Williams Corporate Finance Plc v Holland & Ors

An order made without giving a party an oral hearing which had been promised is a procedural error. The court may remedy that error under Civil Procedure Rules 1998, rule 3.10. A resulting appeal is not necessarily an abuse of process, particularly where the first-instance court’s corrective power has not been exercised and further remittal would cause delay and expense.

Costs are discretionary. The court should consider the parties’ overall success, the importance and value of the issues, proportionality, and the conduct of the litigation. A claimant which succeeds only on minor claims, after losing the substantial issues, may properly receive no order for costs despite recovering a modest sum.

The claimant brought proceedings against Gary Roy Holland and two other defendants arising from the breakdown of a financial consultancy relationship. At trial, the claimant recovered on minor claims against Mr Holland but lost its substantial fee claim and other significant issues. Holland J ordered Mr Holland to pay the claimant’s costs.

After judgment had been handed down, the judge made the costs order without giving Mr Holland the oral hearing which his earlier directions had indicated would occur. Mr Holland appealed against the costs order and the refusal to hear him on costs. The central issues were whether the appeal was an abuse of process, whether the costs order could stand, and what costs order was just.

1. Appeal allowed. The costs order against Mr Holland was set aside. The Court of Appeal substituted an order that there be no order as to costs between the claimant and Mr Holland in the court below.
2. The judge had made an error of procedure by making the costs order without giving Mr Holland the oral hearing he had been promised. Under rule 3.10 of the Civil Procedure Rules 1998, the error did not invalidate the proceedings automatically, but the court had power to remedy it. The appeal was therefore properly before the Court of Appeal.
3. WEA Records Ltd v Visions Channel 4 Ltd [1983] 1 WLR 721 did not establish that this appeal was an abuse of process. That case concerned the appropriate use of the High Court’s power to review an ex parte order and did not govern the present procedural error.
4. In exercising the costs discretion under rule 44.3, the court had to consider the litigation as a whole. Mr Holland had succeeded on the substantial Adler fee claim and the Anderson Ross issues. The claimant’s recovery was confined to minor items and was obtained only after an inadequately pleaded issue emerged at trial. The modest recovery would not have attracted costs in the small claims track.
5. The claimant’s conduct, including delay, failures to comply with procedural obligations and disproportionate litigation, reinforced the conclusion that justice required no order for costs. The Court of Appeal also criticised late and unnotified submissions on the appeal.

• Court of Appeal (Civil Division): Appeal allowed. Holland J’s costs order was set aside and replaced by an order that there be no order as to costs between the claimant and Mr Holland in the court below.
• High Court of Justice, Queen’s Bench Division: Holland J ordered Mr Holland to pay the claimant’s costs after judgment on the substantive claims.