Goknur Gida Maddeleri Enerji Imalat v Organic Village Ltd
| Jurisdiction | England & Wales |
| Judge | Mathew Gullick |
| Judgment Date | 30 September 2020 |
| Neutral Citation | [2020] EWHC 2542 (QB) |
| Date | 30 September 2020 |
| Docket Number | Case No: HQ12X00614 |
| Court | Queen's Bench Division |
[2020] EWHC 2542 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mathew Gullick (sitting as a Deputy Judge of the High Court)
Case No: HQ12X00614
Mr Imran Benson (instructed by Hudson Morgan Williams) for the Claimant
Ms Nerin Bilgin, Director, represented the First Defendant
The Second Defendant appeared in person
Hearing date: 14 July 2020
Further written submissions: 16 July 2020
Approved Judgment
Introduction
By an application notice issued on 15 May 2020, the Claimant (“Goknur”) seeks a non-party costs order against the Second Defendant (“Mr Aytacli”). The application arises following the conclusion of long-running litigation, conducted over the best part of a decade, between Goknur and the First Defendant (“Organic Village”). That litigation was case managed by Master Kay QC, as the assigned Master, and culminated in a five-day trial of Organic Village's counterclaim before Mr Martin Chamberlain QC, sitting as a Deputy High Court Judge, in June 2019. Mr Aytacli, the respondent to the application for a non-party costs order, was formerly the managing director of Organic Village and was its main witness at the trial of the counterclaim.
In a reserved judgment handed down on 12 August 2019, [2019] EWHC 2201 (QB) (“the Trial Judgment”), Mr Chamberlain QC upheld Organic Village's counterclaim. In a separate judgment on damages and costs (“the Damages & Costs Judgment”), the Deputy Judge awarded only nominal damages and as a result considered that Goknur had been the successful party in relation to the counterclaim, for the purposes of CPR 44.2(2)(a). With reductions to reflect the way in which the litigation had been conducted, he ordered that Organic Village should pay one quarter of Goknur's costs of the counterclaim, such costs to be the subject of detailed assessment if not agreed. No order was made for Organic Village to make a payment on account of those costs.
By the time of trial of the counterclaim, Goknur's claim against Organic Village had already been struck out. Goknur had been ordered to pay Organic Village's costs of the claim, also to be assessed if not agreed, and to pay £110,000 on account of Organic Village's costs of the claim. During the course of the litigation, a number of other costs orders were made in favour of Organic Village. Some of the costs were assessed summarily. Other costs orders provided that the costs would be subject to detailed assessment but required Goknur make immediate payments on account of those costs. The total paid by Goknur on account of the various orders for Organic Village's costs which were expressed to be subject to detailed assessment was £185,300. Goknur was also ordered to pay £13,000 into court as security for Organic Village's costs in respect of the enforcement of orders in Turkey.
Neither party appealed against the order made by Mr Chamberlain QC at the conclusion of the trial of the counterclaim. The parties proceeded to negotiate about the amounts due under the various costs orders made in the litigation. At this point, the firm of solicitors which had been acting for Organic Village ceased to represent it. The negotiations, which were principally conducted by Mr Aytacli on behalf of Organic Village, did not result in agreement regarding the overall level of costs payable. Goknur initiated CPR Part 47 proceedings for the detailed assessment of its costs of the counterclaim, pursuant to Mr Chamberlain QC's order. Organic Village did not respond. On 20 April 2020, a Default Costs Certificate was issued, assessing the costs due to Goknur in the sum of £64,305.43. Organic Village is therefore required to pay this sum to Goknur, in satisfaction of the order for costs made by Mr Chamberlain QC. It is common ground that it lacks the resources with which to do so.
Following the breakdown of negotiations about the costs of the litigation at the end of 2019, Organic Village did not commence proceedings for the detailed assessment of any of the costs due to it under the various orders that had been made in its favour. On 9 March 2020, Goknur made an application for an order under CPR 47.8 that Organic Village be required to commence detailed assessment. Master McCloud made an order that unless Organic Village commenced detailed assessment proceedings by 16 March 2020 then its costs would be disallowed and it would be required to pay into court the £185,300 that had been paid by Goknur on account of its costs. Organic Village did not commence the detailed assessment of its costs as required by the Master's order and has not subsequently sought relief from the sanction imposed. Accordingly, as things now stand the costs awarded to Organic Village in the litigation have been disallowed and it is required to pay into court the sum of £185,300 that was paid on account of costs by Goknur. It is common ground that Organic Village does not have the means to pay this sum; the monies that were paid on account of its costs by Goknur were paid directly to its former solicitors.
On 24 March 2020, Goknur made an application that, following Organic Village's non-compliance with Master McCloud's order to pay the sums received as payments on account of costs into court, Organic Village should be required to pay the sum of £185,300 directly to Goknur. I was told at the hearing that Master McCloud had made that order and that a sealed copy was awaited. The lack of a sealed order requiring the payment on account to be returned directly to Goknur, rather than paid into court, is not material to the issues that arise on the application.
On 15 May 2020, Goknur filed this application for a non-party costs order to be made against Mr Aytacli. Prior to the application being made, Mr Aytacli had not been given notice by Goknur that he might be the subject of such an application. Goknur seeks an order that Mr Aytacli pay to Goknur both its assessed costs of the counterclaim, in the sum of £64,305.43, and the payments on account of Organic Village's costs that are due to be returned by Organic Village, in the sum of £185,300. The total amount now sought by Goknur from Mr Aytacli is therefore £249,605.43.
The hearing of the application for a non-party costs order against Mr Aytacli took place before me on 14 July 2020, by way of a remote video hearing using the Skype platform. Goknur was represented by Mr Imran Benson of counsel, who had not appeared at the trial before Mr Chamberlain QC. Organic Village was represented by its director, Ms Bilgin, who is married to Mr Aytacli. Mr Aytacli appeared as a litigant in person, although for a period before the hearing he had been assisted by counsel whom he had instructed directly.
Dealing with the application when not the trial judge
At the beginning of the hearing, I raised with the parties whether the application for a non-party costs order ought instead to be heard by the trial judge, now Mr Justice Chamberlain. This had not been raised as an issue in the witness statements or the skeleton arguments that had been filed, although it was a point clearly made in the authorities that were relied on by Goknur. I referred the parties to what had been said on this issue by the Court of Appeal in Symphony Group Plc v Hodgson [1994] QB 179 and in Deutsche Bank AG v Sebastian Holdings Ltd & Another [2016] EWCA Civ 23, [2016] 4 WLR 17. In the latter case, the Court of Appeal considered at [56] that the advantages of the trial judge hearing an application for a non-party costs order were such that it was difficult to imagine the rare circumstances in which such an application ought be heard by another judge.
Mr Benson submitted that I could and should proceed to hear the application. He pointed out that an adjournment would involve a delay of several months, and submitted that given the application was being heard over a year after the trial and did not turn on events that took place during the trial, I was as well-placed as the trial judge to determine it. He submitted that the litigation and the application for a non-party costs order were not particularly complex, in terms of matters which proceed in the High Court, that much of the factual basis for the application was not controversial and that an adjournment would not be in the interests of justice. Having had their attention drawn to these authorities and having heard Mr Benson's submissions, both Mr Aytacli and Ms Bilgin agreed to the hearing proceeding before me. I indicated to the parties that I would proceed to hear the application, and that I would give my reasons for doing so in this judgment.
As I have already noted, the issue of the application being heard by the trial judge was not raised in either the witness statements or the skeleton arguments that had been filed. The standard form N244 application notice completed by Goknur's solicitors contained the following statement in response to the standard question that appears on it regarding the level of judge required to hear the application: “Mr Justice Chamberlain, if available, or any other QBD judge”. It is unfortunate, in my judgment, that Goknur's solicitors answered the standard question on the form in this way. The authorities to which I have already made reference make it very clear that a non-party costs order application determined after a trial should, save in rare and exceptional circumstances, be dealt with by the trial...
To continue reading
Request your trial
-
Mortgage Five Zero Ltd v The Secretary of State for Business and Trade
...bad faith on the part of the director: see Goknur Gida Maddeleri Enerji Imalet Ithalat Ihracat Ticaret ve Sanayi As v. Cengiz Aytacli [2020] EWHC 2542 (QB) at [40], esp. [40(d)] and 63 Applying the same approach in this case, I reach the following conclusions. 64 First, I consider it clear......
-
Goknur Gida Maddeleri Enerji Imalet Ithalat Ihracat Tiracet Ve Sanayi as v Aytacli
...51 of the Senior Courts Act 1981 (post, para 40).Decision of Matthew Gullick sitting as a deputy judge of the Queen’s Bench Division [2020] EWHC 2542 (QB) affirmed.APPEAL from Matthew Gullick sitting as a deputy judge of the Queen’s Bench DivisionBy a claim form issued on 16 February 2012 t......
-
English High Court Refuses To Grant Non-Party Costs Order Against Defendant's Managing Director
...Footnotes 1 Goknur Gida Maddeleri Enerji Imalat Ithalat Ihracat Ticaret Ve Sanati A.S. v Organic Village Ltd, Mr Cengiz Aytacli [2020] EWHC 2542 (QB). 2 See, for example, Deutsche Bank AG v Sebastian Holdings Ltd & Another [2016] EWCA Civ 3 Dymocks Franchise Systems (NSW) Pty Ltd v Todd & O......