Kilimanjaro AM Ltd v Mann Made Corporate Services (UK) Ltd & Ors

A non-party costs order may be made against a person whose nature and degree of connection with proceedings shows that they caused or facilitated their institution and maintenance without proper authority. This is especially so where a company’s name was knowingly misused and forged documents were relied on. Indemnity costs require conduct or circumstances taking the case out of the norm; exceptional conduct is not a separate legal requirement. An application for a civil restraint order must identify whether the order sought is limited, extended or general. A material failure to do so may justify adjournment where no adequate grounds for waiver are advanced.

The Applicants sought non-party costs orders against three of the Respondents and a civil restraint order against two of them. The applications followed an earlier judgment striking out proceedings brought in the name of the claimant company because purported directorships were fraudulent and the proceedings had been commenced without authority. The Respondents did not attend the hearing. The issues were whether the Respondents had sufficiently caused or controlled the proceedings to justify personal costs liability, whether costs should be assessed on the indemnity basis, and whether the civil restraint order application was procedurally compliant.

1. Non-party costs orders. The court was satisfied that Mr Hussain, Mr Oyekoya and Mr Kalia had each caused or facilitated the proceedings to be brought and maintained in the claimant company’s name. The evidence established their involvement in the purported directorships, the conduct of the proceedings and the use of forged documents. The requirements of Civil Procedure Rules 1998, rule 46.2 had been complied with. Applying the established principles under section 51 of the Senior Courts Act 1981, and the guidance in Deutsche Bank AG v Sebastian Holdings Inc [2016] EWCA Civ 23, each Respondent was personally liable for costs.
2. Basis and amount of costs. The misuse of the company’s name and reliance on forged documents constituted conduct taking the case out of the norm. Following the approach described in Excelsior Commercial and Industrial Holdings Ltd v Salisbury Hammer Aspden and Johnson [2002] EWCA Civ 879, the court held that indemnity costs were appropriate. A payment on account of £200,000 inclusive of VAT was ordered, subject to detailed assessment by a Costs Judge.
3. Civil restraint order. Paragraph 5.2 of CPR PD3C required the application to specify whether the proposed order was limited, extended or general. The application failed to do so, and no sufficient grounds for waiver were advanced. The application was adjourned to a date to be fixed, with the Applicants bearing the costs of and occasioned by the adjournment.