Winchester Park Ltd v Sehayek

Where a claimant obtains the relief sought and invites the court to dismiss the claim, that is not discontinuance under CPR Part 38. The costs are at large, and the court may consider the merits if the factual position is sufficiently clear without conducting a trial. An appellate court should interfere with a costs decision only for an error of principle or irrationality. A lease provision making services conditional on payment does not necessarily create a condition precedent, particularly where statutory mechanisms permit challenges to service charges. Requirements applicable to specific performance do not automatically govern a costs application following dismissal by consent.

The appeal concerned an order requiring Winchester Park Ltd to pay £10,845.40 in costs to Raymond Sehayek after the Central London County Court dismissed his application for a mandatory interim injunction. The injunction had sought restoration of lift services to the respondent’s flat. The lift service was restored during the proceedings, and the respondent then invited the court to dismiss the claim while seeking his costs.

The appellant challenged the costs order on three grounds: whether the judge had wrongly investigated the service-charge account; whether the lease permitted withholding the lift service for non-payment; and whether the injunction application was defective because only one of two joint tenants was a party.

1. Appeal dismissed. The Recorder had exercised a costs discretion. Following [2012] 1 WLR 2607, intervention was justified only for an error of principle or irrationality.
2. The respondent had not discontinued the claim. Discontinuance requires service of a notice under CPR 38.3(1), with the prescribed costs consequences under CPR 38.6. The respondent instead sought dismissal because he had obtained the relief claimed. The costs were therefore at large, and the merits were potentially relevant.
3. The Recorder was entitled to analyse the account using the Tribunal’s findings and conclude that the respondent’s position was sufficiently clear without conducting a trial. The appellant had not sought an adjournment to address the documentation relied on.
4. The construction issue was not necessary to the result because the court accepted that no service charges were due when the injunction application was issued. Nevertheless, if the issue had been live, the court would have held that the lease did not permit withholding the lift service where the service-charge challenge was proper and justified. This was consistent with [1986] 18 HLR 25. The approach in [2004] 2 EGLR 38 did not assist the appellant because non-payment had not been shown to make provision of the lift difficult or impossible.
5. The injunction application was in substance a claim for specific performance, and the ordinary rule in [1977] Ch 106 required all persons entitled to enforce the contract to be before the court. That rule did not apply to the subsequent exercise of discretion on costs. The wife’s absence was therefore immaterial to the costs order.

The judgment records an appeal from the Central London County Court. The County Court dismissed the mandatory interim injunction claim and ordered Winchester Park Ltd to pay the respondent’s costs. The High Court dismissed the appeal.