Lendinvest BTL Limited v Property Services LDN Limited
[2023] EWHC 1778 (Ch)
Brooke Homes (Bicester) Limited v Portfolio Property Partners Limited & Ors
21 February 2024
[2024] EWHC 357 (Ch)
High Court
Two companies fought over money owed. One tried to force the other into bankruptcy to get paid, but it didn't work. The judge decided the company that started the bankruptcy proceedings had to pay most of the legal fees because they ultimately didn't succeed.
Key Facts
- •Brooke Homes (Bicester) Ltd (Brooke Homes) had a judgment against Portfolio Property Partners Ltd and others (P3 parties) for £13.4 million.
- •Desiman Ltd and Desiman 2 Ltd (Desiman parties) were lenders to the P3 parties and had a first charge over the land.
- •Brooke Homes was unable to pay Desiman parties' costs awarded in the main action due to the P3 parties being in administration.
- •Desiman parties issued a winding-up petition against Brooke Homes.
- •Brooke Homes brought an application (Brooke Application) to stay the winding-up petition and for other relief.
- •The sale of land to Cala Management Ltd was delayed and created a complex financial situation.
- •The matter involved various hearings before different judges, including Mr. Justice Sims and Deputy Judges.
Legal Principles
In determining costs, the court should identify the successful party and consider whether the general rule (unsuccessful party pays costs) should be disapplied or modified.
CPR Pt. 44
Success is not a technical term but a result in real life; the question of who succeeded is a matter of common sense.
Bank of Credit and Commerce International v Ali (No. 3) (1999) 149 NLJ 1734
If the court lacks a proper basis of agreed or determined facts to decide costs, it cannot make an order about costs.
BCT Software Solutions Ltd v C Brewer & Sons Ltd [2003] EWCA Civ 939
A winding-up petition is a standard method of enforcing costs orders.
Mann v Goldstein [1967] 1 W.L.R. 1091
The court must take into account all circumstances when deciding costs, including the conduct of the parties.
CPR 44.2(4)
Indemnity costs may be awarded if the conduct of the parties or the circumstances take the case out of the norm.
White Book paragraph 44.3.9
Outcomes
The Desiman parties were ordered to pay 80% of Brooke Homes' costs of the Petition and the Brooke Application on the standard basis.
Brooke Homes was the successful party, as the winding-up petition achieved nothing of substance. The undertakings given by Brooke Homes did not materially improve the Desiman parties' position and the risks they sought to mitigate were largely theoretical. The court considered various factors including the success of individual elements of the Brooke Application and the conduct of both parties.
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