Monica Margaret Ramji v Graham John Harvey & Ors

Indemnity costs require conduct or circumstances taking the case out of the norm, assessed in the court’s wide discretion and having regard to all the circumstances. Knowingly advancing and maintaining dishonest evidence to obtain a financial advantage is a paradigm example. A party’s failure on an individual issue does not ordinarily displace the identification of the successful party in the litigation or require a reduction in its costs. Where costs are subject to detailed assessment, the court should order a reasonable payment on account unless there is good reason not to do so.

This was a consequential costs judgment following a five-day trial of two preliminary issues. The Second, Third and Eighth Defendants succeeded overall: the claim to a beneficial interest in 2 Montacute Road failed, while the challenge to the transfer of 51 Ravensbourne Park Crescent succeeded. The Claimant and the Ninth Defendant were found to have knowingly given dishonest evidence. The issues were the appropriate basis of costs, whether the successful defendants’ costs should be reduced because they failed on the signature challenge, and the amount payable on account pending detailed assessment.

1. Indemnity costs. The court adopted the approach in Excelsior Commercial Industrial Holdings Ltd v Salisbury Hammer Aspden and Johnson, namely that indemnity costs require circumstances taking the case out of the norm. The discretion is wide and requires consideration of all the circumstances. Unreasonableness is sufficient; moral condemnation is not required. The court may consider conduct before and during trial, and whether it was reasonable to raise and pursue particular allegations or issues.
2. The dishonesty found in the evidence was not merely poor recollection. The Claimant and the Ninth Defendant knowingly maintained lies in written and oral evidence in an attempt to obtain a financial advantage. That conduct was plainly out of the norm and justified indemnity costs.
3. Successful party and issue-based costs. The successful party is identified by success in the litigation as a whole, rather than success on every individual issue. The Second, Third and Eighth Defendants were therefore the successful parties. Their failure on the challenge to the signatures did not justify reducing their costs or making them pay costs.
4. Payment on account. Under Civil Procedure Rules 1998, r 44.2(8), a reasonable payment on account should be ordered unless there is good reason not to do so. The court declined to conduct a summary assessment. In the absence of costs budgeting, £69,000 was ordered as a reasonable payment on account, with detailed assessment if the costs were not agreed.
5. The claim was to be transferred to the County Court at Central London, Business & Property List, with a three-month stay to allow settlement discussions and permission to restore for further directions if required.

First-instance consequential judgment following the court’s earlier preliminary-issues judgment, [2023] EWHC 1664 (Ch). No appellate decision is stated.