Euroil Ltd v Cameroon Offshore Petroleum Sarl

Where a costs assessment has become substantially contested and complex, a detailed assessment may be preferable to summary assessment, particularly where a substantial sum is in issue and further exchanges would undermine the summary procedure’s purpose. A payment on account may be ordered where the court is satisfied that the amount represents the minimum likely recovery and is reasonable. Costs must be confined to work properly attributable to the relevant application. An inquiry as to damages on a cross-undertaking should be sought by application supported by evidence, and may appropriately be deferred while the loss position develops.

Following an earlier extempore judgment setting aside an injunction, the court had ordered the claimant to pay the defendant’s costs of the discharge application, with those costs to be summarily assessed. The defendant’s substantial costs schedule was revised after the claimant identified items apparently relating to arbitration work and meetings in Cameroon rather than the application itself.

The issues were whether the costs should remain subject to summary assessment, what payment on account should be made, and whether an inquiry as to damages should be ordered on the cross-undertaking given by the claimant’s parent company.

1. Costs assessment. The court ordered a detailed assessment. Although summary assessment was initially appropriate for a hearing lasting a long half day, the revised schedule and anticipated correspondence meant that the process would become an unsatisfactory halfway house between summary and detailed assessment. The substantial sum in issue and the non-straightforward assessment supported the order for detailed assessment.
2. Payment on account. A payment on account of £120,000 was ordered under Civil Procedure Rules 1998, rule 44.2(8). The court was satisfied that this was the minimum amount the defendant would recover and was reasonable.
3. Recoverable work. The application was significant, urgent and required extensive preparation. It was reasonable and necessary to prepare detailed evidence, address contempt allegations, use partner oversight, instruct solicitors and leading and junior counsel, and have the relevant witness present at the hearing. The witness’s attendance at meetings in Cameroon was not recoverable because he would have attended those meetings in any event, although the reasonable cost of preparing his witness statement was recoverable.
4. Inquiry as to damages. The question whether to order an inquiry on the cross-undertaking was not always straightforward, as illustrated by Malhotra v Malhotra [2014] EWHC 113 (Comm). Any application should be supported by evidence and was better made later, when the defendant could give a realistic assessment of its alleged loss.

The judgment followed an earlier injunction and an extempore judgment setting it aside, cited as [2014] EWHC 52 (Comm). This judgment determined the consequential costs issues and gave directions concerning any later damages inquiry.