Monica Margaret Ramji v Graham John Harvey (in his capacity as Executor of the estate of Sugrim Orlando Ramji Deceased)

Written submissions: 14, 18, 20 July 2023

Approved Judgment – Consequential Matters

HHJ Monty KC:

On 6 July 2023, I handed down my reserved judgment following the 5-day trial of two preliminary issues: [2023] EWHC 1664 (Ch). The Second, Third and Eighth Defendants (represented by Ms Challenger), and the Fourth Defendant (Ms Neale, who was in person), were the successful parties, and the Claimant and the Ninth Defendant, represented by Mr Otchie, were the unsuccessful parties.

The parties were unable to reach an agreement about the costs of the preliminary issues, and I directed that the parties should file written submissions.

In accordance with my directions, I received Ms Challenger's submissions on 14 July, Mr Otchie's submissions in response on 18 July, and Ms Challenger's reply submissions on 20 July. I have received no submissions from Ms Neale.

In summary, Ms Challenger seeks her clients' costs on the indemnity basis, and Mr Otchie accepts that his clients should pay their costs, but submits that they should be on the standard basis.

The court's jurisdiction to make an award of costs on an indemnity basis arises from CPR 44.3(1)(b). The approach of the court when deciding the basis of costs has been recently and thoroughly reviewed and set out in a number of cases.

The test as to whether costs should be on the standard or indemnity basis is that set out in Excelsior Commercial Industrial Holdings Ltd v Salisbury Hammer Aspden and Johnson [2002] EWCA Civ 879. For the court to order costs on the indemnity basis, there must be some circumstances which take the case out of the norm. In Esure Services Ltd v Quarcoo [2009] EWCA Civ 595, at [25], Waller LJ explained that the word “norm” was not intended to reflect whether what occurred was something that happened often so that in one sense it might be seen as “normal”, but was “intended to reflect something outside the ordinary and reasonable conduct of proceedings”: see the judgment of Mrs Justice Joanna Smith in Cabo Concepts Ltd v MGA Entertainment (UK) Ltd & Anor [2022] EWHC 2024 (Pat), [16], and also the discussion about whether unreasonable conduct must be unreasonable to a high degree at [17–23].

It is a matter for the exercise of the court's discretion, which is a wide one: see for example Suez Fortune Investments Ltd v Talbot Underwriting Ltd [2019] EWHC 3300 (Comm). at [11–12].

The summary in Three Rivers District Council v Bank of England [2006] EWHC 816 (Comm) at [25] was approved by Stuart-Smith J as he then was in the Ocensa Pipeline Group Litigation [2016] EWHC 3348 (TCC) as a “useful but not exhaustive summary of the principles and of circumstances that may influence a decision whether or not to award indemnity costs” whilst noting that “both the statements of principle and the specific examples of conduct that may support the making of the order were tailored to the facts of that extraordinary litigation”. I adopt that summary here:

“(1) The court should have regard to all the circumstances of the case and the discretion to award indemnity costs is extremely wide.

(2) The critical requirement before an indemnity order can be made in the successful defendant's favour is that there must be some conduct or some circumstance which takes the case out of the norm.

(3) Insofar as the conduct of the unsuccessful claimant is relied on as a ground for ordering indemnity costs, the test is not conduct attracting moral condemnation, which is an a fortiori ground, but rather unreasonableness.

(4) The court can and should have regard to the conduct of an unsuccessful claimant during the proceedings, both before and during the trial, as well as whether it was reasonable for the claimant to raise and pursue particular allegations and the manner in which the claimant pursued its case and its allegations.

(5) Where a claim is speculative, weak, opportunistic or thin, a claimant who chooses to pursue it is taking a high risk and can expect to pay indemnity costs if it fails.

(6) A fortiori, where the claim includes allegations of dishonesty, let alone allegations of conduct meriting an award to the claimant of exemplary damages, and those allegations are pursued aggressively inter alia by hostile cross examination.

(7) Where the unsuccessful allegations are the subject of extensive publicity, especially where it has been courted by the unsuccessful claimant, that is a further ground.

(8) The following circumstances take a case out of the norm and justify an order for indemnity costs, particularly when taken in combination with the fact that a defendant has discontinued only at a very late stage in proceedings:

(a) Where the claimant advances and aggressively pursues serious and wide-ranging allegations of dishonesty or impropriety over an extended period of time;

(b) Where the claimant advances and aggressively pursues such allegations, despite the lack of any foundation in the documentary evidence for those allegations, and maintains the allegations, without apology, to the bitter end;

(c) Where the claimant actively seeks to court publicity for its serious allegations both before and during the trial in the international, national and local media;

(d) Where the claimant, by its conduct, turns a case into an unprecedented factual enquiry by the pursuit of an unjustified case;

(e) Where the claimant pursues a claim which is, to put it most charitably, thin and, in some respects, far-fetched;

(f) Where the claimant pursues a claim which is irreconcilable with the contemporaneous documents;

(g) Where a claimant commences and pursues large-scale and expensive litigation in circumstances calculated to exert commercial pressure on a defendant, and during the course of the trial of the action, the claimant resorts to advancing a constantly changing case in order to justify the allegations which it has made, only then to suffer a resounding defeat.”

The difference between standard and indemnity costs is potentially substantial, because if there is an order for indemnity costs, then prima facie any approved budget becomes irrelevant, and the conduct out of the norm which justifies such an order means that

“the court will resolve any doubt which it may have as to whether costs were reasonably incurred or were reasonable in amount in favour of the receiving party”.

See CPR 44.3(3) as well as Lejonvarn v Burgess [2020] EWCA Civ 114 at [90]; Denton and Others v TH White Limited [2014] EWCA Civ 906 at [43]; Optical Express Limited and Others v Associated Newspapers Limited [2017] EWHC 2707 (QB) at [52]; and Kellie v Wheatley and Lloyd Architects Limited [2014] EWHC 2886 (TCC) at [17].

Losing badly is not of itself a good reason for awarding indemnity costs: Amoco (UK) Exploration Company v British American Offshore Ltd [2002] BLR 135 at [2].

These, then, are the principles I apply when considering whether there should be an order for indemnity costs.

Ms Challenger says that indemnity costs is the appropriate order because of my findings that the Claimant and the Ninth Defendant gave dishonest evidence in circumstances where they knew that the case they brought – in relation to the preliminary issues – was based on that dishonest evidence. By way of example:

(1) In relation to the claim for a beneficial interest in 2 Montacute Road (“2 MR”), the Claimant had relied on her attempt to register a caution against 2 MR on the false basis that she had contributed to the purchase price, and her Form E in the divorce proceedings contained the same untruth; also false was the...