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John Kimbell KC sitting as a Deputy High Court Judge:
Introduction
This is an application under s.51 of the Senior Courts Act 1981 for a costs order against a non-party (‘ NPCO ’). The Applicant is Paper Mache Tiger Ltd (‘ PMT ’). PMT is a fashion sales, public relations and communications agency based in Islington, North London. PMT was founded in 2008 by its current director, Kyle Robinson.
On 1 November 2021, PMT obtained judgment (‘ the Judgment’ ) in the sum of £718,790 against Lee Mathews Workroom PTY Limited (‘ LMW ’). PMT was also awarded £280,000 on account of its costs.
LMW was incorporated in New South Wales Australia which manufactured and sold clothes for women designed by the Respondent (‘ Ms Mathews ’). It is now in liquidation.
LMW started trading in 2004. It ceased trading in January 2021 and on 14 October 2021 Katherine Barnet and Damien Hodgkinson (‘ the Liquidators ’) were appointed as liquidators under the Australian Corporations Act 2001 (‘ the Liquidation ’). PMT has submitted a proof of debt in the liquidation for sums due under the Judgment.
Ms Mathews was the sole director and shareholder of LMW. LMW sold its assets and business as a going concern to another company owned and controlled by Ms Mathews, Lee Mathews Australia PTY Limited (‘ LMA ’) on the terms of an asset sale agreement dated 30 June 2020 (the ‘ ASA ’).
PMT’s application for costs was issued on 14 April 2022. It is supported by a witness statement of Lesley Timms (‘ Ms Timms ’) a partner at Withers LLP (‘ Withers ’) who represent PMT. A witness statement in response to the application was served by Ms Mathews dated 7 June 2022. I am told that there were difficulties obtaining a listing for this hearing which meant that the application could not be heard until 24 January 2023 when it came before me.
PMT was represented by Stephen Bailey of counsel and Ms Mathews was represented by Mr Benson of counsel. Both produced helpful skeleton arguments. A comprehensive and neutral chronology of events was also submitted.
The applicable legal principles
g) Such impropriety or bad faith will need to be of a serious nature ( Gardiner, Threlfall ) and, I would suggest, would ordinarily have to be causatively linked to the applicant unnecessarily incurring costs in the litigation.”
j. The absence of a warning that a party intended to seek an NPCO, given whilst the litigation was still in progress, is capable of being a relevant factor pointing against making an order, if