Compagnie Noga D'importation Et D'exportation SA v Abacha & Ors

An interlocutory costs order made before trial must be assessed by reference to the circumstances existing when the order was made. The later result of the trial, including adverse findings against a party, cannot retrospectively determine whether that interlocutory order was correct. A possible misunderstanding of an earlier undertaking does not justify setting aside the costs order where it has not been shown that the judge relied on that misunderstanding. The court also stated, obiter, that an appeal against an interlocutory order should ordinarily be brought promptly and should be entertained after substantial delay only in a wholly exceptional case.

The claimant appealed an order made by Longmore J in the Commercial Court on 4 November 1999 requiring it to pay the defendants’ costs of an application for security for costs in any event. The application followed an earlier order concerning security and a cross-undertaking. After the substantive preliminary issues had been tried, the claimant argued that the costs order resulted from a misunderstanding of the earlier undertaking and that the later trial findings justified revisiting it. The central question was whether the interlocutory costs order should be set aside or replaced in light of the corrected undertaking and the subsequent trial outcome.

Laws LJ gave the leading judgment, with Tuckey and Waller LJJ agreeing. The appeal was dismissed.

1. The claimant sought to set aside the order requiring it to pay the defendants’ costs of the security-for-costs application. It argued that Longmore J had misunderstood the undertaking recorded on the earlier occasion and that the defendants’ adverse trial conduct justified a different costs order.
2. The court was not satisfied that Longmore J had made his order because of any erroneous understanding of the undertaking. Even if the undertaking had expressly stated that it operated only if required by the court, the judge might have made the same order.
3. It was wrong in principle to use the outcome of the later trial, or the trial judge’s adverse findings against the defendants, when determining the merits of an interlocutory costs order made before trial. The order proceeded on the basis that the trial might go in several different directions. The relevant question was whether the judge had been wrong in the circumstances existing when the application was made. That had not been demonstrated.
4. Laws LJ added that, save for a wholly exceptional circumstance making it just to do so, the court should not entertain an appeal against an interlocutory order after such an extensive delay. The order was right or wrong when made, and a challenge should ordinarily have been brought then. This observation was additional to the ratio and was obiter.
5. The order of 4 November 1999 stood, and the appeal was dismissed.

• Court of Appeal (Civil Division) — On 23 July 2003, the appeal against the interlocutory costs order was dismissed under [2003] EWCA Civ 1101.
• Queens Bench Division (Commercial Court) — Longmore J ordered on 4 November 1999 that the claimant pay the defendants’ costs of the security-for-costs application in any event.