Shah & Anor v HSBC Private Bank (UK) Ltd

After mixed appellate success, costs may be apportioned by reference to the issues on which each party succeeded or failed and to the practical outcome of the appeal. Where the decision below is reversed only to a limited extent, and the balance of advantage is difficult to assess, the court may make no order as to costs below. Unnecessary points pursued at first instance and on appeal may reinforce that approach. Consequential payment orders may be stayed pending an application for security for costs.

Shah & Anor v HSBC Private Bank (UK) Ltd was an appeal from the High Court of Justice, Queen’s Bench Division, before Mr Justice Hamblen. The Court of Appeal recorded that the decision below had been reversed to a limited extent and that the action remained alive. The supplied judgment principally concerns the consequential terms of the order, the allocation of costs, repayment of £200,000 already paid, a stay pending an application for security for costs, and permission to appeal to the Supreme Court.

The Court of Appeal granted the application and made consequential orders following its limited reversal of the decision below.

1. Costs of the appeal. The court considered the many issues on which the appellants had lost and the respondent had won. It also gave weight to the practical outcome that Mr Shah had succeeded in keeping the action alive. The defendants were therefore ordered to pay 25% of the costs of the appeal, including the costs of the hearing that day, to be taxed if not agreed.
2. Costs below. The court made no order as to the costs before Hamblen J. It was difficult to identify the balance of advantage because the judgment below had been reversed only to a limited extent. The court was also influenced by the fact that many unnecessary points had been taken both below and on appeal.
3. Payment and security for costs. The sum of £200,000 already paid by Mr Shah was made returnable to the claimants, subject to a stay pending an application to the Commercial Judge for security for costs. Lord Justice Lloyd clarified that the final part of the existing paragraph 12 remained, so that repayment was in principle to the claimants’ solicitors subject to that application.
4. Other terms. The agreed order was amended to reflect the refusal of paragraph 6(b). Paragraphs 5 to 8 and paragraph 11 remained. No order was made under paragraph 13, and permission to appeal to the Supreme Court was refused.

• Court of Appeal (Civil Division): on appeal from the High Court, the decision below was reversed to a limited extent. The court granted the application, ordered the defendants to pay 25% of the appeal costs, made no order as to costs below, and refused permission to appeal to the Supreme Court. The judgment is reported at [2010] EWCA Civ 220.
• High Court of Justice, Queen’s Bench Division: judgment of Mr Justice Hamblen; citation not stated in the judgment.