TCPC Management Limited v Windrush Alliance UK Community Interest Company

An unsuccessful application does not, without more, justify indemnity costs. The court must assess the paying party’s conduct in its full context and without hindsight. Conduct remains within the ordinary and reasonable conduct of litigation where arguments were advanced in good faith, even though ultimately unsupported by the evidence.

Summary assessment is generally appropriate for proceedings lasting less than a day. Detailed assessment is justified where the bill is substantial and there are significant disputes about the work undertaken, rates, reasonableness and proportionality. Where detailed assessment is ordered, the court should ordinarily order a reasonable payment on account.

This was a consequential judgment following the court’s decision on the Company’s application to strike out a winding-up petition, reported at [2024] EWHC 683 (Ch). The Petitioner sought indemnity costs. The Company accepted liability for costs on the standard basis.

The court had to determine the appropriate costs basis, whether the costs should be summarily or in detail assessed, and whether a payment on account should be ordered.

1. Costs basis. The Company’s unsuccessful strike-out application, including grounds later considered hopeless, did not take the case outside the norm. The court assessed the Company’s conduct as the matter progressed and in its full context, without hindsight. Its belief that it had suffered a serious wrong was ultimately unjustified, but its arguments had been advanced in good faith. An application which fails, without more, does not justify indemnity costs. The Company was therefore ordered to pay the Petitioner’s costs on the standard basis.
2. Detailed assessment. Paragraph 9.2 of Practice Direction 44 identifies summary assessment as the normal approach for cases lasting less than a day unless there is a good reason otherwise. Here, the bills exceeded £150,000 including VAT, despite a half-day hearing, and the Company raised substantial disputes about the work undertaken and rates charged. Those disputes could not be dealt with efficiently or fairly by summary assessment. The costs were therefore ordered to be subject to detailed assessment if not agreed.
3. Payment on account. Under Civil Procedure Rules 1998, rule 44.2(8), the court ordered a reasonable payment on account. The absence of specific submissions on that issue was not a good reason to make no order, because the existing submissions addressed matters relevant to the assessment. A payment of £70,000 inclusive of VAT was ordered within 14 days. Either party could seek to set aside or vary that part of the order if dealing with it without a hearing had produced an unfair result.
4. The court declined to order that the balance of the costs be treated immediately as an expense of a liquidation under rule 7.108(4)(h) of the Insolvency Rules 2016, because the Company was not then in liquidation and such an order would be premature.

This was a consequential first-instance judgment following the court’s strike-out decision in the same proceedings, reported at [2024] EWHC 683 (Ch). Permission to appeal the earlier decision had been refused in a separate Form N460, with any application to be made to a single High Court judge.