25.02.2013Trustees of Olympic Airlines SA Pension & Life Assurance Scheme v Olympic Airlines SA  EWCA Civ 218
Key areas: security for costs; Court of Appeal
This was an application for security for costs against the Respondent which is subject to liquidation proceedings in Greece.
In July 2010 the Applicants issued separate proceedings in England & Wales due to the Respondent was “established” under art. 3(2) 1346/2000/EC.
These proceedings were successful, but were stayed pending the outcome of further proceedings.
Given the stay the Applicants applied for security on the basis that the Respondent is a company and there is “reason to believe” that they would not be able to fulfil any costs order.
The Applicants submitted that the general rule – that companies which appeal winding-up proceedings should pay security – should apply given the facts.
The Respondent submitted that the “general rule” is more a matter of practice than a “rule”, and that under Greek law, they had “no power” to give security and it would “stifle” an appeal.
The Court held that there was reason to believe the Respondent would not be able to pay its costs; that the appeal “is clearly not frivolous”; but that it was “at least arguable” it would be able to provide security, given Greek law. However, because the Respondent was backed by the Greek government, there was reason to believe that it would be able to satisfy an order.
Overall the Court held that security of £60,000 should be paid, but it was subject to any further arguments on the impact of Greek law.
19.02.2013R (Srinivasans Solicitors) v Croydon County Court & Anor  EWCA Civ 249
Key areas: party’s conduct; both parties win some issues; Court of Appeal
This was an appeal against a refusal to award costs in a successful application for judicial review.
Costs had been refused on the basis that the “wrong criteria” had been used to justify the application; that points had been abandoned at a late stage; and that the Appellant’s conduct caused the initial problems that caused the application.
On appeal, the Court noted that this was an appeal against a Judge’s discretion, and that the Order was based upon the Appellant’s partial success. It held that the Judge was correct to hold that the case was not conducted in an economic manner, and that the rulings on conduct were also valid.
As a result, the application was refused.
07.02.2013R (Tracey) v Cambridge University Hospital NHS Foundation Trust; Secretary of State for Health; Equality and Human Rights Commission  EWHC 197 (Admin)
Key areas: both parties win some issues; High Court
The claim was for a judicial review by the deceased Claimant’s estate of the First Defendant’s refusal to treat her; and the Second Defendant’s lack of a policy in the area. The EHRC was an Interested Party in the case.
The Court had ruled in favour of the Claimant on some issues; and in the First and Second Defendants’ favour on other issues.
The Claimant submitted that had the First Defendant admitted the facts in their without prejudice correspondence of 8th October 2012, the hearing would have been unnecessary. This was rejected because the hearing went further than what the letter covered.
The First Defendant submitted that the Court’s ruling in their favour on causation meant that the hearing was unnecessary. This too was rejected because an investigation was “necessary”.
The Second Defendant submitted that there should be no order as to costs.
In the circumstances, the Court held that no order as to costs between the Claimant and first two Defendants was appropriate.
07.02.2013Knox D’arcy Operations Ltd.; Knox D’arcy Investments Ltd.; v Manches LLP  EWCA Civ 33
Key areas: Solicitor/Own client; Court of Appeal
This was an appeal by the Defendants.
The Defendants had been instructed as solicitors by a third party in a piece of litigation.
At first instance, it was held that the Defendants were not able to use money in their client account to pay their fees. The Judge held that the Defendants had been given notice, before the money was received, that the third party held it on a beneficial basis for the Claimants. He also held that there was nothing in the Defendant’s terms and conditions that allowed them to keep money due from one client to pay another’s outstanding fees, even if they were closely related.
The appeal dealt with three issues: did the Defendants have prior notice?; and, if not, could they use the money to pay their fees?. The third issue was an appeal against a costs order.
On the first issue the Defendant submitted that the burden was on the Claimant to prove notice was given; and that it had to be actual, formal notice, not constructive notice. The Defendants submitted that this was not given, and that the Claimants were a group of companies and any notice that was given did not specify to whom it related.
However, the Court held that notice was given on the basis that it referred to a “Knox D’Arcy case”, and any solicitor would have recognised to whom it related and if they were unsure would have raised questions.
As a result, the appeal on the first issue was dismissed, while the second issue was not relevant.
The third issue was an appeal against an order that the Defendants pay 75% of the Claimants’ first-instance costs. This was appealed on the grounds that the Claimants had served key evidence only a day before trial, and because the damages claim was “inflated”. After considering the judge’s draft judgment on costs, this appeal was also dismissed.
06.02.2013Re A (A Child)  EWCA Civ 43
Key areas: Wasted Costs Order; family proceedings; party’s conduct; unreasonable conduct; Court of Appeal
This was an application by a Rotherham MBC for a Wasted Costs Order against a firm of solicitors acting for a family in a set of adoption proceedings.
The Order was sought due to the Court rejecting the family application to appeal a refusal to re-open a fact-finding decision, which the council claimed was “improper, unreasonable or negligent” conduct under s. 51(6) Senior Courts Act 1981. The child’s solicitors made submissions in favour against the parents’ conduct, but not on the order itself, other than to say that if one was made in their favour; one should also be made in the child’s favour.
The council submitted that the solicitors had not fully complied with their disclosure obligations; that they had misled the court by claiming they had less time to prepare the case than they actually had; that the expert was not instructed in compliance with the Family Procedure Rules; and that once the expert’s report was released the case was “unsustainable”. The child supported these allegations. Both parties also referred to the conduct of the solicitors at trial in support of a claim for their wasted costs.
The family submitted that their conduct had not led to any extra costs being incurred.
In relation to the non-disclosure at the first interim hearing, the Court held that this related to an interim application, which they would have allowed. On the time-limits claim, no extra work was incurred. On the later interim hearing, the Court held that non-disclosure was “a serious and gross failure”. However, their conduct did not lead to any extra costs being incurred. The lack of proper instructions to the expert was “a clear error of judgment”, but again, no extra costs were actually incurred. On the fact that the case continued after the expert’s report had been received, the Court held that it was due to Counsel’s “wholly over optimistic judgment”, not because of any act by the solicitors.
As a result, the application was dismissed.
01.02.2013Vardy Properties; Vardy Properties (Teeside) Ltd. v HM Revenue & Customs  UKFTT 96 (TC)
Key areas: delay; First-Tier Tribunal (Tax)
On 6th September 2012, the First Appellant had lost an appeal against an assessment of Stamp Duty Land Tax, but the Second Appellant won theirs.
The proceedings had been complex under r. 23 Tribunal Procedure (First-tier Tribunal)(Tax Chamber) Rules 2009, and the Appellants had not applied for the costs-shifting provisions to be disapplied.
However, it was not until 13th November 2012 that HMRC wrote to the First Appellant requesting their costs, and the time-limit for doing so had expired on 4th October 2012, i.e. 40 days previously. HMRC stated that the lateness was due to “the lawyer who had conduct of the appeal moving teams”.
The Tribunal held that in the circumstances, it was just to extend the deadline for the application, and that, in principle, there was no reason why the usual costs rules should not apply, and the First Appellant was liable.
On the facts, the Tribunal summarily assessed HMRC’s costs as claimed at £29,901.23.
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