Michael John Isaac v Tan Sri Dato'Vincent Tan & Anor

In assessing costs, the court should identify the overall successful party, rather than treating success on individual issues as necessarily decisive. The assessment remains a question of fact and degree. The possibility of an appeal ordinarily affects whether costs should be stayed, not whether a costs order should be made.

Where costs are ordered subject to detailed assessment, Civil Procedure Rules 1998, r 44.2(8) requires a reasonable payment on account unless there is good reason to make no order. An approved costs budget is normally a useful benchmark, but where the issues have materially narrowed after budgeting, the court should adopt a more conservative figure rather than refuse an interim payment altogether.

This was a costs judgment following the trial of the petitioner’s unfair-prejudice proceedings against the respondents. The trial judgment was [2022] EWHC 2023 (Ch).

The respondents had successfully resisted the substantive relief sought, including a finding of unfair prejudice and an order requiring the acquisition of the petitioner’s shares. The petitioner had obtained some success on valuation, and the issues at trial had become narrower than those addressed in the approved costs budget. The court therefore had to determine the incidence of costs and the appropriate interim payment on account.

1. The respondents were the successful parties overall. The substance of the petitioner’s claim was a finding of unfair prejudice and a share acquisition order, both of which failed. Findings that the first respondent had acted with personal animosity were legally insignificant, and the petitioner’s partial success on valuation did not alter the overall result. Success on one or more issues does not necessarily displace the usual approach of identifying the overall victor. The respondents were therefore entitled to their costs, subject to detailed assessment if not agreed.

2. The prospect of an appeal was irrelevant to the incidence or form of the costs order. It might bear on whether enforcement should be stayed pending appeal, but not on whether the order should be made.

3. Under Civil Procedure Rules 1998, r 44.2(8), a party ordered to pay costs subject to detailed assessment must pay a reasonable sum on account unless there is good reason not to do so. The narrowing of the issues after the costs budget had been approved provided good reason for caution in using the budget as a benchmark, but not for refusing any payment.

4. The appropriate response to the uncertainty was to make a more conservative deduction from the budgeted figures. The court ordered an interim payment calculated by reference to 50% of costs incurred before budgeting and 60% of the approved budget thereafter, in each case with an additional 3% allowance for costs management. Counsel were directed to assist in agreeing the calculation for inclusion in the order.

The judgment followed the trial judgment in the same proceedings, reported at [2022] EWHC 2023 (Ch). This judgment determined costs arising from that decision.