Jim Ennis Construction Ltd & Ors v Thewlis

On an appeal from a discretionary costs order, the appellate court asks whether the order falls outside the wide range of latitude allowed to the first-instance judge. Costs should reflect the outcome of each interlocutory application and the parties’ degree of success. A blanket order that there be no order as to costs is inappropriate where it effectively gives one party the costs of applications on which the other party substantially succeeded. Costs may be apportioned between general case-management work and individual applications, taking account of concessions made before the hearing and the need for a proportionate order.

The appellants, a group of companies and related parties, appealed from a costs order made by His Honour Judge Howarth in the Chancery Division at a case management conference. The judge had made no order as to the costs of several applications, including applications concerning amendments, a stay of earlier costs orders, and permission to serve a Part 20 notice against the principal shareholder. The appellants argued that the judge had failed to recognise their success on particular issues and had departed unjustifiably from the usual approach to costs. The central issue was whether the no-order costs decision fell within the permissible scope of the judge’s discretion.

Appeal allowed in part. Sir Anthony Evans gave the judgment, with which Lord Justice Mance agreed.

1. The governing question on an appeal from a discretionary costs order was whether the order fell outside the wide range of latitude available to the first-instance judge. The court considered the principles in English v Emery Reimbold & Strick Ltd [2002] 1 WLR 2409.
2. The judge’s no-order decision could be justified only if the respondent could properly receive his costs in any event for the applications not concerned with the stay. That approach failed to reflect the appellants’ success on the Part 20 application and their lesser success on the amendment application.
3. Although the respondent obtained permission to issue the Part 20 claim, the appellants’ submissions had substantially restricted the relief sought. The second declaration was deleted, and the contribution and indemnity claims were amended to reflect the applicable law. The judge had therefore underestimated the appellants’ degree of success.
4. The order was substituted. The order concerning costs of and occasioned by amendments remained. The respondent was awarded the costs of the injunction application in any event, but not the costs of the January hearing because the proposed order had been conceded beforehand. One-third of the hearing costs was made costs in the proceedings, and the appellants were awarded two-thirds of their remaining costs in any event. Costs of the appeal were summarily assessed at £8,000 plus VAT.

• Court of Appeal (Civil Division) — In [2003] EWCA Civ 1273, the appeal was allowed in part and a substituted costs order was made.
• Chancery Division, Manchester District Registry — His Honour Judge Howarth made no order as to the costs of the January 2003 case management conference.