Deutsche Bank AG v Sebastian Holdings Inc.
| Jurisdiction | England & Wales |
| Judgment Date | 21 January 2016 |
| Date | 21 January 2016 |
| Court | Court of Appeal (Civil Division) |
Court of Appeal
Before Lord Justice Moore-Bick, Lord Justice Lewison and Lord Justice Simon
When a court was considering whether to exercise its discretion to order that a third party bear some or all of the costs of litigation, the critical issues were the nature and degree of the third party's connection with the proceedings and whether it would be just to make an order against him. Lit tle was to be gained by considering other first instant decisions in which such orders had or had not been made.
The Court of Appeal so stated when dismissing the appeal of Alexander Vik against a decision of Mr Justice CookeUNK ([2014] EWHC 2073(Comm)) joining him as a defendant in proceedings between Deutsche Bank AG and Sebastian Holdings Inc, for the purpose of costs only, and ordering him to pay th e bank, ú36,204,891 on account in respect of its costs against the company. Mr Vik had been the sole shareholder and director of the company at the relevant time and the judge held that he had arranged for almost $1 billion worth of assets to be transferred from the company to himself while the ban k was seeking to recover sums owed to it by the company.
Mr Stephen Cogley, QC and Mr Yash Kulkarni (neither of whom appeared below) for Mr Vik; Mr David Foxton, QC, Ms Sonia Tolaney, QC and Mr James MacDonald for the bank.
LORD JUSTICE MOOREBICK, giving the judgment of the court, said that section 51 of the Senior Courts Act 1981 was now the source of the court's discretion to determine who should bear the costs of proceedings, whether they were parties to the proceedings or third parties.
The procedure was summary in nature based on the evidence given and the facts found at trial, together with the judge's assessment of the behaviour of those involved in the proceedings. The authorities had identified the kind of factors that judges should take into account but each thetimes.co.uk/l awreports case had to be considered on its own merits in order to ascertain whether the third party would suffer an injustice if he was held bound by the evidence and findings at the trial. The critical factor in each case was the nature and degree of his connection with the proceedings.
In a case where the court was satisfied that the third party was effectively controlling the...
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