Red River UK Ltd & Anor v Sheikh & Anor

Where an appeal is substantially resolved by a respondent’s concession and consequential amendment of the pleadings, costs should reflect the limited success actually achieved and the conduct of both parties. A successful appellant may receive a modest costs award even where the appeal advanced wider grounds, incurred disproportionate expense and achieved less than originally sought. Parties should promptly inform the Court of Appeal when the only permitted ground has been conceded, so that an unnecessary hearing and further costs can be avoided.

The appeal arose from interlocutory orders made by Briggs J in continuing litigation concerning a proposed legal charge under a settlement agreement. Permission to appeal was granted only on the limited question whether the judge had made final findings about the defendants’ conduct, rather than deciding the application on the basis of a good arguable case. Briggs J’s judgment was reported at [2007] EWHC 2654 (Ch).

The respondents subsequently conceded that the findings were not final and amended their Particulars of Claim to remove an assertion that the findings were binding, while retaining them as part of their case. The appeal therefore came before the Court of Appeal principally as a dispute about costs, including the effect of the parties’ conduct and the disproportionate preparation for the hearing.

1. Disposition. The appeal was resolved on the limited ground on which permission had been granted. The respondents’ concession and amendment gave the appellants the substance of the relief reasonably available on that ground. The respondents were ordered to pay the appellants £2,000 in respect of the appeal costs, to be set off against sums due from the appellants to the respondents.
2. Assessment of costs. The court adopted a broad-brush assessment. The appellants had failed to obtain permission on their wider grounds and had incurred costs substantially exceeding those attributable to the point on which they succeeded. Much of the preparation, including the appeal bundles, was disproportionate. Those matters justified limiting recovery, but did not justify ordering the appellants to pay the respondents’ costs because the appellants had ultimately obtained success on an important, if narrow, ground.
3. Conduct and offers. The court took into account that the respondents had made no Part 36 or comparable offer concerning the appeal costs, and that the appellants had not sufficiently narrowed their materials and submissions after the concession.
4. Co-operation with the court. Arden LJ observed that parties have an obligation under the Civil Procedure Rules to co-operate with the court and with each other. Once the sole arguable ground had been conceded, both parties should have informed the Civil Appeals Office. Failure to do so may reduce recoverable costs, and a conceding party should consider offering appropriate costs.
5. The court declined to consider a personal costs order against the respondents’ solicitor because the £2,000 was ordered by way of set-off.

• Court of Appeal (Civil Division): The court heard the appeal from Briggs J’s judgment of 15 November 2007 and made a limited costs order in favour of the appellants.
• High Court, Chancery Division: Briggs J refused applications concerning registration and delivery of the proposed charge and continuation of restrictions on dealings with the Land Registry: [2007] EWHC 2654 (Ch).
• Permission stage: Rimer LJ granted permission only on the question whether final findings had improperly been made at the interlocutory stage, refusing permission on the construction and balance-of-convenience grounds: [2008] EWCA Civ 1512.