In the case of Xhosa Office Rentals Ltd v. Multi High Tech PCB Ltd and others, decided last month, the High Court has allowed an application for an order that a third party, Mr L, should be added to the proceedings for the purposes of costs only under CPR 46.2 and, exercising its discretion under section 51 of the Senior Courts Act 1981 (SCA 1981), that Mr L should pay the defendants’ costs of defending the claim.
Section 51(1) of the SCA 1981 gives the court absolute discretion to determine by whom, and to what extent, the costs of proceedings are to be paid, including ordering a non-party to pay the costs of litigation.
Recognising that this power should be only sparingly exercised, the judge made the order for the reasons advanced by the defendants, which he considered to be “cogent and compelling”, in particular:
- Mr L was the claimant in the proceedings in all but name. He effectively decided that the claim should be brought and pursued; he was personally responsible for the manner in which the litigation was conducted; and he alone stood to benefit from it, if successful.
- The claims against the defendants were very weak. They ultimately failed, although this was because of a default in providing security for costs, but not before considerable trouble, stress, anxiety and expense had been occasioned to the defendants.
The decision adds to the jurisprudence on the kind of circumstances which justify making what is an exceptional order.
Chris Harper is a partner and head of the dispute resolution team. He has been recognised by two independent guides to the law, Legal 500 and Chambers, as among the best in the region. Contact Chris on 01392 210700 or email drx@stephens-scown.co.uk.