South Coast Investments Ltd & Ors v Axisa & Ors

Permission to appeal should be granted where the materials disclose a real prospect that an order revisiting an unperfected costs order was made on a mistaken understanding of the original decision or without proper consideration of the costs actually in issue. A court considering whether to add omitted costs must consider whether all, none, or only part of those costs should be allowed. An all-or-nothing order may be unjust if the judge has not addressed the true scale of the costs and the appropriate balance between finality and justice. Delay is relevant, but it does not remove the need for proper consideration.

This was a renewed application by Mr Slater and Mr Abbott for permission to appeal against an order made by Jacob J in the High Court, Chancery Division, on 21 January 2002.

The underlying proceedings concerned control of Morris Merryweather Fire Protection Plc and the beneficial ownership of shares registered in the name of South Coast Investments Ltd. In June 1999, three related actions were struck out and specified costs were summarily assessed, subject to liability caps. Before the order was sealed, Mr Axisa sought an additional order for unrecovered costs. After substantial delay, Jacob J granted that application and directed detailed assessment. The central issue was whether the proposed appeal had a real prospect of success because the judge may have misunderstood the scope of his earlier decision or failed to consider the proper allocation of the omitted costs.

Application for permission. Lord Justice Chadwick allowed the renewed application. The Court of Appeal did not decide the ultimate costs issue. It decided that there was a real prospect of success on an appeal against the order of 21 January 2002.

1. If the January order were viewed simply as an exercise of discretion to revisit an unperfected order, there would be no real prospect that the Court would interfere. The transcript nevertheless raised a substantial question about whether Jacob J had correctly reconstructed his intention in June 1999.
2. It was arguable that the judge had intended in June 1999 to make no further assessment or taxation because he wished to bring the litigation to an end, rather than having overlooked the existence of other costs.
3. It was also arguable that the judge’s later conclusion—that he would necessarily have ordered payment of all the additional costs—was inconsistent with the earlier transcript. That transcript suggested that he had not decided that the discontinuing claimants should bear all costs, but only that they should bear a substantial proportion.
4. The judge had apparently proceeded on the assumption that the omitted costs were relatively small. If he had known that they were substantial, he would have had to consider whether finality justified refusing them, and whether justice required some different allocation. It was impossible to conclude that he would necessarily have allowed or disallowed the whole amount. An order producing either result might be unjust and should not be made without proper consideration.
5. The permission was granted against paragraphs 1 to 4 of the January order. Setting aside only paragraphs 2 to 4 would achieve nothing because paragraph 1 contained the substantive additional costs order. The appeal was assigned a half-day hearing before a two-judge court, and the costs of the permission application were ordered to be costs in the appeal.

• Court of Appeal (Civil Division): on 17 April 2002, the renewed application was allowed and permission to appeal was granted against paragraphs 1 to 4 of the order dated 21 January 2002. The appeal was assigned to a two-judge court.
• High Court, Chancery Division (Jacob J): on 21 January 2002, the draft order was amended before sealing to add provision for unrecovered costs, with directions for detailed assessment and consequential costs.