Bionome Technology Ltd v Dr John Clearwater

An order made on paper may be set aside under Civil Procedure Rules 1998, rule 23.8.3 only where the affected party lacked an opportunity to make representations about the substance of the application. Proper service at a company’s registered address may provide that opportunity, even where the company failed to monitor the address. Relief from sanctions is not automatically excluded in applications concerning orders made without a hearing, but the usual considerations remain relevant. The indemnity principle is concerned with liability to pay legal costs, not with who actually pays them or with VAT treatment. A client is presumed liable for the fees of its legal representative. That presumption may be rebutted by evidence of an agreement excluding liability. Where the evidence showed potential dual liability, there was no genuine issue requiring investigation and relief was refused.

The applicant had unsuccessfully appealed a patent entitlement decision. Following a consent costs order, the respondent applied for assessment of the balance of its costs. The application was served on the applicant’s former solicitors and later at the applicant’s registered office after those solicitors came off the record. The court assessed the respondent’s costs on paper without receiving submissions from the applicant.

The applicant applied to set aside the costs order and sought relief from sanctions. It argued that it had lacked an opportunity to make representations, that the respondent should have raised an alleged indemnity-principle issue, and that the evidence raised a genuine issue about the respondent’s liability for its solicitors’ costs. The central questions were whether the jurisdiction under rule 23.8.3 was engaged and, alternatively, whether relief should be granted.

1. Jurisdiction to set aside. Rule 23.8.3 requires the applicant to show that the court decided the application without a hearing in circumstances where the affected party had no opportunity to make representations about its substance. That condition was not satisfied. The application had been served while the applicant remained represented and was subsequently served at its registered address. The applicant had multiple opportunities to respond and failed to do so.
2. The applicant was responsible for monitoring its address for service, particularly after its solicitors ceased acting. Difficulties concerning an email address did not affect the validity of service at the registered office. The court also had a general power to set aside orders, but no sufficient basis for exercising it was established.
3. The respondent was not required to raise the indemnity-principle issue from an unused witness statement in what was not an ex parte application. Its obligation was not to mislead the court, and that obligation had not been breached.
4. Relief from sanctions. Haley v Siddiqui [2014] EWHC 835 (Ch) did not establish a general rule excluding relief from sanctions in applications concerning orders made without a hearing. In any event, the present applicant had had an opportunity to make representations. Applying the relevant factors, the breach was serious and significant, there was no good reason for it, and the combined delay was excessive. The application therefore failed even if the jurisdictional requirements had been met.
5. Indemnity principle. The principles stated in Revenue & Customs Commissioner v Gardiner [2018] EWHC 1716 (QB) applied. The respondent was the client of Simmons & Simmons and was presumed liable for its solicitors’ costs. The absence of a written retainer did not rebut that presumption. Evidence that Okipa had agreed to meet the costs did not remove the respondent’s liability; it demonstrated potential dual liability. VAT treatment was a separate question of tax law and did not determine indemnity: Popat v Edwin Coe LLP [2013] EWHC 4524 (Ch).
6. There was no genuine issue concerning indemnity requiring investigation. The application was dismissed and the costs order remained in force.

The judgment describes an earlier appeal in the patent entitlement proceedings, which the same judge dismissed on 9 December 2024. The present decision concerned a subsequent application to set aside the costs order and obtain relief from sanctions.