Koza Ltd & Anor v Koza Altin Isletmeleri AS

Costs ordinarily follow the event when an appeal against an interlocutory injunction is dismissed. There is no general rule that the costs of an interlocutory injunction must be reserved. Reservation may be appropriate where the injunction merely holds the position until trial and the trial will illuminate the merits of the earlier resistance.

A successful party should not be deprived of costs for procedural duplication where the court has found that party’s conduct reasonable. Detailed assessment should ordinarily await the conclusion of the proceedings under Civil Procedure Rules 1998, rule 47.1, unless there is an imperative for immediate assessment.

Koza Ltd and Mr Ipek unsuccessfully appealed against an injunction obtained by Koza Altin. The appeal was dismissed in [2020] EWCA Civ 1018. This judgment determined the consequential costs issues.

Koza Altin sought its appeal costs against Mr Ipek alone, immediate assessment and a payment on account of £175,000. The appellants sought reservation or reduction of the costs, joint and several liability with Koza Ltd, set-off against an earlier order favouring Koza Ltd, deferred assessment and a smaller payment on account.

1. Costs of the appeal. The successful respondent was entitled to its costs in full. Costs followed the event. There was no general rule requiring reservation merely because the underlying order was an interlocutory injunction. Unlike an injunction which holds the position until trial, the issues decided on this application would not be revisited in the substantive dispute. The appellants had repeated the same arguments on appeal and failed.

2. No reduction for duplication. The majority in the substantive appeal had found that Koza Altin could not be blamed for seeking the injunction separately from the funding application. Its conduct had been reasonable. It would therefore be unfair to reduce its recovery for duplication arising from that procedural course.

3. Liability of Mr Ipek alone. Making Koza Ltd liable would undermine the injunction’s purpose of preventing dissipation of its assets. Koza Altin would remain Koza Ltd’s sole shareholder, so an order against the company would effectively impose the burden on the successful party. The proposed order would also insulate Mr Ipek from the costs consequences of litigation pursued primarily for his and his family’s benefit.

4. No set-off. The court did not decide whether costs orders involving different parties could ever be set off. Set-off was inappropriate because the orders concerned different litigation issues and would effectively make Koza Ltd bear a liability which the court had deliberately imposed on Mr Ipek alone.

5. Assessment and payment. The respondent’s claimed costs exceeded £370,000. A payment on account of £150,000 represented an appropriate reduction. In accordance with rule 47.1 of the Civil Procedure Rules 1998, detailed assessment should await the conclusion of the proceedings. There was no imperative for immediate payment of any excess.

Mr Ipek was ordered to pay the costs of the appeal, to be assessed if not agreed, and to pay £150,000 on account within 14 days.

• Court of Appeal (Civil Division): The appeal against the injunction was dismissed in [2020] EWCA Civ 1018. In the present consequential judgment, the court ordered Mr Ipek alone to pay the appeal costs, subject to assessment if not agreed.
• High Court, Business and Property Courts, Business List (ChD): Mr Jeremy Cousins QC granted the injunction in [2020] EWHC 654 (Ch).