Uddin & Anor v Hussain & Anor

Where an interim injunction is granted merely to hold the ring pending trial, the usual order is that the costs of the application are reserved. A departure requires a special factor, such as an issue finally determined on which one party has clearly prevailed. The costs discretion under Civil Procedure Rules Part 44 must be exercised consistently with those principles. Ambiguity or lateness in an undertaking, and the routine urgency of an injunction application, will not ordinarily constitute a special factor. The court must also ensure proper notice of the costs sought, a fair opportunity to object, and consideration of reasonableness and proportionality before summarily assessing costs.

The claimants sought interim relief restraining the defendants from disposing of a residential property pending a substantive claim concerning its ownership and the register. An injunction was granted ex parte, with costs reserved. Before the return hearing, the first defendant offered an undertaking not to dispose of the property, and the defendants did not attend after indicating that they would conserve costs.

At the return hearing, Bacon J continued the injunction and ordered the defendants to pay the claimants’ costs, summarily assessed at £44,784.30. The defendants appealed, alleging error in the applicable costs principles and procedural unfairness. The central issue was whether the costs of an interim injunction intended to preserve the position pending trial should have been reserved, and whether special factors justified a different order.

1. Appeal allowed. The order requiring the defendants to pay £44,784.30 was quashed. The costs of the interim relief application were reserved pending resolution of the substantive claim or further order.
2. Under Civil Procedure Rules Part 44 the court has a wide discretion, but it must exercise that discretion in accordance with established principles. Where an injunction is granted to hold the ring pending trial, the usual order is to reserve the costs because there is then no winner or loser. A different order may be justified where the injunction determines issues that will not be revisited and one party has prevailed on them.
3. The judge below had not considered whether the injunction was a hold-the-ring order or identified any special factor justifying departure from the usual approach. That was an error of law requiring the costs order and its supporting reasons to be set aside.
4. There were no special factors here. The alleged ambiguity and lateness of the undertaking did not justify departure. An undertaking should not ordinarily place the giver in a worse position than someone who gives none. The undertaking was also in the form previously requested, and the defendants had not received a full explanation of the claim until the documents were served. The urgency of the application was routine and carried no special weight.
5. Although unnecessary to the decision, the court identified further problems. The defendants were not satisfactorily on notice that costs were sought, the costs schedule had not been served before the hearing, and they had no proper opportunity to object. The judge should not have summarily assessed the costs without addressing reasonableness and proportionality, particularly given the value of the property, the interim nature of the relief and the undertaking offered.

• Court of Appeal (Civil Division) — [2023] EWCA Civ 1127: appeal allowed; the costs order was quashed and costs were reserved pending resolution of the substantive claim or further order.
• High Court of Justice, Business and Property Courts, Business List (Ch D) — judgment of Bacon J dated 1 November 2022: injunction continued and defendants ordered to pay claimants’ costs, summarily assessed at £44,784.30.