Fibula Air Travel SRL v Just-Us Air SRL

In assessing success on an interlocutory application, the court should identify the party who obtained the substantial relief sought, rather than count the number of issues or defences raised. Partial success, and circumstances substantially created by that party, may justify a proportionate reduction in costs.

Issue estoppel requires consideration of the decision actually made by the lower court and the basis for it. A point that was not pleaded, argued or required for the decision cannot ordinarily found an issue estoppel. A factual assumption made on an issue not in dispute does not amount to a determination.

The claimant applied to amend its pleadings to raise substantial audit and approvals defences. The defendant opposed the amendments, save for minor clarifications. The amendments were permitted, although the claimant was only partly successful and had contributed to the circumstances requiring the application.

The court determined the parties’ relative success, the proportion of costs recoverable, the summary assessment of costs and the claimant’s application for permission to appeal. The claimant also argued that the proposed defences were barred by issue estoppel or constituted abuse under Henderson v Henderson.

1. Success and costs. The claimant was the overall successful party because it obtained permission to raise two substantial defences after the defendant had opposed the application substantially in full. The number of defences raised was of peripheral relevance. Because the claimant was only partly successful and was largely responsible for the position in which it found itself, it was awarded 65 per cent of its costs.
2. Summary assessment. The claimed hourly rate was excessive for an application that was neither particularly substantial nor complex. The court applied the guideline rate of £282 and reduced the time allowed for documentary work. The claimant’s costs were assessed at £57,500 before the 65 per cent reduction, producing an award of £37,375.
3. Issue estoppel. The court must examine the decision actually made by the lower court and the basis on which it was made. The audit issue was not pleaded or argued, was not required for the lower court’s decision, and was treated only as an assumed fact. It therefore could not give rise to an issue estoppel. The same conclusion applied to the approvals defence, which had not been raised at all.
4. Abuse and finality. It was not abusive in the circumstances for the claimant to rely on the defences. The court had considered the balance of prejudice, including potential injustice to the defendant, and found that the potential injustice to the claimant outweighed it. The public policy favouring finality, inherent in issue estoppel and Henderson v Henderson, was thereby taken into account.
5. Permission to appeal was refused because an appeal had no reasonable prospect of success.

• High Court (Circuit Commercial Court). The court permitted amendments, awarded the claimant 65 per cent of its costs, assessed those costs at £37,375, and refused permission to appeal.
• Earlier proceedings. The judgment refers to a decision by His Honour Judge Pelling and to Males LJ’s refusal of permission on one ground. The citations are not stated in the judgment.