Factual and Procedural Background
The Respondent commenced proceedings alleging that funds paid to intermediaries for the acquisition of historic sports cars had not been applied for that purpose and that vehicles paid for had not been delivered. The trial was heard in May 2024 by Judge Gleeson (sitting as a Deputy Judge of the High Court) and judgment was handed down on 22 August 2024 dismissing the Respondent's claim against the Appellant. Following a consequentials hearing, Judge Gleeson issued a further judgment dated 7 May 2025 which made no order as to costs between the Respondent and the Appellant. The Appellant appealed that costs ruling with permission.
The factual core relevant to the Appellant concerned (a) an event described as a "raid" in which vehicles were removed from premises linked to the original defendants and (b) the removal and subsequent attempted disposal of a Porsche 959. A key original defendant (referred to in the trial materials) gave an account that vehicles had been delivered to a person identified by a telephone number later associated with the Appellant. A police officer recorded contacting that number and receiving an account consistent with removal of multiple cars, including reference to a Ferrari F40 that had in fact never been purchased. The Appellant denied involvement in that call and gave a limited account in defence.
Procedurally, the Respondent's claims against other defendants proceeded through stays, US proceedings and later reactivation in England. The Appellant was joined, default judgment was entered and later set aside, disclosure directions were given, issues arose about disclosure and co-operation, and the trial took place with the Appellant giving evidence remotely on medical grounds. The trial judge made findings adverse to the Appellant about honesty and cooperation but concluded there was insufficient evidence to find the Appellant liable for conspiracy or conversion. After expressing preliminary views about costs in the principal judgment and holding a consequentials hearing, the judge made a costs order of no order as to costs between the Respondent and the Appellant. The Appellant appealed that costs ruling.
Legal Issues Presented
- Whether the trial judge committed a serious procedural irregularity by refusing to hear further submissions at the consequentials hearing after having expressed a provisional view on costs in the principal judgment.
- Whether the judge was wrong to disallow the Appellant his costs by taking into account alleged non-disclosure or other matters that were not properly before him.
- On the basis that any procedural irregularity vitiates the costs decision, what costs order should be made afresh between the Respondent and the Appellant having regard to CPR Part 44 and the parties' conduct.
Arguments of the Parties
Appellant's Arguments
- The judge was wrong to disallow the Appellant his costs; the judge took into account non-disclosure that was not a material consideration before him and on which no evidence or submissions were made (Ground 1).
- The judge refused to hear or allow submissions on costs at the consequentials hearing despite the earlier order and his provisional view, amounting to breach of natural justice and a procedural irregularity (Ground 2).
- Challenges were raised to the factual findings about the Appellant's conduct, including the reliability and admissibility of the police officer's statement and the sufficiency of evidence for findings of non-disclosure or failure to engage.
Respondent's Arguments
- The judge's statement in the principal judgment about costs was properly a provisional view and the judge was entitled to refuse re-opening that provisional view at the consequentials hearing because of the way the hearing had been conducted and the Appellant's failure to engage earlier.
- The Limbani Conduct Findings (the judge's adverse findings about the Appellant's honesty and conduct) were binding and justified the costs outcome; any procedural error did not change that the correct substantive order was no order as to costs.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Company D v Company E [2022] EWHC 2825 (Comm), [2022] 4 WLR 110 (as cited in the opinion) |
Importance of resolving consequential issues promptly after judgment. |
Cited as part of context emphasising need to conclude costs and consequential matters without undue delay. |
| Company F v Company G [2022] EWHC 2799 (Comm) (as cited in the opinion) |
Similar administrative point on timely resolution of consequential matters. |
Used alongside other Business & Property Division authorities to underline procedural expectations. |
| Barton v Wright Hassall LLP [2018] UKSC 12 |
Obligation of litigants in person to comply with the Civil Procedure Rules. |
Referred to in relation to the Appellant's procedural engagement and obligations. |
| McDonald v Rose [2019] EWCA Civ 4, [2019] 1 WLR 2828 |
Correct timing and locus for seeking leave to appeal against matters determined in judgment. |
Relied upon to explain that leave to appeal against principal judgment had to be sought from Court of Appeal once time expired. |
| Boreh v Djibouti [2017] EWCA Civ 56 |
Limited right to bring free-standing appeals against factual findings. |
Referenced to explain limitation on appeals against factual findings unless part of an appeal against an order. |
| Widlake v BAA Ltd [2009] EWCA Civ 1256, [2010] 3 Costs LR 353 |
When misconduct may justify departure from general rule that unsuccessful party pays costs, including punitive sanctions. |
Used to support proposition that misconduct can justify depriving successful party of costs where conduct is sufficiently reprehensible. |
| Abbott v Long [2011] EWCA Civ 874, [2012] RTR 1 |
Proportionality of depriving a successful party of costs where conduct warrants sanction though not causative of wasted costs. |
Cited for the proposition that a costs penalty for misconduct must be proportionate. |
| Walsh v Singh [2011] EWCA Civ 80, [2011] 2 FLR 599 |
Costs consequences where successful party's conduct is poor; applicability in assessing proportionality. |
Referenced in discussion of proportionality and conduct-based costs adjustments. |
| Ward v Donnellan [2026] EWCA Civ 729 |
Principles when both successful and unsuccessful parties have acted dishonestly; need to consider conduct of applicant for special costs orders. |
Recent authority summarised and applied to stress consideration of both parties' conduct when making out-of-the-ordinary costs orders. |
| Hutchinson v Neale [2012] EWCA Civ 345 |
Evaluative approach required when successful party's dishonesty is asserted; misconduct's relevance to issues and costs. |
Cited as instructive on the need to evaluate nature, degree and effect of misconduct on trial issues and costs. |
| Bank of Tokyo-Mitsubishi UFJ Ltd v Baskan Gida Sanayi Ve Pazarlama SA [2009] EWHC 1696 (Ch), [2010] 5 Costs LR 657 |
Remedial approach to costs where an otherwise successful party advanced a false case; range of measures available. |
Relied on to explain remedial consequences and sanctions available to prevent a dishonest successful party benefiting from costs. |
| Sulaman v Axa Insurance plc [2009] EWCA Civ 1331, [2010] 3 Costs LR 391 |
Acceptability of a single costs order addressing both prolongation of litigation and conduct deserving sanction. |
Used to justify making a single costs order incorporating both causal cost consequences and punitive sanction elements. |
| Grupo Torras v Al-Sabah (5 July 1999) (as cited) |
Example where misconduct of some defendants fuelled commencement of litigation and affected costs awards. |
Referred to as illustrative precedent where defendants' misconduct contributed to the institution of proceedings. |
Court's Reasoning and Analysis
The Court (Judge Foxton delivering the leading judgment, with Judges Baker and Falk agreeing) proceeded in stages.
First, the court analysed Ground 2 (procedural irregularity). It found that Judge Gleeson had expressly stated his view on costs in the principal judgment as provisional and invited further submissions, but at the consequentials hearing refused to hear further submissions from the Appellant on the basis that the matter had already been finally determined. That refusal, the Court held, was a serious procedural irregularity because it denied the Appellant the opportunity to address a decision that would depart from the starting point of CPR 44.2. The Court therefore concluded the costs order made by the lower court was vitiated by a serious procedural error and should be set aside (CPR 52.21(3)(b)).
Second, addressing the consequences, the Court considered whether it should exercise the costs discretion afresh. The Court treated the Limbani Conduct Findings (the trial judge's adverse factual findings about the Appellant's dishonesty, lack of disclosure and limited cooperation) as binding unless successfully challenged. The Court examined the Appellant's challenges to those findings (including arguments about hearsay and medical evidence) and rejected them on the basis that the findings were properly open to the trial judge. In particular, the Court rejected the hearsay objection to the police officer's contemporaneous email and statement and accepted the judge was entitled to infer the Appellant had spoken on the telephone and had given a misleading account; it also accepted that the Appellant's written and oral accounts were inherently improbable.
Third, the Court turned to the applicable legal principles under CPR 44. It reviewed authorities explaining when a successful party may be deprived of costs because of misconduct, stressing that the court must evaluate the nature, degree and effect of misconduct and ensure any sanction is proportionate. The Court observed authorities permitting courts to deprive a successful party of costs both where misconduct caused additional costs and where a proportionate punitive response is justified regardless of precise causal cost consequences.
Finally, applying those principles to the bound factual findings, the Court concluded that the Appellant's false statement to police about the F40, the dishonest account of his relationship with the key defendant, his facilitation of attempts to dispose of the Porsche 959, and his minimalist/misleading disclosure and engagement had materially fuelled the Respondent's pursuit of proceedings and warranted a sanction. The Court therefore held that, on a fresh exercise of the costs discretion, the appropriate and proportionate order as between the Respondent and the Appellant remained no order as to costs.
Holding and Implications
APPEAL DISMISSED
Holding: The Court set aside the lower court's costs order insofar as it was vitiated by a serious procedural irregularity, exercised the costs discretion afresh, and concluded that the correct order between the Respondent and the Appellant is no order as to costs. The appeal against that substantive outcome was dismissed.
Implications: The direct effect is that each party bears their own costs as between the Respondent and the Appellant. The Court reaffirmed established principles governing conduct-based departures from the general rule that costs follow the event, emphasising (i) the need to afford parties an opportunity to be heard before making such a departure, (ii) the binding character of factual findings unless successfully challenged, and (iii) the requirement that any sanction be proportionate. The judgment applies existing authorities to the specific facts and does not purport to establish a novel legal principle.