The High Court’s decision in Jon Flowith & Partners v Greaves & Ors [2025] EWHC 2738 (Ch) demonstrates how costs of separately represented defendants may be apportioned by reference to the evolving nature of their interests during strike-out applications.
Background
The judgment of 22 October 2025 addressed costs issues consequential to an earlier judgment dated 15 September 2025. The substantive hearing on 25 July 2025 concerned an application by the third defendant, IM Properties Development Limited (D3), to strike out the claimant’s claims against it. In the September judgment, the court ordered that the claimant’s claims against D3 be struck out unless the claimant applied within 28 days for permission to amend its particulars of claim to remedy identified defects [§3]. D3’s original position was that the particulars disclosed no reasonable grounds for bringing the claim, but it later modified its stance, advocating for a conditional strike-out order after considering the claimant’s skeleton argument [§3].
The first and second defendants (D1 and D2) participated in the application, primarily to protect their separate interests, particularly concerning the construction of clause 3.1(e) of the Promotion Agreement relating to the payment of “Owner’s Agent Fees” [§4-6]. The claimant’s Particulars of Claim had failed to specify whether D1/D2 or D3 were liable to pay these fees [§4], and D3 contended in its Defence that only D1/D2 were liable, whilst D1/D2 took the opposing position that D3 was liable [§5]. Prior to the hearing, D3 made an open offer to adjourn the application pending service of amended particulars by the claimant, on condition that the claimant paid the costs thrown away [§8]. This offer was rejected by the claimant [§8]. D1 and D2 indicated their agreement in principle with a consent order, subject to amendments ensuring their costs were also covered [§9]. At the hearing, D1 and D2 supported D3’s position that a conditional strike-out order should be made [§11].
Costs Issues Before the Court
The court was required to determine the costs liability arising from the strike-out application, specifically the application by D1 and D2 that the claimant should pay their costs of the application [§1]. The claimant contended that there should be no order as to costs [§1]. The key issues for determination were: whether the claimant, as the unsuccessful party on the application, should be liable for the costs of D1 and D2; whether D1 and D2 were entitled to their costs as separately represented parties with distinct interests; and how the costs should be assessed. A subsidiary issue was whether the costs should be subject to a summary assessment or a detailed assessment.
The Parties’ Positions
The first and second defendants (D1 and D2) sought an order that the claimant pay their costs of the application. They argued that their separate representation was justified because they had distinct interests from D3, particularly regarding the construction of clause 3.1(e) of the Promotion Agreement concerning liability for Owner’s Agent Fees. They emphasised that the claimant’s case was developing through its skeleton argument and oral submissions, which engaged their interests directly [§21]. They also highlighted that the hearing could have been avoided had the claimant sought to amend its pleadings earlier.
The claimant (C) submitted that there should be no order for costs. It relied on the general principle that an unsuccessful party should not ordinarily have to pay two sets of costs [§17]. It cited Bolton MDC v Secretary of State for the Environment [1995] 1 WLR 1176 for the proposition that interested parties should only recover their costs if there was a specific issue requiring separate representation that was not covered by another party [§17]. The claimant argued that neither it nor D3 had suggested the court should determine the construction of the Promotion Agreement in a way that bound D1 and D2, and therefore their attendance was unnecessary [§15].
The Court’s Decision
The court held that the claimant, having lost the application [§12], should bear the costs of D1 and D2 incurred from the date of receipt of the claimant’s skeleton argument onwards [§16, §26]. However, costs incurred by D1 and D2 prior to that date were reserved [§15, §26]. The court refused to undertake a summary assessment of the costs, directing that they be subject to detailed assessment if not agreed, because it did not know the proportion of costs incurred during the relevant period [§26].
The court reasoned that D1 and D2 had a separate interest from D3 which required separate representation [§19]. This was evidenced by the competing constructions of clause 3.1(e) of the Promotion Agreement advanced by D1/D2 and D3 concerning liability for Owner’s Agent Fees [§5, §20]. The court rejected the claimant’s submission that D3 had not sought determination of this point, noting that D3 had indeed sought a determination that would bind D1 and D2 [§15].
Furthermore, the claimant’s evolving case, as set out in its skeleton argument and oral submissions, directly implicated D1 and D2. The claimant advanced claims that went beyond its pleaded case, including allegations that D1 and D2 had acted on behalf of D3 rather than just on their own behalf [§21(1)]. It was also confirmed at the hearing that the Owner’s Agent Fees claim was run against D1 and D2 alone (not D3), though the Particulars had not made this clear [§21(2)]. The court found that in circumstances where the claim was in “a state of some development from the original Particulars, and in a manner which engaged D1 and D2’s interests”, it was appropriate and prudent for D1 and D2 to attend the hearing given their different interest to D3 [§23].
The court noted that D1 and D2’s counsel at the hearing added value to the proceedings, including by answering the court’s question about whether D1 and D2 supported an unless order for the entirety of C’s claim against D3, making submissions about any revised draft pleading and D1/D2’s ability to respond to it, and addressing one point arising from C’s reply [§24]. Counsel was careful not to duplicate D3’s submissions [§24].
The court also found that the strike-out hearing, and thus the associated costs, could have been avoided entirely had the claimant sought to amend its pleadings in good time before the hearing [§13, §25].
For the period before receipt of C’s skeleton argument, the court reserved D1/D2’s costs. During this earlier period, D1/D2’s stance was that they wished to ensure the Owner’s Agent Fees point was not dealt with by the court at D3’s request in a way that decided against their construction [§14]. This was a stance “in opposition to D3 to that degree” [§15], which meant it would not be appropriate to order C to pay these costs. The outcome of the final hearing, particularly the view taken on the competing constructions of clause 3.1(e), would be relevant to how these earlier costs should be borne [§15].
Applying the principle from Bolton MDC, the court concluded that the circumstances justified an award of costs to D1 and D2 for the period after the claimant’s skeleton argument was served. The court noted that Bolton established that interested parties might recover costs not only where there was a separate issue, but also where they had “an interest which requires separate representation” [§18, emphasis in judgment]. The court found that D1 and D2, as separate defendants with different interests from D3, clearly satisfied this test [§19-23].
