Housemaker Services Ltd and Another v Huw Cole and Another
| Jurisdiction | England & Wales |
| Judge | HHJ Paul Matthews |
| Judgment Date | 26 April 2017 |
| Neutral Citation | [2017] EWHC 924 (Ch) |
| Docket Number | Case No: C31BS361 |
| Court | Chancery Division |
| Date | 26 April 2017 |
[2017] EWHC 924 (Ch)
HHJ Paul Matthews
(Sitting as a Judge of the High Court)
Case No: C31BS361
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BRISTOL DISTRICT REGISTRY
Bristol Civil Justice Centre
2 Redcliff Street, Bristol BS1 6GR
Charles Newington-Bridges (instructed by Pitman Blackstock White) for the Second Claimant
Thomas Steward (instructed by Temple Bright LLP) for the Defendants
Application dealt with on paper, without a hearing
Judgment Approved
Introduction
On 7 April 2017 I handed down my judgment in this claim, under neutral citation number [2017] EWHC 753 (Ch). The claim was brought under CPR Part 8 for a limitation direction under section 1028 of the Companies Act 2006, in relation to an underlying claim on three disputed invoices rendered to the defendants by the 1 st claimant (a company which had subsequently been struck off the register and dissolved). I dismissed the claim, because, although it was not "obviously unmeritorious", the 1 st claimant could not show that the dissolution of the company had caused the claim not to be brought, and in any event I was not satisfied that it would have been just to give a limitation direction.
At the hand down hearing, I ordered that the 1 st claimant pay the defendants' costs of the claim on the standard basis. The defendants applied for Mr Wayne Williams, the sole director of the claimant, to be joined as the 2 nd claimant, for the purpose of making an application against him that he pay the costs which the 1 st claimant was ordered to pay to the defendants, but which by reason of the lack of assets, it was unlikely that the 1 st claimant would ever be able to do.
I made the order joining Mr Williams, and then gave directions for the application against him to be dealt with on paper. I received written submissions from Mr Steward, counsel for the defendants, on 12 th April 2017, and written submissions in answer from Charles Newington-Bridges, counsel for the 2 nd claimant, dated 19 April 2017. I then allowed a brief reply in writing from Mr Steward, dated 20 April 2017. This is my judgment on the application against the 2 nd claimant.
The parties' submissions
On behalf of the defendants, it was submitted that the 1 st claimant was merely a legal construct for the 2 nd claimant's business, and there was no distinction in practice between the two. The 2 nd claimant's actions caused the company to be dissolved in the 1 st place. The 2 nd claimant would benefit from any successful claim of the company. The 2 nd claimant gave instructions to pursue the proceedings and appears to have funded them. The claim failed. The 1 st claimant had no assets and it was highly unlikely that it would be able to satisfy an order for costs. Finally, the 2 nd claimant had already shown himself willing to avoid liabilities owed by the 1 st claimant.
On behalf of the 2 nd claimant, it was submitted that the nonparty costs order would always be exceptional, and even more so where the nonparty could have been joined to the original proceedings. Here it would have been open to the defendants to join the 2 nd claimant to those original proceedings.
It was further submitted that the nonparty should be warned at the earliest opportunity of the possibility that the successful party might seek an order for costs against him. Yet the 1 st warning of the application to add the 2 nd claimant and apply for a nonparty costs order was made only the business day before the hearing.
There was no suggestion that the proceedings were brought in bad faith, for an ulterior motive or improperly. The 2 nd claimant caused the proceedings to be brought because he considered that a debt was owed to the 1 st claimant. They were brought in good faith and for the benefit of the 1 st claimant.
The law
In the course of the submissions, I was referred to a number of decided cases, including Aiden Shipping Co v Interbulk [1986] AC 965, HL, Symphony Group v Hodgson [1994] QB 179, CA, Gardiner v FX Music Ltd, unreported, 27 March 2000, Ch D, Barndeal v Richmond LBC [2005] EWHC 1377 (QB), and Deutsche Bank v Sebastian Holdings Inc [2016] 4 WLR 17, CA. I have read them all. These decisions (and those cited within them) establish a number of relevant propositions, as follows.
Generally
The court has jurisdiction to make an order that a nonparty pay the costs of litigation under section 51 of the Senior Courts Act 1981, and CPR rule 46.2. The court's jurisdiction is to be exercised on the basis of a judicial discretion. This means that it must be exercised justly. It is therefore very fact specific. But the procedure is summary in nature.
A decision to make a nonparty costs order is exceptional, but this only means that it is outside the ordinary run of cases. In a case where a nonparty funds and controls or benefits from proceedings, it is ordinarily just to make him pay the costs, if his side is unsuccessful, because the nonparty was gaining access to justice for himself, and thus can be regarded as the real party to the litigation.
Company directors
However, the director of a...
To continue reading
Request your trial
-
Montpelier Business Reorganisation Ltd v Armitage Jones LLP and Others
...not be at personal risk of costs." 22 The special position of a company director has most recently been emphasised in the case of Housemaker Services Ltd v Cole [2017] EWHC 924 (Ch) in particular paragraph 11 to 15: " 11. However, the director of a limited company is in a special position.......
-
Titan Petrochemicals Group Ltd and the Companies Act
...EWCA Civ 546; Threlfall v ECD Insight Limited and Anr. [2015] EWCA Civ 144; and Housemaker Services Limited and Anr v Cole and Anr. [2017] EWHC 924 (Ch). Having reviewed these authorities and without in any way suggesting that these authorities give rise to a mandatory checklist applicabl......
-
Rushbrooke UK Ltd v 4 Designs Concept Ltd
...reasonable opportunity to attend a hearing at which the court will consider the matter further.” 20 In Housemaker Services Ltd v Cole [2017] EWHC 924 (Ch), I said: “9. … The court's jurisdiction is to be exercised on the basis of a judicial discretion. This means that it must be exercised ......
-
Re Titan Petrochemicals Group Ltd (Costs)
...EWCA Civ 546; Threlfall v ECD Insight Limited and Anr[2015] EWCA Civ 144; and Housemaker Services Limited and Anr v Cole and Anr. [2017] EWHC 924 (Ch). Having reviewed these authorities and without in any way suggesting that these authorities give rise to a mandatory checklist applicable to......
-
Raiders Of The Director's Wallet*
...tale for directors about non-party costs awards in litigation) Housemaker Services Limited & another v Cole & another [2017] EWHC 924 (Ch) Mr Wayne Williams ran a building company - he was the sole director. Over the period 2010 to 2011 his company sent three invoices to some custom......
-
English High Court Refuses To Grant Non-Party Costs Order Against Defendant's Managing Director
...Dymocks Franchise Systems (NSW) Pty Ltd v Todd & Ors (No. 2) [2004] UKPC 39. 4 Housemaker Services Ltd and another v Cole and another [2017] EWHC 924 (Ch). Visit us at Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Pra......