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 his part to allow such an order.
Held: ‘It is not a requirement for the making of a non-party costs order against a director who has funded and controlled litigation consequent on a claim brought by his company at his instance, that impropriety must be shown in the way that the claim was prosecuted. ‘ The position of directors who procure their companies to prosecute or defend litigation is treated as special, together with ‘office holders’ over insolvent companies appointed pursuant to insolvency legislation.
Judges:
Evans-Lombe J
Citations:
Times 16-Dec-2005, [2005] EWHC 2730 (Ch), [2006] 2 All ER 811
Links:
Statutes:
Jurisdiction:
England and Wales
Citing:
Main Action – BE Studios Ltd v Smith and Williamson Ltd ChD 15-Jul-2005
. .
Cited – Aiden Shipping Co Ltd v Interbulk Ltd (The ‘Vimeira’) HL 1986
Wide Application of Costs Against Third Party
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 . .
Cited – Goodwood Recoveries Ltd v Breen CA 19-Apr-2005
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 – Carborundum Abrasives Ltd v Bank of New Zealand (No 2) 1992
(New Zealand High Court) The court considered the position of company directors in litigation by their companies: ‘The directors of a company may frequently be in a position different from other non-parties with a direct financial interest in . .
Cited – Globe Equities Ltd v Globe Legal Services Ltd and others and Other Actions CA 5-Mar-1999
A court which was considering ordering a third party, who was not party to the action, to pay costs in an action, should first be satisfied that it is just to do so in all the circumstances. There is no need to establish any exceptional . .
Cited – Arklow Investments Ltd v Maclean 19-May-2000
(High Court of New Zealand) The court considered the potential personal responsibility of a directors for costs incurred by the company in litigation: ‘Where a person is a major shareholder and dominant director in a company which brings . .
Cited – Dymocks Franchise Systems (NSW) Pty Ltd v Todd and others (No. 2) PC 21-Jul-2004
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 . .
Cited – Metalloy Supplies Ltd (In Liquidation) v MA (UK) Ltd CA 7-Oct-1996
A costs order against liquidator of company in litigation is only rarely to be given. The court should ask who is the ‘real’ party to the litigation.
Millett LJ said: ‘[An order] may be made in a wide variety of circumstances where the third . .
Cited – Taylor v Pace Developments CA 1991
Lloyd LJ said: ‘There is only one immutable rule in relation to costs, and that is that there are no immutable rules.’
Lloyd LJ baulked at the suggestion that every director who funded and controlled litigation on behalf of an insolvent company . .
Cited – Floods of Queensferry Ltd and Another v Shand Construction Ltd and others CA 29-May-2002
An application had been made for a non-party costs order against a director of the company claimant. . .
Cited – Arkin v Borchard Lines Ltd and others CA 26-May-2005
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 by:
Cited – Dolphin Quays Developments Ltd v Mills and others CA 17-May-2007
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 . .
Lists of cited by and citing cases may be incomplete.
Costs
Updated: 04 July 2022; Ref: scu.236338
