Cobussen Principal Investment Holdings Ltd v Akbar & Ors

Indemnity costs may be ordered where the conduct or circumstances of the claim take the case out of the norm. Dishonesty is not required. Serious disclosure failures, misleading evidence, repeated late service and culpable conduct may justify indemnity costs, assessed in the circumstances of the case.

Without-prejudice offers made shortly before trial may carry no costs weight where they are unclear, unsupported by reliable performance arrangements, postpone an existing obligation and fail to address substantial accrued costs. A party who has made no meaningful contribution to the proceedings should not ordinarily be ordered to pay costs.

This was a post-judgment ruling on the form of the order and costs following the substantive judgment in [2020] EWHC 2805 (QB). The claimant sought indemnity costs against the first and second defendants, reliance on two without-prejudice save as to costs offers, an interim payment on account, and costs against the third defendant.

The court also considered whether the order should contain a recital concerning possible wasted-costs or non-party-costs applications and how a beneficial-ownership declaration should be expressed.

1. Indemnity costs against Mr Akbar. The court adopted the principles summarised in Galazi v Christoforou [2019] EWHC 670 (Ch). The power arises where something in the conduct or circumstances of the claim takes the case out of the norm. Mr Akbar had lied on fundamental matters and conducted his defence in a manner verging on contempt for proper civil litigation. His conduct was therefore out of the norm, and the claimant’s costs against him were to be assessed on the indemnity basis.
2. Indemnity costs against Legacy. Although dishonesty by its current corporate director was not established, Legacy failed to disclose complete relevant records and its professional directors made inadequate enquiries before advancing a defence. Those failures, together with the late service of evidence, were culpable and out of the norm. In light also of the finding that, for practical purposes, Legacy was Mr Akbar, costs against Legacy were likewise ordered on the indemnity basis.
3. Offers. The offers made shortly before trial were unclear as to the offeror, proposed performance within an unspecified short period, related to a debt already enforceable for approximately 18 months, and did not offer payment of the substantial costs already incurred. They were therefore given no weight, apart from the additional light they shed on the relationship between Mr Akbar and Legacy.
4. Other orders. An interim payment on account of costs of £175,000 was ordered. No costs order was made against Mrs Akbar because she had ceased participating in August 2019 and had not materially increased the claimant’s costs. The declaration was expressed as one that Mr Akbar was the beneficial owner of the entirety of the shareholding in Legacy. No recital concerning possible applications against DWF or Equiom was required.

The judgment concerned post-judgment issues following the substantive decision in [2020] EWHC 2805 (QB) and also referred to the earlier disclosure judgment in [2020] EWHC 476 (QB).