Tamares (Vincent Square) Ltd v Fairpoint Properties (Vincent Square) Ltd

In a costs appeal, the appellate court should not interfere with a discretionary costs order merely because it might have exercised the discretion differently. Intervention requires an error of principle, failure to consider a relevant matter, consideration of an irrelevant matter, or a decision that is wholly wrong or perverse because the factors were not fairly balanced.

Under the Civil Procedure Rules, the court has a flexible discretion. It may identify an overall successful party or adopt an issue-based approach, while having regard to all the circumstances. In commercial litigation involving specific relief, the dispute may properly be treated as ultimately monetary where the remedy is sought for its commercial value. The judge’s 25 per cent reduction was therefore within the permissible range.

The claimant and defendant were adjoining commercial property owners in a rights-to-light dispute. The High Court held that rights existed for two basement-staircase windows, that the proposed development would cause actionable injury, and that damages of £50,000 should be awarded in lieu of an injunction. It rejected the claim concerning two entrance-lobby windows.

On costs up to the first judgment, the deputy judge treated the claimant as the successful party but reduced its recoverable costs by 25 per cent, while awarding it all costs after that date. The defendant appealed only against the first-period order, arguing that the claimant’s failures on two windows and on the injunction meant that it was not the overall winner or should receive a substantially smaller contribution. The central issue was whether the judge had erred in principle or reached a wholly wrong result in exercising the costs discretion: [2007] EWHC 828 (Ch).

1. Appeal dismissed. The deputy judge had ordered the defendant to pay three-quarters of the claimant’s costs up to 4 September 2006 and all of its costs thereafter. The Court of Appeal upheld that order.
2. Costs are a paradigm case of judicial discretion. An appellate court must not interfere merely because it would have exercised the discretion differently. It may intervene for an error of principle, failure to take account of a relevant matter, reliance on an irrelevant matter, or a conclusion that is wholly wrong or perverse because the factors were not fairly balanced. The same approach applies under the Civil Procedure Rules, although those rules provide greater guidance and flexibility.
3. The judge was entitled to identify the claimant as the successful party by applying a practical, common-sense approach. Success is not a technical concept, and the party required to pay money at the end of the case is a strong indication of success. The court may nevertheless make an issue-based or otherwise flexible order under CPR Rule 44.3, rather than applying either a rigid winner-takes-all approach or a mathematical allocation by issue.
4. A claim for an injunction or other specific relief may distinguish a case from litigation concerned only with monetary relief. But in commercial litigation between owners of investment properties, where the specific remedy is sought for its economic leverage or value, the dispute may properly be treated as ultimately monetary. The judge was therefore entitled to regard this dispute as commercial litigation, while recognising that the same conclusion might not be appropriate where specific relief was genuinely sought for its own sake.
5. The judge considered the unsuccessful claim concerning the entrance-lobby windows, the failure to obtain an injunction, the claimant’s unreasonable persistence in seeking oppressive relief, the parties’ offers, and the commercial context. The defendant could also have protected its costs position by paying £50,000 into court. The resulting 25 per cent discount was within the broad range of legitimate outcomes available on the facts and was not plainly unreasonable or perverse.
6. Lord Justice Rix added that CPR Rule 44.3 required flexibility and attention to all the circumstances. The Chancellor agreed with the reasons given by Lord Justices Lloyd and Rix. The formal order was: appeal dismissed.

• Court of Appeal (Civil Division): [2007] EWCA Civ 1309 — appeal dismissed; the High Court costs order was upheld.
• High Court of Justice, Chancery Division (Mr Gabriel Moss QC, sitting as a deputy judge): [2007] EWHC 828 (Ch) — ordered the defendant to pay 75 per cent of the claimant’s costs up to 4 September 2006 and all of its costs thereafter.
• The earlier liability decision was reported as [2006] EWHC 3589 (Ch); damages were determined in [2007] EWHC 212 (Ch).