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12 January 2022
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Successful defendant denied any costs recovery over multiple conduct issues

A High Court judge has made no order for costs in a claim that failed only because it was statute-barred and where both sides contended they should have all or nearly of their costs.

Mr Justice Miles made multiple findings in favour and against of each side in reaching his conclusion.

He gave judgment last October after a 13-day trial, dismissing the claim for being statute-barred. But he held that it would otherwise have succeeded.

In the consequentials ruling, European Real Estate Debt Fund (Cayman) Ltd v Treon and Anor [2021] EWHC 3514 (Ch), he observed that there was “a gulf between the parties' positions” on costs: the claimant sought 80% of its costs on the indemnity basis, while the defendants contended that the claimant should bear their costs, subject to a limited reduction to reflect conduct and the issues on which they lost.

Miles J declared the defendants the overall winners and noted they “would not have been put to any costs had the claimant recognised the validity of the time-bar defence”. He added: “That goes not merely to the starting point, but is an important consideration when deciding any appropriate alternative order.”

He said the defence should not be regarded as an abuse of process, although he found the defendants guilty of deceit and that their main witnesses at times invented evidence. “That led to the defendants denying the claims in deceit, and that undoubtedly led to more prolonged proceedings at the trial. The court should reflect this in its order by depriving the defendants of part of their costs.”

However, the judge continued, not all of the evidence on the main issues of liability was affected by these lies: “There were issues of inducement, causation and loss which did not depend on that.”

On the flip side, the claimant lost on some aspects of the case as well as limitation, “albeit those aspects were relatively small in the overall picture”.

On a broad-brush calculation, Miles J said the limitation issues probably took up about 15% of the trial process and the other issues on which the claimant lost took up perhaps another 5%.

Other factors he weighed in the balance were the additional costs the claimant was put to in exposing the defendants’ false evidence; an offer to drop hands shortly before the trial, which would have reduced the overall costs but not by that much; and some elements of the claimant's conduct.

“Finally, I consider that some of the costs set out in the claimant's costs schedule appear to be high and it is possible that some of them may be disproportionate, though on the information before me, I say no more than that.”

Miles J concluded that the “just order” was that there should be no order as to costs.

Mr C Parker QC and Mr E Meuli (instructed by Gateley) appeared on behalf of the claimant, Ms B Lucas QC and Mr D Kessler (instructed by DMH Stallard) on behalf of the first defendant, and Mr S Lemer (instructed by Taylor Wessing) on behalf of the second and third defendants.

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