Taylor v Pace Developments Ltd
| Jurisdiction | England & Wales |
| Judgment Date | 01 May 1991 |
| Date | 01 May 1991 |
| Court | Court of Appeal (Civil Division) |
Court of Appeal
Before Lord Justice Lloyd, Lord Justice Nourse and Lord Justice Ralph Gibson
Company - insolvency - costs - directors' liability
While it had been clearly established that section 51 of the Supreme Court Act 1981 enabled the court to make an order for costs against a person who was not a party to the proceedings, it would seldom be appropriate to make such an order against the directors of an insolvent defendant company.
The Court of Appeal so stated when dismissing an appeal by the plaintiffs, Mr Richard Taylor and others, against the dismissal by Mr John Lindsay, QC, sitting as a deputy judge in the Chancery Division, of an application by the plaintiffs, who were successful in their proceedings against the defendants, Pace Developments Ltd, for an order for costs, not only against the defendant company, which was insolvent, but also against Mr Nithsdale Dobbs, the managing director and sole beneficial shareholder of the company. An identical question arising in relation to the costs of the fifteenth defendant to the company's counterclaim, Mrs Janet Golding, was decided in the same way.
Mr Richard McCombe, QC, for Mr Taylor and Mrs Golding; Mr Augustus Ullstein for Mr Dobbs.
LORD JUSTICE LLOYD said that until recently it would have been unheard of for a successful litigant to obtain an order for costs from a person who had not been a party to the proceedings. But Aiden Shipping Co Ltd v Interbulk LtdELR ([1986] AC 965) had changed the practice.
Section 51 of the Supreme Court Act 1981 provided: "(1) Subject to the provisions of this or any other Act and to the rules of court, the costs of and incidental to all proceedings in the civil division of the Court of Appeal and in the High Court … shall be in the discretion of the court, and the court shall have full power to determine by whom and to what extent the costs are to be paid."
In Aiden Shipping the House of Lords, reversing the decision of the Court of Appeal, had held that the subsection was not subject to any implied limitation. The words "by whom" were not to be read as meaning "by which party".
In the instant case the judge had exercised his discretion in favour of Mr Dobbs. The question was whether the judge was right.
The judge had given leave to appeal and no doubt the reason leave had so readily been given was the reference in Lord Goff's speech in Aiden Shippingto...
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Moorview Development Ltd v First Active Plc
...is clear ... that the law has moved a considerable distance in refining the early approach of Lloyd LJ in Taylor v Pace Developments Ltd [1991] BCC 406. Where a non-party director can be described as the "real party", seeking his own benefit, controlling and/or funding the litigation, then......
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Phillips v Symes (Expert Witnesses: Costs)
...and Property Trust Co. Plc. (No. 2) The Times, 16 February 1993; Court of Appeal (Civil Division) Transcript No. 160 of 1993; Taylor v. Pace Developments Ltd. [1991] B.C.C. 406; In re A Company (No. 004055 of 1991) [1991] 1 W.L.R. 1003 and Framework Exhibitions Ltd. v. Matchroom Boxing Lt......
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...under the section 51(3) regime? This problem has itself been discussed in a number of cases, such as Taylor v. Pace Developments Ltd [1991] BCC 406, Metalloy Supplies Ltd v. MA (UK) Ltd [1997] 1 WLR 1613, In re North West Holdings plc [2001] 1BCLC 468 and GoodwoodRecoveries Ltd v. Breen [20......
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...particular upon passages from two judgments in the early years of the non-party costs jurisdiction, namely those of Lloyd LJ in Taylor v Pace Developments Ltd [1991] BCC 406 at 409 and Millett LJ in Mettaloy Supplies Ltd v MA (UK) Ltd [1997] 1 WLR 1613 at 1619–20. As he acknowledged, howeve......