Catch a Ride Ltd & Anor v Gardner & Ors

Costs on an interim application are governed by the general rule that the successful party should receive its costs, subject to the court’s discretion having regard to all the circumstances. Relevant considerations include the basis on which relief was obtained, the parties’ conduct, the scope of the relief sought, procedural shortcomings and the judge’s ability to assess the matter in light of the forthcoming trial. A party’s willingness to mediate does not, by itself, justify depriving that party of an otherwise appropriate costs order.

The claimants sought interim relief in a dispute concerning control of a business and the parties’ respective interests in it. The defendants had initially given undertakings, later withdrew them, and opposed the claimants’ entitlement to interim relief. The court appointed a receiver, but only on limited terms forming part of a package intended to encourage resolution of the wider dispute.

The issue was how the costs of the application should be allocated, including whether costs should be reserved because the relief was granted on the basis of interim principles rather than established legal rights, and because the parties were being encouraged to mediate.

1. The claimants succeeded on the application and were entitled to their costs. The court ordered that the costs of the application dated 15 October 2013, so far as not already provided for, be the claimants’ costs in the case.

2. The relevant approach was the general rule that the successful party receives its costs unless, having regard to all the circumstances, a different order is justified. The court considered the observation in Taylor v Burnton [2014] EWCA Civ 21 that costs-in-the-cause orders are now less common and that the winner of an interim application will commonly receive costs at the time.

3. The circumstances supported an immediate costs order. The claimants had succeeded, although on the application of the principles in American Cynamid rather than by establishing their substantive rights. The defendants’ conduct included seizing control of the business, changing their legal position, advancing allegations of fraudulent registration and contesting the claimants’ asserted interest. The claimants’ failure to issue and serve originating process, and their abandonment of broader relief, were also relevant but did not justify reserving costs.

4. The court was to be the trial judge and was therefore well placed to assess the factors. It considered it inappropriate that the defendants should recover their substantial costs in view of their conduct, while recognising that the claimants might ultimately fail to establish an interest supporting the receiver’s appointment.

5. The parties’ willingness to mediate did not weigh against an adverse costs order. Mediation should not deprive a party of a costs order to which it would otherwise be entitled.

First-instance decision on the costs of an interim application. The judgment records that an earlier order of Asplin J guaranteed the claimants payment of £6,500 in respect of costs.