Carroll v Kynaston

In civil proceedings, a party cannot ordinarily recover as damages in later proceedings costs incurred in earlier domestic litigation where those costs could have been claimed and determined in the original proceedings. This remains so where the later claim is framed as breach of a settlement agreement. A costs order, including an order making no order as to costs, is final on that issue; a subsequent action cannot obtain costs that were not sought or were refused. The position may differ where a separate cause of action causes costs in criminal or foreign proceedings and those costs could not have been recovered there. A court may make a proportionate costs award where a party succeeds only in part. Delay in contempt proceedings is a relevant factor, but does not automatically bar committal.

Long-running litigation between the parties included a libel counterclaim. In May 2007 Mr Carroll offered settlement terms, which Mrs Kynaston accepted. Field J later declared that a binding settlement had been concluded and dismissed the counterclaim with no order as to costs, while allowing further proceedings about the agreement and existing costs disputes.

Mr Carroll subsequently claimed damages for breach of the settlement agreement, including costs incurred before Field J. Mrs Kynaston sought summary judgment and committal for contempt. On 18 March 2009 Mrs Justice Sharp rejected the damages claim, awarded Mr Carroll 70% of specified costs, and found him in contempt of an undertaking, imposing a fine of £3,500. The appeal concerned those three matters: recovery of costs as damages, the proportionate costs order, and the effect of delay on the contempt application.

Ward LJ gave the judgment, with which Patten and Elias LJJ agreed. The appeal was dismissed on all three grounds.

1. Costs as damages. The costs incurred in the hearing before Field J could have been sought and awarded in those proceedings. Field J’s directions for possible further proceedings concerned the meaning and effect of the settlement and existing costs orders, not a new damages claim for costs which he himself could have dealt with. A failure to seek costs, and an order making no order as to costs, could not be circumvented by a later action.
2. The general rule was supported by Cockburn v Edwards (1881) 18 Ch. D. 449 and Quartz Hill Consolidated Gold Mining Co v Eyre (1883) 11 Q.B.D. 674. Berry v British Transport Commission [1962] 1 Q.B. 306 was distinguishable because it concerned costs incurred under the different criminal costs regime. Union Discount Co Ltd v Zoller [2001] EWCA Civ 1755 and National Westminster Bank Plc v Rabobank Netherland [2007] EWHC 3163 (Comm) concerned foreign proceedings in which the costs could not have been recovered. Those exceptions did not apply.
3. Costs of the summary judgment application. Sharp J was entitled to treat the reserved costs as costs in the case and award 70%, reflecting Mr Carroll’s partial success in the proceedings. Her reasons were apparent from the judgment and the transcript read together.
4. Contempt. Earlier observations about delay in a different permission application were obiter and supplied no general rule. Delay was a factor for consideration, but was immaterial in the circumstances, given the explanation, the history of harassment and the public interest in enforcing the undertaking. The email was abusive, insulting and threatening, and contempt was proved to the criminal standard. The fine of £3,500 was upheld.

• Court of Appeal (Civil Division): On 13 December 2010, the court dismissed the appeal. [2010] EWCA Civ 1404
• High Court (Queen’s Bench Division): On 18 March 2009, Mrs Justice Sharp rejected the damages claim, made a proportionate costs order and found Mr Carroll in contempt, imposing a £3,500 fine.
• Earlier High Court proceedings: Field J had declared the settlement binding and dismissed the libel counterclaim with no order as to costs.