Elithorn v Poulter & Ors

Success on appeal does not automatically determine the allocation of costs. The court may make a fair overall assessment by considering the outcome, the parties’ settlement offers, the reasonableness of their responses, the issues left unresolved, and the parties’ respective costs. A reasonable offer may justify an allowance in favour of the offering party where the successful appellant failed to engage with it properly. That consideration may be balanced against the appellant’s personal costs and other features of the litigation. An offer based on uncertain valuation or loan assumptions, or requiring a contribution to costs, may not amount to a clear improvement on the result achieved on appeal.

The appellant challenged a judgment of the Central London County Court concerning the beneficial ownership of property and a disputed loan. The Court of Appeal recorded that he had succeeded in overturning the trial judgment and had vindicated a 50% beneficial interest. The court then considered costs, including a pre-trial offer, later offers, the parties’ conduct during negotiations, unresolved issues concerning repayment of the loan, and the substantial difference between the respondents’ legal costs and the appellant’s costs as a litigant in person. The central issue was the fairest allocation of costs at trial and on appeal.

1. Disposition. There was no order for costs, either in the Court of Appeal or below. The court also observed that, other things being equal, the appellant would have been entitled to his costs on the appeal.
2. The court’s task was to achieve a fair allocation of costs in the circumstances as a whole. The appellant’s success in establishing a 50% beneficial interest did not prevent the court from taking account of his conduct in relation to settlement offers.
3. A pre-trial offer proposing beneficial ownership of 75% for the executors and 25% for the appellant was a reasonable first attempt at settlement. The appellant’s materially different counter-offer did not engage properly with it and was unreasonable. That conduct could justify an allowance in costs to the respondents for the period after the offer and during the trial.
4. The offer nevertheless had significant limitations. It depended on an unsupported valuation of £500,000 and on the loan being repayable on demand. The court therefore could not treat it as a clear improvement on, or equivalent to, the result achieved on appeal.
5. Later offers were also relevant. The parties had constructively engaged with a package involving equal beneficial interests, repayment of the loan, and the appellant’s continued occupation of the property for life. However, the offers required a payment towards the respondents’ costs and therefore did not match the outcome of the appeal.
6. The court took account of the unresolved terms and repayment date of the loan, the respondents’ substantial instructed costs, and the appellant’s much more modest personal costs and extensive work as a litigant in person. Balancing those matters produced the fairest result of no order for costs overall.

1. Court of Appeal (Civil Division): recorded that the appellant had succeeded in overturning the trial judgment and establishing a 50% beneficial interest; ordered no order for costs on the appeal or below.
2. Central London County Court: delivered the judgment at trial which was overturned on the substantive appeal. Its citation is not stated in the judgment.