Wolman v Weller

A claimant who discontinues proceedings is presumed liable for the defendant’s costs under CPR r 38.6. The claimant bears the burden of showing good reason to disapply that presumption. The prospect that the claim might have succeeded at trial is insufficient, because discontinuance avoids a trial. A change of circumstances may be relevant, particularly where caused by conduct of the defendant, but it is only the beginning of the enquiry and the court must consider all the circumstances. An application concerning costs on discontinuance is not a trial. The judge may evaluate the evidence without treating unchallenged evidence as conclusive. Permission to appeal requires a real prospect of success or another compelling reason.

The claimant sought permission to appeal from an order of HH Judge Birtles concerning discontinuance of proceedings about the beneficial ownership of shares in London Financial News Publishing Limited. Permission to discontinue had been granted, but the claimant remained liable for the defendant’s costs under CPR r 38.6(1).

The claimant alleged that he had been misled about the defendant’s costs arrangements and that reliance on inaccurate costs information justified departing from the usual costs order. He also challenged the judge’s factual findings, the treatment of costs reserved on earlier hearings, and the direction requiring him to file a notice of discontinuance by a specified date.

1. Permission to appeal refused. The applicable test under CPR r 52.3(6) was whether the proposed appeal had a real prospect of success or whether there was some other compelling reason for it. Under CPR r 52.11, an appeal was ordinarily a review of the lower court’s decision.
2. The parties accepted the statement of principle in Teasdale v HSBC Plc, [2010] EWHC 612 (QB). The presumption under CPR r 38.6(1) could be displaced only for good reason. The fact that the claimant might have succeeded at trial was not itself good reason. A relevant change of circumstances might initiate the enquiry, especially where connected with conduct of the defendant, but the court had to consider all the circumstances under CPR r 44.3.
3. The judge was entitled to reject the claimant’s evidence and conclude that he had not been misled. He was also entitled to conclude that, even with fuller information about costs, the claimant would not have conducted the litigation materially differently. The absence of cross-examination did not require the evidence to be accepted at face value. An application by a claimant who discontinues for relief from costs is not a trial.
4. There was an arguable technical point concerning the judge’s direction to file the notice of discontinuance by 6 June 2011. However, the claimant had undertaken to discontinue and the defendant confirmed that he would take no point on the date of discontinuance. There was therefore no useful purpose in granting permission on that issue.
5. The claimant’s complaint that the judge had adopted the defendant’s skeleton argument also disclosed no real prospect of success. A judge may adopt a party’s formulation of reasons, provided the judgment gives a clear explanation for the order. There is no obligation to address every argument separately.

High Court (Queen’s Bench Division): Permission to appeal from HH Judge Birtles’s order dated 27 May 2011 was refused.