Dillard v F&C Commercial Property Holdings Ltd

The unsuccessful party should ordinarily pay the costs of an appeal and an unsuccessful strike-out application. Complaints about a party’s failure to engage in settlement discussions or alternative dispute resolution may affect costs overall, but do not justify tactical litigation which has proved unsuccessful. Costs must remain proportionate to what was at stake and the work reasonably required. Where appropriate, the court may summarily assess costs and reduce an excessive fee, including the cost of senior counsel.

The appellant had succeeded on the merits of an appeal from the Central London County Court, where the respondent had applied to strike out part of his case. The merits judgment, handed down on 16 April 2014, was in the appellant’s favour. The court then considered written submissions on the costs of the appeal and the strike-out application.

The respondent argued that the appellant’s costs should be reduced because of alleged failures to engage with proposals involving party wall surveyors, settlement and inspection. The central issues were the effect of that conduct on costs, the appropriate basis for ordering costs, and whether the appellant’s costs were proportionate.

1. Costs of the appeal and strike-out application. The appellant had won the appeal, and the respondent’s strike-out application had proved unjustified. There was no reprehensible or improper conduct by the appellant or his advisers. The respondent was therefore ordered to pay the costs of both the appeal and the application below on the standard basis.
2. Conduct and alternative dispute resolution. Alleged poor engagement with settlement proposals or alternative dispute resolution could legitimately be considered when assessing costs overall. It did not, however, give the respondent permission to pursue an unsuccessful tactical application or otherwise avoid the ordinary costs consequences of losing. The appellant was not unreasonable in declining to involve the party wall surveyors again, because they had no jurisdiction to deal with the dispute.
3. Proportionality and summary assessment. The appellant’s costs claim of £35,360.51, including VAT, was disproportionate to the issues and the approximately two-hour hearing. The case involved a short addendum award, only a few sections of the Act and a short deed. The court reduced the appeal brief of senior counsel from £12,500 to £6,000. After allowing for conceded reductions, £21,655 was proportionate and appropriate.
4. The appeal costs were summarily assessed at £21,655 inclusive of VAT, payable within 14 days. The appellant’s costs of the application below were payable in any event, to be assessed on the standard basis if not agreed.

• High Court (Queen’s Bench Division): On appeal from the Central London County Court, the appellant succeeded on the merits. The present judgment determined the consequential costs issues.
• Central London County Court: HHJ Bailey heard the respondent’s strike-out application, which was subsequently held to have been unjustified.