Anthony James Broom v Maria Del Pilar Molina Aguilar (Costs)
[2024] EWHC 1961 (Ch)
Alexander Gorbachev v Andrey Grigoreyvich Guriev
28 March 2023
[2023] EWCA Civ 327
Court of Appeal
Imagine someone asks a court to force a third party to hand over documents. The third party says the court can't do that. The court disagreed, making the third party pay the costs. The appeal court reversed that, saying because the third party's argument, even if wrong, wasn't unreasonable, they shouldn't have to pay.
Key Facts
- •Appeal against costs order in a third-party disclosure application.
- •Trustees (TU and First Link) challenged jurisdiction of the English court in a disclosure application brought by Mr. Gorbachev.
- •Mr. Justice Jacobs dismissed the jurisdiction challenge, ordering Trustees to pay Mr. Gorbachev's costs.
- •The appeal concerns whether CPR 46.1 (costs in special cases) applies to the jurisdiction challenge costs.
- •The underlying dispute is between Mr. Gorbachev and Mr. Guriev over a Russian fertiliser business.
- •Disclosure sought related to documents held by Forsters LLP, who acted for the Trustees.
- •The Trustees argued that CPR 46.1 should apply, meaning Mr. Gorbachev should pay their costs unless their opposition was unreasonable.
- •Mr. Gorbachev argued that CPR 44.2 (costs generally follow the event) should apply.
Legal Principles
In third-party disclosure applications, the general rule is that the applicant pays the third party's costs unless the third party acted unreasonably.
CPR 46.1, Totalise Plc v The Motley Fool Ltd [2001] EWCA Civ 1897, Miller Brewing Co v Mersey Docks and Harbour Company [2003] EWHC 1606 (Ch), SES Contracting v UK Coal Plc [2007] EWCA Civ 791, Jofa Ltd v Benherst Finance Ltd [2019] EWCA Civ 899, Cartier International AG v British Telecommunications Plc [2008] UKSC 28
Costs generally follow the event.
CPR 44.2(2)(a)
The court has power to award costs of and incidental to all proceedings.
Section 51 of the Senior Courts Act 1981 and CPR 44.2(6)(e)
Outcomes
Appeal allowed.
CPR 46.1 applies to the costs of the jurisdiction challenge; it was part of resisting the disclosure application. The Trustees' challenge, while unsuccessful, was reasonable. The court should not address a confidentiality issue raised for the first time on appeal, without evidence before the lower court.