Paper Mache Tiger Limited v Lee Mathews Workroom Pty Ltd (in Liquidation)
[2023] EWHC 338 (Comm)
Transomas Limited & Anor v Kheri Trading Limited & Ors
20 May 2024
[2024] EWHC 1349 (Ch)
High Court
A family fight over inheritance led to two lawsuits. The director of the companies involved was found to be the one truly driving the lawsuits for her own benefit, not the companies'. Because she acted improperly and caused extra costs, she has to pay them personally, not the companies.
Key Facts
- •Transomas Limited (TL) and Transomas Investments Limited (TIL) were defendants in a Redemption Claim and claimants in a Hotel Claim.
- •Jackie Kaur, sole director of TL and TIL, failed to attend court and provide evidence.
- •The Hotel Claim was dismissed due to lack of representation.
- •Applications were made for non-party costs orders against Jackie Kaur.
- •The claims involved a family dispute over a hotel, stemming from estate planning disagreements.
Legal Principles
The court has discretion to determine by whom and to what extent costs are paid.
Sections 51(1) and (3) of the Senior Courts Act 1981 and CPR 46.2
Costs orders against non-parties are 'exceptional', but the ultimate question is whether it is just to make the order.
White Book, Volume 1, at 46.2.2 (1)
If a non-party funds, controls, or benefits from proceedings, justice usually requires them to pay costs if the funded party fails.
White Book, Volume 1, at 46.2.2 (3)
In assessing whether a director was the 'real party' to litigation, the court considers control, funding, and personal benefit.
Goknur Gida Maddeleri Enerji Imalet Ithalat Ihracat Ticaret ve Sanayi As v Aytacli [2021] EWCA Civ 1037
The jurisdiction is summary; the court balances proportionality and justice.
Hilden Developments Ltd v Phillips Auctioneers Ltd and Others [2023] Costs LR 1447
The discretion must be exercised justly.
Deutsche Bank v Sebastian Holdings [2016] EWCA Civ 23
Outcomes
Non-party costs orders were made against Jackie Kaur for both the Hotel Claim and the Redemption Claim.
Jackie Kaur was found to be the 'real party' to both claims, acting primarily in her own interest and not in the best interests of the companies she directed. Her conduct, including making unsubstantiated allegations and pursuing unmeritorious claims, contributed to the costs incurred.