Sheikh Tahnoon Bin Saeed Bin Shakhboot Al Nehayan v Kent (aka John Kent)

Where a party succeeds overall but fails on significant issues, the court may make a proportionate costs adjustment instead of imposing a complex issue-based order. Costs attributable to expert evidence may be allocated separately where that evidence served both successful and unsuccessful issues.

A permission application should not proceed on an academic point where independent findings already determine the outcome. The causation test for physical duress is established by Barton v Armstrong [1976] AC 104. Vicarious liability for intimidation depends on whether the wrongdoing occurred in the course of employment, not on the agent’s apparent authority.

The claimant brought proceedings concerning sums allegedly due under a framework agreement and promissory note. The claim failed in full. The defendant’s counterclaim succeeded in part, including a claim for damages corresponding to sums he would otherwise have had to pay.

The judgment determined consequential questions concerning costs and the claimant’s application for permission to appeal. The proposed appeal challenged findings concerning contractual good faith, causation in physical intimidation, vicarious liability for representatives’ torts, and the assessment of damages.

1. Costs. The defendant was the overall successful party, but had failed on his fiduciary-duty claim and other issues. Applying the discretion under CPR 44.2(2), an issue-based order would make assessment unduly complicated. The fairer and simpler course was to reduce the recoverable costs by a percentage reflecting the significance of the unsuccessful issues and the costs attributable to them.
2. The recoverable costs were therefore reduced by 30%. The claimant was ordered to pay 70% of the defendant’s costs, excluding the defendant’s costs of obtaining expert evidence. Each party was to bear its own costs of that evidence because it was relevant both to the unsuccessful account-of-profits claim and to successful issues concerning economic duress, tort and contractual good faith.
3. An indemnity costs order was refused. Although representatives had used threats and other illegitimate pressure, the claimant had not authorised or known of that misconduct before the facts emerged at trial.
4. Permission to appeal. The challenge to the contractual duty of good faith raised an arguable point of law, but was academic unless the claimant also challenged the findings of blackmail and physical duress. The proposed challenge to causation in physical intimidation had no real prospect of success. The causation test was established by Barton v Armstrong [1976] AC 104, and no principled basis for a different test in the tort of intimidation had been shown.
5. The challenge to vicarious liability was hopeless. The tort of intimidation does not require reliance on the apparent authority of the agent. The relevant question is whether the wrongdoing occurred in the course of the agent’s employment, consistently with the distinction explained in Dubai Aluminium Ltd v Salaam [2003] 2 AC 366.
6. The proposed challenge to damages was not open to the claimant because there was no evidence quantifying the alleged benefits and no pleaded or litigated case that credit should be given for them. Permission to appeal was refused.