The Dubai International Financial Centre

Claim No: CFI 023/2021

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

IGPL GENERAL TRADING LLC

Claimant

and

(1) HORTIN HOLDINGS LIMITED
(2) LODGE HILL LIMITED
(3) WESTDENE INVESTMENT LIMITED

Defendants

COSTS JUDGMENT OF JUSTICE ROGER GILES

UPONreviewing the Order with Reasons of Justice Roger Giles dated 20 September 2021 (the“Order”)

AND UPONreviewing the Claimant’s costs submissions dated 27 September 2021 (the“Claimant’s Submission on Costs”)

AND UPONreviewing the Defendants’ costs submissions dated 27 September 2021 (the“Defendants’ Submission on Costs”)

IT IS HEREBY ORDERED:

1. The Claimant to pay the Defendants cost of the proceedings, including of this determination, to be assessed by the Registrar if not agreed.

2. Stay any assessment by the Registrar until decision of the Claimant’s application for permission to appeal, and if permission is granted until the decision of the appeal.

Issued by:
Nour Hineidi
Registrar
Date of Issue: 6 October 2021
At: 4pm

JUDGMENT

1. By a Claim Form issued on 14 February 2021, the Claimant sought orders for specific performance of an alleged contract to lease premises in London. For the reasons in a judgment issued on 22 August 2021, I ordered that there be immediate judgment in favour of the Defendants and that the proceedings be dismissed. As recorded in the reasons, I was asked to give the parties the opportunity to make submissions as to costs. Written submissions have been received, and this is the determination on costs.

Quantum remains for later

2. In a subsequent judgment I declined to order a stay of the determination on costs, but indicated that there would not be an immediate assessment and that the submissions should not address quantum: I said that assuming an order in favour of the Defendants, their Statement of Costs “is in the briefest form, and although RDC r.38.30 contemplates that it may occur, I do not consider that I am in a position to make an immediate assessment”. The Defendants’ submissions invited me to reconsider this, providing some more information concerning the costs claimed. The information remains insufficient to accept on immediate assessment an amount in the order of the amount claimed, or properly to arrive at a reasonable and proportionate amount, and it is still necessary that (in the absence of agreement) there be an assessment by the Registrar.

The disposition of costs

3. The Defendants submitted that with the dismissal of the proceedings they were “dominantly successful“, despite their failure on the ground of sham in the application for immediate judgment; they said it had nonetheless been a reasonable ground to raise. They submitted further that the Claimant’s case on the ground of authority, on which they had succeeded, had been left obscure until late in the day, and that unnecessary costs had been incurred for that reason and also by excessive requests for inspection of documents which made no difference to the outcome of the application. They sought an order in their favour for the whole of the costs of the proceedings.

4. The Claimant for its part submitted that costs should be awarded on an issues-based approach. It said that the Court had not found it necessary to hear it on the ground of sham at the hearing of the application for immediate judgment, and that the pleaded case for sham had not even been fully taken up in that application. The order it sought was one of exclusion – at one point that the costs relating to the allegations of sham be borne by the Defendants, at another point that the costs relating to the “adequacy of damages” issue (which was pleaded and raised but eventually not part of the argument for immediate judgment) also be borne by them.

5. While the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party, there is a discretion to depart from that rule, and there may be departure to an issues-based costs determination as part of regard to all the circumstances. This is trite, and it is not necessary to go to the authorities cited by the parties. As to when such a departure may be appropriate, the Defendants’ reference to “dominantly successful” came from Adil v Frontline Development Partners Ltd [2014] DIFC CFI 015 (3 April 2016 at [15]; 24 July 2016 at [15]), in the latter of which I said at [14]-[15] :

6. A more detailed statement of the relevant principles is found in the judgment of Justice Sir John Chadwick inAl Khorafi v Bank Sarasin-Alpen (ME) Ltd [2009] DIFC CFI 026 (16 January 2017) at [36]. It is lengthy and I do not set it out, but it includes that success “is a result in real life”; that unreasonable conduct in pursuing the lost issues is not necessary and “there simply needs to be ‘reason, based on justice, for departing from the general rule’”; and that in any litigation a party is likely to fail on one or more issues and the mere fact of failure on certain issues does not justify a separate costs order on those issues. Relevantly to the order sought by the Claimant, the principles include (and I respectfully agree) that in making an issues-based order it is better to make an order for payment of a percentage of costs recoverable or costs recoverable for a specific period of time, rather than an order expressed by reference to the costs of the discrete issues, because of the practical difficulties which the latter course causes.

7. It should not be forgotten that the costs in question are the costs of the proceedings in their entirety, not just the costs of the application for immediate judgment. On any realistic basis, it is not correct that the Defendants failed on the “adequacy of damages“ issue, which while pleaded was but scarcely raised in the immediate judgment application and has not been put to the test. While the ground of sham was not accepted in the immediate judgment application, it was said that there was force in the matters on which the Defendants relied, and the failure was not on the merits but because the case required the factual examination afforded by a trial: it has not been put to a determinative test. Despite its degree of success in the application for immediate judgment, on a realistic view the Claimant failed overall in the dismissal of the proceedings and a separate order for the costs of the ground of sham, or percentage reduction in the Defendants’ costs, is not warranted.

8. The Claimant’s submissions also address a costs order in CFI 016-2021. That is mistaken. For avoidance of doubt, costs in those proceedings, in which the discharge of the orders made on 31 January 2021 remains suspended and the proceedings are not concluded, are not the subject of this determination, which is concerned only with the costs in CFI 023–2021.

Quantum for when?

9. The Defendants submitted that there should be orders for assessment within 14 days and payment within 14 days after assessment. Following on from the stay application, the Claimant submitted that assessment, or if not assessment then payment, should be deferred pending the outcome of the application for permission to appeal and any appeal. I have had regard also to the parties’ submissions in those respects in the stay application.

10. It is correct, as the Defendants submitted, that an appeal does not operate as a stay and they are entitled to enforce their rights, including as to costs; and also that assessment and payment of costs is not something which will make an appeal nugatory. They said that if, following a successful appeal, costs paid by the Claimant had to be repaid, there was “no serious risk” of the costs being irrecoverable by it. On the other hand, it could not be said that the Bank (standing behind the Defendants) is in financial need of the costs, and it was not suggested that recovery of costs by the Defendants will be more difficult if assessment or payment is deferred. Sensible case management, with a view to the overriding objective, means that the parties should not be put to the expense of a detailed assessment, which would not be inconsiderable, if a successful appeal would mean that the expense would be wasted. Accordingly, a stay of assessment should be granted until decision of the application for permission to appeal, and if permission is granted until decision of the appeal.

Costs

11. The Defendants have been “dominantly successful” and the Claimant should pay their costs, to be assessed as part of the overall assessment.

Orders

12. I make the following orders: