CHIA-HSING WANG v FLOREAT PRIVATE LIMITED
[2023] EWHC 1123 (Comm)
Maggie Otto & Ors v Inner Mongolia Happy Lamb & Ors
20 November 2023
[2023] EWHC 2920 (Ch)
High Court
Someone sued, asking a judge to stop someone else from using company money. Before the judge decided, the suing person withdrew their request. The judge said that wasn't technically 'giving up', and because the other side didn't explain things clearly and quickly enough, they had to pay the legal costs.
Key Facts
- •Petitioners brought an application for an interim injunction to restrain the use of a company's funds to pay respondents' legal expenses.
- •The application was based on allegations of unfairly prejudicial conduct under Part 30 of the Companies Act 2006.
- •Petitioners withdrew the application after receiving new evidence from respondents.
- •The dispute centered on whether the withdrawal constituted a discontinuance under CPR Part 38 and the consequent costs implications.
- •Respondents argued that petitioners knew about directors' loans used to pay legal fees, making the application unnecessary.
- •Petitioners argued that they acted reasonably given the lack of timely explanation from respondents.
Legal Principles
Costs are in the discretion of the court (Senior Courts Act 1981, section 51(1); CPR rule 44.2(1)). The general rule is that the unsuccessful party pays the costs of the successful party (CPR rule 44.2(2)(a)), but the court can make a different order (CPR rule 44.2(2)(b)).
Senior Courts Act 1981, section 51(1); CPR rule 44.2(1), (2)(a), (2)(b)
A 'claim' for the purposes of CPR Part 38 is distinguished from a remedy. Abandoning a remedy (like an interim injunction) within an existing claim does not constitute discontinuance of the claim itself.
CPR Part 38; Galazi v Christophorou [2019] EWHC 670 (Ch)
The court has power under CPR rule 3.1(2)(m) to permit the withdrawal of an interim application on such terms as it considers appropriate, including costs.
CPR rule 3.1(2)(m); Parrot Pay Ltd v Goddington Pierce Ltd [2023] EWHC 2774 (Ch)
Outcomes
The court held that the withdrawal of the interim injunction application did not amount to a discontinuance under CPR Part 38.
The application for an interim injunction was a procedural step within the main petition, not a separate claim.
The court permitted the withdrawal of the application under CPR rule 3.1(2)(m).
The court has inherent power to manage cases and further the overriding objective.
The respondents were ordered to pay the petitioners' costs.
The respondents' conduct in failing to provide a timely explanation and in delaying the proceedings caused the application and its associated costs. The petitioners acted reasonably throughout.