When you’re a Successful Defendant but receive Nothing!

This is the case of European Real Estate Debt Fund (Cayman) Ltd -v- Treon & Ors [2021] EWHC 2866 (Ch) whereby Justice Miles considered the costs position after the Defendant had succeeded at Trial after the Claimant’s claim was statute barred.

The facts of the case were that the Claimant brought a claim alleging fraudulent misrepresentation by the Defendant. At the Trial, it was found that the Claimant would have succeeded on the facts of the case had they not been statute barred.

The Parties had diametrically opposed positions in respect of the costs in that the Claimant was of the view the Defendant should pay 80% of the costs however, the Defendant was of the view the Claimant should pay the costs.

Justice Miles stated that it is clear that the Defendants are the successful parties; the claims were entirely dismissed. It follows that the general rule applies unless the court decides to make a different order, but the court should still give real weight to the overall success of the Defendants as the winning parties, even if a different order is appropriate.” He also went on to comment that it was clear that conduct was an extremely important factor in considering whether they should depart from the general rule.

When considering the Defendant’s conduct, Justice Miles also concluded that “…they contested all of the issues raised in the particulars of claim. As I have already explained, they lost on many of these issues.”

Upon considering what the appropriate order was Justice Miles rather damningly found the Defendant guilty of deceit and stated that the Defendant’s witnesses were not just poor, they fabricated evidence. Also as the Claimant only lost on a single point and therefore this should factor into the decision.

In conclusion, Justice Miles decided that the appropriate Order should be no Order as to Costs.

This is an interesting case that confirms that the fact a party is successful does not automatically mean they will receive their costs – conduct is extremely important.

For the full case, please contact Karl Robson, here.

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