Jon Flowith & Partners v John Robert Greaves & Ors

Where a successful party has separate interests from another successful party, and those interests require separate representation, an order for its costs may be appropriate even though it supported the successful position of the other party. The court should assess the parties’ distinct roles, the issues engaged, whether separate representation added value, and whether duplication was avoided. Costs may properly be divided by reference to distinct periods or stages. Costs incurred while a party opposed another party’s position may be reserved pending the final outcome, while costs incurred in supporting the successful position may be payable by the unsuccessful party, subject to detailed assessment.

The judgment concerned costs arising from an earlier conditional strike-out application brought by the third defendant. The claimant had resisted the application, while the first and second defendants initially attended to protect their position on the construction of a promotion agreement and later supported the third defendant’s successful application.

The claimant argued that there should be no order as to costs. The first and second defendants sought payment of their costs and summary assessment. The central issue was whether their separate representation was justified and how their costs should be allocated between the period before and after receipt of the claimant’s skeleton argument.

1. Disposition. The claimant was ordered to pay the first and second defendants’ costs incurred from receipt of the claimant’s skeleton argument onwards, subject to detailed assessment unless agreed. Their earlier costs were reserved.
2. The court applied the principle in Bolton MDC v Secretary of State for the Environment [1995] 1 WLR 1176. An interested or additional party may recover costs where there is a separate issue on which it was entitled to be heard or an interest requiring separate representation. That principle was broader than the claimant’s submission that separate costs were available only for a specific issue requiring separate representation.
3. The first and second defendants had interests distinct from the third defendant. They were separate defendants with different roles and capacities, and the claimant’s developing case engaged matters concerning them. It was therefore reasonable for them to attend through counsel to protect their position.
4. The first and second defendants’ submissions were brief, added value, and did not duplicate the third defendant’s submissions. Their attendance and participation were accordingly justified.
5. The costs required separate treatment by period. Before receipt of the claimant’s skeleton, the first and second defendants were protecting themselves against a possible determination adverse to their construction of the promotion agreement. Those costs were reserved because the final hearing and the ultimate view of that construction would be relevant to their proper incidence.
6. After receipt of the skeleton, the first and second defendants supported the successful conditional strike-out position and made additional submissions relevant to their interests. The appropriate order was therefore payment of those later costs, with proportionality and reasonableness to be addressed on detailed assessment rather than by summary assessment.