Anthony James Broom v Maria Del Pilar Molina Aguilar (Costs)
[2024] EWHC 1961 (Ch)
M & S Restorations Limited v Banco Santander Totta S.A. & Ors
28 October 2024
[2024] EWHC 2724 (KB)
High Court
A company's bank account was wrongly debited. They won their case but only got half their legal costs back. A higher court decided the bank acted unreasonably by fighting the case for years despite clear evidence of wrongdoing, so the company got more of its costs back.
Key Facts
- •M & S Restorations Limited (the Company) appealed a costs order awarding them 50% of their costs after successfully claiming against Banco Santander Totta S.A. (Santander) for a fraudulent debit of £35,425 from their account.
- •The fraud involved third-party fraudsters who impersonated the Company's director to initiate the payment.
- •Santander initially claimed the fraud was an 'inside job' but later conceded it was third-party fraud during the trial.
- •The Company's particulars of claim were considered overly complex by the Judge.
- •The Company had made a Part 36 offer to settle, which was later withdrawn.
Legal Principles
Costs appeals are limited to a review of the lower court's decision unless a rehearing is in the interests of justice (CPR 52.21).
Civil Procedure Rules 1998, Part 52
The court has discretion over costs, with the general rule that the unsuccessful party pays the successful party's costs. However, the court may make a different order considering the conduct of all parties and any settlement offers (CPR 44.2).
Civil Procedure Rules 1998, Part 44
Unless otherwise agreed, a bank's duty to comply with its mandate is strict. If the bank acts outside the mandate, it cannot debit the customer's account. (Philipp v Barclays Bank PLC [2023] UKSC 25)
Philipp v Barclays Bank PLC [2023] UKSC 25
Appeals courts should interfere with a lower court's costs discretion only if the exercise of discretion exceeded the generous ambit within which reasonable disagreement is possible (Esan v Notting Hill Housing Trust [2018] EWCA Civ 1462).
Esan v Notting Hill Housing Trust [2018] EWCA Civ 1462
Outcomes
The appeal was allowed.
The Judge's 50% costs award was deemed 'wrong' under CPR 52.21(3)(a) because the correct proportion was 75%, a significant difference exceeding the permissible range of judicial discretion. This was due to the respondent's conduct in pursuing a factually and legally untenable defense for an extended period, despite the appellant's clear evidence and Part 36 offer.
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