GBM Minerals Engineering Consultants Ltd v GB Minerals Holdings Ltd

Costs on opposed amendment applications are not determined solely by identifying which party obtained permission. The court must consider the parties’ conduct and all relevant circumstances, including whether either party acted opportunistically or caused costs unnecessarily. Where both parties seek litigation advantage, and each application is granted, the appropriate order may be no order as to costs, with each party bearing its own costs. The general rule that the unsuccessful party pays the successful party remains relevant, but it is subject to the court’s wider discretion under Civil Procedure Rules 1998, Part 44.2.

The claimant sought permission to amend its pleadings, principally to remove reliance on 17 Variation Orders which had been falsely created. The defendant sought permission to amend its defence and counterclaim to plead allegations concerning secret payments. Both applications were opposed and both were granted in exceptional circumstances. The trial date was consequently vacated.

The parties could not agree the costs of the hearing. The court was required to determine how the costs of each application should be allocated, having regard to the parties’ success, their conduct, the timing and nature of the applications, and the costs principles in Part 44.2.

1. The court ordered no order as to costs on either amendment application. Each party was to bear its own costs of the hearing.

2. Although each party had obtained permission to amend, that outcome did not automatically entitle either party to its costs. The ordinary rule under Civil Procedure Rules 1998, Part 44.2(2)(a), that the unsuccessful party pays the successful party, operates subject to the court’s consideration of conduct and all relevant circumstances under Part 44.2(4), including unreasonable conduct.

3. The claimant’s amendments were necessary because its original pleading relied on falsely created documents. It was difficult to justify requiring the defendant to pay the costs of correcting that position. However, the defendant could reasonably have avoided the amendment application by providing the Further Information sought in good time. Both parties were therefore at fault to some degree.

4. The defendant’s description of itself as having succeeded on the substantive issue in the claimant’s application was rejected. Permission had been granted to the claimant, and the defendant’s opposition did not amount to success. Conversely, the claimant’s opposition to the defendant’s application was opportunistic in circumstances where the proposed amendments concerned serious allegations supported, at that stage, by contemporaneous documents.

5. The parties’ conduct represented attempts to obtain litigation advantage. Referring to Denton v TH White Ltd [2014] EWCA Civ 906, the judge observed that the courts would be more ready to penalise opportunism. The principle was relevant even though that authority concerned relief from sanctions and satellite litigation.

6. The allegations concerning secret payments remained unproven and no final findings were made on them at this procedural stage. In the exceptional circumstances, the costs of the applications were best left where they fell.