Pourghazi v Kamyab & Ors

A settlement of an assigned legal claim does not necessarily settle the separate court application by which that claim was advanced. The court must distinguish between the underlying claim, the procedural application and any costs claim. A settlement agreement and Tomlin order are construed together, but their effect depends on the language used and the parties bound by them. An assignment of legal rights and an interest in an application does not, without more, confer authority to deal with the procedural application on the assignor’s behalf. Where the settlement documents do not address the separate application or its costs, those costs remain within the court’s discretion.

Investec had pursued a marshalling claim concerning properties said to be beneficially owned by one of the defendants. It later assigned its claim and interest in the proceedings to Mr Pourghazi, but remained the named applicant in its separate application.

Mr Pourghazi and the Core Defendants subsequently settled the dispute and entered into a Tomlin order staying further proceedings in the Claimant’s Application, with no order as to costs between those parties. The Chief Master dismissed Investec’s remaining application and ordered Investec to pay the Core Defendants’ costs up to the assignment date. Investec appealed, arguing that the settlement had also resolved its application and its costs.

The appeal was dismissed.

1. The court distinguished between three matters: Investec’s underlying marshalling claim; Investec’s procedural application asserting that claim; and any costs claim against Investec. The assignment plainly transferred the underlying claim to Mr Pourghazi. It did not follow that Investec’s separate application had also been settled.

2. The settlement agreement and Tomlin order had to be read together. The references to the “Application” and “Claimant’s Application” described Mr Pourghazi’s application dated 21 April 2016, including the expanded claim pleaded after the assignment. They did not describe Investec’s separate application. The no-order-as-to-costs provision likewise operated only between Mr Pourghazi and the Core Defendants in relation to Mr Pourghazi’s application.

3. The assignment of Investec’s legal and beneficial rights, including its interest in the marshalling application, did not give Mr Pourghazi authority to deal with Investec’s procedural application on its behalf. Substitution of Mr Pourghazi as applicant could have addressed that issue, but it had not occurred.

4. The commercial-construction principle referred to in Sirius International Insurance Co v FAI General Insurance Ltd [2004] UK HL 54 and PM Law v Motorplus Ltd [2018] EWCA Civ 1730 did not assist Investec. The documents were not sufficiently ambiguous, and the construction adopted was not commercially irrational.

5. Since the settlement did not determine Investec’s application or its costs, the costs remained within the Chief Master’s discretion. Investec accepted that, absent success on construction, the costs order should stand. The appeal was therefore dismissed.

• High Court (Chancery Division): Mr Justice Mann dismissed Investec’s appeal from the order of Chief Master Marsh dated 29 October 2018, which dismissed Investec’s remaining application and ordered it to pay costs up to 12 January 2018.