Orchard (Developments) Holdings Plc v Reuters Ltd

A costs order is a matter for the trial judge’s broad discretion and depends on the facts of the individual case. The fact that a witness is found to have lied does not automatically make the parties’ conduct criticisable, nor does it require a particular adjustment to costs. The court should not grant permission for a freestanding costs appeal merely because another judge might have made a more favourable order. Where the order falls within the trial judge’s broad discretion, no general principle arises.

After a three-day trial, His Honour Judge Inglis awarded the successful defendants their costs. The trial concerned the operation of a break clause in a lease and, principally, whether service had occurred at the correct address. The judge rejected the process server’s evidence after late disclosure of telephone records led him to conclude that the process server had been lying.

The appellant sought permission to appeal separately against the costs order. It argued that the finding of dishonesty materially altered the costs position. Permission to appeal on the substantive break-clause issue had already been granted. Tuckey LJ had refused permission on paper, considering that the order fell within the trial judge’s wide discretion.

1. Application refused. A freestanding appeal against costs was not justified.
2. The question whether a lying witness should affect costs depends on the facts and falls within the trial judge’s discretion. It is not an automatic consequence of a finding that a witness was untruthful.
3. The parties themselves could not necessarily be criticised merely because a witness whom they called was later found to have lied. The judge was entitled to distinguish between knowingly putting forward false evidence and being unaware that the witness would give untruthful evidence.
4. The trial judge had considered the appellant’s arguments and had awarded costs partly because of the claimants’ late disclosure of telephone records and the way the case had been conducted. It was impossible to say that the order fell outside the broad discretion available on costs.
5. No general guidance was appropriate. The court’s observations on this interlocutory application were not to influence any later costs decision if the substantive appeal succeeded.

• Court of Appeal (Civil Division): permission to bring a freestanding appeal against the costs order refused. Permission had already been granted on the substantive break-clause construction issue.
• Queen’s Bench Division, Nottingham District Registry: His Honour Judge Inglis awarded the successful defendants their costs after trial.