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

The usual rule is that the party seeking an amendment pays the costs caused by it. The court may depart from that rule where new information or events could not reasonably have been pleaded earlier, but the departure should reflect only the costs properly attributable to that circumstance.

Indemnity costs require conduct outside the norm. A weak or unsuccessful claim is insufficient by itself. The conduct must involve misconduct, conduct deserving moral condemnation, or unreasonable conduct to a high degree. An aggregation of less serious factors may also justify indemnity costs.

Summary assessment is inappropriate where the hearing and costs are substantial, the apportionment is difficult, or the claimed rates and attribution require detailed scrutiny.

The judgment determined costs arising from applications decided in the court’s earlier judgment, Peter Waddell Holdco Limited & Anor v Bluebell Cars Holding Limited & Ors [2024] EWHC 3040 (Ch).

The applications concerned amendments to a petition, debarring a company from filing a defence, amendments to a Part 7 claim, and a stay of that claim pending determination of the petition. The issues were the appropriate costs orders, whether costs should be assessed on the standard or indemnity basis, whether summary assessment was suitable, and the amount of any payment on account.

1. Costs of amendments. The usual order is that the party seeking permission to amend pays the costs of and occasioned by the amendments: Taylor v Burton [2014] EWCA Civ 21 at [30]. The principle may not apply where new information or events could not reasonably have been pleaded at the outset, as discussed in Lendlease Construction (Europe) Ltd v Aecom Ltd [2022] EWHC 2855 (TCC) and Various Claimants v MGN Ltd [2021] 4 WLR 55. The court therefore ordered 85% of the consequential petition-amendment costs to be paid by PWHL and 15% to be costs in the case. The usual order applied to the Part 7 amendments.
2. Entitlement to costs. The fact that Mr Fardad and Mr Vaughan had not yet formally been joined to the petition did not prevent costs orders. They had consented to joinder, had personal interests in the allegations, and had a legitimate position on the relief sought.
3. Indemnity costs. An order may be made where the circumstances are outside ordinary and reasonable conduct: Excelsior Commercial and Industrial Holdings Ltd [2002] EWCA Civ 879; Esure Service Ltd v Quarco [2009] EWCA Civ 595. A weak claim alone is insufficient. The court considered the Stay Application and Debarring Application speculative, weak, opportunistic and thin, and regarded the unexplained volte face as unreasonable to a high degree. The related contested parts of the Petition Amendment Application were also out of the norm. Indemnity costs were ordered for those applications.
4. Assessment and payments on account. Summary assessment was unsuitable because the one-day hearing was substantial, the costs were interlinked and poorly apportioned, the claimed hourly rates required scrutiny, and the aggregate sums were very substantial. The costs were accordingly subject to detailed assessment if not agreed. Payments on account were ordered using a broad-brush estimate of likely recovery, with an appropriate margin for error, following Excalibur Ventures LLC v Texas Keystone Inc [2015] EWHC 566 (Comm).