Attwood v Maidment & Ors

Costs in an unfair-prejudice petition remain a matter of judicial discretion. The court must consider all the circumstances, including the parties’ conduct, relative success and any admissible offer to settle, under CPR 44.3. A petitioner who succeeds overall may recover the substantial majority of costs even where some valuation issues are decided against him. A reasonable challenge to an issue may remain reasonable despite ultimate failure, particularly where the opposing party’s evidence or disclosure justified investigation. Settlement offers do not necessarily affect costs where they were not directly relevant to the result and the conduct of negotiations was reasonable.

The judgment concerned costs incurred after an earlier judgment determining an unfair-prejudice petition relating to Annacott Properties Limited. The remaining exercise involved quantifying the price payable for Mr Attwood’s shares and determining the appropriate interest. Mr Attwood sought all of his costs. Mr Maidment argued that the parties had achieved mixed success on valuation, mortgages and interest, and sought a substantial reduction, relying also on settlement correspondence and the guidance in Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd [2009] 1 Costs LR 55.

The central issues were whether Mr Attwood was the successful party, whether his conduct justified a reduction, and how the settlement offers should affect the costs discretion.

1. The court held that Mr Attwood was the successful party both on the petition and on quantification. The final valuation was materially closer to his position than to Mr Maidment’s, although a modest reduction was justified because Mr Attwood had not been wholly successful.
2. Under CPR 44.3, the court had discretion as to whether costs were payable, their amount and timing. The general rule that the unsuccessful party pays the successful party’s costs was subject to consideration of all the circumstances, including conduct, partial success and admissible offers.
3. The challenge concerning outstanding mortgages had ultimately failed, but it had been reasonable to investigate and contest the issue. Mr Maidment had been found unreliable on other matters, had been responsible for producing relevant documentation and had failed to do so. That issue did not justify a significant costs discount.
4. The valuation evidence produced mixed results, but Mr Maidment’s expert evidence was wholly discredited and Mr Attwood’s expert evidence was largely accepted apart from the discounts for assured shorthold tenancies and property condition. The court therefore rejected a substantial reduction.
5. The settlement offers did not affect the costs order. None was directly relevant to the final outcome, and the timing and amounts of the offers did not show unreasonable failure by Mr Attwood to negotiate. The court considered the principles discussed in Carver v BAA Plc [2008] EWCA Civ 412, reported at [2009] 1 WLR 113, but noted the statutory reversal of the relevant aspect by the Civil Procedure (Amendment No. 2) Rules 2011.
6. Mr Attwood was awarded 90 per cent of his costs incurred since 22 September 2011. Permission to appeal was refused because there was no real prospect of success on the points advanced.

First-instance costs judgment following an earlier judgment on the unfair-prejudice petition. Permission to appeal to the Court of Appeal was refused.