Libyan Investment Authority & Ors. v Mr Roger Milner King & Ors.
[2023] EWHC 434 (Ch)
Leighton Denny v Kambiz Babaee & Ors
19 June 2023
[2023] EWHC 1490 (TCC)
High Court
A buyer sued sellers for a faulty house and won. The sellers acted badly by not following a settlement deal, so the judge made them pay extra for the buyer's legal costs after that deal broke down.
Key Facts
- •Claimant purchased a defective house from the First Defendant.
- •Claim brought against the First and Third Defendants for breach of contract and under the Defective Premises Act 1972.
- •Claimant obtained default judgment.
- •Trial concerned causation and quantum.
- •Defendants were litigants in person.
- •Judgment for Claimant: £549,773.90.
- •Claimant sought indemnity costs.
- •Defendants argued for cost reduction due to a change in claim valuation.
- •Defendants failed to file evidence or submissions on the cost reduction.
- •Parties engaged in mediation and reached a settlement agreement, which the Defendants failed to fulfill.
- •Claimant's initial expert report overvalued the repairs.
Legal Principles
Court has broad discretion regarding costs.
CPR 44.2
Court considers conduct of parties, including exaggeration of claims, when determining costs.
CPR 44.2(5)(d), Widlake v BAA Ltd [2009] EWCA Civ 1256
Indemnity costs are appropriate when conduct is 'out of the norm'.
Excelsior Commercial and Industrial Holdings Ltd [2002] EWCA Civ 879
Weakness of legal argument alone doesn't justify indemnity costs; ulterior motives or tactical reasons might.
Arcadia Group Brands Ltd v Visa Inc [2015] EWCA Civ 883
Section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 regarding contracts for sale of land.
Law of Property (Miscellaneous Provisions) Act 1989, s.2(1)
Outcomes
Defendants to pay Claimant's costs on the standard basis up to December 31, 2022.
Defendants' conduct, while criticized, didn't justify indemnity costs for this period. The court considered that the issues were within the 'rough and tumble' of litigation.
Defendants to pay Claimant's costs on the indemnity basis from January 1, 2023.
Defendants reneged on a settlement agreement, conduct considered 'well outside the norm' and justifying indemnity costs from this date onwards.