DENAXE LIMITED v PAUL COOPER & Anor

Where a claim is found to be a clear abuse of process, the costs attributable to it may properly be ordered on the indemnity basis. The same approach may apply to serious claims abandoned at a late stage. Costs of an application involving several issues should be apportioned where the successful party failed on substantial, discrete issues. A percentage reduction may provide a sufficient allowance for those unsuccessful issues, allowing the costs of one application to be assessed on a single basis. A payment on account should not be ordered without sufficient information to form a reasonable view of the sum payable.

The ruling concerned the costs consequences of an earlier strike-out and reverse summary judgment application. The defendants had succeeded in establishing immunity and abuse of process in relation to the principal sale claim, but had failed on res judicata and summary judgment. Ancillary claims had either been abandoned or remained ongoing.

The court had to determine the appropriate basis and allocation of costs, and whether payments on account could properly be ordered.

1. The costs of the sale claim, excluding the costs of the strike-out application, were to be paid by the claimant on the indemnity basis. The claim had been found to be a clear abuse of process, and substantial claims had also been abandoned before the application was heard.

2. The same principle applied in relation to the abandoned peripheral claims, which involved serious and substantial allegations later abandoned.

3. The costs of the application itself required different treatment. The defendants succeeded on immunity and abuse of process, but failed on res judicata and summary judgment. The summary judgment issue involved detailed consideration of the merits and constituted a substantial discrete cost centre.

4. A 25 per cent reduction in the defendants’ costs was appropriate to reflect the issues on which they failed. The court considered that this reduction was a sufficient allowance, permitting the overall costs of the application to be assessed on the indemnity basis rather than partly on the indemnity basis and partly on the standard basis.

5. The claimant was ordered to pay 75 per cent of the defendants’ costs of the application, to be assessed on the indemnity basis. Costs attributable to the continuing peripheral claims were not payable at this stage and were to be excluded on detailed assessment where identifiable.

6. No payment on account was ordered for the wider action costs. The defendants had provided no adequate breakdown, so the court could not assess a reasonable sum without making an arbitrary estimate.

First-instance costs ruling following the court’s earlier strike-out judgment in the same proceedings.