McCallum-Toppin & Anor v Toppin & Ors

The court has a broad, fact-sensitive discretion when deciding whether to make a costs order relating to particular issues or steps. Evidence prepared and adduced in good faith after permission will not ordinarily lose its costs merely because it is later ruled inadmissible or proves unhelpful. The court should assess the litigation and conduct of all parties realistically and in the round. An interim payment on account will generally be ordered unless there is good reason not to do so. A figure of about 90 per cent may be appropriate for budgeted costs, while a lower but substantial percentage may be appropriate for incurred, non-budgeted costs. An application for an interim payment towards a share purchase price should not be summarily excluded where it may succeed and valuation or other contingencies may delay the final payment.

The judgment concerned consequential matters following the court’s main decision in [2019] EWHC 46 (Ch) and its decision in principle on costs in [2019] EWHC 377 (Ch). The petitioners, trustees of a will trust, sought costs including the costs of expert evidence, interim payments on account of costs, and an interim payment towards the purchase price payable for their shares.

The respondents challenged the inclusion of expert costs, sought reductions for alleged conduct and particular issues, opposed or sought to limit interim payments, and argued that the share-price application should be summarily rejected. The central questions were how the costs discretion should be exercised and whether the interim applications should proceed.

1. The court declined to exclude the costs of expert evidence adduced by the parties. CPR rule 44.2 permitted an order relating to particular steps or distinct parts of the proceedings, but the evidence had been prepared and put forward in good faith after permission had been granted. Its later inadmissibility did not make the expenditure improper. The judge treated the evidence by analogy with evidence from a witness whose account is ultimately not preferred. The same conclusion applied to the third respondent, whose participation in the expert evidence was limited but who obtained some assistance from it and took part in cross-examination.

2. The court refused a percentage reduction for alleged conduct. Costs decisions are fact-sensitive and should be assessed broadly, having regard to the conduct of all parties and the fact that unsuccessful allegations are common in litigation. The matters relied on did not justify a significant reduction.

3. The court refused to exclude costs relating to a privilege issue from the first respondent’s liability. Costs incurred in the general pursuit of the litigation were, in principle, covered by the joint and several costs order. The first respondent had also obtained some benefit from the material and the issue had wider relevance.

4. The court ordered interim payments on account. It ordered 90 per cent of budgeted costs and 70 per cent of incurred, non-budgeted costs. The court found no good reason to adopt the lower percentages proposed by the first respondent. The third respondent was made liable for 20 per cent of the total interim payment, reflecting the separate costs order concerning her.

5. The court declined to summarily dismiss the application for an interim payment towards the share purchase price. Under the jurisdiction identified in Annacott Holdings Limited [2011] EWHC 3180 (Ch), the application might succeed. The possibility of a relatively prompt valuation did not justify shutting it out because vicissitudes in the valuation process could cause delay. Directions were therefore to be given for evidence and determination of the application.

This was a first-instance decision on consequential matters following the main judgment in [2019] EWHC 46 (Ch) and the prior costs decision in [2019] EWHC 377 (Ch). The court made the consequential costs and interim-payment orders described above.