Cunico Resources NV & Ors v Daskalakis & Anor

Permission to appeal may be refused where the proposed appeal has no realistic prospect of overcoming factual findings that determine jurisdiction. Where contractual arrangements are merely adjuncts to employment relationships, claims arising from them may remain matters relating to employment. A successful jurisdiction challenge ordinarily attracts a general costs order, but the court may make tailored exceptions for particular applications and allocate liability between parties according to the claims they effectively pursued. Interim costs payments may be assessed pragmatically by reference to incurred costs, appropriate deductions and a reasonable recovery percentage.

The judgment concerned consequential matters following orders in two related claims. The court had previously dismissed an application for default judgment and substantially refused relief from sanctions, then declared that it lacked jurisdiction over the claims and set aside the claim forms and service. The present decision addressed Marketing’s applications for permission to appeal, the time for any appellant’s notices, costs in both claims, interim payment on account and interest.

The central issues were whether the proposed jurisdiction appeal had a realistic prospect of success and how costs should be allocated following the successful jurisdiction challenge.

1. Permission to appeal. Permission to appeal the January Orders was refused. The proposed appeal depended on overturning factual findings that the Advisory Contracts were tax-saving devices and adjuncts to the defendants’ employment relationships within the Cunico group. Those findings meant that the claims fell within the employment-related characterisation adopted in Samengo-Turner and Petter, rather than the materially different situation in Bosworth. If the claims were instead unrelated to employment, the contractual basis for English jurisdiction would fall away. The proposed appeal therefore had no realistic prospect of success.
2. Permission to appeal the December Order was granted conditionally. Marketing could pursue that appeal only if the Court of Appeal granted permission to appeal against the January Order in the 2018 Claim. Any appellant’s notice concerning the December Order was to be filed within 14 days of that grant. Appellant’s notices concerning the January Orders were to be filed by 4 March 2019, with any application for permission made to the Court of Appeal.
3. Costs. Following the successful jurisdiction challenge, Marketing was ordered to bear its own costs and pay the defendants’ costs in the 2018 Claim, subject to a summary assessment of £37,115. There was no order as to costs for the default judgment and relief-from-sanctions applications, because the competing costs consequences broadly balanced. In the 2017 Claim, Resources and Marketing were jointly and severally liable for the defendants’ recoverable costs. Feni was jointly and severally liable only for costs relating to the Feni claims. Exceptions were made for the defendants’ late-evidence application and Feni’s adjournment application. There was no order as to costs between the claimants concerning their own costs, and the burden of the defendants’ costs relating to the Feni claims was allocated in principle 50:50 between Feni and Resources/Marketing.
4. An interim payment of £270,000 was ordered in the 2017 Claim, calculated after deductions and at 60 per cent of the reduced starting figure. Interest on the defendants’ final costs entitlement in that claim was ordered at 8 per cent per annum from 18 January 2019. The claimants were jointly and severally liable for £20,000 costs of the consequentials hearing.

This was a consequential first-instance decision following the court’s earlier judgments in the same proceedings: [2018] EWHC 3382 (Comm) and [2019] EWHC 57 (Comm). No appellate decision is stated.