Victoria Capital Trust & Anor v 381 Southwark Park Road RTM Company Limited & Ors

Costs following an application concerning the scope of a freezing injunction are discretionary. The court should consider success, the reasonableness of raising and contesting issues, the parties’ conduct, relevant offers and the measure of success on individual issues. A successful party may therefore recover only part of its costs where the application was strictly unnecessary, substantial arguments failed, and both parties acted reasonably. Indemnity costs require conduct outside the norm of ordinary litigation; weakness in a legal argument alone is insufficient.

The applicants sought costs after obtaining judgment clarifying that a freezing injunction did not prevent receivers from dealing with specified properties. The application had arisen because the respondents raised concerns about a possible beneficial interest of another company and the priority of the applicants’ charge. The court had held that the application was strictly unnecessary, but that the respondents’ position gave the applicants legitimate cause for concern.

The parties disputed the incidence and basis of costs, the effect of their offers, summary assessment, and whether third-party costs orders should be made against companies and an individual connected with the disclosure failures.

1. Costs in principle. The applicants were the successful party because they obtained the relief sought. That did not determine the entire costs order. Under Civil Procedure Rules 1998 Part 44, the court could consider whether it was reasonable to raise, pursue or contest particular issues, together with the parties’ conduct, offers and the measure of success.
2. The application was strictly unnecessary because the applicants could have proceeded with the sale without further order. Nevertheless, the respondents’ continuing assertion that another company might have a beneficial interest over which the charge lacked priority gave the applicants legitimate cause to seek the court’s comfort. Neither party had acted unreasonably. The respondents’ ring-fencing proposal showed a desire to resolve matters but was based on a misconceived figure and would have deferred, rather than avoided, the underlying dispute.
3. The applicants failed on substantial alternative arguments, including a claim for a declaration, discharge of the injunction and a retrospective undertaking as to damages. An issue-based costs order was available but was not appropriate. The fair order was that the respondents pay 50% of the applicants’ costs.
4. Basis and assessment. The respondents’ conduct was not outside the norm of standard assessment. Weakness in a legal argument, without more, did not justify indemnity costs. The costs were summarily assessed, with reductions for inadequately explained increases and other deficiencies. The sum payable was £14,500 excluding VAT, subject to any further agreement or submissions on VAT, payable within 56 days.
5. A third-party costs order was refused. Although the court could join a person of its own motion under Part 46.2(1), the applicants’ success turned on charge priority, not on whether the third party had a beneficial interest or had failed to provide information. Those matters therefore did not justify transferring liability for the application’s costs.

The judgment describes an earlier judgment handed down on 23 January 2025 concerning the freezing injunction. The present judgment determined the consequential costs issues at first instance.