Eden v Parker

Costs in separate proceedings should be assessed separately where the claims are conceptually and factually distinct, even if they were case-managed and tried together. In a money claim, the party who recovers more through litigation than it could otherwise have recovered is prima facie the successful party, but that is only a starting point. The court must consider all the circumstances, including partial success, conduct and the effect of the parties’ evidence on the trial. Sulaman v AXA Insurance Plc [2009] EWCA Civ 1331 establishes only that a successful party’s costs may be reduced because of lies to the court. It does not prescribe the result in another case. Costs remain a matter for the trial judge’s discretion.

The judgment dealt with consequential matters following the substantive trial judgment in [2016] EWHC 3302 (Ch). The claimant had brought a Part 7 claim and an unfair prejudice petition against the defendant concerning their limited liability partnership. The court had ordered payments and an account in favour of the LLP, but further argument was required on interest, Companies House late-filing fees, managing agents and costs.

The principal issue was how costs should be allocated between the two proceedings, having regard to the parties’ separate successes and failures, their conduct, and the effect of the defendant’s evidence on the trial.

1. The Part 7 claim and the unfair prejudice petition were conceptually and factually distinct. Although they had been case-managed and tried together, their costs should be severed. Trial costs were apportioned 60% to the Part 7 claim and 40% to the petition. Pre-trial attribution was left to the costs judge.
2. The court accepted the general approach that, where a claimant recovers more money by pursuing litigation than it could have recovered without doing so, the claimant is prima facie the successful party. That approach remains subject to the court’s discretion and to all the circumstances, including partial success and conduct.
3. On the Part 7 claim, the substantial misrepresentation and guarantee claims had failed. The successful party was therefore the defendant, notwithstanding the claimant’s success on the comparatively minor Mount Pleasant claim. The defendant’s costs were reduced to 75% because his evidence and attitude had made the trial more complex and prolonged. The costs were assessed on the standard, not indemnity, basis.
4. Sulaman v AXA Insurance Plc [2009] EWCA Civ 1331 was treated as authority only for the proposition that a trial judge may, depending on all the circumstances, disallow part of a successful party’s costs because that party lied to the court. The decision did not require detailed comparison with another case or dictate the exercise of discretion.
5. On the unfair prejudice petition, the claimant was the successful party because the proceedings resulted in monetary orders for the LLP. His recovery was nevertheless reduced substantially to reflect unsuccessful issues, his failure to engage with supplied spreadsheets and his rejection of a proposed independent account. He recovered 50% of the petition costs. The resulting orders were subject to mutual set-off.
6. The defendant was ordered to pay the LLP £1,275 for Companies House late-filing fees, with interest. Interest on sums payable to the LLP was awarded at 2.5% over base rate, compounded quarterly. The managing agents were to be agreed, failing which they would be identified by the district judge.

This was a consequential costs and case-management judgment following the High Court’s substantive judgment in [2016] EWHC 3302 (Ch). No appeal was determined in this judgment.