Gabriela Mozerle Teixeira v Amir Ahmed Moaven & Ors

Indemnity costs are justified where a party’s conduct is radically outside the norm of properly conducted litigation. This includes deliberately creating and deploying sham documents intended to mislead the court, and knowingly allowing a false case to be advanced. The court may make a joint and several costs order against parties whose coordinated conduct was causative of the litigation. At the costs stage, concerns about duplication, delay, excessive resources and the proper allocation of costs should generally be addressed on detailed assessment rather than by speculative deductions. Payments on account should reflect a reasonable assessment of likely recovery and relevant risks, rather than merely an irreducible minimum.

Following a five-day trial, the court had determined that declarations of trust executed by Amir Abbas Moaven were sham documents with no legal or equitable effect: [2026] EWHC 1215 (Ch). The successful claimant and two defendants, together with independent administrators of Abbas’s estate, sought their costs from Amir Moaven, Behzad Faiz and Marios Robert Pittalis.

The applicants sought indemnity costs, joint and several liability, and payments on account. The defendants raised concerns about duplication, delay, excessive resources and the inclusion of administrative costs unrelated to the trial. The central issues were the appropriate basis and allocation of costs, the extent of each defendant’s liability, and the sums properly payable on account pending detailed assessment.

1. Indemnity costs. The court’s discretion to award indemnity costs arises where conduct falls outside the norm of properly and reasonably conducted litigation. The concept is deliberately wide and includes conduct before as well as during proceedings. The relevant conduct need not amount to misconduct or require moral condemnation. This approach was explained in Excelsior Commercial & Industrial Holdings Limited v Salsbury Hammer Aspden & Johnson [2002] EWCA Civ 879 and Esure Services Limited v Quarcoo [2009] EWCA Civ 595.
2. Amir, Faiz and Pittalis had jointly participated in creating sham declarations intended to mislead those concerned with the estate and ultimately the court. Their conduct was causative of the trial and manifestly outside the norm. Pittalis and Faiz were not innocent bystanders: both had knowledge of the documents’ creation, had an interest in maintaining their validity, and failed to tell the truth. Their liability was therefore properly assessed on the indemnity basis and made joint and several with Amir.
3. Faiz and Pittalis were liable only for costs relating to the declarations of trust issues, with a 10% allowance for costs incurred by the claimant and her children on unrelated aspects of the 1975 Act claims. Questions concerning duplication, delay and the allocation of administrative costs were left for detailed assessment; speculative reductions at this stage were inappropriate.
4. Payments on account were to reflect a reasonable sum likely to be recovered, taking account of relevant factors and any repayment risk. Applying the approach in Excalibur Ventures LLC v Texas Keystone Inc. [2015] EWHC 566 (Comm), the court used 80% as a starting point, subject to further allowances. The defendants were ordered to pay specified sums by 4 p.m. on 21 September 2026. Both sets of costs were subject to detailed assessment if not agreed.