Civ 345 (“Hutchinson”), the issue was whether the trial judge had been wrong to start from the position that there should be no order for costs where the successful party was guilty of dishonesty in the conduct of his case. Pitchford LJ gave the only judgment with which Patten LJ agreed. Having considered earlier authorities he said at [28]:

“The starting point for the consideration of any order for costs of an action is (CPR 44.3(2)(a)) that costs should follow the event. It is from this point that the court will, in an appropriate case, consider the conduct of the parties (rule 44.3(2)(b)). There is no general rule that a finding of dishonest conduct by the successful party will replace the usual starting point.”