Sir Henry Royce Memorial Foundation v Hardy

A successful party is ordinarily entitled to its costs under CPR rule 44.2. Indemnity costs require conduct or circumstances taking the case out of the norm. That standard may be met by disproportionate correspondence, irrelevant evidence, offensive or unsupported allegations, and persistent procedural conduct which needlessly increases costs. The fact that a party acts without legal representation does not create a general exemption from procedural rules.

Where a one-day hearing disposes of the claim, summary assessment is ordinarily appropriate, but detailed assessment may be ordered where the costs claimed are sufficiently substantial to make summary assessment unjust. A payment on account may nevertheless be ordered. Permission for a first appeal requires a real prospect of success or another compelling reason, followed by the court’s discretion.

The claimant sought an order under sections 116 and 117 of the Companies Act 2006 concerning a request to inspect or obtain copies of the company’s register of members. The court had already held that the defendant’s request was invalid and was not made for a proper purpose: [2021] EWHC 714 (Ch).

The parties failed to agree consequential orders. The claimant sought indemnity costs, summary assessment and a payment on account. The defendant sought no order as to costs or standard-basis assessment and permission to appeal. The issues were the appropriate costs order and basis of assessment, and whether either proposed appeal ground met the permission threshold.

1. Costs. The claimant was the successful party. Section 117(3) of the Companies Act 2006 adds a power to make a non-party costs order against the person making the request, but otherwise adds nothing to the general costs rules. The defendant was ordered to pay the claimant’s costs.
2. Indemnity basis. The conduct of the litigation was well outside the norm. It included excessive correspondence, insistence on irrelevant and disproportionate evidence, intemperate and condescending language, and unsupported allegations of fraud and other serious wrongdoing. The fact that the defendant was a litigant in person did not justify a more relaxed approach to compliance with procedural rules. The approach in Excelsior Commercial and Industrial Holdings Limited v Salisbury Hammer Aspen and Johnson [2002] EWCA Civ 67 was applied.
3. Donations and indemnity principle. Donations intended to fund the claimant’s legal expenses did not breach the indemnity principle. The claimant remained liable to its solicitors under its retainer, and could recover no more than that liability. The arrangements were neither champertous nor maintenance. The principles in Harold v Smith (1860) 5 H & N 381, Gundrey v Sainsbury [1910] 1 KB 645, Burstein v Times Newspapers Ltd (No 2) [2002] EWCA Civ 1739 and Giles v Thompson [1994] 1 AC 142 were considered and applied.
4. Assessment and payment on account. Although the one-day hearing disposed of the claim, the substantial costs claimed justified detailed assessment under CPR PD 44 paragraph 9.2. The court nevertheless ordered payment on account of 60 per cent of the scheduled costs under CPR rule 44.2(8).
5. Permission to appeal. Under CPR rule 52.6, a first appeal requires a real prospect of success or another compelling reason. The first proposed ground, based on alleged estoppel arising from the section 117 proceedings, was fanciful and unsupported by reliance. The second ground challenged evaluative findings and had no real prospect of success. The approach in Tanfern v Cameron-MacDonald [2001] 1 WLR 1311 and R(Z) v Hackney LBC [2020] 1 WLR 4327 was applied. Permission to appeal was refused.

The judgment records that the substantive claim had previously been determined by the same court in [2021] EWHC 714 (Ch). This judgment dealt with consequential costs matters and permission to appeal from that decision.