Patley Wood Farm LLP & Ors v Kristina Kicks & Anor

The unsuccessful party is generally liable for the successful party’s costs, assessed in the court’s discretion having regard to all the circumstances. Separate legal representation may be permitted for co-parties where their interests differ, particularly on an interlocutory application, provided duplication is minimised. Indemnity costs require conduct outside the norm; getting the law or judgment call wrong is insufficient without more.

Summary assessment is ordinarily appropriate after a short hearing unless substantial grounds for disputing the sum cannot be dealt with summarily. A trustee in bankruptcy may be denied recoupment of costs from the estate where misconduct, perversity, serious error or other injustice makes recoupment unfair. Under CPR rule 52.6, permission to appeal requires a real prospect of success or another compelling reason, but satisfaction of that threshold does not compel permission.

The judgment dealt with consequential matters following an order requiring the respondents, trustees in bankruptcy, to intervene in Court of Appeal proceedings known as the Cottage Eviction Proceedings. The applicants had succeeded on the substance of their application, and the court had invited written submissions on costs, the basis and mode of assessment, recoupment of the trustees’ costs from the bankrupt estates, and permission to appeal.

The central issues were whether the applicants were the successful parties; whether two firms of solicitors had caused recoverable duplication; whether costs should be assessed on the indemnity or standard basis and summarily; whether the trustees should recover their costs from the estates; and whether any proposed appeal had a real prospect of success or another compelling reason for being heard.

1. Costs. The applicants were the successful parties because they succeeded on the substance of the contentious application. The general rule therefore applied: the respondents were to pay their costs. Separate representation was not improper in the circumstances. This was an interlocutory application, not a trial, the applicants had different interests, jointly instructed counsel and had taken steps to minimise duplication.
2. Assessment. The case did not justify indemnity costs. Conduct which involved getting the law wrong or making a poor judgment call was not, without more, conduct outside the norm. The costs were therefore assessed on the standard basis. Because the hearing lasted less than one day and no substantial dispute incapable of summary resolution was shown, summary assessment was appropriate. The court applied a broad-brush approach and assessed total costs at £20,000 plus applicable VAT.
3. Recoupment. The principle in Re Capitol Films Ltd was apt to trustees in bankruptcy. The court may deny an office-holder recoupment where misconduct, a serious mistake, perversity or other injustice makes recovery from the estate unfair. The trustees had acted perversely, failed to act in the creditors’ interests and opposed intervention unnecessarily. Since creditors representing about 60% of the debts were among the applicants, recoupment would unfairly worsen their position. The trustees were denied recoupment in full, and no principled basis existed for allowing 50%.
4. Permission to appeal. Under CPR rule 52.6, a real prospect of success means a prospect that is not unreal. The court retains a discretion even where that threshold is met. There was no real prospect of success on any proposed ground and no other compelling reason. Permission to appeal was refused.

First-instance consequential judgment following the court’s earlier order requiring the trustees in bankruptcy to intervene in the Cottage Eviction Proceedings. The judgment records no later appellate determination.