Viarentis Property Management Limited & Anor v Viagefi 1 Limited & Ors

Where a contract requires an invoice before payment proceedings may be brought, a bona fide invoice satisfies that precondition even if its amount is later found to be overstated. The overstatement affects the recoverable amount, but does not invalidate the invoice or postpone contractual interest until a corrected invoice is issued.

For costs, the successful party is ordinarily identified by considering the litigation as a whole, with the party required to pay money generally being the clearest indicator. An issue-based order is exceptional where issues and evidence overlap. The court may nevertheless make a substantial deduction to reflect major issues on which the successful party failed.

The claimants had obtained judgment for fees under property management and administration service agreements, totalling €554,771.40, and for loans totalling €63,364.44. The court had previously determined the underlying contractual and valuation issues.

The remaining questions were whether contractual interest at 2% above the Bank of England base rate ran from the original invoices, despite those invoices having been overstated, and how the parties’ substantial successes and failures should affect costs.

1. Contractual interest. The relevant agreements provided that periodic fees were payable within 14 days of submission of an invoice and allowed interest at the Bank of England base rate plus 2% on outstanding fees. The earlier judgment had held that fees accrued when the contractual right arose and that an invoice was a precondition to bringing proceedings.
2. A bona fide invoice remained effective even though the court later found that the underlying valuations, and therefore the amount claimed, were overstated. The overstatement constituted a defence or possible set-off as to quantum. It did not render the invoice a nullity or postpone interest until the correct amount had been calculated. The claimants were therefore entitled to contractual interest on the correct amount from 14 days after submission of each relevant invoice.
3. Costs. Under Civil Procedure Rules 1998, CPR 44.2, the general rule is that the unsuccessful party pays the successful party’s costs, subject to a different order. Applying Kastor Navigation v Axa Global Risks, Travellers Casualty v Sun Life, Straker v Tudor Rose (a firm) and A L Barnes Ltd v Time Talk (UK) Ltd, the claimants were the overall successful party because the defendants had to pay substantial sums to them.
4. The court declined to treat the defendants as successful merely because they had defended a larger proportion of the claim in monetary terms. It was also reluctant to make an issue-based order because the issues and evidence were closely connected and difficult to apportion. Those matters instead justified departing from the starting point by reducing the claimants’ recoverable costs.
5. The major overvaluation issue, the failed repudiatory-breach claim and the unsuccessful claim for fees during suspension justified a substantial deduction. The court distinguished Various Claimants v Wm Morrison Supermarkets PLC, which concerned tenuous claims. The claimants were awarded one half of their costs, with no costs payable by them to the defendants.

This was a first-instance costs judgment following earlier judgments in the same litigation, including the judgment dated 21 December 2021 and the consequentials judgment dated 30 January 2024. No appellate decision is stated.