Applicants Awarded 50% Costs Due To Partial Success And Conduct Issues

CLICK ABOVE CORBEN MEWS LIMITED & VICTORIA CAPITAL TRUST V 381 SOUTHWARK PARK ROAD RTM COMPANY LIMITED & ORS [2025] EWHC 1581 (TCC)

In Click Above Corben Mews Ltd v Various Respondents the court addressed multiple costs issues arising from an application to clarify the scope of a freezing injunction. The applicants, successful in obtaining a variation order confirming the injunction did not prohibit their dealing with charged properties, sought full costs on the indemnity basis, citing the respondents’ unreasonable conduct. The respondents resisted, arguing the application was unnecessary given Taylor v Van Dutch Marine Holdings Ltd [2017] EWHC 636 (Ch) and proposed ring-fencing sale proceeds as a pragmatic solution. Mrs Justice Jefford awarded the applicants 50% of their costs on the standard basis, reflecting partial success after rejecting their broader arguments for declarations and retrospective undertakings. The court declined indemnity costs, finding no conduct “out of the norm” under *Arcadia Group Brands Ltd v Visa Inc* [2015] EWCA Civ 883, and summarily assessed costs at £34,100 before applying reductions for inflated rates and partial success, yielding £14,500 (excluding VAT). A third-party costs order under CPR 46.2(1) was refused as disclosure failures by Click St Andrews were not determinative. The applicants’ without prejudice offer of 17 January 2025 was disregarded as they failed to achieve its minimum terms. Payment was ordered within 56 days.

“The order as to costs is a discretionary matter taking into account the matters set out in Part 44. In this case, I have no doubt that the applicants, as the successful party, should have some part of their costs. I do not consider it appropriate to make an issue based costs order although that would have been an available option to reflect the measure of success on issues. Rather, taking account of what I have called the conundrum, the parties' respective conduct, and the measure of success on issues, it seems to me that the fair order is one that the respondents should pay 50% of the applicants' costs.”

Citations

Taylor v Van Dutch Marine Holdings Ltd [2017] EWHC 636 (Ch) A freezing injunction restrains only the defendant whose assets are identified, and it does not prevent a secured creditor from enforcing security against those assets without varying or discharging the order. Arcadia Group Brands Ltd v Visa Inc [2015] EWCA Civ 883 A weak legal argument alone does not justify an indemnity costs award; indemnity costs may be appropriate where proceedings or conduct are plainly hopeless or motivated by an ulterior purpose.

Track allocation housing disrepair CPR 46.13 settlement sum costs restriction SCCO

MRO fee markup cap 25% detailed assessment personal injury Senior Courts Costs Office

Security for costs refused CPR 25.27 very high probability success excessive estimate King's Bench

IPEC scale costs transfer Patents Court PD 30 para 9.2 costs caps Court of Appeal

Costs budget variation CPR 3.15A promptness significant development unfair prejudice Chancery Division

Costs budgeting inter partes proportionality high hourly rates AI disclosure Patents Court CPR 3E

Beneficiary personal liability section 71(3) Solicitors Act 1974 indemnity costs VAT self-supply SCCO

Summary assessment indemnity costs unless order payment on account disclosure default Chancery Division

Provisional assessment set aside CPR 3.1(7) points of dispute filing duty PD 47 para 14.3 SCCO

Fixed recoverable costs police claims CPR 26.9(10)(e) intentional tort exemption

Key Points

A successful party is generally entitled to recover its costs; however, where an application was not strictly necessary, even if successful, the court may apportion costs to reflect issues of necessity and conduct. [18–20, 24]
The court’s discretion under CPR Part 44 includes consideration of the parties’ conduct before and during proceedings, success on particular issues, and the reasonableness of raising, pursuing or contesting them. [5, 18–22, 24]
An offer to resolve proceedings that does not meet the threshold of a Calderbank offer may still be relevant as evidence of reasonableness and conduct for costs purposes, even if it does not reverse the normal costs outcome. [15–17]
Indemnity costs will only be awarded where a party’s conduct takes the case out of the norm; unsuccessful arguments or ordinary litigation conduct are insufficient to justify assessment on the indemnity basis. [25–26, 42–44]
A revised costs schedule filed after a hearing may be discounted on summary assessment if it materially exceeds the earlier version without adequate justification or where the party seeks to benefit from procedural developments. [27–34]

“In my view, neither party acted unreasonably but the applicants made an application which, on their own case, was not strictly necessary and the respondents promoted the concerns which led to the making of the application… seeking a reasonable compromise but, when the matter progressed to a hearing, opposing the application in full.”

Key Findings In The Case

The applicants were the successful party in the application to vary the freezing injunction; however, the court found that the application was not strictly necessary, as the applicants could have acted without further order. This reduced the weight of their success in the overall assessment of costs entitlement. [8, 18–20]
Both applicants and respondents were found to have acted reasonably overall: the applicants sought clarification in light of potential legal risks, while the respondents raised legitimate concerns about the potential for breach of the injunction due to uncertainty regarding beneficial interests. As a result, there was no finding of unreasonable conduct by either side to justify indemnity costs or deprivation of costs. [5–7, 10, 12–14, 17–18, 25–26]
Despite the applicants’ success, the court declined to award full or indemnity costs because a significant portion of the application concerned arguments on which the applicants failed (including for a declaration and discharge of the injunction), and which materially contributed to the costs incurred. [21–22, 24, 26]
The applicants submitted a revised statement of costs post-hearing that was significantly higher than the initial version and included additional items without sufficient justification. The court discounted the claimed amount, ultimately awarding 50% of a reduced sum to reflect both necessity and proportionality. [27–34]
A “without prejudice save as to costs” offer made by the applicants during the costs phase was not effective to reverse or alter liability for costs, as the applicants had not achieved the minimum threshold set by their own offer (full standard basis costs). Accordingly, no further adjustment to the costs order was justified. [38–41]

“The respondents sought to make a practical suggestion to resolve the issue without the need for further litigation… However, the proposal showed a clear desire by the respondents to resolve this matter without recourse to litigation… I agree that it is not an offer that can be taken into account… but… appropriate to have regard to it as indicative of the respondents’ desire to reach an amicable solution and not to be unreasonable.”

Background

This costs judgment arose from proceedings in the Technology and Construction Court concerning a freezing injunction made on 15 August 2022. The applicants, Click Above Corben Mews Limited (acting by its fixed charge receivers) and Victoria Capital Trust, had sought clarification that the freezing injunction did not prohibit their dealing with and disposal of certain properties. The respondents comprised eleven parties, including a right to manage company, various individuals, and corporate entities.

The substantive judgment was handed down on 23 January 2025, following which the parties agreed terms for an order varying the injunction. The variation made clear that the injunction did not prohibit the dealing with and disposal of the Properties by the Receivers. The order provided that any issues as to costs would be determined following written submissions.

The background to the application involved a complex group structure where Click St Andrews was subject to the freezing injunction, whilst the Properties were owned by Click Above Corben Mews Limited. The applicants held a charge over the Properties and sought to enforce their security. The respondents had concerns about whether Click St Andrews might have a beneficial interest in the Properties, which uncertainty arose largely from Click St Andrews’ failure to comply with disclosure obligations under the freezing injunction.

Pre-action correspondence between February and August 2024 revealed the parties’ divergent positions. The applicants maintained that the Properties did not fall within the scope of the injunction and that their Charge took priority over any interest Click St Andrews might have. The respondents flagged risks that disposing of the Properties might breach the injunction and proposed ring-fencing £52,680 from the proceeds of sale as a practical solution.

Costs Issues Before the Court

The court was required to determine several discrete costs issues following the substantive application. First, the incidence of costs needed to be decided – whether costs should follow the event given the applicants’ success, or whether the court should make no order as to costs in light of the parties’ conduct and the circumstances leading to the application.

Second, the court needed to consider the basis of assessment. The applicants sought costs on the indemnity basis, arguing that the respondents’ conduct was out of the norm and had forced them to make an unnecessary application. The respondents resisted this, maintaining their conduct had been reasonable throughout.

Third, the court was asked to undertake a summary assessment of costs. Two versions of the applicants’ statement of costs were before the court: one filed in July 2024 totalling £24,058 plus VAT, and another filed in January 2025 totalling £42,338 plus VAT. The respondents objected to reliance on the January version and sought to cap costs at the July figure.

Finally, the court needed to consider an alternative submission by the respondents that a third party costs order should be made under CPR Part 46.2(1) against Click Group Holdings Ltd, Click St Andrews, or Aaron Emmett, on grounds that their breach of disclosure obligations had necessitated the application.

The Parties’ Positions

The applicants adopted a straightforward position: they were the successful party and costs should follow the event. They argued that the judgment vindicated their position that the freezing injunction did not prohibit their dealing with the Properties, and that the variation order simply clarified this position. They submitted that the respondents should pay their costs, assessed on the indemnity basis due to the respondents’ unreasonable conduct.

The applicants relied on early settlement offers made on 5 February 2024 and 22 February 2024, proposing no order as to costs if the respondents agreed to allow disposal of the Properties. They characterised the respondents’ conduct as “unresponsive, unreasonable, lacked any application of commercial common sense and in certain instances was nonsensical”, particularly regarding the priority issue.

The respondents advanced several arguments against a costs order. They contended the application was entirely avoidable, citing Taylor v Van Dutch Marine Holdings Ltd [2017] EWHC 636 (Ch) as authority that a creditor with security over an asset subject to a freezing order can enforce security without seeking variation of the order. They acknowledged this case was not cited to the court but argued the applicants should have been aware of the legal position.

The respondents maintained they had never positively asserted that the injunction prohibited the applicants from dealing with the Properties. Rather, they were unable to confirm the position due to uncertainty about Click St Andrews’ potential beneficial interest, arising from that company’s non-compliance with disclosure orders. They argued their proposal to ring-fence proceeds showed a reasonable desire to resolve matters without litigation.

On the indemnity basis issue, the respondents cited Arcadia Group Brands Ltd v Visa Inc [2015] EWCA Civ 883, arguing that weakness of a legal argument alone does not justify indemnity costs without evidence of hopeless proceedings or ulterior motives.

Regarding summary assessment, the respondents objected to the January 2025 statement of costs, noting the 75% increase from the July version. They argued that national guideline rates should apply given the applicants’ solicitors were based in Guildford, resulting in rates approximately 25% lower than those claimed.

The Court’s Decision

Mrs Justice Jefford determined that the applicants, as the successful party, were entitled to some portion of their costs. However, she declined to order full costs, instead ordering the respondents to pay 50% of the applicants’ costs. This reflected the court’s assessment of the overall circumstances, including what she termed “the conundrum” faced by the parties, their respective conduct, and the measure of success on various issues.

The court found that whilst the applicants were successful on the main issue, they had failed on several alternative arguments. These included unsuccessful applications for declarations, arguments that the injunction should be discharged entirely, and requests for retrospective undertakings as to damages. The judge noted these “far ranging” issues had consumed substantial time and cost.

On the basis of assessment, the court rejected the application for indemnity costs. Mrs Justice Jefford held there was “nothing so unreasonable in the respondents’ conduct that it was taken out of the norm of assessment on the standard basis.” She found the proceedings were not plainly hopeless nor pursued with ulterior motives, distinguishing the case from circumstances warranting indemnity costs.

Regarding summary assessment, the court expressed concern about the discrepancies between the two statements of costs. The judge found it “wholly unsatisfactory” that costs were allegedly omitted from the July version and questioned how over £5,000 of counsel’s fees could have been mistakenly excluded. She particularly scrutinised the increase in counsel’s fees from £2,750 to £8,000 and the additional £5,000 claimed for costs submissions.

The court summarily assessed costs at £34,100 before applying the 50% reduction, resulting in £17,050. A further 15% reduction was applied to account for the higher hourly rates claimed compared to national guideline rates, producing a final figure of £14,500 (excluding VAT). The parties were given 56 days to pay, recognising that the respondents were effectively individuals.

The court declined to make a third party costs order under CPR Part 46.2(1). Mrs Justice Jefford held that the applicants’ success turned on the priority of the Charge rather than whether Click St Andrews had any interest in the Properties. She found that disclosure failures, whilst explaining the respondents’ position, were not determinative of the application’s merits and did not justify a costs order against third parties.

Finally, the court considered a without prejudice save as to costs offer made by the applicants on 17 January 2025, proposing that the respondents pay costs on the standard basis rather than the indemnity basis sought. As the applicants did not achieve this minimum outcome (receiving only 50% of costs), no adjustment was made for this offer.

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