SEEMA ASHRAF v LESTER DOMINIC SOLICITORS (a firm) & Ors

Where an application succeeds, the usual rule is that costs follow the event. An applicant remains successful even if the opposing party receives an opportunity to remedy the defect through an unless order. That opportunity is an indulgence and does not alter the costs outcome.

Indemnity costs require conduct or circumstances taking the case outside the norm. The relevant norm is ordinary and reasonable conduct of proceedings, rather than conduct which is unusual or rare. A party who leaves its pleaded case undefined and contests an application on an unrealistic basis may satisfy that test. The court retains a broad discretion, and the categories supporting indemnity costs are not closed.

The judgment determined the costs of applications by the Fifth and Sixth Defendants for summary judgment and/or striking out in proceedings brought by the claimant as personal representative of an estate. The applications had been addressed in an earlier judgment, following which the claimant was given an opportunity to re-amend aspects of the claims through unless orders.

The claimant argued that the applications had been unsuccessful or that costs should be costs in the case. The defendants sought their costs, detailed assessment and interim payments on account. The Sixth Defendant additionally sought assessment on the indemnity basis. The issues were whether the applications were successful for costs purposes and whether the claimant’s conduct justified indemnity costs.

1. Fifth Defendant. The application was successful. The existing rectification claim was dismissed and the indemnity claim fell to be struck out because the claimant had failed to plead the decision required by paragraph 1(3) of Schedule 8. The opportunity to re-amend under an unless order was an indulgence and did not make the application unsuccessful. Costs therefore followed the event under CPR 44.2(2)(a), notwithstanding that only one of four grounds succeeded. The Fifth Defendant was awarded its costs, subject to detailed assessment on the standard basis, with an interim payment of £20,000 payable within 28 days.
2. Sixth Defendant. The application was also successful. At the hearing there was no viable pleaded claim against the Sixth Defendant, and the claimant’s proposed future re-amendment did not alter that position. The later application to re-amend was irrelevant to the costs of the application already decided.
3. Indemnity basis. The categories of case warranting indemnity costs are not closed. The critical requirement is conduct or circumstances taking the case out of the norm, as explained in Excelsior Commercial and Industrial Holdings Ltd v Salisbury Hamer Aspden & Johnson [2002] EWCA Civ 879. The relevant norm is ordinary and reasonable conduct of proceedings, not conduct which is merely unusual or rare, as clarified in Esure Services Ltd v Quarcoo [2009] EWCA Civ 595.
4. The claimant’s criticisms of the Sixth Defendant, viewed alone, were part of the undesirable rough and tumble of litigation and did not justify indemnity costs. More seriously, the claimant fought the application on the basis of an unspecified future re-amendment after disclaiming the draft pleading. That conduct left the pleaded case hanging in the air, caused an expensive and purposeless contest, and was unreasonable and outside the norm. The Sixth Defendant was therefore awarded costs subject to detailed assessment on the indemnity basis, with an interim payment of £51,000 payable within 28 days.

The judgment followed an earlier judgment handed down on 21 March 2022 concerning the claimant’s appeal and the Fifth and Sixth Defendants’ applications. The consequential order was made on 27 June 2022. This judgment determined the costs issues on written submissions.