Bernard Carl v Vikash Limbani

The general rule that costs follow success remains the starting point even where the successful party has acted dishonestly. Serious misconduct can justify a proportionate costs sanction independently of any additional expense it caused. Relevant considerations include the nature and degree of the misconduct, its effect on the proceedings and the conduct of the party seeking the sanction. A successful defendant's conduct may justify withholding costs where it encouraged the claimant to bring or pursue the action. Costs consequences can be assessed through common sense inferences without precise causal quantification. A single order may address both those consequences and the need for a sanction.

Refusing submissions on an expressly provisional costs indication constitutes a serious procedural irregularity. On reconsidering costs, the appellate court exercises the discretion afresh, subject to binding factual findings.

Bernard Carl brought proceedings concerning historic sports cars which Richard Edwards, a car dealer, had purported to acquire or hold for him. Carl subsequently joined Vikash Limbani, who worked for Trevor Smith as a chauffeur, alleging involvement in removing cars and attempting to dispose of a Porsche belonging to Carl.

The trial judge dismissed the conspiracy and conversion claims against Limbani. Nevertheless, he found that Limbani had given a false account to a police officer at Edwards' instigation, facilitated an attempted disposal of Carl's cars and given dishonest evidence. The judge provisionally indicated that there should be no order as to costs, subject to further submissions.

At the consequentials hearing, the judge treated that indication as a final determination and refused to hear submissions challenging it. His costs decision was recorded in [2025] EWHC 1104 (Ch). Limbani appealed with permission, challenging both the refusal to hear submissions and the withholding of his costs. The central questions were whether a serious procedural irregularity required reconsideration of costs and, if so, whether his conduct justified withholding costs despite his success in defending the claims.

The appeal was dismissed unanimously. Foxton LJ, with whom Jeremy Baker LJ and Falk LJ agreed, concluded that the original costs decision involved a serious procedural irregularity. Exercising the discretion afresh, the court nevertheless reached the same result: no order as to costs between Carl and Limbani.

1. The trial judge had expressly reserved his preliminary costs view for further submissions. Refusing those submissions on the mistaken basis that costs had already been finally determined was a serious procedural irregularity under CPR 52.21(3)(b). The costs order therefore required reconsideration. The discretion was fully at large before the appellate court; the provisional indication supplied no presumptive starting point. The trial findings remained binding unless successfully challenged (paras [53]–[59]).

2. Under CPR 44.2, the starting point remained that the unsuccessful party paid the successful party's costs. Dishonesty did not automatically displace that rule. The court assessed the seriousness of the misconduct, its relationship to the issues and its effect on costs. Sufficiently serious misconduct could also justify a proportionate sanction irrespective of additional costs, including withholding all costs. The conduct of the party seeking that departure had to be considered: Widlake v BAA Ltd, Abbott v Long and Ward v Donnellan applied (paras [60]–[72]).

3. Costs causation was assessed summarily through common sense inferences from the findings and inherent probabilities. Precise calculation was unnecessary. An appellate court could make that assessment where the trial court had made none or its determination was seriously flawed. A single order could address both the costs consequences of dishonesty and a proportionate sanction without allocating separate portions to each purpose: Sulaman v Axa Insurance plc applied (paras [73]–[76]).

4. The challenges to the findings concerning Limbani's pre-action conduct and dishonest evidence failed. The findings rested on improbability and inconsistency, rather than demeanour. Hearsay was admissible under section 1(1) of the Civil Evidence Act 1995; failure to give notice affected weight and costs rather than admissibility. The court placed no reliance on the insufficiently explained findings concerning formal disclosure obligations, other court orders or engagement with the proceedings (paras [82]–[84]).

5. Limbani's false account encouraged Carl to bring and pursue the proceedings, while his misleading defence and dishonest evidence independently warranted a sanction. Their combined effect justified withholding all his costs. Pursuing a viable claim in the hope of securing assistance against other defendants through settlement did not establish misconduct by Carl. There was no countervailing conduct making the order inappropriate. The court accordingly made no order as to costs between the parties and dismissed the appeal (paras [85]–[91]).

• Court of Appeal (Civil Division): In [2026] EWCA Civ 856 , the court found a serious procedural irregularity in the costs decision, exercised the discretion afresh and reached the same no-order result. The appeal was dismissed unanimously.
• High Court, Business and Property Courts, Business List (ChD): Simon Gleeson, sitting as a Deputy Judge, made no order as to costs between Carl and Limbani following the consequentials hearing. The consequential judgment was [2025] EWHC 1104 (Ch) , handed down on 7 May 2025.
• High Court: Following trial in May 2024, the judge dismissed the claims against Limbani in a judgment handed down on 22 August 2024. He expressed a provisional view that there should be no order as to costs, subject to further submissions.