St Mary's Mansions Limited v Limegate Investment Company Limited & Ors

On an appeal involving several issues, costs should reflect substantial success rather than be awarded mechanically to the party succeeding on every point. A party achieving substantial success may receive a proportion of its appeal costs, reduced to reflect the issue on which it lost. Where the litigation involves a contractual and procedural chain between a head landlord, an intermediate landlord and subtenants, the costs order may mirror that chain.

The case concerned an appeal and cross-appeal from the Central London County Court before His Honour Judge Green QC. The dispute involved claims by a head landlord against an intermediate landlord for service charges, with the intermediate landlord joining its tenants. Three issues were raised. The tenants substantially succeeded on issue one, lost the interest issue, and succeeded entirely on issue three. The central matters addressed in the supplied judgment were the resulting costs allocation and the effect of the parties’ contractual and procedural relationships.

The Court of Appeal, in the judgment delivered by Lord Justice Ward on behalf of the court, recorded that the tenants had achieved substantial success overall. Issue one had been resolved substantially in their favour. They lost on issue two, concerning interest, but that issue occupied only a short part of the appeal. They succeeded entirely on issue three. St Mary's cross-appeal was dismissed.

1. Appeal costs. The tenants were awarded 80 per cent of the costs of the appeal. The reduction from complete costs reflected their failure on the interest issue and their lack of comprehensive success.
2. Pass-through of costs. The procedural and contractual structure required the costs order to follow the chain of parties. Limegate was ordered to pay the tenants’ appeal costs, while obtaining an equivalent costs order against St Mary's.
3. Cross-appeal costs. St Mary's was ordered to pay Limegate’s costs of the cross-appeal. Limegate was, in turn, required to pay those costs to the tenants.
4. Assessment. The court anticipated that the costs could be dealt with by a tripartite assessment.

The supplied judgment contains the court’s disposition and costs reasoning, but no fuller analysis of the substantive issues.

1. Court of Appeal (Civil Division): Appeal and cross-appeal from the Central London County Court, before His Honour Judge Green QC. The tenants achieved substantial success; the cross-appeal was dismissed.