Invest Bank PSC v Ahmad Mohammad El-Husseini & Ors

When an interlocutory costs order is revisited after an appeal has corrected the legal analysis, the court must assess the interlocutory contest as a whole. Success on one legal issue does not necessarily make a party the overall winner. Where the contest was a mixed success and the parties’ fortunes should follow the eventual merits outcome, an order that costs be in the case may remain just. The later trial result may be assumed irrelevant where its timing is fortuitous and unrelated to the ground for reconsideration. Indemnity costs may be appropriate for a serious allegation lacking proper foundation, particularly where it was withdrawn, accompanied by unjustified wasted-costs threats, and reasonable settlement offers were rejected.

The claimant sought variation of interlocutory costs orders made during proceedings concerning secondary claims intended to facilitate enforcement of judgment debts against assets not apparently owned by the principal judgment debtor. The original interlocutory orders directed that specified costs be costs in the case.

The Court of Appeal later corrected the legal analysis on the capacity of a debtor’s acts through a company to fall within Insolvency Act 1986 s.423, leading to amended pleadings. The secondary claims subsequently failed at trial before Calver J, whose judgment was [2024] EWHC 2976 (Comm). The claimant applied to replace the existing costs-in-the-case orders with costs orders in its favour and to revisit payments on account. The central issue was whether the appellate correction justified varying the earlier interlocutory costs orders.

1. The costs variation application was dismissed. The application to reverse or vary the post-trial payments on account was also dismissed.

2. The court assumed, in the claimant’s favour, that the trial outcome was irrelevant. It was potentially unfair to allow the happenstance of a delayed costs application to determine whether the trial result could be considered.

3. The Court of Appeal’s correction on the capacity point did not transform the interlocutory contest into a clear claimant victory. Some claims would have survived only after re-pleading, other claims remained materially defective, and the principal amendment issue concerned the speculative character of a claim. The contest remained a mixed bag.

4. Both sides had achieved substantial but incomplete success. The defendants had succeeded in eliminating or exposing serious deficiencies in parts of the claims, while the claimant had secured success on the capacity point and retained some claims. It was therefore just for the parties’ fortunes as to costs to follow the merits of the secondary claims generally, as reflected in the original orders that costs be in the case.

5. The court did not need to determine further arguments concerning the claimant’s conduct or whether different treatment was appropriate for particular defendants.

6. The second, third, fourth and sixth defendants were awarded their costs of the costs variation application, generally on the standard basis. Costs relating to the 11th witness statement were to be assessed on the indemnity basis. Mo’s costs incurred on or after 11 August 2025, and Alexander and Ziad’s costs incurred on or after 4 June 2025, were also to be assessed on that basis. The court considered a serious, unsupported allegation of deliberate misleading conduct, later withdrawn, and threats of wasted-costs applications to be highly reprehensible. Reasonable offers to reduce costs also supported the limited indemnity-costs orders.

7. Ramzy was entitled to recover his reasonable time-based costs as a litigant in person, subject to determination of the applicable hourly rate.

• Court of Appeal: The claimant’s appeal on the capacity point was allowed on a narrow issue of law in [2023] EWCA Civ 555, permitting further amendment of the pleadings.
• Supreme Court: A further appeal concerned a different issue and did not revisit the capacity point; the Supreme Court referred to it in [2025] UKSC 4.
• High Court (Commercial Court): The secondary claims were dismissed at trial by Calver J in [2024] EWHC 2976 (Comm). The present court refused to vary the earlier costs-in-the-case orders.