Valescure Property Limited (in liquidation) & Ors v Paul Andrew Czekalowski & Anor

After settlement or discontinuance, the court retains a discretion to hand down judgment on issues that are no longer live. The discretion requires consideration of all relevant circumstances, including public and private interests. A full merits judgment will usually be inappropriate where the remaining issues concern costs, the case raises no wider legal or public-interest question, no draft judgment exists, and producing reasons may cause unnecessary expenditure or generate an unattractive appeal. Costs issues can be decided specifically without determining the whole abandoned claim. The prospect of a non-party costs application should not ordinarily lead the court to prejudge the position of persons who are not before it.

The liquidators of Valescure Property Limited brought a claim under section 212 of the Insolvency Act 1986 against the company’s former directors, alleging that their decision to complete a construction project caused substantial loss. The respondents sought dismissal or reverse summary judgment, and the liquidators sought partial summary judgment.

After the hearing, the liquidators discontinued the claim and agreed to pay the respondents’ costs on the indemnity basis, with a third party agreeing to meet the assessed liability. The respondents nevertheless sought a fully reasoned judgment on the merits. The issue was whether the court should exercise its discretion to deliver such a judgment despite discontinuance.

1. The request for a merits judgment was refused. The court retained power to give judgment after settlement or discontinuance, but had to weigh all relevant public and private interests.
2. The remaining matters concerned costs. They could be addressed at a further hearing by findings directed to the issues still live, without first deciding the whole substantive claim. A claimant should not generally be discouraged from discontinuing after concluding that its case is likely to fail.
3. The claim concerned the respondents’ alleged negligence in making a commercial decision about completion of a private construction project. It raised no broader legal, policy or public-interest issue comparable to the exceptional circumstances in Bank of England v Three Rivers DC [2006] EWHC 816 (Comm). The principles concerning publication of findings after discontinuance were therefore distinguishable.
4. The reasoning in Beriwala v Woodstone Properties (Birmingham) Ltd [2021] EWHC 609 (Ch) and Jabbar v Aviva Insurance UK Ltd & Others [2022] EWHC 912 (QB) confirmed the relevance of the circumstances and the public and private interests. Those considerations favoured declining to produce a merits judgment here.
5. No draft or provisional judgment existed when the claim was discontinued. Preparing a judgment would consume judicial resources, create artificiality in an abandoned case, and risk an appeal in proceedings that might contain no relevant order. Any possible relevance to other disputes was too vaguely established to outweigh those considerations.
6. A threatened non-party costs application could be made on notice and supported by evidence. It would be unfair to prejudge persons who had not yet been formally brought before the court. The remaining costs issues were left for further determination.