Peter Waddell Holdco Limited & Anor v Bluebell Cars Holding Limited & Ors

The judgment determines costs arising from the November 2024 hearing ([2024] EWHC 3040 (Ch)) in relation to four discrete applications: the Petition Amendment Application, the Debarring Application, the Part 7 Amendment Application and the Stay Application. The court applied the usual rule that a party seeking permission to amend bears the costs of and occasioned by permitted amendments (Taylor v Burton), but accepted the Lendlease principle that where new matters could not have been pleaded earlier a limited departure from that rule may be appropriate. The court held that PWHL was unsuccessful in opposing contested elements and ordered it to pay the successful parties’ costs; further, because of conduct that was "out of the norm" (a change of position and speculative, opportunistic applications) the court awarded indemnity costs in respect of the Petition Amendment, Debarring and Stay Applications. The court declined to carry out a summary assessment and directed detailed assessment if not agreed, with specified payments on account.

This is a first instance costs judgment arising from the court's November 2024 decision concerning a Part 7 claim and a petition. The judgment deals with four applications resolved at the November hearing: (i) a contested application to amend the petition and points of claim (Petition Amendment Application); (ii) an application seeking an order preventing TopCo from filing and serving points of defence in the petition (Debarring Application); (iii) an agreed application to amend the Part 7 particulars of claim (Part 7 Amendment Application); and (iv) a contested application for a stay of the Part 7 claim until after resolution of the petition (Stay Application).

Nature of relief sought:

• Permission to amend petition and points of claim and consequential directions.
• An order debarring TopCo from filing points of defence in the petition.
• Permission to amend the Part 7 claim particulars (consented).
• A stay of the Part 7 claim pending the petition.

Issues framed by the court:

• Which parties should recover costs and on what basis (standard or indemnity)?
• Whether costs should be reserved to a later CMC or determined now.
• Whether a summary assessment was appropriate or whether the matter required detailed assessment.
• Whether the usual rule that the amending party bears consequential costs should be displaced in respect of particular amendments.

Court’s reasoning and conclusions:

• It was inappropriate to reserve costs of the Petition Amendment Application to a future CMC because the contested drafts had been considered and refused or permitted in their present form; the costs of the contested applications were therefore to be determined now.
• The ordinary rule that a party seeking permission to amend bears the consequential costs (Taylor v Burton) was applied to the Part 7 amendments; for the petition amendments the court found a limited overlap with the Lendlease principle and ordered that 85% of consequential costs be borne by PWHL and 15% be costs in the case.
• TopCo, Mr Fardad and Mr Vaughan were entitled to their costs of contesting the Petition Amendment Application because PWHL had made them parties to that application and each had a personal interest in opposing the contested amendments.
• The Debarring and Stay Applications, together with the contested elements of the Petition Amendment Application, were described as speculative, opportunistic and thin in the context of PWHL’s prior considered agreement to TopCo’s participation and a later unexplained change of position. That conduct was held to take the circumstances "out of the norm" and justified awards of indemnity costs.
• The court refused a summary assessment on the grounds that the hearing was lengthy and complex, apportionments and claimed hourly rates required detailed scrutiny and the total sums claimed were substantial. The costs were ordered to be subject to detailed assessment if not agreed and specified interim payments on account were fixed to reflect likely recovery with appropriate margins.

The judgment therefore disposes of the contested costs issues by ordering PWHL (and, where relevant, Mr Waddell jointly) to pay successful parties’ costs, awarding indemnity costs in respect of particular applications for reasons of unreasonable and out-of-the-norm conduct, and directing detailed assessment with specified payments on account.

The court ordered that PWHL (and where applicable Mr Waddell jointly) must pay the costs of the successful parties in respect of the Petition Amendment Application, the Debarring Application, the Part 7 Amendment Application and the Stay Application. The court applied the usual rule on consequential costs to the Part 7 amendments and, exceptionally, ordered that 85% of the consequential costs of the permitted petition amendments be borne by PWHL and 15% be costs in the case. The Petition Amendment Application, the Debarring Application and the Stay Application were found to be "out of the norm" in the sense required for indemnity costs because of PWHL’s unexplained change of position and speculative/opportunistic conduct; indemnity costs were therefore awarded in respect of those contested applications. A summary assessment was refused as impracticable; the parties’ costs are to be subject to detailed assessment if not agreed, and specified payments on account were ordered (TopCo £40,000; Mr Vaughan £48,000; Mr Fardad £8,000; BIG Parties £80,000; Investor £127,000). The orders reflect the court’s application of CPR 44.2 and PD44, and its assessment of proportionality, reasonableness and the exceptional circumstances justifying indemnity costs.