Cole v Carpenter & Ors

Costs do not automatically follow the event merely because an application is dismissed. The court must assess the parties’ substantive success, the issues on which each party succeeded or failed, and any relevant conduct or causal connection between conduct and costs. Where an application is premature or disproportionate, the applicant may be ordered to bear its own costs even if it established an important part of its case. The successful party’s costs may appropriately be reserved where the significance of the issues, including alleged contempt, will become clearer at trial.

The judgment concerned the parties’ written submissions on the costs of the defendants’ application for permission to make a contempt application against the claimant. The application had been dismissed in the Main Judgment, [2020] EWHC 3155 (Ch), as premature and disproportionate, although the defendants had established a strong prima facie case of contempt and succeeded on the admissibility of without prejudice correspondence. The claimant sought her costs summarily assessed, relying on the dismissal of the application. The defendants sought costs in the case or reservation of costs to the trial judge. The central issue was the appropriate costs order in light of the parties’ differing degrees of success and the unresolved significance of the alleged conduct.

1. Costs discretion. The general rule under Civil Procedure Rules 1998, rule 44.2(2)(a), is that the unsuccessful party pays the successful party’s costs. The court may make a different order under rule 44.2(2)(b), having regard to all the circumstances, including the parties’ conduct and whether a party succeeded on only part of its case under rule 44.2(4).
2. Assessment of success. Success is not determined solely by the formal relief obtained. The court may consider the substantive issues argued, the extent to which each party succeeded, and whether allegations or issues caused significant additional costs. The principles illustrated by Re Elgindata Ltd (No 2) [1992] 1 WLR 1207 and Summers v Fairclough Homes Ltd [2012] UKSC 26 were relevant, including the need for a causal link between dishonesty and costs attributed to it.
3. The defendants had achieved significant partial success, including establishing a strong prima facie case that a contempt had been committed and succeeding on the without prejudice issue. Nevertheless, they failed to obtain the relief sought because the application was premature and disproportionate at that stage.
4. The appropriate order was that the defendants bear their own costs of the application, while the claimant’s costs were reserved to the trial judge. The trial judge could later assess who was substantively successful in light of the completed proceedings and any findings concerning contempt. No costs assessment was required at this stage.