Samson Akwagbe v Frazer Ulrick (as liquidator of BL 634 Limited) & Anor

The starting point is that costs follow the event. A different order requires sound reasons. Indemnity costs are exceptional and require conduct taking the case outside the norm. A weak claim, limited prospects of success, an emphatic defeat, annoyance, difficulty, vocal criticism, or the burden imposed on other creditors is insufficient without more. The court must assess the litigant’s conduct in the litigation, while considering whether it amounts to abuse of process or other conduct outside the ordinary. Costs must also be reasonable and proportionate. A costs application caused by the successful party’s own procedural error may be assessed separately and reduced accordingly.

The applicant sought the removal of the first respondent as liquidator of BL 634 Limited. The court declined to remove him at the hearing on 14 May 2025, but reserved the issue of costs and invited written submissions.

The first respondent sought indemnity costs, relying on Beattie v Smailes. The applicant relied on the court’s discretion, the first respondent’s communication and conduct, and the circumstances affecting his conduct of the application. The issues were whether the applicant should pay costs, whether indemnity costs were justified, and the proper amount of costs, including costs arising from an application to adduce witness evidence.

1. Removal application dismissed. The applicant’s complaints about delay, inefficiency, brusque communication and lack of vigour did not reach the level justifying removal of the liquidator.
2. Under CPR 44(2)(2)(b), the court had discretion over costs, but the starting point remained that costs follow the event. Sound reasons were required to deprive the successful party of its costs.
3. Indemnity costs were refused. They are out of the ordinary and require conduct taking the litigation outside the norm. The application had little chance of success, but was not wholly without merit. The applicant had been difficult and vocal, but had made no personal threats and had not abused the process. The fact that other creditors might bear any shortfall, or that the respondent had been required to defend the application, was insufficient.
4. Beattie v Smailes was materially different on its facts. Its reasoning did not justify indemnity costs in the present circumstances.
5. The applicant was ordered to pay the respondent’s costs on the standard basis. The court summarily assessed the main costs at £18,000 inclusive of VAT and allowed £1,800 for the witness-evidence application, which had been necessitated by the respondent’s own error. The total payable was £19,800 by 9 September 2025 or 28 days after service of the order, whichever was later. Any shortfall could be recovered as an expense of the liquidation.