QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
MR JUSTICE SILBER
| THE QUEEN on the application of RAWLINSON AND HUNTER TRUSTEES S.A. and Others
|- and -
|(1) CENTRAL CRIMINAL COURT
(2) DIRECTOR OF THE SERIOUS FRAUD OFFICE
|THE QUEEN on the application of
(1) ROBERT TCHENGUIZ
(2) R20 LTD
|(1) DIRECTOR OF THE SERIOUS FRAUD OFFICE
(2) COMMISSIONER OF THE CITY OF LONDON POLICE
(3) CENTRAL CRIMINAL COURT
Lord Goldsmith QC, Ben Emmerson QC and Jonathan Barnard (instructed by Wilmer Hale) for the Interested Party, Vincent Tchenguiz
Lord Macdonald of River Glaven QC, Alex Bailin QC and Clare Sibson (instructed by BCL Burton Copeland) for the Claimants, Robert Tchenguiz and R20
James Eadie QC, Mark Ellison QC, Allison Clare and Ben Watson for the Serious Fraud Office
Crown Copyright ©
Mr Justice Silber:
This is the judgment of the court.
The claims for costs on an indemnity basis
(a) Quashed the search warrant issued by HHJ Worsley QC made on 7 March 2011 to enter and search the premises of Consensus Business Group Limited, 35 Park Lane, London W1K 1RV;
(b) Declared the entries, searches and seizures conducted pursuant to the warrant to be unlawful on the grounds set out in the judgment;
(c) Ordered the Director to destroy permanently all copies (in whatever form or media stored) of materials obtained in the course of the searches made pursuant to the warrant;
(d) Quashed by consent the search warrant issued by HHJ Worsley QC on 7 March 2011 to enter and search the home of VT; and
(e) Ordered the applications by the claimants and VT for orders that the Director pay their costs on an indemnity basis be made in writing and to be responded to by the SFO in writing.
(a) Quashed the search warrants executed on 9 March 2011 at the claimants' home and business premises and declared the entries, searches and seizures conducted pursuant to the warrants to be unlawful;
(b) Declared the entries, searches and seizures conducted pursuant to the warrant to be unlawful on the grounds set out in the judgment; and
(c) Ordered that the claimants' application for indemnity costs be made in writing and responded to by the Director in writing.
The issues and the applicable principles
(a) whether the claimants' costs in the VT claim ought to be assessed on a standard or on an indemnity basis;
(b) whether VT in the VT claim is entitled to a separate award of costs and, if so, on what basis they should be assessed; and
(c) Whether the costs agreed as payable in respect of the claimant in the RT claim (namely 80% of the claimant's costs to be paid by the Director) ought to be assessed on a standard or on an indemnity basis.
a) The Court enjoys a "wide and generous discretion" as to the award of costs: Excelsior Commercial and Industrial Holdings Ltd v Salisbury Ham Johnson and Others  EWCA Civ 879 per Lord Woolf at  commenting on Part 44.3, CPR;
b) the Court of Appeal has declined to give guidance on the making of costs orders on an indemnity basis: ibid, and Part 44.4, CPR, White Book at pp1334-1343; and
c) an award of costs on an indemnity basis will only be appropriate where there is "some conduct or […] some circumstance which takes the case out of the norm": Excelsior at , and "all relevant circumstances must be taken into account (at ); (see also Catalyst Investment Group v Lewisham  EWHC 16 (Ch) at ). As the White Book commentary states, "the minimum nature of the conduct required is, except in very rare cases, that there has been a significant level of unreasonableness or otherwise inappropriate conduct in its wider sense […]" (at p1338).
d) The abandonment of issues ought not to be discouraged by the award of indemnity costs where a concession is made: see the observations of Barling J in Catalyst Investment Group v Lewisham  EWHC 16 (Ch).
The claimants' costs in the RT action – Standard or an Indemnity Basis
i) prior to the renewed permission application, the Director did not accept that the claimant had an arguable case that the warrants should be quashed, notwithstanding the overwhelming evidence that the information relied on by the Director materially misstated the position and that his staff had failed to draw the judge's attention to the cogent points which weighed strongly against the granting of the warrants;
ii) even after the grant of permission, the obvious serious and numerous inaccuracies in the information used for the purpose of obtaining the search warrants were not appreciated and accepted. The effect of these inaccuracies was that the claimants suffered serious and completely foreseeable damage.
The claimants' costs in the VT action: Standard or an Indemnity basis?
VT's costs in the VT action: Are they payable and if so, on what basis?