Glass Slipper Ltd & Anor v (Rimson Flower Productions Ltd & Ors

Re-litigating the substance of a claim previously struck out for deliberate non-compliance with a peremptory order will ordinarily constitute an abuse of process. The burden of showing abuse lies on the party alleging it, but the question is an evaluative one. Where the earlier order required security for costs, the court may infer deliberate non-compliance from the claimant’s prior assurance that funds could be raised, absent cogent evidence to the contrary. A non-party costs order is appropriate where a person substantially controls proceedings and conducts them for personal benefit, so that the person is the real party in the litigation. The court must consider whether the non-party was warned of the risk of such an order and whether an earlier warning would probably have altered the person’s conduct.

The claimants brought proceedings concerning rights in a film of a ballet performance. The defendants applied to strike out the claim as an abuse of process because an earlier claim concerning the same substantive rights had been struck out after the claimant failed to provide ordered security for costs. They also sought a non-party costs order against Ms McGuire, the director and majority shareholder of both claimants, who had conducted the litigation.

The court had previously permitted amended particulars and then reconsidered the strike-out application on the papers. The issues were whether the present proceedings improperly re-ran the earlier claim and whether Ms McGuire should be liable for the defendants’ costs.

1. Strike out. The amended particulars complied with CPR 16.4(1)(a), but disclosed that the proceedings were another attempt to pursue substantially the same claim concerning control of exploitation of the film. The change in the alleged copyright owner and the substitution of successive exclusive licensees did not alter the substance of the dispute.
2. The court applied the principles in Harbour Castle Ltd v David Wilson Homes Ltd [2019] EWCA Civ 505. The burden was on the defendants to establish abuse, and the issue required an evaluative assessment. A second action raising the same issues may be abusive where the first was struck out for deliberate failure to comply with a peremptory order. The court found that Ms McGuire had understood the question whether the security could be raised, had answered affirmatively, and had produced no adequate evidence that the funds could not have been obtained. The failure to provide security was therefore deliberate. The present proceedings were an attempt to reinstate the substance of the first claim and were struck out as an abuse of process.
3. Non-party costs. Section 51 of the Senior Courts Act 1981 permits a non-party costs order. The court applied the principles reviewed in Sony/ATV Music Publishing LLC v WPMC Limited [2018] EWCA Civ 2005; [2019] FSR 13. Ms McGuire had drafted the pleadings, conducted the correspondence, instructed counsel, and controlled both claimant companies. She pursued the proceedings largely or entirely for her own benefit and was therefore the real party in the litigation.
4. The warning requirement was satisfied because she was expressly warned of the intended costs application. The court considered that she probably understood the risk by the end of January 2019. No credible evidence showed that an earlier warning would have led her to act differently. It was just to make the order. The defendants were directed to file and serve a schedule of costs by reference to the applicable stage caps. The order did not extend to the costs of the first action.

Not an appeal. The judgment determined applications made in the ongoing High Court proceedings.