Andrew Grijns v Janice Grijns & Ors

Costs ordinarily follow the event. A party’s limited success on a minor and peripheral issue will not justify reducing the successful party’s costs where that issue did not materially increase the litigation’s cost.

Indemnity costs may be ordered where the conduct of the litigation is outside the norm. Impropriety or dishonesty is unnecessary, although relevant. A failure to respond to a serious mediation request is generally unreasonable, but it is not automatically penalised. The court must assess the party’s conduct overall and in context. A party is not required to negotiate on the basis of an wholly unrealistic offer or to mediate an unfounded claim where refusal would have been reasonable.

The claimant pursued claims based principally on proprietary estoppel, seeking a substantial beneficial interest in residential property owned by his mother. He also brought a trespass claim arising from an incident at the property. The defendants succeeded on the substantive claims and on their counterclaim, subject only to a limited reduction in the period for which the claimant had to account for rental profits.

The court had previously dismissed the claims and determined ownership, trespass and mesne profits. This consequential hearing concerned the incidence and basis of costs, including the effect of the claimant’s limited success, the parties’ pre-litigation conduct, mediation, ADR and settlement offers.

1. Costs. The defendants were the clear winners. The claimant’s success concerning the rental account was minor and peripheral. It did not materially increase the costs of the litigation, since the relevant factual material formed part of the wider proprietary estoppel enquiry. No reduction was therefore made.
2. Indemnity basis. Indemnity costs are fact-sensitive and require conduct outside the norm, assessed by reference to the proceedings as a whole. A finding of impropriety or dishonesty is unnecessary. The claimant’s proprietary estoppel case was exceptionally weak, unsupported by contemporaneous evidence, and based on assurances which the court found had been invented. His conduct, including the tactical use of capacity allegations and an unpursued committal application, placed unjustified pressure on his elderly mother. This conduct warranted indemnity costs.
3. Mediation and ADR. Under PGF II SA v OMFS Co Ltd, a failure to respond to a serious request to mediate is generally unreasonable, but the rule is not automatic. The question remains whether the conduct was unreasonable on the particular facts, as part of the overall costs assessment. The defendants had not refused mediation. They had proposed it early, while the claimant imposed unreasonable conditions and failed to provide disclosure needed for meaningful mediation. Given the unfounded nature of the claim, it would also have been reasonable for the defendants to refuse mediation.
4. Settlement offers. The claimant’s offers were substantially worse than the result achieved by the defendants and provided no sensible basis for negotiation. The authorities did not require the defendants to incur further time and cost engaging with wholly unrealistic offers.
5. Orders. The claimant was ordered to pay all costs up to judgment on the indemnity basis. Post-judgment costs were payable on the standard basis.

The judgment records that the court had previously dismissed the claimant’s claims and determined the defendants’ counterclaim. This hearing determined consequential costs issues.