Swift v Brake & Ors

The court has a broad discretion on costs. The general rule is that the unsuccessful party pays the successful party, but all the circumstances, including conduct, must be considered. Indemnity costs require conduct or circumstances taking the case out of the norm; inefficient or sloppy conduct does not automatically meet that threshold. A payment on account under CPR rule 44.2(8) is an estimate of likely recoverable costs, allowing an appropriate margin for uncertainty. It is not a summary assessment. Where costs relate to several applications and the evidence does not permit precise allocation, the court may adopt a broad apportionment, provided the resulting figure is reasonable.

The applicant, formerly trustee in bankruptcy of two respondents, sought relief in the Cottage Application concerning a property, alleged trusts and related orders. The court had previously struck out that application for want of prosecution, save for one unresolved head of relief, and made an order leaving the remaining costs to be determined.

The present hearing concerned whether the applicant should pay the respondents’ outstanding costs, whether those costs should be assessed on the indemnity or standard basis, and the appropriate payment on account pending detailed assessment.

1. Costs of the strike-out application. The applicant was ordered to pay the remaining 40% of the first and second respondents’ costs. The general rule in CPR rule 44.2 applied because they had succeeded on the application.
2. Costs of the underlying application. The applicant was ordered to pay the costs of the Cottage Application, except costs relating to the unresolved paragraph 4 relief. The court did not wait for that issue to be finally resolved because the respondents had succeeded on the discrete matters in issue and no application was made for the paragraph 4 costs.
3. Indemnity basis. The authorities establish that indemnity costs require conduct or circumstances taking the case out of the norm. The applicant’s failure to progress or properly address the proceedings was criticised and caused an inefficient resolution, but, viewed in the round, amounted to sloppy conduct and did not justify indemnity costs. Costs were therefore ordered on the standard basis.
4. Payment on account. CPR rule 44.2(8) requires a reasonable sum, necessarily estimated because detailed assessment has not occurred. The court must not conduct a summary assessment. For the strike-out costs, 65% of the relevant 40% base figure was reasonable. For the underlying application, the court rejected a simple one-third division of combined costs, adopted one quarter as the base in light of the limited evidence and the parties’ transcript allocation, and awarded 50% of that base on account.
5. The parties were directed to agree a minute of order and submit it for approval, with consequential matters to be dealt with initially by written submissions.

First-instance costs decision following the earlier strike-out rulings described in the judgment. The unresolved paragraph 4 issue remained open.