The High Court has ordered that the costs of a withdrawn discovery motion in litigation between Brandon Point Holdings Limited and others and Malin Corporation plc be treated as costs in the cause. That means the party that wins the underlying case may recover the motion costs from the losing party.
Mr Justice Twomey delivered the ex tempore judgment on 25 March 2022, after hearing the costs issue the previous day. The court dealt only with the costs of the withdrawn motion; it did not decide the underlying dispute over whether Malin’s sale of its entire shareholding in Altan Pharma Limited triggered a “change of control event”.
The Brandon Point plaintiffs allege that the event entitled them to convert their shares in Malin into ordinary shares. Malin disputes that position. Brandon Point says the shares would be worth €19,206,037 if its claim succeeds. The judgment records that the proceedings were issued on 12 October 2021, following the alleged event on 1 October 2021.
Brandon Point said it withdrew its discovery motion after Malin’s replying affidavit clarified what information would be relevant to the effect of the Altan sale and what documents Malin’s witnesses would rely on. It argued that those clarifications justified making the motion’s costs costs in the cause. Malin said the substance of its affidavit had already been covered in correspondence and sought its costs of the motion.
The court said differences between the earlier correspondence and the affidavit were not, by themselves, enough to justify Brandon Point issuing the motion. But it found that Malin’s conditions for extending the deadline had left Brandon Point with little practical choice. Malin agreed to extend the deadline to 23 February 2022 on condition that the motion be issued by then and that Brandon Point seek no further adjournment. The motion was issued on 24 February.
The judge concluded that, without the restriction on seeking more time for clarification, the points in Malin’s affidavit were likely to have emerged through correspondence, potentially avoiding the motion. The conditions therefore tipped the balance in favour of treating the costs as costs in the cause. The judgment did not determine who will win the substantive litigation or guarantee a costs recovery; that depends on the eventual outcome of that case.