Summary

Where a tenant had obtained summary judgment against its landlord in relation to the accounting years 2004 to 2006 but not the accounting year 2003, and the evidence showed that the consideration of 2003 added nothing to the costs of the summary judgment application, the correct percentage reduction in an assessment of costs was 10 per cent.

Facts

The court was required to determine the costs of an application for summary judgment and an appeal following the decision in Morshead Mansions Ltd v Mactra Properties Ltd [2013] EWHC 224 (Ch).

The appellant landlord (M) had appealed against a decision granting the respondent tenant (P) summary judgment on its claim for an order for specific performance of M's obligation to provide P with an account in relation to the service charge payable under the lease for each relevant accounting year. P succeeded in obtaining summary judgment for the years 2004 to 2006 but not for the years 2003 and 2007. P sought only the costs of the summary judgment and the appeal and not of the substantive judgment.

P submitted that the inclusion of 2003 in the summary judgment application did not affect the argument or the costs incurred in any way and that there was no argument advanced and no evidence produced which suggested any distinction on the parties' separate cases between 2003 and 2004 to 2006. P argued that it deployed, and needed to deploy, the arguments which it did to succeed in relation to 2004 to 2006 and, having been successful in relation to those years, it should be entitled to its costs. M contended that it was necessary to deploy its arguments on the construction of the lease and to adduce all of its evidence in order to resist summary judgment in relation to 2003 which it had successfully done and that although the construction contended for by M had been rejected, so had the construction contended for by P.

Held

(1) P had been perfectly justified in launching its summary judgment application when it did. The ordinary rule was that the successful party should recover the costs of the application and in relation to 2004 to 2006 P was the clear winner. It had succeeded, as the result of the judgment, in obtaining an order for summary judgment for 2004 to 2006. Although P had got something different from that which it sought, it was undoubtedly the successful party. So far as 2007 was concerned, P failed to obtain summary judgment because it claimed it too soon. But the additional cost of that claim was minimal and raised no discrete issue. P's failure to obtain summary judgment in relation to 2007 should not be reflected by a reduction in the costs, if any, which it would otherwise be entitled to recover. In relation to 2003 P had failed to obtain summary judgment. However the consideration of 2003 added nothing to the costs of the summary judgment application. In the end the argument was principally about the construction of the relevant lease, an argument which would have had to be resolved even if 2003 had never featured at all (see paras 41 and 48-51 of judgment). (2) The no costs approach would simply not be fair to P. It was right that M's success in relation to 2003 should be reflected in a percentage reduction in the costs to which P would otherwise be entitled to recover. The correct percentage reduction was 10 per cent, which was a figure within the permissible range designed to achieve justice between the parties. There was nothing in P's conduct which should be reflected in the costs order. M was to pay 90 per cent of P's costs of the application and of the appeal, including the costs of the application for costs (paras 54-61).

Costs determined