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EXCELSIOR COMMERCIAL & INDUSTRIAL HOLDINGS LTD v (1) SALISBURY HAMER
ASPDEN & JOHNSON (A Firm) (2) BETESH & CO (A Firm) (2002) CA (Lord Woolf
LCJ, Waller LJ, Laws LJ) 12/6/2002 CIVIL PROCEDURE - CPR COSTS : STANDARD BASIS
: INDEMNITY BASIS : CIVIL PROCEDURE RULES 1998 SI 1998/3132 : CPR PART 36 : CPR
PART 44 : PAYMENT INTO COURT : JUDGE'S DISCRETION : FACTS OF CASE : CONDUCT OF
PARTIES : NO ISSUING OF GUIDELINES The making of a costs order on an indemnity
basis would be appropriate in circumstances where the facts of the case and/or
the conduct of the parties took the situation away from the norm. Appeal by the
claimant ('E') from the costs orders of HH Judge Bradbury made on 18 July 2001
dismissing E's claim against the first defendant ('D1') and allowing E's claim
against the second defendant ('D2'). The judge took into account the fact that
D1 and D2 together made a CPR Part 36 offer of £100,000 into court on 7 June
2001, one day before the start of the trial and, having regard to the facts of
the case, awarded E nominal damages of £2 against D2. The judge ordered that E
pay D1 and D2's costs up until 8 June 2001 on a standard basis and on an
indemnity basis thereafter, subject to a detailed assessment. E submitted that
it was successful against D2 and that the judge was wrong to have made such an
order in favour of D2. In addition, E submitted that the Court of Appeal ought
to consider setting out guidelines for when judges should and should not make
costs orders on an indemnity basis. HELD: (1) The argument as to costs was
canvassed before the judge who had heard the case from start to finish and he
was clearly well aware of the relevant circumstances that entitled him to reach
the conclusion that he did. (2) It was always difficult for the Court of Appeal
to second guess that sort of decision. The trial judge would always be in a far
better position to determine where the costs of a case ought to lie, and it was
therefore inappropriate for the Court of Appeal to interfere in such decisions.
(3) Circumstances in which a court might be concerned with costs and payments
into court might vary considerably , not only because of the conduct of the
parties but also because of the circumstances and nature of the litigation.
There were an infinite variety of situations that might go before a court
justifying the making of a costs order on an indemnity basis and, accordingly,
it was not possible to respond to E's submission that guidance should be given
for judges intending to make such costs orders. (4) Judges were faced with a
hard enough task in following the requirements of the Civil Procedure Rules 1998
SI 1998/3132 ('CPR'). The Court of Appeal could do no more than draw a judge's
attention to the extensive width of the discretion on this issue provided in CPR
Part 44. Issues of costs ought to be left to a judge's discretion following the
rules provided in the CPR. The words of the CPR should not be replaced or
supplemented with guidance notes from the Court of Appeal. (5) The making of a
costs order on an indemnity basis would be appropriate in circumstances where
the facts of the case and/or the conduct of the parties was such as to take the
situation away from the norm. Appeal dismissed. Nicholas Davidson QC instructed
by Ward Hadaway for E. Alastair Hammerton instructed by Beachcroft Wansbroughs
(Manchester) for D1. Roger Stewart QC and Graham Chapman instructed by Reynolds
Porter Chamberlain for D 