Everyday Finance DAC v Bradley & Ors (Approved)

Factual and Procedural Background

This judgment concerns a costs issue arising from an earlier judgment delivered on an application brought by Company A (formerly the plaintiff) and Company B (then a non-party) for reliefs under a Settlement Agreement dated 31 January 2020. The earlier judgment included an order substituting Company B for Company A as the plaintiff in the proceedings. The costs issue relates to that application and the opposition thereto by the defendants, including a group of defendants referred to as the "Malcomson Law Defendants" and an individual defendant.

The application was initially returnable in early February 2020, with consent to the orders sought initially given by the individual defendant. The Malcomson Law Defendants opposed the orders, necessitating a hearing. The individual defendant later withdrew consent and opposed the orders. The court ultimately granted all relief sought by Company A/Company B, rejecting the opposition by the Malcomson Law Defendants and the individual defendant. The costs issue was reserved for later determination.

The individual defendant appealed the orders and sought a stay; both were refused by the Court of Appeal, which affirmed the High Court orders and directed that the individual defendant was liable for one set of costs in respect of the appeals.

Legal Issues Presented

1. Whether Company B (as substituted plaintiff) is entitled to an order for costs against the Malcomson Law Defendants and the individual defendant following their unsuccessful opposition to the application.
2. Whether any such costs order should be made jointly and severally against the Malcomson Law Defendants and the individual defendant or apportioned separately between them.
3. Whether a stay should be granted on the enforcement or execution of any costs order made against the Malcomson Law Defendants and/or the individual defendant pending the determination of the substantive proceedings or appeal.

Arguments of the Parties

Company B's Arguments

• Company B contended it was entitled to costs as the entirely successful party in the application under s. 169(1) of the Legal Services Regulation Act 2015.
• It argued the costs order should be joint and several against the Malcomson Law Defendants and the individual defendant, as both opposed the application unsuccessfully.
• Company B opposed any stay on the costs order, relying on precedent emphasizing the importance of enforceability of costs orders to successful litigants.

Malcomson Law Defendants' Arguments

• They did not oppose an order for costs against them but contended costs should not be joint and several with the individual defendant, seeking separate treatment and apportionment.
• They sought a stay on any costs order pending the determination of the substantive proceedings, relying on dicta cautioning against premature enforcement of interlocutory costs orders.
• They argued it would be unfair if they bore the burden of costs payable by the individual defendant in case of non-payment.

Individual Defendant's Arguments

• The individual defendant opposed any order for costs against him, challenging the merits of the underlying dispute and contesting joint and several liability with the Malcomson Law Defendants.
• He applied for a stay on any costs order pending appeal, which was refused by the Court of Appeal.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by affirming the general legal framework governing costs orders under the Legal Services Regulation Act 2015 and Order 99 of the Rules of the Superior Courts. The presumption is that a party who is "entirely successful" is entitled to an award of costs against unsuccessful parties unless special circumstances apply. None of the disapplying factors under s. 169(1) were found to be present.

The court found Company B was entirely successful in the application, having obtained all the orders sought, including substitution as plaintiff, declarations of equitable mortgage and well charging orders, appointment of receivers, and rejection of the withdrawal of consent by the individual defendant. Both the Malcomson Law Defendants and the individual defendant opposed the application unsuccessfully.

Regarding joint and several liability, the court noted the normal and default position is that costs should be joint and several against multiple unsuccessful parties unless their respective responsibilities can be clearly identified and separated. The court found no basis to apportion costs between the Malcomson Law Defendants and the individual defendant in this straightforward litigation, especially given their active opposition to the application on overlapping grounds.

The court rejected the Malcomson Law Defendants’ argument that it would be unfair for them to bear costs potentially unpaid by the individual defendant, reasoning that fairness favored the successful party’s ability to recover full costs rather than risking non-payment. The court also rejected their attempt to distance themselves from the opposition to the orders, noting their significant participation in the proceedings.

On the issue of stays, the court refused the individual defendant’s application for a stay on the costs order, noting his appeal had been dismissed by the Court of Appeal. However, the court granted a stay on enforcement of the costs order against the Malcomson Law Defendants pending the determination of the substantive proceedings against them, balancing the interests of justice and recognizing that the trial had not yet occurred. This stay does not prevent adjudication of costs but suspends payment obligations pending trial outcome.

Holding and Implications

The court ORDERED that Company B is entitled to an award of costs against the Malcomson Law Defendants and the individual defendant, who are jointly and severally liable for those costs. The costs order is to be in favour of Company B (the substituted plaintiff).

The court REFUSED the individual defendant’s application for a stay on the costs order.

The court GRANTED a stay on the enforcement or execution of the costs order against the Malcomson Law Defendants pending the determination of the substantive proceedings against them in the High Court.

The implications of this decision are that Company B may enforce the costs order and seek payment from the individual defendant immediately, while enforcement against the Malcomson Law Defendants is stayed until the substantive trial concludes. No new precedent was created; the decision applies established principles to the facts of this case.