The High Court has ordered 3V Benelux BV to pay 70% of SafeCharge Card Services Limited’s costs of a security for costs motion, subject to deductions for costs associated with issues on which SafeCharge lost. Execution of the costs order is stayed pending final determination of the underlying action.
Mr Justice Allen delivered the costs judgment on 29 May 2020. The security motion had been decided in two earlier judgments: in October 2019, the court found SafeCharge had a prima facie defence and reason to believe 3V Benelux would be unable to pay costs if its action failed. The court also found 3V Benelux had not established, on a prima facie basis, that its financial position resulted from alleged wrongdoing by SafeCharge. In March 2020, the court ruled on the amount and form of security.
The costs dispute concerned whether the motion’s costs should follow the outcome, be made costs in the cause, or be left to the trial judge. 3V Benelux argued that issues about the defence and the cause of its financial position could arise again at trial. SafeCharge argued that the security decision was a separate procedural event and should not be revisited.
Justice Allen concluded that the key issues decided on this motion would not be revisited in the same way at trial. The trial will determine whether 3V Benelux proves its claim; the motion had considered whether SafeCharge had a prima facie defence and whether 3V Benelux had established a prima facie connection between alleged breach of contract and its inability to pay costs. The judge noted that the trial case could concern a shortfall in services after termination, rather than the claim that services had entirely ceased, which was eventually accepted to be wrong.
The judge said the costs should ordinarily follow SafeCharge’s success in obtaining security. However, SafeCharge had pursued a frustration defence that failed to meet the prima facie threshold and had unsuccessfully tried to reopen its costs estimates. The frustration issue increased the hearing’s length and preparation costs. The court assessed it as accounting for about 20% of the costs of the initial hearing and set SafeCharge’s share of the motion costs at 70% overall.
The order excludes SafeCharge’s costs of its attempt to revise its estimate. It also allows 3V Benelux’s costs of preparing a revised estimate in response. The judgment does not determine the underlying contractual claim, which remains for trial. The parties were given liberty to make further written applications within 14 days.