General Mediterranean Holdings SA & Anor v Latchin (t/a Dinkha Latchin Associates)

Where co-defendants conduct a common defence that occupies most of the litigation and that defence fails, a defendant who succeeds on separate, minor issues may still be ordered to bear the costs of the common defence. A separate issue will not ordinarily justify a reduction where it required no additional evidence and took little time. Appeal costs may be made joint and several, including an interim payment on account. Non-payment of an interim costs order does not itself justify entering judgment on preliminary issues. Any proposed limitation amendment and its terms are matters for the trial judge, who may make payment of accrued costs a condition of amendment.

The judgment concerned costs following the Court of Appeal’s substantive decision of 16 December 2003. The first defendant’s appeal had been dismissed, while the second defendant’s appeal had been allowed for Projects 1, 2 and 3 but dismissed for Project 4. The defendants sought further argument on costs. The court determined that no further oral hearing was necessary, allocated the appeal costs, ordered the defendants’ liability to be joint and several, and considered whether non-payment of interim costs justified entry of judgment on preliminary issues.

Lord Justice Jacob gave the judgment, with which Lord Justices Sedley and Brooke agreed.

1. Further hearing. No oral hearing was necessary. The written submissions raised no new points, and a further hearing would cause additional expense and delay.
2. Allocation of costs. Although the second defendant had succeeded on all but the minor Project 4 issue, he had joined the first defendant in running the common defence. That defence occupied nearly all the time at first instance and on appeal and had failed. He was therefore required to pay its costs. No reduction was justified for the distinct issue concerning his personal liability because it required no additional evidence and took trivial argument time. The first defendants likewise remained liable for the costs of the dispute concerning the second defendant’s liability.
3. Interim costs. The second defendant’s liability was joint and several with that of the first defendant. He was ordered to pay £160,000 on account of costs, reduced by any amount already paid by the first defendants, within 14 days. The claimant’s further request for £40,000 was refused.
4. Preliminary issues and amendment. The court declined to enter judgment for the claimant merely because the interim costs order had not been paid. Whether the defendants should be permitted to amend their pleadings to raise a limitation defence, and on what terms, was a matter for the trial judge. If amendment were permitted, payment of accrued costs and sums already ordered could be imposed as a precondition.

The costs order below remained undisturbed. The claimant received the assessed costs of the appeal, including the written submissions, and further proceedings were remitted to the Technology and Construction Court.

• Court of Appeal (Civil Division): The substantive appeal was dismissed as to the first defendant and allowed for the second defendant in relation to Projects 1, 2 and 3, but not Project 4. This judgment determined the outstanding costs issues and remitted further proceedings to the Technology and Construction Court.
• Queen’s Bench Division, Technology and Construction Court: Appeal from the order of Mr Recorder Uff in claim HT-01-463. The costs order below was left undisturbed.