CR Construction (UK) Limited v Barclays Bank PLC (Costs and Stay)

Having handed down my substantive judgment (reported under neutral citation number [2026] EWHC 202 (TCC)) I am now going to give my judgment on the first issue which I must deal with, which is the question as to whether or not the intervening party (“the employer” as I call them in the judgment) should be entitled to its costs of the injunction application made by the Claimant in this case.

There is no real dispute as to the relevant principles. In the different context of public procurement cases they were summarised most recently by Lord Justice Coulson (sitting as a first instance judge) in the case of International Game Technology v The Gambling Commission [2023] EWHC 1961 (TCC).

That was a public procurement case where the question was whether or not the intervening party, who had been the successful bidder in the public procurement the subject of the action, should have its costs, and, if so, on what basis? He began his summary of the law at para.13. He referred to the speech of Lord Lloyd in Bolton MBC and Others v Secretary of State for the Environment [1995] 1 WLR 1176 which, as he said, was a case concerned with a planning dispute, where the developer successfully sought its costs of defending the Secretary of State’s original planning decision. Lord Lloyd said, in a passage which is often quoted, that an developer will not normally be entitled to his costs unless it can show that there was likely to be a separate issue on which it was entitled to be heard, that is to say an issue not covered by counsel for the defendant or unless he had an interest which requires separate representation. The mere fact that he is the developer will not of itself justify a second set of costs in every case.

That, of course, is a reflection of the fact that in the Administrative Court, interested parties will not normally be entitled to their costs of appearing unless the Court is satisfied that they have, putting it colloquially, brought something of benefit to the party, which could not and was not just as well said by the defendant as the decision-maker.

Further, as Lord Justice Coulson observed at para.15, “That approach has also been followed in public procurement cases.” In particular, he referred to the summary by Mr Justice Fraser in Bechtel Ltd v High Speed Two (HS2) Ltd v Balfour Beatty Group Ltd [2021] EWHC 458 (TCC), at para.25, where Fraser J. set out six relevant principles, which I apply and adopt. In particular, in para. 6 Fraser J. observed that there may be specific and unusual features of any particular case upon which an interested party may rely and there can be no exhaustive list of such features. The court will, when exercising its discretion, take all the relevant factors into account, but the presence of one or more of these unusual features will make it more likely that an interested party will obtain a costs award in its favour.

This is, of course, a different type of case to those considered in the cases referred to above, because it is a case where the contract in issue upon which the claimant relied to seek its injunction was a tripartite contract for the provision of a performance bond, where both the intervening party as the beneficiary and the bank as the surety had a certain commonality of interest in the proper performance of the bond, as against the Claimant (or “contractor” as I call it in this judgment) as the party providing the bond.

It is also a case where the Claimant chose to bring the injunction application solely against the bank. Mr Cheung submitted, rightly, that it is always a decision for a contractor who is seeking to obtain an injunction which has the effect of restraining a bank from paying out under a demand to decide who to make the application against, so that it was perfectly appropriate for the claimant to seek to proceed only against the bank. Nonetheless, it is clear that, in the real world the beneficiary will have a substantial and direct commercial interest in whether or not any such injunction is granted.

I have not been referred to and am not aware of any previous authority in relation to the principles upon which costs may be awarded in this sort of situation. However, if one considers the question from first principles, since if an injunction is granted the beneficiary will be directly affected, because it will be unable to obtain the money which otherwise it would receive if the bank is allowed to perform its obligations under the performance bond, there is an obvious reason why they should be entitled to seek to be joined as an intervener in an appropriate case. If they are joined, and if they file evidence, attend the hearing and make submissions which assist the court in a significant way, then there is no reason why they should not be entitled to their costs in an appropriate case.

Further, above and beyond this point, in my view if a party in the position of the contractor has decided to proceed to seek an injunction against the bank alone, but also obviously knows that if an injunction is granted that will hit the beneficiary in its pocket, it would be good practice for it to notify the beneficiary of its intention to make the application and to serve the documents upon it on an informal basis to enable the beneficiary to make an informed decision as to whether or not it was satisfied simply to allow the bank to present the arguments in opposition to the application or to apply to be joined to present those arguments which it wishes to advance.

Turning to the facts of this case, two of the grounds relied upon by the claimant were, first, that it had a strong case based on an alleged repudiation by the employer of the underlying building contract and, second, that it had a strong case based on an alleged right of set-off in relation to monies due under the building contract the subject of the demand. In such circumstances it seems to me to be obvious that the bank would likely have no direct knowledge of those underlying matters and that the employer would be entirely justified in wishing to see the injunction application and the evidence in support with a view to adducing evidence, if it needed to, as to whether or not this was indeed a strong case on those two points in particular, and to make submissions on the point if necessary at the hearing.

It follows, it seems to me, that it was entirely proper for the employer to seek to be joined into the proceedings to see the evidence and to respond and to be heard if appropriate.

I acknowledge that in its evidence and submissions the employer did not descend into the details of the dispute for the entirely good reason that, as I have found, it would have been impossible in any event for the contractor to persuade me that it had a strong case on the merits of the repudiation or the set-off issues on the facts. However, equally, the employer could not realistically have hoped to persuade me that the contractor did not have at least a seriously arguable case on the facts on those points if they had been relevant considerations. However, as a result of my conclusions on the proper construction of the bond and the relevant legal principles, they were not relevant considerations.

Further, if the contractor had objected to the employer being joined, then I have no doubt that I would have joined them anyway for the reasons I have given above.

For all of those reasons I am satisfied that in principle the employer is entitled to its reasonable costs of its involvement in these proceedings.

The further question which I need to deal with is whether or not that entitlement should be subject to any limitation when it comes to the question of assessment or whether I should simply hold that the employer should be treated as if it was effectively a second defendant and should therefore have all of its reasonable costs of appearing.

In my judgment this is where the analogy with the planning and the public procurement cases is relevant because on the basis of the same principles it does not seem to me that an intervening party can simply assume that they will get their full costs, even if much of what they do is essentially duplicative of the work already done by the bank.

On the facts of this case, what happened was that by the time that the intervening party made its decision as to what evidence to adduce and to what extent it would participate at the hearing, it had already seen the claimant’s evidence and skeleton argument and it had seen the bank’s evidence and its skeleton. Therefore, in reality in my view, it would have known that this was not a case where, unless something unusual turned up, there was nothing of obvious significance which it could add by way of directly relevant evidence or as regards the submissions which were already going to be made by the bank at the hearing in any event.

In those circumstances, it seems to me that the appropriate course is that I should find that the employer should have its costs, but that they should be assessed on the basis that they should be limited to its reasonable costs of reading into the case on receipt of the evidence and the submissions, of deciding how to respond, of providing a reasonable response both by way of witness evidence and submissions, and of attending the hearing not simply to support and to assist the bank in its defence but so as to be able to address any particular points which might have arisen at the hearing in relation to the detail of the terms of the building contract and the underlying facts and law applicable to the underlying disputes between the contractor and the employer. That is because I accept that it was always possible that, contrary to expectations, the detail of such points might became relevant at the hearing, either because of a further point taken on behalf of the applicant at the hearing or because the judge found a particular point potentially or particularly relevant in a way that the parties might not necessarily have anticipated in advance. The summary assessment of the amount of these costs is a question for summary assessment, to which I will turn shortly, but I am satisfied and find that this is the proper basis for that assessment.

This is my judgment as to whether or not the claimant contractor should pay the defendant bank’s costs on the standard or the indemnity basis.

As Ms Shah for the bank said in para.5 of her skeleton:

“The question for the Court is whether there is something in the conduct of the action or the circumstances of the case which takes the case out of the norm in a way which justifies an order for indemnity costs.”

The case cited in support of that proposition is the well-known case of Excelsior Commercial & Industrial Holdings Ltd v Salisbury Hamer Aspden & Johnson (Costs) [2002] EWCA Civ 879.

She also rightly reminds me in para.7 that in the case of Noorani v Calver [2009] EWHC 592 (QB),Mr Justice Coulson said that:

“...persisting with a hopeless case despite reasonable offers to settle may also warrant indemnity costs.”

Indeed, he made the same point in the context of a Part 36 offer, which was not accepted when sitting in the Court of Appeal in the case of Lejonvarn v Burgess [2020] EWCA Civ 114.

As against that, Mr Cheung also drew my attention to the decision of Mr Justice Roderick Evans in Williams v Jervis [2009] EWHC 1837 (QB) in para.13, where he said that:

“…when assessing the reasonableness of the conduct of the paying party, one must avoid an assessment based on hindsight, i.e. assessing the conduct with the knowledge of the outcome of the case and with knowledge of how a particular issue was ultimately resolved.”

In this case, it does not seem to me that it ought to have been blindingly obvious to the claimant from the outset that this case was absolutely hopeless, or that I could draw the conclusion that they either knew that or ought to have known that but nonetheless persisted with the claim through to a final hearing for some ulterior motive or otherwise in a completely unreasonable way.

Instead, in my view they failed to appreciate the difficulties with the claim at the time they brought the application which became clear once it had been thoroughly investigated at a full day’s hearing by reference to the evidence, the legal authorities and the persuasive arguments of all counsel involved. It is also, I think, fair to say that even though the bank may have been under no legal obligation to provide a copy of the demand before it served its evidence, it would have helpful for the bank, if necessary seeking the consent of the employer to do so first, to have provided the claimant with a copy of the demand so that it could make good its points about the lack of merit on that particular part of the case at an earlier stage.

The position of the employer is also relevant to the further point urged upon me by Ms Shah, which is the offer made by Barclays without prejudice save as to costs on 19 January 2026 which I have now seen and read. This set out in some detail the banks case as to why the application lacked merit, which has ultimately proved entirely correct, and invited the claimant to withdraw the application and agree to pay 75 per cent of Barclays’ costs on the standard basis, failing which Barclays would seek its costs on the indemnity basis at the hearing. Ms Shah submits that the claimant unreasonably refused this offer, instead proposing - without justification - that Barclays should pay the money received from the surety under the counter-guarantee (“HSB”) into court. She records that Barclays made clear in its response that whilst it had no objection to that suggestion, provided it was held harmless by the other parties from any liability and it be fully compensated for its costs. However, she also notes that the proposal was rejected by the employer, and accordingly, Barclays could not agree to it.

This concise history of these discussions demonstrates in my view that contrary to the approach of the claimant in, for example, the Lejonvarn v Burgess [2020] EWCA Civ 114 (06 February 2020) case to which I have referred, the approach of the claimant in these negotiation was not completely unreasonable or intransigent. Instead, it was seeking to agree a compromise which in the end was unsuccessful because the employer would not agree to it. For the reasons I have given in my substantive judgment the employer was perfectly entitled not to agree to the proposal, but nonetheless it illustrates that this is not a case where a failure to accept a reasonable offer tips the case over the balance from conduct which does not justify indemnity costs to one which does. I also bear in mind that the price of the offer being made by Barclays at the time was already payment of 75 per cent of its standard costs.

For all of those reasons, it seems to me that this is not an appropriate case for indemnity costs. I will now summarily assess the costs of both the bank and the employer on that basis.

I am now going to summarily assess the costs payable by the claimant to the bank. I have been referred to the costs schedules provided by the claimant as well as by the bank and the employer. Ms Shah is entitled to make the preliminary observation that if one totals the costs incurred by the claimant’s English solicitors with the costs incurred by their Hong Kong solicitors the total is significantly in excess of the costs claimed by the bank.

Whilst it would appear that the Hong Kong solicitors’ costs would be irrecoverable in any event in this the litigation, it also appears that they have taken the role of document preparation, so that if one adds the claimed cost of that work to the work done by the English solicitors that lesser total would still significantly exceed the bank’s costs.

Of course, the fact that one party may have incurred greater costs than the other does not in itself mean that the other’s costs are thereby necessarily rendered reasonable, but it is nonetheless a helpful comparator to begin the assessment process.

In my view, given the value and the importance of this case and the complexity of the issues which have been litigated, my overall impression and view is that the bank’s costs do not fall outside a reasonable bracket. It does not seem to me that there is any basis for any substantial reductions from its budget. In particular, whilst it may be that Mr Black’s hourly rate as a grade 1 fee earner is somewhat higher than that the guideline rate for a Regional National 1 firm, it has been clearly reasonable overall to use a specialist Manchester law firm for this case and that overall the rates charged are reasonable.

Whilst it is also true that the time spent on attendances and documents may reasonably be subject to some challenge in relation to some of the totals, as against that, I have to bear in mind that this has been a disputed claim for an interim injunction where there has been ongoing correspondence for a significant period of time and where the position in relation to the involvement of the employer as well as the listing of the case has clearly necessitated more work than if this was simply a straightforward application made, listed and determined in relatively short order. The costs claimed in the schedule also include the costs of considering the reserved judgment and dealing with and attending at this consequentials hearing as well.

In the end, it seems to me that some reduction is required, but by no means a significant reduction, and I will summarily assess the banks’ costs in the sum of £75,000, together with VAT on that sum, which will then be calculated at the appropriate rate as stated in the costs schedule.

I am now going to summarily assess the employer intervener’s costs. The updated schedule, taking the costs up to and including today’s hearing, totals £138,000-odd, which is significantly higher than the costs of the bank and also significantly higher than the costs of the claimant if one strips out the Hong Kong legal costs other than in relation to work done on documents, which, as I have already said, would appear to be work which has not been done by the English solicitors.

If the employer had been the sole defendant from the start I would have been inclined to reduce the recoverable costs to around the level of the bank’s recoverable costs, especially given the lesser duration of the employer’s involvement. Whilst it is true, as Mr Wilken KC has submitted, that on analysis the overall time spent has been no more than that of the bank, it must follow that that has happened over a shorter period of time and ought to have involved commensurately lesser work. Thus, I would have reduced the claim on attendances in any event.

Also, as I have already said, what in my judgment is a reasonable amount for the claimant should pay for is the cost of reading in, responding in relatively limited witness evidence and then to have ensured that its interests were protected at the hearing by ensuring that it instructed counsel who was ready to deal with any matters not already covered by the bank and, most importantly, any which might have been raised in relation to the underlying merits which the bank was not in a position to address in detail. That is a very different assessment from that which would apply of the employer was and had been an effective second defendant from the start.

For all of those reasons, but also bearing in mind, as Mr Wilken has submitted, that this injunction, if it had been successful, would have directly hit the intervener employer in the pocket in a way that it would not have done the bank, it seems to me that it should receive the same amount of costs as the bank has done, so that I will summarily assess its costs in the sum of £75,000. In their case, no VAT is claimed.

I am not going to grant a stay of the order pending any appeal as contended for by Mr Cheung for the contractor. As is now apparent to me, this has turned out to be a case where I should not have indicated a provisional view without having had the benefit of hearing all three counsel first on the point. Having heard from all three counsel, I am satisfied that it is not an appropriate case for any stay, even for a limited period of seven days as I had indicated was my provisional view.

That is because, despite Mr Cheung’s ingenious submission to the contrary, the reality is that the only order that I have made in substantive terms is to refuse to grant the application for an injunction. A stay against that order would achieve nothing because, as both Ms Shah and Mr Wilken KC submit, that would not have the effect of imposing, through the back door, an injunction which has been refused at the front door.

It is true that the bank had previously stated that it would not pay the beneficiary until the hearing of the injunction, but that has of course now taken place and no injunction has been granted. If ask myself now, in the light of my judgment is there any basis for granting an interim injunction pending any application for permission to appeal to the Court of Appeal the answer, given my judgment, would have to be emphatically no, even for a short period to allow an application to be made direct to the Court of Appeal for a stay.

A further point which arises is that, given that any appeal could only be brought against the refusal of an injunction against the bank, then insofar as there is any prejudice it is not entirely obvious, in reality, what the prejudice would be, because I do not think Mr Cheung could have submitted that the bank would not be good for the money if an appeal was successful. I have also already dealt with any prejudice to the contractor in my substantive judgment, in particular given the fact that HSB has already paid the bank the amount due under the counter-guarantee and held that no obvious prejudice arises in such circumstances. So, for all of those reasons, I have moved away from my initial informal view and refuse to grant a stay.