Handi-Craft Company & Anor v B Free World Ltd & Ors

Costs are ordinarily payable promptly once ordered. A party seeking an unusually lengthy period for payment must provide evidence of the circumstances said to justify that indulgence. The court may adopt a broad-brush approach where detailed allocation of costs would be disproportionate or impracticable. A separate cross-undertaking is generally unnecessary where an appellate court can make consequential orders, including repayment, if the costs order is varied. Costs arising from settling the form of order ordinarily remain costs in the action unless there is a proper reason to make a separate order.

This was the fourth judgment in lengthy trade mark infringement and passing-off proceedings. Earlier judgments had determined liability and costs, including an interim order requiring the Berkovitch defendants to pay £300,000 on account of costs. The parties remained unable to agree the final form of order.

The court determined written submissions concerning permission to appeal, the timing and structure of payment, a proposed stay and cross-undertaking, the treatment of costs relating to certain defendants, and the costs of post-judgment hearings.

1. Permission to appeal. Permission to appeal from the costs judgment was refused. Costs were within the trial judge’s discretion, the court had sufficient opportunity to assess the relevant factors, and no issue of principle arose. The alleged procedural irregularity concerning the hearing on 27 September 2007 was also rejected. No formal application for an adjournment had been made, and the court had proceeded only with matters unlikely to be affected by the personal defendants’ views.
2. Payment of interim costs. Applying the principle in Mars UK Ltd v Teknowledge Ltd [2000] FSR 138 at 153–154, the successful party was entitled in principle to receive costs as soon as possible. A defendant seeking indulgence must identify evidence of personal difficulty or special circumstances. The Berkovitch companies produced no evidence justifying their proposed four-year payment schedule. The court therefore ordered payment of £300,000 in three monthly instalments of £100,000, beginning on 2 January 2008.
3. Stay and cross-undertaking. The court refused to include a cross-undertaking. If the Court of Appeal later granted relief, it could make consequential orders, including repayment of sums paid under the order below. There was no evidence that the claimants would dissipate the money or otherwise default. The operative payment date also allowed time to seek permission to appeal and apply for a stay.
4. Other costs issues. The costs of the Berkovitch children were not to be excised from the general calculation. Their joinder was necessary or justifiable, and separate assessment would be difficult and inconsistent with the broad-brush approach. Existing orders adequately dealt with the settled Mothercare and Boots claims. No separate order was made for the post-judgment hearings; those costs remained costs in the action.

The judgment records earlier judgments in the same proceedings, including a costs judgment, but gives no separate citations for them. Permission to appeal from the costs judgment was refused; any further application had to be made to the Court of Appeal.