Lee Chu v Kin Ming Je & Anor (Costs)

When determining costs of interim applications, the court should identify the winner, give appropriate weight to the general rule that the successful party receives its costs, and then decide whether justice requires a different order. Criticism of pleadings, delay, limited hearing time or the failure of an offer will not ordinarily justify departing from that rule. Proportionate costs may be ordered where appropriate, but the consequence must be justified by the circumstances. Indemnity costs require conduct taking the case out of the norm. Under CPR 44.2(8), a payment on account should ordinarily be ordered in a reasonable sum unless there is good reason not to do so.

The judgment concerned costs following the determination of a suite of interim applications on 23 January 2024, including applications for worldwide freezing injunctions and asset disclosure orders, strike-out applications, jurisdiction challenges and an application concerning expert evidence on US law.

The claimant succeeded against the first defendant on several applications, but failed against the second defendant on the freezing-injunction application while succeeding against her on the jurisdiction application. The court was required to determine the incidence and basis of assessment of costs, whether costs should be paid on account, and the appropriate allocation of costs between the parties.

1. Incidence of costs. Applying CPR 44.2, the court identified the winner on each application, gave weight to the general rule that the successful party should receive its costs, and asked whether justice required a different order. The claimant was awarded her costs against the first defendant on the successful freezing-injunction, strike-out and jurisdiction applications. The second defendant was awarded her costs of the dismissed freezing-injunction application, and the claimant was awarded her costs of the successful jurisdiction application against her.
2. Criticisms of delay, imperfect pleadings and a later amendment did not justify reducing the claimant’s recovery to a proportion of her costs. Any costs occasioned by a future amendment could be dealt with separately. The limited time spent on the jurisdiction application was relevant to assessment and any payment on account, but did not justify departing from the general rule.
3. There was no order for the claimant’s costs against the second defendant in relation to the expert-evidence application. The second defendant had adopted a neutral stance, and the application concerned issues on which the parties had achieved mixed results. The claimant was not ordered to pay the second defendant’s costs of that application.
4. The second defendant’s costs of the unsuccessful freezing-injunction application were to be assessed on the standard basis. The case did not involve conduct taking it out of the norm. The claim was not grossly exaggerated, any exaggeration was innocent rather than culpable, and failure to accept an offer was insufficient, particularly where the offer did not include the asset-disclosure order sought.
5. Payment on account. Under CPR 44.2(8), a payment on account should be ordered in a reasonable sum unless there is good reason not to do so. The first defendant accepted that principle, and £150,000 was ordered on account of the claimant’s costs. No payment on account was ordered between the claimant and the second defendant because costs orders ran in both directions, allocation between overlapping applications would be difficult, the request was raised only in reply submissions, and it was unsupported by final statements of costs.
6. Detailed assessment of the costs ordered was directed.