Pineport Ltd v Grangeglen Ltd

Costs in a claim for relief against forfeiture are not necessarily a condition of granting relief. The court may determine them separately under CPR 44.2. The general rule that the successful party receives its costs remains discretionary.

In a delayed application, the court should consider whether the tenant provided the information and assurances reasonably required to assess the application, and whether the landlord responded reasonably. A landlord need not take the initiative in resolving the application, but must respond reasonably, particularly after receiving a proper offer. The parties’ conduct, the extent of success and admissible offers may justify different costs orders for different periods.

The claimant sought relief from forfeiture of its lease following non-payment of service charges reserved as rent. The court had already granted relief on terms that the claimant pay £24,530, including £3,000 for legal expenses relating to the forfeiture.

The consequential hearing concerned whether the costs of the relief claim formed part of the conditions of relief and, separately, what costs order should be made. The claimant had made a late offer exceeding the sum ultimately ordered, together with the landlord’s reasonable legal costs. The central issues were the proper application of CPR 44.2, the parties’ conduct, and the effect of the offer.

1. The court confirmed that the legal costs of the relief claim were not a condition of relief. Paragraph 56 of the earlier judgment had separated the legal costs of the forfeiture from the legal costs of the claim. The latter fell to be determined under CPR 44.2.

2. Under CPR 44.2, the court has a broad discretion as to whether costs are payable and by whom. The successful-party rule is only a general rule. The court must consider the parties’ conduct, the extent of success and admissible offers, together with the other matters identified by the rule.

3. The appropriate approach was first to ask whether the tenant had provided the information and assurances reasonably required for the landlord to assess the application, and secondly whether the landlord had acted reasonably. A landlord was not obliged simply to grant relief or to make the running, even where refusal might produce a substantial windfall. It was nevertheless required to respond reasonably.

4. The claimant’s late offer was significant. It exceeded the amount ultimately ordered and included the landlord’s reasonable costs. The landlord had not responded within a reasonable period, particularly given the impending trial. The court considered that acceptance would probably have avoided the trial.

5. The claimant was ordered to pay the defendant’s costs up to and including 4 March 2016. The defendant was ordered to pay the claimant’s costs from 5 March 2016 through the consequentials hearing. Both awards were on the standard basis. Patel v K&J Restaurants Limited did not require an indemnity costs order in these unusual circumstances.

not stated in the judgment.