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	England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Rollerteam Ltd v Siddiqi [2025] EWHC 612 (Ch) (17 March 2025) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2025/612.html Cite as: [2025] EWHC 612 (Ch)

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IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

		Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NL
		17 March 2025

Mr Justice Rajah :

1. This is an appeal of the decision of Costs Judge Rowley dated 12 June 2024 to strike out the Appellant's amended bill of costs in the sum of £75,228.43. Warby J had ordered the Respondent to pay the costs of five Defendants of which the Appellant was one on 24 May 2019.

Background

2. The underlying proceedings in which the costs order was made related to a long running dispute over a family business, the Sherlock Holmes museum in Baker Street, London. The Respondent was a supporter and adviser of one family faction. The First Defendant in the proceedings was the head of another faction. The Second Defendant was his wife and the Third, Fourth and Fifth Defendants were companies owned by husband and/or wife. The Third and Fifth Defendants are now in liquidation.
3. On 10 January 2019, the Respondent commenced proceedings against the Defendants claiming £4,149,911.84 in damages and interest. The statements of case alleged injury to reputation and consequential financial loss resulting from what the Claim Form described as a "course of criminal conduct". The Respondent alleged offences of blackmail, harassment and libel. On 12 April 2019, the Defendants applied to strike out the claim and for summary judgment in respect of the Second to Fifth Defendants. The Respondent applied for an injunction and orders for disclosure. A few days before the hearing the Respondent decided to abandon the original claim and applied to substitute a new claim by amendment raising new claims of conspiracy to injure, wrongful interference, breach of confidence, interference with Article 8 rights as well as harassment.
4. The background set out above is taken from the judgment of Warby J. On 24 May 2019, Warby J dismissed all the Respondent's applications, granted summary judgment for the Second to Fifth Defendants, struck out the Claim Form (save for the harassment claim) and struck out the Particulars of Claim. He gave directions for the Respondent to amend his harassment claim against the First Defendant if he wished to pursue it. He ordered the Respondent to pay the Defendants' costs of (1) the injunction application, (2) the disclosure application (3) the Defendant's summary judgment and strike out application and (4) the amendment application. He directed a payment on account of £39,938.52.
5. Proceedings continued with applications to amend, appeal and stay but have eventually resulted in the payment of part of the payment on account and an order of Costs Judge Rowley on 14 December 2022 requiring the Defendants to commence detailed assessment of their costs by 15 February 2023.
6. Only the Fourth Defendant ("D4"), who is the Appellant, served a Notice of Commencement, dated 14 February 2023, in accordance with CPR 47.6. D4 served a bill of costs with its Notice of Commencement totalling £82,432.78, although I have not seen a copy of it.

The Unless order

7. On 27 April 2023, the Judge made an unless order striking out D4's bill of costs and assessing the claimed costs at zero unless it served by 25 May 2023 a revised bill of costs which contained information specified in the order. The relevant condition for the purposes of this appeal is that the revised bill of costs should be one which:-

"(iii) where any item of work was done jointly for the benefit of the Fourth Defendant and any other Defendant, indicates the proportion of that work claimed to have been done on behalf of the Fourth Defendant".

Attempted compliance

8. D4 served a revised bill of costs in the sum of £75,228.43 by the stipulated date. It was said to be a bill of costs on behalf of the First, Second, Third, Fourth and Fifth Defendants. In a section headed Assessment Notes, it made the point that one firm of solicitors, RPC, had represented all five Defendants and said:

"4. It is accepted that the bill of costs served on or around 14/02/2023, said to be a bill of costs of the fourth defendant only, was misconceived. The order of The Honourable Mr Justice Warby dated 12/06/2019 provided (under paragraphs 8(1) to 8(4) of that order) that the claimant is to pay the defendants' costs (all five defendants' costs) of the injunction application, the disclosure application, the strike-out application and the amendment application, all to be assessed on the standard basis if not agreed. This bill of costs therefore is a bill of costs in relation to all five defendants.

5. Although the defendants are very mindful of the requirements of the order of Costs Judge Rowley dated 04/05/2023 in that, inter alia, paragraph (2)(iii) of that order directs that "where any item of work was done jointly for the benefit of the Fourth Defendant and any other Defendant, [the bill of costs must indicate] the proportion of that work claimed to have been done on behalf of the Fourth Defendant":

(a) as above, the bill of costs then before Costs Judge Rowley was misconceived in that it was a bill of costs of the fourth defendant only; that should not have been so

(b) as above, RPC were instructed to represent all five defendants

(c) as above, the various costs orders made on 12/06/2019 were in favour of all five defendants in relation to all applications (paragraphs 8(1) to 8(4) of that order)

(d) as above therefore, this bill of costs is a bill of costs of all five defendants

(e) work done and disbursements incurred claimed in this bill of costs was for the benefit of all five defendants

As such, there is no reasonable need to apportion work so as to show work

done/disbursements incurred for the benefit of the fourth defendant only, and any attempted apportionment of work done/disbursements incurred as between each defendant would be entirely academic and serve no useful purpose; all five defendants have a costs order in their favour in respect of all applications referred to in the order of 12/06/2019 and this bill of costs is a bill of costs in respect of all five defendants.

Put another way, 100% of the costs incurred in relation to the injunction application, the disclosure application, the strike-out application and the amendment application were incurred for the benefit of the fourth defendant, just as 100% of those costs were incurred for the benefit of the first, second, third and fifth defendants."

9. At note 7, D4 went on to say that to accommodate the fact that some work will have been done for the benefit of the first defendant only in relation to the harassment claim against him, profit costs in Parts 1, 2, and 3 of the bill of costs had been reduced by 10%.

The judgment

10. On 15 August 2023, the Claimant applied to strike out D4's revised bill of costs as not having complied with the unless order. After a hearing on 17 November 2023 Costs Judge Rowley found there had been a material non-compliance with the order and struck out D4's bill of costs and assessed the costs at zero. I set out the relevant part of his judgment below.

"17. …Since only the fourth defendant is seeking costs via these detailed assessment proceedings, any work done for the defendants more generally needs to be divided appropriately so that only the costs for which the fourth defendant is liable are sought from the claimant. It is only if the work was solely for the fourth defendant that it will be recoverable in its entirety. (There is a category of work which is said to be "non-divisible" which could also be claimed in full but examples of such work are, in my experience, rare. The example usually given is of a court fee for, say an application, which would be the same figure, regardless of how many defendants were involved in that application.)

18. It is a time consuming task to draw the bill and then divide the entries so that only a proportion is claimed for each entry. As Mr James's skeleton points out, the correct approach is to look at each entry rather than to allow a percentage recovery to be applied against all entries. The costs judge in Haynes v Department of Business, Innovation and Skills [2014] EWHC 643 (QB)was allowed to take this latter approach simply because there was no evidence before him which would allow him to consider the entries in any detail. In the absence of that information, he was entitled to allow 10% of the reasonable costs because only one of ten defendants was liable to pay the Claimant's costs. If this case turned out similarly, the fourth defendant would be looking at a 20% recovery, which was a point I made to Mr Aidinantz during his submissions. If all of the costs were allowed as reasonable (an unusual outcome) the bill would be reduced from £75,000 to £15,000 in any event.

19. Given the time consuming nature of dividing the entries, the costs draftsman who produced the revised bill clearly thought they had found a short cut by seeking the costs on behalf of all of the defendants. In doing so, it appeared there would be no need to divide the time. But that approach overlooks all manner of questions of authority to pursue the costs on behalf of all of the defendants. At most, the bill has only been signed by the first defendant and the second defendant, for herself and for the fourth defendant. Moreover, it ignores the fact that only the fourth defendant is able to bring its costs for assessment within these proceedings – the other defendants having chosen not to serve notices of commencement.

20. As such, the notes at the end of the narrative carry no weight in justifying the lack of division of the costs in this bill. The costs claimed by the fourth defendant were not "misconceived" in being claimed solely for that defendant. Each defendant had the opportunity to seek to recover their costs but the majority did not do so. It is too late for them to do so now. The only misconception, if that is the correct term, is the belief that an order requiring division of the bill can effectively be ignored in this manner.

21. The assessment of costs where the entries are divided is an extremely time consuming task. One reason for requiring the bill to be drawn to show exactly what proportion of time is being claimed for each entry is so that the paying party i.e. the claimant is able to decide which entries / proportions to challenge. Only those which are challenged would then need to be determined at a hearing. This winnowing out of the entries which can be agreed inevitably reduces the time required for a detailed assessment hearing. The time to assess such entries invariably requires a disproportionate amount of time to the costs involved and yet the costs judge is limited in what can be done in terms of allocating an appropriate share of the court's resources to that bill, if it has been properly drawn and challenged.

22. The requirement at paragraph 2 of my order dated 27 April 2023 for the revised bill to reflect realistic sums that may be recoverable for one of five defendants was therefore no empty obligation. Having failed to deal with that obligation, it is entirely plain that the fourth defendant's bill does not comply with my order. Whilst there may be some entries solely for the fourth defendant's benefit, most of them will be for the benefit of other defendants as well since the same solicitors were instructed on behalf of all the defendants."

Unless orders – principles

11. The effect of CPR 3.8 is that the sanction embodied in an unless order takes effect without the need for any further order if the party to whom it is addressed fails to comply with it in any material respect; Marcan Shipping (London) Limited v Kefalas and Candida Corporation [2007] EWCA Civ 463 at [34]. It is not necessary or appropriate for a party to make an application to the court for the sanction to be imposed [34] and if it does the court's function is limited to deciding what order is needed to reflect the sanction which has already taken effect [34]. The party in default must apply for relief from sanctions pursuant to CPR 3.9 if he wishes to escape its consequences, although the court can, but is not bound, to intervene of its own motion [35]. This means that when making an unless order the Court should consider carefully whether the sanction being imposed is appropriate in all the circumstances of the case; Marcan [36].
12. Determining whether the party's actions have complied with the condition in an unless order is judged by giving the words in the order their ordinary meaning in the context of the case; see Pan Petroleum AJE Ltd v Yinka Folawiyo Petroleum Co Ltd & Ors [2017] EWCA Civ 1525 at [41]. Given their potential consequences, unless orders must be clear (so that the party to whom it is directed is in no doubt what he or she needs to do to avoid the sanction); Poule Securities Ltd v Howe & Ors [2021] EWCA Civ 1373 at [30]. If the order is not clear there may be no firm foundation for a finding that the order has been breached; see Raja v Van Hoogstratten [2004] EWCA Civ 968 at [111].

The appeal

13. The only question before the judge was whether D4 had failed to comply with the unless order in a material respect. If it had, then the sanction took effect without further order. There was no application for relief from sanctions before the Costs Judge and he did not consider such relief of his own motion.
14. The order required D4 to serve a bill of costs which "where any item of work was done jointly for the benefit of the Fourth Defendant and any other Defendant, indicates the proportion of that work claimed to have been done on behalf of the Fourth Defendant". That required:

a. identification of work done jointly for the benefit of D4 and another Defendant;

b. a statement of what proportion of work D4 claimed to have been done on behalf of D4.

It will be seen that there was no requirement so as to comply with the order that the provision of this information be provided in any particular way, whether by an entry beside each item of claimed costs or otherwise. There was no requirement, contrary to paragraph 22 of the judgment, for it to "reflect realistic sums that may be recoverable for one of five defendants". Such a requirement would in any event clearly not have been one which left D4 in no doubt as to what it had to do to comply.

15. In my judgment the unless order was complied with by the service of D4's revised bill of costs which:

a) identified that all of the work had been done jointly for the benefit of D4 and other Defendant; and

b) stated that D4 claimed 100% of the work was for D4's benefit except for a specified reduction of some costs by 10% in respect of the issue of harassment which was for the benefit of the First Defendant only.

16. That is clear from the Notes which said: (i) "work done and disbursements incurred claimed in this bill of costs was for the benefit of all five defendants" (ii) "100% of the costs incurred in relation to the injunction application, the disclosure application, the strike-out application and the amendment application were incurred for the benefit of the fourth defendant, just as 100% of those costs were incurred for the benefit of the first, second, third and fifth defendants" and (iii) "to accommodate the fact that some work will have been done for the benefit of the first defendant only in relation to the harassment claim against him only, profit costs in Parts 1, 2 and 3 of the bill of costs have been reduced by 10%".
17. The judge made no mention of these passages or statements in the Notes, focussing instead on the attempt by the costs draftsman to treat the bill of costs as on behalf of all five defendants. He quite rightly observed that this did not work. But it was not right to conclude that D4 had therefore effectively ignored his order "requiring division of the bill". In fact, the information actually required by the order was provided, and whether the claim being made by D4 to 90%-100% was in the judge's opinion realistic or unrealistic was neither here nor there. That is sufficient to dispose of this appeal.

An unrealistic bill?

18. Nevertheless, I should say something about the judge's view that D4's bill "failed to reflect realistic sums that may be recoverable" as that is the basis of his conclusion that his order had been breached. He considered the bill to be unrealistic because "whilst there may be some entries solely for the fourth defendant's benefit, most of them will be for the benefit of other defendants as well since the same solicitors were instructed on behalf of all the defendants." The judge said that in respect of the bulk of the common costs it was only if the work was solely for D4 that it would be recoverable in its entirety. He distinguished "non-divisible" costs which appear to be a reference to costs described as non-specific costs in the leading authority of Haynes v Department for Business, Innovation and Skills [2014] 3 Costs LR 475 at [26].
19. Approaching the matter from principle, it cannot be the correct approach in a case such as this that only costs which are incurred solely for the benefit of D4 can be recovered in full. It seems to have been assumed by the Costs Judge (as is now alleged) that this was a joint retainer of RPC such that each Defendant was liable for all of the costs billed by RPC. In Haynes, it was held that non-specific common costs such as court fees, medical reports and travel expenses which would have been incurred by the receiving party in any event are recoverable by the receiving party as its costs. That recognises what I perceive to be an underlying principle that (subject to the operation of the indemnity principle) any common costs which would have been reasonably incurred by D4 in any event to defend itself from the Claimant's claims are recoverable in full by D4. As Haynes made clear, specific common costs capable of identification and division should be subjected to specific investigation as to what if any division is appropriate to reflect that principle. It is not therefore costs which are solely for the benefit of D4 that can be recovered in full. The real question is whether any of the common costs of defending the action by the Defendants have been increased by issues relating to the Defendants other than D4 or are solely attributable to those other Defendants. As Mr Griffiths said, in the example of the conference with counsel envisaged in Haynes [26] concerning the liability of all ten defendants, if the same conference and the same advice would have been required if there was one, five or ten defendants then there should be no division of that fee. Costs incurred to achieve the Defendants' joint objective of striking out the claims against D2-D5, resisting an injunction, resisting disclosure and resisting amendment are likely to be largely costs which would have been incurred whether there was one Defendant or five Defendants. In these circumstances, the judge's reasoning as to why D4's bill of costs was unrealistic was, in any event, flawed.

Conclusion

20. I will allow the appeal.