R G Spiller Ltd v Derhalli & Anor

A consent order is treated like a judgment, but it determines only the issues actually determined by its terms and necessary effect. It does not automatically create an issue estoppel covering every underlying allegation or argument. In deciding costs, the court must consider all the circumstances, including the parties’ conduct and proportionality. Where a party seeks an urgent ex parte injunction without first giving a short opportunity to provide an undertaking, and the urgency is not sufficiently demonstrated, that conduct may justify refusing costs of the substantive proceedings. Costs incurred in a disproportionate costs dispute may themselves be refused or limited.

The claimant contractor obtained an ex parte injunction restraining the defendants from calling on a performance bond and requiring confirmation that they placed no further reliance on it. The defendants subsequently consented to an order in substantially those terms, with costs reserved. The claimant applied for its costs, arguing that the consent order amounted to judgment in its favour and that it was therefore the successful party. The defendants contended that the order was a pragmatic settlement and that the claimant’s decision to proceed without notice was unreasonable. The central issues were the effect of the consent order and the appropriate costs order.

1. Effect of the consent order. A consent order is to be treated like a judgment, but the court must identify the issue or issues actually determined by it. It is wrong to infer that every dispute underlying the settlement has been determined. The order did not establish all the factual allegations or contractual issues advanced by the claimant.
2. Costs of the injunction proceedings. The claimant had obtained the relief sought, but the defendants’ agreement was pragmatic and did not amount to acceptance of the claimant’s evidence or every aspect of its case. The original bond had already been returned, and there had been no clear indication that the defendants intended to call it. The claimant should have given the defendants a short opportunity, potentially only a few hours, to confirm that no call would be made and to provide the bank with the necessary confirmation.
3. The delay between the claimant’s concerns arising and the without-notice application further weakened the claim that the injunction application justified a costs order. Having regard to all the circumstances and the proportionality of the costs dispute, there should be no order as to the costs of the injunction proceedings.
4. Costs of the costs application. The claimant had specifically sought an order for its costs and had failed. The claimant was ordered to pay the defendants’ costs of that application on the standard basis. The judge observed that instructing leading counsel for the costs dispute was disproportionate given the amount at stake.

The judgment does not state an appellate history. It records that Stuart-Smith J had previously granted a limited ex parte injunction, followed by a consent order with costs reserved.