Practice and Procedure


PUBLISHED February 19, 2003

It was within a costs judge's discretion under CPR 47.15 to decide the appropriate sum of costs to be paid by certain defendants in an action and there was no valid basis for interfering with that decision.Claimant's ('C') appeal from an order of a costs judge of 29 November 2002 directing and certifying that the tenth ('M') and thirty-eighth ('D') defendants pay ?525,000 to C by way of costs incurred in an action. C claimed to have been the subject of a huge fraud orchestrated by the first and second defendants in an action now including 55 defendants. Proceedings were commenced in May 1996 and M was named as a defendant to the action for tracing purposes. D was not joined as a party until 11 January 1999, at which time C alleged conspiracy on the parts of M and D. On 29 October 1999, judgment in default was entered against M and D CIBC Mellon Trust Co Ltd v (1) Mora Hotel (2) Chascona (2003) All ER 564. The form of judgment was prepared by C's solicitors and included: '10th and 38th defendants pay C's damages to be assessed together with the costs of the action to be taxed on an indemnity basis'. M and D applied to set aside the default judgment, which application was dismissed on 3 February 2003 CIBC Mellon Trust Co Ltd v Stolzenberg & Ors (2003) LTL 3/2/2003. C applied for an interim certificate of costs, CPR 47.15, on the basis that if M and D succeeded in applying to set aside judgment then the court might make an order that costs be paid as a condition of M and D being allowed to defend. The costs judge held inter alia that: (i) an order that a particular defendant should pay the costs of the action meant the costs of the action against that particular defendant; and (ii) it was wholly unjust that the defendants that remained after others had left the action at no cost to themselves should have to bear the burden of costs incurred by C in pursuing the departed defendants. C submitted that the costs judge erred in principle and should have acceded to its submission that M and D were jointly and severally liable for the costs of the action including pre-writ investigatory costs that related to the issues in the action.HELD: (1) C was entitled to seek a detailed assessment of the costs against the defendants named in the order drafted by C's solicitors. (2) The costs judge had a discretion to decide the sum he considered appropriate. It was plain from CPR 47.15 that this was pre-eminently a discretionary regime. It was a great mistake to elevate certain statements extracted from authorities as binding principles to be applied in all cases. (3) There was potential for injustice and unfairness if one adopted C's approach. Why should M and D be obliged to pay the costs of the action incurred from May 1996 to January 1999. The costs judge was fully entitled to leave the costs of the investigation to be sorted out at a detailed assessment when all the issues had been identified and the responsibility of M and D had been established. Given the formidable complexity of the issues, costs orders and where and when the defendants entered and left the litigation, the costs judge's approach was understandable. (4) There was no valid basis for interfering with the costs judge's discretion and decision.Appeal dismissed.