Grenda Investments Ltd v Barton

I have to deal now with the question of costs, both of the application by Mr Barton to strike out the proceedings as representing an abuse of process and of Grenda's application for summary judgment.

I propose to deal with the first of those first. That is an application which was based exclusively on an invitation to the Court to infer from the inactivity in the proceedings from the end of 2015 until the autumn of 2016 that a decision was made by Grenda (and Mr Ruhan) not to pursue proceedings.

I have dealt in my judgment earlier with the merits of that, and I have rejected the invitation to me to make that inference. If that application stood alone, the ordinary and usual position would be that the party who made it, having failed, should have to pay the costs of the application incurred by the opposite party, here Grenda.

Mr Hext submits that I should adopt a different approach to that and should, instead, make an order for ‘costs in case’ on the basis that the factual territory underlying the suggested inference which gave rise to the application for striking out will be territory which will be gone over at trial, when considering the allegation that the non-pursuit agreement, said by Mr Barton to be entered into, was entered into in November 2015, that non-pursuit agreement arising as a substantive defence to the claim,

I am not persuaded by Mr Hext's submission. It seems to me that the position is quite straightforward, and it is the one I have described which is that an application was made to strike out the proceedings, it failed and, as a consequence, the costs should be borne by the party who made it, namely Mr Barton.

The fact that the non-pursuit agreement will be explored at trial is interesting, but by no means conclusive in circumstances where the abuse argument will not be revisited at trial. It is that abuse argument which, therefore, has now run its course, never to start again and, in those circumstances, I consider that the only appropriate order, exercising my discretion, is to require Mr Barton to pay the costs of that application, and that is what I order.

Turning now to the summary judgment application, the position here is a little bit more nuanced. I have considerable sympathy with Mr Lord's submission that it took until Mr Barton's third witness statement, served in mid-June this year, for Mr Barton to give the level of particularisation concerning the set-off agreement which ought to have been given a lot earlier.

I am not going to repeat everything I have said so far, but it is striking that, when Grenda asked for further information of the Defence concerning the allegation that an agreement was entered into, the information which came forward referred to an agreement entered into at 55 Baker Street, London, in March 2014 yet in Mr Barton's witness statement served in June this year the case advanced is different in that Mr Barton says that the agreement was entered into on 6 February 2014 in Zurich over dinner.

It is not satisfactory that that clarification, if that is the right word, should have been so delayed. Put differently, I can well see why the application for summary judgment was made when it was made in May this year. At that stage, the position on the alleged oral agreement was obscure, to say the least.

I am clear, in the circumstances, that Grenda should therefore have its costs up until a period after they were able to take on board Mr Barton's evidence in his witness statement in the middle of June. In broad terms, I consider that Grenda should have its costs up until the end of June this year.

The question which then arises is what should happen in relation to the costs (the majority of the overall costs) which have been incurred in relation to the summary judgment application since the end of June this year. Mr Lord is able to make the submission that that summary judgment application, whilst ultimately unsuccessful, was nonetheless, as demonstrated by my earlier judgment, successful or at least not wholly unsuccessful as regards the alleged non-pursuit agreement.

Mr Lord, therefore, submits that, on no view, should his client have to pay the costs after the end of June this year, referable to the non-pursuit agreement issue. His overall submission is that the appropriate costs order is ‘costs in case’ from the end of June onwards.

I see some force in that submission, but it seems to me that, realistically, the main focus of the summary judgment application was not the non-pursuit agreement issue, but the allegation that an agreement was entered into in early February 2014 concerning the right of set-off. Having looked at the evidence, it is right, I consider, for Mr Hext to point out that the amount of evidence devoted to the non-pursuit agreement issue was very much in the minority. I propose, in the circumstances, therefore, not to seek to split out the costs since the end of June this year, as between the non-pursuit agreement issue, on the one hand, and the set-off agreement issue, on the other, and instead to approach the question of costs in a more global way.

Mr Hext's submission is that, the summary judgment application having failed, Grenda (as the unsuccessful party) should have to pay the costs. He submits that that is the usual position when any party makes an application and there should not be any different approach when the application concerned is a summary judgment application.

Mr Lord's submission, as I say, is that the appropriate order is ‘costs in case’ on the basis that ultimately whether the claims can be resisted will, in line with what I have decided, have to be determined at a trial.

It is interesting that there is no guidance in the White Book as to the appropriate approach to adopt where a summary judgment application has been made and has failed. I have, therefore, to approach matters doing what I consider to be the fair and just thing in the exercise of my discretion.

I consider that the right order, in the circumstances, is not to require Grenda to pay Mr Barton's costs, but instead to make an order that Mr Barton should have his costs in case – in other words, that the costs of the summary judgment application should be ‘the Defendant’s (Mr Barton's) costs in case’. That seems to me to represent a fair approach since ultimately, if Mr Barton prevails in his defences, he will get his costs of the summary judgment application, whereas, if he fails, he will not get his costs of the summary judgment application, but equally Grenda will not get them either.

As for Mr Hext's submission that this represents an inconsistent approach, taking into account my conclusion in relation to the strike-out application, I do not see the inconsistency. The strike-out application, as I have explained, has been made and is now never going to see the light of day again. The summary judgment application has been made and has failed, but the issues to which it was directed will see the light of day again, because they will be the very issues to be explored at trial. Put a different way, it was open to Mr Barton not to make the strike-out application and, had he not done so, the question of delay and the inference which I was invited to draw from that delay would never have been explored, at least as an issue requiring determination.

The fact that, in exploring the non-pursuit agreement issue at trial, it may be that the question of inactivity will be looked into should not be allowed to obscure the fact that that inactivity, in and of itself, is no longer an issue for the Court. It was on the strike-out application, but it will no longer be hereafter.