Sullivan v Grout & Ors

A judge deciding costs has a broad range of permissible orders. An appellate court should not interfere where the order falls within that discretion, even if the successful party achieved only qualified success. Striking out may be justified where a party repeatedly fails to comply with disclosure and inspection orders, including an unless order and a final opportunity to remedy default, and the judge concludes that proper compliance will not occur. The appellate court’s role is supervisory: intervention requires an error of law, failure to consider the right matters, or consideration of wrong matters. Where the judge has considered the matters under Civil Procedure Rules rule 3.9 and there is no reasonable prospect of showing the decision wrong, permission to appeal should be refused.

The claimant brought proceedings as assignee of Harnchester Ltd’s book debts, alleging that the first and second defendants had intercepted or altered cheques and converted them for their own benefit. The claim also included allegations against National Westminster Bank plc.

The bank settled the claim for £32,000. Wright J struck out individual items corresponding to the settlement and ordered the claimant to pay half the second defendant’s costs of the application. The claimant appealed that costs order.

Separately, following repeated failures to comply with disclosure and inspection orders, including an unless order and a further final opportunity, Curtis J struck out the claim in its entirety. The claimant sought permission to appeal. The central issues were whether Wright J had exceeded his costs discretion and whether Curtis J had been entitled to strike out the claim.

1. Costs appeal. Lord Justice Longmore gave the leading judgment, with Lord Justice Laws agreeing. The appeal against Wright J’s costs order was dismissed. A costs judge has a range of possible orders available. Wright J was entitled to regard the second defendant’s success as qualified and to award only half of her costs. The order was within the proper bounds of his discretion. The claimant’s acceptance that the settled sum had to be brought into account did not require an order that costs be costs in the case.
2. Appellate review. The Court of Appeal is a court of review. It may interfere with a discretionary decision only where there is an error of law, a failure to take the right considerations into account, or the taking into account of wrong considerations.
3. Strike-out for disclosure default. Curtis J was entitled to strike out the claim. The documents were vital to the determination of the dispute, yet the claimant repeatedly failed to comply with orders for disclosure and inspection. Those failures continued after an unless order and after Bell J had provided a further opportunity for compliance. Curtis J was entitled to conclude that the claimant was not seriously intending to give proper disclosure.
4. Permission to appeal. Curtis J had considered in detail the matters required by Civil Procedure Rules rule 3.9. The Court of Appeal found no reviewable error and no reasonable prospect that the strike-out decision could be shown to be wrong. Permission to appeal was therefore refused.
5. The second respondent received her costs of the costs appeal. No order was made for the costs of the permission application, subject to public funding assessment.

1. Court of Appeal (Civil Division): The appeal against Wright J’s costs order was dismissed. The application for permission to appeal Curtis J’s strike-out order was refused.
2. Queen’s Bench Division: Wright J ordered the claimant to pay half the second defendant’s costs of the application after striking out items covered by the bank settlement. Curtis J subsequently struck out the claim for continuing non-compliance with disclosure and inspection orders.