Mears Ltd v Costplan Services (South East) Ltd & Ors

Costs should not automatically follow the ultimate result where the litigation involved substantial and separable issues on which the parties achieved different outcomes. The court should identify who succeeded on particular issues, while giving appropriate weight to the overarching objective and the practical reason for any injunction. A partial costs order may therefore be appropriate. Where an interim payment on account is required but reliable schedules are unavailable, the court may order a conservative sum which it is satisfied the receiving party will incontestably recover. Permission to appeal should be refused where the proposed appeal has no real prospect of success and there is no other compelling reason for it.

Following an expedited Technology and Construction Court trial concerning practical completion, Mears Ltd failed in its overarching attempt to prevent practical completion, but succeeded on a substantial issue concerning breach. The court had to determine the appropriate allocation of costs between Mears and the second and third defendants, with the first defendant having adopted an essentially neutral position. It also considered interim payments on account and Mears’s application for permission to appeal the construction issue.

1. The claimant had not achieved its overarching objective of preventing practical completion. However, it had succeeded on a substantial issue, while the second and third defendants had advanced a root-and-branch case on several issues which ultimately failed. The costs order therefore had to reflect issue-based success as well as the ultimate result.

2. The court considered that an equal division of costs would give insufficient weight to the failure of the claimant’s principal objective and the fact that the injunction proceedings had been driven by that objective. The claimant was accordingly ordered to pay 40 per cent of the second defendant’s costs and 40 per cent of the third defendant’s costs. The first defendant, having been essentially neutral, was ordered to bear its own costs.

3. An interim payment order should ordinarily be made unless justice requires otherwise. Because the defendants had not provided complete costs schedules in sufficient time, the court could not calculate the payment by reference to the proposed figures. It nevertheless ordered payments on account of £75,000 to the third defendant and £60,000 to the second defendant, being sums which they would incontestably recover.

4. Permission to appeal was refused. The issue was one of construction rather than primary fact, but the outcome was considered entirely plain. There was no real prospect of a successful appeal and no other compelling reason for one.