ACE Autobody Ltd v Motorpark Ltd & Ors (Costs) (Approved)

Factual and Procedural Background

This opinion is a Supreme Court ruling on costs following a substantive appeal judgment delivered on 18 February 2026. The Plaintiff/Respondent sued the Defendants/Appellants asserting an entitlement to a 10-year lease of disputed premises. The Defendants/Appellants defended the claim and counterclaimed for declarations that the Plaintiff/Respondent had no estate or interest in the premises and for an injunction requiring the Plaintiff/Respondent to vacate.

The High Court dismissed both the claim and the counterclaim, but found the Plaintiff/Respondent was not a mere licensee and instead occupied as a contractual tenant from year to year. The High Court ordered the Plaintiff/Respondent to pay the Defendants/Appellants the costs of the claim, and ordered the Defendants/Appellants to pay the Plaintiff/Respondent the costs of the counterclaim, making no order on certain other cost categories (including an interlocutory injunction application, reserved costs, or discovery costs).

On appeal, the Court of Appeal allowed the Plaintiff/Respondent’s appeal and dismissed the Defendants/Appellants’ cross-appeal, set aside the High Court costs order, and awarded the Plaintiff/Respondent its High Court costs (including reserved costs) and appeal costs. The Defendants/Appellants then appealed to the Supreme Court against the Court of Appeal’s finding that the Plaintiff/Respondent was entitled to a 10-year lease, and were entirely successful. The parties then exchanged written submissions on the costs consequences, leading to this costs ruling.

Legal Issues Presented

1. What costs orders should be made following the Supreme Court’s decision allowing the Defendants/Appellants’ appeal, including the appropriate allocation of costs in the Supreme Court, the Court of Appeal, and the High Court?
2. Whether there was any basis to depart from the presumptive rule on costs under section 169(1) of the Legal Services Regulation Act 2015 in light of the case’s circumstances (including the asserted public importance of issues and the parties’ conduct/positions).

Arguments of the Parties

Defendants/Appellants’ Arguments

• The “pre-eminent issue” throughout was the Plaintiff/Respondent’s claim to a 10-year lease, which the Supreme Court rejected; most evidence and cost were directed to that issue.
• The Plaintiff/Respondent never argued for a periodic tenancy; any ongoing possession or potential statutory entitlement to a new tenancy (under the Landlord and Tenant (Amendment) Act 1980) was said to be extraneous to the appeal’s costs.
• As the Defendants/Appellants were entirely successful in the Supreme Court, they sought their costs in accordance with section 169(1) of the Legal Services Regulation Act 2015, contending that the cited authority did not require a different result.
• For the Court of Appeal, they suggested awarding them the costs of the Plaintiff/Respondent’s appeal and awarding the Plaintiff/Respondent the costs of the cross-appeal; alternatively, they argued there should be no order on the cross-appeal.
• For the High Court, they urged reinstatement of the High Court’s original costs orders as a proper exercise of discretion.

Plaintiff/Respondent’s Arguments

• Despite acknowledging the Defendants/Appellants’ success in the Supreme Court, the Plaintiff/Respondent contended that no costs order should be made in favour of either party in any court.
• The proceedings were said to have been triggered by the Defendants/Appellants’ demand for possession; the Plaintiff/Respondent’s entitlement to remain in possession and to pursue a new tenancy was said to be unaffected by the Supreme Court’s decision.
• The appeal was said to involve important issues of contract and equitable estoppel in commercial transactions; the Defendants/Appellants’ “significant change of position” on the periodic tenancy issue was said to have impacted the appeal’s scope and focus.
• As to the Court of Appeal, the Plaintiff/Respondent suggested the costs of the appeal and cross-appeal should cancel out, resulting in no order.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court applied the default (prima facie) position that a successful party is entitled to its costs of the Supreme Court appeal under section 169(1) of the Legal Services Regulation Act 2015. While acknowledging a discretion to depart from that position depending on the nature and circumstances of the case and the conduct of proceedings, the Court found no basis to do so here.

The Court rejected reliance on the appeal’s asserted general public importance as a reason to depart from the general rule, stating that this was clear from Little v Chief Appeals Officer and emphasizing the dispute was a commercial one between private commercial actors. The Court also held that the Defendants/Appellants’ decision not to challenge the High Court’s periodic tenancy finding in the Supreme Court did not alter the costs outcome for the Supreme Court appeal: the Defendants/Appellants focused on, and succeeded in overturning, the Court of Appeal’s determination that the Plaintiff/Respondent was entitled to a 10-year tenancy, and therefore costs should follow the event.

However, the Court considered the costs position in the High Court and Court of Appeal to be different. It identified the immediate catalyst for the proceedings as the Defendants/Appellants’ assertion of an entitlement to immediate vacant possession on the basis that the Plaintiff/Respondent was a mere licensee, an assertion advanced in their counterclaim and rejected in the High Court. The High Court’s finding that the Plaintiff/Respondent was a yearly tenant was described as a significant benefit, reflected by the fact that the Defendants/Appellants pursued (and lost) a cross-appeal against that finding. The Court declined to speculate whether the cross-appeal would have been pursued absent the Plaintiff/Respondent’s appeal, focusing instead on the fact that it was pursued and unsuccessful.

The Court further held it was unrealistic to treat the Plaintiff/Respondent’s continued possession as extraneous, because the unsuccessful attempt to establish that the Plaintiff/Respondent had no interest and should vacate underpinned the determination that enabled the Plaintiff/Respondent to apply for (and be prima facie entitled to) a new tenancy under Part II of the Landlord and Tenant (Amendment) Act 1980. Taking these factors together, the Court concluded that although the Plaintiff/Respondent ultimately failed on its core claim to a 10-year lease, it obtained something of real value from the litigation; accordingly, no party should recover costs in respect of the High Court or Court of Appeal proceedings.

Holding and Implications

ORDER: The Court (1) set aside the Court of Appeal’s costs order; (2) directed the Plaintiff/Respondent to pay the Defendants/Appellants the costs of the Supreme Court appeal (subject to adjudication if not agreed); and (3) made no other costs order (resulting in no order for costs in respect of the High Court and Court of Appeal proceedings).

Implications: The Defendants/Appellants recover their Supreme Court appeal costs, while neither side recovers costs for the High Court or Court of Appeal stages. The Court indicated that no departure from the default Supreme Court costs position was justified merely because the appeal raised issues said to be of general public importance, and it treated the matter as a private commercial dispute. No broader implications beyond the parties’ costs positions were identified in the ruling.