WOL (London) LLP v Croydon Investments Limited & Ors (Costs)

Where an application substantially fails but exposes a pleading deficiency requiring amendment, the unsuccessful applicant may be ordered to pay the successful party’s costs subject to a reduction reflecting the amendment required. An indemnity costs order requires circumstances justifying departure from the standard basis; an unsupported claim will be refused. Costs may be awarded to a non-party who reasonably attends an application because of an active interest in its outcome, particularly where the application fails and the non-party’s participation was reasonable and just.

The judgment concerned costs and consequential case-management orders following the dismissal of the First Defendant’s application to strike out the Claimant’s Amended Particulars of Claim or obtain summary judgment.

The Claimant sought permission to re-amend its pleading and an order that the First Defendant pay its application costs on the indemnity basis. The First Defendant argued for standard-basis costs, no order, or costs in the case. The Third Defendant, although not a party to the application, sought its costs because it had attended and had an active interest in the outcome.

The issues were whether re-amendment should be permitted, how the costs should be apportioned and assessed, and whether the Third Defendant should recover its attendance costs from the First Defendant.

1. Re-amendment. The court had previously held that the Amended Particulars of Claim did not expressly set out parts of the case against the First Defendant, but that the deficiencies could be cured by re-amendment. The draft Re-Amendment solved those deficiencies. Permission was therefore granted for it to be filed, and re-service was dispensed with.
2. Claimant’s costs. The First Defendant’s application had substantially failed, apart from the issue requiring the Claimant to re-amend its pleading. The First Defendant was ordered to pay 90% of the Claimant’s costs of the application, the reduction reflecting the need for re-amendment. The court declined to order indemnity costs because nothing had been established to justify that basis.
3. The costs were not summarily assessed. The sum claimed appeared high, so the costs were to be subject to detailed assessment on the standard basis if not agreed. A payment on account was ordered in the sum of £38,394.54, representing 50% of 90% of the amount claimed.
4. Third Defendant’s costs. Although not a party to the application, the Third Defendant reasonably attended because it had an obvious and active interest in the application and its outcome. In those circumstances, and because the First Defendant’s application failed, it was appropriate and just for the First Defendant to pay the Third Defendant’s costs.
5. The Third Defendant’s costs were summarily assessed at £23,504.58, subject to the VAT element being payable only to the extent that it could not be recovered from HMRC.

The judgment records that the First Defendant’s strike-out and summary-judgment application had been dismissed in an earlier judgment handed down on 9 February 2024. This judgment determined consequential re-amendment and costs issues.