England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CHANCERY DIVISON COMPANIES UNIT
(SIR EDWARD EVANS-LOMBE)

		Royal Courts of Justice Strand, London, WC2A 2LL
		25th May 2010

Lord Justice Etherton:

Introduction

1. This appeal arises out of an unfair prejudice dispute, originally under the Companies Act 1985 section 459, and after 1 October 2007 under section 994 of the Companies Act 2006, between the shareholders of Minrealm Limited ("Minrealm") and Minrealm VAT Refunds Limited ("Minrealm Refunds"), which are the first and second respondents. Like many such disputes it has been prolonged, highly antagonistic and very expensive. A figure of £1.5m costs has been mentioned in one of the skeleton arguments.
2. Having eventually reached court for an estimated eight day trial at the end of November 2009, the parties, under the sensible encouragement of the judge, Sir Edward Evans-Lombe, settled by the second day of the trial all substantive relief, leaving outstanding only the question of costs.
3. This appeal, which unusually for a costs only appeal is brought with the permission of the judge, is about his decision to make no order as to the costs of the petition. The appellants, who are the shareholders and directors who instituted the unfair prejudice proceedings, claim that the judge's approach was wrong in principle in important respects and they should be awarded all their costs. It is again a sad reflection on the nature of this type of dispute that the time estimate for this issue before the court is a full day. In the event, with the benefit of clear and concise submissions of counsel, it has been possible to conclude the appeal in a shorter time.

Background

4. One of the applications made during the course of the proceedings was by the appellants for an order that the three individual respondents (who are the other shareholders and directors of Minrealm and Minrealm Refunds) be committed to prison or fined for contempt of court, in breaching undertakings given to Mann J on 10 August 2006. In giving judgment dismissing the application on 13 September 2007, Kitchen J helpfully summarised the background as follows in his judgment:

"5…. The first respondent was incorporated on 1 November 1982 and conducted business from premises at 30 Old Bond Street, London W1. 50% of its share capital is held by the first petitioner and the remaining 50% either by the third respondent, on the petitioners' case, or by the fourth and fifth respondents, on the respondents' case. The directors of the first respondent are the two petitioners and the third to fifth respondents.

6. Since about September 2005, the business of the first respondent has been the making of hotel reservations on behalf of Middle Eastern customers and the subletting of three properties, namely (a) Flat 5, Egerton Court, Harrington Road, London SW7, (b) 48 Lancaster Gate, London W2, and (c) Flat 3, 40 Hyde Park Gate, London W8.

7. Further, the third to fifth respondents accept and aver that since about September 2005 the first respondent has been under the effective control of the fourth and fifth respondents and the petitioners have been excluded from its management.


8. Nevertheless, relations between the parties were initially amicable and negotiations took place between them with a view to the acquisition by the third to fifth respondents of the interests of the petitioners. The petitioners say they trusted the third to fifth respondents to manage the first respondent fairly until such time as the terms of the acquisition were agreed. It seems rents and other monies payable to the first respondent were duly paid into its accounts with the Allied Irish Bank.


9. Unfortunately, in about June 2006, the negotiations between the parties broke down and the petitioners allege that since that time the third to fifth respondents have systematically stripped the assets of the first respondent and diverted its business to themselves or to other companies and parties associated with them. They also allege that the third to fifth respondents have mismanaged and actively sabotaged the interests of the first respondent where their attempts to obtain its assets for their own benefit have failed. These allegations are supported by a number of detailed particulars. However, for the purposes of the application before me, I need only refer to two of them.


10. Specifically, the petitioners say (and indeed the third to fifth respondents admit) that on about 12 June 2006 the fifth respondent opened Abbey accounts no. 42200489 and no. 42200452 in the name of RRR Services Limited ("RRR"), and account no. 42314010 in the name of Leading Services of the World Limited ("LSW"), two companies owned and controlled by the fifth respondent.


11. Further, the petitioners say (and the third to fifth respondents again admit) that since about mid June 2006 all or substantially all rental income derived from Flat 5, Egerton Court, 48 Lancaster Gate and Flat 3, 40 Hyde Park Gate, has been paid into those new RRR and/or LSW accounts, whereas before that time it was paid into the Allied Irish Bank accounts of the first respondent."

5. Minrealm Refunds' business, as an extension of that of Minrealm, had been to make VAT refund claims for overseas clients who had paid for supplies in respect of which VAT was recoverable.
6. I should also mention that RR Services Limited and Leading Services of the World Limited, mentioned in paragraphs [10] and [11] of Kitchen J's judgment, have been added as the sixth and seventh respondents.

Proceedings

7. It was in those circumstances that on 21 July 2006 the first appellant, Khaled El Bishlawi, presented a petition under section 459 against Minrealm and the three individual respondents; and Khaled El Bishlawi and the second appellant, Diaa El Bishlawi, presented a petition under section 459 against Minrealm Refunds and the three individual respondents. Those petitions were consolidated by order of His Honour Judge Mackie QC dated 23 February 2007. The consolidated petition is dated 16 March 2007 ("the consolidated petition").
8. The relief sought in the consolidated petition was an order:

"(1) to regulate the conduct of the affairs of Minrealm in future;

(2) to require Minrealm to refrain from transferring its assets (or securing the renewal of assets e.g. leases) to or for the benefit of A A M Soliman, M Soliman and E A Belal or third parties save in so far as any such transactions arise in the course of normal commercial dealings;

(3) to authorize civil proceedings to be brought in the name and on behalf of Minrealm against A A M Soliman, M Soliman and E A Belal (the 2nd to 4th Respondents) to recover assets of Minrealm diverted by the said Directors in breach of their duties to Minrealm and/or generally for breach of their duties as Directors, on such terms as the Court may direct;

(4) further or in the alternative, for the purchase of the shares of A A M Soliman by the Petitioner at fair value as determined by the Court;

(5) that accounts be taken in relation to Minrealm, RRR, and LSW;

(6) for further relief as the Court thinks fit;"

9. Following the presentation of the unfair prejudice petitions, the individual respondents offered their shares in Minrealm Refunds to the appellants for 1p. This offer was accepted by the appellants in October 2006, and the transaction was completed. Thereafter, the petition in relation to Minrealm Refunds remained alive for the purpose of determining who should bear the costs of what had gone before.
10. A petition to wind up Minrealm was presented on 31 July 2007 by the directors of Minrealm, in reality the individual respondents, on the ground that the company was insolvent. That petition came before Morgan J on a disputed hearing on 6 and 7 November 2007. He refused to make a winding up order and adjourned it pending the appellants' interim payment application in the section 459 proceedings. In the event, the winding up petition, like the consolidated petition, came before Sir Edward Evans-Lombe on 30 November 2009.
11. I should mention at this point two offers that were made in the course of the proceedings prior to the trial. Paragraph 4 of the respondents' amended Answer contained an offer to purchase the appellants' shares:

"In this answer the ... Respondents all make the open offer that the shares in [Minrealm] be valued by a Court appointed valuer as at the date of the petition or, alternatively, the 30^th day of September 2005 and thereafter the First [appellant's] shares in [Minrealm] be sold to the Fourth and Fifth Respondents for a price determined by the said valuer."

12. Paragraph 2 of the Reply made in effect a counter-offer as follows:

"With reference to paragraph 4 of the Answer, the premise of the offer to buy the shares of the First Petitioner is that (as the Respondents have asserted since 7 June 2006) Mr Ahmed Soliman has already transferred his shares (5 ordinary shares being 50% of the total shares) to M Soliman and E A Belal. No such transfer has been registered with Companies House nor has any documentary proof of transfer or agreement to transfer been produced by the Respondents. Further any offer to purchase as at the date of the petition would need to include the value of the companies RRR Services Limited and Leading Services of the World Limited, to whom the Respondents had wrongly diverted the business of the First Respondent, 'Minrealm', as appears from the consolidated Petition. Interest would need to be paid on the purchase price of the shares from the date of valuation, whether such date be the end of September 2005 or the date of the Petition. The method of dealing with the proceeds of the sale of the property known as Hereford House (in respect of which there was a deemed sale in August 2005 and an actual sale in October 2005) needs to be ascertained and agreed. The Petitioners asked for relief in paragraph 10 of the petition including, at paragraph 10(4) 'the purchase of the shares of [the Third Respondent] by the Petitioner at fair value as determined by the Court'. Alternatively, subject to resolution of the matters identified above and subject to contract, the Petitioners would be content for the Third, Fourth and Fifth Respondents to purchase the First Petitioner's shares in Minrealm at a value to be determined by the Court."

13. So far as concerns Minrealm, by the time of the trial before the judge the answer of the individual respondents to the consolidated petition was that, as a result of discussions between the parties between August and June 2006, there was a binding contract for the sale by the appellants of their shares in the two companies to the fourth and fifth respondents, and therefore there was an agreement which entitled them to exclude the appellants from the management of the companies from that time.
14. The skeleton arguments on behalf of the individual respondents raised two further matters. They contended that the right of the appellants to take up again a management role could only have arisen by a contractual right. There was no such right and a mere refusal to allow re-entry was not in the circumstances of itself prejudicial; and also, by the relevant time, the appellants had become competitors of Minrealm.
15. The appellants' position at the trial was that the winding up petition should be dismissed and a share buy-out order made in relation to Minrealm on the consolidated petition. The appellants accepted that an appropriate buy-out could be conducted of the first appellant's shares at a valuation date of 30 September 2005.
16. In relation to the petition concerning Minrealm Refunds, the appellants' case was that they were entitled to their costs.
17. At the outset of the trial, the judge expressed the view that the individual respondents' case on the absence of unfair prejudice was bound to fail if they had no arguable case that any such binding contract as pleaded in their amended Answer had ever been reached, and an order for a buy-out of the first appellant's shares at a valuation could probably be agreed between the parties as the appropriate form of relief.
18. In his judgment on costs on 1 December 2009 (which was the second day of the trial) the judge described what approach he had taken on the previous day. He said:

"4. The allegation of exclusion was admitted by the Majority Directors. Their defence to both the main allegations in the petition, exclusion and diversion of assets, was that they believed themselves to have contracted to buy the shares held by one of the Minority Directors in the company which represented a 50 per cent interest and that accordingly their actions could not be categorised as unfairly prejudicial of the Minority Directors. Nonetheless in a late addition to their Answer, the Majority Directors indicated that they would not oppose an order that they purchase the First Petitioner's shares at a price to be fixed by the court.

5. I took the view that a fundamental issue in the merits of the case was whether the Majority Directors were entitled, in the circumstances, to assume that they had made a contract to buy those shares so justifying the proprietary actions with relation to the assets of the Company which followed and the exclusion of the Minority Directors from access to the company's records and to any part in the control of the company's operations.


6. Accordingly, the process that I embarked upon yesterday was an attempt to arrive at a solution of this fundamental issue by looking at the documentary support for the existence of a contract. I have not tried the petition, I have not heard the witnesses, I have not seen all the documents.

…

10. I have already referred to the unusual aspect of this case that the answer presented by the Majority Directors to the petition indicates that they were prepared to accept an order of the Court requiring them to purchase the shares of the first petitioner at a value to be established, if necessary, by a court-appointed arbitrator as at 30 September 2005. However, the answer contains no admission that the Majority Directors were guilty of unfairly prejudicial conduct and that has never been admitted by them.


11. Initially, the Minority Directors sought an order that they be at liberty to purchase the Majority Directors' shares in a company but in their skeleton argument, presented to the Court in anticipation of the hearing, they indicated that they thought that, with the passage of time, the most practical solution and one that they would accept would be an order in the form proposed by the Majority Directors.


12. It was this which caused me to intervene early in the hearing and suggest that the hearing had, effectively, become one that concerned costs alone which I was reluctant to spend the eight days allocated to the hearing trying. In the result, the parties have arrived at an agreed order which disposes of the substantive issues between them."

19. The substance of the agreement between the appellants and the individual respondents was as follows. As to the consolidated petition, it was agreed that there should be an order by consent that the individual respondents were jointly and severally to purchase the five shares in Minrealm then held by the first appellant at a price to be agreed between them, or (in the absence of agreement) to be certified by a valuer who was to be a chartered accountant, either agreed between the parties or, in default of agreement, appointed by the court. The value of the shares was to be the undiscounted pro rata proportion of the value of Minrealm as at 30 September 2005 as a going concern and on the basis of a sale between a willing buyer and a willing seller, together with an amount equal to interest at the judgment rate from 30 September 2005 to the date when the valuer certified the shares. Completion of the sale and purchase of the shares was to take place within 28 days of the valuation being certified. It was also agreed that at the same time as completion of the sale of the shares, the appellants should in effect pay or receive payment in respect of any sum due from them to Minrealm or from Minrealm to them.
20. So far as concerns the winding up petition, it was agreed that the petition should be dismissed by consent with no order as to costs.
21. That, then, left only the question of costs, as to which the judge, having heard submissions, delivered his judgment on the second day. As I have said, his decision was that there should be no orders to costs. His reasoning was expressed relatively briefly as follows:

"7. The problems this sort of situation gives rise to have been the subject of authority summarised in the 2009 White Book at 44.3.7 under the heading "Judicial Review". The notes read as follows:

"The Administrative Court considered the powers of the court in relation to costs in judicial review proceedings concluded without a full hearing. The following principles were identified:

(i) the court has power to make a costs order when the substantive proceedings have been resolved without a trial but the parties have not agreed about the costs;

(ii) it will normally be irrelevant that the claimant is LSC [state] funded.

(iii) the overriding objective is to do justice between the parties without incurring unnecessary court time and consequently additional costs.

(iv) at each end of the spectrum there will be cases where it is obvious which side would have won had the substantive issues been bought to a conclusion. In between the position will, in differing degrees, be less clear. How far the court will be prepared to look into the previously unresolved substantive issues will depend on the circumstances of the particular case, not least the amount of the costs at that stage and the conduct of the parties;

(v) in the absence of a good reason to make any order, the fall back is to make no order as to costs;

(vi) the court should take care to ensure that it does not discourage parties from settling judicial review proceedings, for example by a local authority making concessions at an early stage.


R ...Boxall) v Waltham Forest London Borough Council 4 CCLR 258, Scott Baker J."

…..



9. I have already said that the issues in the case involve oral evidence that would have involved cross-examination and extensive documentation provided on disclosure by both sides which I have only touched the surface of. At my request I was shown the documentary evidence which supported or disproved the Majority Directors' case that in 2005-06, there had come into existence an oral contract to sell the shares held by the first petitioner to the respondents at a price to be arrived at by reference to a valuation by Mr Berry, the company's accountant.


…

13. Adopting what I will call the Boxall case approach, it seems to me that the petitioners probably have a strong case, but not an overwhelming one, that there was never any contract for the sale of the shares. It seems to me that on balance, the documents which I have been shown are against such a finding.


14. However, the possibility that the Majority Directors might have successfully resisted the claim in the petition that there had been unfairly prejudicial conduct by the Majority Directors as against the Minority Directors cannot be ruled out.

15. In these circumstances, it seems to me I am driven to the fallback position in the Boxall case and I will make no orders as to costs."

22. Orders were in due course drawn up and entered giving effect to the compromise agreed by the appellants and the individual respondents and the judge's order for the costs of the consolidated petition. Save as to costs and permission to appeal, the provisions of the order on the consolidated petition were stated to be by consent.
23. It is clear that the order on the consolidated petition was made pursuant to section 996 of the 2006 Act, which is as follows so far as material:

"(1) If the court is satisfied that a petition under this Part is well founded, it may make such order as it thinks fit for giving relief in respect of the matters complained of.

(2) Without prejudice to the generality of subsection (1), the court's order may --

…

(e) provide for the purchase of the shares of any members of the company by other members or by the company itself..."

The Appeal

24. The appellants appeal from the judge's order for costs. They say that the judge should have ordered the individual respondents to pay their costs of the consolidated petition. The grounds for that contention may be summarised briefly as follows: (1) the appellants had a very strong case for substantive relief under section 495 of the 1985 Act and section 994 of the 2006 Act; (2) at the trial they obtained that relief by consent; (3) the order they obtained was premised on their being entitled to that relief as a substantive matter, so that the court had jurisdiction to order it; (4) the relief that they obtained had not been previously offered; and (5) in the circumstances it was a manifestly erroneous exercise of discretion for the judge not to make an order for costs in favour of the appellants and instead to make no order as to costs.
25. Mr George Bompas QC, for the appellants, has elaborated upon those grounds as follows in his written and oral submissions. He submits that the judge should have found it was clear and obvious that the appellants would have won if the issues on the consolidated petition had been fought to a conclusion. The basis for that is set out in some detail in the main part of the appellants' skeleton argument and also in the schedule to that skeleton argument. As to the alleged agreement for the sale of the appellants' shares, the judge did in fact conclude that the appellant's case that there was no such contract was a strong one. Further, if there was no such contract for the sale of the first appellant's shares, or indeed, even if there was such a contract, so long as it remained uncompleted there could be no proper basis for the exclusion of the appellants who remained directors and one or more of whom remained shareholders, or for the diversion of Minrealm's business. So far as concerns the allegation that the exclusion of the appellants was legitimate since they had become competitors of Minrealm, there was no allegation to that effect in the respondents' statements of their case and no evidence on the point. Further, the order made by the judge disposing of the consolidated petition was premised on the appellants having satisfied the court that their case under section 994 of the 2006 Act was made out. Moreover, the judge should have concluded and taken into account that, when the individual respondents offered to purchase the appellants' shares at a valuation, they did not offer to pay interest, nor did they offer that the valuation of the appellants' shares should be on an undiscounted basis (that is, not taking into account that they had no more than 50% of the shares), and nor did they offer to pay the appellants' costs. It was, Mr Bompas submitted, perfectly reasonable for the appellants in those circumstances not to have accepted the offer and to continue to trial.
26. For all those reasons, the appellants say that the judge exceeded the bounds of a proper exercise of discretion in making the order for costs which he did in respect of the consolidated petition. His costs order, they say, should be set aside and this court should instead order that the individual respondents pay the applicants' costs of the proceedings, to be assessed on a standard basis, if not agreed.
27. The individual respondents robustly oppose the appeal on several grounds. They are set out in their skeleton argument and have been elaborated upon before us by Mr Ashley Roughton, on behalf of the respondents, in his oral submissions. They say that, in addition to the defence to the consolidated petition that there was an agreement in 2006 which entitled them to exclude the appellants from the day-to-day management of Minrealm, they were in any event justified in excluding the appellants from the affairs of the company because the appellants were competitors and because the appellants wished to obtain potentially confidential information of Minrealm for their own purposes. The respondents further say that the section 459 petition should never have been issued and the proper way of dealing with the dispute was for there to have been a winding up petition by the members, which would not have been resisted by the respondents.
28. The individual respondents rely particularly upon repeated offers that they made for the purchase of the appellants' shares in Minrealm in order to avoid or settle the litigation. In that connection, in addition to paragraph 4 of the amended Answer which I have cited above, they draw attention to the terms of the letter from the respondents to the appellants dated 27 July 2006, which said:

"Your Petitions state that our clients have 'excluded' your client and his brother from the management of the Companies. Quite apart from the fact that they voluntarily resigned from any active role in the Companies, this is at odds with the attempts made by our client to settle the differences between them without litigating the matter. Our clients reluctantly agreed to pay to yours the valuation fixed by S Beri & Co but this was rejected. As an alternative, our clients offered an independent valuation by a jointly nominated chartered accountant or one appointed by the Institute. This again was rejected. Our clients offered to meet yours in a round table 'without prejudice' meeting with each party's solicitor being present. That offer was rejected. Finally your client was put on notice of the Board Meeting which was called to be held on 26 June 2006. Your clients did not attend that Board Meeting and offered no explanation for their absence. All those matters will be put to the court when the question of costs in the current proceedings are considered."

29. Primarily, the position of the individual respondents, as developed by Mr Roughton, is that the judge was correct to take the view that, because the appellants' case that there was no agreement for sale was not obvious or absolutely clear, the judge was right to make no order as to costs.

Discussion and Conclusion

30. The principles applicable to a dispute as to costs of the present kind are now well established. The extract from the 2009 White Book quoted by the judge correctly summarises the principles set out by Scott Baker J in R (Boxall) v Waltham Forest London Borough Council [2001] 4 CCL Rep 258. They are derived from the summation in paragraph [22] of Scott Baker J's judgment. They have been approved by the Court of Appeal in R v Southwark LBC ex p Kuzeva [2002] EWCA Civ 781; Brawley v Marczynski [2002] EWCA Civ 756, [2004] 4 All ER 106; and R (Scott) v London Borough of Hackney [2009] EWCA Civ 217. In the latter case, Hallett LJ, with whose judgment the other two judges agreed, repeated that the same principles apply for publicly funded proceedings for judicial review and all other civil litigation (paragraph [38]) and that the judge dealing with the issue of costs in these circumstances should make "a reasonable and proportionate attempt... to analyse the situation and determine whether an order for costs is appropriate..." and that "A judge must not be tempted too readily to adopt the fall back position of no order for costs" ([31]). That was also a point made by Longmore LJ, giving the lead judgment in Brawley. He said as follows:

"[18] As far as Mr Shipley's third point on the law is concerned, there is, in my judgment, no tradition in these matters of there being "no order as to costs" merely because a dispute has been settled except as to costs. No doubt if it is truly impossible to say what the likely outcome would have been it is a possible order. But if one looks at the authorities referred to by Mr Shipley one finds that the position is much more precisely expressed. I refer firstly to R v Holderness Borough Council, ex p James Roberts Developments Ltd. (1993) 5 Admin LR 470. Butler-Sloss LJ said this (at 483-484):

'It is not the function of the courts to make decisions on academic issues of law where there is no dispute to resolve. I have great sympathy with a view as to the undesirability of deciding an important issue in a dispute which no longer exists for the purpose of determining who pays the costs of litigation which has otherwise come to an end. In this case however there are now considerable costs incurred on both sides and, with regret, I cannot see how the court can bar the parties from obtaining a decision as to who should pay those costs. The issue of costs alone may keep litigation alive, see Ainsbury v Millington [1987] 1 WLR 379. The court is not in a position to assess the correct costs order without an evaluation of the prospects of success had the application for judicial review been heard and determined.'

[19] In a dissenting judgment but on this point not substantially dissenting from Butler-Sloss LJ, Simon Brown LJ said (at 478):

'I recognise, of course, that costs applications have to be entertained and resolved. But not, I would suggest, by litigating the case for all the world as if the substantive issues need to be resolved for their own sake. In my judgment an altogether broader approach should be adopted. One which enables the court in a comparatively short time to decide, and decide moreover without giving a fully reasoned judgment, into which general category of discontinuance the case falls'"

31. I agree with the appellants that the judge appears to have fallen into an error of approach in the present case. The substantive order on the consolidated petition was made pursuant to section 996 of the 2006 Act. There was no dismissal of the consolidated petition, but rather a substantive order made by way of relief upon it. The statutory jurisdiction can only be invoked if the court is satisfied that the unfair prejudice petition is well founded. That consideration, together with the judge's conclusion that the appellants "probably have a strong case" that there never was a binding contract for the sale of the shares, meant that, at least as a starting point, the appellants had a sound basis for claiming the costs of the consolidated petition: comp CPR 44.3(2)(a) I do not accept Mr Roughton's submission that the judge could only have ordered costs in favour of the appellants if they had established a case that was certain to succeed.
32. The factor that the judge weighed against an order in the appellants' favour was that he could not rule out the "possibility" that individual respondents "might have successfully resisted the claim in the petition that there had been unfairly prejudicial conduct by the Majority Directors against the Minority Directors". He did not amplify the reason for that possibility, and the natural assumption is that he was merely saying that the "probability" of the appellants' success on the binding agreement for sale point was not a "certainty". If that was what he meant, then, for the reasons I have already given, that would not, in my judgment, justify making no order for costs in favour of the appellants. If, on the other hand, he was taking account of the arguments of the individual respondents that they were entitled to exclude the appellants because the appellants were competitors or for some other reason, then it is clear in my judgment that those arguments were bound or were almost bound to fail.
33. There was no evidence as to competition by the appellants at the time that they sought to re-engage in the management of Minrealm in June 2006; and, if there was no agreement for the sale of the shares, there could be no proper basis for their exclusion for any other reason, bearing in mind that the appellants remained, and, as I understand it, still remain directors. It is clear from the correspondence, moreover, that the individual respondents were determined to exclude the appellants from participating as a matter of general principle and not related to any specific request for information or access to any particular document or computers.
34. For those reasons I would set aside the order of the judge. We are invited to substitute our own discretion. For my part, I do not consider that it would be proportionate or, indeed, right in principle to examine in detail the arguments for and against the existence of a binding contract for sale. The judge, who had the benefit of pre-reading for the trial and the submissions made on the first day of trial, together with subsequent submissions of counsel, formed the view that there was a strong case that the appellants would win on that issue. There is no reason, in my judgment, for the Court of Appeal to disturb that finding.
35. I do not consider, moreover, that it was unreasonable for the appellants to have presented unfair prejudice petitions rather than a winding up petition of Minrealm or Minrealm Refunds. The ultimate order by consent in effect verified they were reasonable in wishing to have their shares purchased at a valuation on a going concern basis.
36. On the other hand, however, I think it is right to bear in mind, in deciding what order for costs should be made, that the individual respondents made clear in their Answer of 8 July 2007 to the consolidated petition that they were prepared to purchase the first appellant's shares at a valuation, in default of agreement to be determined by a valuer appointed by the court, either as at the date of the petition (21 July 2006) or 30 September 2005. The Reply expressed a willingness of the appellants to sell at the valuation, but had various qualifications. In the event, the ultimate order by consent was in substance that which was offered in the Answer, namely for a purchase at a value as at 30 September 2005, the value to be fixed by a valuer appointed by the court, if not agreed. The order, it is true, also gave interest on the price and was on an undiscounted basis, but I do not regard the absence of those matters in the individual respondents' Answer as a deliberate omission or a real stumbling block. Those points were never put in issue by the appellants. In any event, the question of interest was not raised until the Reply (see Profinance Trust SA v Gladstone [2001] EWCA Civ 1031, [2002] 1 WLR 1024), and a valuation on an undiscounted basis was never expressly demanded.
37. It is clear from the offers in the Answer and the Reply, and from what was achieved by agreement on the first day of the trial and the actual orders by consent that were made, that litigation after the end of 2007 achieved nothing in terms of substantive relief that could not have been and should have been achieved then and was merely a dispute as to costs, for which the parties were prepared to engage in an eight-day trial.
38. Mr Bompas submitted that it is wrong in principle to penalise the appellants for the failure to agree to take a course in 2007, which was in fact taken on the first and second days of the trial in 2009, in the absence of an offer in 2007 by the respondents on precisely the same terms as the consent order on the consolidated petition. Clearly, each case turns on its own facts. In the present case, it is perfectly clear that nothing was achieved by two years of further litigation after 2007, save the continuation of a dispute as to costs, and that, but for that issue of costs, the parties could and should have settled on the same terms that were eventually achieved by agreement on the first or second day of the trial. This is not a case where the opportunity for settlement only arose very shortly before the trial.
39. Making due allowance, therefore, for a period of time after the exchange of the offers in the Answer and the Reply for reaching agreement between the parties and bringing the matter before the court, I would order that the appellants have their costs to the end of 2007 but that there be no order for costs thereafter.

Mr Justice Hedley:

40. I agree and have nothing useful to add.

Lord Justice Thorpe:

41. I also agree.

Order: Application allowed