GEOQUIP MARINE OPERATIONS AG v TOWER RESOURCES CAMEROON SA & ANOR.

For costs purposes, the successful party is ordinarily the party that succeeds overall in the litigation, rather than merely on an individual issue. Where distinct claims produce success for different parties and no overall winner can fairly be identified, the court may order each party to pay the costs of the claim on which the other party succeeded. The court should depart from the general rule cautiously and avoid hindsight. Conduct, abandoned arguments and settlement-related matters will affect costs only where they materially justify a different order. Costs subject to detailed assessment should ordinarily attract a payment on account, but that order may be withheld where mutual payments would be insignificant.

Geoquip succeeded against the defendants on its claim for the balance of a contractual lumpsum and the related guarantee claim. It failed on its claim for Standby Costs, including the alternative estoppel claims, and the defendants succeeded on that issue.

The parties disputed who was the successful party under CPR rule 44.2(2). Geoquip sought 60% of its costs. The defendants sought 80% of their costs, relying also on alleged disclosure failures and Geoquip’s failure to mediate. The court had to determine the appropriate costs order, including the costs of an unsuccessful adjournment application, detailed assessment and payments on account.

1. Overall costs position. The general rule under CPR rule 44.2(2) is that the unsuccessful party pays the successful party’s costs. The successful party ordinarily means the party that succeeds overall in the litigation, not merely on a particular issue: Kastor Navigation Co Ltd v AXA Global Risks (UK) Ltd [2004] EWCA Civ 277.
2. Here, the lumpsum claim and the Standby Costs claim were distinct. They depended on different facts and raised different legal and construction issues. The court could not fairly identify either party as the sole successful party. The parties’ differing allocations of costs did not resolve that difficulty.
3. The appropriate order was therefore an issues-based order under CPR rule 44.2(6)(f), or an equivalent application of the general rule: the defendants were to pay Geoquip’s costs of the successful lumpsum and related guarantee claim, while Geoquip was to pay the defendants’ costs of the unsuccessful Standby Costs and related guarantee claim. A proportionate discount on one overall costs award would unfairly prejudice the party successful on one distinct claim.
4. The court should remain cautious about departing from the general rule and should avoid hindsight when assessing the significance of issues and conduct. The defendants’ abandoned penalty and rectification arguments did not justify reducing their costs recovery. The alleged disclosure deficiencies and failure to mediate did not justify reducing Geoquip’s costs of the lumpsum claim.
5. The defendants were ordered to pay Geoquip’s costs of the adjournment application, on which Geoquip had succeeded. All costs were subject to detailed assessment. No payment on account was ordered because reciprocal payments would probably produce only a small net difference and little practical benefit under CPR rule 44.2(8).

First-instance costs decision following the court’s earlier judgment on the underlying contractual and guarantee claims. The judgment itself does not state any subsequent appellate decision.