Holdings Limited v Oakvest Limited & Ors

On a security for costs application, the court must first identify the successful party. The successful applicant will ordinarily recover the costs reasonably incurred in obtaining the order or security. The court may nevertheless allocate later costs differently where the respondent provides acceptable security and the applicant’s conduct has contributed to avoidable expense. Where competing considerations make a wholly successful costs order unfair, costs incurred after a reasonable period for considering the security may be made costs in the case.

The third defendant applied for security for costs after requesting security from the claimant. The claimant later offered an after-the-event insurance deed of indemnity in lieu of security. Correspondence followed concerning the insurer’s status and the authority of the proposed signatory. The claimant ultimately provided the executed deed, which the third defendant accepted as sufficient security.

The application was therefore successful in principle, but the court had to determine how the costs should be divided between the date of the claimant’s offer and the later provision of the signed deed.

1. Disposition. The third defendant was the successful applicant because security had previously been refused, an application had been issued, and security was ultimately provided. It was therefore entitled in principle to recover the costs of the application.
2. The timing of the application, issued between Christmas and the New Year, did not justify reducing the costs award. The hearing took place sufficiently later to give the claimant a realistic opportunity to respond.
3. The court rejected the objection that an unincorporated Lloyd’s syndicate could not act as an insurer because it lacked separate legal personality. Lloyd’s syndicates conduct insurance business as groups of individuals, and policies may be executed on their behalf by an underwriter, coverholder or managing agent.
4. The applicant should recover its costs up to 11 February 2022 and for a short period thereafter sufficient to digest the documentation. The claimant had been entitled to tender the deed earlier, but the applicant’s objections to the proposed arrangements were surprising and contributed to the expense. The fact that the security took the form of a deed of indemnity rather than a policy also made the case less straightforward.
5. Subject to submissions on timing, the proposed order was that the successful applicant recover its costs up to 15 February 2022, with the costs thereafter being costs in the case.

Not stated in the judgment. This was a first-instance costs determination in the Commercial Court.