Skatteforvaltningen (The Danish Customs and Tax Administration) (“SKAT”) v Solo Capital Partners LLP (in Special Administration) & Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Foxton |
| Judgment Date | 21 November 2022 |
| Neutral Citation | [2022] EWHC 2969 (Comm) |
| Docket Number | Case No: CL-2018-000297, CL-2018-000404, CL-2018-000590, CL-2019-000487 & CL-2020-000369 |
| Court | Queen's Bench Division (Commercial Court) |
[2022] EWHC 2969 (Comm)
Mr Justice Foxton
Case No: CL-2018-000297, CL-2018-000404, CL-2018-000590, CL-2019-000487 & CL-2020-000369
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
KING'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
James Goldsmith KC, Abra Bompas, Theo Barclay, James Russell and Matthew Hoyle (instructed by Pinsent Masons LLP) for the Claimant
David Head KC and Tom De Vecchi and Sophia Dzwig (instructed by DWF Law LLP) for the DWF Defendants
Hearing dates: 21 st November 2022
RULING 3
Mr Justice Foxton Monday, 21 November 2022
( 15:44 pm)
Ruling by Mr Justice Foxton
An application has been made by the DWF defendants, and so far as I am concerned today only by the DWF defendants, for a costs order in their favour to be subject to either immediate assessment or at least a payment on account relating to the costs of what has been called the beneficial ownership case. That case was originally advanced by SKAT in circumstances which I will explain, but was then abandoned, as recorded in the order made at the May 2022 CMC.
The argument on this application for the costs has occupied the court for the best part of half a day, which at least enables me to understand why the trial estimates for the resolution of this case are what they are.
By way of a summary of the relevant principles, which essentially were not in dispute, the court has a discretion when a party ceases to pursue part of its case that it was previously pursuing, but without any determination by the court as to the merits of the abandoned case, as to whether to make any costs order at that point, and if so, what order to make. Mr Justice Pepperall in RG Carter Projects Limited v CUA Property Limited [2020] EWHC 3417 (TCC) at [10]–[11] addressed the position of a party who abandoned a cause of action as follows:
“10. In many instances, an order for the costs of and caused by (or, as we used to say, occasioned by) an amendment or (as PD 17 puts it) the costs of and arising from the amendment, will meet the justice of the case. There will, however, be cases where the amendment abandons a particular cause of action that the defendant has spent a significant sum defending. Even in such cases, sometimes the amended statement of case will still pursue other causes of action arising out of the same facts, or the amendment will essentially just put a new label on previously pleaded facts such that the earlier costs have not been entirely wasted …
11 Yet in other cases, the cause of action is simply abandoned, and substantial costs will have been wasted. An award of costs on the conventional basis would, in such cases, cover the defendant's costs of amending his defence to delete the now redundant answer to the abandoned plea, but would not recompense such defendant for the costs of investigating the original case or of pleading the first defence. On such facts, the usual order would not be just and the appropriate order will often be to award the defendant not just the costs of and caused by the amendment, but also the costs in respect of the abandoned cause of action.”
It has also been said by Mr Justice Marcus Smith in Genius Sports Technologies Limited v Soft Construct (Malta) Ltd [2022] Cost LR 825 at [14] that orders for assessment and payment of costs along the way when an issue which has been raised is abandoned will be rare.
The reality is that each case is going to turn on its own particular facts and I think it can fairly be said that the circumstances of this litigation are so singular that the benefit to be gained from general statements of principle is rather less than might otherwise be the case.
One point which Mr Justice Marcus Smith did make when explaining why such orders are rare was because “the process of identifying in the course of proceedings what costs relate to which deletions will be time consuming, cumbersome and generally speaking unjust” ([14(c)]). However, the extent to which that is the case will depend both upon the nature of the issue abandoned and also on the nature of the costs order which the court decides to make.
It has also been said that a trial judges will often be best placed to determine the incidents of costs following an abandoned issue and I was referred in SKAT's skeleton argument to the decision in AB v Goldsmith Williams [2015] EWHC 1559 (Ch) [21]–[22] which contains an observation to that effect. Once again, the force with which that observation applies will vary from case to case. I should note that judges hearing interim applications very often think the trial judge is best placed to decide a whole range of points. Trial judges who then come to those points many years on, when they are at best a footnote in the ancient history of the case, are not always persuaded of the wisdom of the earlier choice. A trial judge dealing with consequential issues in a case such as this is going to have a vast amount to do, it is important to bear in mind the very lengthy period of the time which will elapse in this case before any consequential costs issues will be determined in costs. That period will be measured in years: quite how many years will be the subject of a further hearing before Mr Justice Andrew Baker next week.
I will now explain the background to the issue which is no longer pursued. In its original Particulars of Claim, SKAT alleged that the defendants had made a representation, and advanced four grounds for saying that the representation was false. Part of one ground was that a representation had been made as to the defendants' beneficial ownership of certain companies (as that term is understood in the...
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