Geoquip Marine Operations AG v Tower Resources Cameroon SA
| Jurisdiction | England & Wales |
| Judge | Peter MacDonald Eggers |
| Judgment Date | 09 June 2022 |
| Neutral Citation | [2022] EWHC 1408 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2020-000441 |
[2022] EWHC 1408 (Comm)
Peter MacDonald Eggers QC
(sitting as a Deputy Judge of the High Court)
Case No: CL-2020-000441
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Julia Dias QC and Jason Robinson (instructed by Clyde & Co LLP) for the Claimant
SJ Phillips QC and Rebecca Jacobs (instructed by Richard Slade & Company) for the Defendants
Hearing dates: 19th May 2022
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This judgment was handed down by the judge remotely for circulation to parties' representatives by email. The date of hand-down is deemed to be 9 th June 2022
Introduction
On 16th March 2022, I handed down judgment in respect of two claims brought by the Claimant (“Geoquip”) against the Defendants:
(1) The claim for the balance of the lumpsum due under the contract between Geoquip and the First Defendant. I allowed this claim.
(2) The claim for Standby Costs, which was a claim under the contract and alternatively a claim by reference to an estoppel by convention or contract. I dismissed this claim.
I also allowed the claim against the Second Defendant as guarantor in respect of the claim for the lumpsum.
The matter came back before me on 19th May 2022 in respect of the costs of the action and the costs of the adjournment application. At the beginning of the trial in December 2021, the Defendants applied for an adjournment of the trial. I dismissed that application.
Ms Julia Dias QC on behalf of Geoquip submitted that as Geoquip succeeded in recovering sums due under the contract, and under the guarantee, Geoquip is entitled to costs of the action being the successful party within the meaning of CPR rule 44.2(2). Nonetheless, as Geoquip did not succeed in respect of the claim for Standby Costs, Ms Dias QC accepted that there should be a discount of 40% to reflect the fact that the success was not complete. Geoquip therefore seeks an order for 60% of the costs, as well as the costs of the adjournment application.
Ms Dias QC further referred to certain defences and counterclaims raised by the Defendants which were abandoned soon before trial, in particular a defence based on the Standby Costs being a penalty and a counterclaim for rectification. Both of these matters related to the claim for the Standby Costs.
Mr SJ Phillips QC on behalf of the Defendants submitted that the Defendants are entitled to an order for costs because they are the successful party, in that:
(1) They succeeded in resisting the Standby Claim and although they did not succeed on the claim for the balance of the lumpsum, that claim occupied a small part of the action and the trial in that it was essentially an issue of construction of the contract, whereas the claim for the Standby Costs was more factually intensive to which the evidence of the factual witnesses was principally directed.
(2) In addition, the Defendants refer to the failure on the part of Geoquip to engage in mediation as ordered by Calver, J on 16th April 2021 (para. 9), and the failure of Geoquip to provide disclosure of certain documents, which should be taken into account as relevant considerations.
However, recognising that the Defendants did not succeed on all matters, Mr Phillips QC submitted that there should be a discount of 20% from a full order as to costs, resulting in a costs order of 80% in the Defendants' favour.
Neither party sought an issues-based order and therefore the dispute between them centred on who was the successful party within the meaning of CPR rule 44.2(2)(a).
Under CPR rule 44.2(2), “ (a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but (b) the court may make a different order”.
CPR rule 44.2(4) provides that “ In deciding what order (if any) to make about costs, the court will have regard to all the circumstances, including — (a) the conduct of all the parties; (b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and (c) any admissible offer to settle made by a party which is drawn to the court's attention, and which is not an offer to which costs consequences under Part 36 apply”.
Amongst the “ different orders” which the Court may make in accordance with CPR rule 44.2(2)(b) is an issues-based order. CPR rule 44.2(6)-(7) provides:
“(6) The orders which the court may make under this rule include an order that a party must pay —
(a) a proportion of another party's costs;
…
(c) costs from or until a certain date only;
…
(f) costs relating only to a distinct part of the proceedings
…
(7) Before the court considers making an order under paragraph (6)(f), it will consider whether it is practicable to make an order under paragraph (6)(a) or (c) instead.”
It is certainly true that the successful party means the person who succeeds overall in the litigation, and not just on any particular issue ( Kastor Navigation Co Ltd v AXA Global Risks (UK) Ltd [2004] EWCA Civ 277; [2004] 2 Lloyd's Rep 119, para. 143).
Identifying the successful party is by no means always an easy enquiry, although in most cases the successful party will be clearly identifiable. In Rotam Agrochemical Company Ltd v Gat Microencapsulation GmbH [2018] EWHC 3006 (Comm); [2018] 6 Costs LR 1365, Butcher, J said at para. 17–18:
“17. As set out in Medway v Marcus at para [46] by Tomlinson LJ, the starting point is to identify the successful party, and that this “surprisingly elusive process” has never been better described than by Sir Thomas Bingham MR in Roache. That involves a determination of which party “as a matter of substance and reality” has won. As the line of cases relied on by Rotam indicates, in very many cases it will be clear that the party which is to be paid money has won. Nevertheless there is no inflexible rule to that effect, as is shown by Medway and Magical Marking, in each of which the court needed to decide — unlike in Fox v Foundation Piling— which was the successful party.
18. Consistently with this, I consider that if a party, though ordered to pay a sum of money, has in reality and in substance won, it should be regarded as the successful party …”
That said, there is justification in ensuring that the general rule is adhered to unless good and proper reasons can be given for departing from it. Otherwise, if the Court were to depart from the general rule too often and too readily, it would cease to be a general rule. Thus, in Blackpool Borough Council v Volkerfitzpatrick Ltd [2020] EWHC 2128 (TCC); [2020] Costs L.R. 1295, HHJ Stephen Davies said (at para. 13–14):
“13. The second question is whether the court should indeed be cautious about departing from the starting point (that the successful party should recover its costs) “too far and too often”, as suggested by Jackson LJ in Fox v Foundation Piling Ltd [2011] EWCA Civ 790, who described such departures as a “growing and unwelcome tendency … [which] … may strive for perfect justice in the individual case, but at huge additional cost to the parties and at huge costs to other litigants because of the uncertainty which such an approach generates”.
14. In my view, when deciding whether or not to depart from the starting point by reference to matters such as relative lack of success, the reasonableness of pursuing particular allegations or issues, the manner of pursuit and allegations of exaggeration, a trial judge should be careful to avoid applying the considerable benefit of hindsight which comes from having reached a firm decision at the end of the litigation. It is very often the case, in a dispute of any complexity, that the issues and the evidence both become more focused and more clear both at trial and particularly by the time of delivery of judgment in a way which they were not from the outset. Whilst each party who has won on a particular issue will often have been convinced from the outset that victory on that point was inevitable, that does not necessarily mean that this result would have been apparent, whether to the other party or to the judge when case managing the case or reading in to the case pre-trial. Another judge may well have reached a different conclusion on a factual issue or on a...
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