Mastercigars Direct Ltd v Withers LLP

This judgment deals with one consequential matter following the judgment I gave on 10 June 2009, the neutral citation of which is [2009] EWHC 1295 (Ch). The consequential matter is as to the costs of the applications which were the subject of that judgment.

The result of my judgment was that I dismissed the application made by Mastercigars and I dismissed the application made by Withers.

Following my judgment, both parties made written submissions as to costs.

The position taken by Mastercigars was straightforward. It submitted that as there were two applications, one by each party, and as both had failed, there should be no order as to costs. That result should apply to all the costs of the applications, including the hearing of both applications before Master Simons on 17 April 2009 and the hearing of both applications before me on 22 April 2009. Mastercigars did not separate out the costs of the applications for costs following the judgment on 10 June 2009.

Withers’s position was more complicated. They dealt first with Mastercigars’ application and dealt separately with the hearing on 17 April 2009 and the hearing on 22 April 2009. They submitted that Withers should have their costs of the hearing of Mastercigars’ application on 17 April 2009 on two grounds. The first suggested ground was that the application should not have been before the Master at all but should have been listed for hearing by me on 22 April 2009. The second ground was that, in accordance with my judgment, the application ultimately failed. As to Withers’ own application, they again distinguished between the costs of the hearing on 17 April 2009 and the costs of the hearing on 22 April 2009. They submitted that the Master did not deal with the question of the costs of their application on 17 April 2009 and so it was not now open to anyone to seek the costs of that hearing. As regards the hearing on 22 April 2009, Withers failed but their failure should not result in Withers paying the costs incurred by Mastercigars in dealing with the failed application but should instead result in an order that Withers should not recover 100% of the costs of that hearing but only 80%. The reduction of 20% was said to be a fair reflection of the relative complexity of the two applications and the time taken in dealing with them.

In my judgment, apart from any consideration as to the effect of the Master not expressly dealing with the costs of Withers’ application on 17 April 2009, the outcome of the two applications should either be:

In reaching my conclusion in the last paragraph, I have taken the view that it would not be right to regard one or other of the two applications as involving more work or greater complexity or greater need for oral argument. I regard the two applications as similar in all respects now relevant. The length of oral argument on 22 April 2009 is not a helpful consideration as the parties essentially ran out of time on that date and the matter was considered by me in detail after the hearing on the basis of the documents provided to me.

Having reached the above conclusions, it does not seem to me to be necessary to explore whether Withers are right in relation to the first point they made about the hearing of Mastercigars’ application on 17 April 2009, as recorded in paragraph 5 above.

As between the alternatives identified in paragraph 6 above, my preference is for alternative (2). Alternative (1) would involve two assessments of costs whereas alternative (2) involves no assessment. I have not been provided with figures which would allow me to compare the differences between the parties’ bills for the two different applications. In these circumstances, I am prepared to hold that if alternative (1) were ordered and resulted in two assessments, the reasonable and proportionate costs for the two applications ought to be similar, rather than radically different. In these circumstances there is no injustice in selecting alternative (2).

As regards Withers’ point that the Master did not deal with the costs of the hearing of Withers’ application on 17 April 2009 and that therefore no one now can seek the costs of that hearing, I do not see that point (if correct) as causing any difficulty or as altering my view. My view on the overall merits is that there should be no order as to costs and that is compatible with Withers’ submission as to the effect of the order, or more accurately non-order, on 17 April 2009. In any event, I am not sure Withers’ submission is correct. It may be that when the Master adjourned Withers’ application to be heard by me, he adjourned the whole application so that I am able to deal with all the costs of that application. However, in my judgment, this point is academic and need not be pursued.

Accordingly, I order that there be no order as to costs of the applications which were the subject of the judgment on 10 June 2009. This order includes any costs incurred since 10 June 2009 in making submissions as to costs. I do not think it is right to single out those last mentioned costs for separate treatment.