Phillips & Ors v Symes & Ors

Costs normally follow the event, but the court may depart from that rule in exceptional circumstances. Where a litigant raises a serious capacity issue, fails to pursue it, and thereby causes an enquiry involving other potentially affected parties, the enquiry should ordinarily be conducted in one hearing with all necessary parties before the court.

Where joinder is necessary to prevent inconsistent findings and to protect the administration of justice, the resulting costs need not be treated as ordinary third-party costs. The court may order the litigant who caused the issue to pay the costs, including the costs of parties joined to resolve it, even where those parties have been vindicated.

The judgment concerned the costs of an issue about Robin Symes’s mental capacity. The capacity issue had arisen from medical evidence advanced on his behalf, but Mr Symes did not actively pursue it. The issue had potentially affected the validity of orders, transactions, legal retainers and the bankruptcy proceedings.

The Administrators brought the issue before the court and former legal advisers were joined because the determination might affect proposed claims based on Yonge v Toynbee. The capacity issue was determined in an earlier judgment, which found that Mr Symes had capacity throughout the relevant periods. The court then had to decide who should bear the costs of the Administrators and the joined solicitor respondents.

1. Costs of the capacity issue. Mr Symes had caused the proceedings by advancing, through medical evidence and related applications, the case that he lacked capacity, while taking no effective steps to pursue or withdraw it. He was therefore ordered to pay the Administrators’ costs, subject to detailed assessment if not agreed.
2. Joinder and the nature of the enquiry. The court rejected the suggestion that the matter should be treated simply as an ordinary Part 20 claim. Although the Administrators had a direct interest in preserving a possible claim against the solicitors, they had little or no choice but to bring the capacity issue to the court’s attention. The issue affected the progress of the underlying proceedings and raised public policy concerns, particularly because the court should not proceed towards serious orders, including committal, while capacity remained unresolved.
3. The capacity question was an enquiry into Mr Symes’s mental status. It was necessary to determine it in one finite hearing involving all potentially affected parties. Multiple hearings, based on different evidence and producing inconsistent findings, would bring the administration of justice into disrepute.
4. Departure from the usual costs rule. Although a successful joined party would ordinarily recover its costs, the circumstances were exceptional. The Administrators were innocent of the capacity allegation, had been forced to resolve it, and had defeated it at considerable expense. The solicitor respondents were also innocent and had been vindicated, but they had obtained the benefit of a determination achieved through the single enquiry.
5. The costs of the solicitor respondents were therefore not to be paid by the Administrators. Mr Symes was ordered to pay those costs, subject to detailed assessment if not agreed.

The capacity issue had previously been determined by the High Court in [2004] EWHC 1887 (Ch). The Court of Appeal substantially dismissed Mr Symes’s appeal in [2003] EWCA Civ 1769. This judgment determined the consequential costs of the capacity issue.