Whaleys (Bradford) Limited v (1) Bennett (2) Cubbitt [2017] EWCA Civ 2172

Whaleys was awarded its trial costs on the indemnity basis. The Defendants failed to pay and then failed to attend means hearings or provide documentary evidence. Suspended committal orders were made and an application by the Defendants to stay enforcement action was dismissed as totally without merit. The Judge at first instance declined to award indemnity costs of the three assessment hearings as he did not regard the case as ‘exceptional’. The Court of Appeal held that the Judge had not necessarily applied the wrong test. The critical requirement was “some conduct or some circumstance which takes the case out of the norm…” (Excelsior Commercial & Industrial Holdings Ltd v Salisbury Hammer Aspden & Johnson [2002] EWCA Civ 879). That could be described as an ‘exceptional’ case. However, in this case, the Judge could not have properly concluded that the circumstances did not take the case out of the norm. Even if many debtors behaved like the Defendants, and therefore the conduct was ‘ordinary’ it did not make it reasonable. The Judge in this case had therefore not applied the correct test. The behaviour of the Defendants put the Claimant to considerable additional trouble and expense. It was thus appropriate to order costs on the indemnity basis. Richards LJ added that the Judge’s use of the word ‘exceptional’ was unhelpful, as, whatever the precise linguistic analysis, ‘exceptional’ in ordinary English connoted a stricter test that was applicable in indemnity costs orders.