References:  AC 965,  2 WLR 1051,  2 All ER 409
Coram: Lord Goff of Chieveley
A claim had been made against charterers by the ship owners, and in turn by the charterers against their sub-charterers. Notice of motion were issued after arbitration awards were not accepted. When heard, costs awards were made, which were now appealed.
Held: The appeals were allowed. The court’s discretion when awarding costs as conferred by section 51(3) was wide. Lord Goff of Chieveley said: ‘thus ensuring that the court has, so far as possible, freedom of action, leaving it to the rule-making authority to control the exercise of discretion (if it thinks it right to do so) by the making of rules of court, and to the appellate courts to establish principles upon which the discretionary power may, within the framework of the statute and the applicable rules of court, be exercised.’ The jurisdiction provided by this Section was not subject to any implied limitation that costs could only be awarded against those who were parties to the litigation. Non-parties could be ordered to pay costs where justice so required. Nevertheless, an order for the payment of costs by a non-party will always be exceptional, and a person or entity who had been ordered to pay such costs would be able to appeal against the order, even though he, she or it was not a party to the original action.
Lord Goff: ‘. . . it is not surprising to find the jurisdiction conferred under section 51(1), like its predecessors, to be expressed in wide terms. The subsection simply provides that ‘the court shall have full power to determine by whom . . . the costs are to be paid.’ Such a provision is consistent with a policy under which jurisdiction to exercise the relevant discretionary power is expressed in wide terms, thus ensuring that the court has, so far as possible, freedom of action, leaving it to the rule-making authority to control the exercise of discretion (if it thinks it right to do so) by the making of rules of court, and to the appellate courts to establish principles upon which the discretionary power may, within the framework of the statute and the applicable rules of court, be exercised. ‘ and
‘In the vast majority of cases, it would no doubt be unjust to make an award of costs against a person who is not a party to the relevant proceedings….. I do not, for my part, foresee any injustice flowing from the abandonment of that implied limitation. Courts of first instance are, I believe, well capable of exercising their discretion under the statute in accordance with reason and justice. I cannot imagine any case arising in which some order for costs is made, in the exercise of the court’s discretion, against some person who has no connection with the proceedings in question. If any problem arises, the Court of Appeal can lay down principles for the guidance of judges of first instance; or the Supreme Court Rules Committee can propose amendments to the Rules of the Supreme Court for the purpose of controlling the exercise of the statutory power vested in judges subject to rules of court. ‘
Statutes: Supreme Court Act 1981 51(1)
This case cites:
- Overruled – Forbes-Smith -v- Forbes-Smith and Chadwick CA ( P 258,  LJP 61,  LT 789,  50 WR 6,  17 TLR 587,  45 Sol Jo 595)
W petitioned for judicial separation. H cross-petitioned for divorce, citing C as co-respondent. The actions were consolidated, W’s petition withdrawn, and a decree absolute of divorce granted to H. A costs order was made against C. On taxation, H . .
- Overruled – Fairfax (John) & Sons -v- E C de Witt & Co CA ( 1 QB 323)
- Appeal from – Interbulk Limited -v- Aiden Shipping Co Limited (The ‘Vimeira’) CA ( 2 Lloyd’s Rep 66)
The court considered whether an arbitrator had a duty to raise a point missed by counsel.
Held: Robert Goff LJ: ‘In truth, we are simply talking about fairness. It is not fair to decide a case against a party on an issue which has never been . .
(This list may be incomplete)
This case is cited by:
- Cited – Murphy, and Murphy -v- Young & Co’s Brewery Plc, Sun Alliance & London Insurance Plc CA (Times 08-Jan-97, Bailii,  EWCA Civ 1000,  1 All ER 518,  1 WLR 1591)
When an unsuccessful party has had its legal costs funded under legal expenses insurance, should the insurer be held liable to pay the successful party’s costs? The insurer had not instigated the litigation, nor controlled it, and could not be . .
- Cited – Hamilton -v- Al Fayed and Others (No 2) CA (Bailii, Times 17-Jun-02, Gazette 20-Jun-02,  EWCA Civ 665,  QB 1175)
The claimant had lost a libel action and been bankrupted. The defendant sought to recover his costs from those who had financially supported the claimant. He now appealed a dismissal of his request for contributions.
Held: An order for the . .
- Cited – Individual Homes Ltd -v- Macbream Investments Ltd ChD (Times 14-Nov-02, Gazette 28-Nov-02)
The claimant had in the course of proceedings obtained an order requiring an employee of the third party to attend as a witness. That third party now sought to be joined so as to claim its costs.
Held: The Act and the rules allowed the court . .
- Cited – Dymocks Franchise Systems (NSW) Pty Ltd -v- Todd and others (No. 2) PC (Bailii,  UKPC 39, PC,  1 WLR 2807)
PC (New Zealand) Costs were sought against a non-party, following an earlier determination by the Board.
Held: Jurisdiction to make such an order was not complete. Where the order sought was against a . .
- Applied – Goldsworthy -v- Brickell CA ( Ch 378,  2 WLR 133)
The plaintiff had granted a tenancy of his substantial farm to the first defendant, and made him a partner. The first defendant later bought out the plaintiff who was in turn later reconciled with his only son who had previously had some . .
- Cited – McDonald and Others -v- Horn and Others CA (Ind Summary 08-Aug-94, Times 10-Aug-94,  1 All ER 961, (1994) 144 NLJ 1515,  ICR 685,  1 CR 685)
A court may make a pre-emptive award of costs to pension fund members who wished to sue the trustees. Hoffmann LJ said: ‘if one looks at the economic relationships involved, there does seem to me to be a compelling analogy between a minority . .
- Cited – Arkin -v- Borchard Lines Ltd and others CA (Bailii,  EWCA Civ 655, Times 03-Jun-05)
The court considered the costs aftermath of a huge claim undertaken on a no win no fee basis and failing. The funder of the claim complained at an award of costs against it.
Held: Those who fund litigation must accept that their risks extend . .
- Cited – Goodwood Recoveries Ltd -v- Breen CA (Bailii,  EWCA Civ 414,  1 WLR 2723)
A claim against the defendant for money owed to someone else had been bought by the claimant of which Slater, a solicitor, was a director and shareholder. The claim was pursued in the name of the claimant by Slater as its solicitor and principal . .
- Cited – BE Studios Ltd -v- Smith & Williamson Ltd ChD (Times 16-Dec-05, Bailii,  EWHC 2730 (Ch),  2 All ER 811)
The claimant company had failed in its action. The court was asked to make a costs order personally against the principal director of the claimant who had controlled the litigation and funded it. He responded that no impropriety had been shown on . .
- Cited – Ward and others -v- Sabherwal and others T/A Nath Bros. QBNI (Bailii, Bailii,  NIQB 54,  NIEHC 54)
- Cited – M J Benyon & others -v- David Scadden & others EAT (Gazette 10-Nov-99,  IRLR 700, EAT/1269/98, Bailii,  UKEAT 1269_98_1406)
The tribunal had found that the claimants and their union had pursued their case, even though they recognised the weakness of the case, with the additional intention of persuading their employer to recognise their union, UNISON. Such behaviour was . .
- Cited – Aparau -v- Iceland Frozen Foods Plc CA (Times 12-Nov-99, Gazette 25-Nov-99, Gazette 01-Dec-99,  ICR 341,  IRLR 196, Bailii,  EWCA Civ 3047,  1 All ER 228)
Where a case had been remitted by the EAT to a tribunal for reconsideration in respect of matters specified by the EAT, the tribunal’s consideration was to be limited to those matters remitted. It was not open to the tribunal to consider matters . .
- Cited – B Hedden -v- Exeter Diocesan Board for Christian Care EAT (EAT/125/97)
EAT Unfair Dismissal – Reason for Dismissal . .
- Cited – Phillips, Harland (Suing As Administrators of the Estate of Christo Michailidis), Papadimitriou -v- Symes (A Bankrupt) Robin Symes Limited (In Administrative Receivership) Jean-Louis Domercq ChD (Bailii,  EWHC 2330 (Ch),  2 Costs LR 224,  2 All ER (Comm) 538,  CP Rep 12,  4 All ER 519,  1 WLR 2043, (2005) 83 BMLR 115)
Dr Zamar had given expert evidence in the principal proceedings. It was now said that that evidence had not been given in the proper way, and a remedy was now sought. . .
- Cited – In Re Andrews CA (Times 19-Mar-99, Gazette 08-Apr-99,  1 WLR 1236, Bailii, QBCOF 98/0522/4,  EWCA Civ 864,  2 Costs LR 133,  CP Rep 30)
The defendant and his son had been charged with offences relating to their joint business, and restraint orders were made. The son was convicted, but the defendant was acquitted and awarded his costs out of central funds. The taxing officer held . .
- Cited – Capewell -v- Revenue and Customs and Another HL (Bailii,  UKHL 2, Times 01-Feb-07,  1 WLR 386,  2 All ER 370)
The defendant appealed an order regarding the remuneration of a receiver appointed to administer a restraint order placed on the assets of the defendant under the 1988 Act on the basis of an allegation that the defendant had been involved in a . .
- Cited – Dolphin Quays Developments Ltd -v- Mills and others CA (Bailii,  EWHC 1180 (Ch))
The owner had agreed to sell a long lease of an apartment to the defendant. Part of the price was to be by way of set off of an existing debt, but ths was not set out in the contract. The claimant bought the land and the benfit of the contract from . .
- Applied – Knight -v- FP Special Assets Ltd ((1992) 174 CLR 178)
(High Court of Australia) Two orders for the payment of costs had been made against the receivers and managers of the claimant in the action, Forest Pty Ltd, and the defendant to a counterclaim brought by the defendants to the action, Howe . .
- Cited – Webster (the Parents) -v- Norfolk County Council and others (Rev 1) CA (Bailii,  EWCA Civ 59)
Four brothers and sisters had been adopted after the parents had been found to have abused them. The parents now had expert evidence that the injuries may have been the result of scurvy, and sought leave to appeal.
Held: Leave was refused. . .
- Cited – Masri -v- Consolidated Contractors International Co Sal and Others HL (Bailii,  UKHL 43, Times,  2 BCLC 382,  Bus LR 1269,  4 All ER 847 4 All ER 847,  3 WLR 385)
The claimant sought to enforce a judgment debt against a foreign resident company, and for this purpose to examine or have examined a director who lived abroad. The defendant said that the rules gave no such power and they did, the power was outside . .
(This list may be incomplete)
Last Update: 19-Jan-16 Ref: 179731