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 non-party (and, indeed, the first such order to be sought in the proceedings), it is supplemental to the judgment already pronounced and sealed and in no way varies it, the board retained the power to make it. ‘a non-party could not ordinarily be made liable for costs if those costs would in any event have been incurred even without such non-party’s involvement in the proceedings. ‘ These proceedings would not have been commenced without the involvement of the Association against which the costs order was now sought.’ The conditions required to make a third party liable in costs were met, and an order was made.
Lord Brown said: ‘Although costs orders against non-parties are to be regarded as ‘exceptional’, exceptional in this context means no more than outside the ordinary run of cases where parties pursue or defend claims for their own benefit and at their own expense. The ultimate question in any such ‘exceptional’ case is whether in all the circumstances it is just to make the order. It must be recognised that this is inevitably to some extent a fact-specific jurisdiction and that there will often be a number of different considerations in play, some militating in favour of an order, some against.’
. . And ‘Where, however, the non-party not merely funds the proceedings but substantially also controls or at any rate is to benefit from them, justice will ordinarily require that, if the proceedings fail, he will pay the successful party’s costs. The non-party in these cases is not so much facilitating access to justice by the party funded as himself gaining access to justice for his own purposes. He himself is ‘the real party’ to the litigation, a concept repeatedly invoked throughout the jurisprudence . .’


Lord Nicholls of Birkenhead, Lord Hutton, Lord Rodger of Earlsferry, Lord Brown of Eaton-under-Heywood, Dame Sian Elias


[2004] UKPC 39, [2004] 1 WLR 2807


Bailii, PC


New Zealand


See alsoDymocks Franchise Systems (NSW) Pty Limited v Todd and Todd, Bilgola Enterprises Ltd and Lambton Quay Books Ltd PC 7-Oct-2002
PC (New Zealand) The claimants asserted that the respondents had wrongly terminated their franchise licence. The agreement was subject to the New South Wales law requiring good faith, but the court had not had . .
CitedAiden 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 . .
CitedLindo v Barrett PC 1856
The Board refused the appellant’s application, made a year after the order allowing its substantive appeal, for an order for the costs of the appeal: ‘[I]t is impossible now, after the matter has been disposed of, and the Order in Council acted . .
CitedMetalloy 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 . .
CitedHamilton v Al Fayed (2) CA 13-Oct-2000
A third party who financially supported a court action had no right to be joined as a party even at hearings at which decisions would be made which might affect his potential liabilities. Those who financially support proceedings must acknowledge . .
CitedMurphy, and Murphy v Young and Co’s Brewery Plc, Sun Alliance and London Insurance Plc CA 20-Nov-1996
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 by:

See alsoDymocks Franchise Systems (NSW) Pty Limited v Todd and Todd, Bilgola Enterprises Ltd and Lambton Quay Books Ltd PC 7-Oct-2002
PC (New Zealand) The claimants asserted that the respondents had wrongly terminated their franchise licence. The agreement was subject to the New South Wales law requiring good faith, but the court had not had . .
CitedArkin 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 . .
CitedBE Studios Ltd v Smith and Williamson Ltd ChD 2-Dec-2005
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 . .
CitedMyatt and others v National Coal Board (No 2) CA 16-Mar-2007
The parties had been involved in compensation claims. Complaint was made that the solicitors had recovered fees for action which substantially was intended to benefit the solicitor. The conditional fee agreements had been found to be unenforceable. . .
CitedDolphin 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 . .
CitedLingfield Properties (Darlington) Ltd v Padgett Lavender Associates QBD 18-Nov-2008
Application for non-party costs order against litigation funder. The third party denied that he was a person against whom an order could be made, and denied his formal involvement in the companies funding the litigation.
Held: Such an order . .
CitedThomson v Berkhamsted Collegiate School QBD 2-Oct-2009
Costs were to be sought against third parties to the action. A pupil had taken court action against the school seeking damages, alleging that it had failed to protect him from bullying. His action was discontinued. The school now sought its costs . .
CitedMedia Cat Ltd v Adams and Others PCC 18-Apr-2011
The claimants had begun copyright infringement cases. Having been refused a request to be allowed to withdraw the cases as an abuse, their solicitors now faced an application for a wasted costs order.
Held: The court only has jurisdiction to . .
CitedWeatherford Global Products Ltd v Hydropath Holdings Ltd and Others TCC 10-Oct-2014
Application by successful party to join a third party so as to make costs order against him. . .
CitedExcalibur Ventures Llc v Texas Keystone Inc and Others CA 18-Nov-2016
Excalibur had entered into a conditional fee agreement with its solicitors to suport its intended claim against the respondents. Funders had advanced some andpound;13m to take the mater forward. . .
CitedGoknur v Aytacli CA 13-Jul-2021
Third Party Costs – Director of Insolvent Company
(Organic Village) The Court considered the circumstances Limited in which a director and shareholder of an insolvent company may be personally liable for some or all of that company’s costs liabilities incurred in unsuccessful litigation, pursuant . .
CitedTravelers Insurance Company Ltd v XYZ SC 30-Oct-2019
Challenge to the making of a non-party costs order under section 51 of the Senior Courts Act 1981 against the product liability insurer of one of the defendants in litigation being managed under a Group Litigation Order (‘GLO’). Many of the . .
Lists of cited by and citing cases may be incomplete.


Updated: 04 May 2022; Ref: scu.199671