Tchenguiz v Director of the Serious Fraud Office & Ors
2014
COURT OF APPEAL (CRIMINAL DIVISION)
United Kingdom
CORAM
- LORD JUSTICE JACKSON
- LADY JUSTICE SHARP
- LORD JUSTICE VOS
Areas of Law
- Civil Procedure
2014
COURT OF APPEAL (CRIMINAL DIVISION)
United Kingdom
CORAM
AI Generated Summary
Vos LJ, delivering a costs judgment following the Court of Appeal’s main decision on 31 October 2014, addressed Robert Tchenguiz’s twelfth ground of appeal challenging Eder J’s order requiring him to pay the Serious Fraud Office’s costs of a CPR 31.22 application on an indemnity basis. The court rejected any special rule that indemnity costs should be awarded against applicants in all CPR 31.22 applications, reaffirming the wide discretion under CPR 44.3 to award indemnity costs only when circumstances take a case outside the norm. Because Tchenguiz’s application was extraneous to the extant proceedings, required substantial effort from the SFO, and was resisted in the public interest, the court concluded Eder J had ample grounds for the award. RT’s appeal was dismissed, with Lady Justice Sharp and Lord Justice Jackson concurring.
Judgment
Costs Judgment
Lord Justice Vos:
Introduction
We handed down our judgments in the main appeal on Friday 31 st October 2014. I will use the same abbreviations as were used by Jackson LJ in his main judgment. At the hearing of the appeal, we agreed that, after judgment, we would deal in writing with RT’s 12 th ground of appeal. Only the first part of that ground is now pursued. That relates to the order made by Eder J requiring RT to pay the SFO’s costs of the application before Eder J on an indemnity basis.
The judge’s reasons for awarding indemnity costs were as follows:-
“This is a difficult question that arises under CPR 31.22 as to the proper approach of the court with regard to an order for costs. As I said in my review team judgment, this kind of application was made at the request of Mr Robert Tchenguiz solely for his benefit in relation to extraneous proceedings. Therefore, looking at CPR 44, it seems to me this does take this application out of the ordinary run of things. In those circumstances, it seems to me that the general approach ought to be that, where an applicant makes an application under CPR 31.22, that in principle the other party should be entitled to a full indemnity in respect of his costs, of course only for that party’s reasonable costs. Anything less than that would expose that other party to the risk of having to pay costs in those circumstances in relation to an application that had nothing to do with the existing proceedings, but was, as I say, for an extraneous purpose.”
The parties’ submissions
RT submits, in outline, that the principle expressed by the judge to the effect that the disclosing party in receipt of an application under CPR Part 31.22 should obtain indemnity costs is flawed for 3 reasons, which I have summarised in my own language:-
The respondent to an application under CPR Part 31.22 can always avoid court costs by consenting to the application as envisaged by CPR Part 31.22(1)(c), and the law should encourage such reasonable behaviour.
The premise of an application under CPR Part 31.22(1)(b) is that it is in the interests of justice that relief should be granted. A principle that emasculated the court’s discretion in applications that related to matters extraneous to the current proceedings would produce arbitrary results.
Since the opponents to an application under CPR 31.22 are likely to be hostile to the applicant, the rule proposed would encourage unnecessary litigation. This is the obv