LITTMAN v COSTA & ANOR (2002) Ch.D (HH Judge Langan QC) 18/11/2002 CPR - CIVIL PROCEDURE Where a master ordered that a claimant pay the defendants' costs of setting aside default judgments, the master should have made an allowance in the costs order for the fact that the claimant had been partly successful as the master had considered that the defendants' two principal strands of defence did not have a real hope of success. Claimant's appeal from an interlocutory costs order of Master Bowman of 5 July 2002 that the claimant ('L') pay the defendants' costs incurred in setting aside default judgments. L was the assignee of causes of action vested in Harley Street Pathology Services Ltd ('HSPSL') of which the first defendant was a director and the second defendant its legal advisers. L commenced proceedings alleging, inter alia, that: (i) the first defendant wrongly paid £15,000 to the second defendant on account of fees and HSPSL had no board of directors that could properly authorise such payment; and (ii) a cheque paid to the first defendant was wrongly paid as again there was no board to authorise the payment. The defendants served defences on L but failed to file copies with the court within 28 days of service of the particulars of claim. L obtained judgment against the defendants, who applied to set aside. The master set aside the default judgments and made it clear that the two principal strands of the defences as to inquoracy and trusteeship argument had no real prospect of success. The master stated that the application had been successful. HELD: The master had been correct in identifying the defendants as the successful party, but L had been successful to a certain extent insofar as the master considered that the main elements of the defence did not have a real hope of success. Under CPR 44.3 the master erred in principle in not making some allowance for these matters. Most of the hearing before the master was devoted to matters of inquoracy and trusteeship, which the master decided had no real hope of success. The master was dealing with an interlocutory hearing, but any reasonable tribunal would have taken the view that some deduction should have been made from the defendants' costs. BCCI v Ali & Ors (1999) TLR 2/3/2000 followed. Not to do so was an error of principle. The defendants were partly, not wholly, successful and had failed on their two main issues. Order that L pay 70 per cent of the defendants' costs. L in person. Mark Watson-Gandy instructed by Phillip Ross & Co for the defendants.