Against non-party (4)

Total Spares & Supplies Ltd v Antares SRL [2006] EWHC 1537 (Ch)

An order against a non-party is exceptional and may only be made if it is just and reasonable. It can no longer be said that causation is a necessary precondition to an order for costs against a non-party: there may be cases where justice dictates otherwise. Where a party aids and abets a litigant to divest himself of assets for the purpose of preventing the effective enforcement of a costs order, it could be ‘just and reasonable’ to order the party who aids and abets in this way to pay the costs in question. The facts were complicated. There were five defendants and in an attempt to deprive the claimants of the fruits of victory if they succeeded, the fifth defendant had been incorporated some six weeks before the trial, and about two weeks before the start of the trial, the first defendant transferred its business and related assets and liabilities to the fifth defendant. The overwhelming likelihood was that the fifth defendant was controlled by the fourth defendant whose husband managed the business of the first defendant. The fact that the transfer of the business was not causative of the costs incurred by the claimant was no bar to the making of a third party cost order. In the circumstances, the fifth defendant was ordered to pay 55% of the claimant’s costs incurred after the transfer of the business. The fourth defendant was ordered to pay 55% of the claimant’s entire costs.