Durnont Enterprises v Fazita Investment Limited & Ors

Where several parties combine to advance the same unsuccessful case, they will ordinarily be jointly and severally liable for the successful party’s costs, particularly where they share a common interest and conduct the litigation together. Indemnity costs require conduct outside the norm, including unreasonable conduct to a high degree. A broad, late-stage approach which raises every available point and generates unnecessary evidence may satisfy that threshold. A payment on account should be a reasonable estimate of likely recovery, allowing a margin for error. A stay pending appeal requires reliable evidence of serious injustice to the appellant which outweighs the respondent’s prejudice. Security for costs may be released where circumstances have materially changed and the claimant has succeeded, although release may be stayed pending an application for permission to appeal.

The court determined consequential matters following its judgment of 25 February 2026, which dismissed applications by the defendants to challenge jurisdiction, strike out the claim, obtain reverse summary judgment and set aside permission for a derivative claim.

The claimant sought costs and consequential relief. The issues were whether liability for costs should be joint and several, whether costs should be assessed on the indemnity or standard basis, the appropriate interim payment, whether payment should be stayed pending appeal, and whether security for costs should be released. The defendants also sought permission to appeal.

1. Joint and several liability. The defendants had separately represented interests but shared a common cause in challenging jurisdiction. They adopted and supported one another’s submissions and each had an interest in the success of the others’ applications. In substance, they had advanced one unsuccessful challenge. Applying the usual rule identified in Ontulmus v Collett [2014] EWHC 4117 (QB), liability for the claimant’s costs was joint and several.
2. Indemnity costs. The defendants’ “kitchen sink” approach involved taking every point, filing extensive factual evidence and pursuing matters which were later abandoned. It was contrary to the restrained and proportionate approach required to challenges based on full and frank disclosure, as explained in Mex Group Worldwide Limited v Ford [2025] 1 WLR 975. The conduct was unreasonable to a high degree and outside the norm. Costs of the jurisdiction challenge were therefore awarded on the indemnity basis. The claimant’s serious breach of its duty of full and frank disclosure justified disallowing 33% of the costs otherwise recoverable.
3. Interim payment and stay. Under CPR rule 44.2(8), the interim payment was to be a reasonable estimate of likely recovery with an allowance for error. Applying Excalibur Ventures LLC v Texas Keystone [2015] EWHC 566 (Comm), £1.6 million was ordered, representing 65% of the estimated costs. The payment was stayed pending an application for permission to appeal, conditional on payment into court. Under CPR rule 52.16, the balance of justice favoured preserving the position temporarily because the defendants had not produced reliable evidence of serious injustice if payment was made.
4. Security for costs. Material changes included the claimant’s success and the reduced prospects of the defendants overturning the costs order. Security was ordered to be released, but release of 50% was stayed pending the permission application. The claimant had caused the security application to be issued and heard by failing to agree an acceptable mechanism for providing security, so it was ordered to pay those costs on the standard basis, with a 40% payment on account.
5. Permission to appeal. Permission was refused. The proposed grounds principally challenged evaluative decisions and exercises of discretion without identifying an error of principle. The approach in Prescott v Potamianos (also known as Re Sprintroom) [2019] EWCA Civ 931 applied. The defendants could renew the application in the Court of Appeal.

First-instance consequential judgment following the High Court judgment handed down on 25 February 2026. Permission to appeal was refused, subject to renewal in the Court of Appeal.