Securing an Issue Based Costs Order – General Motors UK Ltd v The Manchester Ship Canal Company Limited No 2 [2017] EWHC 21 (Ch)

This was a High Court decision of HH John Behrens following reserved judgment at a hearing on 30 November 2016 where the parties had been able to agree many outstanding issues save for costs liabilities.

 

The main action surrounded a claim for relief from forfeiture. Typically, in accordance with Bland v Ingrams Estates Ltd (No 2) [2001] EWCA Civ 1088, it is the applicant who pays the respondent’s costs on an indemnity basis, save for any situation where costs have increased due to unnecessary opposition to the grant of relief.

 

The parties were agreed that General Motors UK Ltd (the applicant) should be responsible, on an indemnity basis, for The Manchester Ship Canal Company Ltd’s (the respondent) costs in respect of terminating the licence and defending the claim up to the point of serving their defence (April 2015). However, in August 2016, the applicant amended their case to rely on the 1885 Act, and it was the liability for these costs that the parties were unable to agree on the basis that this claim had ultimately failed.

 

The matter was complex and involved multiple costs orders. The respondent contended that an issue based costs order was appropriate, and that they should be awarded their costs arising out of the 1885 Act claim on a standard basis. This was disputed by the applicant.

 

HH John Behrens considered the parties’ arguments and the provisions of CPR 44.2, which permits the Court to exercise discretion as to costs and make, if appropriate, an issue based order (CPR 44.2(6)(f)).

 

He also considered that the matter had been subject to costs management, and identified that this enabled extracting the costs of individual issues a more manageable task.

 

Taking into account all of the issues, HH Behrens concluded that this matter was suitable for an issue based costs order, and proceeded to make respective orders for each outstanding costs issue. In relation to the costs following the applicant’s claim under the 1885 Act, he took into account the principles laid down in Bland that “the applicant will normally be required to pay the lessor’s costs of the forfeiture proceedings, save in so far as those costs have been increased by the lessor’s opposition to the grant of relief”, and considered whether the respondent’s opposition was unreasonable or unnecessary, and proceeded to order that the applicant pay the costs of forfeiture and the relief application on an indemnity basis up to 26 August 2016, and that there be no order for costs on that specific issue thereafter.

If you have any questions or queries in relation this blog please contact Joanne Chase (joanne.chase@clarionsolicitors.com and 0113 336 3327) or the Clarion Costs Team on 0113 2460622.

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