Bayat & Ors v Cecil & Ors

Costs following a successful appeal should reflect the overall outcome of the proceedings. Where the respondents’ success below is rendered inconsequential by their failure on the issues determined on appeal, the court may order them to pay a proportion of the appellants’ costs below as well as the appeal costs. A case-management decision to hear issues together does not itself justify altering that order. An unsuccessful application for permission to appeal on a separate issue attracts no costs award.

The appellants appealed from the decision of Hamblen J in the Queen’s Bench Division, Commercial Court, reported at [2010] EWHC 641 (Comm). The Court of Appeal had already determined the substantive appeal in a judgment handed down on 18 February 2011, in which the appellants were successful on the issues appealed. The remaining questions concerned the allocation of costs of the appeal, the unsuccessful permission application concerning forum, and the proceedings below. The Court also had to determine repayment of sums paid on account and further interim costs payments.

1. Appeal costs. The appellants, having succeeded on the appeal, were entitled to their costs of the appeal. Those costs were to be subject to detailed assessment on the standard basis in default of agreement.
2. Permission application. The appellants were not entitled to costs of their unsuccessful application for permission to appeal on the issue of forum.
3. Costs below. The costs order had to reflect the overall outcome. The appellants should have succeeded on the issues successfully appealed and on issues including the claims against the third defendant. Although the respondents had succeeded on issues involving greater costs below, that success was inconsequential in light of their failure on the issues determined on appeal. The fact that the appellants had sought to have extensions of time and service determined as preliminary issues did not alter the position. Hamblen J’s decision to hear all issues together was an unimpeachable case-management decision. The appropriate order was that the respondents pay one third of the appellants’ costs to the date of Hamblen J’s order dated 29 March 2010, subject to detailed assessment on the standard basis in default of agreement.
4. Further financial directions. Subject to those qualifications, the appellants were entitled to the costs of the claim. The respondents were ordered to repay £375,000 paid pursuant to Hamblen J’s order, with interest at 1 per cent above Bank of England Base Rate. Interest was also ordered on costs, and interim payments on account were directed in the sums of £500,000 for the first three appellants and £20,000 for the fourth appellant.

• Court of Appeal (Civil Division): The appellants succeeded on the issues determined on appeal. This judgment resolved the remaining costs issues and made consequential repayment, interest and interim payment orders.
• Queen’s Bench Division, Commercial Court: Hamblen J’s decision was reported at [2010] EWHC 641 (Comm). The Court of Appeal described the decision to hear all issues together as an unimpeachable case-management decision.