Lakatamia Shipping Co Ltd v Su

Costs following an application for relief from sanctions are governed by the court’s discretion, having regard to the parties’ conduct and the outcome of the application. Ordinarily, the applicant should pay the costs of making the application and providing supporting evidence. However, an opponent who unreasonably contests relief may be ordered to pay the costs caused by that opposition. A party is not entitled to assume that it can oppose every application for relief without costs consequences, particularly where the breach is trivial and relief is plainly appropriate under the Mitchell guidance.

The defendant applied for relief from sanctions after a delay of approximately 15 minutes in providing disclosure. Relief was granted because the breach was trivial. The claimant had set out the procedural history and corrected matters in the defendant’s evidence, but also positively and vigorously opposed the application at a half-day hearing. The issue was how the costs of the application and hearing should be apportioned between the parties.

1. The court’s discretion as to costs was governed by CPR 44.3, including the conduct of the parties and whether a party had succeeded on part of its case. Conduct included whether it was reasonable to raise, pursue or contest an issue and the manner in which that was done under CPR 44.4(5).

2. The defendant had needed to apply for the court’s indulgence and persuade the court that relief was appropriate. Ordinarily, the applicant should therefore pay the costs of making the application, including the supporting evidence.

3. It was reasonable for the claimant to provide the procedural history and correct inaccuracies or omissions in the defendant’s evidence. The defendant was accordingly ordered to pay the costs of its application and the claimant’s costs of its witness statement.

4. The claimant’s positive opposition at the hearing was unreasonable. Once the factual material was fully set out, the application was a clear case for relief under the guidance in the Mitchell case. The prior history of non-compliance did not justify maintaining the sanction for such a trivial breach.

5. The claimant’s opposition caused the substantial costs of the contested hearing. The defendant had to bear a proportion because the application would have required a hearing in any event, but the claimant was ordered to pay the bulk of the hearing costs. The court emphasised that the Civil Procedure Rules 1998 require litigation to be conducted reasonably and realistically, consistent with the Commercial Court Guide.

First-instance costs judgment concerning an application for relief from sanctions. The judgment records that relief had previously been granted, but gives no citation for that decision.