Jon Flowith & Partners v John Robert Greaves & Ors

JONATHAN HILLIARD KC sitting as a Deputy Judge of the High Court: Introduction

1. This judgment is further to my 15 September 2025 judgment, neutral citation number [2025] EWHC 2343 (Ch) (the “Judgment” ), following the 25 July 2025 hearing before me. I use the same abbreviations as in the Judgment. This judgment deals with D1 and D2’s costs of the Application brought by D3, specifically D1 and D2’s contention in consequential submissions that C should pay their costs of the Application, and that I should summarily assess those costs. C’s submission is that there should be no order as to costs.

2. I have carefully taken into account the written submissions on costs of C on the one hand and D1 and D2 on the other, and am grateful for them. No-one has suggested that an oral hearing is required to deal with costs. I consider that it would not be appropriate to have such a hearing, given the full written submissions I have received and that neither party has requested such a hearing.

3. In the Judgment, I concluded that I should strike-out C’s claims against D3 unless C applied within 28 days for permission to amend its Particulars and permission was granted to remedy the defects. Originally D3 had contended that the Particulars did not, and could not be improved to , disclose reasonable grounds for bringing the claim or a real prospect of success. However, following service of C’s skeleton, which D3 contended set out claims that went beyond those set out in C’s Particulars of Claim, D3’s position at the hearing before me was that I should grant a conditional strike-out of the type referred to in the first sentence of this paragraph, and I ruled that was correct.

4. Part of C’s claim asserted that C had not been paid its “Owner’s Agent Fees” under the Promotion Agreement for the period between September 2017 and 30 August 2018: Judgment [15], [32(8)(a)]. C did not specify in the relevant paragraph of the Particulars of Claim- [38]- who C contended was liable to pay the Owner’s Agent Fees out of D1 and D2 on one hand or D3 on the other.

5. D3 contended in its Defence that it was not liable to pay any Owner’s Agent Fees, on- among other things- the basis that the relevant clause of the Promotion Agreement (cl.3.1(e)) only contained a promise by D3 to reimburse D1 and D2 for Owner’s Agent costs that D1 and D2 had borne, not a promise by D3 to C to pay such costs: Judgment [35(1)]. D3 also claimed contribution against D1 and D2, and in the course of D1 and D2’s defence to D3’s contribution notice D1 and D2 contended that any payment of Owner’s Agent fees was an obligation on D3 rather than D1 and D2. Therefore, D1 and D2 set up a competing construction of cl.3.1(e) to that of D3: Judgment [41(2)].

6. Turning against that backdrop to D1 and D2’s role in the Application, D1 and D2 stated in their short skeleton that the Application was primarily a matter between C and D3. D1 and D2 did however resist any suggestion that the Court should reach a determination at the hearing on the construction of cl.3.1(e) as part of the Application, contending that this should only be ruled on at trial after hearing live evidence and reading the contemporaneous documents: [12] of D1 and D2’s 18 July 2025 skeleton for the 25 July 2025 hearing.

7. Therefore, D1 and D2 were seeking to protect themselves against the outcome of D3’s Application, not resisting C’s position on the Application.

8. Following receipt of C’s skeleton of the same day, D3’s solicitors wrote to C’s solicitors on 21 July 2025 making an open offer to adjourn the Application pending service of a draft amended particulars by C, providing that C paid D3’s costs thrown away by reason of the adjournment. By letter of 22 July 2025, C rejected that offer through its solicitors.

9. Also on 22 July, D1 and D2 wrote through their solicitors to the parties, agreeing to the consent order put forward by D3 under cover of D3’s 21 July letter with certain amendments, specifically (a) that C paid D1 and D2’s costs thrown away as well, (b) affording D1 and D2 as well as D3 the ability to serve an amended defence following receipt of amended particulars from C, and a consequential amended defence to any amended contribution notice from D3, and (c) that C paid D1 and D2’s costs of and occasioned by C’s amendments to its particulars of claim. C did not respond directly to that letter but as it rejected D3’s open offer, any possibility of a consent order fell away at that stage.

10. D3 filed a further skeleton on 23 July, setting out the contention that I should grant a conditional strike-out of the type set out in the first sentence of [2] above.

11. At the hearing before me, D1 and D2 supported through Counsel D3’s position that I should grant such a conditional strike-out, and made clear that Counsel appeared to protect D1 and D2, together with making certain other submissions that I mention below. Analysis

12. In my judgment, C lost the Application. D3 sought from its supplemental skeleton onwards a conditional strike-out order, which D1 and D2 supported and C resisted. I held that such an order should be granted. Therefore, I found in favour of D3, supported by D1 and D2.

13. Further, for the reasons explained in the Judgment, C should have sought to amend its claim earlier and provide a draft amended pleading in good time before the hearing. Had C done so, in my judgment it would have been possible to avoid the hearing of D3’s strike-out application. There may, depending on the defendants’ stances, have needed to be a hearing to consider the draft amended pleading, but that would have been a hearing with a slightly different purpose to the one that took place before me.

14. I turn against that backdrop to D1 and D2’s costs. Starting with the period up to receipt of C’s skeleton, D1 and D2’s position was that they wished to ensure that the issue concerning the Owner’s Agent Fees point was not dealt with by the Court at D3’s request in a way that decided against D1 and D2’s construction. Given that, in my judgment it is understandable that D1 and D2 wished to attend the hearing.

15. However, that stance was a stance in opposition to D3 to that degree. Therefore, in my judgment, it would not be appropriate for me to order that C should pay these costs. Rather D1 and D2’s costs up to receipt of C’s skeleton should be reserved. The outcome of a final hearing, in particular, the view taken on D1 and D2’s construction of cl.3.1(e) of the Promotion Agreement, will be relevant to how these costs should be borne. C contends that D1 and D2 should bear their own costs, arguing that that neither C or D3 ever suggested the Court should reach any determination on the construction of the Promotion Agreement vis-à-vis D1 and D2. I reject this: D3 did seek determination of this point in a way that would bind D1 and D2. See for example [45] of D3’s skeleton.

16. I turn next to D1 and D2’s costs for the period following receipt of C’s skeleton. D1 and D2’s stance became that they supported the open offer (with the glosses mentioned above) and C repleading its case. At the hearing through Ms Newton, they supported D3’s position that a conditional strike-out order should be granted, so they supported the winning position, and she also made brief other submissions in opening and submissions at the end of the hearing about a particular point arising from C’s reply.

17. C points out in its written costs submissions that, as the White Book explains at [44.2.13], generally an unsuccessful party should not have to pay two sets of costs. C relies on the House of Lords decision in Bolton MDC v Secretary of State for the Environment [1995] 1 WLR 1176 for the proposition that in general interested parties should only get their costs if there is some specific issue which requires separate representation.

18. In Bolton MDC, which arose in the planning context, the House of Lords held that a developer would not normally be entitled to his costs in supporting the Secretary of State in a successful defence of the latter’s decision, unless “ he can show that there was likely to be a separate issue on which he was entitled to be heard, that is to say an issue not covered by counsel for the Secretary of State; or unless he has an interest which requires separate representation ” (1178G-H; underlining added). Therefore, the circumstances in which the House of Lords stated that interested parties might be awarded their costs were broader than C contends.

19. However, I do consider that D1 and D2 had an interest here which was separate to D3 and which required separate representation.

20. D1 and D2 were separate defendants to the claim with different interests from D3, reflecting the different roles and capacities they had in the events complained of by C.

21. It was readily understandable that they would wish to attend the hearing through Counsel to protect their separate interests as defendants. It was not clear how debate would proceed at the hearing, particularly given the development of C’s position in its skeleton and the claims that it heralded in them. Indeed: (1) As I explained in the Judgment at [95], it became clear from a combination of C’s oral submissions and skeleton that it intended to advance a claim against D3 that went beyond what it had pleaded, and this claim advanced against D3 involved allegations in respect of D1 and D2 as well e.g. [95(1)] to [95(3)]. For example, as explained in [95(1)], the claim articulated by C in its skeleton and orally contended that D1 and D2 had acted on behalf of D3 rather than just on behalf of D1 and D2 in taking steps toward C in August and September 2018. (2) It was confirmed by C in oral submission that the assertion in [38] of the Particulars that C had not been paid its Owner’s Agent Fees for the period between September 2017 and 30 August 2018 was intended to be (a) a claim in debt rather than (as the Prayer suggested) a claim in damages and (b) was run against D1 and D2 (and them alone), not D3: Judgment [76]. The lack of clarity as to who that claim was run against had been pointed by D3 in its skeleton at [28(a)].

22. I also agree with D1 and D2’s submission that it was readily conceivable that the Court would wish to understand D1 and D2’s position on D3’s application and C’s submissions as they developed through oral submission.

23. Therefore, C’s claim was in a state of some development from the original Particulars, and in a manner which engaged D1 and D2’s interests. In such circumstances, in my judgment it is clear that there was good reason, and that it was appropriate, for D1 and D2 to attend the hearing given their different interest to D3.

24. At the hearing, D1 and D2 set out in its position orally through Ms Newton, which- while brief- added value to the hearing. She also answered my question as to whether D1 and D2 supported an unless order in respect of the totality of C’s claim against D3, including in relation to Owner’s Agent Fees (which she did). She made submissions about any revised draft pleading that C put forward, including that D1 and D2 should be able to plead to it, and made one point at the end of the hearing in response to C’s reply. Ms Newton was careful in her submissions not to duplicate those of Ms Yates for D3.

25. Further, as explained above, the strike-out hearing and the costs of it could have been avoided had C put forward a revised pleading in good time before the hearing.

26. Taking the above together, in my judgment this means that the appropriate order is that C should pay D1 and D2’s costs from receipt of C’s skeleton onwards to be subject to detailed assessment unless agreed. As explained above, the appropriate way to divide costs is into D1 and D2’s costs incurred (a) before and (b) after receipt of C’s skeleton, the former costs being reserved. Any points on proportionality or reasonableness of the latter costs can be dealt with on detailed assessment. It would not be appropriate to assess summarily D1 and D2’s costs incurred after receipt of C’s skeleton, because I do not know the proportion of the costs incurred during this period.