Sahota v Moor & Anor

Permission to appeal on costs alone is granted only in rare cases. Costs remain a matter primarily within the discretion of the judge making the order. Where a judge permits a party to raise a late pure question of law on terms preserving the other party’s costs entitlement, the exercise of that discretion will not ordinarily justify a further appeal absent a point of principle or practice. A judge’s provisional observation about a possible indemnity creates no appealable ruling where no order determines the indemnity’s existence or enforceability. The Court of Appeal will likewise rarely entertain an appeal against costs ordered on a stay application.

Dr Agbaje sought permission to appeal against costs aspects of decisions made by Lightman J in partnership-account proceedings involving Dr Sahota and the other partners. Master Bowles had conducted the inquiry, and Lightman J heard the appeal from that decision.

Lightman J permitted the defendants to rely on a late pure question of law limiting recovery of Dr Sahota’s partnership share to the two equity partners. He nevertheless ordered that this should not affect Dr Sahota’s entitlement to costs against Dr Agbaje. Dr Agbaje sought a different costs order, challenged the judge’s reference to a possible indemnity, and raised a further costs point concerning a stay application. The central issue was whether any of those matters justified permission for a further appeal.

Application refused. Lord Justice Waller refused permission to appeal.

1. The proceedings had been heard by Master Bowles and then appealed to Lightman J. A further appeal on the substantive issues would therefore be a second appeal, requiring permission. No point of principle or practice, or compelling reason, had been identified.
2. The application was confined principally to costs. Although a costs order made by a judge hearing an appeal might technically fall outside the second-appeal restriction, the Court of Appeal would entertain a costs point alone only in rare cases. Costs are peculiarly matters for the discretion of the judge who makes the order.
3. Lightman J had deplored the defendants’ failure to raise the legal point earlier, but allowed it because it was a pure question of law. He granted that indulgence on the express basis that Dr Sahota’s entitlement to costs against Dr Agbaje would not be affected. There was no proper basis for attacking that exercise of discretion in the Court of Appeal.
4. The judge’s reference to a possible indemnity from Dr Agbaje to the other partners was not a ruling. No order determined that an indemnity existed or that it could be enforced. Its existence and effect remained matters for later determination, so ground 2 disclosed no basis for permission.
5. Ground 3 concerned costs ordered by another judge on a stay application. An appeal from such a costs order was also a costs appeal of the kind the Court of Appeal would very rarely entertain.

The application for permission to appeal was refused.

• Court of Appeal (Civil Division): On the application for permission to appeal, permission was refused: [2002] EWCA Civ 824.
• High Court, Chancery Division: Lightman J heard the appeal from the inquiry conducted by Master Bowles and made the costs orders challenged before the Court of Appeal.
• Master Bowles: Conducted the partnership-account inquiry and determined the underlying issues concerning dissolution, partnership status and partnership assets.