Leonard Cook v Charlotte Skeggs

An appellate court may interfere with a costs order where the lower court’s exercise of discretion was wrong in principle or failed to reflect the parties’ relative success. The usual starting point is that the unsuccessful party pays the successful party’s costs. A party who succeeds on distinct strike-out and summary-judgment issues should not ordinarily be ordered to pay the applicant’s costs merely because a late amendment affected one part of the case. Any departure from the usual order must be justified by conduct or another significant circumstance and must be confined to the issue to which it relates. Where the lower court’s approach is flawed, the appellate court should exercise the costs discretion afresh.

The defendant appealed against an order requiring her to pay 80% of the claimant’s costs of a strike-out and summary-judgment application. The underlying claim concerned a disputed property transaction and allegations of fraud and conspiracy.

The lower court had rejected summary judgment, finding that the defendant’s factual case had a sufficient prospect of success, and had permitted amendments which substantially addressed pleading criticisms. It nevertheless treated the claimant’s application as substantially justified and awarded him most of its costs. The central issue was whether that order properly reflected the distinct issues and the parties’ relative success.

1. Appeal allowed. The costs order was wrong because it did not properly reflect the outcome of the hearing. The defendant had successfully resisted both summary judgment and strike out, although her late amendment justified some reduction in her costs.
2. The summary-judgment application was not ancillary to the strike-out application. It involved a separate evidential challenge to the merits of the defence and would have failed even without the amendments. The defendant was therefore the successful party on that distinct issue.
3. The general rule under CPR r 44.2(2) is that the unsuccessful party pays the successful party’s costs, subject to all the circumstances, including conduct. A significant reason is required before the successful party is deprived of costs or ordered to pay the unsuccessful party’s costs. The relevant conduct here was the late amendment, which related only to the strike-out issue.
4. An issues-based order was not appropriate. Although the issues were distinct, practical difficulties arose in separating the costs, and the conduct-based adjustment could be made proportionately. The claimant was ordered to pay the defendant’s costs of the contested application on the standard basis, reduced by 25%.
5. The court exercised the costs discretion afresh rather than recasting the lower court’s order. The defendant also succeeded in the appeal and was awarded the appeal costs, subject to summary assessment after further written submissions.

• High Court (King’s Bench Division): the defendant appealed the order of HHJ Parker dated 12 March 2025. The appeal was allowed and the costs discretion was exercised afresh.