Galliford Try Infrastructure Ltd v Mott MacDonald Ltd

Costs are determined by applying the general rule that the successful party should recover its costs, subject to the court’s discretion and all the circumstances, including conduct and the issues on which a party has lost. A rejected Part 36 offer may justify indemnity costs, but the court may balance that consequence against limited failures on particular issues and order standard-basis costs instead. Third-party costs may be allocated through the defendant where the defendant’s conduct and the rejected offer make that the fairest course. Permission to appeal in fact-sensitive Technology and Construction Court cases should be granted sparingly. The applicant must show a realistic prospect of success or another compelling reason.

This was a consequential judgment following the substantive trial of claims involving Galliford Try Infrastructure Ltd, Mott MacDonald Ltd and Rowen Structures Ltd. Mott MacDonald succeeded in the main action against Galliford Try, while Rowen succeeded in the Part 20 proceedings brought by Mott MacDonald.

The court determined the parties’ liability for costs, the effect of a rejected Part 36 offer, interest and interim payments. It also refused Galliford Try permission to appeal and considered an application to extend the time for applying to the Court of Appeal.

1. Costs of the main action. Mott MacDonald was the successful party, but it had lost on contributory negligence and on whether Galliford Try’s remedial route was reasonable. Those issues were reasonable to plead or pursue, although the remedial-route argument was not reasonable in the stronger sense. Balancing those matters against Galliford Try’s unjustified rejection of Mott MacDonald’s Part 36 offer, the appropriate order was that Galliford Try pay Mott MacDonald’s costs in full on the standard basis.
2. Third-party costs. Mott MacDonald was not unreasonable in joining Rowen to substantial proceedings, although the case against Rowen was only on the cusp of reasonableness. Rowen’s costs were therefore payable through Mott MacDonald, with Galliford Try bearing 50 per cent of them. Interest on Rowen’s costs was ordered at 8 per cent from 1 March 2008.
3. Interest and interim payments. Interest on Mott MacDonald’s recoverable costs ran from 19 December 2007, subject to payment and standard assessment. Interim payments were ordered within 28 days: 60 per cent of Rowen’s stated costs and 50 per cent of Mott MacDonald’s stated costs.
4. Permission to appeal. Under the Civil Procedure Rules, the court considered whether there was a real prospect of success or another compelling reason. Duty of care and reliance issues were highly fact-sensitive. Skanska Construction UK Ltd v Egger (Barony) Ltd [2004] EWHC 1748 (TCC) and Yorkshire Water Services Ltd v Taylor Woodrow Construction Northern Ltd [2002] EWHC 2140 (TCC) supported a sparing approach to permission in such cases. The realistic-prospect criterion was explained by reference to Swain v Hillman [2001] 1 All ER 91. The proposed grounds were predominantly factual or mixed fact and law and satisfied neither criterion. Permission was refused.
5. The time for an application to the Court of Appeal was extended to 12 September 2008, rather than to the end of September.

First-instance consequential judgment on costs and permission to appeal following the court’s substantive judgment. Permission to appeal was refused, but time for lodging an application to the Court of Appeal was extended to 12 September 2008.