South Tees Development Corporation & Anor v PD Teesport Limited

Costs ordinarily follow the event. The fact that an appeal was finely balanced does not, without more, displace that rule. Costs of an appeal are expressly excluded from the costs budgets contemplated by Precedent H and Precedent T, so a party is not required to vary its budget to include them. Costs of an urgent adjournment application may be treated as additional to approved budgets where it was reasonable not to include them. Where an appeal and an alternative adjournment application are closely interrelated, success may properly be assessed by reference to the hearing as a whole. On a detailed assessment, a payment on account should generally be ordered unless there is good reason not to do so.

The judgment determined costs following the defendant’s successful appeal against Master Brightwell’s decision of 11 August 2023 permitting the claimants and the third party to amend their statements of case. The appeal was allowed in the judgment dated 1 September 2023. The court also determined the costs of the defendant’s alternative application to adjourn an expedited trial, which was dismissed following the successful appeal.

The issues were whether the defendant’s appeal costs were recoverable despite not appearing in its costs budget, whether the adjournment application costs could be treated as additional to the approved budgets, which parties were successful when the applications were considered together, and whether a payment on account should be ordered.

1. Appeal costs. The defendant was the successful party on the appeal. The claimants and the third party were therefore required to pay its costs on the standard basis. The general rule in CPR 44.2(2)(a) was not displaced merely because the appeal was said to be finely balanced.

2. Costs budgets. Precedent H, mandated by CPR PD 3D, expressly excludes the costs of appeals. The same exclusion appears in Precedent T. Accordingly, the defendant was not obliged to vary its costs budget under CPR 3.15A to reflect the appeal costs, and the absence of such a variation did not affect the costs order.

3. Adjournment application. It was reasonable, in light of the urgency created by the imminent trial, not to include the adjournment application in the budgets. CPR 3.17(4) therefore permitted those costs to be treated as additional to the approved budgets.

4. Assessment of success. The appeal and adjournment application were issued together, heard together and closely interrelated. The adjournment application was an alternative to the appeal. Justice required success to be assessed by reference to the hearing as a whole, at which the defendant was plainly successful. The claimants and the third party were ordered to pay both sets of costs.

5. Payment on account. Detailed assessment was appropriate. Under CPR 44.2(8), a reasonable payment on account should be ordered unless there was good reason not to do so. Although the defendant’s costs were likely to be reduced substantially, its statement was not so unreliable as to justify refusing an interim payment. A payment of £45,000 was ordered, apportioned if necessary as £30,000 for the appeal and £15,000 for the adjournment application.

• High Court, Chancery Appeals: The appeal from Master Brightwell’s decision of 11 August 2023 was allowed in the judgment dated 1 September 2023, [2023] EWHC 2229 (Ch). This judgment dealt with the resulting costs and the alternative adjournment application.