Les Ambassadeurs Club Ltd v Albluewi

Costs following interim applications generally follow the successful party. Indemnity costs require conduct or circumstances taking the case out of the norm; material non-disclosure is relevant but does not automatically justify that basis, particularly where the breach was not deliberate or in bad faith. The court must weigh all the circumstances. A case involving an arguable application which fails for insufficient evidence is not necessarily a case with no basis. A summary assessment may be refused where the costs are substantial, the proceedings are extensive, or detailed scrutiny is required. A payment on account may also be withheld where there is a good reason, including the practical need to preserve a potential set-off against a judgment debt in the substantive proceedings.

The judgment concerned costs after the court had discharged freezing injunctions and dismissed the claimant’s application to continue them. The defendant sought the costs of the injunctions, the discharge application and the continuation application, assessed on the indemnity basis, with summary assessment and an interim payment on account.

The claimant accepted that costs should generally be payable to the defendant but relied on criticisms of the defendant’s conduct. It opposed indemnity costs, summary assessment and immediate payment on account. The issues were the appropriate costs order, the basis of assessment, whether the costs should be assessed summarily and whether payment should be made before conclusion of the substantive proceedings.

1. Costs order. The defendant succeeded on the applications heard by the court. The claimant was therefore ordered to pay the costs of those applications and of the without-notice and continuation injunctions. Criticisms of the defendant did not determine the result, and non-disclosure independently supported the order that those costs should follow the outcome.

2. Indemnity costs. The applicable test, stated in Excelsior Commercial and Industrial Holdings Ltd [2002] EWCA Civ 879, [2002] C.P. Rep. 67, was that indemnity costs require conduct or other circumstances taking the case out of the norm. Non-disclosure in a without-notice application is an important factor and may justify indemnity costs, especially if deliberate or culpable, but it is not decisive. The present case was not one with no basis: the claimant had an argument, but the evidence as a whole did not establish a real risk of dissipation. The non-disclosure was not in bad faith. The costs were therefore to be assessed on the standard basis. The approach was consistent with Esure Services Ltd v Quarcoo [2009] EWCA Civ 595.

3. Summary assessment. Summary assessment was inappropriate. The costs arose from several hearings and stages, exceeded £100,000, and required particular scrutiny because the defendant’s costs were substantially greater than the claimant’s. The court also considered that the prospect of delayed payment and detailed assessment at the end of the proceedings supported refusal of summary assessment.

4. Payment on account. Although the starting point under the CPR is payment as applications proceed, there was a good reason not to order an interim payment. The claimant had a good arguable case and might need to set off the costs order against a judgment obtained in the substantive claim. The defendant’s unsatisfactory indebtedness was relevant, while the absence of bad faith and the failure to prove a real risk of dissipation prevented the countervailing considerations from being decisive. Assessment was deferred until conclusion of the proceedings under CPR 47.1 and 47PD.1.

The judgment followed the court’s earlier decision, [2020] EWHC 1313 (QB), which discharged the freezing injunctions and dismissed the claimant’s application for their continuation. This judgment determined the consequential costs issues.