Ramzan v Brookwide Ltd (Ancillary Matters)

For costs on an appeal, the successful party is identified by the substance of the result. A party securing a very substantial reduction in the award may recover its costs even though it fails on a distinct issue, such as eliminating a loss-of-profit award. An issues-based reduction is not required merely because the party was unsuccessful on that issue. Where costs payable are not yet ascertained, set-off should take effect only once the costs are agreed or assessed. The court may also decline to order an interim payment on account and give liberty to apply to resolve practical enforcement difficulties.

Brookwide Ltd appealed to the Court of Appeal from a judgment of the High Court, Chancery Division, Birmingham District Registry, given by Ms Geraldine Andrews QC sitting as a Deputy High Court Judge: [2010] EWHC 2453 (Ch). The appeal had secured a very substantial reduction in the amount awarded, although Brookwide had failed to eliminate the award for loss of profit. This ancillary judgment concerned costs, an interim payment on account, and set-off against the unsatisfied judgment and outstanding costs orders. The central issue was whether Brookwide should be treated as the successful party and how the parties’ unascertained liabilities should be reconciled.

The court determined the ancillary costs matters. Lord Justice Tomlinson recorded that the costs conclusion was that of the majority, comprising Lord Justice Lloyd and himself. Lady Justice Arden dissented on the appropriate allocation of costs.

1. Costs of the appeal. The majority treated Brookwide as the successful party because it had obtained a very substantial reduction in the amount awarded. Its failure to eliminate the loss-of-profit award did not justify disallowing any part of its appeal costs. Arden LJ would instead have adopted an issues-based approach, taking account of the parties’ relative success on the issues argued, and would have limited Brookwide’s recovery to half its appeal costs.
2. Interim payment and set-off. All three members of the court agreed that an interim payment on account of costs was inappropriate. They also agreed that the costs payable to Brookwide should be set off against the unsatisfied part of the judgment and against outstanding costs orders made in favour of Ramzan.
3. Unascertained costs. Because the amount of Brookwide’s costs had not yet been agreed or assessed, the set-off was directed to occur only once that amount had been ascertained. Liberty was given to apply to a Chancery Master if the parties could not agree how their respective liabilities should be reconciled and discharged.

1. Court of Appeal (Civil Division): Determined ancillary matters following the appeal, treating Brookwide as the successful party for costs by majority.
2. High Court of Justice, Chancery Division, Birmingham District Registry: Judgment under appeal, given by Ms Geraldine Andrews QC sitting as a Deputy High Court Judge: [2010] EWHC 2453 (Ch).