FVS Investments Limited v G3 Good Governance Group & Ors

A claim struck out on a technical basis should not automatically be certified as totally without merit where the order says nothing about the underlying legal or factual merits. In such circumstances, a civil restraint order does not arise from the proceedings.

A successful applicant will ordinarily recover the costs of an application under Civil Procedure Rules 1998, Part 48, unless conduct or other circumstances justify a different order. Indemnity costs are appropriate where the paying party’s conduct falls outside the norms reasonably expected in Commercial Court litigation.

The claimants brought proceedings against G3 Good Governance Group, Michael David Bevan and Nicholas Harding. The claim had been struck out on a technical basis in an earlier judgment. The claimants were absent and unrepresented at the present hearing, while the defendants applied for consequential orders concerning certification, civil restraint and costs.

The court had to determine whether the claim should be certified as totally without merit, whether a civil restraint order should be made, the appropriate costs order, and whether those costs should be assessed on the standard or indemnity basis.

1. Certification and civil restraint order. The claim was struck out on a technical basis. The judgment giving that order did not address the legal or factual merits of the underlying claims. It was therefore inappropriate to certify the claims as totally without merit. No civil restraint order arose from the proceedings.
2. Costs. The defendants were successful in their application. The primary test under Civil Procedure Rules 1998, Part 48, supported an order that they recover the costs of and occasioned by the application. No conduct by the defendants justified an alternative order.
3. Basis of assessment. The court applied the Excelsior test. The relevant question was whether the paying party’s conduct fell outside the norm in material respects. The circumstances leading to the strike-out application and the resulting order demonstrated a failure by the claimants to conduct the litigation within the norms expected in the Commercial Court. The defendants’ costs were accordingly ordered to be assessed on the indemnity basis.