OJSC TNK-BB v Lazurenko

On an application for costs following withdrawal of an appeal, the ordinary permission-to-appeal costs approach may change when the court directs the respondent to attend or file submissions. A direction for a two-judge hearing, coupled with notification that the respondent could attend and be heard, brought the matter within paragraph 20(2) of the practice direction accompanying Part 52. An application for a stay is outside the normal position because an appeal does not itself stay the order below under CPR Part 52.7. The respondent was therefore entitled to costs from the point at which the appeal had materially proceeded. Costs relating to a contingent security-for-costs application were excluded, and the costs awarded were assessed on the indemnity basis.

OJSC TNK-BP Holding and another sought to restrain Mr Lazurenko from disclosing confidential business information. Roth J initially granted an injunction. On an inter partes hearing, the Chancellor, Sir Andrew Morritt, discharged it and awarded Mr Lazurenko his costs on the indemnity basis.

TNK filed an appellant’s notice seeking permission to appeal and applied for a stay. The permission application was adjourned to a two-judge court, and the Civil Appeals Office notified Mr Lazurenko that the hearing would be public and that he could attend and be heard. After Mr Lazurenko served a skeleton argument, TNK withdrew the appeal. The issue was whether, and to what extent, Mr Lazurenko was entitled to costs.

1. Costs on the permission application. Paragraph 20(1) of the practice direction accompanying Part 52 reflects the ordinary position that a respondent who voluntarily files submissions or attends a paper application for permission will not normally receive costs. That position changed when Sir Robin Jacob directed that the application be heard by a two-judge court and the respondent was notified that he and his legal team could attend and be heard. The application therefore fell within paragraph 20(2), and Mr Lazurenko was entitled in principle to his costs even though the appeal was withdrawn rather than refused.
2. Effect of the stay application. Under CPR Part 52.7, an appeal does not operate as a stay of the order below. An application for a stay is consequently not the normal position, particularly where the underlying order concerns an injunction. This provided an additional reason for treating the matter as outside the ordinary paper-application costs regime.
3. Scope and basis of the order. Costs were awarded from and including 16 November 2012. Costs incurred in a potential application for security for costs were excluded because that application would not have been necessary unless permission to appeal had been granted. The costs awarded were to be assessed on the indemnity basis, the Chancellor’s reasons for that basis being regarded as compelling.

• Court of Appeal (Civil Division): In [2013] EWCA Civ 137, Lewison LJ ordered Mr Lazurenko’s appeal-related costs from and including 16 November 2012, excluding contingent security-for-costs costs, on the indemnity basis.
• High Court: Roth J initially granted an injunction. The Chancellor, Sir Andrew Morritt, later discharged it and awarded Mr Lazurenko costs on the indemnity basis.