SWIVEL UK LIMITED v TECNOLUMEN GMBH & ANOR.

An appellate court should interfere with a first-instance costs discretion only where the judge erred in principle, omitted or considered an irrelevant matter, or reached a decision outside the permissible range. A party seeking relief from sanctions will ordinarily bear its own costs and, usually, the costs of a respondent who reasonably opposes the application, even where relief is granted.

There is no automatic entitlement to costs merely because relief succeeds. The usual rule may be displaced where opposition is sufficiently unreasonable to fall within the warning in Denton v TH White Ltd [2014] EWCA Civ 906. The distinction between an irregular default costs certificate and one set aside for good reason is material.

The appellant, the defendant below, appealed against a costs order made by Master Whalan on 18 December 2020. The Master had set aside a default costs certificate, ordered the continuation of detailed assessment proceedings, directed an interim payment on account of costs, and summarily assessed the respondents’ costs of the applications at £10,000.

The appeal concerned only the costs order. The appellant argued that the respondents had acted unreasonably in resisting relief from sanctions and that the Master’s reasoning and exercise of discretion were flawed. Permission to appeal was granted by Bacon J on 15 September 2021. The central issue was whether the Master had exceeded the proper scope of his costs discretion.

1. Appeal dismissed. The Master’s decision fell within the range of decisions reasonably open to him. The appellate court was not entitled to substitute its own view merely because it might have assessed the factors differently.
2. The general approach in an application for relief from sanctions is that the applicant should bear its own costs. Ordinarily, it should also pay the reasonable costs of a respondent who opposes the application in a considered, proportionate and non-opportunistic manner. The rule is discretionary and must be adapted to the facts.
3. Denton v TH White Ltd [2014] EWCA Civ 906, especially at [41], warns against taking advantage of mistakes where the breach is neither serious nor significant, there is a good reason, or relief is otherwise obvious. That warning does not create an immediate correlation between success in obtaining relief and recovery of costs. A sufficiently unreasonable opposition may justify departing from the usual costs position, but the threshold is high. The adversarial nature of litigation limits any general duty of cooperation.
4. The distinction in CPR 47.12 was material. Under CPR 47.12(1), an irregularly obtained default costs certificate is set aside because the receiving party was not entitled to it, and the usual costs consequence may be that the party obtaining it pays the costs of setting it aside. CPR 47.12(2) applies where there is some good reason for detailed assessment proceedings to continue. The Master correctly treated the present case as falling within CPR 47.12(2).
5. The Master was entitled to regard the missed deadline as serious and significant, to treat the bereavement as an explanation rather than a good reason, and to conclude that the circumstances justified continuation of the detailed assessment. His conclusion that the respondents’ conduct did not amount to impropriety or sufficiently unreasonable opposition was open to him.
6. The Master’s ex tempore reasons were sufficient when read as a whole. The short explanation for the costs order was appropriate because it reflected the usual order. The appeal was dismissed.

• High Court (Chancery Division): Appeal from Master Whalan’s costs order of 18 December 2020 dismissed. Permission to appeal had been granted by Bacon J on 15 September 2021.