Summary

The court had jurisdiction to order a payment on account of costs where a costs order was deemed to have been made under CPR r.44.12 on discontinuance of a claim under CPR r.38.6.

Facts

The court was required to determine costs following the discontinuance of claims by claimant (C) against two of the defendants and the abandonment of an application by the first defendant (D) for summary judgment.

C had issued proceedings against D and two companies in respect of contractual claims arising from an alleged agreement about the distribution of a VAT repayment to a group of companies which had demerged. D applied for summary judgment. C applied for permission to amend her particulars of claim. After a two-day hearing the summary judgment hearing was adjourned to be dealt with at the same time as the amendment application, with costs reserved. C served further amended particulars of claim that amended the claims against D and abandoned all claims against the companies. D consented to the proposed amendments and abandoned his summary judgment application. C filed notice of discontinuance of her claims against the companies and agreed to pay their costs. The issues were (i) whether a payment on account should be ordered in respect of the costs agreed to be paid to the companies; (ii) how the costs of the summary judgment application should be borne.

C argued that the court did not have jurisdiction to order a payment on account where the costs liability arose by default under CPR r.38.6 on discontinuance. D argued that the summary judgment application was only abandoned because of the further amended particulars of claim which raised factual issues not suitable for a summary judgment hearing, and that the application had had the beneficial effect of causing C to discontinue the claims against the companies and forcing her to clarify her pleaded claims against D.

Held

(1) C's argument on jurisdiction ignored CPR r.44.12, which provided for a deemed costs order to be made where a right to costs arose under r.38.6. Rule 44.12 was clear in its terms and the mischief that a payment on account sought to address, namely that a person in whose favour a costs order had been made should not be out of pocket, was the same, Gollop v Pryke considered. The court had jurisdiction to order a payment on account where there had been discontinuance under r.38.6, and it was appropriate to do so. (2) It was inappropriate to make a finding about whether D would have succeeded in obtaining summary judgment if it were not for the further amended particulars of claim; it could not be right to decide on the merits of C's contractual claim without hearing the trial, BCT Software Solutions Ltd v C Brewer & Sons Ltd [2003] EWCA Civ 939, [2004] C.P. Rep. 2 considered. It could not be said that there had been no grounds for bringing the summary judgment application, and there was merit in the argument that the further amended particulars of claim had moved the goalposts to such an extent that it was reasonable for D to abandon the summary judgment application. In the circumstances, the proper course was to order costs in the case.

Costs determined
C had issued proceedings against D and two companies in respect of contractual claims arising from an alleged agreement about the distribution of a VAT repayment to a group of companies which had demerged. D applied for summary judgment. C applied for permission to amend her particulars of claim. After a two-day hearing the summary judgment hearing was adjourned to be dealt with at the same time as the amendment application, with costs reserved. C served further amended particulars of claim that amended the claims against D and abandoned all claims against the companies. D consented to the proposed amendments and abandoned his summary judgment application. C filed notice of discontinuance of her claims against the companies and agreed to pay their costs. The issues were (i) whether a payment on account should be ordered in respect of the costs agreed to be paid to the companies; (ii) how the costs of the summary judgment application should be borne.

C argued that the court did not have jurisdiction to order a payment on account where the costs liability arose by default under CPR r.38.6 on discontinuance. D argued that the summary judgment application was only abandoned because of the further amended particulars of claim which raised factual issues not suitable for a summary judgment hearing, and that the application had had the beneficial effect of causing C to discontinue the claims against the companies and forcing her to clarify her pleaded claims against D.