Dale Heathcote & Anor v Asertis Limited

Costs are discretionary, but the court must first identify whether an order should be made and the successful and unsuccessful parties. A global approach is often appropriate. It may be inappropriate where multiple claimants or defendants advance distinct claims, because joinder for convenience does not make separate claims unitary. The appellate court reviews the exercise of discretion in light of the case as argued below. An appellant will generally not be allowed to rely on a factor or alternative basis that was not put to the judge, absent good reason. Where both sides invited a global approach to costs, the judge was entitled to adopt it, even though separate treatment might have supported a different allocation.

Asertis Limited brought two claims as assignee of Servico Build Tec Ltd. The rewards claim was against Mr Heathcote and concerned payments made under an employee benefit trust. The payment claim was against Mr Heathcote and Servico Contract Upholstery Ltd and concerned an alleged preference.

After a three-day trial, the High Court dismissed the rewards claim apart from entering judgment for £7,800 already paid, and allowed the payment claim. At the subsequent costs hearing, the judge treated Asertis as the successful party and ordered the defendants to pay 75% of its costs globally. The defendants appealed, arguing that the two claims and the defendants’ positions should have been treated separately. The central issue was whether the judge had exceeded the permissible bounds of his costs discretion: [2022] EWHC 2498 (Ch).

Appeal dismissed. Lord Justice Lewison gave the judgment, with Lord Justice Males agreeing.

1. Under rule 44.2 of the Civil Procedure Rules, the court has a wide discretion as to whether costs are payable, their amount and when they are to be paid. Once it decides to make an order, it must identify the successful and unsuccessful parties and consider all relevant circumstances, including conduct, partial success and admissible settlement offers.
2. A global approach is commonly appropriate where there is one claim, even if it rests on more than one cause of action. The position may differ where multiple claimants or defendants advance or meet distinct claims. The fact that claims are joined and managed together for convenience does not make them a single claim. The court applied the reasoning illustrated by Day v Day [2006] EWCA Civ 415, Flitcraft Ltd v Price [2024] EWCA Civ 136 and Sirketi v Kupeli [2018] EWCA Civ 1264.
3. The appellate function is to review the lower court’s discretionary decision on the evidence and submissions before it. An appellant will generally not be permitted to rely on material or a new basis that the judge was never invited to consider, unless there is good reason for doing so. The court applied the principles stated in Allen v Bloomsbury Publishing Ltd [2011] EWCA Civ 943 and Samsung Electronics Co Ltd v LG Display Co Ltd [2022] EWCA Civ 423, which had been approved in Secretary of State for Transport v Cuciurean [2022] EWCA Civ 661.
4. Both parties had invited the High Court to assess costs globally. Their submissions did not ask the judge to allocate costs separately between the rewards claim and the payment claim, or to address Upholstery’s position separately. The judge therefore did not err in adopting the global approach. Whether the Court of Appeal might have made a different order was irrelevant, and the appeal was dismissed.

1. Court of Appeal (Civil Division): The appeal against the High Court’s costs order was dismissed in [2024] EWCA Civ 242.
2. High Court of Justice, Business and Property Courts in Manchester, Insolvency and Companies List: After trial and a costs hearing, the court entered judgment for Asertis in relation to the £7,800 payment, allowed the payment claim, and ordered the defendants to pay 75% of Asertis’s costs: [2022] EWHC 2498 (Ch).